EMPLOYMENT AGREEMENT
BETWEEN
CAROLINA POWER & LIGHT COMPANY,
FLORIDA POWER CORPORATION
AND
H. XXXXXXX XXXXXXXXXX, XX.
November 30, 2000
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT ("Agreement"), dated as of the 30th day of
November, 2000, between Carolina Power and Light Company, a North Carolina
corporation headquartered in Raleigh, North Carolina, and a subsidiary of CP&L
Energy, Florida Power Corporation, ("FPC") a Florida Corporation headquartered
in St. Petersburg, Florida and a subsidiary of CP&L Energy, its successors or
assigns and H. Xxxxxxx Xxxxxxxxxx, Xx. ("Xxxxxxxxxx"). Carolina Power & Light
and CP&L Energy shall be referred to as CP&L throughout.
Recitals
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1. The Company and Xxxxxxxxxx wish to enter into an employment
relationship whereby Xxxxxxxxxx will be employed initially by CP&L but will
perform as President - Chief Executive Officer of Florida Power Corporation
("FPC"). Beginning January 1, 2002, Xxxxxxxxxx will cease being an employee of
Carolina Power and Light and will become an employee of Florida Power
Corporation. Throughout this document the term "Company" shall be used to refer
to Carolina Power and Light prior to January 1, 2002 or as long as Xxxxxxxxxx is
employed by Carolina Power and Light and shall refer to FPC beginning January 1,
2002 or as long as Xxxxxxxxxx is employed by FPC.
2. Xxxxxxxxxx will be employed as an "at will" employee of the Company.
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 THE AGREEMENT:
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(a) The Agreement becomes effective on November 30, 2000, and
shall remain in effect for a three-year period;
(b) Each year, the Agreement will be extended such that
prospective term will always be three years forward ("Evergrow provisions") on
the anniversary date of the effective date.
(c) Company may elect to not extend this Agreement and must
notify Xxxxxxxxxx at least 60 days prior to the annual anniversary date of the
Agreement's effective date. In each event, the Agreement will be effective for
the remainder of its term.
(d) The Agreement cannot extend beyond Xxxxxxxxxx'x normal
retirement date unless Xxxxxxxxxx is requested to serve in his full-time
position for a defined period as set forth by the Board of Directors.
2. RESPONSIBILITIES; OTHER ACTIVITIES.
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Xxxxxxxxxx shall initially occupy the position of President -
Chief Executive Officer at FPC and shall undertake the general responsibilities
and duties of such position as directed by the Company. During the Employment
Term, Xxxxxxxxxx shall perform faithfully the duties of Xxxxxxxxxx'x position,
devote all of Xxxxxxxxxx'x working time and energies to the business and affairs
of the Company and shall use Xxxxxxxxxx'x best efforts, skills and abilities to
promote the Company's. The Company reserves the right to reassign Xxxxxxxxxx to
other positions.
3. SALARY.
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As compensation for the services to be performed hereunder:
Xxxxxxxxxx will be paid a salary at the annual rate of Two Hundred Thirty
Thousand Dollars ($230,000) (less applicable withholdings) beginning on November
30, 2000. Annual salary for each subsequent year of the Employment Term shall be
subject to adjustment by the Company during the normal annual salary review
process for similarly situated executives as determined by the Company in its
discretion. Annual Salary shall be deemed earned proportionally as Xxxxxxxxxx
performs services over the course of the Salary Year. Payments of annual Salary
shall be made, except as otherwise provided herein, in accordance with the
Company's standard payroll policies and procedures.
4. BENEFITS
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During the Employment Term, Xxxxxxxxxx shall be entitled to
participate in all Company sponsored benefits programs as the Company may have
in effect upon terms and in accordance with policies and procedures
substantially equivalent to those then in effect and applicable generally to
employees of the Company. Provided, however, that nothing contained in this
Agreement shall require the Company to continue to offer such benefits or
programs or to limit the Company's absolute right to modify or eliminate these
benefits.
(a). Management Incentive Compensation Plan. Xxxxxxxxxx will
be eligible to participate in the Management Incentive Compensation Plan (MICP).
Pursuant to the terms of MICP, Xxxxxxxxxx'x target compensation under such plan
will be 45% of base salary earnings, effective January 1, 2001, contingent upon
the closing of the Florida Progress Corporation ("FPC") acquisition.
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(b). Long Term Incentives. Xxxxxxxxxx will be eligible to
participate in the Performance Share Sub-Plan under the 1997 Equity Incentive
Plan in accordance with the terms of the plan. Pursuant to the terms of the
plan, Xxxxxxxxxx'x target compensation under such plan will be 100% of
Xxxxxxxxxx'x base salary at the time of the award. The annual target percentage
is effective January 1, 2001, contingent upon the closing of the FPC
acquisition.
(c). Restricted Share Grant. Xxxxxxxxxx will be eligible to
participate in the Restricted Share Grant Plan under the 1997 Equity Incentive
Plan in accordance with the terms of the plan. Restrictions are based on
continued employment.
(d). Management Deferred Compensation Plan. Xxxxxxxxxx will be
eligible for participation in CP&L's Management Deferred Compensation Plan
(MDCP), subject to its terms. Additionally, Xxxxxxxxxx also has a vested benefit
under the suspended Deferred Compensation Plan for Key Management Employees.
(e). Supplemental Retirement Plan. Pursuant to its terms,
Xxxxxxxxxx is eligible for participation in CP&L Supplemental Retirement Plan
(SRP), subject to its terms.
(f). Restoration Retirement Plan. Xxxxxxxxxx will be eligible
for participation in CP&L's Restoration Retirement Plan, subject to its terms.
If Xxxxxxxxxx becomes eligible for benefits under CP&L's Supplemental Senior
Executive Retirement Plan, Xxxxxxxxxx forfeits all benefits under the
Restoration Retirement Plan.
(g). Supplemental Senior Executive Retirement Plan. Xxxxxxxxxx
shall be eligible for participation in CP&L's Supplemental Senior Executive
Retirement Plan (SERP), subject to its terms.
(h). Executive Permanent Life Insurance Plan. Xxxxxxxxxx shall
be eligible to participate in CP&L's Executive Permanent Life Insurance Plan,
subject to its terms.
(i). Executive AD&D Life Insurance. Xxxxxxxxxx shall be
eligible to participate in CP&L's Executive AD&D Life Insurance Plan, subject to
its terms.
(j). Stock Purchase-Savings Plan. Xxxxxxxxxx shall be eligible
to participate in CP&L's Stock Purchase-Savings Plan, subject to its terms.
(k). Financial Planning. Consistent with the Company's
practice with respect to other senior executives, Xxxxxxxxxx will be reimbursed
for financial planning and tax preparation.
(l). Vacation. Xxxxxxxxxx shall be entitled to four (4) weeks
of paid vacation days.
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(m). Holiday. Xxxxxxxxxx will be eligible for 11 paid holidays
in each calendar year as provided in the Company Handbook.
(n). Automobile Allowance. Xxxxxxxxxx will be eligible to
receive an automobile allowance of One Thousand, Three Hundred and Fifty Dollars
($1350) per month (less withholdings) subject to the terms of the Company's
policies. Xxxxxxxxxx will also be eligible for a cellular phone and reserved
parking at the Company's expense.
(o). Annual Physical. The Company will pay for an annual
physical examination by a physician of Xxxxxxxxxx'x choice.
(p). Luncheon/Dinner Club. FPC will pay an initiation fee and
monthly dues for a membership at a luncheon/dinner club approved by the FPC
Board of Directors. Xxxxxxxxxx shall be eligible for this benefit on the Closing
Date.
(q). Air Travel.
(i). The Company will provide airline club
membership in accordance with the Company's policy.
(ii). The Company will reimburse Xxxxxxxxxx'x
spouse's travel expenses when she accompanies Xxxxxxxxxx to business meetings
where spousal attendance is customary.
(iii). The Company will provide chartered aircraft
for Xxxxxxxxxx'x business related travel as needed.
(iv). The Company will allow Xxxxxxxxxx to travel
first class at his discretion for business related travel.
(r). Country Club Membership. At Xxxxxxxxxx'x option, if
joined, the Company will pay an initiation fee and monthly dues for a membership
for Xxxxxxxxxx at a country club approved by the Company. Business related
expenses will be reimbursed consistent with the Company's expense account
guidelines.
(s). Health Club Membership. The Company will pay the
initiation fee and monthly dues to a health club membership for Xxxxxxxxxx.
(t). Personal Computer. The Company will provide a personal
computer to Xxxxxxxxxx to be used at his personal residence.
(u). Home Security. The Company will install a home security
system at Xxxxxxxxxx'x personal residence.
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(v). Other Benefits. Xxxxxxxxxx shall be eligible for
participation in other Company benefit plans, subject to the terms of the
respective plans, as described in more detail in the Employee Handbook or
Summary Plan Descriptions.
5. TERMINATION OF EMPLOYMENT.
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(a). Termination Without Cause. During the terms of this
Agreement, if Xxxxxxxxxx'x employment is terminated without cause, then
Xxxxxxxxxx will be provided with his base salary at Xxxxxxxxxx'x current rate
for the remainder of the term of this Agreement. Additionally, the Company will
reimburse Xxxxxxxxxx for his COBRA premium for up to eighteen (18) months after
the termination of Xxxxxxxxxx'x employment as long as Xxxxxxxxxx is not eligible
for coverage under the same type of benefit plan covered by COBRA. Receipt of
these benefits is subject to the requirements of paragraph 5(g),(h) and (i) of
this Agreement. In addition, Xxxxxxxxxx will be eligible to retain all benefits
under existing benefit programs to the extent vested within the terms of those
programs.
(b) Termination for Cause. During the term of this Agreement,
the Company may elect at any time to terminate Xxxxxxxxxx'x employment
immediately hereunder and remove Xxxxxxxxxx from employment for cause. For
purposes of this paragraph 5, cause for the termination of employment shall be
defined as: (i) any act of Xxxxxxxxxx'x including, but not limited to,
misconduct, negligence, unlawfulness, dishonesty or inattention to the business,
which is detrimental to the Company's interests; or (ii) Xxxxxxxxxx'x
unsatisfactory job performance or failure to comply with the Company's
direction, policies, rules or regulations. If Xxxxxxxxxx is terminated for Cause
as defined, then he shall be eligible to retain all benefits under existing
benefit programs which he has vested pursuant to those plans, but he shall not
be entitled to any form of salary continuance or any form of severance benefits.
Upon such termination, Xxxxxxxxxx shall be entitled to any earned but unpaid
salary accrued to the date of termination. Any continued rights or benefits
Xxxxxxxxxx'x legal representatives may have under employee benefit plans and
programs of the Company upon Xxxxxxxxxx'x termination for cause shall be
determined in accordance with the terms or provisions of the plan or program.
(c). Constructive Termination.
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(i) Within the term of this Agreement, if
Xxxxxxxxxx'x employment is constructively terminated, then Xxxxxxxxxx will be
provided with his base salary at the current rate for the remainder of the term
of this Agreement. Additionally, the Company will reimburse Xxxxxxxxxx for his
COBRA premiums for up to eighteen (18) months after the termination of
Xxxxxxxxxx'x employment as long as Xxxxxxxxxx is not eligible for coverage under
the same types of benefits plans covered by COBRA. Receipt of these benefits is
subject to the requirements of paragraph 5(g), (h) and (i) of this Agreement. In
addition, Xxxxxxxxxx will be eligible to retain all benefits under existing
benefit programs to the extent vested within the terms of those programs.
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(ii) For the purposes of paragraph 5 of this
Agreement, a constructive termination will be deemed to occur if: aa) there is a
substantial change in the form of ownership of the Company (e.g., the Company is
acquired, enters into a business combination with another company or otherwise
substantial changes form of ownership) and bb) Xxxxxxxxxx is offered a new
position with a material change in authority, duties, wages or benefits, or
Xxxxxxxxxx is asked to relocate more than 50 miles. If Xxxxxxxxxx'x employment
is constructively terminated under this paragraph, Xxxxxxxxxx is entitled to the
greater of either the benefits contained in this paragraph or the benefits he is
entitled to, if any, under the CP&L Management Change-in-Control Plan, according
to the terms of the Plan. Changes in the corporation structure of the Company
not related to an acquisition of the Company shall not constitute a grounds for
constructive termination.
(d). Voluntary Termination - If Xxxxxxxxxx terminates his
employment voluntarily for any reason at any time, then he shall be eligible to
retain all benefits under existing benefit plans which have vested pursuant to
the terms of those plans, but he shall not be entitled to any form of salary
continuance or any form of severance benefit.
(e). Termination Due to Death. In the event of the death of
Xxxxxxxxxx during the Employment Term, Xxxxxxxxxx'x employment hereunder shall
terminate and the Company shall have no further obligation to Xxxxxxxxxx under
this Agreement except as specifically provided in this Agreement. Xxxxxxxxxx'x
estate shall be entitled to receive all earned but unpaid Salary accrued to the
date of termination and any Bonus for a prior fiscal year that has been earned
but not paid. The Bonus, if any, for the current fiscal year shall be calculated
on a pro rata basis for the portion of the fiscal year in which death occurred
and shall be paid at the regularly scheduled time for the payment of the Bonus.
Any rights and benefits Xxxxxxxxxx, or Xxxxxxxxxx'x estate or other legal
representatives, may have under employee benefit plans and programs of the
Company upon Xxxxxxxxxx'x death during the Employment Term, if any, shall be
determined in accordance with the terms and provisions of such plans and
programs.
(f). Termination Due to Medical Condition.
(i). The Company may terminate Xxxxxxxxxx'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, Xxxxxxxxxx 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, Xxxxxxxxxx is substantially unable to perform Xxxxxxxxxx'x duties
hereunder because of a medical condition for a period of 180 consecutive days
during the Employment Term. Provided, however, that if Xxxxxxxxxx applies for
and is deemed eligible for benefits under CP&L's Long-Term Disability Plan (LTD
Benefits), Xxxxxxxxxx shall receive such benefits and his employment will not be
terminated as long as he is receiving LTD Benefits.
(ii). Upon the termination of Xxxxxxxxxx'x employment
due to medical condition or placement of Xxxxxxxxxx on Long Term Disability
(LTD), the Company
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shall have no further obligation to Xxxxxxxxxx under this Agreement except as
specifically provided in this Agreement. Upon such termination or placement on
LTD, Xxxxxxxxxx shall be entitled to all earned but unpaid Salary accrued to the
date of termination or placement on LTD and any Bonus for a prior fiscal year
that has been earned but not paid. The Bonus, if any, for the current fiscal
year shall be calculated on a pro rata basis for the portion of the fiscal year
Xxxxxxxxxx was employed or placed on LTD by the Company and shall be paid at the
regularly scheduled time for the payment of the Bonus. Any continued rights and
benefits Xxxxxxxxxx, or Xxxxxxxxxx'x legal representatives, may have under
employee benefit plans and programs of the Company upon Xxxxxxxxxx'x termination
or placement on LTD due to medical condition, if any, shall be determined in
accordance with the terms and provisions of such plans and programs.
(g). Release of Claims - In order to receive continuation of
salary under this paragraph 5(a) and 5(c), Xxxxxxxxxx agrees to execute a
written release of all claims against the Company, and its employees, officers,
directors, subsidiaries and affiliates, on a form acceptable to the Company.
(h) Covenant Not to Compete. If the Company terminates
Xxxxxxxxxx'x employment without Cause under paragraph 5(a) or Constructively
terminates Xxxxxxxxxx'x employment under paragraph 5(c) of this Agreement,
Xxxxxxxxxx, for one year after the Termination Date, shall not compete directly
or indirectly with the Company, or its affiliates within fifty (50) miles of any
geographic area in which the Company or its affiliates has a material business
interests with which Xxxxxxxxxx is involved at the time of the termination of
Xxxxxxxxxx'x employment.
(i) Non Interference. If the Company terminates Xxxxxxxxxx'x
employment without Cause under paragraph 5(a) or Constructively terminates
Xxxxxxxxxx'x employment under paragraph 5(c) of this Agreement, Xxxxxxxxxx, for
one year after the Termination Date, shall not whether on his own account or on
the account of another individual, partnership, firm, corporation, or other
business organization (other than the Company and its affiliates), directly or
indirectly, intentionally solicit, endeavor to entice away from the Company or
any of its affiliates, or otherwise interfere with the relationship of the
Company or its affiliates with, any person who is employed by or otherwise
engaged to perform services for the Company or its affiliates including but not
limited to, any independent representatives or organizations, or any person or
entity that is a customer of the Company or its affiliates.
6. ASSIGNABILITY.
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No rights or obligations of Xxxxxxxxxx under this Agreement
may be assigned or transferred by Xxxxxxxxxx, except that (a) Xxxxxxxxxx'x
rights to compensation and benefits hereunder may be transferred by will or laws
of intestacy to the extent specified herein and (b) Xxxxxxxxxx'x rights under
employee benefit plans or programs described in Section 4 may be assigned or
transferred in accordance with the terms of such plans or programs, or regular
practices thereunder. The Company may assign or transfer its rights and
obligations under this Agreement.
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7. CONFIDENTIALITY. Xxxxxxxxxx will not disclose the terms of this
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 Xxxxxxxxxx'x best efforts to obtain a protective
order requiring that all disclosure be kept under court seal) and will notify
the Company promptly upon receipt of such order or subpoena.
8. MISCELLANEOUS.
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(a) Governing Law. This Agreement shall be governed by, and
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
understandings and representations between the parties hereto pertaining to the
subject matter hereof and supersedes all undertakings and agreements, whether
oral or in writing, if any, previously entered into by them with respect
thereto.
(c) Amendment or Modification; Waiver. No provision in this
Agreement may be amended or waived unless such amendment or waiver is agreed to
in writing, signed by Xxxxxxxxxx and by an officer of the Company 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 wavier 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 by the Company, which may be given by any means and need not be in
writing except that if termination is for Cause, oral notice must be followed by
written notice required under Section 5(c) hereof) 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 Xxxxxxxxxx:
H. Xxxxxxx Xxxxxxxxxx, Xx.
Florida Power Corporation
000 Xxxxxxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
If to the Company:
CP&L Service Company LLC
000 Xxxxxxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attn.: 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 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 Xxxxxxxxxx'x death or a
judicial determination of Xxxxxxxxxx'x incompetence, reference in this Agreement
to Xxxxxxxxxx shall be deemed, where appropriate, to refer to Xxxxxxxxxx'x legal
representative, or, where appropriate, to Xxxxxxxxxx'x beneficiary or
beneficiaries.
(g) Headings. Headings contained herein are for convenient
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
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 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 to any others available at law or in equity.
(k) Withholding Taxes. All payments under this Agreement shall
be 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/ H. Xxxxxxx Xxxxxxxxxx, Xx. Date: 12/11/00
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H. Xxxxxxx Xxxxxxxxxx, Xx.
By: /s/ Xxxxxxx Xxxxxxxxx III Date: 12/4/00
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Carolina Power and Light Company
Title:
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By: /s/ Xxxxxxx Xxxxxxxxx III Date: 12/4/00
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Florida Power Corporation
Title:
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