EMPLOYMENT AGREEMENT BETWEEN [Name of Subsidiary] AND [Officer] [Date]
Exhibit
10
BETWEEN
[Name
of Subsidiary]
AND
[Officer]
[Date]
This
EMPLOYMENT AGREEMENT ("Agreement"), dated as of the ____________ day of
_________________, 200_ (the “Effective Date”), is by and between
_______________________________, a corporation headquartered in
__________________, and a wholly-owned subsidiary of Progress Energy, Inc.,
its
successors or assigns and [Full Name] (“Officer”). __________________________
shall be referred to as the “Company” throughout. Progress Energy, Inc. shall be
referred to as “Progress Energy” throughout.
Preamble
The
Company and Officer agree to enter into an employment relationship in which
Officer will serve as ______________ of the Company under the terms and
conditions as set forth within the Agreement:
Provisions
NOW,
THEREFORE, in consideration of the mutual covenants and promises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and accepted, the parties hereto
hereby agree as follows:
1. RESPONSIBILITIES;
OTHER ACTIVITIES.
Officer
shall occupy the position of _____________ at the Company and shall undertake
the general responsibilities and duties of such position as directed by Company
senior management. During the Term of the Agreement as defined in Section 2
below, Officer shall perform faithfully the duties of Officer’s position, devote
all of Officer’s working time and energies to the business and affairs of the
Company and use Officer’s best efforts, skills and abilities to promote the
Company’s business interests. Notwithstanding anything herein to the contrary,
the Company reserves the right to assign or reassign Officer’s employment to
other positions, including positions at subsidiaries or affiliates of Progress
Energy. If so assigned or reassigned, Officer will serve in such positions,
and
shall have such responsibilities and duties, as determined by such new employer.
As used in the Agreement, the term “Company” shall also refer to any new
employer to which the Agreement is assigned in accordance with this Section
1.
2. TERM
OF THE AGREEMENT.
(a) The
Agreement is effective as of the Effective Date and shall remain in effect
until
_________________, 200_, [3 years] unless earlier terminated under Section
8
below.
(b) On
January 1, 200_ and on January 1 of each year thereafter (each an “Extension
Date”), the term of the Agreement (the “Term”) automatically will be extended by
an additional year, unless notice of non-renewal is timely given by the Company
pursuant to Paragraph 2(c) below.
(c) The
Company may elect to not extend the Term of the Agreement and must notify
Officer no later than 60 days prior to the relevant Extension Date that it
does
not intend to renew the Term of the Agreement pursuant to Paragraph 2(b), above.
Should the Company elect not to renew the Term of the Agreement, the Agreement
will terminate at the end of the then-current Term.
3. BASE
SALARY.
As
compensation for the services to be performed hereunder, Officer will be paid
a
Base Salary at the annual rate of ______________________ Thousand Dollars
($___,000) (less applicable withholdings) (“Base Salary”) during 200_. Base
Salary for each subsequent year of employment during the Term of the Agreement
shall be subject to adjustment by the Company during the normal annual salary
review process for similarly situated executives as determined by the Company
in
its discretion. Base Salary shall be deemed earned proportionally as Officer
performs services over the course of each year the Agreement is in effect.
Payments of Base Salary shall be made, except as otherwise provided herein,
in
accordance with the Company’s standard payroll policies and procedures.
4. EMPLOYEE
BENEFIT PLANS.
During
the Term of the Agreement, Officer shall be entitled to participate in all
applicable benefits plans sponsored by the Company or Progress Energy that
are
available for participation generally to Company employees, subject to the
terms
and conditions of such plans (the “Benefit Plans”).
5. EXECUTIVE
INCENTIVES AND PERQUISITES.
During
the Term of the Agreement, and subject to Section 6 below, Officer shall be
eligible to participate in executive incentive and executive perquisites
sponsored by, or offered pursuant to the policies of, the Company or Progress
Energy that are applicable generally to similarly situated Company executives,
subject to the terms and conditions of such plans, policies or programs, unless
specifically provided for in this Agreement. As of the Effective Date, these
executive incentives and perquisites consist of the following:
(a) Short
Term Incentive Plan.
Officer
is eligible to participate in the Progress Energy sponsored Management Incentive
Compensation Plan (the “MICP”), with a current annual target of __% of actual
base salary earnings, subject to the terms of the MICP.
(b) Long
Term Incentives.
Officer
is eligible to participate in a long term incentive program, subject to the
terms of the Progress Energy, Inc. Equity Incentive Plan (the “EIP”), consisting
of the following components at the Effective Date:
(i) PSSP
or Other Performance-Based Incentives.
An
annual award of performance-based long term incentives (“LTI”) (currently
shares/units from the Performance Share Sub-Plan) with a current annual target
of __% of actual base salary earnings. These awards are generally made in
March.
(ii) Restricted
Stock.
An
award of restricted common stock or restricted stock units, with a current
annual target of __% of actual base salary earnings, vesting ratably on the
3rd,
4th
and
5th
anniversaries from the date of grant, or upon such other vesting schedule as
determined by Progress Energy. These annual awards are generally made in March.
(c) Base
Salary Deferral Plan.
Officer
is eligible to participate in the Progress Energy sponsored Management Deferred
Compensation Plan (“MDCP”).
(d) Incentive
Deferrals.
Officer
is eligible to defer his earned MICP and/or LTI awards into deemed investments
of Progress Energy common stock on an unfunded basis pursuant to terms of the
MICP or EIP, as applicable.
(e) Restoration
Pension Plan.
Officer
is eligible to participate in the Progress Energy sponsored non-qualified
pension plan (the “Restoration Retirement Plan”) subject to its terms and
conditions. If Officer becomes a participant under Progress Energy’s
Supplemental Senior Executive Retirement Plan, Officer forfeits all benefits
under the Restoration Retirement Plan.
(f) Supplemental
Senior Executive Retirement Plan.
Officer
shall be eligible for participation in Carolina Power & Light Company’s
Supplemental Senior Executive Retirement Plan (“SERP”), subject to its
terms.
(g) Perquisite
Program.
Officer
is eligible to participate in a perquisite program as determined by the Company
from time to time. The perquisite program may include such benefits as the
Company determines would be appropriate, including, but not limited to,
continued participation in the Progress Energy sponsored Split Dollar Life
Insurance Plan (subject to its terms and consistent with applicable laws and
regulations), an automobile allowance, an annual executive physical, luncheon,
airline and country club memberships, financial and estate planning services,
tax preparation services, an executive accidental death and dismemberment
insurance policy and home security. Any perquisite program benefits shall be
subject to such limitations, modification or cancellation as the Company shall
determine in its sole discretion.
6. COMPANY
PLAN AND PROGRAM MAINTENANCE.
Officer’s entitlement to the benefits described in Sections 4 and 5 shall be
governed exclusively by the terms of the plans and programs described in those
provisions. Nothing in the Agreement shall require Progress Energy or the
Company to continue or maintain any short term incentive, long term incentive,
employee or executive benefit plan or program or any perquisite. Progress Energy
and the Company shall have the right to modify, replace or eliminate any
incentive or benefit plans or programs, including perquisites.
7. VACATION
AND HOLIDAYS.
Officer
will be entitled to four weeks of vacation leave per year, unless his combined
years of service to Progress Energy subsidiaries entitle him to additional
vacation leave pursuant to Company policy. Officer will be granted paid holidays
per Company policy.
8. TERMINATION
OF EMPLOYMENT.
(a) Termination.
During
the Term of this Agreement, the Company may elect at any time to terminate
Officer’s employment immediately hereunder and remove Officer from any
employment with or without “Cause,” as defined below.
(i) Constructive
Termination.
For
purposes of this Agreement, the Company shall be deemed to have terminated
Officer’s employment without cause if Officer is displaced from an assignment
within the controlled group of Progress Energy, Inc. subsidiaries and
affiliates, and (1) is not simultaneously reassigned to another position with
the controlled group of Progress Energy, Inc. subsidiaries and affiliates;
or
(2) in the event that Progress Energy, Inc. sells more than 50% of its interest
in a Progress Energy, Inc. subsidiary to which Officer is assigned to a third
party during the term of Officer’s assignment, and the third party purchaser
does not offer Officer a position with materially comparable authority and
duties within fifty (50) miles from Officer’s current geographic work location.
Upon such constructive termination, the obligations and rights of the parties
will be governed by Paragraph 8(a)(ii) below.
(ii) Termination
Without Cause.
During
the Term of this Agreement, if Officer’s employment with the Company is
terminated without Cause, and Officer’s employment under the Agreement is not
assigned to another subsidiary or affiliate of Progress Energy, then Officer
will be provided with severance equal to 2.99 times his then-current Base
Salary, payable in equal installments over a period of 2.99 years from the
date
of such termination. Additionally, the Company will reimburse Officer for the
costs of continued coverage under certain health and welfare benefit plans
pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”)
for up to eighteen (18) months after such termination of his employment;
provided, however, that Officer shall not be eligible for COBRA reimbursement
beyond the date on which his continued coverage terminates in accordance with
COBRA. Receipt of the benefits in this paragraph is subject to the requirements
of Paragraphs 8(f), 8(g) and 8(h) and 11(1) of this Agreement. In addition,
Officer will be eligible to retain all benefits under existing Benefit Plans
and
executive benefit plans as described in Sections 4 and 5 to the extent vested
within, and subject to, the terms of those plans. Upon termination without
Cause, Officer shall be entitled to any earned but unpaid Base Salary accrued
to
the date of termination. Any continued rights or benefits Officer or his legal
representatives may have under any Company or Progress Energy sponsored employee
benefit plan or program upon his termination without Cause shall be determined
in accordance with the terms or provisions of the plan or program.
(iii) Termination
for Cause.
For
purposes of this Agreement, “Cause” shall be defined as: (1) any act of
Officer’s including, but not limited to, misconduct, negligence, unlawfulness,
dishonesty or inattention to the business, which is detrimental to the Company’s
interests; or (2) Officer’s unsatisfactory job performance or failure to comply
with Company policies, rules or regulations. If Officer is terminated for Cause
as defined herein, then he shall be eligible to retain all benefits under
existing Benefit Plans and executive benefit plans as described in Sections
4
and 5 that have vested pursuant to, and subject to, the terms of those plans,
if
permitted by such plans, but he shall not be entitled to any form of salary
continuation or severance benefits under the Agreement. Upon termination for
Cause, Officer shall be entitled to any earned but unpaid Base Salary accrued
to
the date of termination. Any continued rights or benefits Officer or his legal
representatives may have under any Company or Progress Energy sponsored employee
benefit plan or program upon his termination for Cause shall be determined
in
accordance with the terms or provisions of the plan or program.
(b)
Change
in Control.
In the
event that Progress Energy experiences a Change in Control, as defined by the
Progress Energy, Inc. Change in Control Plan (the “Change in Control Plan”) and
Officer is (1) designated by the Organization and Compensation Committee of
Progress Energy’s Board of Directors as covered by the Change in Control Plan,
and (2) is terminated without Cause or constructively terminated under the
terms
of this Agreement or the Change in Control Plan, then Officer may elect to
receive benefits under either the Change in Control Plan or the Agreement.
Under
no event will Officer receive benefits under both the Change in Control Plan
and
the Agreement.
(c) Voluntary
Termination; Lapse of Term.
If
Officer terminates his employment voluntarily for any reason at any time, or
if
the Term of the Agreement lapses due to non-renewal, then he shall be eligible
to retain all benefits under existing Benefit Plans and executive benefit plans
that have vested pursuant to, and subject to, the terms of those plans, as
of
the last date of regular employment. He shall not be entitled to any form of
salary continuation or other severance benefit under the Agreement.
(d) Termination
Due to Death.
In the
event of Officer’s death during the Term of the Agreement, Officer’s employment
hereunder shall terminate and the Company shall have no further obligation
to
Officer under the Agreement except as specifically provided in the Agreement.
Officer’s estate shall be entitled to receive all earned but unpaid Base Salary
accrued to the date of termination and any short term incentive for a prior
fiscal year that has been earned but not paid. Any rights and benefits Officer
or Officer’s estate or other legal representatives may have under Benefit Plans
and executive benefits and incentive plans of the Company or Progress Energy
upon Officer’s death during the Term of the Agreement, if any, shall be
determined in accordance with the terms and provisions of such plans and
incentive or benefit programs.
(e) Termination
Due to Disability.
(i) The
Company may terminate Officer’s employment hereunder, subject to compliance with
the Americans With Disabilities Act or other applicable law, due to Disability
if (1) for a period of 180 consecutive days during the Term of the Agreement,
Officer is totally and permanently disabled as determined in accordance with
the
Company's long term disability plan (LTD), if any, as in effect during such
time; or (2) at any time during which no such plan is in effect, Officer is
substantially unable to perform his duties hereunder because of a medical
condition for a period of 180 consecutive days during the Term of the Agreement,
as determined by the Company in good faith (either event shall be deemed
“Disability” for the purposes of the Agreement).
(ii) Upon
the
termination of Officer’s employment due to Disability, the Company shall have no
further obligation to Officer under this Agreement except as specifically
provided in this Agreement. Upon such termination for Disability, Officer shall
be entitled to all earned but unpaid Base Salary accrued to the date of
termination and any short term incentive for a prior fiscal year that has been
earned but not paid. The short term incentive, if any, for the current fiscal
year shall be calculated on a pro rata basis for the portion of the fiscal
year
Officer was performing the duties of his position and shall be paid at the
regularly scheduled time for the payment of the short term incentive. Any
continued rights and benefits Officer or Officer’s legal representatives may
have under employee benefit plans and programs of the Company or Progress Energy
upon Officer’s termination for Disability, if any, shall be determined in
accordance with the terms and provisions of such plans and
programs.
(f) Release
of Claims.
In
order to receive severance benefits under Paragraphs 8(a) or 8(b), Officer
agrees to execute a written release of all claims against the Company, and
its
employees, officers, directors, subsidiaries and affiliates, on a form
acceptable to the Company.
(g) Covenant
Not to Compete.
If the
Company terminates Officer’s employment without Cause under Paragraph 8(a)(ii),
or if Officer becomes eligible for the benefits available under Paragraphs
8(a)(i) or 8(b), Officer, for the greater of (i) one year, or (ii) as long
as
Officer is receiving severance payments under this Agreement, shall not compete
directly or indirectly with the Company or its affiliates within fifty (50)
miles of any geographic area in which the Company or its affiliates has a
material business interest with which Officer is or was previously
involved.
(h) Non-Interference.
If the
Company terminates Officer’s employment without Cause under Paragraph 8(a)(ii)
or if Officer becomes eligible for the benefits available under Paragraphs
8(a)(i) or 8(b), Officer, for the greater of (i) one year, or (ii) as long
as
Officer is receiving severance payments under the Agreement, shall not, whether
on his own account or on the account of another individual, partnership, firm,
corporation, or other business organization (other than the Company and its
affiliates), directly or indirectly, solicit, endeavor to entice away from
the
Company or any of its affiliates, or otherwise interfere with the relationship
of the Company or its affiliates, any person who is employed by or otherwise
engaged to perform services for the Company or its affiliates including but
not
limited to, any independent representatives or organizations, or any person
or
entity that is a customer of the Company or its affiliates.
(i) Confidential
Information; Trade Secrets.
Officer
hereby agrees that Officer shall not, directly or indirectly, at any time during
the term of Officer’s employment under this Agreement, and for a two-year period
following the termination of such employment for any reason, reveal, divulge,
or
disclose to any person not expressly authorized by the Company any Confidential
Information, or use or make use of any Confidential Information in connection
with any business activity other than that of the Company. Throughout the term
of this Agreement and at all times after the date that this Agreement terminates
for any reason, Officer shall not directly or indirectly transmit or disclose
any Trade Secret of the Company to any person, and shall not make use of any
such Trade Secret, directly or indirectly, for himself or for others, without
the prior written consent of the Company. The parties acknowledge and agree
that
this Agreement is not intended to, and does not, alter either the Company’s
rights or Officer’s obligations under any state or federal statutory or common
law regarding trade secrets and unfair trade practices.
Anything
herein to the contrary notwithstanding, Officer shall not be restricted from
disclosing or using Confidential Information that is required to be disclosed
by
law, court order or other legal process; provided,
however,
that in
the event disclosure is required by law, Officer shall provide the Company
with
prompt notice of such requirement so that the Company may seek an appropriate
protective order prior to any such required disclosure by Officer.
For
purposes of this Paragraph 8(i), the term “Confidential Information” means all
information regarding the Company, its activities, business or clients that
is
the subject of reasonable efforts by the Company to maintain its confidentiality
and that is not generally disclosed by practice or authority to persons not
employed by the Company, but that does not rise to the level of a Trade Secret.
“Confidential Information” shall not include information that has become
generally available to the public by the act of one who has the right to
disclose such information without violating any right or privilege of the
Company. For purposes of this Paragraph 8(i), the term “Trade Secret” means all
information, without regard to form, which is not commonly known by or available
to the public and which information: (1) derives economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; and (2) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy. These definitions
shall not limit any definition of “confidential information,” “trade secret,” or
any equivalent terms under state or federal law.
9. ASSIGNABILITY.
No
rights
or obligations of Officer under this Agreement may be assigned or transferred
by
Officer, except that (i) Officer’s rights to compensation and benefits
hereunder may be transferred by will or laws of intestacy to the extent
specified herein, and (ii) Officer’s rights under Benefit Plans described
in Section 4 or executive incentive and benefit plans described in
Section 5 may be assigned or transferred in accordance with the terms of
such plans or programs, or regular practices thereunder. The Company, in its
sole discretion, may assign or transfer its rights and obligations under this
Agreement.
10. CONFIDENTIALITY.
Unless
otherwise made public by the Company, Officer will not disclose the terms of
this Agreement except (i) to financial and legal advisors under an obligation
to
maintain confidentiality, or (ii) as required by a valid court order or subpoena
(and in such event will use his best efforts to obtain a protective order
requiring that all disclosures be kept under court seal) and will notify the
Company promptly upon receipt of such order or subpoena.
11. MISCELLANEOUS.
(a) Governing
Law.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of ______________ without reference to laws governing conflicts of
law.
(b) Entire
Agreement.
This
Agreement contains all of the understandings and representations between the
parties hereto pertaining to the subject matter hereof and supersedes all
undertakings and agreements, whether oral or in writing, if any, previously
entered into by them with respect thereto.
(c) Amendment
or Modification; Waiver.
No
provision in this Agreement may be amended or waived unless such amendment
or
waiver is agreed to in writing, signed by Officer and by a duly authorized
officer of the Company thereunto duly authorized to do so. Except as otherwise
specifically provided in the Agreement, no waiver by a party hereto of any
breach by the other party hereto of any condition or provision of the Agreement
to be performed by such other party shall be deemed a waiver of a similar or
dissimilar provision or condition at the same or any prior or subsequent
time.
(d) Notice.
Any
notice (with the exception of notice of termination by the Company, which may
be
given by any means and need not be in writing except that if termination is
for
Cause, oral notice must be followed by written notice) or other document or
communication required or permitted to be given or delivered hereunder shall
be
in writing and shall be deemed to have been duly given or delivered if
(i) mailed by United States mail, certified, return receipt requested, with
proper postage prepaid, or (ii) otherwise delivered by hand or by overnight
delivery, against written receipt, by a common carrier or commercial courier
or
delivery service, to the party to whom it is to be given at the address of
such
party as set forth below (or to such other address as a party shall have
designated by notice to the other parties given pursuant hereto):
If
to
Officer:
Full
Name
Name
of
Subsidiary
Address
City,
State, Zip
If
to the
Company:
Name
of
Subsidiary
c/o
Progress Energy Service Company, LLC
000
X.
Xxxxxxxxxx Xxxxxx
Xxxxxxx,
Xxxxx Xxxxxxxx 00000
Attn.:
Vice President, Human Resources
Any
such
notice, request, demand, advice, schedule, report, certificate, direction,
instruction or other document or communication so mailed or sent shall be deemed
to have been duly given, if sent by mail, on the third business day following
the date on which it was deposited at a United States post office, and if
delivered by hand, at the time of delivery by such commercial courier or
delivery service, and, if delivered by overnight delivery service, on the first
business day following the date on which it was delivered to the custody of
such
common carrier or commercial courier or delivery service, as all such dates
are
evidenced by the applicable delivery receipt, airbill or other shipping or
mailing document.
(e) Severability.
In the
event that any provision or portion of this Agreement shall be determined to
be
invalid or unenforceable for any reason, the remaining provisions or portions
of
this Agreement shall be unaffected thereby and shall remain in full force and
effect to the fullest extent permitted by law.
(f) References.
In the
event of Officer’s death or a judicial determination of Officer’s incompetence,
reference in this Agreement to Officer shall be deemed, where appropriate,
to
refer to Officer’s legal representative, or, where appropriate, to Officer’s
beneficiary or beneficiaries.
(g) Headings.
Headings contained herein are for convenient reference only and shall not in
any
way affect the meaning or interpretation of this Agreement.
(h) Counterparts.
This
Agreement may be executed in counterparts, each of which shall be deemed to
be
an original, but all of which together shall constitute one and the same
instrument.
(i) Rules
of Construction.
The
following rules shall apply to the construction and interpretation of this
Agreement:
(1) Singular
words shall connote the plural number as well as the singular and vice versa,
and the masculine shall include the feminine and the neuter.
(2) All
references herein to particular articles, paragraphs, sections, subsections,
clauses, Schedules or Exhibits are references to articles, paragraphs, sections,
subsections, clauses, Schedules or Exhibits of this Agreement.
(3) Each
party and its counsel have reviewed and revised (or requested revisions of)
this
Agreement, and therefore any rule of construction requiring that ambiguities
are
to be resolved against a particular party shall not be applicable in the
construction and interpretation of this Agreement or any exhibits hereto or
amendments hereof.
(4) As
used
in this Agreement, "including" is illustrative, and means "including but not
limited to."
(j) Remedies.
Remedies specified in this Agreement are in addition to any others available
at
law or in equity.
(k) Withholding
Taxes.
All
payments under this Agreement shall be subject to applicable income, excise
and
employment tax withholding requirements.
(l) Compliance
with 409A.
Notwithstanding anything in the Agreement to the contrary, if any amount or
benefit that the Company determines would constitute non-exempt “deferred
compensation” for purposes of Section 409 of the Internal Revenue Code (“Code”)
would otherwise be payable or distributable under this Agreement by reason
of
Officer’s separation from service during a period in which he is a Specified
Employee (as defined below), then to the extent necessary to comply with Code
Section 409A: (i) if
the
payment or distribution is payable in a lump sum, Officer’s right to receive
payment or distribution of such non-exempt
deferred compensation
will be
delayed until the earlier of Officer’s death or the first day of the seventh
month following Officer’s separation from service (subject to exceptions
specified in the final regulations under Code Section 409A),
and
(ii) if
the
payment or distribution is payable over time, the amount of such non-exempt
deferred compensation that would otherwise be payable during the six-month
period immediately following Officer’s separation from service will be
accumulated and Officer’s right to receive payment or distribution of such
accumulated amount will be delayed until the earlier of Officer’s death or the
first day of the seventh month following Officer’s separation from service
(subject to exceptions specified in the final regulations under Code Section
409A),
whereupon the accumulated amount will be paid or distributed to Officer, without
interest, and the normal payment or distribution schedule for any remaining
payments or distributions will resume.
For
purposes of this Agreement, the term “Specified Employee” has the meaning given
such term in Code Section 409A and the final regulations thereunder,
provided,
however,
that,
as permitted in such final regulations, the Company’s Specified Employees and
its application of the six-month delay rule of Code Section 409A(a)(2)(B)(i)
shall be
determined in accordance with rules adopted by the Board of Directors, which
shall be applied consistently with respect to all nonqualified deferred
compensation arrangements of the Company, including this Agreement.
IN
WITNESS WHEREOF, the parties hereto have executed, or have caused this Agreement
to be executed by their duly authorized officer, as the case may be, all as
of
the day and year written below.
FULL
NAME
___________________________________ Date:
_________________________
NAME
OF
SUBSIDIARY
By:
________________________________ Date:
_________________________
NAME
TITLE
