Exhibit 10.1
SEVERANCE AND RELEASE AGREEMENT
PARTIES
The parties to this Severance and Release Agreement ("Agreement") are Sierra
Pacific Resources and its affiliates Nevada Power Company and Sierra Pacific
Power Company (collectively referred to as "Company"), and Xxxx X. Xxxxxx
("Employee").
BASIS
(a) Employee currently holds the position of President, Nevada Power
Company, with Company. This Agreement is not based upon any change in
control or in the ownership of a substantial portion of the Company's
assets.
(b) Employee has had access to Confidential Information, as hereinafter
defined. Employee has occupied a position of trust and confidence with
respect to such Confidential Information.
(c) This Agreement is intended as a final settlement of any and all claims,
known or unknown, that Employee may have against Company arising out of
or related to his employment with Company or the termination of that
employment, including, but not limited to all rights Employee may have
pursuant to the Employment Agreement as defined below. This Agreement
provides Employee with benefits that exceed the benefits contained in
the Employment Agreement and is adequate consideration for this
Agreement.
TERMS OF AGREEMENT
1. DEFINED TERMS
1.1 "CONFIDENTIAL INFORMATION" means any plan, specification,
pattern, procedure, profile, design, device, list,
compilation, data, or information relating to the present or
planned business of Company which has not been released
publicly by authorized representatives of Company, or which is
not common to industry practice, including, but not limited to
trade secrets as defined in NRS 600A.010, et seq. Confidential
Information may include inventions; marketing and sales plans
or programs; customer and supplier information; financial
data; purchasing, pricing, or supply information; product
engineering information; technological know-how; designs,
plans or specifications regarding products and materials;
manufacturing processes and techniques; regulatory approval
strategies; computer programs, data, formulae and
compositions; service techniques and protocols; and new
product
strategies, plans and designs. Confidential Information also
includes information that if disclosed, could negatively
affect the Company's reputation and it's relationship with
business, governmental agencies and customers. Confidential
Information includes all information received by Company under
an obligation of confidentiality to a third party.
1.2 "EMPLOYMENT AGREEMENT" means all previous agreements, express
or implied, between Company and Employee, including change in
control or letter agreements.
1.3 "STIP" means short-term cash incentive payment.
1.4 "SERP" means Supplemental Executive Retirement Plan.
2. TERMINATION OF EMPLOYMENT
2.1 Company shall terminate Employee's employment with Company
effective May 31, 2002 ("Termination Date"). Any accrued and
unused Paid Time Off will be included in Employee's final
paycheck. Employee agrees not to seek re-employment with
Company or any of its subsidiaries or affiliates.
3. BENEFITS TO EMPLOYEE
3.1 Company shall pay to Employee severance in the amount of
$450,000.00 ("Severance"), payable, on the condition that
Employee is in full compliance with the confidentiality and
non-disparagement provisions of this Agreement, one-half on
the date of separation, one-quarter 90 days after the date of
separation, and one-quarter on the first anniversary of the
date of separation.. The Severance shall be subject to
withholding, deductions, assessments and taxes, if applicable.
3.2 Commencing on the Termination Date, the Company shall continue
to cover Employee and Employee's dependants as defined in the
Health Plan under its medical, prescriptive drugs, dental,
vision and EAP employee welfare benefit plans ("Health Plans")
to the same extent as Employee and his dependents are covered
immediately prior to the Termination Date until May 31, 2005,
or until Employee becomes employed with an entity which
provides health and medical benefits, whichever is earlier.
Company shall pay all costs incurred in providing the
above-described coverage for Employee. Employee shall be
eligible to participate in open enrollment and is subject to
any amendments or changes that would apply to other covered
employees. If Employee becomes eligible for similar coverage
through another employer or disability, then Employee shall
notify Company of such coverage and
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Company shall be entitled to terminate coverage under this
Agreement and/or offer Employee COBRA in the form and manner
required by law.
3.3 On the Termination Date, Employee shall be paid in cash the
amount of his vested benefit in the SERP calculated to include
new provisions in the Plan, which include in the SERP payment
of the 2000 and 2001 STIPs, as though said STIPs had been
paid, and will thereafter have no SERP benefits.
3.4 Because your employment is terminated for reasons other than
cause, retirement, death or disability, you will have rights
with respect to your Non-Qualified Stock Option grants as
follows, in accordance with the grant letter you received. Any
vested shares are exercisable within three months of the
Termination Date. Shares which are not vested as of the
Termination Date shall immediately terminate and shall be
forfeited to the Company.
3.5 Employee is covered under Supplemental Executive Life
insurance. Employee shall continue to be covered under such
insurance until May 31, 2005, or until Employee becomes
reemployed with an entity that provides life insurance
benefits, whichever is earlier, at which time Employee shall
have the option of converting such insurance in strict
accordance with the terms of such policy and paying the
premiums thereon.
3.6 If ever in the future any of the Company's officers are paid a
STIP for the year 2000 ("2000 STIP"), then the Employee shall
be paid the 2000 STIP at the same time and in the form and
manner paid to the other officer(s). The 2000 STIP shall be
subject to withholding, deductions, assessments, and taxes, if
applicable. If ever any of the Company's officers are paid a
STIP for the year 2001 ("2001 STIP"), then the Employee shall
be paid the 2001 STIP at the same time and in the form and
manner paid to the other officer(s). The 2001 STIP shall be
subject to withholding, deductions, assessments, and taxes, if
applicable. If ever any of the Company's officers are paid a
STIP for the year 2002 ("2002 STIP"), then the Employee shall
be paid a prorated portion of the 2002 STIP at the same time
and in the form and manner paid to the other officer(s).
Employee's prorated portion of the 2002 STIP shall be
calculated by dividing the number of hours credited to
Employee during 2002 (1/1/02 through Termination Date) by
2080, and Employee shall be entitled to receive the resulting
percentage of the 2002 STIP. The 2002 STIP shall be subject to
withholding, deductions, assessments, and taxes, if
applicable. 2000 and 2001 STIPs, if ever paid, shall be in the
amounts used in calculating the STIP adjustments to the SERP
in 3.3 unless such different amount(s) are reflective of like
adjustments to other officer(s)' STIPs.
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3.7 If requested by Employee, Company shall provide Employee with
outplacement assistance. The Company shall determine who will
provide the outplacement assistance and the nature and extent
of such assistance. Employee shall have 18 months after the
Termination Date to begin receiving such assistance.
3.8 Company has granted Employee a Special Restricted Stock Grant
of 4,000 shares of Company stock in June 2001. Employee has
fully vested in said stock and Company shall issue such stock
to Employee within 30 days of the Termination Date. Employee
may elect to receive a combination of stock and cash to
provide for tax liabilities.
3.9 Employee's June 2001 agreement relating to real property owned
at Eagle Lake, California, shall continue for a period of 18
months following the date of separation in order to compensate
and reimburse Employee for the cost of sale and closing
expenses relating to such property should such sale occur.
4. CONFIDENTIALITY
4.1 Employee shall preserve as confidential all Confidential
Information. Employee shall not use Confidential Information
for the benefit of Employee or any third party. Employee shall
not disclose to others any Confidential Information or any
copy or notes made from any Item embodying Confidential
Information. If Employee is required to disclose Confidential
Information pursuant to a valid order of a court or other
governmental entity or any political subdivision thereof; then
Employee shall first give notice to Company so that Company
shall have a reasonable opportunity to interpose an objection
or obtain a protective order requiring that the Confidential
Information and/or documents so disclosed be used only for the
purposes for which the order was issued. The confidentiality
provisions herein shall expire 36 months from the date of this
agreement.
5. MUTUAL NON-DISPARAGEMENT
5.1 Employee agrees to not make disparaging statements about the
Company or its officers and/or directors to third parties such
as the news media, governmental officials, or governmental
agencies. This section does not apply to testimony made under
oath before a court or governmental entity. This section does
not apply to statements of opinion made to family and friends
so long as they are not news media, governmental officials, or
governmental agencies.
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5.2 Company, its officers and/or directors agree to not make
disparaging statements about Employee to third parties,
including employees. This section does not apply to testimony
made under oath before a court or governmental entity.
6. NON-COMPETITION
6.1. Employee agrees that the restrictions set forth in paragraphs
7.1 and 7.2 are fair and reasonable and are reasonably
required for the protection of the interests of the Company.
Employee agrees that compliance with the provisions of
paragraphs 7.1 and 7.2 will not cause Employee undue hardship
nor unreasonably interfere with Employee's ability to earn a
livelihood.
7. RELEASE
7.1 Employee hereby waives and releases Company and its officers,
directors, agents, and employees (collectively referred to as
"Company Agents") from any claims, rights, contracts or causes
of action existing or accrued as of the date this Agreement is
signed that Employee may have against Company or Company
Agents (collectively referred to as "Claims") which arise out
of or are related to Employee's employment with Company
(collectively referred to as "Release") or the termination of
said employment. This Release includes, but is not limited to,
the following:
7.1.1 Claims which are known or unknown at the time of the
signing of this Agreement;
7.1.2 Claims which arise under any state or federal laws,
including, but not limited to, the Civil Rights Act
of 1964, as amended, and the Age Discrimination in
Employment Act of 1967, as amended, which have arisen
on or before the date of execution of this Agreement;
and
7.1.3 Claims based upon any contract of employment,
including but not limited to, the Change in Control
Agreement, except as set forth herein.
7.2 Employee shall not commence any action against Company or
Company Agents in violation of this Release.
7.3 Employee does not waive any Claim which arises after the
effective date of this Agreement.
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7.4 Employee further expressly acknowledges and agrees that:
7.4.1 In consideration for this Waiver, Employee shall
receive compensation beyond that which Employee was
otherwise entitled to receive before entering into
this Agreement;
7.4.2 Employee has been advised to consult with an attorney
before signing this Agreement;
7.4.3 This Agreement is being offered only to Employee at
this time.
7.4.4 Employee was given a copy of the Agreement on or
about May 10, 2002. Employee was informed that
Employee had 21 days within which to consider the
Agreement. If Employee fails to execute this
Agreement within said 21-day period, then the terms
and conditions contained in this Agreement are
automatically withdrawn without further action or
notice by Company.
7.4.5 Employee was informed and understands that Employee
has seven days following the date Employee executes
this Agreement in which to revoke this Agreement. Any
revocation of the Agreement must be in writing and
delivered to the Acting Vice-President of Human
Resources of Company during the revocation period.
This Agreement will become effective and enforceable
seven days following execution by Employee, unless it
is revoked during the seven-day period.
8. MISCELLANEOUS PROVISIONS
8.1. AGREEMENT IS CONFIDENTIAL: Unless and until the terms of this
Agreement, and the amount of any payment eligible to be paid
or actually paid under this Agreement, are disclosed in
writing to the public by Company pursuant to any applicable
legal duty to disclose such information, it shall be a
condition of eligibility to receive or retain any payment
pursuant to this Agreement that Employee hold the terms of
this Agreement and the amount of any payment hereunder in
strict confidence. Employee may disclose such information on a
confidential basis to Employee's family and to any financial
counselor, tax advisor or legal counsel retained by Employee.
8.2 ASSIGNMENT BY COMPANY: The obligations of Company hereunder
shall be the obligations of any and all successors and assigns
of Company. Company may assign this Agreement without
Employee's consent to any affiliate or subsidiary of Company,
provided that such assignment does not relive the Company's
obligations hereunder. Company may assign this Agreement
without Employee's consent to any company that
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acquires all or substantially all of the stock or assets of
Company, or into which or with which Company is merged or
consolidated. The Employee may not assign the Agreement, and
no person other than Employee or Employee's estate may enforce
the rights of Employee under this Agreement.
8.3 Mutual WAIVER: The waiver by Employee or Company of a
violation respectively by Company or by Employee of any
provision of this Agreement shall not be construed as a waiver
of any subsequent violation.
8.4 SEVERABILITY: The provisions of this Agreement shall be
severable, and in the event that any portion or provision of
it is found by any court to be unenforceable, in whole or in
part, the remainder of this Agreement shall nevertheless be
enforceable and binding on the parties. In the event that any
restriction set forth in this Agreement shall be declared by a
court of competent jurisdiction to exceed the maximum
restriction such court deems reasonable and enforceable, the
restriction deemed reasonable and enforceable by the court
shall become and thereafter be the maximum restriction
hereunder.
8.5 REVIEW OF AGREEMENT: Employee acknowledges that Employee had
sufficient opportunity to review this Agreement with an
attorney or, if Employee did not do so, it is because Employee
read and understands this Agreement and did not believe that
legal advice was necessary. Employee agrees that the
restrictions contained in this Agreement are fair and
appropriate under the circumstances.
8.6 DISPUTE RESOLUTION: Any dispute between the parties which is
covered by, arises out of, or is based upon this Agreement
shall be settled by final and binding arbitration. Any award
or determination rendered by the arbitrator may be entered as
a judgment in any court having jurisdiction thereof. The
arbitration is subject to the following:
8.6.1 The arbitration shall be administered by the American
Arbitration Association ("AAA") in accordance with
its Employment Dispute Resolution Rules ("Rules") in
effect at the time of the arbitration.
8.6.2 The arbitration shall be heard by one neutral
arbitrator. The arbitrator shall be an attorney
admitted to the practice of law in at least one
state.
8.6.3 The arbitrator shall have the authority to award any
remedy or relief that a state or federal court having
jurisdiction over the persons and subject matter is
authorized to grant.
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8.6.4 The Company shall pay all of the costs and/or fees
charged by AAA and the arbitrator. The arbitrator
shall have the authority to award attorney's fees and
costs pursuant to sub-section 8.6.3 above.
8.7 JURISDICTION: This Agreement shall be construed under the laws
of the State of Nevada except where Federal laws are
applicable. Venue for any arbitration or action to enforce the
arbitration provisions of this Agreement shall be in the State
of Nevada.
8.8 EFFECTIVE DATE: This Agreement shall become effective on the
date it is signed by the Employee.
8.9 FINAL AGREEMENT: This Agreement supercedes all prior
understandings, statements or agreements concerning the
subject matter of this Agreement, including the Employment
Agreement or Change in Control Agreement. Any amendment to
this Agreement shall be in writing and signed by both parties.
This Agreement contains all of the terms and conditions agreed
upon by the parties. There are no understandings or agreements
which conflict or modify the terms of this Agreement. Company
has made no representations or promises upon which Employee
relies in signing this Agreement except the terms set forth
herein. Company has made no representations upon which
Employee relies concerning the tax characteristics or status
of the benefits described in this Agreement.
COMPANY XXXX X. XXXXXX
By:
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Date: May __, 2002 Date: May __, 2002
MAR-SEVAGRMT02
