EXECUTIVE TRANSITION AGREEMENT
Exhibit
10.2
This
Executive Transition Agreement (the “Agreement”) is entered into on this 28th
day of July, 2009, by and between PNMR Services Company (the “Company”), PNM
Resources, Inc. (“PNM Resources”) and Xxxxxxx X. Xxxxx (the
“Executive”).
R E C I T
A L S:
A. Executive
currently is employed by Company and serves as the Senior Vice President,
General Counsel and Secretary of PNM Resources, Company’s parent organization,
and its wholly owned affiliates.
B. Executive
has announced his intention to retire and to resign from his active employment
with Company and his position as an officer of PNM Resources, effective as of
the close of business on December 31, 2009 (the “Resignation Date”), or
other such date as may be agreed to by the parties.
C. In
order to provide for the smooth transition of Executive’s duties and
responsibilities to a successor, and to secure Executive’s future services in
the capacity described below, Company, PNM Resources and Executive are entering
into this Executive Transition Agreement as of the date first set forth
above.
NOW,
THEREFORE, Company, PNM Resources and Executive agree as follows:
1.
Continued
Employment. Executive shall continue to serve Company and PNM
Resources as the Senior Vice President, General Counsel and Secretary of PNM
Resources until the earlier of (a) the close of business on
December 31, 2009 or (b) the employment effective date of Executive’s
successor. If Executive’s successor commences employment prior to
December 31, 2009, it is anticipated that Executive’s title will become
Senior Vice President and Chief Legal Officer; provided, however, that upon
request of the Company if necessary to facilitate the hiring of a suitable
successor, Executive shall become the Senior Vice President, Chief Regulatory
Counsel of PNM Resources, and suitable office arrangements shall be
made. Executive’s total compensation shall not be reduced as a result
of a change in title or job responsibilities. If Executive’s
successor is appointed prior to December 31, 2009, Executive, in his new
role, will work with his successor in order to accomplish a smooth transition of
his duties and responsibilities.
2.
Resignation. Effective
as of the close of business on December 31, 2009, Executive hereby resigns
as an officer of PNM Resources and from his employment with
Company. Executive’s resignation applies and extends to any and all
positions he may hold with any subsidiary or division of Company or PNM
Resources and any related boards as well as from any other positions Executive
may hold by virtue of Executive’s employment with Company or his position as an
officer of PNM Resources. Company and PNM Resources accept
Executive’s resignation.
3.
Retainer
Agreement. Effective as of January 1, 2010, Executive and
Company will enter into a “Retainer Agreement” pursuant to which Executive will
agree to provide legal services to Company during calendar year
2010. The Retainer Agreement may be extended from year to year upon
the mutual agreement of Company and Executive. As provided in
Section 6, the Retainer Agreement will become void if Executive fails to
sign the Release Agreement attached hereto as Exhibit A within the time
periods described in Exhibit A.
4.
SERP. Executive
and Company have entered into a Supplemental Employee Retirement Agreement (the
“SERP”), which was amended and restated effective as of January 1, 2009 by
a document executed on October 20, 2008. As provided in
Section 9, the SERP shall continue in full force and effect following the
execution of this Agreement. Executive does acknowledge, however,
that since he is voluntarily resigning from his employment in connection with
his retirement, and since the new role described in Section 1, above, is
solely for the purpose of his transition into retirement and the Company’s
transition to his successor (and therefore not a Constructive Termination), he
is not entitled to receive any payments pursuant to Sections 6 or 7 of the
SERP. Executive also acknowledges that since he will continue to
provide services to Company as an independent attorney pursuant to the Retainer
Agreement, he will not be considered to have incurred a “Separation from
Service” within the meaning of Section 9(g)(2) of the
SERP. Since Executive will not be deemed to have incurred a
Separation from Service, he will not be entitled to begin receiving a
supplemental retirement benefit pursuant to Section 9 of the SERP until he
is considered to have incurred a Separation from Service. Executive
also acknowledges that his payments may be further delayed in accordance with
Section 9 of the SERP if Executive is a “Specified Employee” (as defined in
the SERP) at the time of his Separation from Service.
5.
Notice of
Executive’s Rights. Various state and federal laws prohibit
employment discrimination based on age, sex, race, color, national origin,
religion, ancestry, sexual orientation, gender identification, physical or
mental handicap and disability, mental condition or veteran
status. These laws are enforced through state, federal and local
agencies, including the Equal Employment Opportunity Commission (EEOC) and the
Department of Labor. Pursuant to Section 6, Executive will be
required to release any claims Executive may have under these laws as well as
any other claims Executive may have by executing the Release Agreement attached
hereto as Exhibit A. Executive should carefully consider the
Release Agreement and thoroughly understand its effect before signing this
Agreement or the Release Agreement. Executive is strongly encouraged
to consult with his attorney before signing this Agreement or the Release
Agreement. Executive understands that the decision to consult with an
attorney is solely the decision of Executive.
6.
Release. In
consideration of the Retainer Agreement referred to in Section 3, Executive
agrees to execute the Release Agreement attached hereto as
Exhibit A. The Release Agreement shall be executed by Executive
between January 1 and February 15, 2010. Executive will
have the opportunity to continue to review and consider the execution of the
Release Agreement between the date of this Agreement and February 15,
2010. Executive may not sign the Release Agreement prior to
January 1, 2010. Executive will be allowed to revoke the Release
Agreement within seven (7) days after signing it. Revocation may be
made by returning a copy of the Release Agreement along with the Employee
Revocation Form attached to the Release Agreement as
Exhibit 1. For any revocation to be effective, the Release
Agreement and
2
the
Employee Revocation Form must be received no later than the close of business on
the seventh (7th) day after Executive signs the Release Agreement. If
Executive fails to sign the Release Agreement by February 15, 2010, or if
Executive revokes the Release Agreement after signing it, the Retainer Agreement
referred to in Section 3 shall be void.
7. Non-Disclosure,
Confidentiality And Non-Compete.
(a)
Confidential
Information and Company Materials.
(1) As an
officer of PNM Resources and an executive level employee of Company, Executive
has had access to certain “Confidential and Proprietary Information” regarding
products, services, marketing, customers, business ideas and strategies and
research. Executive understands and expressly acknowledges that
Company possesses and will continue to possess Confidential and Proprietary
Information which is important to its business. For purposes of this
Agreement, “Confidential and Proprietary Information” is information that was or
will be developed, created, or discovered by or on behalf of Company, or which
became or will become known by, or was, is or will be conveyed to Company, which
has commercial value in Company’s business. The term “Confidential
and Proprietary Information” includes, but is not limited to, any information or
materials that Executive is required to keep confidential pursuant to
the New Mexico Rules of Professional Conduct applicable to Executive
as General Counsel of PNM Resources as well as any other information about trade
secrets, products, services, computer programs, designs, customers, technology,
ideas, marketing and marketing efforts, know how, processes, compositions, data,
techniques, improvements, inventions (whether patentable or not), works of
authorship, business and product development plans, administration of programs
and products, the salaries and terms of compensation of other employees,
customers and other information concerning Company’s actual or anticipated
business, pricing, studies, information and analyses, Company contracts and fee
arrangements, research or development, and/or any information which is generated
or received in confidence by or for Company from any other person.
(2) Executive
acknowledges that the Confidential and Proprietary Information belongs solely to
Company, and that use of the Confidential and Proprietary Information by any
person or entity other than Company would be damaging to Company.
(3) Executive
understands and expressly acknowledges that Company possesses and will continue
to possess “Company Materials” which are important to its business. For purposes
of this Agreement, “Company Materials” include documents or other media or
tangible items that contain or embody Confidential and Proprietary Information
or any other information concerning the business, operations or future/strategic
plans of Company, whether such documents have been prepared by Executive or by
others, including but not limited to portions of Company’s customer and client
lists which have been specially compiled by Company and includes information not
generally available to the public, such as customer preferences, customer
contacts, prices and the way and means in which Company conducts its business,
sells its products, and administers its programs and
business. “Company Materials” also include, but are not limited to,
blueprints, drawings, photographs, emails, charts, graphs, notebooks, marketing
and program materials, customer lists, computer disks, tapes or printouts,
3
sound
recordings and other printed, typewritten or handwritten documents or documents
on any medium.
(b)
Non-Disclosure
Of Confidential And Proprietary Information. Executive hereby
agrees as follows:
(1) Assignment
of Rights in Confidential and Proprietary Information and Non-Disclosure
Agreement. All Confidential and Proprietary Information and
all title, patents, patent rights, copyrights, customer lists, maskwork rights
and trade secret rights, and other intellectual property and rights
(collectively “Rights”) in connection therewith will be and remain the sole
property of Company. Executive hereby assigns to Company any Rights
Executive may have in such Confidential and Proprietary
Information. After Executive’s Resignation Date, Executive will keep
in confidence and trust and will not use or disclose any Confidential and
Proprietary Information or anything relating to it without the prior written
consent of an officer of Company.
(2) Non-Disclosure
of Company Materials and Return of Company Property. All
Company Materials are the sole property of Company. Executive agrees
that Executive will return all Company Materials, apparatus, equipment,
materials, writings, data (on any medium) and other physical property, or any
reproduction of such property, excepting only (i) Executive’s personal
copies of records relating to Executive’s compensation; (ii) Executive’s
copy of this Agreement; and (iii) legal, regulatory and other Company
Materials that may be required by or helpful to Executive in providing services
under the Retainer Agreement.
(3) Copies. Executive
will not copy any Confidential and Proprietary Information or Company Materials
onto diskettes or other electronic media, nor create documents or files
containing Confidential and Proprietary Information or Company Materials except
as provided in Section 7(b)(2)(iii), above.
(c)
Non-Solicitation
of Company Employees. For two years following the Resignation
Date, Executive also agrees that he will not encourage or solicit any employee
or consultant of Company to leave Company for any reason; provided, however,
that this provision does not apply to prevent Executive from hiring an employee
or consultant of Company if the employee or consultant of Company responds to a
general solicitation for applications.
(d) Enforcement. Executive
acknowledges that the obligations imposed on Executive are legally binding and
enforceable, and that Executive’s violation of those obligations will result in
irreparable harm and damage to Company. In the event that Company
brings any action or proceeding to enforce the provisions of Section 7(b)
or Section 7(c), Executive waives, and agrees that Executive will not
assert in such action, the claim or defense that an adequate remedy at law is
available to Company. The remedies available to Company for any
breach of this Section by Executive shall be cumulative, and an award of
injunctive relief shall not preclude an award to Company of monetary damages or
other relief.
4
(e)
Disclosure
to Other Parties. Executive agrees that Company has the right
to disclose the obligations imposed upon Executive by this Agreement to
Executive’s future or prospective employers and/or business
associates.
(f)
Special
Definition of “Company.” For purposes of this Section, the
term “Company” includes PNMR Services Company, PNM Resources, Inc. and each and
every one of their Affiliates (as the term “Affiliates” is defined in the
Release Agreement).
8.
Non-Disparagement. Executive
agrees not to disparage or speak ill of Company, PNM Resources, or any Affiliate
of either or of any past or present employee, officer or director of Company,
PNM Resources or any Affiliate of either. Similarly, Company agrees
that no officer or director of Company, PNM Resources or any Affiliate of either
shall, while employed by or while serving on the Board of Directors of Company,
PNM Resources or any Affiliate of either, disparage or speak ill of Executive to
any third person.
9.
Other
Documents. This Agreement shall not have any impact on any
other agreement entered into between Company, PNM Resources or any Affiliate of
either, on the one hand, and Executive, on the other, all of which shall
continue in full force and effect in accordance with their terms.
10. Enforcement
Expenses. If Executive breaches any provision of this
Agreement, Company will be entitled to recover from Executive all reasonable
expenses, including attorneys’ fees, incurred by Company in seeking to enforce
this Agreement or in seeking damages for breach of this Agreement, regardless of
whether a lawsuit is actually filed. If Company claims a breach of
any provision of this Agreement and it is determined that no such breach
occurred, Executive will be entitled to recover from Company all reasonable
expenses, including attorneys’ fees, incurred by Executive in defending against
the claim that a breach has occurred.
11.
Controlling
Laws. This Agreement shall be interpreted under the laws of
the State of New Mexico without reference to principles of conflict of
laws.
12.
Arbitration. All
disputes, controversies, or claims arising from or relating to this Agreement
which are not resolved by good faith negotiation within twenty (20) days after
notice to the other party shall be determined by final binding arbitration
without appeal with a single arbitrator administered by the American Arbitration
Association under its Commercial Arbitration Rules. The arbitration
shall be governed by the Federal Arbitration Act, 9 U.S.C. § 1-16, and
judgment on the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. The place of arbitration shall be
Albuquerque, New Mexico. The parties shall bear their own costs and
attorneys’ fees for the arbitration, and share equally the cost of the
arbitrator.
13.
Severability. If
any part or parts of this Agreement are found to be unenforceable, the remaining
portions of this Agreement shall remain in effect.
14.
Entire
Agreement. EXECUTIVE HAS CAREFULLY READ AND FULLY UNDERSTANDS
ALL OF THE PROVISIONS OF THIS AGREEMENT, WHICH ALONG WITH THE RELEASE AGREEMENT
ATTACHED HERETO AS EXHIBIT A SETS FORTH
5
THE
ENTIRE AGREEMENT BETWEEN THE PARTIES WITH REGARD TO EXECUTIVE’S RESIGNATION, AND
ACKNOWLEDGES THAT EXECUTIVE HAS NOT RELIED UPON ANY REPRESENTATION OR
STATEMENTS, WRITTEN OR ORAL, NOT SET FORTH IN THIS DOCUMENT.
15.
Other
Representations of Executive. Executive hereby represents that
Executive (a) has carefully read all of this Agreement;
(b) understands the provisions of this Agreement; (c) had decided
whether to consult with his attorney regarding this Agreement; (d) has
determined that it is in his best interest to enter into this Agreement;
(e) has not been influenced to enter into this Agreement by any statement,
representation or coercive act of Company or its counsel not contained in this
Agreement; and (f) is entering into this Agreement knowingly, willingly and
voluntarily.
16.
Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together will constitute one and the same
instrument. This Agreement also may be executed by facsimile
signature or by a signature sent from one party to the other on a scanned
document.
IN
WITNESS WHEREOF, the parties hereto, personally or by their authorized
representatives, have signed this Agreement as of the day and year first above
written.
PNM
RESOURCES,
INC. PNMR
SERVICES COMPANY
By /s/ Xxxxxx X.
Xxxxxx
By
/s/ Xxxxxx X.
Xxxxxx
Title Chairman and
Chief Executive
Officer Title Chairman and
Chief Executive
Officer
/s/
Xxxxxxx X. Xxxxx
Xxxxxxx
X. Xxxxx
6
EXHIBIT
A
RELEASE
AGREEMENT
This
Release Agreement is executed pursuant to the Executive Transition Agreement
entered into between the undersigned, Xxxxxxx X. Xxxxx, and PNMR Services
Company (the “Company”) and PNM Resources, Inc. (“PNM Resources”).
By
signing this Release Agreement, I, Xxxxxxx X. Xxxxx, hereby release and
discharge Company, PNM Resources and the other “Released Parties” noted below
from any and all claims which I have or may have arising out of or related to my
employment or termination of employment (the “Claims”).
For this
purpose, the “Released Parties” include Company; PNM Resources; the “Affiliates”
(as that term is defined below) of either; and the current and former directors,
officers, agents, supervisors, employees and successors of Company and any other
Released Party, in their corporate and individual capacities.
For
purposes of this Release Agreement, the term “Affiliate” means (i) any
member of a “controlled group of corporations” (within the meaning of
Section 414(b) of the Code as modified by Section 415(h) of the Code)
that includes Company and/or PNM Resources as a member of the group, and
(ii) any member of a group of trades or businesses under common control
(within the meaning of Section 414(c) of the Code as modified by
Section 415(h) of the Code) that includes Company and/or PNM Resources as a
member of the group. A complete list of Affiliates is available on
request.
The
release provided by this Release Agreement includes, but is not limited to, any
Claims arising under Title VII of the Civil Rights Act, as amended, which
prohibits discrimination based on race, color, national origin, or sex; the Age
Discrimination in Employment Act, which prohibits discrimination based on age;
the Equal Pay Act, which prohibits paying men and women unequal pay for equal
work; the Rehabilitation Act of 1973, which prohibits discrimination based on
handicap; the Americans with Disabilities Act, which prohibits discrimination
based on disability; the Vietnam Era Veterans Readjustment Act of 1974, which
prohibits discrimination against veterans; the Workers’ Adjustment Retraining
Notification Act, which provides for notice of mass layoffs and plant closings;
the Employee Retirement Income Security Act of 1974 (ERISA), which governs
rights in employee benefit plans; the New Mexico Human Rights Act and the Texas
Commission on Human Rights Act, which prohibit discrimination based on race,
color, national origin, religion, ancestry, sex, sexual orientation, gender
identity, disability or mental or physical handicap; the Family and Medical
Leave Act of 1993, which provides certain reinstatement rights for employees
taking medical leave; or any other federal, state or local laws or regulations
prohibiting discrimination. This Release also includes a release of
any Claims arising from state or federal common law or statute, including any
Claims relating to Company’s or any other Released Party’s right to terminate
me, including, but not limited to, any Claims for wrongful discharge,
retaliatory discharge, breach of a covenant of good faith and fair dealing, or
breach of employment contract.
I agree
not to file any lawsuit or assert any claim, without limitation, based upon the
foregoing state or federal common law or statutes.
This
Release does not release Company for any amounts or benefits due pursuant to the
Supplemental Employee Retirement Agreement entered into between me and Company,
PNM Resources and the Public Service Company of New Mexico, which was amended
and restated effective as of January 1, 2009 by a document executed on
October 20, 2008 (the “SERP”). This Release also does not apply
to any amounts to which I may be entitled under the PNM Resources, Inc.
Employees’ Retirement Plan, Retirement Savings Plan, Executive Savings
Plan II, Officer Incentive Plan, Performance Equity Plan, nor to any
benefits to which I might otherwise be entitled pursuant to any other Company
sponsored pension or welfare benefit plan (as that term is defined in
Section 3(2)(A) or Section (3)(1) of ERISA) other than the PNM
Resources, Inc. Non-Union Severance Pay Plan or the PNM Resources, Inc. Officer
Retention Plan. Pursuant to 29 U.S.C. § 626, this Release does
not extend to any Claims or rights that may arise out of the actions of Company
or any other Released Party after the date of this Release.
As
provided in the Executive Transition Agreement, I understand that I may sign and
return this Release Agreement at any time on or after January 1, 2010 and
on or before February 15, 2010 and that I may use the entire period of time
between the date of execution of the Executive Transition Agreement and
February 15, 2010 to review and consider this Release Agreement before
signing it. I also acknowledge that I may revoke this Release
Agreement within seven (7) days after signing it. As a result, this
Release Agreement shall become effective and enforceable only if this Release
Agreement is not revoked during this revocation period. I acknowledge
that revocation may be made by returning a copy of this Release Agreement along
with the Employee Revocation Form attached as
Exhibit 1. Further, I acknowledge that for any revocation to be
effective this Release Agreement and the Employee Revocation Form must be
received no later than the close of business on the seventh (7th) day after I
sign this Agreement. If I revoke this Agreement, I acknowledge that
the Retainer Agreement entered into between Company and me pursuant to the
Executive Transition Agreement shall be void.
I hereby
represent that I (a) have carefully read all of the provisions of this
Release Agreement; (b) understand the provisions of this Release Agreement;
(c) have decided whether to consult with an attorney regarding this Release
Agreement; (d) have determined that it is in my best interest to enter into
this Release Agreement; (e) have not been influenced to enter into this
Release Agreement by any statement, representation or coercive act of Company,
PNM Resources, any Affiliate or representative of Company or PNM Resources, or
its counsel not contained in this Release Agreement; and (f) am entering
into this Release Agreement knowingly, willingly and voluntarily.
IN
WITNESS WHEREOF, I, Xxxxxxx X. Xxxxx, have signed this Release Agreement as
of this ____ day of __________, 2010.
______________________________________
Xxxxxxx
X. Xxxxx
2
EXHIBIT
1
EMPLOYEE REVOCATION
FORM
To: Xxxxx
X. Xxxx, Senior Vice President and Chief Administrative Officer
I hereby
revoke my acceptance of the foregoing Release Agreement. I
acknowledge that by revoking this Release Agreement the related Retainer
Agreement is void
____________________________ _____________________________________
Date Executive
|
FOR OFFICE USE
ONLY
|
Received
by the Designated Representative on _________________, ________, by
_______________________________________.
3
