SEPARATION AGREEMENT
THIS SEPARATION AGREEMENT (the "Separation Agreement") is entered into
by XXX XXXXXXXX ("Xx. Xxxxxxxx") and PUGET SOUND ENERGY, INC. ("PSE"or
"Company").
RECITALS
A. Xx. Xxxxxxxx has been employed by PSE as Vice President External Affairs
pursuant to an Agreement dated March 20, 1998 (the "Employment Agreement").
B. Having had a productive employment relationship and because of Xx.
Xxxxxxxx'x desire to engage in a consulting business, the parties now wish to
end their employment relationship on amicable grounds and mutually agreeable
terms. To accomplish this change in a positive manner, Xx. Xxxxxxxx and PSE
further wish to clarify and resolve all issues relating to Xx. Xxxxxxxx'x
employment with PSE.
AGREEMENTS
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises contained below, good and adequate consideration for which is
mutually acknowledged, PSE and Xx. Xxxxxxxx agree as follows:
1. CONCLUSION OF EMPLOYMENT RELATIONSHIP
Xx. Xxxxxxxx'x employment as vice president, external affairs, will end
effective December 31, 1999. PSE will immediately take all steps to remove Xx.
Xxxxxxxx as an officer and/or signatory from all relevant places, and will take
any requisite action to inform appropriate government and/or regulatory entities
who require notice of such change. The parties agree that they will arrive at a
mutually satisfactory statement for use in describing this transition to others.
2. SEVERANCE BENEFIT
PSE agrees that it will provide Xx. Xxxxxxxx with a benefit in the form
of a severance payment representing salary and health insurance benefit premiums
for the period through September 30, 2000, at the same base salary level he was
receiving in December 1999 and for health insurance benefits obtained under
COBRA. The severance payment shall be made in one lump sum payment, less
required withholding, following the effective date of this Agreement and as soon
as administratively possible after January 1, 2000. PSE agrees that, as of
December 31, 1999, Xx. Xxxxxxxx will and shall have a vested right to
thirty-five per cent (35%) of a normal full retirement benefit at age 62 under
the PSE Supplemental Executive Retirement Plan effective June 1, 1997 and
amended through February 24, 1999 (the "SERP"). PSE further agrees that Xx.
Xxxxxxxx may keep as his own property the personal computer and laptop computer
that have been assigned to him by PSE.
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3. ADDITIONAL PAYMENTS
Following the effective date of this Agreement and at the time that
other officers of the Company receive their similar Incentive Award, PSE agrees
to pay Xx. Xxxxxxxx'x 1999 Annual Incentive Plan award, as determined under the
Annual Incentive Plan goals for 1999 by the Compensation Committee of the Board
of Directors in the ordinary course. Following the effective date of this
Agreement and as soon as is administratively possible, PSE agrees to pay Xx.
Xxxxxxxx $45,432, less required withholding, representing payment for the pro
rata portion (based on the portion of each award cycle elapsed as of December
31, 1999, and the performance of the Company against the target benchmarks
during the period ended October 31, 1999) of Xx. Xxxxxxxx'x four outstanding
target awards under the PSE Long Term Incentive Plan (the "LTIP"). Xx. Xxxxxxxx
shall be paid his 1999 base salary, less required withholding, in the normal
course for the period ended December 31, 1999.
4. GENERAL RELEASE OF CLAIMS
Subject to the exclusion herein, PSE and Xx. Xxxxxxxx expressly waive
any claims against one another and release one another (including PSE
subsidiaries and affiliates and each of their respective officers, directors,
stockholders, managers, employees, agents and representatives) from any claims
that either of them may have in any way connected with Xx. Xxxxxxxx'x employment
with PSE and the termination thereof. It is understood that this release
includes, but is not limited to, any claims for wages, bonuses, employment
benefits, or damages of any kind whatsoever, including without limitation any
claims arising out of any contracts, expressed or implied, any covenant of good
faith and fair dealing, expressed or implied, any theory of wrongful
constructive discharge, or any federal, state or other governmental statute or
ordinance, including, without limitation, Title VII of the Civil Rights Act of
1964, the federal Age Discrimination in Employment Act, the Americans with
Disabilities Act, the Family and Medical Leave Act, the Washington Law Against
Discrimination, or any other legal limitation on the employment relationship.
Excluded from this release are claims Xx. Xxxxxxxx may have related to his SERP
or LTIP under the official plan documents adopted by the Board of Directors or
Board Compensation Committee for those plans as such documents exist on the date
of this Agreement, his 1999 bonus as determined in accordance with the PSE
Annual Incentive Plan, or other claims that an employee may have with regard to
vested benefits under Employee Retirement Income Security Act, claims under the
Washington Industrial Insurance Act or any other claim which may not be released
in accordance with law.
The parties represent and warrant that they have not filed any
complaints, charges or lawsuits against one another with any governmental agency
or any court, and agrees that they will not initiate, assist or encourage any
such actions.
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Nothing in this waiver and release shall preclude either party from
enforcing his/its rights hereunder.
5. REVIEW AND REVOCATION PERIOD; EFFECTIVE DATE
Xx. Xxxxxxxx and PSE agree that he has had up to 21 days to review this
Agreement and consult legal counsel before executing the Agreement, during which
time the proposed terms of this Agreement have not been amended, modified or
revoked by PSE. Xx. Xxxxxxxx may revoke this Agreement after executing it if he
so chooses by providing notice of his decision to revoke the Agreement to PSE
(Attn: Xxxxxxx Xxxxxx) within seven days following the date he signs this
Agreement. This Agreement shall become effective and enforceable upon expiration
of this seven-day revocation period.
6. CONFIDENTIAL INFORMATION; NONDISPARAGEMENT
6.1 Safeguarding of Confidential Information
Xx. Xxxxxxxx acknowledges that in the course of his employment as an
officer of PSE he has obtained access to confidential information that relates
to the business and affairs of PSE, including but not limited to PSE's business
plans and strategies, financial plans, legislative and governmental affairs
plans and strategies, regulatory plans and strategies, budgets and forecasts,
legal and regulatory affairs, competitive position, and other similar matters.
Xx. Xxxxxxxx agrees that he shall safeguard all confidential information
regarding PSE, shall not disclose it to any other party and shall not use it for
any purpose other than as directed by PSE.
6.2 Nondisparagement
Xx. Xxxxxxxx and PSE and its officers and directors further agree that
they will not make disparaging or derogatory statements about one another,
affiliates, officers, managers, employees and/or agents, or knowingly engage in
conduct detrimental to one another's business or reputation.
7. ARBITRATION OF DISPUTES
Any dispute between PSE and Xx. Xxxxxxxx with respect to any of the
matters set forth herein shall be submitted to binding arbitration in city of
Seattle, state of Washington. Either PSE or Xx. Xxxxxxxx may commence the
arbitration by delivery of a written notice to the other, describing the issue
in dispute and its/his position with regard to the issue. If PSE and Xx.
Xxxxxxxx are unable to agree on an arbitrator within 30 days following delivery
of such notice, the arbitrator shall be selected by a Judge of the Superior
Court of the State of Washington for King County upon three days' notice.
Discovery shall be allowed in connection with any such arbitration to the same
extent permitted by the Washington Rules of Civil Procedure but either party may
petition the arbitrator to limit the scope of such discovery, in which event the
arbitrator shall determine the extent of discovery allowable in connection with
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the dispute in question. Except as otherwise provided herein, the arbitration
shall be conducted in accordance with the rules of the American Arbitration
Association then in effect for expedited proceedings. The award of the
arbitrator shall be final and binding, and judgment upon an award may be entered
in any court of competent jurisdiction. The arbitrator shall hold a hearing, at
which the parties may present evidence and argument, within 30 days of his or
her appointment, and shall issue an award within 15 days of the close of the
hearing.
8. COVENANT OF GOOD FAITH
The parties agree that this Agreement contains an implied covenant of
good faith and fair dealing.
9. SEVERABILITY
The provisions of this Agreement are severable, and if any part of it
is found to be unlawful or unenforceable, the other provisions of this Agreement
shall remain fully valid and enforceable to the maximum extent consistent with
applicable law.
10. KNOWING AND VOLUNTARY AGREEMENT
Xx. Xxxxxxxx represents and agrees that he has read this Agreement,
understands its terms and the fact that it releases any claims he might have
against PSE and its agents, understands that he has the right to consult counsel
of his choice and has done so, and enters into this Agreement without duress or
coercion from any source. Xx. Xxxxxxxx acknowledges and that PSE has provided
him reasonable time to consider its offer and to seek legal assistance. Xx.
Xxxxxxxx has consulted an attorney of his choice and understands that he is
waiving all potential claims against PSE, other than those reserved herein.
11. ENTIRE AGREEMENT
This Agreement sets forth the entire understanding of the parties with
regard to the termination of Xx. Xxxxxxxx'x employment with PSE, and supercedes
the Employment Agreement and any prior or contemporaneous agreements and
understandings, written or oral, express or implied, pertaining to the
employment relationship between Xx. Xxxxxxxx and PSE. The headings and
subheadings in this Agreement are for convenience of reference and are not
intended to add substance to the terms of the Agreement. The parties expressly
acknowledge that, except as expressly provided herein with respect to Xx.
Xxxxxxxx'x SERP benefits vesting and with respect to payout of LTIP benefits (in
the case of both of which this Agreement provides benefits to Xx. Xxxxxxxx in
excess of those set forth in the SERP and LTIP official Plan Documents), nothing
herein supercedes, modifies, or extinguishes any official Plan Document adopted
by the PSE Board of Directors or Compensation Committee relating to the rights
and obligations of the parties under the LTIP or the SERP. The parties agree and
acknowledge that in order to be enforceable, any modifications, changes,
additions or deletions to this Agreement must be in writing and signed by both
parties.
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12. AUTHORITY TO ENTER AGREEMENT
PSE and Xx. Xxxxxxxx agree and warrant that PSE for itself, and Xx.
Xxxxxxxx for himself, have the authority to enter into this Separation
Agreement. The individual signing this Separation Agreement on behalf of PSE
warrants and represents that he is duly authorized to do so, has the legal
capacity to do so, and that all corporate actions necessary to authorize the
execution, delivery and performance of this Separation Agreement have been duly
and validly taken prior to the date hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
dates indicated below.
Puget Sound Energy, Inc. Xxx Xxxxxxxx
By: Xxxxxxx X. Xxxxxx Xxx Xxxxxxxx
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Its: President & Chief Dated:12/29/99
Executive Officer
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