Exhibit 10c(29)
EMPLOYMENT AGREEMENT
BETWEEN
PROGRESS ENERGY CAROLINAS, INC.
AND
XXXXXXX X. XXXXXXX
January 1, 2005
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement"), dated as of the ____________ day
of January, 2005, is between Progress Energy Carolinas, Inc., a limited
liability corporation headquartered in Raleigh, North Carolina and a wholly-owed
subsidiary of Progress Energy, Inc., its successors or assigns, and Xxxxxxx X.
Xxxxxxx ("Xxxxxxx"). Progress Energy Carolinas, Inc. shall be referred to as
"PEC" or "the Company" throughout. Progress Energy, Inc. shall be referred to as
"Progress Energy" throughout.
Preamble
The Company and Xxxxxxx agree to enter into an employment relationship in
which Xxxxxxx will serve as President and Chief Operating Officer of Progress
Energy, for the term as set forth within the Agreement, and in consideration of
this Agreement, the parties agree to the terms and provisions outlined herein:
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. RESPONSIBILITIES; OTHER ACTIVITIES.
Xxxxxxx shall occupy the position of President and Chief Operating Officer
at Progress Energy and shall undertake the general responsibilities and duties
of such position as directed by Progress Energy's Chief Executive Officer.
During the Term of the Agreement as defined in Section 2, below, 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 Progress Energy's
regulated operating subsidiaries and shall use Xxxxxxx'x best efforts, skills
and abilities to promote Progress Energy's general business interests. PEC
reserves the right to reassign Xxxxxxx to other positions within the controlled
group of Progress Energy companies.
2. TERM OF THE AGREEMENT:
(a) The Agreement becomes effective on January 1, 2005 ("the Effective
Date"), and shall remain in effect until December 31, 2007.
(b) On January 1, 2006 and on January 1 of each year thereafter ("the
Extension Date"), the Agreement will be extended such that each prospective term
will always be three years forward ("Evergrow provisions").
(c) The Company may elect to not extend the Agreement and must notify
Xxxxxxx no later than 60 days prior to the Extension Date that it does not
intend to renew the Agreement pursuant to paragraph 2(b), above. Should the
Company elect not to renew the Agreement, the Agreement will continue in effect
for the remainder of its term.
(d) The Agreement cannot extend beyond Xxxxxxx'x normal retirement
date unless Xxxxxxx is requested to serve in his full-time position for a
defined period as set forth by the Chief Executive Officer of Progress Energy.
3. BASE SALARY. As compensation for the services to be performed hereunder,
Xxxxxxx will be paid a Base Salary at the annual rate of ________________
($_________) (less applicable withholdings) ("Base Salary") during 2005. Base
Salary for each subsequent year of employment under the Agreement shall be
subject to adjustment by PEC during the normal annual salary review process for
similarly situated executives as determined by PEC in its discretion. Annual
Base Salary shall be deemed earned proportionally as Xxxxxxx performs services
over the course of each year the Agreement is in effect. Payments of annual Base
Salary shall be made, except as otherwise provided herein, in accordance with
PEC's standard payroll policies and procedures.
4. EMPLOYEE BENEFIT PLANS. During the Employment Term, Xxxxxxx shall be
entitled to participate in all applicable Company and Progress Energy sponsored
benefits plans as may be in effect upon terms and in accordance with policies
and procedures equivalent to those then in effect and applicable generally to
PEC employees.
5. EXECUTIVE INCENTIVES, BENEFITS AND PERQUISITES. Xxxxxxx will be eligible
to participate in the following executive incentive and benefit plans and to
receive the following executive perquisites:
(a) Short Term Incentive Plan. Xxxxxxx is eligible to participate in
the Progress Energy sponsored Management Incentive Compensation Plan (MICP),
subject to its terms.
(b) Long Term Incentive Plans. Xxxxxxx is eligible to participate in
the Progress Energy long term incentive program, subject to its terms, with the
following components:
(i) PSSP. An award of performance shares/units earned over a
three-year period and adjusted based on Progress Energy performance. These
annual awards are generally made in March.
(ii) Restricted Stock. An award of restricted common stock
vesting ratably on the 3rd, 4th and 5th anniversaries from the date of grant.
These annual awards are generally made in March.
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(c) Base Salary Deferral Plan. Xxxxxxx is eligible to participate in
the Progress Energy sponsored Management Deferred Compensation Plan (MDCP),
subject to its terms.
(d) Incentive Deferral Plans. Xxxxxxx is eligible to defer up to 100%
of his earned MICP and/or PSSP awards into deemed investments of Progress Energy
common stock on an unfunded basis.
(e) Supplemental Senior Executive Retirement Plan. Xxxxxxx shall be
eligible for participation in Progress Energy's Supplemental Senior Executive
Retirement Plan (SERP), subject to its terms. For purposes of the SERP only,
Xxxxxxx has been credited with seven years of deemed service (vesting and
benefits), including the three year Senior Management Committee requirement.
(f) Split Dollar Insurance Plan. Xxxxxxx shall continue to participate
in the Progress Energy sponsored Split Dollar Life Insurance Plan, subject to
its terms and consistent with applicable laws and regulations.
(g) Executive AD&D Life Insurance. Xxxxxxx shall be eligible to
participate in Progress Energy's Executive AD&D Life Insurance Plan, subject to
its terms.
(h) Financial Planning. Xxxxxxx shall be eligible to participate in
the Progress Energy sponsored financial planning program, subject to its terms.
(i) Estate Planning. Xxxxxxx is eligible to receive reimbursement of
up to $_________ annually for the preparation and periodic update of Xxxxxxx'x
estate plan.
(j) Automobile Allowance. Xxxxxxx is eligible to receive an automobile
allowance of ___________________ ($______) per month (less withholdings),
subject to the terms of applicable Progress Energy policies.
(k) Annual Physical. PEC will pay for an annual physical examination
by a physician of Xxxxxxx'x choice within the parameters of Progress Energy's
executive physical program.
(l) Luncheon Club. PEC will pay the monthly dues for a membership at a
luncheon club approved by Progress Energy's Chief Executive Officer. Business
related expenses will be reimbursed consistent with PEC's expense account
guidelines.
(m) Country Club Membership. PEC will pay an initiation fee and
monthly dues for a membership for Xxxxxxx at a country club approved by Progress
Energy's Chief Executive Officer. Business related expenses will be reimbursed
consistent with PEC expense account guidelines.
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(n) Health Club Membership. PEC will pay an initiation fee and monthly
dues to a health club for Xxxxxxx'x membership.
(o) Home Security. PEC will provide a home security system at
Xxxxxxx'x residence and reimburse Xxxxxxx for applicable monitoring fees.
(p) Air Travel.
(i) PEC will provide an airline club membership in accordance
with Company policy.
(ii) PEC will reimburse Xxxxxxx'x spouse's travel expenses when
she accompanies Xxxxxxx to business meetings where spousal attendance is
customary.
(iii) PEC will provide chartered aircraft for Xxxxxxx'x business
related travel as needed.
(iv) PEC will allow Xxxxxxx to travel first class at his
discretion for business related travel.
(q) Personal Computer. PEC will provide a personal computer to Xxxxxxx
to be used at his personal residence.
6. COMPANY PLAN AND PROGRAM MAINTENANCE. Xxxxxxx'x entitlement to the
benefits described in Sections 4 and 5 shall be governed exclusively by the
terms of the plans and programs described in those provisions. Nothing in the
Agreement shall require Progress Energy or the Company to continue or maintain
any short term incentive, long term incentive, employee or executive benefit
plan or program or any perquisite. Progress Energy and the Company shall have
the right to modify, replace or eliminate any incentive or benefit plans or
programs, including perquisites.
7. VACATION AND HOLIDAYS. Xxxxxxx will be entitled to four (4) weeks of
vacation leave per year, unless his combined years of service to Progress Energy
subsidiaries entitle him to additional vacation leave pursuant to Company
policy. Xxxxxxx will be granted paid holidays per Company policy.
8. TERMINATION OF EMPLOYMENT.
(a) Involuntary Termination.
(i) For purposes of this Agreement, PEC shall be deemed to have
terminated Xxxxxxx'x employment if Xxxxxxx is displaced from an assignment
within the controlled group of Progress Energy subsidiaries and affiliates, and
(1) is not simultaneously reassigned to another position within the controlled
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group of Progress Energy subsidiaries and affiliates; or (2) in the event that
Progress Energy sells more than 50% of its interest in a Progress Energy
subsidiary to which Xxxxxxx is assigned to a third party during the term of
Xxxxxxx'x assignment, the third party purchaser does not offer Xxxxxxx a
position with comparable authority, duties, wages and benefits.
(ii) Termination Without Cause. During the term of this
Agreement, if Xxxxxxx'x employment from the controlled group of Progress Energy
companies is terminated without Cause as Cause is defined in paragraph
8(a)(iii), then Xxxxxxx will be provided with his then-Base Salary at the rate
at the time of termination for the remainder of the Term of the Agreement.
Additionally, PEC will reimburse Xxxxxxx for the costs of continued coverage
under certain health and welfare benefit plans pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1985 ("COBRA") for up to eighteen (18)
months after the termination of his employment; provided, however, that Xxxxxxx
shall not be eligible for COBRA reimbursement if he is otherwise eligible for
coverage under benefit plans offering substantially equivalent or greater
benefits than the plans in which he is eligible to participate under COBRA.
Receipt of the benefits in this paragraph is subject to the requirements of
paragraphs 8(f), (g) and (h) of this Agreement. In addition, Xxxxxxx will be
eligible to retain all benefits under existing benefit plans to the extent
vested within the terms of those plans.
(iii) Termination for Cause. During the Term of the Agreement,
PEC may elect at any time to terminate Xxxxxxx'x employment immediately
hereunder and remove Xxxxxxx from employment for Cause. For purposes of this
paragraph 8(a)(iii), Cause for the termination of employment shall be defined
as: (1) any act of Xxxxxxx'x including, but not limited to, misconduct,
negligence, unlawfulness, dishonesty or inattention to the business, which is
detrimental to PEC's interests; or (2) Xxxxxxx'x unsatisfactory job performance
or failure to comply with PEC policies, rules or regulations. If Xxxxxxx is
terminated for Cause as defined herein, then he shall be eligible to retain all
benefits under existing benefit plans that have vested pursuant to those plans,
but he shall not be entitled to any form of salary continuation or severance
benefits. Upon termination for Cause, Xxxxxxx shall be entitled to any earned
but unpaid Base Salary accrued to the date of termination. Any continued rights
or benefits Xxxxxxx or his legal representatives may have under any PEC or
Progress Energy sponsored employee benefit plan or program upon his termination
for Cause shall be determined in accordance with the terms or provisions of the
plan or program.
(b) Change in Control. In the event that Progress Energy experiences a
Change in Control, as defined by the Progress Energy, Inc. Change in Control
Plan ("the Change in Control Plan") and Xxxxxxx is (1) designated as covered by
the Change in Control Plan, and (2) is Involuntarily Terminated or
Constructively Terminated under the terms of the Change in Control Plan, then
the greater of the benefits under the Change in Control Plan, if applicable, and
the benefits available in the event of an involuntary termination without Cause
as defined in paragraph 8(a)(ii), will be the legal authority regarding any
severance compensation and benefits.
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(c) 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 plans that have vested pursuant to the terms of
those plans, but as of the last date of regular employment, he shall not be
entitled to any form of salary continuation or other severance benefit.
(d) Termination Due to Death. In the event of Xxxxxxx'x death during
the Term of the Agreement, Xxxxxxx'x employment hereunder shall terminate and
the Company 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 Base Salary accrued to the date of
termination and any short term incentive for a prior fiscal year that has been
earned but not paid. The short term incentive, if any, for the year in which
Xxxxxxx'x death occurs shall be calculated on a pro rata basis for the portion
of the fiscal year prior to Xxxxxxx'x death occurring and shall be paid at the
regularly scheduled time for the payment of the short term incentive. Any rights
and benefits Xxxxxxx, or Xxxxxxx'x estate or other legal representatives, may
have under employee benefit plans and programs of PEC or Progress Energy upon
Xxxxxxx'x death during the Term of the Agreement, if any, shall be determined in
accordance with the terms and provisions of such plans and programs.
(e) Termination Due to Medical Condition.
(i) PEC may terminate Xxxxxxx'x employment hereunder, subject to
the Americans With Disabilities Act or other applicable law, due to medical
condition if (1) for a period of 180 consecutive days during the Term of the
Agreement, Xxxxxxx is totally and permanently disabled as determined in
accordance with the Company's long term disability plan (LTD), if any, as in
effect during such time; or (2) at any time during which no such plan is in
effect, Xxxxxxx is substantially unable to perform his duties hereunder because
of a medical condition for a period of 180 consecutive days during the Term of
the Agreement. Provided, however, that if Xxxxxxx applies for and is deemed
qualified for benefits under the Progress Energy sponsored Long Term Disability
Plan (LTD Benefits), Xxxxxxx shall receive such benefits and his employment will
not be terminated as long as he is receiving LTD Benefits.
(ii) Upon the termination of Xxxxxxx'x employment due to medical
condition or any period during which Xxxxxxx is qualified for LTD Benefits, PEC
shall have no further obligation to Xxxxxxx under this Agreement except as
specifically provided in this Agreement. Upon such termination or qualification
for LTD Benefits, Xxxxxxx shall be entitled to all earned but unpaid Base Salary
accrued to the date of termination or placement on LTD and any short term
incentive for a prior fiscal year that has been earned but not paid. The short
term incentive, if any, for the current fiscal year shall be calculated on a pro
rata basis for the portion of the fiscal year Xxxxxxx was performing the duties
of his position and shall be paid at the regularly scheduled time for the
payment of the short term incentive. Any continued rights and benefits Xxxxxxx,
or Xxxxxxx'x legal representatives, may have under employee benefit plans and
programs of PEC or Progress Energy upon Xxxxxxx'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.
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(f) Release of Claims. In order to receive continuation of salary
under paragraph 8(a) or 8(b), Xxxxxxx agrees to execute a written release of all
claims against PEC, and its employees, officers, directors, subsidiaries and
affiliates, on a form acceptable to PEC.
(g) Covenant Not to Compete. If PEC terminates Xxxxxxx'x employment
without Cause under paragraph 8(a), or if Xxxxxxx becomes eligible for the
benefits available under paragraph 8(a) as the result of a Change in Control as
set forth in paragraph 8(b), Xxxxxxx, 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 interest with which Xxxxxxx was involved at
the time of his separation.
(h) Non Interference. If PEC terminates Xxxxxxx'x employment without
Cause under paragraph 8(a) or if Xxxxxxx becomes eligible for the benefits
available under paragraph 8(a) as the result of a Change in Control as set forth
in paragraph 8(b), Xxxxxxx, 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, 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.
9. ASSIGNABILITY.
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 Sections 4 and 5 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.
10. 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
his best efforts to obtain a protective order requiring that all disclosures be
kept under court seal) and will notify PEC promptly upon receipt of such order
or subpoena.
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11. 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 PEC 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 by
PEC, 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) 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:
Xxxxxxx X. Xxxxxxx
Progress Energy Carolinas, Inc.
000 X. Xxxxxxxxxx Xxxxxx, PEB 1219
Xxxxxxx, Xxxxx Xxxxxxxx 00000
If to PEC:
Progress Energy Carolinas, Inc.
c/o Progress Energy Service Company, LLC
000 X. Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attn.: Vice President, Human Resources
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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:
(1) 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.
(2) 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.
(3) 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.
(4) As used in this Agreement, "including" is illustrative, and
means "including but not limited to."
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(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.
XXXXXXX X. XXXXXXX
Date:
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PROGRESS ENERGY CAROLINAS, INC.
By: Date:
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XXXXXX X. XXXXXXX
CHAIRMAN
