EMPLOYMENT AND RETENTION AGREEMENT BETWEEN PEOPLES ENERGY CORPORATION AND THOMAS M. PATRICK CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
EXHIBIT
10(a)
BETWEEN
PEOPLES
ENERGY CORPORATION
AND
XXXXXX
X. XXXXXXX
CHAIRMAN,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
THIS
AGREEMENT is effective as of August 31, 2006 (“Effective Date”), by and between
Peoples Energy Corporation, an Illinois corporation (“PEC” or the “Company”),
and Xxxxxx X. Xxxxxxx, Chairman, President and Chief Executive Officer (the
“Executive”).
WITNESSETH
WHEREAS,
the Executive is a valuable employee of the Company and an integral part of
the
management of the Company; and
WHEREAS,
PEC wishes to encourage the Executive to continue his career and services with
the Company for the period preceding an anticipated change in control
transaction; and
WHEREAS,
the Board of Directors of PEC previously determined that it would be in the
best
interests of the Company and its shareholders to assure continuity in the
management of the Company’s administration and operations in the event of a
change in control by entering into a severance agreement with the Executive;
and
WHEREAS,
PEC and the Executive entered into a severance agreement effective as of August
1, 2002, which was superseded by a severance agreement effective as of June
2,
2004 (the “Severance Agreement”);
WHEREAS,
the Board of Directors of PEC and the Executive now desire to cancel the
Severance Agreement and replace it with this Agreement in consideration of
the
parties’ agreement that the Executive will delay his retirement pending
completion of an anticipated change in control transaction; and
WHEREAS,
the parties acknowledge that the Executive is waiving certain rights under
the
Severance Agreement and other arrangements in exchange for new rights provided
by this Agreement.
NOW
THEREFORE, for good and valuable consideration, the parties hereby agree to
the
following:
1. Definitions.
“AAA”
shall have the meaning set forth in paragraph 5 of this Agreement.
“Affiliate”
shall mean the subsidiaries of PEC and other entities controlled by such
subsidiaries.
“Agreement”
shall mean this Employment and Retention Agreement.
“Board”
shall mean the Board of Directors of PEC.
“Cause”
shall mean the Executive’s fraud or dishonesty which has resulted in or is
likely to result in material economic damage to the Company as determined in
good faith by a vote of at least two-thirds of the non-employee directors of
PEC
at a meeting of the Board at which the Executive is provided an opportunity
to
be heard.
“Change
in Control” shall mean:
(i) the
acquisition by any Person or Persons acting in concert, of ownership of stock
of
PEC that, together with stock held by such Person or Persons acting in concert,
constitutes more than fifty percent (50%) of the total fair market value or
total voting power of the stock of PEC (calculated in accordance with Code
Section 318(a) and subject to the limitations of Internal Revenue Service
(“IRS”) Notice 2005-1); or
(ii) a
change
in the ownership of a substantial portion of the assets (as defined for purposes
of Code Section 409A) of PEC; or
(iii) a
change
in the effective control (as defined for purposes of Code Section 409A) of
PEC.
“Code”
shall mean the United States Internal Revenue Code of 1986, as amended, or
any
successor thereto.
“Company”
shall mean PEC and include any Affiliate and successor or successors to
PEC.
“Compensation
Committee” shall mean the Management Development and Compensation Committee of
the PEC Board of Directors.
“Disability”
shall mean an impairment that affects the Executive and causes him either (a)
to
be unable to engage in any substantial gainful activity by reason of a medically
determinable physical or mental impairment that can be expected to result in
death or to last for a continuous period of not fewer than 12 months, as
determined by a physician selected by the Company; or (b) to receive income
replacement benefits for a period of not fewer than three (3) months under
an
accident and health plan covering employees of the Company by reason of a
medically determinable physical or mental impairment that can be expected to
result in death or to last for a continuous period of not fewer than 12
months.
“Effective
Date” shall mean the date set forth in the first paragraph of this
Agreement.
“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.
“PEC”
shall mean Peoples Energy Corporation, an Illinois corporation.
“PEC
LTIC” shall mean the Peoples Energy Corporation Long Term Incentive Compensation
Plan, as amended from time to time, or any successor plan.
-
2
-
“PEC
Retirement Plan” shall mean the Peoples Energy Corporation Retirement Plan as in
effect on the Effective Date, as amended from time to time, or any successor
plan.
“PEC
SRB”
shall mean the Peoples Energy Corporation Supplemental Retirement Benefit Plan
as in effect on the Effective Date, as amended from time to time, or any
successor plan.
“PEC
STIC” shall mean the Peoples Energy Corporation Short Term Incentive
Compensation Plan, as amended from time to time, or any successor
plan.
“Person”
shall have the meaning given in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d) and 14(d) thereof, including a “group” as
defined in Section 13(d) except that such term shall not include: (i)
the Company or any of its subsidiaries; (ii) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any of
its
Affiliates; (iii) an underwriter temporarily holding securities pursuant to
an
offering of such securities; or (iv) a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
“Severance
Agreement” shall have the meaning set forth in the preamble to this
Agreement.
“Term”
shall mean the term of this Agreement as set forth in paragraph 2.
2. Term.
This
Agreement shall be effective as of the Effective Date and shall continue
thereafter until the Executive retires from employment with the Company, the
Executive’s employment terminates due to death, Disability or another reason
other than Cause, or the Company terminates the Executive’s employment for
Cause.
3. Compensation
and Employee Benefits.
a. Salary
and Benefits.
(i) During
the Term, the Executive shall continue to receive his current salary in
accordance with the Company’s normal payroll procedures, subject to increase
from time to time in accordance with salary increases generally granted to
Company executives, and shall remain eligible to participate in all Company
bonus programs, incentive arrangements and employee benefit plans for which
he
is eligible as of the Effective Date or thereafter in accordance with their
terms.
(ii) Upon
the
termination of the Executive’s employment for any reason other than Cause,
within five (5) business days after such termination PEC shall pay to the
Executive (or, if the Executive has died before receiving all payments to which
he has become entitled hereunder, to the beneficiary or estate of the Executive
as described in paragraph 12) the sum of his accrued but unpaid salary and
accrued but unused paid time off for nonunion employees under the Paid Time
Off
Bank, as in effect on the Effective Date, as amended from time to time, or
any
successor plan.
-
3
-
b. Incentive
Payments.
The
Executive shall be entitled to the following incentive payments if he remains
employed with the Company through November 30, 2006 or dies or experiences
a
Disability that causes termination of his employment on or before that
date:
(i)
one
million dollars ($1,000,000) (less applicable tax withholdings) payable on
December 1, 2006; and
(ii) one
million seven hundred seventy-five thousand dollars ($1,775,000) (less
applicable tax withholdings) payable as soon as practicable following the date
that is six months after the Executive’s employment termination date, provided
that he is not terminated for Cause.
The
incentive payments are in consideration of the Executive’s agreement to and
compliance with the terms set forth in paragraphs 4, 7, and 17 of this
Agreement, provided that he complies with such terms and his employment is
not
terminated for Cause. PEC shall pay the designated amounts to the Executive
(or,
if the Executive dies before receiving the payments to which he has become
entitled hereunder, to the beneficiary or estate of the Executive as described
in paragraph 12) in lump sum cash payments.
If the
Executive’s employment is terminated for Cause after November 30, 2006 or he
fails to agree to and comply with paragraphs 4, 7 and 17 of this Agreement,
he
shall forfeit his right to receive the incentive payment described in paragraph
(ii) above.
c. Success
Bonus.
If
the
Executive remains employed with the Company on:
(i)
the
later
of (A) the closing date of the Change in Control transaction under consideration
on the Effective Date (“Project Score”), or (B) at the Company’s option (with
notice to be provided to the Executive before the closing of Project Score),
the
date that marks the three (3)-month anniversary of the closing of Project Score;
or
(ii)
if
Project Score is abandoned and does not close, the later of (A) the date
PEC hires a new chief executive officer and he or she commences service in
such
position, or (B) at the Company’s option (with notice to be provided to the
Executive before the new chief executive officer commences service), the date
that marks the three (3)-month anniversary of the new chief executive officer’s
first day of service in such position;
or
if the
Company terminates the Executive’s employment due to death, Disability or a
reason other than Cause before the occurrence of an event described in (i)
or
(ii) above, then PEC shall pay to the Executive (or, if the Executive has died
before receiving all payments to which he has become entitled hereunder, to
the
beneficiary or estate of the Executive as described in paragraph 12) a lump
sum
cash payment in the amount of two million dollars ($2,000,000), provided that
the Executive complies with the terms of paragraph 7 of this Agreement. Such
payment shall be made as soon as practicable following the date that is six
months after the Executive’s employment termination date.
-
4
-
d. Retirement
Benefits and Incentives.
The
Executive shall be entitled to receive any vested benefits credited or accrued
on his behalf under any retirement plan, bonus program or incentive arrangement
maintained by the Company, including, but not limited to, the PEC LTIC, the
PEC
Retirement Plan, the PEC SRB and the PEC STIC. Such benefits shall be
distributed or paid in accordance with the respective provisions of such plans,
programs or arrangements. To the extent required under Code Section 409A,
certain benefit distributions or payments (not including benefits due under
the
Company’s qualified retirement plans, such as the PEC Retirement Plan) may not
be payable
before
the date that is six months after the Executive’s employment termination date.
If the Executive’s benefit payments under the PEC SRB are delayed for six months
to comply with Code Section 409A and he elects an annuity form of distribution
under that plan, the annuity payments that otherwise would have been payable
during the six months immediately following the Executive’s employment
termination shall be aggregated and paid to the Executive all at once as soon
as
practicable following the date that is six months after the Executive’s
employment termination date.
e. Health
Benefits.
The
Executive shall be entitled to any post-retirement health benefits for which
he
is eligible under the Company’s welfare benefit plans (within the meaning of
Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”)). If the Executive is not retirement eligible, within the
meaning of the Company’s welfare benefit plans, at the time of his employment
termination, the Company may provide health benefits through a fully insured
health care or HMO plan. PEC’s obligations under this paragraph 3.e. shall
cease on the earlier of (i) the date as of which such coverage ends in
accordance with the Company’s welfare benefit plan and (ii) the date
following the termination of the Executive’s employment as of which the
Executive is eligible to receive benefits under welfare benefit plans (within
the meaning of ERISA Section 3(1)) provided by an employer of the Executive
other than the Company.
4. Source
of
Payments.
a. All
payments provided for in paragraph 3 shall be paid in cash from the general
funds of PEC; provided, however, that such payments shall be reduced by the
amount of any payments made to the Executive or his dependents, beneficiaries
or
estate from any trust or special or separate fund established or utilized by
PEC
to assure such payments. The Company shall not be required to establish a
special or separate fund or other segregation of assets to assure such payments,
and, if the Company makes any investments to aid it in meeting its obligations
hereunder, the Executive shall have no right, title or interest whatever in
or
to any such investments except as may otherwise be expressly provided in a
separate written instrument relating to such investments. Nothing
contained in this Agreement, and no action taken pursuant to its provisions,
shall create or be construed to create a trust of any kind, or a fiduciary
relationship between the Company and the Executive or any other person. To
the extent that any person acquires a right to receive payments from the Company
such right shall be no greater than the right of an unsecured creditor of the
Company.
-
5
-
b. The
Executive hereby waives the contribution requirement described in Section 1(f)
of the Amended and Restated Trust under Peoples Energy Corporation Directors
Deferred Compensation Plan, Directors Stock and Option Plan, Executive Deferred
Compensation Plan and Supplemental Retirement Plan dated February 27, 2004
(the
“Trust Agreement”) with respect to any benefits to which he may be entitled
under the plans covered by the Trust Agreement.
5. Litigation
Expenses; Arbitration.
a. PEC’s
obligation to make the payments provided for in this Agreement and otherwise
to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Executive or others, except as set forth in
paragraph 7. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement. PEC agrees
to pay, upon written demand therefor by the Executive, all legal fees and
expenses which the Executive may reasonably incur as a result of any dispute
or
contest (regardless of the outcome thereof) by or with the Company or others
regarding the validity or enforceability of, or liability under, any provision
of this Agreement, plus in each case interest at the federal long-term rate
in
effect under Code Section 1274(d), compounded monthly. In any such action
brought by the Executive for damages or to enforce any provisions of this
Agreement, the Executive shall be entitled to seek both legal and equitable
relief and remedies, including, without limitation, specific performance of
the
Company’s obligations hereunder, in his sole discretion. The obligation of
the Company under this paragraph 5 shall survive the termination for any reason
of this Agreement (whether such termination is by the Company, by the Executive,
upon the expiration of this Agreement or otherwise).
b. In
the
event of any dispute or difference between the Company and the Executive with
respect to the subject matter of this Agreement and the enforcement of rights
hereunder, the Executive may, in his sole discretion by written notice to PEC,
require such dispute or difference to be submitted to arbitration. The
arbitrator or arbitrators shall be selected by agreement of the parties or,
if
they cannot agree on an arbitrator or arbitrators within 30 days after the
Executive has notified PEC of his desire to have the question settled by
arbitration, then the arbitrator or arbitrators shall be selected by the
American Arbitration Association (the “AAA”) in Illinois upon the application of
the Executive. The determination reached in such arbitration shall be
final and binding on both parties without any right of appeal of further
dispute. Execution of the determination by such arbitrator may be sought
in any court of competent jurisdiction. The arbitrators shall not be bound
by judicial formalities and may abstain from following the strict rules of
evidence and shall interpret this Agreement as an honorable engagement and
not
merely as a legal obligation. Unless otherwise agreed by the parties, any
such arbitration shall take place in Illinois, and shall be conducted in
accordance with the Rules of the AAA.
6. Tax
Withholding.
The
Company may withhold from any payments made under this Agreement all federal,
state or other taxes, including excise taxes as shall be required pursuant
to
any law or governmental regulation or ruling.
-
6
-
7. Waiver
and Releases.
In
consideration of the covenants under this Agreement, including, but not limited
to, paragraphs 3 and 5, and as a condition precedent to receiving any payments
under this Agreement, the Executive agrees to execute, concurrently with his
employment termination, a release substantially in the form of Exhibit A and
a
Confidentiality Agreement substantially in the form of Exhibit B,
respectively, attached hereto and by this reference made a part
hereof.
8. Entire
Understanding.
This
Agreement contains the entire understanding between the Company and the
Executive with respect to the subject matter hereof and supersedes any prior
agreement between the Company and the Executive providing for severance or
similar benefits, except that this Agreement shall not affect or operate to
reduce any benefit or compensation inuring to the Executive of any kind
elsewhere provided and not expressly provided for in this
Agreement.
9. Severability.
If,
for
any reason, any one or more of the provisions or part of a provision contained
in this Agreement is held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision or part of a provision of this Agreement not held invalid,
illegal or unenforceable, and each other provision or part of a provision shall,
to the fullest extent consistent with law, continue in full force and
effect.
10. Consolidation,
Merger, or Sale of Assets.
If
PEC
consolidates or merges into or with, or transfers all or substantially all
of
its assets to, another corporation, limited liability company, limited
partnership, or other entity, the term “the Company” as used herein shall
include such other entity and this Agreement shall continue in full force and
effect.
11. Notices.
All
notices, requests, demands and other communications required or permitted
hereunder shall be given in writing and shall be deemed to have been duly given
if delivered by overnight courier, facsimile or electronic mail or mailed,
postage prepaid, first class with return receipt, as follows:
a. to
PEC:
Peoples
Energy Corporation
000
Xxxx
Xxxxxxxx Xxxxx
Xxxxxxx,
Xxxxxxxx 00000
Attention:
Secretary
Facsimile:
(000) 000-0000
-
7
-
b. to
the
Executive:
Xxxxxx
X.
Xxxxxxx
Chairman,
President and Chief Executive Officer
Peoples
Energy Corporation
000
Xxxx
Xxxxxxxx Xxxxx
Xxxxxxx,
Xxxxxxxx 00000
Facsimile:
(000) 000-0000
or
to
such other address as either party shall have previously specified in writing
to
the other.
12. No
Attachment.
Except
as
required by law and as expressly provided in this paragraph 12, no right to
receive payments under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge or
hypothecation or to execution, attachment, levy or similar process or assignment
by operation of law, and any attempt, voluntary or involuntary, to effect any
such action shall be null, void and of no effect. Notwithstanding the
preceding sentence, the Executive may, by giving written notice to PEC during
the Executive’s lifetime, designate a beneficiary or beneficiaries to whom the
benefits described in paragraph 3 shall be transferred in the event of the
Executive’s death. Any such designation may be revoked or changed by the
Executive at any time and from time to time by similar written notice. If
there is no such designated beneficiary living upon the death of the Executive
or if all such designated beneficiaries die prior to the receipt by the
Executive of the referenced benefits, such benefits shall be transferred to
the
Executive’s surviving spouse or, if none, then such benefits will be transferred
to the estate or personal representative of the Executive. If the Company,
after reasonable inquiry, is unable to determine within twelve months after
the
Executive’s death whether any designated beneficiary of the Executive did in
fact survive the Executive, such beneficiary shall be conclusively presumed
to
have died prior to the Executive’s death.
13. Binding
Agreement.
This
Agreement shall be binding upon, and shall inure to the benefit of, the
Executive and the Company and their respective permitted successors and
assigns.
14. Modification
and Waiver.
This
Agreement may not be modified or amended except by an instrument in writing
signed by the parties hereto. No term or condition of this Agreement shall
be deemed to have been waived, nor shall there be any estoppel against the
enforcement of any provision of this Agreement except by written instrument
signed by the party charged with such waiver or estoppel. No such written
waiver shall be deemed a continuing waiver unless specifically stated therein,
and each such waiver shall operate only as to the specific term or condition
waived and shall not constitute a waiver of such term or condition for the
future or as to any act other than that specifically waived.
-
8
-
15. Headings
of No Effect.
The
paragraph headings contained in this Agreement are included solely for
convenience of reference and shall not in any way affect the meaning or
interpretation of any of the provisions of this Agreement.
16. Governing
Law.
This
Agreement and its validity, interpretation, performance, and enforcement shall
be governed by the laws of the State of Illinois without giving effect to the
choice of law provisions in effect in such state.
17. Termination
of Severance Agreement.
The
Severance Agreement is hereby terminated and no longer in effect as of the
Effective Date.
18. Code
Section 409A Compliance.
No
provision in this Agreement is intended to provide a deferral of compensation
within the meaning of Code Section 409A. Company and Executive agree that
if and to the extent Code Section 409A applies to this Agreement, the Agreement
shall be administered in accordance with the requirements of Code Section 409A
so that there will not be a plan failure under Code Section 409A(a)(1), and
all
amounts payable hereunder shall be distributed only in compliance with the
requirements of paragraphs (2), (3) and (4) of such Code section, including,
by
way of example and without limitation, Code Section 409A(2)(A)(i), which
prohibits the distribution of compensation subject to Code Section 409A to
a
“specified employee” of a publicly traded company any earlier than six months
after the date of separation of service in the case of a distribution by reason
of separation of service. No distribution shall be made under the
Agreement that would fail to meet the requirements of Code Section
409A.
In
addition, this Agreement is not intended to materially modify any deferred
compensation plan of the Company that existed on October 3, 2004. However,
if this Agreement would otherwise be interpreted to be a material modification
of any deferred compensation plan of the Company that existed on October 3,
2004, as permitted by IRS Notice 2005-1, Q&A-18(b), this Agreement shall be
treated as material modification of such deferred compensation plan only as
to
the benefits provided by this Agreement and only the benefits provided by this
Agreement shall be subject to Code Section 409A.
[SIGNATURE
PAGE FOLLOWS]
-
9
-
IN
WITNESS WHEREOF, PEC has caused this Agreement to be executed, and the Executive
has executed this Agreement.
PEOPLES
ENERGY CORPORATION
By:
XXXXXXX
X. XXXXXXX
Director
and Chairman of the Management
Development and Compensation Committee
of the Board of Directors
Development and Compensation Committee
of the Board of Directors
EXECUTIVE
By:
XXXXXX
X.
XXXXXXX
Chairman,
President and Chief Executive Officer
-
10
-
EXHIBIT
A
RELEASE
OF CLAIMS
AND
COVENANT
NOT TO XXX
THIS
RELEASE OF CLAIMS AND COVENANT NOT TO XXX (the “Release”) is executed and
delivered by XXXXXX X. XXXXXXX (the “Executive”), to Peoples Energy Corporation,
its subsidiaries, and affiliates (collectively referred to as the
“Company”).
In
consideration of the agreement by the Company to provide the Executive with
the
payments and benefits under the Employment and Retention Agreement between
the
Executive and the Company dated August 31, 2006, the Executive hereby agrees
as
follows:
1. Release
and Covenant.
The
Executive, of his own free volition, forever waives and releases any and all
claims the Executive, his dependents, relatives, heirs, executors,
administrators, successors and assigns has or may have against the Company,
its
directors, officers, employees, agents, stockholders, successors and assigns
(both individually and in their official capacities with the Company) of any
kind or nature whatsoever arising from facts, assertions, circumstances,
omissions or matters occurring on or before the date hereof, including all
claims arising from or relating in any way to the Executive’s employment with
the Company or the conclusion of such employment (whether such claims are
presently known or hereafter discovered). This release includes, but is
not limited to, a release of any claims in tort or contract, including claims
for wrongful discharge, breach of any employment contract or any other
agreement, contract, practice or policy. In addition to any other claims,
the Executive specifically waives, releases, and covenants not to xxx or to
file
any charges or administrative actions with respect to any and all claims against
the Company under the Americans with Disabilities Act, the Age Discrimination
in
Employment Act, Title VII (or any other title) of the Civil Rights Act of 1964
(including all claims of sex, race, national origin, and religious
discrimination), Section 1981 of the Civil Rights Act, the Federal Equal Pay
Act, the Illinois Human Rights Act, the Illinois Wage Payment and Collection
Act, the Xxxx County Human Rights Ordinance, the City of Chicago Human Rights
Ordinance, the Employee Retirement Income Security Act, the Family and Medical
Leave Act, or any other federal, state or local statute, law, regulation,
ordinance, or doctrine of common law or public policy, contract or tort law
having any bearing whatsoever on the terms and conditions of employment or
termination of employment. This Release shall not, however, constitute a
waiver of any of the Executive’s rights under the Employment and Retention
Agreement or any rights he may have as a director or officer of the Company
to
indemnification under the Company’s articles of incorporation or by-laws with
respect to claims by third parties. The Executive acknowledges that, in
his decision to enter into this Release, he has not relied on any
representations, promises or agreements of any kind, including oral statements
by representatives of the Company, except as set forth in this
Release.
2. Due
Care.
This
Release contains a release of all claims under the Age Discrimination in
Employment Act (“ADEA”) and, therefore, pursuant to the requirements of the
ADEA, the Executive acknowledges that he has been advised (i) that this release
includes, but is not limited to, all claims under the ADEA arising up to and
including the date of execution of this release; (ii) to consult with an
attorney and or other advisor of his choosing concerning his rights and
obligations under this release; (iii) to fully consider this release before
executing it, and that he has been offered ample time and opportunity, in excess
of 21 days, to do so; and (iv) that this release shall become effective and
enforceable 7 days following execution of this Release by the Executive, during
which 7-day period the Executive may revoke his acceptance of this Release
by
delivering written notice to: Corporate Secretary, Peoples Energy
Corporation, 000 Xxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000.
3. No
Assignment of Claims.
The
Executive represents and warrants that there has been no assignment or other
transfer of any interest in any claim which the Executive may have against
the
Company. The Executive agrees to indemnify and hold the Company harmless
from any liability, claims, demands, damages, cost, expenses and attorney’s fees
incurred as a result of any person asserting such assignment or transfer of
any
rights or claims under any such assignment or transfer. It is the
intention of the Executive and the Company that this indemnity does not require
payment as a condition precedent to recovery by the Company from the Executive
under this indemnity.
4. Modification
and Waiver.
This
Release may not be modified or amended except by an instrument in writing signed
by the Executive and the Company. No term or condition of this Release
shall be deemed to have been waived, nor shall there be any estoppel against
the
enforcement of any provision of this Release except by written instrument signed
by the party charged with such waiver or estoppel. No such written waiver
shall be deemed a continuing waiver unless specifically stated therein, and
each
such waiver shall operate only as to the specific term or condition waived
and
shall not constitute a waiver of such term or condition for the future or as
to
any act other than that specifically waived.
5. Governing
Law.
To
the
extent not governed by federal law, this Release and its validity,
interpretation, performance, and enforcement shall be governed by the laws
of
the State of Illinois without giving effect to the choice of law provisions
in
effect in such state.
IN
WITNESS WHEREOF, the Executive has executed this Release and delivered it to
the
Company on __________________ ____, _______.
By:
XXXXXX
X.
XXXXXXX
-
2
-
EXHIBIT
B
CONFIDENTIALITY
AND NON-SOLICITATION AGREEMENT
BETWEEN
PEOPLES
ENERGY CORPORATION
AND
XXXXXX
X. XXXXXXX
THIS
CONFIDENTIALITY AND NON-SOLICITATION AGREEMENT (the “Agreement”), effective as
of _______________ ____, ______, by and between Peoples Energy Corporation,
including any of its subsidiaries, affiliates and related entities (the
“Company”) and XXXXXX X. XXXXXXX (the “Executive”).
WITNESSETH
WHEREAS,
the Executive is an employee of the Company;
WHEREAS,
the Company and the Executive have entered into an employment and retention
agreement dated August 31, 2006 (the “Employment and Retention Agreement”) under
which the Company has covenanted to provide the Executive with certain payments
and benefits in the event that the Executive’s employment with the Company ends
under the circumstances described therein;
WHEREAS,
in consideration of the Company’s covenants under the Employment and Retention
Agreement, and as a condition precedent to the Executive receiving any payments
or benefits under the Employment and Retention Agreement, the Executive has
agreed to execute a confidentiality agreement concurrently with his employment
termination as described in the Employment and Retention Agreement;
NOW,
THEREFORE, as a condition precedent, and in consideration of the covenants
by
the Company to provide the Executive with the payments and benefits under the
Employment and Retention Agreement, the Executive hereby agrees as follows:
1. Confidential
Information; Acknowledgement of Legitimate Business Interest of the
Company.
The
Executive expressly recognizes and acknowledges that during his employment
with
the Company, he became entrusted with, had access to, or gained possession
of
confidential and proprietary information, data, documents, records, materials,
and other trade secrets and/or other proprietary business information of the
Company that is not readily available to competitors, outside third parties
and/or the public, including without limitation, information about (i) current
or prospective customers and/or suppliers, (ii) employees, research, goodwill,
production, and prices, (iii) business methods, processes, practices or
procedures; (iv) computer software and technology development, (v) the Company’s
hydrocarbon interests and prospects, and (vi) business strategy, including
acquisition, merger and/or divestiture strategies (collectively or with respect
to any of the foregoing, the “Confidential Information”). The Executive
further
recognizes
and acknowledges that the Confidential Information is the sole and exclusive
property of the Company and that the Company has a legitimate interest in
protecting its Confidential Information.
2. Non-Disclosure
of Confidential Information.
The
Executive agrees that following his termination of employment, he shall keep
and
retain in confidence all Confidential Information and will not, without the
consent of the Company, disclose or divulge any Confidential Information
obtained during his employment with the Company to any third party for so long
as the Confidential Information is valuable and unique, or until either the
Company has either itself released the Confidential Information into the public
domain or the Confidential Information has clearly become publicly available
by
means other than the Company or the Executive. No individual piece of
Confidential Information shall be deemed to have become publicly available
merely because other pieces of Confidential Information shall have become
publicly available, and no individual piece of Confidential Information shall
be
deemed to have become publicly available unless all of its substantive
provisions shall have become publicly available. This paragraph 2 shall
not prevent the Executive from using general skills and experience developed
in
positions with the Company or other employers, or from accepting a position
of
employment with another company, firm, or other organization, provided that
such
position does not require divulgence or use of the Confidential
Information.
3. Cooperation
with the Company.
If
the
Executive receives a subpoena or other judicial or administrative process
demanding that he disclose Confidential Information (“Subpoena”), the Executive
agrees that he will promptly notify the Company and cooperate fully with the
Company if the Company elects to challenge or otherwise resist disclosure of
the
Confidential Information sought by the Subpoena. Any such challenge or
resistance by the Company shall be at the Company’s own expense. If the
Executive promptly notifies the Company of the receipt of a Subpoena and the
Company declines or fails to challenge or resist the Subpoena, or if after
intervention by the Company in the judicial or administrative process, the
Company is unsuccessful in quashing or opposing the disclosure, the Executive
may produce the Confidential Information or respond to the Subpoena as he deems
appropriate.
4. Return
of
Property.
The
Executive understands and agrees that all business information, files, research,
records, memoranda, books, lists and other documents and tangible materials,
including computer disks, and other hardware and software that he receives
during employment, whether confidential or not, are the property of the Company
and that, immediately upon the termination of the Executive’s employment, he
will promptly deliver to the Company all such materials, including copies
thereof, in his possession or under his control.
5. Non-Solicitation.
The
Executive covenants and agrees that for a period commencing on the date of
the
Executive’s termination of employment with the Company and ending on the date
that is one (1)
-
2
-
year
after such employment termination date, the Executive shall not, directly or
indirectly, solicit, induce, influence, or attempt to induce any employee of
the
Company to terminate his employment with, or compete against the Company or
any
present or future affiliates of the Company. In particular, and without
limiting the foregoing, the Executive agrees that during the one-year (1-year)
period commencing on the Executive’s employment termination date with the
Company, the Executive shall not directly or indirectly attempt to hire any
other employee of the Company or otherwise encourage any other employee to
leave
the employ of the Company, or (ii) advise or recommend to any other person
that
they employ or solicit for employment, any employee of the Company.
6. Equitable
Relief.
The
Executive acknowledges that the Confidential Information to be disclosed to
the
Executive during his employment is of a special and unique character, and that
the breach of any provision of this Agreement, including without limitation,
its
non-solicitation provision, will cause the Company irreparable injury and
damage. Accordingly, the Company shall be entitled, in addition to all
other remedies available to it, to injunctive and equitable relief to prevent
a
breach of any part of this Agreement or to enforce any part of this
Agreement.
7. Assignment.
This
Agreement is not assignable, in whole or in part, and shall not be assigned,
by
the Executive; and any purported assignment by the Executive shall be considered
null and void. This Agreement is assignable and may be so assigned by
Employer, and this Agreement shall inure to the Benefit of, and shall be binding
upon, any and all successors and assigns of the Company.
8. Entire
Understanding.
This
Agreement contains the entire understanding between the Company and the
Executive with respect to the subject matter hereof.
9. Severability.
If,
for
any reason, any one or more of the provisions or part of a provision contained
in this Agreement shall be held to be invalid, illegal or unenforceable in
any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision or part of a provision of this Agreement not held invalid,
illegal or unenforceable, and each other provision or part of a provision shall,
to the fullest extent consistent with law, continue in full force and
effect.
10. Consolidation,
Merger, or Sale of Assets.
If
the
Company consolidates or merges into or with, or transfers all or substantially
all of its assets to, another corporation, the term “the Company” as used herein
shall include such other corporation and this Agreement shall continue in full
force and effect.
- 3 -
11. Notices.
All
notices, requests, demands and other communications required or permitted
hereunder shall be given in writing and shall be deemed to have been duly given
if delivered by overnight courier, facsimile or electronic mail or mailed,
postage prepaid, first class with return receipt, as follows:
a. to
the
Company:
Peoples
Energy Corporation
000
Xxxx
Xxxxxxxx Xxxxx
Xxxxxxx,
Xxxxxxxx 00000
Attention:
Secretary
Facsimile:
(000) 000-0000
b. to
the
Executive:
the
Executive’s most recent home address
or
facsimile number on file with the Company
or
to
such other address as either party shall have previously specified in writing
to
the other.
12. Binding
Agreement.
This
Agreement shall be binding upon, and shall inure to the benefit of, the
Executive and the Company and their respective permitted successors and
assigns.
13. Modification
and Waiver.
This
Agreement may not be modified or amended except by an instrument in writing
signed by the parties hereto. No term or condition of this Agreement shall
be deemed to have been waived, nor shall there be any estoppel against the
enforcement of any provision of this Agreement except by written instrument
signed by the party charged with such waiver or estoppel. No such written
waiver shall be deemed a continuing waiver unless specifically stated therein,
and each such waiver shall operate only as to the specific term or condition
waived and shall not constitute a waiver of such term or condition for the
future or as to any act other than that specifically waived.
14. Headings
of No Effect.
The
paragraph headings contained in this Agreement are included solely for
convenience of reference and shall not in any way affect the meaning or
interpretation of any of the provisions of this Agreement.
15. Governing
Law.
This
Agreement and its validity, interpretation, performance, and enforcement shall
be governed by the laws of the State of Illinois without giving effect to the
choice of law provisions in effect in such state.
-
4
-
IN
WITNESS WHEREOF, Peoples Energy Corporation, on behalf of itself and its
subsidiaries, affiliates and related entities, has caused this Agreement to
be
executed, and the Executive has executed this Agreement, as of the effective
date written above.
PEOPLES
ENERGY CORPORATION
By:
XXXXXXX
X. XXXXXXX
Director
and Chairman of the Management
Development and Compensation Committee
of the Board of Directors
Development and Compensation Committee
of the Board of Directors
EXECUTIVE
By:
XXXXXX
X.
XXXXXXX
Chairman,
President and Chief Executive Officer
-
5
-
