Exhibit 10b(22)
EMPLOYMENT AGREEMENT
BETWEEN
NORTH CAROLINA NATURAL GAS CORPORATION
AND
XXXXXX X. XXXXXXX
July 15 , 1999
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT ("Agreement"), dated as of the July 15, 1999, between
North Carolina Natural Gas Corporation ("NCNG" or "Company"), a Delaware
Corporation headquartered in Fayetteville, North Carolina and a subsidiary of
Carolina Power & Light Company ("CP&L"), and Xxxxxx X. Xxxxxxx ("Xxxxxxx").
Recitals
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1. On or around July 15, 1999 ("Closing Date"), North Carolina Natural
Gas will, through a merger transaction, become a wholly owned subsidiary of
Carolina Power & Light ("CP&L"). NCNG, as it existed prior to this merger, will
be referred to herein as "Pre-Merger NCNG."
2. Xxxxxxx was employed as Vice President Marketing of Pre-Merger NCNG
and entered into an Employment Agreement with Pre-Merger NCNG on July 18, 1998
("Prior Agreement").
3. NCNG and Xxxxxxx wish to enter into an employment relationship whereby
Xxxxxxx will be employed as Vice President Marketing of NCNG after the Closing
Date.
4. NCNG and Xxxxxxx wish to rescind his Prior Agreement and enter into
this new Employment Agreement which will supersede all prior agreements on the
subject matter.
5. Xxxxxxx will be employed as an "at will" employee of NCNG. The parties
wish to enter into this Agreement to set forth certain terms related to that
relationship.
Provisions
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NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and accepted, the parties hereto
hereby agree as follows:
1. TERM OF EMPLOYMENT.
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(a). Employment. The Company hereby agrees to employ Xxxxxxx as an
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"at will" employee, and Xxxxxxx hereby accepts employment with NCNG, for the
Employment Term stated herein, subject to the terms and conditions hereof.
(b). Employment Term. Unless sooner terminated in accordance with the
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provisions of Section 6, Xxxxxxx'x term of employment with NCNG under this
Agreement (the "Employment Term") shall commence on the Closing Date
("Employment Date"), and shall continue until July 15, 2002. Should Xxxxxxx'x
employment with NCNG continue past July 15, 2002, then such employment shall not
be subject to this Employment Agreement.
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2. RESPONSIBILITIES; OTHER ACTIVITIES.
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Xxxxxxx shall initially occupy the position of Vice President
Marketing of NCNG and shall undertake the general responsibilities and duties of
such position as directed by NCNG. During the Employment Term, Xxxxxxx shall
perform faithfully the duties of Xxxxxxx'x position, devote all of Xxxxxxx'x
working time and energies to the business and affairs of NCNG and shall use
Xxxxxxx'x best efforts, skills and abilities to promote NCNG. NCNG reserves the
right to modify Xxxxxxx'x duties and responsibilities and to reassign him to
another position, subject to the provisions of Section 6(c).
3. SALARY.
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As compensation for the services to be performed hereunder: Xxxxxxx
will be paid a salary at the annual rate of One Hundred Three Thousand Dollars
($103,000) (less applicable withholdings) beginning on the Employment Date.
Annual salary for each subsequent year of the Employment Term shall be subject
to adjustment by the NCNG Board of Directors at its discretion. Annual salary
shall be deemed earned proportionally as Xxxxxxx performs services over the
course of the Salary Year. Payments of annual salary shall be made, except as
otherwise provided herein, in accordance with NCNG's standard payroll policies
and procedures.
4. PRIOR AGREEMENT.
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The parties agree that the Prior Agreement between NCNG and Xxxxxxx
dated July 28, 1998, is no longer in effect and that this Employment Agreement
supersedes Xxxxxxx'x Prior Agreement with NCNG.
5. BENEFITS.
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During the Employment Term, Xxxxxxx shall be entitled to participate
in all Company sponsored benefit programs as NCNG or CP&L may have in effect in
accordance with their terms. Provided, however, that nothing contained in this
Agreement shall require NCNG or CP&L to continue to offer such benefits or
programs or to limit NCNG's or CP&L's absolute right to modify or eliminate
these benefits.
(a). Existing Pre-Merger NCNG Plans. Xxxxxxx will continue
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participating in the following existing Pre-Merger NCNG Plans until December 31,
1999, in accordance with their terms: North Carolina Natural Gas Executive
Pension Restoration Plan, North Carolina Natural Gas Employees' Pension Plan,
North Carolina Natural Gas 401(k) Plan and all other health and welfare plans as
described in the Pre-Merger NCNG Handbook, in which Xxxxxxx was eligible to
participate. Xxxxxxx'x rights to benefits under these Plans will be based upon
the terms of these Plans.
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(b). Terminating Pre-Merger NCNG Plans. The parties acknowledge that
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the following Pre-Merger North Carolina Natural Gas plans will terminate, in
accordance with their terms, on or around the Closing Date: the NCNG Long Term
Incentive Plan; the NCNG Annual Incentive Plan; the NCNG Employee Stock Purchase
Plan; and the NCNG Key Employee Stock Option Plan. Xxxxxxx'x rights to benefits
in those plans will be based upon the terms of those plans.
(c). CP&L Plans and Post-Merger NCNG Plans. Xxxxxxx will be
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eligible to participate in the following benefit plans subject to their terms:
(i). Management Incentive Compensation Program. Xxxxxxx will
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be eligible to participate in the CP&L Management Incentive Compensation Program
(MICP) beginning in 2000, for which payment will be made on or before March 31,
2001, in accordance with the terms of the plan. Pursuant to the terms of the
MICP, Xxxxxxx'x target compensation under such program will be approximately 20%
of base salary earnings. Xxxxxxx will be entitled to a 1999 Bonus for the
remainder of 1999 to be calculated under the terms of the CP&L MICP and prorated
accordingly.
(ii). Management Deferred Compensation Plan. Xxxxxxx will be
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eligible to participate in CP&L's Management Deferred Compensation Plan in
accordance with the terms of the plan. Xxxxxxx'x participation in this plan
shall begin January 1, 2000.
(iii). Supplemental Retirement Plan. Xxxxxxx will be eligible
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for participation in CP&L's Supplemental Retirement Plan (SRP), subject to its
terms. Xxxxxxx'x participation in this plan shall begin January 1, 2000.
(iv). Stock Purchase Savings Plan. Xxxxxxx shall be eligible
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to participate in CP&L's Stock Purchase Savings Plan, subject to its terms.
Xxxxxxx'x participation in this plan shall begin January 1, 2000.
(v). Choice Benefit Program. Xxxxxxx shall be eligible to
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participate in CP&L's Choice Benefit Program, subject its terms. Xxxxxxx'x
participation in this program shall begin January 1, 2000.
(vi). Vacation. Xxxxxxx shall be entitled to four (4) weeks
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of paid vacation days beginning January 1, 2000 as provided in the NCNG
Handbook.
(vii). Holiday. Xxxxxxx will be eligible for ten (10) paid
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holidays each calendar year as provided in the NCNG Handbook.
(viii). Capital City Club. NCNG will pay an initiation fee and
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monthly dues for membership at the Capital City Club for Xxxxxxx. Xxxxxxx shall
be immediately eligible for this benefit.
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6. TERMINATION OF EMPLOYMENT.
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(a). The employment relationship between Xxxxxxx and NCNG is "at will"
and may be terminated by either NCNG or Xxxxxxx with or without advance notice
and may be terminated with or without cause as defined below.
(b). Termination Without Cause or Change in Control. Within three
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years of the Employment Date (on or before July 15, 2002), if Xxxxxxx'x
employment is terminated Without Cause or as a result of a Change in Control of
NCNG, then Xxxxxxx will be provided with severance benefits as described below,
subject to paragraph 6(h).
(i). Severance Benefits. In accordance with a termination
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under this paragraph 6(b), and subject to paragraph 6(h), Xxxxxxx shall be
entitled to the benefits described below. All payments shall be subject to
required payroll withholdings, including any withholdings for excise taxes for
parachute payments.
(aa). Salary. Xxxxxxx shall be entitled to
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continuation of his then current base annual salary for two (2) years and eleven
(11) months following such termination, paid on a semi-monthly basis. Provided,
however, that if Xxxxxxx is re-employed before the expiration of the two (2)
years and eleven (11) months period following termination, remaining severance
shall be reduced to the difference, if any, between the salary continued
hereunder and the salary in the new position.
(bb). Welfare Benefit Plans and 401(k) Plan. NCNG shall
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pay Xxxxxxx a monthly sum to compensate Xxxxxxx for the employer-paid portion of
medical, life, AD&D and disability coverage and for the loss of the company
match under the 401(k) plan. Provided, however, that these payments shall cease
sixty (60) days following Xxxxxxx'x re-employment before the end of the two (2)
year and eleven (11) month period following termination. Upon re-employment,
NCNG shall have no further obligation to Xxxxxxx under this paragraph
6(b)(i)(bb).
(cc). Retirement Plan. In order to compensate Xxxxxxx
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for loss of pension benefits, NCNG shall calculate a "make up" pension benefit.
This "make up" pension benefit shall equal the value which would have been added
to Xxxxxxx'x pension benefit, under the retirement plan in which he is
participating at the time of termination, had his employment been continued for
two (2) years and eleven (11) months beyond the termination date or to the date
sixty (60) days following Xxxxxxx'x re-employment, whichever is earlier. The
"make up" pension benefit shall be calculated within a reasonable period of time
following such date. The net present value of the "make up" pension benefit
(less applicable withholdings) shall be payable, in semi-monthly payments, over
a five (5) year period beginning on the first of the month following such
calculation.
(i). Calculation. If Xxxxxxx'x employment is
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terminated under this paragraph on or before December 31, 1999, then the "make
up" pension
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benefits will be calculated based upon the final average pay as it would have
been determined under the NCNG Employees' Pension Plan as of the date of
termination. If Xxxxxxx'x employment is terminated on or after January 1, 2000,
then this "make up" pension benefit shall be calculated based upon the base
salary as determined under the CP&L Supplemental Retirement Plan as of the date
of termination.
(dd). Re-employment. Xxxxxxx acknowledges that benefits
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under paragraph 6(b) are affected by his re-employment before the expiration of
two (2) years and eleven (11) months from the date of termination. Xxxxxxx
agrees that he shall provide written notice to NCNG of any such re-employment
within fourteen (14) days of the date re-employment commences. Such notice shall
include the terms of employment, including start date, salary, benefit
availability, and other information as may be requested by the NCNG Board of
Directors. Such notice shall be delivered to: Vice President, Human Resources,
Carolina Power & Light Company, P. O. Xxx 0000, Xxxxxxx, Xxxxx Xxxxxxxx, 00000.
For purposes of this Agreement, re-employment shall include, but not be limited
to, work as an employee, agent, consultant, independent contractor, or in any
other capacity, for an employer, firm, or other entity, or for one's own
business.
(ee). Change in Control. For the purposes of paragraph 6
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of this Agreement, a Change in Control shall be deemed to occur if there is a
change in the form of ownership of NCNG (e.g., NCNG is acquired, enters into a
business combination with another company or otherwise changes form of
ownership). Movement of CP&L to a holding company structure or other
reorganization among any affiliated companies shall not be considered a Change
in Control.
(c). Constructive Termination. If within three (3) years of the
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Employment Date (on or before July 15, 2002), Xxxxxxx is reassigned to another
position with significantly and materially reduced responsibilities, or his
annual salary is reduced by 15% or more, then, at Xxxxxxx'x option, Xxxxxxx may
deem such action to be a Constructive Termination. Should Xxxxxxx wish to deem
such action a Constructive Termination, then Xxxxxxx must notify, in writing,
the Chief Executive Officer of NCNG within 30 days of the date Xxxxxxx received
notification of the change in his duties or salary. Should Xxxxxxx declare such
action to be a Constructive Termination, then he shall be entitled to the
benefits described in paragraph 6(b), subject to paragraph 6(h).
(d). Voluntary Termination. If Xxxxxxx terminates his employment
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voluntarily for any reason at any time, then he shall be eligible to retain all
benefits under existing benefit programs which have vested pursuant to the terms
of those programs, but he shall not be entitled to any form of salary
continuance or any form of severance benefit.
(e). Termination for Cause. The Company may elect at any time to
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terminate Xxxxxxx'x employment immediately hereunder (except as specifically
provided otherwise in this Agreement) and remove Xxxxxxx from employment for
Cause. For purposes of this paragraph 6, cause for the termination of employment
shall be defined as: i) the willful and
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continued failure by him substantially to perform his duties with the Company
(other than any such failure resulting from his incapacity due to physical or
mental illness), or (ii) the willful engaging by him in misconduct which is
materially injurious to the Company, monetarily or otherwise. Upon the
termination of Xxxxxxx'x employment for Cause, NCNG shall have no further
obligation to Xxxxxxx under this Agreement except as specifically provided in
this Agreement. Upon such termination, Xxxxxxx shall be entitled to all earned
but unpaid salary accrued to the date of termination. Any continued rights and
benefits Xxxxxxx, or Xxxxxxx'x legal representatives, may have under employee
benefit plans and programs of NCNG upon Xxxxxxx'x termination for cause, if any,
shall be determined in accordance with the terms and provisions of such plans
and programs.
(f). Termination Due to Death. In the event of the death of Xxxxxxx at
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any time during the Employment Term, Xxxxxxx'x employment hereunder shall
terminate and NCNG shall have no further obligation to Xxxxxxx under this
Agreement except as specifically provided in this Agreement. Xxxxxxx'x estate
shall be entitled to receive all earned but unpaid salary accrued to the date of
termination. Any rights and benefits Xxxxxxx, or Xxxxxxx'x estate or other legal
representatives, may have under employee benefit plans and programs of NCNG upon
Xxxxxxx'x death during the Employment Term, if any, shall be determined in
accordance with the terms and provisions of such plans and programs.
(g). Termination Due to Medical Condition.
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(i). At any time NCNG may terminate Xxxxxxx'x employment
hereunder, subject to the Americans With Disabilities Act or other applicable
law, due to medical condition if (i) for a period of 180 consecutive days during
the Employment Term, Xxxxxxx is totally and permanently disabled as determined
in accordance with the Company's long-term disability plan, if any, as in effect
during such time or (ii) at any time during which no such plan is in effect,
Xxxxxxx is substantially unable to perform Xxxxxxx'x duties hereunder because of
a medical condition for a period of 180 consecutive days during the Employment
Term.
(ii). Upon the termination of Xxxxxxx'x employment due to
medical condition, NCNG shall have no further obligation to Xxxxxxx under this
Agreement except as specifically provided in this Agreement. Upon such
termination, Xxxxxxx shall be entitled to all earned but unpaid salary accrued
to the date of termination. Any continued rights and benefits Xxxxxxx, or
Xxxxxxx'x legal representatives, may have under employee benefit plans and
programs of NCNG upon Xxxxxxx'x termination due to medical condition, if any,
shall be determined in accordance with the terms and provisions of such plans
and programs.
(h). Release of Claims. In order to receive continuation of salary and
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benefits under this paragraph 6, Xxxxxxx agrees to execute a written release of
all claims against NCNG, and its employees, officers, directors, subsidiaries
and affiliates, on a form acceptable to NCNG.
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7. ASSIGNABILITY.
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No rights or obligations of Xxxxxxx under this Agreement may be
assigned or transferred by Xxxxxxx, except that (i) Xxxxxxx'x rights to
compensation and benefits hereunder may be transferred by will or laws of
intestacy to the extent specified herein, and (ii) Xxxxxxx'x rights under
employee benefit plans or programs described in Section 5 may be assigned or
transferred in accordance with the terms of such plans or programs, or regular
practices thereunder. NCNG may assign or transfer its rights and obligations
under this Agreement.
8. CONFIDENTIALITY. Xxxxxxx will not disclose the terms of this
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Agreement except (i) to financial and legal advisors under an obligation to
maintain confidentiality, or (ii) as required by a valid court order or subpoena
(and in such event will use Xxxxxxx'x best efforts to obtain a protective order
requiring that all disclosure be kept under court seal) and will notify NCNG
promptly upon receipt of such order or subpoena.
9. MISCELLANEOUS.
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(a). Governing Law. This Agreement shall be governed by, and
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construed in accordance with, the laws of the State of North Carolina without
reference to laws governing conflicts of law.
(b). Entire Agreement. This Agreement contains all of the
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understandings and representations between the parties hereto pertaining to the
subject matter hereof and supersedes all undertakings and agreements, including
specifically the Prior Agreement entered into on July 28, 1998, whether oral or
in writing, previously entered into by them with respect thereto.
(c). Amendment or Modification; Waiver. No provision in this Agreement
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may be amended or waived unless such amendment or waiver is agreed to in
writing, signed by Xxxxxxx and by an officer of NCNG thereunto duly authorized
to do so. Except as otherwise specifically provided in the Agreement, no waiver
by a party hereto of any breach by the other party hereto of any condition or
provision of the Agreement to be performed by such other party shall be deemed a
waiver of a similar or dissimilar provision or condition at the same or any
prior or subsequent time.
(d). Notice. Any notice (with the exception of notice of termination
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by NCNG, which may be given by any means and need not be in writing) or other
document or communication required or permitted to be given or delivered
hereunder shall be in writing and shall be deemed to have been duly given or
delivered if (i) mailed by United States mail, certified, return receipt
requested, with proper postage prepaid, or (ii) otherwise delivered by hand or
by overnight delivery, against written receipt, by a common carrier or
commercial courier or delivery service, to the party to whom it is to be given
at the address of such party as set forth below (or to such other address as a
party shall have designated by notice to the other parties given pursuant
hereto):
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If to Xxxxxxx:
Xxxxxx X. Xxxxxxx
Carolina Power & Light Company
000 Xxxxxxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
If to NCNG:
Carolina Power & Light Company
000 Xxxxxxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Vice President-Human Resources
Any such notice, request, demand, advice, schedule, report, certificate,
direction, instruction or other document or communication so mailed or sent
shall be deemed to have been duly given, if sent by mail, on the third business
day following the date on which it was deposited at a United States post office,
and if delivered by hand, at the time of delivery by such commercial courier or
delivery service, and, if delivered by overnight delivery service, on the first
business day following the date on which it was delivered to the custody of such
common carrier or commercial courier or delivery service, as all such dates are
evidenced by the applicable delivery receipt, airbill or other shipping or
mailing document.
(e). Severability. In the event that any provision or portion of this
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Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions or portions of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by
law.
(f). References. In the event of Xxxxxxx'x death or a judicial
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determination of Xxxxxxx'x incompetence, reference in this Agreement to Xxxxxxx
shall be deemed, where appropriate, to refer to Xxxxxxx'x legal representative,
or, where appropriate, to Xxxxxxx'x beneficiary or beneficiaries.
(g). Headings. Headings contained herein are for convenient
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reference only and shall not in any way affect the meaning or interpretation of
this Agreement.
(h). Counterparts. This Agreement may be executed in several
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counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
(i). Rules of Construction. The following rules shall apply to the
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construction and interpretation of this Agreement:
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(i). Singular words shall connote the plural number as well as
the singular and vice versa, and the masculine shall include the feminine and
the neuter.
(ii). All references herein to particular articles, paragraphs,
sections, subsections, clauses, Schedules or Exhibits are references to
articles, paragraphs, sections, subsections, clauses, Schedules or Exhibits of
this Agreement.
(iii). Each party and its counsel have reviewed and revised (or
requested revisions of) this Agreement, and therefore any rule of construction
requiring that ambiguities are to be resolved against a particular party shall
not be applicable in the construction and interpretation of this Agreement or
any exhibits hereto or amendments hereof.
(iv). As used in this Agreement, "including" is illustrative,
and means "including but not limited to."
(j). Remedies. Remedies specified in this Agreement are in addition
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to any others available at law or in equity.
(k). Withholding Taxes. All payments under this Agreement shall be
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subject to applicable income, excise and employment tax withholding
requirements.
IN WITNESS WHEREOF, the parties hereto have executed, or have caused
this Agreement to be executed by their duly authorized officer, as the case may
be, all as of the day and year written below.
By: /s/ Xxxxxx X. Xxxxxxx Date: August 5, 1999
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Xxxxxx X. Xxxxxxx
By: /s/ Xxxxxx X. Xxxxx Date: August 5, 1999
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North Carolina Natural Gas Corporation
Title: President
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