Exhibit 10.1
SEVERANCE AGREEMENT
BETWEEN
DQE, INC.
AND
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
THIS AGREEMENT, is by and between DQE, Inc., a Pennsylvania corporation
(the "Company") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (the "Executive") and is effective on the
date established pursuant to Section 16.
W I T N E S S E T H:
WHEREAS, the Executive is a valuable employee of the Company, an integral
part of its management, and a key participant in the decision-making process
relative to short-term and long-term planning and policy for the Company; and
WHEREAS, the Company wishes to encourage the Executive to continue his
career and services with the Company for the period during and after an actual
or threatened Change in Control; and
WHEREAS, the Board of Directors of the Company, at its meeting on April
4, 1997, determined that it would be in the best interests of the Company and
its shareholders to assure continuity in the management of the Company's
administration and operations in the event of a Change in Control by entering
into this Agreement with the Executive;
NOW THEREFORE, it is hereby agreed by and between the parties hereto as
follows:
1. Definitions.
a. "Board" shall mean the Board of Directors of the Company.
b. "Cause" shall mean the Executive's fraud or dishonesty which
has resulted or is likely to result in material economic damage to the Company
or Duquesne Light Company ("Duquesne") or their affiliates, as determined in
good faith by a vote of at least two-thirds of the non-employee directors of the
Company at a meeting of the Board at which the Executive is provided an
opportunity to be heard.
c. "Change in Control" shall mean:
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(i) any person (as such term is used in Section 13(d) of the
Securities Exchange Act of 1934 (the "Act"), excluding a corporation at least
80% of the ownership of which after acquiring its interest is owned directly by
the holder of common stock of the Company immediately prior to such acquisition
("Person")), is the beneficial owner, directly or indirectly, of 20% or more of
the outstanding stock of the Company requiring the filing of a report with the
Securities and Exchange Commission under Section 13(d) of the 1934 Act;
(ii) a purchase by any Person of shares pursuant to a tender or
exchange offer to acquire any stock of the Company (or securities convertible
into stock) for cash, securities or any other consideration provided that, after
closing of the offer, such Person is the beneficial owner (as defined in Rule
13d-3 under the 1934 Act), directly or indirectly, of 20% or more of the
outstanding stock of the Company (calculated as provided in Paragraph (d) of
Rule 13d-3 under the 1934 Act in the case of rights to acquire stock);
(iii) public announcement of a transaction approved by the Board
which involves (a) any consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or pursuant to which
shares of stock of the Company would be converted into cash, securities or other
property, other than a consolidation or merger of the Company in which holders
of its stock immediately prior to the consolidation or merger own at least 80%
of the common stock of the surviving corporation immediately after the
consolidation or merger, or (b) any consolidation or merger in which the Company
is the continuing or surviving corporation but in which the common shareholders
of the Company immediately prior to the consolidation or merger do not hold at
least 80% of the outstanding common stock of the continuing or surviving
corporation (except where such holders of common stock hold at least 80% of the
common stock of the corporation which owns all of the common stock of the
Company), or (c) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all or substantially all the assets of
the Company (except to an entity 80% of the common stock of which is owned by
the holders of the common stock of the Company immediately prior to such
transaction or by an entity 80% of which is owned directly or indirectly by the
Company), or (d) any merger or consolidation of the Company where, after the
merger or consolidation, one Person owns 100% of the shares of stock of the
Company (except where the common holders of the Company's stock immediately
prior to such merger or consolidation own at least 80% of the outstanding stock
of such Person immediately after such merger or consolidation); or
(iv) a change in the majority of the members of the Board within
a 24-month period unless the election or nomination for
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election by the Company's shareholders of each new director was approved by the
vote of at least two-thirds of the directors then still in office who were in
office at the beginning of the 24-month period.
With respect to subparagraph 1c(iii) of this Paragraph 1, upon the Board's
determination that the transaction subject to the public announcement thereunder
will not be closed, a Change in Control shall not be deemed to have occurred
from such date forward and this Agreement shall continue in effect as if no
Change in Control had occurred except to the extent termination requiring
payments under Paragraph 3 hereof occurs prior to such Board's determination.
d. "Compensation" shall mean the sum of (i) the Executive's annual
rate of base salary on the last day the Executive was an employee of the Company
(or if higher, the annual rate in effect on the date of the Change in Control),
including any elective contributions made by the Company on behalf of the
Executive that are not includible in the gross income of the Executive under
Section 125 or 402(a)(8) of the Internal Revenue Code of 1986, as amended (the
"Code") or any successor provision thereto, and (ii) the maximum bonus
opportunity of the Executive for the calendar year preceding employment
termination (or, if higher, the Executive's maximum bonus opportunity for the
year of termination of employment).
e. "Competing Business" shall mean any person, corporation or other
entity which develops, produces, markets, sells or services (1) any energy
product or service, including but not limited to gas or electric products or
services, and/or (2) any product or service which is the same as or similar to
products or services which the Company developed, produced, marketed, or sold,
including but not limited to energy products and services, within the last year
prior to termination of Executive's employment hereunder.
f. "Confidential Information" shall mean all information disclosed
to Executive or known by Executive as a consequence of or through Executive's
employment, which is not generally known in the industry in which the Company
and/or an affiliate is or may become engaged, about the Company's or an
affiliates' business, products, processes, and services, including but not
limited to information relating to research, development, inventions, computer
program designs, flow charts, source and object codes, products and services
under development, pricing and pricing strategies, marketing and selling
strategies, power generating, servicing, purchasing, accounting, engineering,
costs and costing strategies, sources of supply, customer lists, customer
requirements, business methods or practices, training and training programs, and
the documentation thereof. It includes, but is not limited to, proprietary
information and trade secrets of the Company and its affiliates. It will be
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presumed that information supplied to the Company and its affiliates from
outside sources is Confidential Information unless and until it is designated
otherwise.
g. "Constructive Discharge" shall mean any of the following:
(i) if the Change in Control is a public announcement pursuant to
subparagraph 1(c)(iii), then for the period, and only for such period, from such
public announcement until the date which is the earlier of
(A) the date of the closing of the transaction so announced, or
(B) the date of the Board's determination that such transaction
will not be closed,
a material decrease in the level of the Executive's positions or titles with the
Company or Duquesne as in effect the day prior to a Change in Control, or any
action by the Company or Duquesne which results in a material diminution in
authority, duties or responsibilities, excluding for this purpose, changes to
the individuals, groups, positions or divisions which report to the Executive or
the person or position to whom the Executive reports;
(ii) If the Change in Control is any event described in
▇▇▇▇▇▇▇▇▇ ▇▇, then for the entire Coverage Period
(A) any material failure by the Company or Duquesne to comply
with any of the provisions of this Agreement, other than any such failure not
occurring in bad faith and which is remedied by the Company or Duquesne as
appropriate, promptly after receipt of written notice thereof given to the
Company or Duquesne as the case may be;
(B) the Company, Duquesne or parent of either requiring the
Executive to be based at any office or location more than 50 miles from
Pittsburgh, Pennsylvania other than to a location which is within 35 miles of
the principal executive office of the Company and Duquesne, or the parent
thereof;
(C) a reduction in the Executive's base pay or maximum bonus
opportunity which is more than de minimis (except if such reduction is a part of
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a reduction for all executive officers of the Company, Duquesne and any parent
company thereof);
(D) a reduction which is more than de minimis in the number of
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options granted under the Company's annual
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option program based on the grant made in 1997 or in the number of options
granted pursuant to any future three year cycle under the Company's Long Term
Incentive Plan from the grant made for the three year cycle which began prior to
the Change in Control (except to the extent that options are replaced by another
equity incentive program and the Executive receives awards thereunder of
substantially equivalent or greater value as determined in good faith by the
Board's Compensation Committee);
For purposes of computing the reduction in the number of options granted under
the Company's annual option program necessary to constitute a Constructive
Discharge under subsection (D) of this section, the number of options granted in
the most recent year will be determined using the same methodology as was used
for determining the 1997 annual stock option awards under the Company's Long
Term Incentive Plan.
(E) a reduction which is more than de minimis in the combined
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annual benefit accrual rate under the SERP and the Company's qualified defined
benefit pension plans as in effect immediately prior to the Change in Control;
or
(F) a reduction which is more than de minimis in the long term
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disability and life insurance coverage provided to the Executive under the
Company's life insurance and long term disability plans as in effect immediately
prior to the Change in Control.
No such event described hereunder shall constitute Constructive Discharge unless
the Executive has given written notice to the Company specifying the event
relied upon for such termination within one year after the occurrence of such
event and the Company or Duquesne, as the case may be, has not remedied such
within 30 days of receipt of such notice.
The Company and Executive, upon mutual written agreement, may waive any of the
foregoing provisions which would otherwise constitute a Constructive Discharge.
h. "Coverage Period" shall begin on the Starting Date and end on the
Ending Date.
i. "Disability" shall mean an injury or illness which permanently
prevents the Executive from performing services to the Company or Duquesne and
which qualifies the Executive for payments under the Company's long term
disability plan.
j. "Ending Date" shall be the earlier of (i) the date on which a
public announcement is made by the Company of its intention to
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abandon a Change in Control transaction, or (ii) the date which is 36 full
calendar months following the date on which a Change in Control occurs. If the
Change in Control was a public announcement pursuant to subparagraph 1c(iii),
and the transaction is not abandoned, the Ending Date shall be the date which is
36 full calendar months following the date of the consummation of the
transaction which was the subject of such public announcement.
k. "Invention" shall mean discoveries, concepts, and ideas, whether
patentable or not, including, but not limited to apparatus, processes, methods,
techniques, and formulae, as well as improvements thereof or know-how related
thereto, relating to any present or prospective activities of the Company and
its affiliates.
l. "SERP" shall mean the Pension Service Supplement Plan for DQE,
Inc. and Affiliates or other special pension benefit arrangements.
m. "Starting Date" shall be the date on which a Change in Control
occurs.
n. "Works" shall mean all material and information created by
Executive in the course of or as a result of Executive's employment by the
Company which is fixed in a tangible medium of expression, including, but not
limited to, notes, drawings, memoranda, correspondence, documents, records,
notebooks, flow charts, computer programs and source and object codes,
regardless of the medium in which they are fixed.
2. Term.
This Agreement shall be effective as of the date above written and shall
continue thereafter until 36 full calendar months following the date of an
occurrence of a Change in Control or, if the Change in Control event is a public
announcement under subparagraph 1c(iii), 36 full calendar months following the
date of the closing of the transaction which was the subject of the shareholder
approval. Provided, however, Paragraph 11 shall continue in effect beyond the
term of this Agreement and shall continue in effect beyond the Executive's
termination of employment with the Company.
3. Severance Benefit.
a. If the Executive's employment hereunder is terminated by the
Company for any reason other than Cause, death or Disability, or by the
Executive in the event of a Constructive Discharge, at any time during the
Coverage Period, then, within five business days after such termination, the
Company shall pay to the Executive (if the Executive dies after termination of
employment but before receiving
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all payments to which he has become entitled hereunder, to the estate of the
Executive) (i) accrued but unpaid salary and accrued but unused vacation; (ii)
severance pay in a lump sum cash amount equal to three times the Executive's
Compensation; (iii) a lump sum payment equal to $309,077.00; (iv) a lump sum
payment equal to $383,250.00; (v) if the Executive's employment termination date
is prior to June 30, 1999, an amount equal to $142,000; and (vi) the amount, if
any, the Executive forfeited of the Company contribution account under the
Company's 401(k) plan. To the extent not paid or payable under such plans, the
Company shall pay to the Executive (y) the present value of the benefits
(calculated assuming the Executive will begin receiving benefits at the earliest
retirement date under such plans, or if later, at the end of the three year
period following termination of employment, based on the actuarial assumptions
used for purposes of the qualified defined benefit plan) that would have
accrued, but did not accrue, under the qualified defined benefit retirement
plans and the SERP (with any payments being made hereunder with respect to the
qualified defined benefit retirement plans being considered for purposes of
determining the amount payable with respect to the SERP under this sentence) in
place and operational on the date of termination as if, for vesting and benefit
accrual purposes, the Executive had continued to be employed and participated in
such plans for the three year period following employment termination, less (z)
the payments which are made (or could be made without reduction for early
payment) under the Company's qualified and non-qualified defined benefit
retirement plans and SERP during the three year period which begins on the date
of employment termination; it being understood by all parties hereto that
payments made under this Agreement and the deemed three year period shall not be
considered for purposes of determining the actual benefit payable under the
terms of the SERP or the qualified defined benefit plan and are not considered
part of the relevant payroll records for purposes of the SERP or the qualified
defined benefit plan. The Board's Compensation Committee has determined that any
termination which entitles the Executive to benefits under this subparagraph 3a
will be an approved termination for purposes of the Company's Long Term
Incentive Plan. The Executive's termination of employment with the Company to
become an employee of a corporation which owns 100% of the Company (or any
direct or indirect 80% owned subsidiary thereof) shall not be considered a
termination of employment for purposes of this Agreement. The subsequent
termination of Executive's employment from such corporation (other than to
become an employee of a company described in the sentence above) shall be
considered a termination of employment for purposes of this Agreement.
b. For a period commencing with the month in which termination of
employment as described in Paragraph 3a above shall have occurred, and ending 36
months thereafter, the Executive shall be entitled to all benefits under the
Company's welfare benefit plans
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(within the meaning of Section 3(1) of the Employee Retirement Income Security
Act of 1974, as amended), as if the Executive were still employed during such
period, at the same level of benefits and at the same dollar cost to the
Executive as is available to all of the Company's senior executives generally.
If and to the extent that equivalent benefits shall not be payable or provided
under any such plan, the Company shall pay or provide equivalent benefits on an
individual basis. The benefits provided in accordance with this Paragraph 3b
shall be secondary to any comparable benefits provided by another employer.
c. The Executive may voluntarily terminate his employment for any
reason (other than to avoid a termination for Cause) in the thirteenth calendar
month which begins after the date of the Change in Control, or if the Change in
Control is a public announcement pursuant to subparagraph 1c(iii) in, and only
in, the thirteenth calendar month which begins after the date the Change in
Control transaction is closed, and the Company shall pay to the Executive (or
the Executive's estate upon death) the amounts determined under Paragraph 3a and
provide the benefits under Paragraph 3b; provided, however, the lump sum amounts
calculated under subparagraphs 3a(ii), (iii), (iv) and (v) shall be multiplied
by 2/3 and, all other portions of Paragraph 3a two shall be substituted for
three and 24 months shall be substituted for 36 months, as the case may be.
d. (i) If Independent Tax Counsel shall determine that the
aggregate payments made, and benefits provided, to the Executive pursuant to
this Agreement and any other payments, and benefits provided, to the Executive
from the Company, its affiliates and plans, which constitute "parachute
payments" as defined in Section 280G of the Code (or any successor provision
thereto) ("Parachute Payments") would be subject to the excise tax imposed by
Section 4999 of the Code (the "Excise Tax") and if the amount of the Parachute
Payments in excess of 300% of the "base amount" (as defined in Section 280G of
the Code, the "Base Amount") is greater than 10% of the total value of the
Parachute Payments, then the Executive shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount (determined by
Independent Tax Counsel) such that after payment by the Executive of all taxes
(including any Excise Tax) imposed upon the Gross-Up Payment and any interest or
penalties imposed with respect to such taxes, the Executive retains from the
Gross-Up Payment an amount equal to the Excise Tax imposed upon the payments.
For purposes of this Paragraph 3d, "Independent Tax Counsel" shall mean a
lawyer, a certified public accountant with a nationally recognized accounting
firm, or a compensation consultant with a nationally recognized actuarial and
benefits consulting firm with expertise in the area of executive compensation
tax law, who shall be selected by the Company and shall be reasonably acceptable
to the Executive, and whose fees and disbursements shall be paid by the Company.
Notwithstanding the
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provisions hereof to the contrary, if the Executive is entitled to severance
payments and benefits under Paragraph 3c, the Executive shall not be entitled to
Gross-up Payments under this subparagraph 3d(i) and the Parachute Payments shall
be reduced, if necessary, in accordance with the procedures of subparagraph
3(d)(v).
(ii) If Independent Tax Counsel shall determine that no Excise Tax
is payable by the Executive, it shall furnish the Executive with a written
opinion that the Executive has substantial authority not to report any Excise
Tax on the Executive's Federal income tax return. If the Executive is
subsequently required to make a payment of any Excise Tax, then the Independent
Tax Counsel shall determine the amount of such additional payment ("Gross-Up
Underpayment"), and any such Gross-Up Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive. The fees and disbursements of
the Independent Tax Counsel shall be paid by the Company.
(iii) The Executive shall notify the Company in writing within 15
days of any claim by the Internal Revenue Service that, if successful, would
require the payment by the Company of a Gross-Up Payment. If the Company
notifies the Executive in writing that it desires to contest such claim and that
it will bear the costs and provide the indemnification as required by this
sentence, the Executive shall:
(A) give the Company any information reasonably requested by
the Company relating to such claim,
(B) take such action in connection with contesting such
claim as the Compan shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by the Company,
(C) cooperate with the Company in good faith in order to
effectively contest such claim, and
(D) permit the Company to participate in any proceedings
relating to such claim; provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold the
Executive harmless, on an after-tax basis, for any Excise Tax or income tax,
including interest and penalties with respect thereto, imposed as a result of
such representation and payment of costs and expenses. The Company shall control
all proceedings taken in connection with such contest; provided, however, that
if the Company directs the Executive to pay such claim and ▇▇▇ for a refund, the
Company shall advance the amount
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of such payment to the Executive, on an interest-free basis and shall indemnify
and hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax, including interest or penalties with respect thereto, imposed with
respect to such advance or with respect to any imputed income with respect to
such advance.
(iv) If, after the receipt by the Executive of an amount advanced
by the Company pursuant to Paragraph 3d(iii), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall, within 10
days, pay to the Company the amount of such refund, together with any interest
paid or credited thereon after taxes applicable thereto.
(v) If Independent Tax Counsel shall make a determination that
Parachute Payments would be subject to the Excise Tax, but the amount of
Parachute Payments in excess of 300% of the Base Amount is not greater than 10%
of the total value of the Parachute Payments, then such Parachute Payments shall
be reduced (but not below zero) but only to the extent the Independent Tax
Counsel shall determine is necessary that no portion thereof shall be subject to
the Excise Tax. The determination of Independent Tax Counsel under this
subparagraph (v) shall be final and binding on all parties hereto. No
additional payments by the Company or return of payments by the Executive shall
be required or made if a later determination which based on case law, an IRS
holding or otherwise would result in a recalculation of the Excise Tax
implications. Unless the Executive gives prior written notice specifying a
different order to the Company to effectuate the limitations described above,
the Company shall reduce or eliminate the Parachute Payments by first reducing
or eliminating those payments or benefits which are not payable in cash and then
by reducing or eliminating other Parachute Payments, in each case in reverse
order beginning with payments or benefits which are to be paid the farthest in
time from the employment termination date. Any notice given by the Executive
pursuant to the preceding sentence shall take precedence over the provisions of
any other plan, arrangement of agreement governing your rights and entitlements
to any benefits or compensation.
(vi) Notwithstanding any provision herein to the contrary, if
payments and/or benefits are due under this Agreement pursuant to Paragraph C of
this Section, if Independent Tax Counsel shall determine that the Parachute
Payments to the Executive would be subject to the Excise Tax, then such
Parachute Payments shall be reduced (but not below zero) but only to the extent
necessary that no portion thereof shall be subject to the Excise Tax. The
determination of Independent Tax Counsel under this subparagraph (vi) shall be
final and binding on all parties hereto. No additional payments by the Company
or return of payments by the Executive shall be required or made if a late
determination which based on case law, an IRS holding
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or otherwise would result in a recalculation of the Excise Tax implications.
Unless the Executive gives prior written notice specifying a different order to
the Company to effectuate the limitations described above, the Company shall
reduce or eliminate the Parachute Payments by first reducing or eliminating
those payments or benefits which are not payable in cash and then by reducing or
eliminating other Parachute Payments, in each case in reverse order beginning
with payments or benefits which are to be paid the farthest in time from the
employment termination date. Any notice given by the Executive pursuant to the
preceding sentence shall take precedence over the provisions of any other plan,
arrangement of agreement governing your rights and entitlements to any benefits
or compensation.
e. In the event of any termination of the Executive's employment
described in Paragraph 3a or Paragraph 3c, the Executive shall be under no
obligation to seek other employment, and there shall be no offset against
amounts due the Executive under this Agreement on account of any remuneration
attributable to any subsequent employment; provided, however, that to the extent
the Executive receives medical and health benefits from a subsequent employer,
medical and health benefits under Paragraph 3b shall be secondary to those
received from the subsequent employer.
f. The Executive is a party to an employment agreement dated August
30, 1994, amended June 27, 1995, (the "Employment Agreement"). In consideration
of this Agreement and other good and valuable consideration, the Executive and
the Company agree that on the date of a Change in Control, the Employment
Agreement shall terminate and the provisions thereof no longer in effect;
provided, however, if (i) the Change of Control is a public announcement
pursuant to subparagraph 1c(iii), (ii) the Board determines the transaction
subject to the public announcement thereof will not close, and (iii) the
Executive is an employee of the Company or an affiliate thereof on the date the
Board so determines, then on such date the Employment Agreement shall be
reinstated in all respects with the Employment Agreement's remaining term being
the same as the remaining term of the Employment Agreement on the date of the
Change of Control. In addition, it is intended that the termination provisions
herein are in lieu of, and not in addition to, termination or severance payments
and benefits provided under the Company's other termination or severance plans
or agreements ("Other Termination Benefits"). Other Termination Benefits the
Executive receives, or is entitled to receive in the future, shall reduce
payments and benefits provided hereunder.
g. Notwithstanding any provision herein to the contrary, the Company
shall not have any obligation to pay any amount or provide any benefit, as the
case may be, under this Agreement, unless and until the Executive executes (i) a
release of the Company, its affiliates and related parties, in such form as the
Company may reasonably request, of all claims against the Company, its
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affiliates and related parties relating to the Executive's employment and
termination thereof and (ii) an agreement to continue to comply with, and be
bound by, the provisions of Paragraph 11 hereof.
4. Source of Payments.
All payments provided for in Paragraph 3 above shall be paid in cash from the
general funds of the Company; provided, however, that such payments shall be
reduced by the amount of any payments made to the Executive or his dependents,
beneficiaries or estate from any trust or special or separate fund established
by the Company to assure such payments. The Company shall not be required to
establish a special or separate fund or other segregation of assets to assure
such payments, and, if the Company shall make any investments to aid it in
meeting its obligations hereunder, the Executive shall have no right, title or
interest whatever in or to any such investments except as may otherwise be
expressly provided in a separate written instrument relating to such
investments. Nothing contained in this Agreement, and no action taken pursuant
to its provisions, shall create or be construed to create a trust of any kind or
a fiduciary relationship between the Company and the Executive or any other
person. To the extent that any person acquires a right to receive payments from
the Company such right shall be no greater than the right of an unsecured
creditor of the Company.
5. Litigation Expenses: Arbitration.
a. Full Settlement, Litigation Expenses; Arbitration. The Company's
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obligation to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Executive or others. The Company agrees to pay,
upon written demand therefor by the Executive, all legal fees and expenses the
Executive reasonably incurs as a result of any dispute or contest (regardless of
the outcome thereof) by or with the Company or others regarding the validity or
enforceability of, or liability under, any provision of this Agreement, plus in
each case, interest at the applicable Federal rate provided for in Section
7872(f)(2) of the Code. The Executive agrees to repay to the Company any such
fees and expenses paid or advanced by the Company if and to the extent that the
Company or such others obtains a judgment or determination that the Executive's
claim was frivolous or was without merit from the arbitrator or a court of
competent jurisdiction from which no appeal may be taken, whether because the
time to do so has expired or otherwise. Notwithstanding any provision hereof or
any other agreement, the Company may offset any other obligation it has to the
Executive by the amount of such
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repayment. In any such action brought by the Executive for damages or to enforce
any provisions of this Agreement, he shall be entitled to seek both legal and
equitable relief and remedies, including, without limitation, specific
performance of the Company's obligations hereunder, in his sole discretion. The
obligation of the Company and the Executive under this Paragraph 5 shall survive
the termination for any reason of this Agreement (whether such termination is by
the Company, by the Executive, upon the expiration of this Agreement or
otherwise).
b. In the event of any dispute or difference between the Company and
the Executive with respect to the subject matter of this Agreement and the
enforcement of rights hereunder, either the Executive or the Company may, by
written notice to the other, require such dispute or difference to be submitted
to arbitration. The arbitrator or arbitrators shall be selected by agreement of
the parties or, if they cannot agree on an arbitrator or arbitrators within 30
days after the Executive has notified the Company of his desire to have the
question settled by arbitration, then the arbitrator or arbitrators shall be
selected by the American Arbitration Association (the "AAA") in Pittsburgh,
Pennsylvania, upon the application of the Executive. The determination reached
in such arbitration shall be final and binding on both parties without any right
of appeal or further dispute. Execution of the determination by such arbitrator
may be sought in any court of competent jurisdiction. The arbitrators shall not
be bound by judicial formalities and may abstain from following the strict rules
of evidence and shall interpret this Agreement as an honorable engagement and
not merely as a legal obligation. Unless otherwise agreed by the parties, any
such arbitration shall take place in Pittsburgh, Pennsylvania, and shall be
conducted in accordance with the Rules of the AAA. The Executive's expenses for
such proceeding shall be paid, or repaid to the Company, as the case may be as
provided in Paragraph a of this Section.
6. Income Tax Withholding.
The Company may withhold from any payments made under this Agreement all
federal, state or other taxes as shall be required pursuant to any law or
governmental regulation or ruling.
7. Entire Understanding.
This Agreement contains the entire understanding between the Company and the
Executive with respect to the subject matter hereof and supersedes any prior
severance or termination agreement between the Company and the Executive, except
that this Agreement shall not affect or operate to reduce any benefit or
compensation inuring to the Executive of any kind elsewhere provided and not
expressly dealt with in this Agreement.
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8. Severability.
If, for any reason, any one or more of the provisions or part of a provision
contained in this Agreement shall be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision or part of a provision of this Agreement
not held so invalid, illegal or unenforceable, and each other provision or part
of a provision shall to the full extent consistent with law continue in full
force and effect.
9. Consolidation, Merger, or Sale of Assets.
If the Company consolidates or merges into or with, or transfers all or
substantially all of its assets to, another entity the term "the Company" as
used herein shall mean such other entity and this Agreement shall continue in
full force and effect.
10. Notices.
All notices, requests, demands and other communications required or permitted
hereunder shall be given in writing and shall be deemed to have been duly given
if delivered or mailed, postage prepaid, first class as follows:
a. to the Company:
DQE, Inc.
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Attention: Vice President and General Counsel
b. to Duquesne:
Duquesne Light Company
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President and General Counsel
c. to the Executive:
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or to such other address as either party shall have previously specified in
writing to the other.
11. Confidentiality, Inventions, Works, Noncompete, Nonsolicitation, etc.
The Executive acknowledges that the additional severance benefits provided
hereunder are substantial and are good and adequate consideration for the
purposes of the covenants, promises and agreements of this Paragraph 11 and all
other provisions of this Agreement.
a. The Executive acknowledges that all Confidential Information shall
at all times remain the property of the Company and its affiliates (i.e., the
parent of the Company, if any, or another company the majority interest of which
is owned by the Company or by a parent or subsidiary of the Company). The
Executive will safeguard and maintain on the premises of the Company, to the
extent possible in the performance of the Executive's work for the Company or an
affiliate, all documents and things that contain or embody Confidential
Information. Except as required as part of the Executive's duties to the
Company, the Executive will not, during his employment by the Company, or
thereafter, directly or indirectly use, divulge, disseminate, disclose, lecture
upon, or publish any Confidential Information without having first obtained
written permission from the Company to do so.
b. (i) All Inventions made or conceived by the Executive, either
solely or jointly with others, (i) during the Executive' employment by the
Company and (ii) without one (1) year after termination of such employment,
whether or not such Inventions are made or conceived during the hours of the
Executive's employment or with the use of the Company's or an affiliates'
facilities, materials, or personnel, will be the property of the Company or its
nominees.
(ii) The Executive will, without royalty or any other additional
consideration:
(A) inform the Company promptly and fully of such Inventions
by written report, setting forth in detail a description, the operation and the
results achieved;
(B) assign to the Company all the Executive's right, title,
and interest in and to such Inventions, any applications for United States and
foreign Letters Patent, any continuations, divisions, continuations-in-part,
reissues, extensions or additions thereof filed for upon such Inventions and any
United States and foreign Letters Patent;
15
(C) assist the Company or its nominees, at the expense of the
Company, to obtain, maintain and enforce such United States and foreign Letters
Patent for such Inventions as the Company may elect; and
(D) execute, acknowledge, and deliver to the Company at its
expense such written documents and instruments, and do such other acts, such as
giving testimony in support of the Executive's inventorship and invention, as
may be necessary in the opinion of the Company to obtain, maintain or enforce
the United States and foreign Letters Patent upon such Inventions and to vest
the entire right and title thereto in the Company and to confirm the complete
ownership by the Company of such Inventions.
c. All Works created by the Executive during his employment by the
Company will be and remain exclusively the property of the Company. Each such
Work is a "work for hire" and the Company may file applications to register
copyright as author thereof. The Executive will take whatever steps and do
whatever acts the Company requests, including, but not limited to, placement of
the Company's proper copyright notice on such Works to secure or aid in securing
copyright protection and will assist the Company or its nominees in filing
applications to register claims of copyright in such works. The Executive will
not reproduce, distribute, display publicly, or perform publicly, alone or in
combination with any data processing or network system, any Works of the Company
without the written permission from the Company.
d. The Executive covenants and agrees that during the period of the
Executive's employment hereunder and for a period of one (1) year following the
termination of the Executive's employment for any reason, including without
limitation termination by the Company for cause or without cause, the Executive
shall not engage, directly or indirectly, whether as principal or as agent,
officer, director, employee, consultant, shareholder, or otherwise, alone or in
association with any other person, corporation or other entity, in any Competing
Business located in the states of Pennsylvania, Ohio, West Virginia, Maryland,
New York, New Jersey or Virginia. The Executive recognizes that the Company and
its affiliates conduct or intend to conduct business within the geographic area
set forth herein, and therefore, the Executive agrees that this restriction is
reasonable and necessary to protect the Company's and its affiliates' business.
e. The Executive agrees that for a period of two (2) years following
the termination of the Executive's employment with the Company for any reason,
whether terminated for Cause or without cause, the Executive shall not, directly
or indirectly, solicit the business of, or do business with, any customer,
supplier, or prospective customer or supplier of the Company or an affiliate of
the Company
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with whom the Executive had direct or indirect contact or about whom the
Executive may have acquired any knowledge while employed by the Company.
f. The Executive agrees that, during the Executive's employment with
the Company and for a period of two (2) years following termination of the
Executive's employment with the Company, whether terminated with cause or
without cause, the Executive shall not, directly or indirectly, solicit or
induce, or attempt to solicit or induce, any employee of the Company or an
affiliate of the Company to leave the Company or an affiliate for any reason
whatsoever, or hire or solicit the services of any employee of the Company or an
affiliate.
g. The Executive understands and agrees that any violation of this
Agreement shall be deemed material to continuing employment and could result in
disciplinary action up to and including termination. The Executive acknowledges
that the legal remedy available to the Company and its affiliates for any breach
of covenants on the part of the Executive will be inadequate, and, therefore, in
the event of any threatened or actual breach of this Agreement, the Company or
an affiliate shall be entitled to specific enforcement of this Agreement through
injunctive or other equitable relief in a court with appropriate jurisdiction.
The existence of any claim or cause of action by the Executive or other against
the Company or an affiliate, whether predicated on this Agreement or otherwise,
shall not constitute a defense to enforcement by the Company or an affiliate of
this Agreement.
h. Termination of the Executive's employment, whether voluntary or
involuntary, whether for cause or without cause, shall not impair or relieve the
Executive of any the Executive's obligations hereunder. Upon termination of the
Executive's employment, for whatever reason, or upon request by the Company, the
Executive will deliver to the Company the originals and all copies of notes,
sketches, drawings, specifications, memoranda, correspondence, documents,
records, notebooks, computer disks and computer tapes and other repositories of
Confidential Information and inventions then in the Executive' possession or
under Executive's control, whether prepared by the Executive or by others. Upon
termination of the Executive's employment, for whatever reason, or upon request
by the Company, the Executive will deliver to the Company the originals and all
copies of Works, then in the Executive's possession or under the Executive's
control.
12. No Attachment.
Except as required by law, no right to receive payments under this Agreement
shall be subject to anticipation, commutation,
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alienation, sale, assignment, encumbrance, charge, pledge or hypothecation or to
execution, attachment, levy or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect.
13. Binding Agreement.
This Agreement shall be binding upon, and shall inure to the benefit of, the
Executive and the Company and their respective permitted successors and assigns.
14. Modification and Waiver.
Prior to the date of a Change in Control, this Agreement may be terminated,
modified or amended by action of a majority of the members of the Board. After
a Change in Control, this Agreement may not be terminated, modified or amended
except by an instrument in writing signed by the parties hereto. No term or
condition of this Agreement shall be deemed to have been waived, nor shall there
be any estoppel against the enforcement of any provision of this Agreement,
except by written instrument signed by the party charged with such waiver or
estoppel. No such written waiver shall be deemed a continuing waiver unless
specifically stated therein, and each such waiver shall operate only as to the
specific term or condition waived and shall not constitute a waiver of such term
or condition for the future or as to any act other than that specifically
waived.
15. Headings of No Effect.
The paragraph headings contained in this Agreement are included solely for
convenience of reference and shall not in any way affect the meaning or
interpretation of any of the provisions of this Agreement.
16. Revocation, Executive Acknowledgments, and Effective Date.
This Agreement shall become effective on the date executed. The Executive
shall have seven (7) calendar days after signing the Agreement to revoke it.
Such revocation shall be in writing to the Company at the address set forth in
Paragraph 10. The Executive acknowledges that he has read and understands the
provisions of this Agreement. The Executive further acknowledges that he has
been given an opportunity for his legal counsel to review this Agreement (or is
given the opportunity to do so prior to the end of the revocation period
hereunder) and that the provisions of this Agreement are reasonable and that he
has received a copy of this Agreement.
17. Not Compensation for Other Plans.
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It is understood by all parties hereto that amounts paid and benefits provided
hereunder are not to be considered compensation, earnings or wages for purpose
of any employee benefit plan of the Company or its affiliates, including, but
not limited to, the SERP and the qualified retirement plans.
18. Governing Law.
This Agreement and its validity, interpretation, performance, and enforcement
shall be governed by the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the Company through its officers duly authorized, and the
Executive both intending to be legally bound have duly executed and delivered
this Agreement, to be effective as of the date set forth in Paragraph 16.
DQE, INC.
Date: 4/4/97 By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Its Vice President
EXECUTIVE
Date: 4/4/97 /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Schedule to Exhibit 10.1
Severance Agreements which were substantially identical to that filed as Exhibit
10.1 were entered into with the following parties, materially differing only as
follows:
Other Party Material Differences
----------- --------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ "Severance Benefit" under Section 3a: aggregate lump
sum payment of $579,024; no additional lump sum amount
payable if terminated prior to June 30, 1999.
▇▇▇▇▇ ▇. ▇▇▇▇▇ "Severance Benefit" under Section 3a: aggregate lump
sum payment of $481,903.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ "Severance Benefit" under Section 3a: aggregate lump
sum payment of $296,714; no additional lump sum amount
payable if terminated prior to June 30, 1999.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ "Severance Benefit" under Section 3a: aggregate lump
sum payment of $262,647; no additional lump sum amount
payable if terminated prior to June 30, 1999.
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