CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE
EXHIBIT 10.2
CONFIDENTIAL SEPARATION
AGREEMENT AND
GENERAL RELEASE
This
Confidential Separation Agreement and General Release (the "Agreement") is by
and between H. Xxxx Xxxxx II ("Xx. Xxxxx'') and Texas Gas Transmission, LLC
("Texas Gas"), Boardwalk GP, LLC ("Boardwalk"), Boardwalk Pipelines Holding
Corp. ("Holding") and Boardwalk Operating GP, LLC ("Operating") (Texas Gas,
Boardwalk, Holding and Operating are collectively referred to herein as the
"Company" and references herein are deemed to refer to each such entity
individually).
1. Voluntary
Retirement from Employment.
Xx. Xxxxx agrees to voluntarily retire from all employment with the
Company, as evidenced by Exhibit A to this Agreement, which will be executed
concurrently with this Agreement. As part of his retirement, Xx. Xxxxx is
resigning as a director and officer of each of Holding, Boardwalk, and Texas Gas
and as Trustee of any Pension or Post-Retirement Plan(s). Xx. Xxxxx'x retirement
and separation from employment and the positions he holds with Texas Gas,
Boardwalk, Holding and Operating shall be effective at the time of his signing
of this Agreement. The Company agrees to accept Xx. Xxxxx'x voluntary
retirement. Xx. Xxxxx and the Company intend that this termination of employment
shall constitute a separation from service for purposes of Section 409A of the
Internal Revenue Code of 1986, as amended (the "Code") and that Xx. Xxxxx shall
no longer continue a level of bona fide services rendered to the Company at a
level that is at or in excess of 50% of the average level of services that he
provided to the Company during the previous 36 months.
2. Consulting
Services.
In consideration of the payment set forth in Section 4(ii) of this
Agreement, from March 1, 2008 until February 28, 2009, Xx. Xxxxx shall serve as
a Consultant to the Company and its subsidiaries or affiliates providing
regulatory, market and customer consulting services on an as requested basis.
Xx. Xxxxx'x consulting services for the Company shall terminate on February 28,
2009 without the necessity of any notice or other action by him or the
Company.
As a
Consultant, Xx. Xxxxx shall serve as an independent contractor, and not an
employee, of the Company or any of its subsidiaries or affiliates. Xx. Xxxxx
shall have the right to control the details of the consulting services he shall
provide to the Company. Xx. Xxxxx shall work with the Company to ensure that his
actions as a Consultant are consistent with the goals and objectives of the
Company and the subsidiary or affiliate that has requested his services. As a
Consultant, Xx. Xxxxx shall not be entitled to receive any Company benefits,
such as employee benefits, in connection with his consulting services; provided
however this provision will have no affect on the benefits Xx. Xxxxx receives as
a retiree of the Company. Xx. Xxxxx shall supply all equipment and supplies
necessary for his consulting services. Xx. Xxxxx shall control the hours of his
work. Xx. Xxxxx shall also control the location of his work; however, there may
be occasions when Xx. Xxxxx is expected to meet with Company officials at a
Company facility or other designated location. Xx. Xxxxx shall be free to hire
assistants in providing consulting services and shall be free to provide
consulting services to his other clients (provided Xx. Xxxxx performs no
services that would conflict with Section 10 of the Agreement.) Xx. Xxxxx shall
be responsible for the
payment of all expenses associated with his provision of consulting services to
the Company; provided however, the Company shall reimburse Xx. Xxxxx for the
reasonable cost of any travel or related expenses incurred at the Company's
direction, but in no event shall any such reimbursements be made after the last
day of the calendar year following the calendar year that the expense was
incurred.
Xx. Xxxxx
shall not be treated as an employee for federal or state tax purposes with
respect to the consulting services rendered under this Agreement. The Company
shall, to the extent it is legally required to do so, file all necessary tax
information reports with federal and state taxing authorities, including an
Internal Revenue Service Form 1099, to report the income arising from this
Agreement.
EXHIBIT
10.2
3. Effective
Date.
Xx. Xxxxx has up to and including twenty-one (21) days from the receipt
of this Agreement within which to consider the Agreement. This Agreement shall
become final, binding and enforceable on the eighth day after Xx. Xxxxx signs
the Agreement, unless Xx. Xxxxx revokes the Agreement as provided for in Section
14 of this Agreement (the "Effective Date").
4. Payment.
(i) As
consideration for Xx. Xxxxx'x promises within this Agreement, including without
limitation, Sections 8, 9, and 10, and Xx. Xxxxx'x execution and acceptance of
this Agreement, the Company shall pay Xx. Xxxxx the xxxxx amount of Two Million
Two Hundred and Fifty Thousand Dollars and 0/100 ($2,250,000), less required
governmental payroll deductions, in the form of a lump-sum payment on March 14,
2008. This payment shall constitute a separate payment that is unrelated to any
other payment set forth in this Section 4 of this Agreement for purposes of
Section 409A of the Internal Revenue Code of 1986, as amended (the
"Code").
(ii) As consideration for
the consulting services that Xx. Xxxxx shall provide, pursuant to Section 2 of
this Agreement, the Company shall pay Xx. Xxxxx the sum of Two Hundred Fifty
Thousand Dollars and 0/100 ($250,000) in the form of twelve (12) equal monthly
installments, each in the gross amount of Twenty Thousand Eight Hundred
Thirty-Three Dollars and 34/100 ($20,833.34). No deductions shall be made from
these payments. The first installment shall be paid in March of 2008. During
each of the subsequent eleven (11) months, Xx. Xxxxx shall receive another
installment payment, provided however that in no event shall any payment be made
after March 15 of 2009. Each of these payments shall constitute a separate
payment that is unrelated to any other payment set forth in this Section 4 of
the Agreement for purposes of Section 409A of the Code.V
(iii) In consideration of Xx. Xxxxx'x
execution and acceptance of this Agreement, the Company shall continue to pay
Xx. Xxxxx an amount equal to his regular bi-weekly salary, less required
governmental payroll deductions, on each regular payday for Texas Gas, until the
Effective Date. The final payment shall be made on the March 14, 2008 payday,
and shall include a lump-sum cash amount equal to the value of any unused PTO
time that existed on the date this Agreement was signed. Each of these payments
shall constitute a separate payment that is unrelated to any other payment set
forth in this Section 4 of the Agreement for purposes of Section 409A of the
Code.
EXHIBIT 10.2
5. Release.
In consideration of the payments set forth in Section 4(i) and Section 4(iii),
payments to which Xx. Xxxxx is not otherwise entitled, and the sufficiency of
which Xx. Xxxxx acknowledges, Xx. Xxxxx hereby KNOWINGLY AND VOLUNTARILY RELEASES
AND DISCHARGES Texas Gas, Boardwalk, Holding and Operating and/or their
respective past and present successors, assigns, affiliates, parent companies,
subsidiaries, partnerships, limited partnerships, partners, joint ventures,
predecessors and benefit plans, and the respective past and present officers,
directors, trustees, conservators, employees, agents, insurance carriers, plan
administrators, plan trustees and attorneys of each of the foregoing from any
and all rights, claims, debts, liabilities, actions and/or causes of action,
whether in law or in equity, whether known or unknown, that are based upon facts
occurring at any time prior to, or at the time of, Xx. Xxxxx'x signing of this
Agreement including, but not limited to, any matter or action related to Xx.
Xxxxx'x employment with, termination from, and/or affiliation with Texas Gas,
Boardwalk, Holding and/or Operating, including, but not limited to, the
following:
5.1. Any
statutory claims under the Civil Rights Act of
1866, the Civil
Rights Act of 1964, and the Civil Rights Act of
1991; the Americans with Disabilities Act of 1990; the Age Discrimination in
Employment Act; the Older Workers Benefit Protection Act; the Rehabilitation Act
of 1973; Executive Order 11246; the Family and Medical Leave Act of 1993; the
Employee Retirement Income Security Act; the Equal Pay Act; the Xxxxxxxx-Xxxxx
Act, Chapter 451 of the Texas Labor Code; the Texas Payday Law; Chapter 21 of
the Texas Labor Code; the Kentucky Civil Rights Act, the Kentucky Equal Pay Act,
the Kentucky Equal Opportunities Act and all other federal, state or local
statutes, laws or regulations;
5.2. Any
tort, contract, other common law claims, matters or actions related to Xx.
Xxxxx'x employment, retirement and/or separation from employment with Texas Gas,
Boardwalk, Operating and/or Holding, including, but not limited to, defamation,
slander, libel, invasion of privacy, intentional infliction of emotional
distress, fraud, misrepresentation, wrongful discharge, breach of contract,
breach of any express or implied covenant of good faith and fair dealing and
breach of fiduciary duty; and,
5.3. Any
and all claims for past or future employment benefits, including, but not
limited to, wages, bonuses, incentives, vacation pay, medical insurance coverage
and/or other benefits; provided, however, that this release shall not be
applicable to: (1) any vested benefits provided under a retirement plan
sponsored by Company that is qualified under Section 401(a) of the Code
(including, without limitation, any retirement plan subject to Section 401(k) of
the Code), (2) any medical benefits provided by a medical plan sponsored by
Company, except to the extent provided under the terms of such medical plan or
(3) any vested benefits in the Texas Gas Salary Continuation Plan and the Texas
Gas Supplemental Retirement Plan . Notwithstanding anything in this Section 5.3
to the contrary, with respect to the post-retirement medical benefits referred
to in the prior sentence, the Company reserves the right to modify or eliminate
such benefits pursuant to the terms of any such medical plan providing such
benefits.
EXHIBIT
10.2
6. Resignation
from All Positions with the Company.
Xx. Xxxxx agrees that, with the exception of the Consultant role as
provided in Section 2, as of the date he executes this Agreement, he will resign
from any positions of any nature with Texas Gas, Boardwalk, Holding and/or
Operating including, without limitations, any positions as an officer or
director with Texas Gas, Boardwalk, Holding and/or Operating or any parent,
affiliate or subsidiary of Texas Gas, Boardwalk, Holding and/or Operating. Xx.
Xxxxx agrees to execute any documents necessary to accomplish those
resignations.
7. Waiver of
Rights to Equity Compensation.
In consideration of the payments set forth in Section 4, payments to which Xx.
Xxxxx is not otherwise entitled, and the sufficiency of which Xx. Xxxxx
acknowledges, Xx. Xxxxx'x rights to any and all equity compensation from the
Company, including without limitation, any and all LP units and GP units to
which he may be entitled pursuant to the Boardwalk GP Phantom Unit Plan and the
Boardwalk LP Phantom Unit Plan are hereby terminated and Xx. Xxxxx shall have no
further rights to any such compensation.
8. Confidentiality
of Agreement. Xx. Xxxxx agrees he shall not
disclose, or cause to be disclosed, any of the terms of this Agreement, except
to his attorney, spouse and/or tax advisor, or as required by law. Xx. Xxxxx
agrees to direct his attorney, spouse, and/or tax advisor to abide by this
promise of confidentiality. Xx. Xxxxx represents that no unauthorized
disclosures concerning the terms of this Agreement, or the sums provided in
Section 4, were made prior to the signing of this Agreement.
9. Confidential
and Proprietary Information. Xx. Xxxxx
acknowledges, agrees and stipulates that during his employment with Texas Gas
and Boardwalk he has had access to confidential and proprietary information
relating to the business and affairs of the Company, its affiliates,
subsidiaries and parent companies, including, without limitation, (i) financial
information, including budgets or projections, business plans, pricing policies
or strategies, tariff information, business methods, or any other financial,
marketing, pricing, or regulatory strategic information; (ii)
information about existing or potential customers and their representatives,
including customer identities, lists, preferences, customer services and all
other customer information; (iii) information about employees and the terms and
conditions of their employment with the Company; (iv) information about
potential acquisitions or divestitures; and (v) any other non-public information
that cannot be obtained readily by the public and would be useful or helpful to
competitors, customers or industry trade groups if disclosed (collectively,
"Confidential Information"). Xx. Xxxxx agrees that he shall not, at any time,
directly or indirectly, for any reason whatsoever, with or without cause, unless
pursuant to a lawful subpoena, use, disseminate or disclose any of the
Confidential Information to any person or entity. Xx. Xxxxx further acknowledges
that if Xx. Xxxxx were to use or disclose, directly or indirectly, the
Confidential Information, that such use and/or disclosure would cause the
Company irreparable harm and injury for which no adequate remedy at law exists.
Therefore, in the event of the breach or threatened breach of the provisions of
this Agreement by Xx. Xxxxx, the Company shall be entitled to obtain injunctive
relief to enjoin such breach or threatened breach, in addition to all other
remedies and alternatives which may be available at law or in equity. Xx. Xxxxx
acknowledges that the remedies contained in the Agreement for violation of this
Agreement are not the exclusive remedies which the Company may
pursue.
10. Non-Competition
and Non-Solicitation. For and in
consideration of the sums paid to Xx. Xxxxx pursuant to Section 4 of this
Agreement, Xx. Xxxxx agrees as follows:
EXHIBIT 10.2
10.1
During the period of twelve (12) months from and after the Effective Date,
Xx. Xxxxx
agrees that he will not (whether for compensation or otherwise), alone or as an
officer, director, stockholder (except for investments in securities of publicly
traded companies which are not in excess of one percent (1%) of such entity's
securities), partner, associate, employee, agent, principal, trustee, salesman,
consultant, co-venturer, creditor, guarantor, owner, representative, advisor or
in any other capacity, perform work for or become associated with any customers
of the Company, its affiliates, subsidiaries and parent companies as of the
Effective Date, or any natural gas pipeline trade groups, except as needed to
perform the consulting services on behalf of the Company described in Section 2,
to the extent that Xx. Xxxxx is requested to participate, advise or consult
regarding any business or regulatory matters that involve the Company. In
addition, Xx. Xxxxx shall not during this period solicit, induce, or encourage
any of the current employees or consultants of the Company or any of its
subsidiaries to discontinue their relationship with the Company or establish a
relationship with any other employer.
10.2 Xx.
Xxxxx agrees that the limitations as to time, geographical area and scope of
activity to be restrained are reasonable and are not greater than necessary to
protect the goodwill and/or Confidential Information of the
Company. Xx. Xxxxx further agrees that the terms of Section 10.1 will
not in any way prevent Xx. Xxxxx from earning a living.
10.3 Xx.
Xxxxx acknowledges that the damages which will be suffered by the Company by a
breach of any term or provision of Section 10.1 would be continuing and
irreparable. To the extent Xx. Xxxxx violates any of the terms of Section 10.1,
Xx. Xxxxx acknowledges and agrees that he shall pay back to the Company one-half
of the payments to he made to him in accordance with Section 4(ii) of this
Agreement. Because monetary damages for any violation of Section 10.1 would be
difficult, if not impossible, to ascertain, Xx. Xxxxx agrees the Company shall
be entitled to equitable relief, including specific performance and injunction,
to ensure and enforce his performance of and adherence to the obligations in
Section 10.1.
11. Company
Property.
Xx. Xxxxx agrees to deliver to the Director of Human Resources of Texas
Gas no later than the Effective Date any and all property, including keys,
access cards, files provided for Xx. Xxxxx'x use by the Company and all CD's,
computer disks and other electronic or written materials which relate to the
Company, its business activities, or Xx. Xxxxx'x position with the
Company.
12. Non-Disparagement.
Xx. Xxxxx and Company agree that they shall not make disparaging remarks
or communications of any type concerning the other, or any of Company's parents,
affiliates or subsidiaries or any of the officers or directors of any of those
entities. Xx. Xxxxx and Company agree that they shall engage in no conduct
designed to be, or that would have the effect of being, detrimental to the
interests and goodwill of the Company or Xx. Xxxxx, nor will they engage in any
conduct designed to reflect, or that would have the effect of reflecting,
adversely on the reputation and/or goodwill of the Company or Xx. Xxxxx,
provided, that no section or provision in this Agreement shall be construed as
prohibiting Xx. Xxxxx or the Company from making any truthful statements or
reports to any regulatory agency or other governmental agency or
official.
-
EXHIBIT 10.2
13. Twenty-One
(21) Days to Consider.
The Company advises Xx. Xxxxx that he has twenty-one (21) calendar days
from the date he receives this Agreement within which to consider whether to
sign this Agreement. The Company advises Xx. Xxxxx that he may voluntarily
choose to sign the Agreement earlier, but is not required to do so.
14. Seven (7)
Davs to Revoke.
The Company hereby advises Xx. Xxxxx that for a period of seven (7)
calendar days after he signs this Agreement, Xx. Xxxxx may revoke this
Agreement. This Agreement shall not become effective or enforceable until the
revocation period has expired. In order to revoke this Agreement pursuant to
this Section 14, Xx. Xxxxx must submit his revocation in writing to Xxxx Xxxxx,
Director of Human Resources, Texas Gas Transmission. LLC, 0000 Xxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000, before the expiration of the seven (7) day period.
Notwithstanding the foregoing, Xx. Xxxxx acknowledges that his retirement from
employment as of the date of his execution of this Agreement shall remain
effective even if Xx. Xxxxx revokes the Agreement. Xx. Xxxxx acknowledges,
represents and agrees that he understands his rights and obligations under this
Section 14.
15. Advice of
Attorney.
The Company hereby advises Xx. Xxxxx to consult with an attorney prior to
executing (signing) this Agreement.
16. Non-Admission.
This Agreement is not an admission by either Xx. Xxxxx or the Company of
any wrongdoing or liability.
17. Prior
Agreements Superseded.
This Agreement constitutes the sole agreement of the parties hereto
concerning subject matter herein and supersedes any prior understandings or
written or oral agreements between the parties regarding the subject matter
herein.
18. Exclusive
Law, Severability and Venue. This Agreement
shall be interpreted in accordance with the laws of the Commonwealth of Kentucky
(except its provisions governing the choice of law). If any provision of this
Agreement becomes or is deemed invalid, illegal or unenforceable in any
applicable jurisdiction by reason of the scope, extent or duration of its
coverage, then such provision shall be deemed amended to the minimum extent
necessary to conform to applicable law so as to be valid and enforceable or, if
such provision cannot be so amended without materially altering the intention of
the parties, then such provision shall be stricken and the remainder of this
Agreement shall continue in force and effect. If any provision of this Agreement
is rendered illegal by any present or future statute, law, ordinance or
regulation (collectively the "Law"), then that provision shall be curtailed or
limited only to the minimum extent necessary to bring the provision into
compliance with the Law. All other terms and provisions of this Agreement shall
continue in full force and effect without impairment or limitation. Xx. Xxxxx
agrees that for all matters directly or indirectly arising out of this
Agreement, venue and jurisdiction for any such matters shall lie with the state
and federal courts located in Daviess County, Kentucky as applicable under this
Agreement.
19. Section
409A.
To the extent that the terms of this Agreement would subject Xx. Xxxxx to
xxxxx income inclusion, penalties, interest, or additional tax pursuant to
Section 409A of the Code, those terms are automatically stricken and reformed
either to be exempt from, or to comply with, Section 409A of the Code and the
regulations issued thereunder. Notwithstanding any provision of this Agreement
to the contrary, only to the extent that this Agreement is subject to the
requirements of Section 409A of the Code and is not exempted from such
requirements, if at the time of Xx. Xxxxx'x termination of employment with the
Company, he is a "specified employee" as defined in Section 409A of the Code, no
payment or benefit that results from his termination of employment shall be
provided until the date which is six months after the date of his termination of
employment (or, if earlier, his date of death). Payments to which Xx. Xxxxx
would otherwise be entitled during the six-month period described above shall be
accumulated and paid in a lump sum on the first day of the seventh month after
the date of his termination of employment. Notwithstanding anything to the
contrary, to the extent required by Section 409A of the Code: (a) the amount of
expenses eligible for reimbursement or to be provided as an in-kind benefit
under this Agreement during the calendar year may not affect the expenses
eligible for reimbursement or to be provided as an in-kind benefit in any other
calendar year; and (b) the right to reimbursement or in-kind benefits under this
Agreement shall not be subject to liquidation or exchange for another
benefit.
EXHIBIT
10.2
20. Tax
Advice. Xx. Xxxxx acknowledges that
neither the Company nor any of its representatives have provided him with any
tax advice or tax-related representations concerning the payments provided for
in this Agreement or any other aspect of this Agreement. Xx. Xxxxx agrees that
he should consult his own tax advisor(s) for any such tax advice or
information.
21. Acceptance.
By his signature below, Xx. Xxxxx knowingly and voluntarily agrees to and
accepts this Agreement. Xx. Xxxxx acknowledges that he has carefully read this
Agreement and that he signs this Agreement of his own free will.
ACCEPTED
AND AGREED:
BY: /s/ H.
Xxxx Xxxxx
II
H. Xxxx Xxxxx II
Date: February 25,
2008
For Texas Gas Transmission,
LLC:
BY: /s/ Xxxxx
Xxxxxxx
Xxxxx
Xxxxxxx,
Vice
President, Human Resources
Date: March 5,
2008
For Boardwalk GP, LLC:
BY: /s/ Xxxxx
Xxxxxxx
Xxxxx Xxxxxxx,
Vice
President, Human Resources
Date: March 5,
2008
For: Boardwalk
Pipelines Holding Corp.:
BY: /s/ Xxxxx
Xxxxxxx
Xxxxx
Xxxxxxx,
Vice
President, Human Resources
Date: March 5,
2008
For Boardwalk Operating GP,
LLC:
BY: /s/ Xxxxx
Xxxxxxx
Xxxxx
Xxxxxxx,
Vice
President, Human Resources
Date: March 5,
2008
EXHIBIT 10.2
EXHIBIT
A
VOLUNTARY
LETTER OF RETIREMENT AND RESIGNATION
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EXHIBIT 10.2
Voluntary
Letter of Retirement and Resignation
I, H.
Xxxx Xxxxx II, hereby voluntarily retire from all employment and, I hereby
voluntarily resign from all positions, including as a director or officer, which
I currently hold with Texas Gas Transmission, LLC, Boardwalk GP, LLC, Boardwalk
Pipelines Holding Corp. and Boardwalk Operating GP, LLC, and any and all of
their parents,
subsidiaries, affiliates of other related entities. My retirement and
resignations are effective today as evidenced by my signature
below.
/s/ H. Xxxx
Xxxxx,
II February 25,
2008
Xxxx
Xxxxx Date
