Exhibit 10.1
CONFIDENTIAL SEVERANCE AGREEMENT AND RELEASE
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This Confidential Severance Agreement and Release ("Agreement"), dated as
of August 23, 1999, is made between Xxxxx X. Xxxxxxxx ("Employee"), the
undersigned employee, and DQE, Inc. ("the Company") for the purpose of forever
releasing the Company and all "Released Parties" as defined herein from any and
all possible liability to Employee. The parties, intending to be legally bound
hereby, enter into this Agreement as follows:
1. Employee has voluntarily elected to resign from employment with the
Company and its subsidiaries and affiliates and from all officer, board and
committee positions at the Company and its subsidiaries and affiliates,
including without limitation the positions set forth in Exhibit A, in exchange
for the benefits provided herein. The Company's employment records will reflect
that Employee's employment with the Company will end effective August 23, 1999
(the "Termination Date").
2. The Company, on its behalf, and on behalf of the Released Parties as
defined herein, has agreed to provide to Employee, and Employee has expressly
agreed to accept, the following, in full settlement, release and discharge of
all possible claims, known or unknown, which Employee might have or might have
claimed for any reason:
a. As soon as practicable after the Termination Date, Employee shall
receive a lump sum cash payment of his accrued vacation pay and the unpaid
amount of sold vacation time.
b. Employee shall be entitled to receive all benefits accrued by
him as of the Termination Date under all qualified and nonqualified
pension and 401(k)
plans of the Company and its affiliates in such manner and at such time as
are provided under the terms of such plans.
c. On the next regularly scheduled payday following the later of
(i) the Termination Date or the (ii) the execution of this Agreement, the
Company will pay to Employee the first of twenty-four (24) semi-monthly
payments, less standard deductions and tax withholdings, the total of all
being an amount equal to twelve (12) months of base salary at Employee's
most recent rate of pay. By signing this Agreement, Employee acknowledges
that his resignation would not ordinarily entitle him to this separation
allowance, that this separation allowance is intended by the parties to
constitute separation pay and not actual continuation of salary and that
he is being awarded this allowance in consideration for signing this
Agreement.
d. Health, dental, long-term disability and accidental death and
dismemberment insurance benefits will be provided to Employee for the
length of his salary continuance of the same kind and at the same cost to
Employee as if still employed by the Company. If Employee becomes employed
during the period of time he is on salary continuance, he must notify the
Company by contacting in writing Xxxxxx X. Xxxxx, Executive Vice President
and General Counsel of the Company at 000 Xxxxxxx Xxxxxx - 00/xx/ Xxxxx,
Xxxxxxxxxx, Xxxxxxxxxxxx 00000. The benefits Employee is receiving from
the Company will then cease if he is eligible to receive from his new
employer benefits that the Company reasonably determines to be comparable
to the benefits Employee is receiving from the Company. Severance pay
will, however, continue to be paid.
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e. For the length of Employee's salary continuance, the Company
shall pay the cost, in an aggregate amount not to exceed $15,000, for
outplacement services to be provided to Employee by the Bizet Group.
f. As soon as practicable after the Termination Date, Employee will
receive a lump sum amount equal to the actuarial equivalent of the
additional benefits Employee would have accrued under the Retirement Plan,
the Supplemental Plan and the Pension Service Supplement Plan (PSSP) if
Employee had continued to be employed by the Company for the period of his
salary continuance under this Agreement and if his covered compensation
for such period had continued at as rate equal to his rate of covered
compensation for the twelve (12) full calendar months immediately
preceding the calendar month in which the Termination Date occurred (for
purposes of the foregoing, actuarial equivalence shall be determined in
accordance with the terms of the Retirement Plan, the Supplemental Plan
and the Pension Service Supplement Plan (PSSP), as applicable.
g. On July 22, 1997, Employee was granted a stock option (the "1997
Three-Year Option") in respect of an aggregate of 22,500 shares of the
Company's Common Stock pursuant to the 1997 three-year stock option
program under the terms of the Company's Long-Term Incentive Plan. In
1997, the first tranche of the 1997 Three-Year Option, in respect of 6,750
shares, was awarded to Employee by the Compensation Committee (the
"Committee") of the Company's Board of Directors. In July 1999, the
Committee awarded a second tranche of the 1997 Three-Year Option, in
respect of 6,750 shares. The third and final tranche,
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in respect of 9,000 shares, has not yet been awarded. The parties agree
that the second and third tranches of the 1997 Three-Year Option, as well
as the 1999 annual stock option in respect of an aggregate of 18,129
shares of Company Common Stock granted to Employee as of December 18, 1998
but not yet awarded, shall be forfeited by Employee as of the Termination
Date and shall not be exercisable by Employee or any other person on or
after the Termination Date. All other stock options granted to Employee
prior to the Termination Date under the terms of the Company's Long-Term
Incentive Plan and not heretofore exercised by Employee, as described in
Exhibit B hereto, shall, upon execution of this Agreement, remain
exercisable in accordance with their respective terms for one year after
the Termination Date at which time any unexercised portion of such options
shall expire and no longer be exercisable. Employee acknowledges and
agrees that his resignation would not ordinarily entitle him to the
continued ability to exercise such stock options and that he is being
given this ability in consideration for signing this Agreement.
h. For the length of his salary continuance, Employee shall have the
right, at the Company's expense, to continue to use the financial planning
and counseling services offered to Company executives by AYCO in
accordance with the guidelines established by the Company for such
services.
Except as expressly provided above, Employee waives any compensation,
benefits or rights that may have accrued in his capacity as an employee or
otherwise prior to the date of this Agreement and shall not be entitled to
receive any salary or benefits or participate in any compensation plans,
programs or arrangements of the Company and its affiliates after the
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Termination Date.
3. In consideration for the payments and benefits that Employee shall be
provided under this Agreement, Employee on behalf of himself and his dependents,
heirs, administrators, representatives, executors, successors, assigns and any
other person or entity, including any government agency seeking to assert a
claim on his behalf, hereby releases and forever discharges the Company and its
agents, servants, officers, directors, employees, parents, subsidiaries,
divisions, affiliates, predecessors, successors and assigns, all its employee
benefit plans and their administrators, trustees and other fiduciaries
(severally and collectively called "the Released Parties") from any and all
injuries, causes of actions, claims and demands whatsoever, and from all debts
and liabilities whatsoever, whether known or unknown, asserted or unasserted or
any that Employee or any person or entity acting for Employee now have or
hereafter may have against any of the Released Parties for any acts, practices
or events up to and including the effective date of this Agreement and the
continuing effects thereof, it being Employee's intention to effect a general
release of all claims. This release includes, without in any way limiting the
generality of the foregoing, any claims for attorneys' fees, any claims for
costs arising out of or relating to Employee's employment by the Company, and
any claims arising from any alleged violation by any of the Released Parties of
any federal, state or local statute, ordinance, rule, Executive Order or
regulation, including, but not limited to, Title VII of the Civil Rights Act of
1964, as amended, the Rehabilitation Act of 1973, the Pennsylvania Worker's
Compensation Act, the Americans with Disabilities Act, the Employee Retirement
Income Security Act of 1974, as amended, the Pennsylvania Human Relations Act,
the Civil Rights Act of 1991, the Americans with Disabilities Act and the Age
Discrimination in Employment Act, as amended; provided, however, that the
foregoing release shall not adversely
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affect Employee's COBRA rights or his rights to benefits under the Company's
401(k) Plan for Management Employees or its tax-qualified Retirement Plan and
Supplemental Retirement Plan.
4. Nothing in this Release is intended as a waiver of, or to interfere
with, Employee's right to file a charge under, or to testify, assist or
participate in any manner in any investigation, hearing or proceeding under any
statute over which the Equal Employment Opportunity Commission has jurisdiction;
provided, however, that Employee agrees that the waiver and release in Paragraph
3 bars him from receiving any personal financial recovery or other personal
remedy as a result of, or in connection with, any such charge, investigation,
hearing or proceeding.
5. The Company and Employee agree to refrain from making any disparaging
remarks about each other or otherwise acting or commenting in a way which
reflects adversely upon the Company's business or personnel or Employee's work
performance.
6. The terms of this Agreement shall remain strictly confidential.
Employee agrees that he will not, unless compelled by law or judicial process to
do so, disclose or discuss, directly or indirectly, its terms with anyone other
than his spouse, attorney, financial advisors, and prospective employers who
have specifically requested a copy hereof.
7. Notwithstanding the foregoing, all of the confidentiality, non-
competition and other obligations of Employee under that certain Employee Non-
Competition and Confidentiality Agreement between Employee and the Company dated
December 13, 1996 (the "Non-Competition Agreement"), which is incorporated
herein by reference, shall remain in full force and effect as set forth in the
Non-Competition Agreement, but the provisions of the Non-Competition Agreement
regarding severance pay shall be deemed terminated and of no force or effect.
Without limiting the scope of his obligations under the Non-Competition
Agreement,
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Employee acknowledges and agrees that the Company's confidential and proprietary
information includes, but is not limited to, all proprietary information and
trade secrets of the Company and its affiliates, such as all information
disclosed to Employee or known by him about (1) any matters relating to the
participation of the Company and/or an affiliate in certain lease transactions
wherein the Company and/or an affiliate acquired interests in certain portfolios
of equipment and a power facility (collectively the "Assets") and the ongoing
administration of such property interests including, without limitation, any
agreements or arrangements relating to the sale or release of any of the Assets;
(2) any agreements or arrangements between the Company and/or an affiliate and
Computer Leasing Inc. or any affiliate thereof including, without limitation,
any remarketing arrangements and any matters relating to the acquisition by the
Company and/or an affiliate of beneficial ownership of certain equipment trusts
that participated in the leasehold transactions referenced in (1) above; (3) any
matters relating to the participation of the Company and/or an affiliate in
domestic sale/leaseback transactions; (4) any matters relating to the
participation of the Company and/or an affiliate in certain offshore
lease/leaseback transactions; (5) any matters relating to the participation of
the Company and/or an affiliate in investments in landfill gas recovery
operations, as well as investments in limited partnership holding oil and gas
well investments; and (6) any matters relating to the participation of the
Company and/or an affiliate in investments in limited partnerships which invest
in affordable housing projects. It will be presumed that information supplied to
the Company and/or any affiliate from outside sources is confidential
information unless and until it is designated otherwise. Before making any
legally required disclosure of the Company's confidential or proprietary
information, Employee shall give the Company as much advance written notice as
possible.
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8. Employee agrees to deliver to the Company on or before the
Termination Date, all confidential or proprietary information, equipment,
documents, files, lists or other written, graphic or electronic records relating
to the Company's business, and all copies of such materials, which are or have
been in Employee's possession, or under his control.
9. In addition to any other remedy herein set forth or available to the
Company at law or in equity, in the event that Employee breaches or otherwise
fails to observe any and all of the covenants, agreements or duties herein set
forth above, as determined by a court or other body of competent jurisdiction,
the Company may, in its discretion, terminate this Agreement and shall
thereafter be released from performing under any other arrangement set forth
herein.
10. It is expressly understood and agreed that by entering into this
Agreement, the Company does not admit in any way that it has treated Employee
unlawfully or wrongfully. To the contrary, the Company expressly denies that it
has violated any of Employee rights or harmed him in any way.
11. Employee acknowledges that he has carefully read and fully
understands all the provisions and effects of this Agreement; that he has had
the opportunity to consult and thoroughly discuss all aspects of it with an
attorney; that he is voluntarily entering into this Agreement; and that neither
the Company nor its agents or attorneys made any representations or promises
concerning the terms or effects of this Agreement other than those contained
herein. Employee understands and acknowledges that he is bound by the terms of
the Non-Competition Agreement, the terms and conditions of which are
incorporated herein by reference.
12. Employee acknowledges that he has been given no less than twenty-one
days to consider this Agreement before executing it. Employee acknowledges that
he has been
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advised orally and by this writing to consult with an Attorney prior to signing
this Agreement. He further acknowledges that he may revoke this Agreement for a
period of seven (7) days from the date he executes it (the "Revocation Period"),
by notifying in writing, Xxxxxx X. Xxxxx, Executive Vice President and General
Counsel of the Company at 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxx 00000.
13. This Agreement shall be construed under the laws of the United States
and of the Commonwealth of Pennsylvania. The provisions hereof are severable,
except the provisions of Paragraph 3 are not severable from the consideration
provided in Paragraph 2. If any term, condition, clause or provision of this
Agreement shall be deemed unenforceable, it shall have no effect on the
enforceability of the other provisions hereof.
14. Nothing in this Agreement is intended to, nor shall it be deemed to,
constitute a waiver or release of any claim under the Age Discrimination in
Employment Act which arises after this Agreement is executed by the parties.
15. This Agreement and the Non-Competition Agreement (as modified in
Section 7 hereof) represent the entire agreement of the parties and any
amendments hereto shall not be effective unless they are in writing signed by
all parties and/or their duly authorized representatives. Without limiting the
generality of the foregoing, the Severance Agreement, dated as of April 4, 1997,
between Employee and the Company is deemed terminated in its entirety and shall
be of no further force or effect.
16. By signing this Agreement, Employee has made the following
representation: "I HAVE READ THIS AGREEMENT, AND HAVE HAD AN OPPORTUNITY TO
CONSULT WITH AN ATTORNEY OF MY CHOOSING ABOUT IT. I HAVE BEEN GIVEN THE
NECESSARY TIME TO CONSIDER ITS CONTENTS AND I
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FULLY UNDERSTAND ALL OF ITS TERMS. I AM SIGNING THIS AGREEMENT VOLUNTARILY."
This Agreement is made this 3/rd/ day of October, 1999 effective as of the
Termination Date.
/s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxx X. Xxxxxxxx
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Witness Xxxxx X. Xxxxxxxx
Attest: DQE, INC.
/s/ Xxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxxxx Executive Vice President
----------------------------------- and General Counsel
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EXHIBIT A
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BOARD POSITIONS:
Allegheny Development Corp. Duquesne Enterprises, Inc.
AquaSource, Inc. Duquesne Light Company
Bushton Company EnviroGas Recovery, Inc.
Diemen-Flevo Co. Monongahela Light and Power Co.
DQE Capital Corporation Montauk, Inc.
DQE Communications, Inc. Monticello Corporation
DQE Energy Services, Inc. Property Ventures, Ltd.
DQEnergy Partners, Inc.
OFFICER POSITIONS:
Company Name Title
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Bushton Company President
DQE Capital Corporation Vice President
DQE, Inc. Vice President - Finance
Montauk, Inc. President
Waste Energy Technology, LLC Manager
EXHIBIT B
OF CONFIDENTIAL
SEVERANCE
AGREEMENT
AND RELEASE
LONG TERM INCENTIVE PLAN SUMMARY
NAME: XXXXX X. XXXXXXXX DATE: AUGUST 23, 1999
Shares
Option Shares Exercise Shares Unexercisable
Date Awarded Price SAR's DEA's Exercisable Until 11/12/99
---- ------- ----- ----- ----- ----------- --------------
11/11/96 1015 $29.9375 YES YES 1015 0
05/08/97 2396 28.5625 YES YES 2396 0
07/22/97 3159 30.9375 NO YES 3159 0
11/10/97 2954 30.7188 YES YES 2954 0
11/10/97 2962 30.7188 YES YES 2962 0
01/26/98 11774 33.1250 YES NO 11774 0
08/04/98 3268 35.0625 YES YES 3268 0
11/11/98 1219 40.5625 YES YES 1219 0
11/11/98 2096 40.5625 YES YES 2096 0
02/08/99 1619 39.5938 YES YES 1619 0
05/11/99 682 41.0000 YES YES 0 682
05/11/99 3193 41.0000 YES YES 0 3193
Memo: All options expire one (1) year after date of termination.
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