EXHIBIT 10(c)
RESIGNATION AND
GENERAL RELEASE AGREEMENT
This RESIGNATION AND GENERAL RELEASE AGREEMENT ("Agreement"), made as of the 7th
day of August 2002, pursuant to Michigan law, by and between Xxxx X. Xxxxxx (the
"Employee"), an individual, and CMS Energy Corporation (the "Company"), a
Michigan corporation, is a resignation agreement, which includes a general
release of claims.
WHEREAS, the Employee has offered to resign from employment with the Company, to
release any and all claims which the Employee may have against the Company, and
to comply with other covenants set forth in this Agreement, in return for a
separation allowance and other consideration.
NOW THEREFORE, in consideration of the covenants undertaken and the releases
contained in this Agreement, the Employee and the Company agree as follows:
1. VOLUNTARY RESIGNATION
The Employee shall voluntarily resign from employment with CMS Energy
Corporation effective August 1, 2003, by executing and submitting a letter of
resignation at the time he executes this Agreement to the Chairman and CEO of
the Company.
2. VOLUNTARY RESIGNATION OF OFFICER AND DIRECTOR STATUS
At the time he executes this Agreement, the Employee shall voluntarily submit a
letter of resignation to the Chairman and CEO of the Company. In that letter,
Employee shall resign effective immediately all offices and directorships which
he may hold with the Company, with any subsidiary of the Company, and with any
other company or partnership in which the Company or any of its subsidiaries has
an interest, provided that for his positions as chief financial officer of the
Company and of Consumers Energy Company, Employee's resignation shall be
effective as of August 16, 2002.
3. SEPARATION ALLOWANCE AND OTHER CONSIDERATION
The following is the consideration for the releases and the other covenants in
this Agreement:
A. Beginning August 1, 2002, the Employee shall remain on the payroll
at Employee's current annual salary, but as an employee in salary
grade 1, until the date of his resignation as set forth in Section 1
of this Agreement. The total amount of Employee's current annual
salary to be paid pursuant to this Section 3(A) is included in the
total amount of the separation allowance specified in Section 3(B)
below and shall be paid on a pro rata basis as part of the twenty
five installments set forth in Section 3(B). As of the
date he executes this Agreement, in addition to fulfilling his
responsibilities pursuant to Section 15, Employee shall have only the
job responsibilities, including the location where they are to be
carried out, which he receives in writing from the Chairman and CEO of
the Company. Except as set forth in this Section, however, the Employee
shall receive no other salary or salary increases from the Company.
Further, within 5 days of executing this Agreement, Employee shall
provide the Chairman and CEO of the Company a list of all matters (1)
upon which he is working personally without the substantive assistance
of any other person and (2) all matters on which he is working with the
substantive assistance of others, including the identity of those
providing that assistance. The list shall identify the status of each
matter as of the date the list is prepared.
B. After August 1, 2002, the Company shall pay to Employee a separation
allowance (which includes his current annual salary of $500,000.00 per
year as an employee from August 1, 2002 through July 31, 2003) in the
total amount of $1,650,000.00, less state, federal, FICA and other
applicable withholding taxes and authorized deductions. Said separation
allowance will be paid in twenty five (25) installments with the first
installment of $825,000.00, less applicable withholding taxes and
deductions, payable no later than August 10, 2002. The balance of
$825,000.00 will be paid in twenty four (24) equal installment payments
of $34,375.00 less applicable withholding taxes and deductions. The
equal installment payments shall be made twice a month on approximately
the 15th and 30th days of the month. The first equal installment
payment is due on or about August 15, 2002, with the twenty fourth and
last equal installment payment due on or about July 30, 2003.
Ninety-five percent of the total amount of the separation allowance
shall be consideration for the General Release and Discharge by
Employee (see Section 7), and five percent of the total amount shall be
consideration for the Release of Age Discrimination Claims by Employee
(see Section 8).
C. As further consideration for the releases and other covenants in this
Agreement, the Board of Directors of the Company shall extend the time
period that the Employee may exercise his existing CMS Energy
Corporation stock options for three years from the date he executes
this Agreement. This extension shall allow Employee to exercise all
options that Employee would otherwise forfeit as a result of resigning
from the Company, but shall not extend the life of the options that
would have expired during this three year period had the Employee
continued his employment with the Company.
D. The Company shall allow all awards of restricted common stock to vest
according to Section 7.2(h) of the CMS Energy Corporation Performance
Incentive Stock Plan, as amended and restated effective December 3,
1999.
E. If Employee elects to retire and elects insurance coverage of a type or
in an amount for which an active employee would be required to
contribute a portion of the cost, Employee will pay the amount of the
contribution to the Company or the insurance carrier, as the Company
directs, each month. Nothing in this Agreement waives the Employee's
rights
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to participate in the Company's retiree medical plan as in effect on
the date of Employee's retirement if the Employee meets the
requirements for participation.
4. CONFIDENTIAL MATERIALS AND INFORMATION
(A) The Employee shall promptly return to the Company and shall not take
or copy in any form or manner any Confidential Materials or
Information. The Employee acknowledges that by reason of the
Employee's position with the Company the Employee has been given
access to Confidential Materials or Information respecting the
Company's business affairs. The Employee represents that the
Employee has held all such information confidential and will
continue to do so, and that the Employee will not use such
information and relationships for any business (which term herein
includes a partnership, firm, corporation or any other entity)
without the prior written consent of the Company.
(B) "Confidential Materials or Information" includes, by way of example
and not limitation, notes, letters, internal Company memoranda,
records, reports, recordings, records of conversations and other
information concerning the Company's business affairs which the
Employee obtained by virtue of the Employee's position with the
Company and which was not disseminated to the public during the term
of the Employee's employment. It also includes the contents of
Employee's personal computer and the non-original copies of
documents contained in Employee's office files.
(C) Employee further agrees not to testify or act in any capacity as a
paid or unpaid expert witness, advisor or consultant on behalf of
any person, individual, partnership, firm, corporation or any other
person or entity that has or may have any claim, demand, action,
suit, cause of action, or judgment against Employer.
(D) In order to assist Employee in satisfying his obligations of
cooperation under Section 15 of this Agreement, the Company will
make a copy for the Employee and his counsel of the Confidential
Materials or Information they believe are required for the rendering
of such assistance by Employee. Such materials and information as
selected shall be returned by Employee and his counsel to the
Company after the assistance is completed.
5. CONFIDENTIALITY
(A) The Employee agrees that the terms and conditions of this Agreement
shall remain confidential as between the parties and that the
Employee shall not disclose them to any other person except
Employee's legal counsel, financial and/or tax advisors, future
employer(s), and members of his immediate family. Employee shall
also be allowed to disclose the terms and conditions to other
persons after he has requested and received the express consent of
the Company for such disclosure.
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(B) Without limiting the generality of the foregoing, neither the
Company nor the Employee will respond to or in any way participate
in or contribute to any public discussion, notice or other publicity
concerning or in any way relating to the facts and circumstances
surrounding the termination of Employee's employment with the
Company or the execution of the terms and conditions of this
Agreement. Notwithstanding the foregoing sentence, the Company shall
be allowed to make such filings regarding the terms and conditions
of this Agreement with the appropriate regulatory bodies, as may be
required or advisable in the Company's sole discretion, including
the submission of this Agreement as an exhibit to such filings.
(C) Without limiting the generality of the foregoing, the Employee
specifically agrees that he and the persons to whom he is allowed to
make disclosure pursuant to paragraph (A) above shall not disclose
information regarding this Agreement to any current or former
employee of the Company.
(D) The Employee hereby acknowledges that a breach of the
confidentiality provisions of this Agreement by Employee shall
constitute and be treated as a material breach of this Agreement and
will be detrimental to and cause harm to the Company, and as
liquidated damages in the event of a breach, Employee agrees to
repay the Company all funds received under this Agreement.
6. NO ADMISSION OF LIABILITY
The consideration advanced herein by the Company is in full settlement of all
possible claims by the Employee and does not constitute an admission of
liability by the Company. The consideration has been advanced as a compromise to
avoid expense and terminate any potential controversy. The covenants undertaken
by the Employee do not constitute an admission of liability by the Employee.
7. GENERAL RELEASE AND DISCHARGE BY EMPLOYEE
In consideration of the payments and commitments made by the Company to the
Employee (described in Section 3 above), the Employee on his own behalf, and his
descendants, ancestors, dependents, heirs, executors, administrators, assigns,
and successors, and each of them, hereby covenants not to xxx and fully releases
and discharges the Company, and its parent, subsidiaries and affiliates, past
and present, and each of them as well as its and their trustees, directors,
officers, agents, attorneys, insurers, employees, stockholders, representatives,
assigns, and successors, past and present, and each of them, hereinafter
together and collectively referred to as "releasees," with respect to and from
any and all claims, wages, demands, rights, liens, agreements, contracts,
covenants, actions, suits, causes of action, obligations, debts, costs,
expenses, attorneys' fees, damages, judgments, orders and liabilities of
whatever kind or nature in law, equity or otherwise, whether now known or
unknown, suspected or unsuspected, and whether or not concealed or hidden, which
the Employee now owns or holds or has at any time
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heretofore owned or held as against said releasees, arising out of or in any way
connected with the Employee's employment relationship with the Company, or the
Employee's voluntary resignation from employment or any other transactions,
occurrences, acts or omissions or any loss, damage or injury whatever, known or
unknown, suspected or unsuspected, resulting from any act or omission by or on
the part of said releasees, or any of them committed or omitted prior to the
date of this Agreement, including but not limited to, claims based on any
express or implied contract of employment which may have been alleged to exist
between the Company and the Employee, Title VII of the Civil Rights Act of 1964,
42 U.S.C. Section 2000e, et seq, as amended, the Civil Rights Act of 1991, P. L.
102-1 66, the Xxxxxxx-Xxxxxx Civil Rights Act, MCLA Section 37.2101, et seq, the
Rehabilitation Act of 1973, 29 U.S.C. Section 701, et seq, as amended, the
Americans with Disabilities Act of 1990, 42 U.S.C. Section 12206, et seq, as
amended, or the Michigan Handicappers' Civil Rights Act, MCLA Section 37.1101,
et seq, as amended, or any other federal, state or local law, rule, regulation
or ordinance, and claims for severance pay, sick leave, holiday pay, and any
other fringe benefit of the Company except rights, if any, under the group
insurance plans, pension plan, supplemental executive retirement plan, savings
plan, the employee stock ownership plan, or the Consolidated Omnibus Budget
Reconciliation Act of 1985 ("COBRA") with respect to the continuation coverage
of medical benefits, and rights under Section 3(E) of this Agreement. Nothing in
this Agreement is intended to, nor does the Employee and the Company, waive the
right to enforce this Agreement pursuant to Section 13 below.
8. RELEASE OF AGE DISCRIMINATION CLAIMS BY EMPLOYEE
In consideration for the consideration described in Section 3 above, the Company
and the Employee further agree that this Agreement releases and discharges the
Company from each, every and all liability to the Employee for any damage to
person or property whatsoever, whether now known or unknown, apparent or not yet
discovered, foreseen or unforeseen, developed or undeveloped, resulting or to
result from claims of age discrimination occurring prior to the date of this
Agreement under the Age Discrimination in Employment Act of 1967 ("ADEA"), 29
U.S.C. Section 621, et seq, as amended by the Older Workers Benefit Protection
Act of 1990. The Employee specifically acknowledges for purposes of this
provision that: (1) the Employee has been advised by the Company to consult with
an attorney prior to signing this release under the Age Discrimination in
Employment Act, as amended; (2) the Employee has been given 21 days to consider
the release; and (3) the Employee may revoke this Agreement with 7 days of
signing this Agreement. In the event of such a revocation, the Employee will
repay to the Company all funds received under this Agreement. Such a revocation,
to be effective, must be in writing and either (i) postmarked within 7 days of
execution of this Agreement and addressed to the attention of Xxxx X. Xxxxx, CMS
Energy Corporation, at 000 Xxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx
00000, or (ii) hand delivered to Xxxx X. Xxxxx within 7 days of execution of
this Agreement. Employee understands that if revocation is made by mail, mailing
by certified mail, return receipt requested, is recommended to show proof of
mailing. IF EMPLOYEE SIGNS THIS AGREEMENT PRIOR TO THE END OF THE 21 DAY PERIOD,
EMPLOYEE CERTIFIES THAT THE EMPLOYEE KNOWINGLY AND VOLUNTARILY DECIDED TO SIGN
THE AGREEMENT AFTER CONSIDERING IT LESS THAN 21 DAYS AND HIS DECISION TO DO SO
WAS NOT INDUCED BY THE COMPANY THROUGH FRAUD,
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MISREPRESENTATION, A THREAT TO WITHDRAW OR ALTER THE OFFER PRIOR TO THE
EXPIRATION OF THE 21 DAY TIME PERIOD. The release provided for in this Section 8
shall not be effective or enforceable until after the revocation period has
passed.
9. GOVERNING LAW AND SEVERABILITY OF INVALID PROVISIONS
This Agreement will be governed by and construed in accordance with the laws of
the State of Michigan, without regard to its conflicts of law principles.
Further, if any provision of this Agreement is held invalid, the invalidity
shall not affect other provisions or applications of the Agreement, which can be
given effect without the invalid provisions, or applications and to this end the
provisions of this Agreement are declared to be severable.
10. FULL UNDERSTANDING AND VOLUNTARY ACCEPTANCE
In entering this Agreement, the Company and the Employee represent that they
have had the opportunity to consult with attorneys of their own choice, that the
Company and the Employee have read the terms of this Agreement and that those
terms are fully understood and voluntarily accepted by them. The parties further
represent that this Agreement contains the entire Agreement between the parties
and that neither party has made any promise, inducement or agreement not herein
expressed.
11. DISCLOSURE TO STATE OR FEDERAL AGENCIES OR COURTS
Nothing in this Agreement is to be construed as prohibiting the Employee from
freely providing any information to a State or Federal Agency or Court when
requested or required to do so by such Agency or Court or when otherwise
permitted by law to provide such information.
12. LITIGATION
In the event of litigation or other proceeding ("litigation") by the Employee
against the Company in matters that have been released under this Agreement, the
Employee agrees to repay the Company the consideration advanced under Section 3,
above, prior to the commencement of litigation, and, except as provided in
subsection 13(G) below, to pay to the Company all costs and expenses of
defending against the litigation incurred by the Company or those associated
with the Company, including reasonable attorneys' fees. Notwithstanding the
foregoing, this Section is not intended to preclude the offset of the portion of
the consideration received under Section 3 related to the release of an ADEA
claim, in lieu of the repayment of said ADEA consideration by Employee, if
Employee commences litigation pursuant to ADEA.
13. ARBITRATION
The parties agree that any disputes between them relating to the formation,
breach, interpretation and application of this Agreement and not settled by the
parties shall be submitted to arbitration.
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(A) Arbitration proceedings shall be conducted in Dearborn, Michigan
on at least ten (10) business days' written notice to the parties.
Such proceedings shall be conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration
Association (except as may be specified otherwise herein).
(B) There shall be only one arbitrator, having knowledge and
experience with employment law. If the parties cannot agree upon
the arbitrator, each party shall select a representative qualified
to be the arbitrator, and the two representatives shall select the
arbitrator. If either party fails to select a representative, the
other party may seek to have the Federal District Judge having the
highest authority in the Federal District in which Dearborn,
Michigan is situated to appoint a person meeting the qualification
requirements specified herein to serve as the arbitrator. If the
judge with the highest seniority does not immediately appoint
someone, the party may make such request of the next senior
judge(s) (in descending order of authority) until a qualified
arbitrator is appointed.
(C) Each party shall be entitled to reasonable discovery through
requests for admission, requests for production of documents and
by depositions of not more than 10 individuals, and by no other
means; and discovery procedures shall be utilized only for the
discovery of relevant admissible evidence or information
reasonably calculated to lead to the discovery of relevant
admissible evidence, and shall not place an undue burden on the
party from whom discovery is sought.
(D) All discovery shall be completed, and the arbitration hearing
shall commence within 90 days after appointment of the arbitrator;
and absent a finding by the arbitrator of exceptional
circumstances, the hearing shall be completed and an award setting
forth the findings and reasoning for the arbitrator's decision,
shall be rendered within 60 days after the conclusion of the
hearing.
(E) The arbitrator shall not have authority to fashion a remedy that
includes consequential, exemplary or punitive damages of any type
whatsoever, and the arbitrator is hereby prohibited from awarding
injunctive relief of any kind, whether mandatory or prohibitory.
(F) The award shall be final and binding on all parties and shall not
be subject to court review. However, it may be enforced in any
court of competent jurisdiction.
(G) The costs of the arbitration proceeding, which shall include the
arbitrator's xxxx for services in connection with the arbitration
proceeding, will be apportioned equally between the parties and
each party shall pay its own attorney fees, experts' fees and any
other expenses incurred in connection with the preparation for or
conduct of the proceeding.
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14. EXPENSES
Employee shall be reimbursed for all reasonable business expenses of the kind
that are customarily reimbursed by the Company to its officers, incurred by him
in connection with the cooperation to be provided under Section 15 of this
Agreement, to the extent requested by the Company, or in connection with any
other matter at the Company's request.
15. COOPERATION WITH COMPANY ON INVESTIGATIONS AND LAWSUITS
Employee agrees to fully cooperate with the Company in the existing or future
civil or criminal investigations by the Securities and Exchange Commission, the
Commodity Futures Trading Commission, the Federal Energy Regulatory Commission
and any other inquiry, request, investigation or proceeding by or from any other
federal or state, governmental agency, office, legislative or regulatory body,
that may arise as a result of the operations or business of CMS Marketing
Services and Trading Company and any civil or criminal lawsuit, shareholder or
otherwise, related to the subject matter of the above-referenced investigations,
inquiries, requests or proceedings. Expenses incurred in complying with this
Section shall be reimbursed in accordance with the terms of Section 14 of this
Agreement. Nothing in this Section provides to the Company the right to direct
or determine the defense(s) which the Employee might assert in response to any
complaint brought against the Employee as an individual.
16. OTHER EMPLOYMENT
Nothing in this Agreement shall be construed to prohibit Employee from accepting
employment with another employer after August 1, 2002, provided that Employee's
other employment is subject to Employee fulfilling all of Employee's obligations
contained herein. Failure to fulfill those obligations as a result of such other
employment shall constitute and be treated as a material breach of this
Agreement and will be detrimental to and cause harm to the Company, and as
liquidated damages in the event of such a breach, Employee agrees to repay the
Company four hundred thousand dollars ($400,000) of the funds being received
under this Agreement.
17. CANCELLATION OF PRIOR AGREEMENTS
This Agreement sets forth the entire agreement of the parties hereto with
respect to the subject matters contained herein and supersedes, cancels, voids
and renders of no further force and effect any and all employment agreements,
change of control agreements and other similar agreements, communications,
representations, promises, covenants, communications and arrangements, whether
oral or written, between the Company and the Employee that may have been
executed or made prior to the date of this Agreement and which also may address
the subject matters contained herein, including but not by way of limitation the
Employment Agreement dated December 13, 1999 between the parties.
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18. INDEMNIFICATION AND INSURANCE
Nothing in this Agreement shall be construed to alter, modify or limit
Employee's rights (i) pursuant to applicable statutes, common law and
resolutions of the Board of the Company to seek or obtain indemnification from
the Company respecting defense costs, judgments and other liabilities and (ii)
to assert a claim for reimbursement under any potentially applicable directors
and officers liability insurance policy.
19. AUTHORITY TO EXECUTE THIS AGREEMENT
The below signatory on behalf of the Company represents that he is fully
authorized by CMS Energy Corporation to execute this Agreement and to make the
representations, covenants and promises contained herein on the Company's
behalf.
Signed on this 7th day of August, 2002.
/s/ Xxxx X. Xxxxxx
--------------------------------------
Xxxx X. Xxxxxx
CMS ENERGY CORPORATION
By: /s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx
Chairman of the Board
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