GENERAL RELEASE &
SEVERANCE AGREEMENT
This GENERAL RELEASE & SEVERANCE AGREEMENT
(“AGREEMENT”) is made and entered into by Xxxxxxxx X. Xxxxxx
(“Employee”) and Progress Energy Service Company, LLC (“the Company”).
In consideration of the termination
benefits provided to Employee under the Employment Agreement between Progress Energy
Service Company and Xxxxx Xxxxxx dated January 8, 2004 (“the Employment
Agreement”), and by signing this AGREEMENT, the parties agree as follows:
| 1. |
SEPARATION FROM EMPLOYMENT. Employee shall resign as an officer of the Company
and its subsidiaries effective at the close of business on November 14, 2005;
however, Employee shall remain employed under the Employment Agreement until
January 6, 2006 (“Separation Date”). Between November 14, 2005 and
January 6, 2006 Employee shall make himself available to provide transition
support and assistance as reasonably requested by the Company. |
| 2. |
TERMINATION BENEFITS. In consideration for signing this GENERAL RELEASE, the
Company agrees to pay Employee termination benefits in accordance with the terms
of the Employment Agreement for a termination without cause as set forth in
Paragraph 9(a)(ii) and other relevant provisions of the Employment Agreement. In
addition, the Company and Employee agree that: |
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(a) |
Employee shall be eligible to participate in the Progress Energy, Inc. sponsored
Management Incentive Compensation Plan, subject to its terms, for the 2005 plan
year. |
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(b) |
Pursuant to the terms of the Progress Energy, Inc. 2002 Equity Incentive Plan,
Employee shall be permitted to exercise all stock options that have vested under
the Equity Incentive Plan on or before the Separation Date within thirty-six
(36) months following the Separation Date. |
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(c) |
The Company shall provide the following relocation benefits to Employee: |
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(i) |
Employee shall be allowed a six-month period following the Separation Date in
which to market his residence. If an offer is received during the six-month
period, Employee shall receive 2% of the sales price up to a maximum of Thirty
Thousand dollars ($30,000.00). If Employee’s residence is not sold during
the six-month period, the Company will acquire the residence at the appraised
value. The appraised value will be determined based on the average of two
appraisals, provided the values of the appraisals are within 5% of each other.
If the value of the two appraisals are not within 5% of each other, a third
appraisal will be requested and the three values will be averaged. |
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(ii) |
Employee shall not be required to reimburse the Company for any relocation
expenses incurred between January 7, 2005 and January 6, 2006. |
3.
GENERAL RELEASE OF CLAIMS.
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(a) |
Release by Employee. IN CONSIDERATION OF THE TERMINATION BENEFITS PROVIDED BY
THE COMPANY UNDER THE EMPLOYMENT AGREEMENT AND THE BENEFITS AND THE MUTUAL
RELEASE PROVIDED HEREIN, EMPLOYEE HEREBY RELEASES THE COMPANY, ITS PARENT,
SUBSIDIARIES AND AFFILIATES, AND ITS PAST, PRESENT AND FUTURE PREDECESSORS,
SUCCESSORS, ASSIGNS, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, EMPLOYEE BENEFIT
PLANS AND PLAN ADMINISTRATORS FROM ALL CLAIMS AND WAIVES ALL RIGHTS EMPLOYEE MAY
HAVE OR CLAIM TO HAVE RELATING TO EMPLOYEE’S EMPLOYMENT WITH THE COMPANY,
ITS SUBSIDIARIES AND AFFILIATES, OR EMPLOYEE’S SEPARATION THEREFROM,
arising from events which have occurred up to the date Employee executes this
AGREEMENT, including but not limited to, claims, whether previously known or
later discovered, for relief, including but not limited to, front pay, back pay,
compensatory damages, punitive damages, injunctive relief, attorneys’ fees
and costs or any other remedy, arising under: (i) the Age Discrimination In
Employment Act of 1967, as amended, (“ADEA”); (ii) the Employee
Retirement Income Security Act of 1974, as amended, (“ERISA”); (iii)
Title VII of the Civil Rights Act of 1964, as amended; (iv) the Energy
Reorganization Act and Atomic Energy Act, both as amended; (v) the Americans
With Disabilities Act (“ADA”); (vi) any wrongful termination claim
under any state or federal law; (vii) claims for benefits under any
employee benefit plan maintained by the Company related to service credits or
other issues; (viii) claims under the Older Workers Benefit Protection Act
of 1990 (“OWBPA”); and (ix) any other federal, state or local
law. Notwithstanding the above, this GENERAL RELEASE shall not apply to claims
under the North Carolina Workers’ Compensation Act. |
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(b) |
Release by the Company. IN CONSIDERATION FOR THE MUTUAL RELEASE PROVIDED HEREIN,
THE COMPANY RELEASES EMPLOYEE FROM ALL CLAIMS AND WAIVES ALL RIGHTS, KNOWN OR
UNKNOWN, IT MAY HAVE OR CLAIM TO HAVE RELATING TO HIS EMPLOYMENT WITH THE
COMPANY arising from events which have occurred up to the date Employee executes
this AGREEMENT, including but not limited to, claims, whether previously known
or later discovered, for relief, including but not limited to, claims for
compensatory damages, punitive damages, injunctive relief, attorneys’ fees
and costs or any other remedy arising under federal, state or local law. |
| 4. |
COVENANT NOT TO XXX. To the extent allowed by law, Employee further agrees not
to xxx the Company, its parent, subsidiaries and affiliates, or its past,
present or future successors, assigns, officers, directors, employees, agents or
employee benefit plans or plan administrators on any of the released claims or
join as a party with others who may xxx on any such claims. The Company agrees
not to xxx Employee on any of the released claims. |
| 5. |
CERTIFICATION REGARDING INTERNAL CONTROLS. Employee hereby certifies that he is
not aware of any control weaknesses, compliance issues or accounting issues that
have not been previously disclosed in writing to both the Company’s Chief
Executive Officer and its General Counsel or have been specifically identified
and recognized as an issue in the Xxxxxxxx-Xxxxx Section 404 process. |
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(a) |
The Company will indemnify, defend and hold harmless Employee against (i)
reasonable expenses, including attorneys’ fees, incurred in connection with
any threatened, pending or completed action, suit or proceeding (including
appeals), whether civil, criminal, administrative, investigative or arbitrative,
seeking to hold him liable for actions Employee took as a Company officer or
employee, and (ii) any judgment, money decree, fine, tax, penalty or settlement
for which Employee may have become liable in any such action, suit or
proceeding. |
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(b) |
Notwithstanding any other provision of this Agreement, the Company shall not
indemnify Employee against liability or expense he may incur on account of his
activities which were at the time taken known or believed by him to be in
conflict with the best interests of the Company or the Company’s
affiliates. Furthermore, the Company shall not indemnify Employee with respect
to any liability arising out of an unlawful distribution or any transaction from
which Employee derived an improper personal benefit. |
| 7. |
COOPERATION IN LITIGATION. Employee agrees that he will make reasonable efforts
to cooperate with, and make himself available at mutually convenient times and
locations to the Company as may be necessary to assist with litigation, claims
or disputes involving the Company or any of its affiliates that may arise
concerning decisions or actions about which he has knowledge. In connection with
such litigation, dispute or claim, Employee, at mutually convenient times and
locations, will participate in interviews, testify at hearings and provide other
information as requested by the Company or its counsel. The Company agrees to
reimburse Employee for reasonable costs and expenses, including but not limited
to, travel and reasonable attorneys’ fees incurred in connection with the
foregoing. |
| 8. |
TRANSITION BENEFIT ACKNOWLEDGEMENT. Employee acknowledges that the benefits
available to Employee under the Employment Agreement and this AGREEMENT are of
greater value than the termination benefits which Employee would be entitled to
receive if Employee did not sign this AGREEMENT. Employee understands that
nothing in this AGREEMENT will affect Employee’s rights to receive other
accrued benefits otherwise available to Employee under applicable Company
policies. |
| 9. |
REGULATORY RESPONSIBILITIES. Employee acknowledges that this AGREEMENT does not
restrain Employee’s rights or the rights of the Company to report or
provide information to the Nuclear Regulatory Commission (“NRC”)
(including possible violations or requirements imposed under the Atomic Energy
Act or the Energy Reorganization Act, any nuclear safety concern or any
workplace safety concern), to the Occupational Safety and Health Administration
(concerning workplace safety or compliance with the Xxxxxxxx-Xxxxx Act of 2002),
the Securities and Exchange Commission (concerning financial disclosure
concerns) or any other governmental agency with jurisdiction over such matters. |
| 10. |
REVIEW PERIOD. Employee was provided with an initial draft of this AGREEMENT on
November 10, 2005 and understands that the Company desires that he have adequate
time and opportunity to review and understand the consequences of entering into
it. Employee understands that Employee has the right and the Company encourages
Employee: (i) to consult with an attorney prior to executing this AGREEMENT; and
(ii) that Employee has at least 45 days following November 10, 2005 within which
to consider signing it. In the event that Employee does not return and execute a
copy of the AGREEMENT within 45 days of receipt, Employee understands that
Employee will not be eligible for the termination benefits provided by the
Employment Agreement or the benefits provided herein. |
| 11. |
NO MITIGATION. None of the benefits contained herein shall be subject to any
mitigation obligation on Employee’s part, or be terminated or diminished if
Employee should accept other employment after the Separation Date. |
| 12. |
NON-DISPARAGMENT. Neither the Employee nor any officer, director or any other
authorized spokesperson of the Company shall state or otherwise publish anything
about the other party which would adversely affect the reputation, image or
business relationships and goodwill of the other party in its/his market and
community at large. |
| 13. |
DISCLAIMER OF LIABILITY. Employee and Company acknowledge that this AGREEMENT is
intended to avoid all litigation relating to Employee’s employment with the
Company and Employee’s separation therefrom; therefore, it is not to be
considered as the Company’s admission of any liability to Employee —
liability which the Company denies, nor is it intended to be an admission by
Employee of any liability or wrongdoing of Employee – liability which
Employee denies. |
| 14. |
ACKNOWLEDGEMENT OF UNDERSTANDING. Employee represents that Employee has
carefully read the entire AGREEMENT, fully understands its consequences, and
knowingly and voluntarily enters into it. Employee further certifies that
neither the Company nor any of its agents, representatives or attorneys have
made any representations to Employee concerning the terms or effects of this
AGREEMENT other than those contained herein. |
| 15. |
SEVERABILITY. If a court of competent jurisdiction holds that any provision or
sub-part thereof contained in the AGREEMENT is invalid, illegal or
unenforceable, that invalidity, illegality or unenforceability shall not affect
any other provision in the AGREEMENT. |
| 16. |
REVOCATION. Employee understands that Employee may revoke the AGREEMENT during
the seven-day period immediately following its execution. The AGREEMENT will not
become effective or enforceable until the revocation period has expired. To
revoke the AGREEMENT, a written notice of revocation must be delivered to the
Company addressed to: Vice President — Human Resources, Progress Energy
Service Company, LLC, 000 X. Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx Xxxxxxxx, 00000.
Employee further understands that if Employee exercises Employee’s right to
revoke the AGREEMENT during the seven-day revocation period, Employee will
forfeit any and all rights Employee might otherwise have to the termination
benefits provided herein and by the Employment Agreement. |
| 17. |
CHOICE OF LAW. This AGREEMENT will be governed by North Carolina law and the
applicable provisions of federal law, including but not limited to the ADEA,
ERISA, the Civil Rights Act of 1964, the Energy Reorganization Act, the Atomic
Energy Act, ADA, and the OWBPA. |
| 18. |
ASSIGNABILITY. Employee agrees that this AGREEMENT constitutes an agreement
between Employee and the Company. The AGREEMENT shall apply to, be binding upon
and inure to the benefit of Employee’s successors, assigns, heirs and other
representatives. |
In witness whereof, Employee has
signed this AGREEMENT on the day and year written below.
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/s/ Xxxxxxxx X. Xxxxxx
Xxxxxxxx X. Xxxxxx
November 14, 2005
Date
/s/ Xxxxx X. Xxxxx III
PROGRESS ENERGY SERVICE COMPANY, LLC
By: Xxxxx X. Xxxxx III
President and Chief Executive Officer
November 14, 2005
Date
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