EXHIBIT 10.(h)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered as of the 1st day
of March, 1998, by and between Florida Progress Corporation (the "Company") and
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WITNESSETH:
WHEREAS, the Employee is currently serving as the President and
Chief Executive Officer of the Company under an employment agreement entered
into as of June 1, 1995 (the "Existing Agreement"); and
WHEREAS, the Employee and the Company wish to amend the Existing
Agreement to extend the term thereof and to make certain other amendments to the
provisions of the Existing Agreement; and
WHEREAS, it is the desire of both parties that the arrangements
and understandings of the parties concerning the continued employment of the
Employee under the Existing Agreement as so amended be set forth in writing in
this restatement of the Existing Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained in this Agreement, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Employment. The Company hereby agrees to continue the
employment of the Employee, and the Employee hereby accepts such continued
employment, upon the terms and subject to the conditions set forth in this
Agreement.
2. Term. The term of employment under this Agreement (the "Term
of Employment") shall begin as of March 1, 1998, and, subject to the provisions
of termination as hereinafter provided in Sections 6 and 7, shall terminate on
February 28, 2002; provided, however, that beginning on March 1, 2000 and on
each March 1 (the "Renewal Date") thereafter, the Term of Employment shall
automatically be extended for one additional year unless either party gives the
other written notice of termination at least ninety (90) days prior to any such
Renewal Date.
3. Duties.
(a) The Employee is now engaged as the President
and Chief Executive Officer of the Company, and will become the Chairman of the
Board of Directors of the Company upon the retirement of the current Chairman.
In addition, the Employee shall have such other duties and hold such offices as
may from time to time be reasonably assigned to him by the Board of Directors
of the Company (the "Board of Directors") with respect to the business and
affairs of the Company, consistent with his status as the most senior executive
officer of the Company.
(b) The Employee agrees to act within the scope
of authority delegated to him from time to time pursuant to this Agreement and,
so far as reasonably practicable, to observe and abide by every limitation
placed upon such authority from time to time by the Board of Directors. No
latitude, indulgence or forbearance granted by the Board of Directors to the
Employee shall be deemed a relinquishment of its right to direct or control
him or a waiver of its right to require performance and fulfillment of the
duties and responsibilities of his employment hereunder or of any other
provision hereof.
4. Extent of Services. During his Term of Employment, the
Employee shall devote his full time, energy and attention to, and actively
participate in, the management of the business and affairs of the Company and
shall not become employed, engaged or involved, in any capacity, in any
commercial or professional endeavor, business or business activity other than
the business and affairs of the Company, provided, however, that the foregoing
shall not prevent Employee from serving as a director or trustee of other
corporations or organizations if such service has been approved by the
Company's Board of Directors.
5. Compensation. The Company shall pay the Employee, and the
Employee agrees to accept from the Company, as compensation in full for the
Employee's services under this Agreement and the faithful performance and
observance of all of the Employee's obligations to the Company hereunder, the
following:
(a) Base Salary. Throughout the Term of
Employment the Employee shall be paid a base salary not less than Six Hundred
and Sixty Thousand as determined annually by the Board of Directors of the
Company, payable in accordance with the Company's standard pay practices.
(b) Incentive Plans. In addition to the base
salary provided for in paragraph 5(a), Employee shall be entitled to
participate in the Company's Management Incentive Compensation Plan (MICP),
and the Company's Long-Term Incentive Plan (LTIP), any other incentive
compensation plans that may be established by the Board of Directors;
participation in the MICP and LTIP shall be at a target level (expressed as a
percentage of base salary) not less than the level authorized for any other
executive officer of the Company.
(c) SERP. Employee will be entitled to continue
to participate in the Company's Supplemental Executive Retirement Plan (SERP),
or any successor plan thereto at not less than his current benefits together
with any improvements thereto, provided, however, that the annual retirement
benefits to be paid from the SERP, the Employees' Retirement Plan of Florida
Progress Corporation and the Florida Progress Corporation Retirement Benefit
Non-discrimination Plan for Excess Benefits and pursuant to this Agreement
shall not be less than the following amounts depending upon the date on which
the Employee's Term of Employment under this Agreement ends:
January 31, 2002 or later $600,000
January 31, 2001 or later $585,000
January 31, 2000 or later $570,000
January 31, 1999 or later $555,000
January 31, 1998 or later $540,000
provided, however, that if Employee is married at the expiration of the Term of
Employment:
(i) Employee's minimum retirement benefit provided in accordance with
the foregoing table shall be appropriately adjusted so as to provide him with an
actuarial equivalent benefit paid out as a 100% life annuity to him and a 100%
survivor annuity to his spouse, such adjustment to involve only the reduction
necessary to convert Employee's current retirement benefit under the SERP (which
is in the form of a 100% life annuity, with an unreduced 50% surviving spouse
annuity) into the foregoing form of payment; and
(ii) if the Term of Employment ends by virtue of the Employee's death,
his spouse shall receive an annuity equal to the minimum retirement benefit
provided in accordance with the foregoing table, but reduced to the same extent
that his retirement benefit would have been reduced under (i) above had Employee
retired as of the date of his death.
(d) Employee Benefits. Employee shall be
entitled to continue to participate in the Company's Retirement Plan, Savings
Plan, Executive Optional Deferred Compensation Plan and all other benefit plans
that are available to employees of the Company and, in addition, upon
termination of employment under this Agreement, the Employee shall, after
the expiration of any continued health insurance benefits provided by the
Company, be eligible to continue such benefits (at the Employee's cost) to
the same extent that such benefits are made available by the Company thereafter
to the senior executive officers of the Company and, after the Employee attains
age 65, to retired senior executive officers of the Company.
6. Termination by the Company. The Company, acting by a vote
of its Board of Directors, may terminate Employee's employment hereunder (and
consequently his Term of Employment) under the following circumstance:
(a) Termination for Cause.
(i) The willful, substantial, continued and
unjustified refusal of Employee to perform the duties
required of him by this Agreement to the extent of
his ability to do so.
(ii) The willful engaging by Employee in
conduct which is demonstrably and materially
injurious to the Company, financially or otherwise.
For purpose of this paragraph, no act, or failure to
act, on Employee's part shall be deemed "willful"
unless done, or omitted to be done, by Employee not
in good faith and without reasonable belief that
Employee's action or omission was in the best
interest of the Company.
(iii) Notwithstanding the foregoing, Employee
shall not be deemed to have been terminated for cause
unless and until there shall have been delivered to
Employee a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the
entire membership of the Board of Directors at a
meeting of the Board (after reasonable notice to
Employee and an opportunity for Employee, together
with Employee's counsel, to be heard before the
Board), finding that, in the good faith opinion of
the Board, Employee was guilty of engaging in such
conduct.
(b) Termination due to Disability. The Employee
shall be unable to perform his duties hereunder by reason of disability that
shall have continued for a period of at least one hundred and eighty (180)
consecutive days. Moreover, during any such 180-day period the Employee shall
receive the base salary pursuant to this Agreement and any MICP and LTIP award
as if he were not disabled. The word "disability" as used in this Agreement
shall mean the inability of the Employee, as determined by the Board of
Directors, by reason of physical or mental disability to perform the duties
required of him under this Agreement.
(c) Termination Without Cause. The Company,
acting by majority vote of its Board of Directors, terminate, the Term of
Employment without cause upon thirty (30) days' written notice to Employee.
Upon termination of Employee's employment under
paragraph 6(c) or by the Employee for Good Reason as defined in paragraph 8(d),
the Employee shall be entitled only to provisions of Section 8 and the
Company shall have no other obligation to the Employee. In the event of
termination of the Employee's employment under the provisions of paragraph
6(a) or 6(b) or if the Employee terminates his employment under this
Agreement for any reason other than "Good Reason" as defined in paragraph
8(d), all rights of the Employee under this Agreement shall terminate upon the
effective date of the termination of employment, the Employee shall have no
further rights to be employed or to receive any further benefit under this
Agreement, and the Company shall thereafter have no obligations to the Employee
under this Agreement, except for rights the Employee vested and accrued prior
thereto.
7. Death of Employee. If the Employee dies
during the Term of Employment, all rights of the Employee under this Agreement
shall terminate upon his death other than rights vested and accrued prior
thereto, including, without limitation, the SERP benefit provided in
paragraph 5(c) of this Agreement as if the Employee had retired on the date
of his death. The Company shall pay to the estate of the Employee the base
salary that otherwise would be payable to the Employee through the end of the
calendar year in which his death occurs as well as a target MICP payment, and
the Company shall have no additional obligation under this Agreement to
the Employee or his estate.
8. Severance Pay.
(a) If Employee's employment is terminated by
the Company without cause under the provisions of paragraph 6(c), or if
Employee's employment is terminated by the Employee for Good Reason, as defined
in paragraph 8(d) of this Agreement:
(i) the Employee shall be entitled to receive
and the Company shall be obligated to pay to the
Employee, an amount equal to three times the sum of
his annual base pay and the MICP target amount in
effect as of the date of termination,
(ii) the Employee shall receive the number of
shares equal to (1) the target award that he could
earn under his award agreement for each uncompleted
performance cycle under the LTIP, plus (2) the number
of shares earned and not yet paid out for any
performance cycle that has been completed.
(b) The Company shall pay the Employee the
amount due under paragraph 8(a)(i) in a lump-sum payment not later than
fifteen (15) days following the date of the Employee's termination of
employment. The shares referred to in Section 8(a)(ii) shall be issued to
the Employee as soon as practical.
(c) Any amount payable under this Section 8 is
in lieu of, and not in addition to, any further compensation payments for the
then remaining Term of Employment. Such amount shall be paid to the Employee
regardless of whether the Employee finds, seeks or receives an offer for
alternative employment or receives compensation from other sources. The
Employee shall be under no duty to mitigate damages or losses that he might
incur by reason of such termination of his employment by the Company.
(d) For purposes of this Agreement, "Good
Reason" shall mean, without the Employee's express written consent, the
occurrence of any one or more of the following:
(i) a change in the duties and
responsibilities of the Employee's position such that
a substantial reduction occurs from the duties and
responsibilities in effect either as of the date of
this Agreement or immediately prior to the change in
responsibilities;
(ii) a reduction by the Company of the
Employee's base salary as in effect on the date
hereof, as increased from time to time, except a
reduction consistent with salary reductions of all
personnel on the executive payroll;
(iii) the Company requiring the Employee to be
based in a city other than the city where the
Employee is based on the date hereof.
9. Restrictive Covenants.
(a) During the Term of Employment, and for a
period of two (2) years after the expiration of the Term of Employment or
other termination of the Employee's employment hereunder, whether by the
Employee, the Company or otherwise, for whatever reason or no reason at all,
the Employee shall maintain the confidentiality of all confidential and
proprietary information relating to the business of the Company and its
subsidiaries that he has previously acquired as an employee of the Company or
that he may acquire in the course of his engagement hereunder, and shall
not utilize such confidential and proprietary information to the detriment of
the Company or any of its subsidiaries, or otherwise knowingly disclose any
such confidential information to any third person. Following expiration of the
Term of Employment or other termination of the Employee's employment hereunder,
whether by the Employee, the Company or otherwise, for whatever reason or no
reason at all, the Employee shall promptly return to the Company all written
materials containing confidential and proprietary information regarding the
Company or any of its subsidiaries that the Employee has previously acquired
as an employee of the Company or that he obtained in the course of the
performance of his duties hereunder.
(b) During the Term of Employment, and for a
period of two (2) years after the expiration of the Term of Employment or
other termination of the Employee's employment hereunder, whether by the
Employee, the Company or otherwise, for whatever reason or no reason at all,
the Employee:
(i) shall not induce or attempt to
induce any employee of the Company to leave the
employ of the Company or any of its subsidiaries; and
(ii) shall not, directly or indirectly, own,
operate, manage, have a proprietary interest of any
kind in, extended financial assistance to, solicit,
encourage or handle patronage for, be employed by or
serve as a consultant, or in any other capacity, for
the principal or branch office or facilities of any
person engaged primarily in business the same as,
substantially similar to or in substantial direct
competition with the business of the Company or any
of its subsidiaries and located within the States of
Florida, Georgia, Alabama, North Carolina and South
Carolina, except that the Employee may own stock in
such a corporation so long as such stock is publicly
traded, the Employee does not own more than five
percent (5%) of the outstanding stock of said
corporation and the ownership of such stock does not
in any way represent any form of compensation for any
services rendered by the Employee to said
corporation.
(iii) The Employee acknowledges that his
skills are such that he can be gainfully employed in
noncompetitive employment and that the agreement not
to compete will in no way prevent him from earning a
living.
(c) It is understood by and between the parties
hereto that the covenants set forth in this Section 9 are essential elements of
this Agreement, and that, but for the agreement of the Employee to comply with
such covenants, the Company would not have agreed to enter into this
Agreement. Such covenants by the Employee shall be construed as agreements
independent of any other provision in this Agreement. The existence of any
claim or cause of action of the Employee against the Company, whether predicated
on this Agreement or otherwise, shall not constitute a defense to the
enforcement by the Company of such covenants, or any of them.
(d) The Employee agrees that damages at law will
be an insufficient remedy to the Company if the Employee violates the terms
of this Section 9 and that the Company would suffer irreparable damage as a
result of any such violation. Accordingly, it is agreed that the Company
shall be entitled, upon application to a court of competent jurisdiction, to
obtain injunctive relief to enforce the provisions of this Section 9, which
injunctive relief shall be in addition to any other rights or remedies available
to the Company.
(e) The Employee agrees to pay to the Company
all costs and expenses incurred by the Company relating to the enforcement of
the terms of this Section 9, including reasonable fees and disbursements of
counsel and legal assistants (whether incurred before trial, at trial, in
appellate proceedings, or otherwise).
(f) The restrictions of this Section 9 shall
extend to all activities of Employee, whether as a sole proprietor, an
independent contractor, partner or joint venture, or as an officer, director,
stockholder (except as otherwise specified in paragraph (b)(ii) above), agent,
employee or salesman for any individual, firm, partnership, corporation or other
entity, or otherwise.
(g) The period of time during which the Employee
is prohibited from engaging in certain business practices pursuant to the
provisions of paragraphs (a) or (b) of this Section 9 shall be extended by
any length of time during which the Employee is in breach of such covenants.
(h) It is agreed by the Company and the Employee
that if any portion of the covenants set forth in this Section 9 are held to be
invalid, unreasonable, arbitrary or against public policy, then such portion of
such covenants shall be considered divisible both as to time and geographical
area. The Company and the Employee agree that, if any court of competent
jurisdiction determines the specified time period or the specified geographical
area applicable to this Section 9 to be invalid, unreasonable, arbitrary or
against public policy, a lesser time period or geographical area that is
determined to be reasonable, non-arbitrary and not against public policy may be
enforced against the Employee. The Company and the Employee agree that the
foregoing covenants are appropriate and reasonable when considered in light of
the nature and position held by the Employee and the extent of the business
conducted by the Company.
10. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Restrictions. The Employee acknowledges
and is aware that applicable state and federal securities laws prohibit any
person who has material non-public information about a company from purchasing
or selling the securities of that company. The Employee further acknowledges
that during the course of his employment by the Company he may become privy to
material non-public information regarding the Company or other companies. The
Employee agrees and acknowledges that such material non-public information will
be the property of the Company and such other companies. The Employee covenants
and agrees not to disclose, and will not suffer or permit any of the employees
or agents of the Company under his supervision to disclose, to any third person
or make use of any material non-public information about the Company or any
other company in connection with the purchase or sale of any securities,
including securities of the Company and its subsidiaries. The foregoing
covenants regarding material non-public information shall not apply to the
extent that such information is publicly disclosed by the Company or other
companies or otherwise publicly disclosed in accordance with law by a person
other than the Employee.
11. Compliance with Other Agreements. The Employee represents
and warrants that the execution of this Agreement by him and his performance of
his obligations hereunder will not conflict with, result in the breach of any
provision of or the termination of or constitute a default under any Agreement
to which the Employee is a party or by which the Employee is or may be bound.
12. Disputes. Should a "change in control", as defined in
Section 1.3 of the CIC Agreement described in Section 16, occur, the Employee
shall be entitled to recover all reasonable costs and expenses (including fees
and disbursements of counsel and legal assistants, whether incurred before
trial, at trial, in appellate proceedings, or otherwise) incurred with respect
to any action relating to this Agreement, whether brought by Employee, or by or
on behalf of the Company or any successor or affiliate; in all other cases, the
prevailing party in any action relating to this Agreement shall be entitled to
recover all such costs and expenses.
To the extent permitted by law, the Company shall pay to
Employee on demand, interest on any amount not paid in full when due under the
terms of this Agreement. The amount shall be computed by applying to the sum of
all delinquent amounts an interest rate. The interest rate shall be a fixed rate
per year which shall be the "prime rate" as listed daily in the Money Rates
column of the Wall Street Journal published the day on which Employee's
employment terminates.
13. Waiver of Breach. The waiver of the Company of a breach by
the Employee of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach by the Employee. No waiver shall
be valid unless in writing and approved by the Board of Directors of the
Company.
14. Notice. All notices, requests, demands and any other
communications that are required or that may be given under this Agreement shall
be in writing and shall be deemed to have been duly given when received, if
personally delivered; when transmitted, if transmitted by electronic fax,
telecopy or similar electronic transmission method (provided customary evidence
of receipt is obtained); the day after it is sent, if sent by recognized
overnight delivery service; and three days after it is sent, if mailed, first
class certified mail, return receipt requested, postage prepaid. In each case
notice shall be sent to the parties at the following addresses:
To the Company at: Florida Progress Corporation
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Attn: Corporate Secretary
To the Employee at: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Personal delivery to the Company shall be only to an executive officer thereof
other than the Employee. Either party may change his or its address to which
notice is to be sent pursuant hereto by sending a notice of such change in
conformity with the foregoing requirements to the other party.
15. Binding Effect; Assignment. The rights and obligations of
the Company under this Agreement shall inure to the benefit of and shall be
binding upon the successors and assigns of the Company. This Agreement is a
personal employment contract, and the Employee acknowledges that the services to
be rendered by him are unique and personal. Accordingly, the Employee may not
assign or otherwise transfer any of his rights or delegate any of his duties or
obligations under this Agreement.
16. Entire Agreement. Except as otherwise provided in this
Section, the parties hereto agree that this Agreement constitutes the entire
agreement between the parties hereto pertaining to the employment of the
Employee, that this Agreement supersedes all prior and contemporaneous
agreements and understandings of the parties, and that there are no warranties,
representations or other agreements between the parties in connection with the
subject matter hereof. The Employee and the Company agree that the Agreement
dated as of January 30, 1998 between the Employee and the Company (the "CIC
Agreement") shall remain in full force and effect. After a "change in control,"
as defined in paragraph 1.3 of the CIC Agreement, (i) any payment or benefit to
which the Employee may be or become entitled under this Agreement that is also
provided, in whole or in part, under the CIC Agreement shall be paid or provided
to the Employee under this Agreement, and the Employee shall be entitled to such
payment or benefit under the CIC Agreement only to the extent that such payment
or benefit is greater than the payment or benefit to be made under this
Agreement, and (ii) any duty or obligation to which the Employee may be or
become subject under this Agreement to which he may also be or become subject
under the CIC Agreement shall be determined under whichever of this Agreement or
the CIC Agreement imposes the lesser duty or obligation, as the case may be upon
the Employee.
17. Separability and Modification. In the event any provision
of this Agreement is invalid or unenforceable under the laws of the State of
Florida, such provision shall be deemed to be restricted in scope or otherwise
modified to the extent necessary to render the same valid and enforceable, or
shall be deemed excised from this Agreement if circumstances so require, and
this Agreement shall be constructed and enforced herein as so restricted or
modified, or as if such provision had not originally been contained herein, as
the case may be.
18. Amendment. The parties hereto may amend or modify this
Agreement in such manner as may be agreed upon only by a written instrument
executed by such parties.
19. Definition of "Person". For all purposes of this
Agreement, the word "person" shall refer not only to a natural person but also
to any corporation, partnership, joint venture, trust or other entity or
business arrangement.
20. Governing Law. This Agreement shall be construed
and enforced in accordance with the laws of the State of Florida.
21. Headings. The headings of the various sections in this
Agreement are inserted for the convenience of the parties and shall not affect
the meaning, construction or interpretation of this Agreement. They are not
intended to modify or explain or to be a full or accurate description of the
contents hereof.
22. Additional Payment. In the event that any payment or benefit
under this Agreement would subject the Employee to the excise tax imposed under
4999 of the Internal Revenue Code of 1986, as amended (or any successor section
thereto), the Employee shall be entitled to an additional payment determined
under the provisions of Section 6.3 of the CIC Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement the day and year first above written.
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