[LOGO] Florida Progress Corporation
One Progress Plaza 33701
P.O. Box 33042
St. Petersburg, FL 33733
813/824-6400
March 21, 1996
Allen J. Keesler, Jr.
President
Florida Power Corporation
3201 34th Street, South
St. Petersburg, FL 33733
Dear Allen:
In view of your impending retirement on April 1, 1996, this letter will serve as
a means for Florida Progress Corporation ("Florida Progress") and Florida Power
Corporation ("Florida Power") to acknowledge the benefits that they are willing
to provide in connection with your retirement as an officer of Florida Power.
Florida Progress and Florida Power agree to the following:
1. Your current salary shall continue through April 1, 1996, and
you shall be eligible to earn a pro-rata Management Incentive
Compensation Plan award for 1996. In addition, you will earn
compensation for any unused vacation that was earned in 1995. The
restricted shares you have earned under the 1992-1994 and the
1993-1995 performance cycles of the Long Term Incentive Plan shall
vest as of January 1, 1997, and all restrictions under that plan
shall lapse as of that date. You also shall be eligible to earn a
pro rata percentage of your Long Term Incentive Plan award for
Cycles IV and V.
2. You have been designated a participant under Article 5 of the
Florida Progress Corporation Supplemental Executive Retirement
Plan, as amended and restated as of October 1, 1994 ("SERP"), by
the Compensation Committee of the Board of Directors of Florida
Progress. Upon your retirement from Florida Power, the amount of
your total yearly retirement benefit, payable monthly pursuant to
Section 5.1(b)(1) of the SERP, would be $375,761.53 until you
reach age 62, assuming that you select the 50% contingent
annuitant option as a survivor benefit under the Employees
Retirement Plan of Florida Progress Corporation ("Retirement
Plan") and the Florida Progress Corporation Retirement Benefit
Nondiscrimination Plan for Excess Benefits ("Nondiscrimination
Plan"). You may select from several other survivor benefit payment
options under those two
A. J. Keesler, Jr.
Page 2
plans; however, selecting another payment option would change
the amount of your total payments under those three plans, due to
the adjustment provided for in Section 6.1(c) of the SERP. For
example, your selection of the 100% contingent annuitant option
would result in a total annual benefit to you of $368,752.75 until
age 62. After age 62, your annual benefit, in any event, will be
reduced by $11,856, which is the amount of your annual social
security retirement benefit. Upon your death, your wife, Sarah,
shall be entitled to receive a surviving spouse benefit pursuant
to Section 5.2 of the SERP, provided she is your legal spouse on
your date of death. The foregoing amounts do not reflect any
required withholdings for federal tax purposes.
3. The amount by which the total monthly amounts payable pursuant
to paragraph 2 above exceeds the sum of the monthly amounts
payable pursuant to the Retirement Plan and the Nondiscrimination
Plan are payable solely from and pursuant to Article 5 of the
SERP.
4. You are entitled to receive medical benefits under the terms
and conditions of the Florida Power Comprehensive Medical Plan.
5. You are entitled to receive life insurance coverage equal to
your base salary until you reach age 70, at which point your life
insurance will decrease to one-half of that base salary
calculation.
6. You have previously been designated a participant in the SERP
under Article 4. As a vested participant, you and your wife,
Sarah, are entitled to certain benefits. However, under the SERP,
you may not receive the special early retirement benefits under
Article 5 if you are eligible for benefits under Article 4.
Consequently, you and Sarah hereby waive and relinquish all
benefits you are entitled to under Article 4 of the SERP and
withdraw as a participant thereunder.
7. Deferrals of compensation under the Executive Deferred
Compensation Plan will be paid out in the month that you designate
in 1996, or automatically in the first quarter of 1997.
In consideration of the preceding:
A. You agree not to sue or to file any action or charge, claim, or
lawsuit, and to fully release and discharge Florida Power and/or
Florida Progress Corporation ("Florida Progress") and their employees,
officers, and directors, from any and all claims, wages, causes of
action, expenses, attorneys' fees, damages, judgments, and liabilities
under applicable federal, state or local law, regulation, or ordinance
including, but not limited to, any claim for age or other type of
discrimination under the Age Discrimination in Employment Act, The
Older Workers' Benefits Protection Act, Title VII of the Civil Rights
Act of 1964, the Americans with Disabilities Act, or any other
federal, state, or
A. J. Keesler, Jr.
Page 3
local law or ordinance. This waiver and release does not apply to
any claims or rights that may arise under the Age Discrimination in
Employment Act after the date that you sign this agreement. Florida
Progress expressly denies any violation of any of its policies,
procedures, or local, state or federal laws, regulations, or
ordinances.
B. You agree that you have been privy to certain confidential or
proprietary information concerning Florida Progress and its
affiliates, including, but not limited to, confidential or proprietary
information relating to strategic business plans, ongoing business
operations and practices, financial data (both historical and
projected), business relationships (including those with customers,
vendors and co-ventures or partners) and trade secrets. You agree that
you will not (i) divulge such information to any person or
organization, other than to further the business interests of Florida
Progress and its affiliates, (ii) use such information in a manner
that would be detrimental to Florida Progress or any of its
affiliates, or (iii) purchase or sell securities based upon such
information, unless in all cases such information becomes public
otherwise than as a result of a breach of confidence. Also, we expect
that you will refrain from accusing Florida Progress or its affiliates
of any wrongdoing based upon events that have occurred to date;
provided, however, that the foregoing undertaking on your part will
not preclude you from providing truthful testimony to or before a
court or regulatory body in the event you are required to do so and
provided, however, you may disclose information if the disclosure is
protected by the Florida Whistleblowers Act of 1986, or any similar
applicable federal or state statute.
C. You also acknowledge that you are aware of the forfeiture
provisions contained in Sections 5.05 of the Nondiscrimination Plan
and Section 9.4 of the SERP, which are attached hereto, and that they
impose obligations on you which if breached could result in the
forfeiture of benefits payable in accordance with this Agreement and
those plans. Among other things, you are obligated to not render any
services of any advisory nature or become employed by or participate
or engage in any business in competition with Florida Progress or any
of its subsidiaries, without the prior written consent of Florida
Progress. For purposes of this sub-paragraph C., any entity
(including, but not limited to, any investor-owned company, electric
co-operative, independent power producer, municipal or public agency
or authority) involved, directly or indirectly, in the ownership or
operation of facilities used for the generation, transmission,
distribution, or brokering of electricity shall be considered to be in
competition with Florida Power.
D. You also agree that the entitlement to be paid benefits under this
agreement and pursuant to the SERP and the Nondiscrimination Plan (but
not the benefits payable pursuant to the Retirement Plan), whether to
you or your surviving spouse, shall be discontinued and forfeited, and
Florida Progress and Florida Power shall have no further obligation
under the SERP to you or your surviving spouse if (1) you undertake or
engage in any act or conduct (whether alone, or with or on behalf of
any person or firm) that has or is reasonably likely to have an
adverse impact on the financial condition, operations or business
prospects of Florida Progress or any of its affiliates
A. J. Keesler, Jr.
Page 4
and (2) within thirty days after Florida Progress requests that you
cease such act or conduct, you fail to cease such act or conduct.
The obligation of Florida Power and Florida Progress to provide the
above-described benefits is conditioned upon your acceptance of, and agreement
to comply with, the obligations contained or referred to in the preceding four
paragraphs. Should you accept those conditions and obligations and subsequently
breach their terms, Florida Power and Florida Progress shall have no further
obligations under this Agreement and may avail themselves of any judicial
relief, including, without limitation, the recoupment of all monies paid and the
value of all benefits conveyed under this Agreement, except for any monies paid
and benefits conveyed from the Retirement Plan.
Should Florida Progress or Florida Power waive performance of any of your
obligations, that will not constitute an ongoing waiver or a waiver of such
obligation in the future.
Should any party to this Agreement engage the services of an attorney in order
to enforce its rights under this Agreement in the event of a breach thereof, the
prevailing party in any action shall be entitled to recover all reasonable costs
and expenses (including reasonable attorneys' fees before and at trial and in
appellate proceedings), together with prejudgment interest on any amounts found
due from the date such amounts would have been payable at an annual interest
rate of six percent (6%).
It is recommended that you review this Agreement with an attorney prior to
signing and accepting its terms.
You will have forty-five (45) days from the date of your receipt of this
Agreement to review it prior to signing. In addition, you will have the right to
revoke this Agreement within seven (7) days of the date on which the Agreement
is signed by the parties to the Agreement. In the event that you revoke this
Agreement, the benefits described within this Agreement will not be paid to you.
You understand and agree that the benefits under this Agreement will not be paid
until the expiration of this seven (7) day period.
This Agreement may not be altered, amended, modified or terminated except by an
instrument in writing executed by an authorized representative of Florida
Progress, Florida Power and you. You agree that, except for your rights under
the plans listed in Schedule A hereto, this is the entire Agreement between you,
Florida Progress and Florida Power, written or oral. The rights and obligations
of each party under this Agreement shall inure to the benefit of and shall be
binding upon the successors and assigns of that party.
A. J. Keesler, Jr.
Page 5
The undersigned parties have had an opportunity to read and review this document
and they freely, voluntarily and without coercion agree to the terms set forth
within this Agreement and waive any rights in contradiction thereto.
This document was received by you on March 22, 1996.
FLORIDA PROGRESS CORPORATION
By: /s/ Richard Korpan
------------------------------
Richard Korpan
President and Chief Operating Officer
Date: 3/21/96
FLORIDA POWER CORPORATION
AGREED:
/s/ Allen J. Keesler, Jr. By: /s/ Joseph H. Richardson
- --------------------------- ------------------------------
Allen J. Keesler, Jr. Joseph H. Richardson
Senior Vice President
/s/ Sarah Keesler Date: 3/22/96
- ---------------------------
Sarah Keesler
Date: 3/28/96
Attachments
Schedule A to Keesler Letter
1. Employees' Retirement Plan of Florida Progress Corporation.
2. Florida Progress Corporation Retirement Benefit Nondiscrimination Plan
for Excess Benefits.
3. Florida Progress Corporation Supplemental Executive Retirement Plan,
Benefits under Article 5.
4. Savings Plan for Employees of Florida Progress Corporation.
5. Florida Progress Corporation Long-Term Incentive Plan.
6. Florida Power Comprehensive Medical Plan.
7. Florida Progress Executive Deferred Compensation Plan.
9.4 Forfeiture of Benefits. As a condition of receiving benefits under
this Plan, a Participant shall not, directly or indirectly, after the
termination of his or her employment with an Employer:
(a) use or disclose any financial or business information of the
Company and/or its subsidiaries obtained by the Participant during the
course of his or her employment, other than information that has been
previously made available to the public through normal, authorized
business channels, in a manner that would be prejudicial to the
interests of the Company and its subsidiaries. Notwithstanding the
preceding requirements of this subsection (a), a Participant may
disclose information if required by legal process or if the disclosure
is protected by the Florida Whistle-blower's Act of 1986, or any
similar applicable federal or state statue; or
(b) render any services of an advisory nature or become employed by or
participate or engage in any business in competition with the Company
or any of its subsidiaries, without the prior written consent of his
or her Employer. A Participant shall be considered as engaging in a
business if he or she is a shareholder or other owner, or partner,
director, officer, or employee of, or
consultant to, the business; provided, that a Participant shall
not be prohibited from owning securities of a competitor if (1)
the securities owned constitute less that 2% of the competitor's
total outstanding securities of the same class and (2) the
Participant does not have the power to control, direct or
substantially influence the competitor's management or policies.
Any breach of any of the foregoing conditions will result in complete forfeiture
of any further benefits under the Plan for both the Participant and any
surviving spouse of the Participant. The immediately preceding sentence shall
not require the forfeiture or the return of any benefit received or due prior to
the breach of any of the specific conditions.
9.5 Applicable Law. This instrument shall be construed in
accordance with and governed by the laws of the State of Florida, to the extent
not superseded by the laws of the United States.
RETIREMENT BENEFIT NONDISCRIMINATION PLAN
ARTICLE V - GENERAL PROVISIONS
5.01 If and whenever the Board of Directors authorizes
post-retirement increases in benefits in respect of Employees
retired under the Retirement Plan, the Company shall, unless
otherwise directed by the said Board, contemporaneously grant
increases in benefits under this Plan to parallel the action
taken by said Board with respect to Retirement Plan benefits.
5.02 The Company shall have the right to deduct from each payment
to be made under this Plan any required withholding taxes.
5.03 Except as specifically provided herein, benefits payable
hereunder shall not be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or
charge.
5.04 In the event that the Company shall find that an Eligible
Employee or other person entitled to a benefit is unable to
care for his affairs because of illness or accident, is a
minor or has died, the Company may direct that any benefit
payment due him, unless claim shall be have been made
therefor by a duly appointed legal representative, be paid to
his spouse, a child including an adopted child of the
Eligible Employee, a parent or other blood relative, or to a
person with whom he resides, and any such payment so made
shall be a complete discharge of the liabilities of the Plan
therefor.
5.05 In the event that an Eligible Employee shall commit any
wrongful act, either directly or indirectly, against, and to
the detriment of, the Company, and as a result thereof his
employment is terminated, the Company shall have no further
obligation to make payments either to the Eligible Employee or
his beneficiary under the Plan. In addition, an Eligible
Employee shall forfeit any benefit payments thereafter due him
under the Plan if he, without the prior written consent of the
company, at any time enters into or in any manner takes part
either as an employee, agent, officer, director, owner, or
otherwise, in any business which is in competition with the
Company or any of its subsidiaries. The Company shall have the
absolute right to determine in its sole discretion:
(i) whether or not an Eligible
Employee's employment was
terminated as a result of
a wrongful act and
(ii) whether or not an Eligible
Employee has in any manner
entered into competitive
activity so as to cause
termination of his benefits
hereunder.