AGREEMENT AND GENERAL RELEASE
Exhibit 10.89
AGREEMENT AND GENERAL RELEASE
THIS AGREEMENT AND GENERAL RELEASE (the “Agreement”) is entered into by Xxxxxxx X. Xxxxx (hereinafter referred to as “Xxxxx”) and Puget Sound Energy, Inc. (hereinafter referred to as “PSE”).
RECITALS
X. Xxxxx has been employed by PSE as Senior Vice President Regional Services and Community Affairs and his duties in that position ended effective July 31, 2003, by mutual agreement.
X. Xxxxx and PSE wish to enter into an agreement to clarify and resolve any disputes that may exist between them arising out of the employment relationship and its termination, and any continuing obligations of the parties to one another following the end of the employment relationship.
C. PSE has advised Xxxxx of his right to consult an attorney prior to signing this Agreement and has provided him reasonable time to consider its offer and to seek legal assistance. Xxxxx has either consulted an attorney of his choice or has voluntarily elected not to consult legal counsel, and understands that he is waiving all potential claims against PSE, except as specifically reserved herein.
D. This Agreement is not and should not be construed as an admission or statement by either party that it or any other party has acted wrongfully or unlawfully. Both parties expressly deny any wrongful or unlawful action.
AGREEMENTS
NOW, THEREFORE, in consideration of the following recitals and the mutual promises contained below, it is agreed as follows:
1. EMPLOYMENT: ENDING DATE AND RESPONSIBILITIES
Xxxxx will have no further active employment responsibilities after July 31, 2003 (the “Paid Leave Initiation Date”). Upon the Effective Date of this Agreement (as defined below), Xxxxx will be placed on a paid administrative leave through March 31, 2004 (the “Paid Leave Period”), at which point his employment with PSE will end. If this Agreement does not become effective, Xxxxx’x employment with PSE will terminate retroactive to July 31, 2003.
2. PAID LEAVE AND BENEFITS
| A. | Salary and Insurance Benefits |
Commencing with the Effective Date of this Agreement and through the Paid Leave Period, PSE will continue to pay Xxxxx a monthly salary of $21,250.00, less required and authorized withholding. During the Paid Leave Period, Xxxxx also will be eligible to continue participation in PSE’s officer-level benefit programs, except for short and long term disability and worker’s compensation programs.
Through March 31, 2006, PSE will continue Xxxxx’x medical and dental group insurance through its group plans on the same basis as during his active employment unless he sooner obtains similar coverage under another employer-sponsored plan, in which case Xxxxx is to promptly advise PSE of his new insurance coverage. If Xxxxx has not secured other medical and dental insurance coverage by March 31, 2006, he will then be entitled to continue his PSE medical and dental insurance coverage at his own expense, to the extent permitted by and subject to applicable provisions of COBRA. PSE’s obligation will cease if its medical and dental group insurance carriers at any date before March 31, 2006 no longer permit group coverage for Xxxxx; in that event, Xxxxx will be entitled to continue his PSE medical and dental insurance coverage at his own expense, to the extent permitted by and subject to applicable provisions of COBRA.
| B. | Incentive Payments |
No later than March 1, 2004, PSE will pay Xxxxx (a) a lump sum equal to the value of the 2000 – 2003 grant, measured as of June 30, 2003, as defined in the Puget Energy 1995 Long Term Incentive Plan (i.e., $211,088), and (b) a lump sum equal to the value, if any, of the result of his assigned goals under the terms of the 2003 Annual Incentive Plan. PSE agrees that Xxxxx has elected to defer these payments into his Deferred Compensation Plan Account for payment as defined in Section D of this document. The Annual Incentive Plan payment will be based on PSE’s December 31, 2003 results, and both payments will be subject to any required or authorized withholding.
| C. | Supplemental Executive Retirement Plan |
Xxxxx is entitled to benefit payments under PSE’s Supplemental Executive Retirement Plan (“SERP”). PSE agrees that Xxxxx may commence actuarially reduced SERP benefit payments as early as age 55. If Xxxxx commences receipt of SERP benefits and then obtains employment that would otherwise require suspension of such benefits, PSE agrees to waive suspension of benefits under Section 3.6 of the SERP. Attached hereto as Exhibit A is a copy of a letter from PSE to Xxxxx, transmitting an estimate by Milliman USA of Xxxxx’x SERP benefits (identified as “New PSE SERP” in Exhibit A).
| D. | Deferred Compensation Plan |
Xxxxx is a participant in PSE’s Deferred Compensation Plan. No later than 60 days after March 31, 2004, PSE will commence paying Xxxxx’x Account Balance in the Deferred Compensation Plan in 60 monthly payments as defined as a Monthly Installment Method in the Plan. These payments will be subject to authorized and required withholding.
| E. | Stock Options |
Following the Effective Date of this Agreement, Xxxxx may exercise any unexpired stock options available to him during the Paid Leave Period.
| F. | Outplacement Services |
PSE will provide Xxxxx with services through Xxxxxxx & Company’s Flagship Program for Senior Executives—Resident.
| G. | Club Membership |
PSE will continue to pay Xxxxx’x dues for his membership at the Rainier Club through March 31, 2004.
| H. | Laptop Computer |
Xxxxx may retain the laptop computer that was provided to him by PSE for use during his employment; provided that Xxxxx agrees that he will not download from the laptop computer any proprietary information of PSE and that he will submit his laptop computer to PSE’s information systems department so that PSE files and material may be deleted.
3. VALID CONSIDERATION
Xxxxx agrees that certain of the payments and other benefits described in the preceding paragraph are not required by PSE policies or procedures or by any other contractual obligation of PSE, and are offered by PSE solely as consideration for this Agreement. Xxxxx acknowledges that these payments represent a substantial benefit to him.
4. CONFIDENTIALITY OF SEPARATION AGREEMENT
Xxxxx agrees that, except as otherwise required by law, he will keep the terms of this Agreement (including but not limited to the salary continuation amounts) completely confidential, and that he will not disclose any information concerning this Agreement or its terms to anyone other than him immediate family, legal counsel, and/or financial advisors, who he will first inform of and from whom he will obtain agreement to be bound by this confidentiality clause.
5. GENERAL RELEASE OF CLAIMS
Xxxxx expressly waives any claims against PSE and releases PSE (including its officers, directors, stockholders, managers, agents and representatives) from any claims that he may have in any way connected with his employment and/or the termination of his employment with PSE; provided that, this waiver and release does not waive or release claims for Xxxxx’x vested retirement benefits or his vested benefits in the Deferred Compensation Plan. It is understood that this release includes, but is not limited to, any claims for wages, bonuses, employment benefits, or damages of any kind whatsoever, arising out of any contracts, express or implied, any covenant of good faith and fair dealing, express or implied, any theory of wrongful discharge, any legal restriction on PSE’s right to terminate employment, or any federal, state or other governmental statute or ordinance, including without limitation, Title VII of the Civil Rights Act of 1964, the federal Age Discrimination in Employment Act, the American with Disabilities Act, the Family and Medical Leave Act, the Washington Law Against Discrimination, or any other legal limitation on the employment relationship.
Xxxxx represents that he has not filed any complaints, charges or lawsuits against PSE with any governmental agency or any court, and agrees that he will not initiate or encourage any such actions.
This waiver and release shall not waive or release claims where the events in dispute first arise after the execution of this Agreement, nor shall it preclude Xxxxx from filing a lawsuit for the exclusive purpose of enforcing his rights under this Agreement.
6. REVIEW AND REVOCATION PERIOD; EFFECTIVE DATE
Xxxxx and PSE agree that he shall have 21 days to review this Agreement and consult legal counsel if he so chooses, during which time the proposed terms of this Agreement shall not be amended, modified or revoked by PSE. Xxxxx may revoke this Agreement if he so chooses by providing written notice of his decision to revoke the Agreement to PSE (ATTN: Xxxxxxx Xxxxxxxx) within seven days following the date he signs this Agreement. This Agreement shall become effective and enforceable upon expiration of this seven-day revocation period, and the Effective Date shall be the first day following the expiration of the revocation period.
7. NONDISPARAGEMENT
Xxxxx agrees that, unless required by law, he will not make disparaging or derogatory statements about PSE, its officers, managers, employees and/or agents or engage in conduct detrimental to PSE’s business or reputation. Any violation of this obligation by Xxxxx during the Paid Leave Period will cancel PSE’s obligation to make any further salary continuation payments still due.
PSE agrees that, unless required by law, its officers, directors and managers who have knowledge of this Agreement will not make disparaging or derogatory statements about Xxxxx or engage in conduct detrimental to Xxxxx’x business or reputation.
8. D&O COVERAGE; LITIGATION
Xxxxx will continue to be covered by PSE’s Director and Officer liability insurance for actions arising based on his conduct as an Officer of PSE. In case of litigation that arises involving PSE matters about which Xxxxx has knowledge or expertise, Xxxxx agrees that he will cooperate with PSE and make himself reasonably available to work with PSE in the pursuit or defense, as applicable, of such litigation. PSE will pay Xxxxx for any such consultation or other services he renders in connection with such litigation at an hourly rate computed based on his final earnings level at PSE (i.e., annual salary divided by 2,080).
8. SEVERABILITY
The provisions of this Agreement are severable, and if any part of it is found to be unlawful or unenforceable, the other provisions of this Agreement shall remain fully valid and enforceable to the maximum extent consistent with applicable law.
9. KNOWING AND VOLUNTARY AGREEMENT
Xxxxx represents and agrees that he has read this Agreement, understands its terms and the fact that it releases any claim he might have not expressly reserved against PSE and its agents, understands that he has the right to consult counsel of choice and has either done so or knowingly waived the right to do so, and enters into this Agreement without duress or coercion from any source.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates indicated below:
| PUGET SOUND ENERGY, INC. | ||
| /s/ Xxxxxxx X. Xxxxxxxx |
/s/ Xxxxxxx X. Xxxxx | |
| Xxxxxxx X. Xxxxxxxx | Xxxxxxx X. Xxxxx | |
| Title: President and Chief Executive Officer |
Dated: August 25, 2003 | |
| Dated: August 25, 2003 |
