Exhibit 10
AMENDMENT TO EMPLOYMENT AGREEMENT
Between
PROGRESS ENERGY SERVICE COMPANY, LLC AND XXXXX X. XXXXX III
This AMENDMENT TO EMPLOYMENT AGREEMENT ("Amendment") dated as of the
___5th____ day of August, 2005, between Progress Energy Service Company, LLC
("PESC"), formerly known as CP&L Service Company, and Xxxxx X. Xxxxx III
("Xxxxx"), serves to amend the Employment Agreement Between CP&L Service
Company, LLC and Xxxxx X. Xxxxx III, dated August 1, 2000 ("Employment
Agreement") for the time period stated herein.
RECITAL
WHEREAS, PESC recognizes that, in March of 2005, Xxxxx was assigned
increased responsibilities in his role as President and Chief Executive Officer
of PESC and PESC wishes to provide Xxxxx with an incentive to remain in the
employ of PESC until April 1, 2008.
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 is hereby acknowledged and accepted, the parties hereto
hereby agree as follows:
1. Incentive Payments. Subject to the conditions set forth in paragraph 2
of this Amendment and contained herein, PESC agrees to the following:
a. For the plan years 2005, 2006 and 2007, PESC will increase Xxxxx'x
target award percentage for performance shares granted pursuant to the
Performance Share Sub-Plan ("PSSP") of the Progress Energy 2002 Equity
Incentive Plan. The increased target is 165% of Xxxxx'x base salary for
each respective year.
b. PESC agrees to pay for restricted stock awarded to Xxxxx in the
years 2005, 2006 and 2007 under an increased restricted stock award
percentage of 85% of Xxxxx'x base salary during each respective year.
c. PESC acknowledges that Xxxxx will continue to participate in the
Amended Management Incentive Compensation Plan of Progress Energy, Inc., as
amended January 1, 2005 ("MICP"), a cash bonus plan, at the
President/Executive Vice President target award level, and PESC further
acknowledges that, at the time of each annual review of MICP awards for the
years 2005, 2006 and 2007, the Chief Executive Officer of Progress Energy,
Inc. will consider exercising his discretion under the plan to increase the
awards to Xxxxx. If the Chief Executive Officer determines in his
discretion that an increase in the MICP award is justified by the
performance of Xxxxx, the amount of the award will be based upon a target
award equal to 63% of the base salary of Xxxxx for the year.
d. PESC agrees that should Xxxxx continuously remain in the employ of
PESC or any other subsidiary of Progress Energy, Inc. until April 1, 2008,
or should Xxxxx'x employment terminate, at any time, under paragraphs 6(a),
6(e) or 6(f) of the Employment Agreement, then, at PESC's option, either
Xxxxx'x PSSP grants for the 2006 and 2007 plan years and/or any restricted
stock awards granted to Xxxxx in 2005, 2006 and 2007 will vest immediately
upon his employment termination date, provided the Progress Energy, Inc.
2002 Equity Incentive Plan (Amended and Restated Effective July 10, 2002)
and its exhibits permit such vesting, or PESC will pay Xxxxx the equivalent
cash value of the PSSP grants and/or restricted stock awards as of that
date. The number of shares to be vested under the PSSP upon the termination
of Xxxxx, if any, will be subject to the adjustment provided in the event
of early vesting under the PSSP.
2. Limitations on Acceleration of Vesting Schedule and/or Equivalent Cash
Payment. Should Xxxxx'x employment terminate prior to April 1, 2008 under
paragraphs 6(b), 6(c) or 6(d) of the Employment Agreement, Xxxxx will not be
entitled to the accelerated vesting schedules and/or equivalent cash payment
described in paragraph 1(d) of this Amendment.
3. Employment Relationship. Nothing in this Amendment shall change the "at
will" employment relationship between Xxxxx and PESC. Xxxxx acknowledges that
this Amendment does not constitute a contract for employment for any specific
term or fixed period of time and that PESC retains the right to terminate the
employment of Xxxxx at any time, with or without cause, subject to PESC's
obligation to provide benefits hereunder and under the Employment Agreement.
4. Confidentiality. The terms and provisions of this Amendment are
confidential and shall not be disclosed by Xxxxx to third parties except as
required by law. Notwithstanding the above, Xxxxx may reveal the terms and
provisions of the Amendment to immediate family members, to legal counsel or to
a financial advisor provided that such persons agree to maintain the
confidentiality of this Amendment.
5. Governing Law. This Amendment will be governed by North Carolina law to
the extent not preempted by federal law.
6. Term of Amendment. This Amendment will terminate on the earlier of
Xxxxx'x termination of employment prior to April 1, 2008, or pay out of all
vested PSSP grants and/or vested restricted stock awards.
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7. Severability. If any provision of this Amendment is deemed by any law,
regulation, ordinance or order by any court of competent jurisdiction to be
unlawful, invalid, void or otherwise unenforceable, the rights and obligations
of the Parties shall be reduced or abated only to the extent required to remove
or cure such illegal or unenforceable portion, so long as the Amendment is not
affected in a manner or to the extent which would render it economically or
materially infeasible to either Party.
8. Effect of Amendment on Employment Agreement. With the exception of the
payments, terms and time periods discussed in this Amendment, payment of the
Incentive Payments and the terms of this Amendment do not otherwise modify the
Employment Agreement.
9. Entire Agreement. This Amendment shall constitute the entire
understanding between the Parties relating to the subject matter hereof.
10. Additional Amendments. No statements or agreements, oral or written,
made prior to the date hereof, shall vary or modify the written terms set forth
herein, and neither Party shall claim any additional amendment, modification or
release from any provision hereof by reason of a course of action or mutual
agreement unless such agreement is in writing, signed by both Parties and
specifically states it is an additional amendment to this Amendment.
IN WITNESS WHEREOF the parties have entered into this Amendment.
Progress Energy Service Company, LLC Xxxxx X. Xxxxx III
By: /s/ Xxxxx X. Xxxxx III By: /s/ Xxxxxx X. XxXxxxx
------------------------ ----------------------
Xxxxx X. Xxxxx III Xxxxxx X. XxXxxxx
President and CEO, Progress Energy Manager of Progress Energy
Company LLC Service Company, LLC
Chairman and CEO, Progress
Energy, Inc.
Dated: August 4, 2005 Dated: August 5, 2005
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