FIRST AMENDMENT
TO
EMPLOYMENT AGREEMENT
This FIRST AMENDMENT TO EMPLOYMENT AGREEMENT, by and between
Duke Energy Corporation, a North Carolina corporation ("Duke"), PanEnergy Corp,
a Delaware corporation ("PanEnergy"), and Xxxx X. Xxxxxx (the "Executive") is
made as of this 24th day of October, 1997.
WHEREAS, the Executive has entered into an employment age dated November
24, 1996, with PanEnergy (the "Employment Agreement");
WHEREAS, the parties hereto intend that all rights and obligations of
PanEnergy under the Employment Agreement be assumed by Duke;
WHEREAS, the Employment Agreement provides that it may be amended by the
written agreement of the parties; and
WHEREAS, the parties hereto now wish to amend the Agreement in certain
respects.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, the parties do hereby amend the Employment
Agreement as follows:
1. Section 3(b) (ii) of the Employment Agreement is hereby amended by
deleting the text thereof in its entirety and replacing it with the following:
"(ii) Annual Bonus. (a) In respect of calendar year 1997, the
Executive shall be eligible, based upon the Executive's achievement of
performance goals (set by the Compensation Committee of the Board, in
consultation with the Executive, at levels substantially consistent
with past practice) during such fiscal year, to receive a bonus at a
target level of not less than 50% of the Annual Base Salary, with the
opportunity, substantially consistent with past practice, to earn in
excess of such amount based upon the attainment of agreed upon
performance goals. Such bonus shall be paid no later than March 31,
1998.
(b) Commencing in calendar year 1998, the Executive shall be
eligible, based upon the achievement of performance goals during such
year, to receive an annual bonus with a target level of 60% of the
Executive's base salary for purposes of the applicable annual bonus
plan. The establishment of the performance goals, the evaluation of the
actual
performance against such goals, and the determination of the bonus (if
any) actually payable to the Executive (which may be at, above or below
the target level) shall be made by the Compensation Committee of the
Board acting in its sole discretion. At the discretion of the Board,
such bonus may be made payable pursuant to the terms of an annual bonus
plan that is intended to comply with the requirements of Section 162(m)
of the Internal Revenue Code, and that is subject to the approval of
the Company's stockholders at its 1998 annual meeting.
(c) For purposes of Section 5(a) hereof concerning the Company's
obligations upon termination of employment, the term "Target Annual
Bonus" shall mean the target level of the Executive's annual bonus
multiplied his Annual Base Salary, each as in effect under this Section
3 immediately prior to the Date of Termination."
2. Section 3(b)(iii) of the Employment Agreement is hereby amended by
deleting the text thereof in its entirety and by replacing it with the
following:
"(iii) Long Term Incentives. The Compensation Committee of the
Board shall award to the Executive one or more nonqualified stock
options to purchase an aggregate of 200,000 shares of the Company's
common stock, without par value, (the "Option") pursuant to the terms
of the Company's Stock Incentive Plan (the "Plan"). The number of
shares covered by the Option in excess of 100,000 (100,000 shares)
shall be subject to the approval by the stockholders of the Company of
an amendment to the Plan to increase the number of shares that may be
subject to stock options granted during a year to any one participant.
The option may be granted in one or more installments at the discretion
of the Compensation Committee, but in any event shall be fully granted
by the date of the 1998 annual meeting (subject to stockholder approval
as described above). The exercise price per share of the Option shall
be the fair market value of the Common Stock on the date(s) of grant,
determined in accordance with the terms of the Plan. The Option shall
vest in accordance with a schedule no less favorable than equal annual
installments of 20 percent each as to the number of shares subject to
the Option, commencing on the first anniversary of the date(s) of
grant, and shall have a maximum term of exercise of 10 years from the
date(s) of grant (subject in each case to your continued employment by
the Company). The Option shall also include provisions consistent with
the Plan with respect to the vesting and term of the Option in
connection with a "change of control" of the Company and the death or
disability of the Executive. The foregoing and other applicable terms
and conditions of the Option shall be set forth in a stock option
agreement approved by the Compensation Committee of the Board.
Notwithstanding any prior agreement between the Company and the
Executive, the Company is
under no obligation to make any other stock option or other long-term
incentive awards to the Executive during the Employment Period."
3. All rights and obligations of p~nFnergy under the Employment
Agreement are hereby assigned to and assumed by Duh~, and all
references to "the Company" in the Employment Agreement, as amended
hereby, shall hereinafter be deemed to be references to Duke.
Except as amended and mod)fied hereby, the terms of the Employment
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have entered into this First
Amendment to Employment Agreement as of the day and year first above written.
/s/ Xxxx X. Xxxxxx
---------------------------------
Xxxx X. Xxxxxx
DUKE ENERGY CORPORATION
/s/ P.M. Xxxxxxxx
----------------------------------
By: P.M. Xxxxxxxx
Title: President & COO
PANENERGY CORP
/s/ P.M. Xxxxxxxx
-----------------------------------
By: P.M. Xxxxxxxx
Title: President & CEO
