SEPARATION AGREEMENT
This Separation Agreement (“Agreement”)
is made by and between Xxxx X. Xxxxx (the “Executive”) and Pepco Holdings, Inc
and its subsidiaries and affiliates (collectively, the “Company”).
WHEREAS, Executive is an at-will
employee of the Company and serves as the Senior Vice President and Chief
Financial Officer Pepco Holdings, Inc. and also serves as an officer and/or
director of certain of its subsidiaries; and
WHEREAS, the Company and Executive have
mutually agreed to the termination of the employment of Executive and wish to
set forth herein the terms and conditions of such termination.
NOW, THEREFORE, in consideration of the
mutual covenants and agreements herein contained, and intending to be legally
bound, the Company and Executive agree as follows:
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1.
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Termination
of Employment and Resignation as a
Director
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Executive acknowledges and agrees that
his employment by the Company will cease on June 12, 2009 (the “Termination
Date”). As of the Termination Date, (i) Executive shall be deemed to
have resigned as director of each Company subsidiary of which he is a director
on the Termination Date and (ii) Executive shall have no further duties or
responsibilities to the Company, except as otherwise provided in this Agreement,
and shall have no authority to act for or on behalf of the Company.
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2.
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Severance
and Post-Termination Benefits
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(a) Executive
acknowledges and agrees that, except as otherwise set forth in this Section 2,
Executive shall not be entitled to receive any compensation or benefits after
the Termination Date or by reason of the termination of his employment and
service as a director, except for (i) accrued base salary through the
Termination Date, (ii) vested benefits under any savings, pension or deferred
compensation plan in which Executive participates accrued as of the Termination
Date, and (iii) a payment in the amount of $29,884.62 as compensation for three
weeks of accrued vacation time as of the Termination Date.
(b) On
the condition that, no earlier than on the Termination Date and no later than 21
days after the Termination Date, Executive executes and delivers a General
Release of Claims, substantially in the form attached hereto as Attachment A
(the “Release”), and does not revoke the Release within the revocation period
specified therein, the Company shall provide to Executive the following payments
and benefits (“Severance Benefits”):
i. a
severance payment in the amount of $828,800;
ii. reimbursement
by the Company of monthly premiums incurred by Executive for COBRA continuation
health insurance care coverage elected by Executive (and/or his beneficiaries)
covering a period beginning on the Termination Date and ending on the
earlier
of (i)
the date that is 18 months following the Termination Date and (ii) the date on
which Executive obtains health insurance coverage from another
employer. Each such payment shall be considered to be a separate
payment for purposes of section 409A of the Internal Revenue Code;
iii. reimbursement
in the cumulative amount of $50,000 for (i) any legal fees, costs and expenses
incurred in connection with the negotiation of, and entry into, this Agreement,
and (ii) the costs of outplacement or relocation services incurred by Executive
on or before December 31, 2009; and
iv. reimbursement
for the fees, costs and expenses of fiscal planning and tax preparation services
for calendar years 2009 and 2010 in an amount not to exceed
$15,000.
(c) Executive
acknowledges and agrees (i) that the Severance Benefits are being provided in
consideration of the releases, waivers and agreements of Executive set forth in
this Agreement and the Release and (ii) that upon any material breach by
Executive of this Agreement or the Release that causes actual injury to the
Company, the Company may require that such Severance Benefits (net of any taxes)
shall be forfeited by Executive or, if already paid to Executive, shall be
repaid by Executive to the Company, as liquidated damages for such
breach.
(d) The
payment to Executive under clause (i) of paragraph (b) of this Section 2 shall
be due and payable on the third business day following the last day of the
seven-day revocation period referred to in the Release.
(e) The
payments to Executive under clause (ii) of paragraph (b) of this Section 2 shall
be subject to the submission by Executive no later than 30 days after the
monthly premium is paid by Executive of such evidence as the Company may
reasonably request documenting the payment by the by
Executive. Reimbursement shall be made within ten business days after
the presentation by Executive of the required documentation.
(f) The
payments to Executive under clauses (iii) and (iv) of paragraph (b) of this
Section 2 shall be subject to the submission by Executive to the Company of
receipts, invoices or other evidence documenting such fees, costs or expenses no
later than 60 business days after they are incurred by Executive and in no event
later than May 15, 2011. Reimbursement shall be made within 20
business days after the presentation by Executive of the required
documentation.
(g) All
payments to Executive under this Section 2 are subject to any applicable
federal, state, District of Columbia and local tax withholding
requirements.
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Reimbursement
Of Business Expenses
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Executive shall submit all requests for
reimbursement of business expenses incurred by Executive by no later than 60
business days after the Termination Date. The Company will process
such requests in the ordinary course consistent with it policies and procedures
in effect
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immediately prior to the Termination Date, but in no event later than
20 business days after the receipt by the Company of all required
documentation.
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4.
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Return
Of Company Property and Passwords
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Executive shall return to the Company,
no later than the Termination Date, all Company property in the possession or
control of Executive, including without limitation any company car, computer,
cell phone, pager or other electronic equipment, and any Company credit card,
software, key, access device, book, record and policy and procedure
manual.
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5.
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Non-Disparagement
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(a) For a period of five years
following the Termination Date, Executive agrees (i) not to make any
disparaging, negative or defamatory comments about the Company, its businesses
or its directors, officers and employees, whether written, oral or electronic,
(ii) not to make any public or private statements including, but not limited to,
press releases, statements to journalists, employees, prospective employers,
interviews, speeches or conversations, that disparage the Company or any of its
businesses, or (iii) in addition to the confidentiality requirements set forth
in this Agreement and those imposed by law, not to provide any third party,
directly or indirectly, with any documents, papers, recordings, e-mail, internet
postings, or other written or recorded communications referring or relating to
the Company or its businesses that would support, directly or indirectly, any
disparaging, negative or defamatory
statement. Notwithstanding the foregoing, nothing in this Agreement
shall prevent or restrict Executive from disclosing any information required by
law, regulation, legal or administrative process.
(b) For a period of five years
following the Termination Date, the Company agrees that neither it nor any of
its directors or officers will (i) make any disparaging, negative or defamatory
comments about Executive or his businesses, whether written, oral or electronic,
(ii) make any public or private statements including, but not limited to, press
releases, statements to journalists, employees, prospective employers,
interviews, speeches or conversations, that disparage Executive, or (iii)
provide any third party, directly or indirectly, with any documents, papers,
recordings, e-mail, internet postings, or other written or recorded
communications referring or relating to Executive that would support, directly
or indirectly, any disparaging, negative or defamatory
statement. Notwithstanding the foregoing, nothing in this Agreement
shall prevent or restrict the Company or its directors and officers from
disclosing any information required by law, regulation, legal or administrative
process.
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6.
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Confidential
Information And Trade Secrets
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Executive agrees that at all times
following the Termination Date he shall keep secret and retain in strictest
confidence, and shall not use or disclose, directly or indirectly, any
confidential information, trade secrets or proprietary data of the Company,
including without limitation, any data, information, ideas, knowledge and papers
pertaining to the customers, prospective customers, business
methods, business plans, financial data and financial projections of the
Company; provided, however, that nothing in this Agreement shall prevent
Executive from disclosing information (i) that becomes publicly available or
(ii) in response to any subpoena or court order.
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7.
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Non-Solicitation
Of Employees
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Executive agrees that, for a period of
one year from the date of this Agreement, he will not solicit for employment any
employee of the Company or, directly or indirectly, attempt to cause or
influence any employee to terminate or modify his or her employment with the
Company.
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8.
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Company
Release
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The Company hereby irrevocably and
unconditionally releases Executive, and his estate, executors and administrators
(collectively, the "Executive Releasees") from any and all claims, damages,
causes of action, suits, controversies, causes of action, cross-claims,
counter-claims, demands, debts, or liabilities of any nature whatsoever in law
and in equity ("Claims") that the Company ever had, now has or at any time
hereafter may have against any of the Executive Releasees by reason of any
matter, cause or thing whatsoever from the beginning of time to the date this
Agreement is signed by Executive (the "Company Release"); provided, however,
that (i) this release shall not apply to any unlawful conduct that Executive may
have engaged in while an employee of the Company and (ii) nothing in this
Section 8 shall in any way release the Executive Releasees from any obligation
of Executive under this Agreement or the Release or waive or discharge the right
of the Company to bring any Claim to enforce any provision of this Agreement or
the Release. The Company represents that it has not commenced or
joined in any claim, charge or action against Executive arising out of or
relating in any way to Executive's employment or positions held with the
Company, the termination thereof, or any other matter released pursuant to this
Section 8.
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9.
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Indemnification
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The Company agrees that the entry by
Executive into this Agreement or the Release will not alter or amend the rights
of Executive, or the obligations of the Company, with respect to indemnification
under the Company’s Certificate of Incorporation as in effect on the date
Executive signs this Agreement.
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10.
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Enforcement
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(a) Executive
agrees that any breach by him, whether willful or otherwise, of Sections 5(a), 6
or 7 of this Agreement will cause continuing and irreparable harm to the Company
for which monetary damages would not be an adequate remedy. In the
event of a breach by Executive of any of Sections 5(a), 6 or 7, the Company
shall have the right to enforce the provision by seeking injunctive or other
relief in any court, without limiting the remedies at law or in equity otherwise
available to the Company.
(b) In
any action at law or in equity to enforce or interpret the terms of this
Agreement, the prevailing party shall be entitled to recover, in addition to any
other relief, reasonable attorneys’ fees, costs and
disbursements.
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11.
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Warranties
and Covenants of Executive
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Executive warrants and covenants that:
(i) he personally has read this Agreement, (ii) he has had an opportunity to
seek legal counsel to advise him with regard to this Agreement and the Release,
(iii) he has had sufficient time to consider this Agreement and fully
understands the contents of this Agreement and of the Release, including the
fact that the Release contains a release of and a covenant not to xxx for any
and all claims which he may have against the Company, both known or unknown,
even though there may be facts and consequences unknown to Executive, and (iv)
he has freely and voluntarily entered into this Agreement.
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12.
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Cooperation
on Litigation or Disputes
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For a period of five years following
the Termination Date, if requested by the Company, and subject to reimbursement
for expenses reasonably incurred (including, but not limited to, meals,
accommodations, travel and other incidental expenses) and payment at the hourly
rate of $460, Executive agrees to cooperate with and assist the Company in
response to reasonable requests regarding the defense of any ongoing litigation,
claims, grievances, arbitrations or disputes concerning Company or its
businesses with respect to matters that were within the scope of Executive’s
responsibilities while employed by the Company.
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Entire
Agreement
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This Agreement contains the entire
agreement and understanding between the Company and Executive with regard to the
termination of Executive’s employment and supersedes any prior or
contemporaneous negotiations or agreements, written or oral, with respect to the
termination of Executive’s employment.
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14.
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Amendments
and Waivers
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(a) This
Agreement can be modified or waived only by a written agreement signed by the
Company and Executive.
(b) The
Company and Executive agree that neither the waiver by a party of a breach of
any term or condition of this Agreement, nor the failure of a party on one or
more occasions to enforce any term or condition of this Agreement, shall be
construed as a waiver by such party of any subsequent breach of such term or
condition or any other term or condition of this Agreement.
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15.
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Governing
Law
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This Agreement shall be governed by,
and construed in accordance with, the laws of the District of Columbia (without
regard to any conflicts of law rule that might otherwise refer construction or
interpretation of this provision to the substantive law of another
jurisdiction).
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16.
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Severability
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Whenever possible, each provision of
this Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law in
any
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jurisdiction,
such invalidity, illegality or unenforceability will not affect any other
provision or the effectiveness or validity of any provision in any other
jurisdiction, and this Agreement will be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
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17.
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Section
Headings
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The section headings in this Agreement
are for convenience only and shall not be taken into account in the
interpretation of this Agreement.
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18.
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Facsimile
Signatures and Counterparts
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This Agreement may be executed by
facsimile signature, and in two or more counterparts, each of which shall be
deemed an original, and all of which together shall be deemed to be one and the
same instrument.
IN WITNESS WHEREOF, the Company has
caused this Agreement to be executed by a duly authorized officer, and Executive
has executed this Agreement, in each case on the date indicated
below.
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XXXX
X. XXXXX
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PEPCO
HOLDINGS, INC.
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/s/
Xxxx X. Xxxxx
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By:
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/s/
Xxxxxx X. Xxxxx
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Xxxxxx
X. Xxxxx
President
and Chief Executive Officer
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Date: June
12, 2009
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Date: June
12, 2009
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RELEASE
OF CLAIMS
I, Xxxx X. Xxxxx, in consideration of
the mutual promises set forth in that certain Separation Agreement (the
"Agreement") executed by me and Pepco Holdings Inc. (together with its
subsidiaries and affiliates, the "Company") on June 12, 2009, including the
payments and benefits set forth in Section 2 thereof, and intending to be
legally bound, hereby agree as follows:
I understand that the “Severance
Benefits” (as defined in Section 2(b) of the Agreement) are being provided by
the Company in consideration for the execution and delivery by me of this
Release of Claims and are not salary, wages or benefits to which I was already
entitled. I understand and agree that I will not receive the
Severance Benefits unless I (i) execute this Release of Claims and (ii) do not
revoke this Release of Claims within the time period specified herein or breach
any term of this Release of Claims or the Agreement.
I, on my own behalf, and on behalf of
my heirs, agents, attorneys, assigns and anyone else claiming for and through
me, hereby knowingly, voluntarily and fully waive, unconditionally release and
forever discharge (except to the extent provided in the next succeeding
paragraph) all claims, damages, causes of action, suits, controversies, causes
of action, cross-claims, counter-claims, demands, debts, or liabilities of any
nature whatsoever in law and in equity (“Claims”) that have arisen or might have
arisen at any time prior and up to and including the date of this Release of
Claims (whether known or unknown, accrued or contingent, liquidated or
unliquidated) that I now have or may have against the Company and its officers,
directors, employees, representatives, agents, attorneys, insurers (but only
with respect to Claims that Executive otherwise could assert against the
Company), predecessors, successors and assigns, including, without any
limitation on the general nature of the foregoing release: (i) any Claims
relating to my employment and the termination of my employment with the Company,
including any Claim of wrongful discharge or breach of contract, (ii) any Claims
arising under any federal, state, District of Columbia or local law relating to
discrimination on account of race, color, religion, sex, national origin, age,
disability, marital status or other illegal basis, (iii) any Claims based on any
tort, such as fraud, defamation or intentional infliction of emotional distress,
(iv) any Claims for wages, insurance or other fringe benefits, including group
health and pension benefits and (v) any Claims for attorneys' fees or
costs. I agree not to xxx, or otherwise institute or cause to be
instituted or in any way voluntarily participate in or assist in the prosecution
of (whether as an individual or class representative) any complaints or charges
against any persons or entities released hereby in any federal, state, District
of Columbia, local or other court, administrative agency or other forum
concerning any claims released hereby, and I represent that no such complaint or
charge by me or on my behalf is pending. I warrant that this is a
general release and that there has been no assignment or transfer of any claim
covered hereby.
I understand and agree that in
providing the general release set forth herein, I am specifically releasing all
claims under the Age Discrimination in Employment Act, as amended, 29 U.S.C. §
621 et seq.
Notwithstanding the above, I further
acknowledge and agree that I am not waiving and am not being required to waive
(i) any claim for the benefits provided for in the Agreement, (ii) any claim for
vested benefits under any employee benefit plan in which I was a
participant
on or prior to the date of the Agreement, (iii) any rights or claims that I may
have that first arise after the date I execute this Release of Claims, (iv) any
right that cannot be waived under law, such as unemployment insurance and
worker’s compensation benefits and the right to file an administrative charge or
participate in an administrative investigation or proceeding; provided, however,
that I disclaim and waive any right to share or participate in any monetary
award resulting from the prosecution of such charge or investigation or
proceeding with respect to any such administrative change I may file under this
clause (iv), and (v) any claim that I may have to indemnification and
reimbursement of expenses under the Company’s Certificate of
Incorporation.
I further understand and acknowledge
that: (i) I have at least twenty-one (21) days to consider the release of such
claims, (ii) for a period of seven (7) days following the signing of this
Release of Claim, I may revoke this Release of Claims and (iii) this Release of
Claims shall not be enforceable until the seven-day revocation period has
expired without revocation. I agree that, if I revoke this release
during the revocation period and have received any benefits under the Agreement
during the revocation period, all such benefits shall be rescinded and, to the
extent practicable, will be returnable to the Company. I further
acknowledge that (i) revocation can be made by delivering a written notice of
revocation to Xxxxx Xxxxxxx Xxxxxx, Secretary, Pepco Holdings, Inc., 000 Xxxxx
Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000 and (ii) for such revocation to be
effective, notice must be received no later than 5:00 p.m. on the seventh
calendar day after the day on which I sign this Release of Claims. If
I revoke this Release of Claims as set forth herein, I acknowledge that I shall
not be reinstated as an employee of the Company.
I affirm that I have read this Release
of Claims in its entirety, have had a full and fair opportunity to consider and
understand its terms, and have been advised to consult with counsel of my choice
at my expense. I further acknowledge that I have, of my own free will, agreed to
the terms hereof.
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June
12, 2009
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/s/
Xxxx X. Xxxxx
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Date
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Xxxx
X. Xxxxx
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ELECTION
TO EXECUTE PRIOR TO EXPIRATION OF
TWENTY-ONE
DAY CONSIDERATION PERIOD
I, Xxxx X. Xxxxx, understand that I
have at least twenty-one (21) days within which to consider and execute the
foregoing Release of Claims. However, after having an opportunity to
consult counsel, I have freely and voluntarily elected to execute the Release of
Claims before the twenty-one (21) day period has expired.
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June
12, 2009
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/s/
Xxxx X. Xxxxx
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Date
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Xxxx
X. Xxxxx
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