Exhibit 10b(27)
EMPLOYMENT AGREEMENT
BETWEEN
CAROLINA POWER AND LIGHT
AND
XXX X. XXXXXXX
AUGUST 3, 1998
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement"), dated as of the 3rd day of August,
1998, between Carolina Power & Light Company ("Company"), and Xxx X. Xxxxxxx
("Xxxxxxx").
RECITALS
1. The Company and Xxxxxxx wish to enter into an employment relationship
whereby Xxxxxxx will be employed initially as Senior Vice President Power -
Operations at Carolina Power and Light.
2. Xxxxxxx will be employed as an "at will" employee of CP&L. The
parties wish to enter into this Agreement to set forth certain terms related to
that relationship.
PROVISIONS
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.
(a) Employment. The Company hereby agrees to employ Xxxxxxx as an
"at will" employee, and Xxxxxxx hereby accepts employment with CP&L, for the
Employment Term stated herein, subject to the terms and conditions hereof.
(b) Employment Term. Unless sooner terminated in accordance with
the provisions of Section 6, Xxxxxxx'x term of employment with CP&L under this
Agreement (the "Employment Term") shall commence as of that date his employment
commenced on August 3, 1998 and shall continue until terminated by CP&L or
Xxxxxxx pursuant to Section 7.
2. RESPONSIBILITIES; OTHER ACTIVITIES.
Xxxxxxx shall initially occupy the position of Senior Vice
President -- Power Operations and shall undertake the general responsibilities
and duties of such position as directed by CP&L. 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 CP&L and
shall use Xxxxxxx'x best efforts, skills and abilities to promote CP&L's. CP&L
reserves the right to reassign Xxxxxxx to other positions.
3. SALARY.
As compensation for the services to be performed hereunder:
Xxxxxxx will be paid a salary at the annual rate of $250,000 (Two Hundred Fifty
Thousand Dollars)(less applicable withholdings) beginning on August 3, 1998.
Annual salary for each subsequent year of the Employment Term shall be subject
to adjustment by CP&L 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 CP&L's standard payroll policies and procedures.
4. TRANSITION COMPENSATION.
Xxxxxxx will receive a cash payment of $100,000 (less
witholdings) within 30 days of hire. An additional $100,000 (less withholdings)
cash payment will be paid within 30 days of the first anniversary date of hire,
assuming continued employment and satisfactory performance.
5. RELOCATION.
(a). Relocation Program. Xxxxxxx will be eligible to participate
in CP&L relocation program in accordance with its terms with any taxable portion
grossed up.
(b). Temporary Living Expenses. Xxxxxxx will be provided
temporary living expense for a period of up to six months.
6. BENEFITS
During the Employment Term, Xxxxxxx shall be entitled to
participate in all-Company sponsored benefits programs as CP&L 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
CP&L. Provided, however, that nothing contained in this Agreement shall require
CP&L to continue to offer such benefits or programs or to limit CP&L's absolute
right to modify or eliminate these benefits.
(a). Management Incentive Compensation Program. Xxxxxxx will be
eligible to participate in the Management Incentive Compensation Program
(MICP)beginning in 1998, for which payment will be made on or before March 31,
1999. Pursuant to the terms of MICP, Xxxxxxx'x target compensation under such
program will be approximately 35% of base salary earnings; provided, however,
that any compensation payable for 1998 performance will be pro rated based upon
the date on which Xxxxxxx begins his employment with CP&L under this agreement.
(b). Long Term Incentives. Xxxxxxx will be eligible to
participate in the 1998 Performance Share Sub-Plan under the Equity Incentive
Program in accordance with the terms of the plan.
(c). Restricted Share Grant Plan. Xxxxxxx will be eligible to
participate in the Restricted Share Grant Plan under the Equity Incentive
Program in accordance with the terms of the plan.
(d). Deferred Compensation Plan for Key Management Employees.
Xxxxxxx will be eligible for participation in CP&L's Deferred Compensation Plan
for Key Management Employees, subject to its terms. Additionally, Xxxxxxx and
CP&L agree to execute a separate agreement underwhich CP&L will defer on
Xxxxxxx'x behalf, an amount to generate retirement income equal to $500,000. A
term of this agreement will provide: (1) that if Xxxxxxx retires from CP&L after
age 65, this income will be paid over a 15 year period beginning at retirement;
(2) if termination of employment occurs between age 60 and age 65, reduced
benefits will be available; and (3) if termination occurs before age 60, Xxxxxxx
will forfeit this CP&L provided deferral benefit.
(e). Supplemental Retirement Plan. Pursuant to its terms, Xxxxxxx
will be eligible for participation in CP&L Supplemental Retirement Plan (SRP),
subject to its terms.
(f). Supplemental Senior Executive Retirement Plan. Xxxxxxx shall
be eligible for participation in CP&L's Supplemental Senior Executive Retirement
Plan (SERP), subject to its terms. In connection with Xxxxxxx'x participation in
SERP, Xxxxxxx, upon hire, will be awarded five (5) years of service toward the
vesting requirements of SERP. This credit will not apply to the vesting
requirements of any other plan or benefit program at CP&L.
(g). Executive Permanent Life Insurance Program. Xxxxxxx shall be
eligible to participate in CP&L's Executive Permanent Life Insurance Program,
subject to its terms.
(h). Executive AD&D Life Insurance. Xxxxxxx shall be eligible to
participate in CP&L's Executive AD&D Life Insurance Program, subject to its
terms.
(i). Stock Purchase Savings Plan. Xxxxxxx shall be eligible to
participate in CP&L's Stock Purchase Savings Plan, subject to its terms.
(j). Financial/ Estate Planning. Consistent with CP&L's practice
with respect to other senior executives, Xxxxxxx will be reimbursed for
financial and estate planning including financial planning and tax preparation.
(k). Vacation. Xxxxxxx shall be entitled to four (4) weeks of
paid vacation days
(l). Holiday. Xxxxxxx will be eligible for ten (10) paid holidays
in each calendar year as provided in the CP&L Handbook.
(m). Automobile Allowance. Xxxxxxx will be eligible to receive an
automobile allowance of $1350 per month (less withholdings) subject to the terms
of CP&L's
policies. Xxxxxxx will also be eligible for a cellular phone and reserved
parking at CP&L's expense.
(n). Annual Physical. CP&L will pay for an annual physical
examination by a physician of Xxxxxxx'x choice.
(o). Capital City Club. CP&L will pay an initiation fee and
monthly dues for a membership at the Capital City Club for Xxxxxxx.
(p). Airline Club Membership. CP&L will provide airline club
membership in accordance with CP&L policy.
(q). Country Club Membership. At Xxxxxxx'x option, if joined,
CP&L will pay an initiation fee and monthly dues for a membership for Xxxxxxx at
a country club approved by CP&L. Business related expenses will be reimbursed
consistent with CP&L's expense account guidelines.
(r). Personal Computer. CP&L will provide a personal computer to
Xxxxxxx to be used at his personal residence.
(s). Other Benefits. Xxxxxxx shall be eligible for participation
in other CP&L benefit plans, subject to the terms of the respective plans, as
described in more detail in the Employee Handbook. In addition, upon retirement
from CP&L, Xxxxxxx will be entitled to the same medical and dental coverage
provided to other future retirees, such as the Presidential/Chief Executive
Office; provided that to the extent any such benefit may not be provided to
Xxxxxxx due to statutory or regulatory limitation, CP&L will obtain
substantially equivalent coverage on an insured basis.
7. TERMINATION OF EMPLOYMENT.
(a). The employment relationship between Xxxxxxx and CP&L is "at
will" and may be terminated by either CP&L or Xxxxxxx with or without advance
notice and may be terminated with or without cause as defined below.
(b). Termination Without Cause. Within two years of employment
(on or before August 3, 2000), if Xxxxxxx'x employment is terminated without
cause, then Xxxxxxx will be provided with severance benefits equal to two years
of annual base salary, paid on a semi-monthly basis subject to the requirements
of paragraph 7(h). In addition, Xxxxxxx will be eligible to retain all benefits
under existing benefit programs to the extent vested within the terms of those
programs.
(c). Constructive Termination - If on or before August 3, 2000
Xxxxxxx'x employment is constructively terminated, then Xxxxxxx will be provided
with severance benefits equal to two years of annual base salary, paid on a
semi-monthly basis subject to the
requirements of paragraph 7(h). In addition, Xxxxxxx will be eligible to retain
all benefits under existing benefit programs to the extent vested within the
terms of those programs. For the purposes of paragraph 7 of this Agreement, a
constructive termination will be deemed to occur if: a) there is a change in the
form of ownership of CP&L (e.g., CP&L is acquired, enters into a business
combination with another company or otherwise changes form of ownership) and b)
Xxxxxxx is asked to leave. If Xxxxxxx'x employment is constructively terminated
under this paragraph, Xxxxxxx 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.
(d). Voluntary Termination - If Xxxxxxx terminates his employment
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 - For purposes of this paragraph 7,
cause for the terrmination of employment shall be defined as: (i) any act of
Xxxxxxx'x including, but not limited to, misconduct, negligence, unlawfulness,
dishonesty or inattention to the business, which is detrimental to CP&L's
interests; or (ii). Xxxxxxx'x unsatisfactory job performance or failure to
comply with CP&L's direction, policies, rules or regulations.
(f). Termination Due to Death. In the event of the death of
Xxxxxxx during the Employment Term, Xxxxxxx'x employment hereunder shall
terminate and CP&L 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 and any Bonus for a prior fiscal year that has been earned but not
paid. 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 Xxxxxxx, or Xxxxxxx'x estate or other legal representatives, may
have under employee benefit plans and programs of CP&L 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.
(i). CP&L 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, CP&L 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 and any Bonus for a prior fiscal year that has been
earned but not paid. Bonus, if any, for the current fiscal year shall be
calculated on a pro rata basis for the portion of the fiscal year Xxxxxxx was
employed by CP&L and shall be paid at the regularly scheduled time for the
payment of the Bonus. Any continued rights and benefits Xxxxxxx, or Xxxxxxx'x
legal representatives, may have under employee benefit plans and programs of
CP&L 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 under this paragraph 7(b) and 7(c), Xxxxxxx agrees to execute a written
release of all claims against CP&L, and its employees, officers, directors,
subsidiaries and affiliates, on a form acceptable to CP&L.
8. ASSIGNABILITY.
No rights or obligations of Xxxxxxx under this Agreement may be
assigned or transferred by Xxxxxxx, except that (a) Xxxxxxx'x rights to
compensation and benefits hereunder may be transferred by will or laws of
intestacy to the extent specified herein and (b) Xxxxxxx'x rights under employee
benefit plans or programs described in Section 5(a) 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.
9. CONFIDENTIALITY. Xxxxxxx 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 Xxxxxxx'x best efforts to obtain a protective order
requiring that all disclosure be kept under court seal) and will notify CP&L
promptly upon receipt of such order or subpoena.
10. MISCELLANEOUS.
(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
Xxxxxxx and by an officer of CP&L 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 CP&L, 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):
If to Xxxxxxx:
Xxx X. Xxxxxxx
Carolina Power and Light
CPB 1223
Xxxxxxx, Xxxxx Xxxxxxxx 00000
If to CP&L:
Carolina Power & Light Company
000 Xxxxxxxxxxxx Xxxxxx
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 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
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
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:
(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/ Xxx X. Xxxxxxx Date:
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Xxx X. Xxxxxxx
By: /s/ Xxxxxx X. Xxxxxxxxxx Date:
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Carolina Power & Light Company
Title: VP - Human Resources
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