EXHIBIT 10(f)
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
EXECUTIVE SEVERANCE AGREEMENT
(Effective ________________)
This Severance Agreement (the "Agreement") is made as
of______________ between CENTRAL LOUISIANA ELECTRIC COMPANY, INC., a Louisiana
corporation (the "Company"), and_________________________, an individual
("Employee").
WHEREAS, the Company wishes to employ Employee, and Employee wishes
to accept employment by the Company, under the terms and conditions set forth in
this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties agree as follows:
1. EMPLOYMENT:
(a) The Company employs Employee and Employee accepts employment as
__________________________________________ ("Executive Employment").
Employee will perform the duties that are customarily incident to such
position and such other duties as may from time to time be assigned to
him/her by the Chief Executive Officer of the Company.
(b) During the Term of Employment (as hereinafter defined), Employee
will devote his/her full time, attention and energies to the business of
the Company and will not, without the prior written consent of the Chief
Executive Officer of the Company, be engaged (whether or not during normal
business hours) in any other business or professional activity, whether or
not such activities are pursued for gain, profit or other pecuniary
advantage. Notwithstanding the foregoing, Employee will not be prevented
from (i) engaging in any civic or charitable activity for which Employee
receives no compensation or other pecuniary advantage; (ii) investing
his/her personal assets in businesses which do not compete with the
Company provided that such investment will not require any services on the
part of Employee in the operation of the affairs of the businesses in
which investments are made and provided further that Employee's
participation in such businesses is solely that of an investor; (iii)
purchasing securities in any corporation whose securities are regularly
traded, provided that such purchases will not result in Employee owning
beneficially at any time five percent or more of the equity securities of
any corporation engaged in a business competitive with that of the
Company; or (iv) participating in any other activity approved in advance
in writing by the Chief Executive Officer of the Company.
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2. TERM: The Term of Employment will begin on the date set forth
above and will continue through July 1, ____ [3 years]; provided, however, that
commencing July 1, ____ [in the year following the effective day], and
thereafter on each anniversary of this Agreement (the "Extension Date"), the
Term of Employment will be extended by one (1) year, unless the Company or
Employee gives written notice to the other, at least thirty (30) days before the
Extension Date, that the Term of Employment will not be extended.
3. SALARY AND COMPENSATION:
(a) Except as otherwise provided in this paragraph 3(a), the Company
will pay to Employee during the period of his/her Executive Employment a
salary equal to his/her annual base salary as of the date of this
Agreement. Employee's annual base salary will be subject to review no less
often than annually and may be increased or reduced by the Board of
Directors of the Company, in its sole discretion, provided, however, that
Employee's annual base salary may not be reduced at any time unless such
reduction is part of a reduction in pay uniformly applicable to all
officers of the Company. The Company will pay such salary to Employee in
accordance with its customary payroll practices applicable to other
executive officers. Employee will also be eligible for participation in
the Annual Incentive Compensation Plan, the Long-Term Incentive
Compensation Plan and other bonus incentive plans which the Company may
adopt from time to time for similarly situated executives.
(b) Employee will be entitled to all health, disability and life
insurance benefits, pension benefits and other employee benefits and
perquisites generally provided to similarly situated executive officers of
the Company on the same basis as such benefits and perquisites are
provided to such executive officers.
(c) The Company will reimburse Employee for all reasonable expenses
paid or incurred by Employee in performing his/her duties hereunder in
accordance with the Company's standard expense reporting and reimbursement
policies.
4. TERMINATION OF EMPLOYMENT:
(a) Except as specifically provided in this Agreement or under the
terms of any employee benefit plan in which Employee participates,
Employee will not be entitled to any compensation or benefits from the
Company after the date his/her Executive Employment terminates.
(b) If Employee's Executive Employment is terminated prior to the
expiration of the Term of Employment (i) by the Company for any reason
other than a Material Breach of this Agreement by Employee (as hereinafter
defined),
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or (ii) by Employee due to a Constructive Termination (as hereinafter
defined), Employee will be entitled to receive, as severance pay, an
amount equal to one hundred percent (100%) of his/her annual base salary
at time of termination under paragraph 3(a) (determined immediately prior
to any reduction in such salary), provided Employee is not in breach of
any post-termination obligation imposed on her under the terms of this
Agreement. The amount of severance pay provided pursuant to this paragraph
4(b) will be paid to Employee in two equal installments, with the first
installment to be paid on termination of Employee's Executive Employment
and the second installment to be paid six (6) months thereafter.
(c) If Employee's Executive Employment is terminated prior to the
expiration of the Term of Employment by the Company because of a Material
Breach of this Agreement by Employee, or by Employee for any reason other
than the reasons set forth in paragraph 4(b)(ii) and (iii), Employee will
be entitled to receive his/her salary pro rated to the date of
termination.
(d) For purposes of this Agreement, a "Material Breach of this
Agreement by Employee" will occur if Employee: (i) commits an intentional
act of fraud, embezzlement or theft in the course of his/her Executive
Employment or otherwise engages in any intentional misconduct which is
materially injurious to the Company's financial condition or business
reputation; (ii) commits intentional damage to the property of the Company
or any subsidiary or commits intentional wrongful disclosure of
Confidential Information (as hereinafter defined) which is materially
injurious to the Company's financial condition or business reputation; or
(iii) intentionally refuses to perform the material duties of his/her
position under this Agreement. For purposes of this Agreement, no act or
failure to act on the part of Employee will be deemed "intentional" if it
was due primarily to an error in judgment or negligence, but will be
deemed "intentional" only if done or omitted to be done by Employee not in
good faith and without reasonable belief that his/her action or omission
was in the best interest of the Company or any subsidiary.
(e) For purposes of this Agreement, a "Constructive Termination"
will occur if Employee terminates his/her Executive Employment (i)
following a reduction (other than a reduction in pay uniformly applicable
to all officers of the Company) of the annual amount of base salary being
paid to Employee at any time pursuant to paragraph 3(a), or (ii) following
a significant reduction in his/her authority, duties or responsibilities
from those contemplated in paragraph 1 of this Agreement; PROVIDED,
HOWEVER, that no event or condition described in clauses (i) and (ii) of
this paragraph 4(e) shall constitute Constructive Termination unless (X)
Employee gives the Company written notice of his/her objection to such
event or condition within ninety (90) days after the date Employee learns
of such event, (Y)
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such event or condition is not corrected by the Company within thirty (30)
days of its receipt of such notice, and (Z) Employee resigns his/her
employment with the Company not more than fifteen (15) days following the
expiration of the thirty (30) day period described in the foregoing clause
(Y). The failure of Employee to effect a Constructive Termination as to
any one event described in clauses (i) and (ii) above shall not affect
his/her entitlement to effect a Constructive Termination as to any other
such event.
5. ADDITIONAL BENEFITS: Employee will be entitled to the following
additional benefits if his/her Executive Employment is terminated under the
circumstances described in the first sentence of paragraph 4(b).
(a) If Employee's principal office is located in Pineville,
Louisiana at the time of such termination of Executive Employment, the
Company will (i) at the written request of Employee, purchase his/her
principal residence if such residence is located within sixty (60) miles
of the Company's Pineville, Louisiana office (the "Principal Residence")
for an amount equal to the greater of (A) the purchase price of such
Principal Residence plus the documented cost of any capital improvements
to the Principal Residence made by Employee or (B) the fair market value
of such Principal Residence as determined by the Company's usual
relocation practice and (ii) pay or reimburse Employee for the cost of
relocating Employee, his/her family and their household goods and other
personal property, in accordance with the Company's usual relocation
practice, to any location in the continental United States.
Notwithstanding the foregoing, the Company will not be obligated to
purchase Employee's Principal Residence or to pay or reimburse such
relocation expenses unless, within twelve (12) months after the
termination of his/her Executive Employment, the Company is requested to
purchase such Principal Residence or Employee has relocated from the
Pineville, Louisiana area.
(b) If Employee elects continuation coverage within the meaning of
Section 4980B(f)(2) of the Internal Revenue Code of 1986, as amended (the
"Code"), with respect a group health plan sponsored by the Company (other
than a health flexible spending account under a self-insured medical
reimbursement plan described in Sections 125 and 105(h) of the Code), the
Company will pay the continuation coverage premium for the same type and
level of group health plan coverage received by the Employee immediately
prior to such termination of Executive Employment for the period beginning
on the effective date of such continuation coverage and ending on the
earlier of the date that is 18 months after such termination of Executive
Employment or the date Employee becomes covered under the group health
plan of another employer. Notwithstanding the foregoing, the Company will
not be obligated to pay the continuation coverage premium with respect to
Employee's participation in a group health plan sponsored by the
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Company if one or more qualified beneficiaries with respect to Employee
elect such continuation coverage but Employee does not elect such coverage
or during any period that Employee or any qualified beneficiary with
respect to Employee continues to receive such continuation coverage under
a group health plan sponsored by the Company after Employee becomes
covered by the group health plan of another employer.
6. CHANGE IN CONTROL OF THE COMPANY:
(a) If a Change in Control of the Company (as hereinafter defined)
occurs prior to the expiration of the Term of Employment and within three
years after the Change in Control of the Company (i) Employee's Executive
Employment is terminated by the Company for reasons other than a Material
Breach of this Agreement by Employee or (ii) Employee terminates his/her
Executive Employment for Good Reason (as hereinafter defined), the
Company, within thirty (30) days of Employee's termination of Executive
Employment, will pay to Employee, in lieu of any severance obligation
under paragraph 4 and in lieu of the benefits Employee is otherwise
entitled to receive under paragraph 5, an amount equal to 3.0 times
Employee's "base amount" as such term is defined in Section 280G(d) of the
Code minus one dollar.
(b) As used in this Agreement, the term "Change in Control of the
Company" will have the same meaning as the term "Change in Control" set
forth in Section 7.3 of the Central Louisiana Electric Company, Inc. 1990
Long-Term Incentive Compensation Plan.
(c) As used in this Agreement, the term "Good Reason" means that,
following a Change in Control of the Company and without Employee's
written consent, (i) there has been a significant adverse change in the
nature or scope of Employee's authority, duties or responsibilities from
those contemplated in paragraph 1 of this Agreement, (ii) there has been a
reduction in Employee's base salary, or a termination of Employee's rights
to any employee benefits, in effect immediately prior to the Change in
Control, (iii) Employee has reasonably determined that, as a result of a
change in circumstances following the Change in Control of the Company
that significantly affect his/her Executive Employment, she is unable to
exercise the authority, power, duties and responsibilities contemplated by
paragraph 1 of this Agreement or (iv) Employee is required to be away from
his/her office in the course of discharging her duties and
responsibilities under this Agreement significantly more than was required
prior to the Change in Control; PROVIDED, HOWEVER, that no event or
condition described in clauses (i) through (iv) of this paragraph 6(c)
shall constitute Good Reason unless (X) Employee gives the Company written
notice of his/her objection to such event or
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condition at any time after Employee learns of such event, (Y) such event
or condition is not corrected by the Company within thirty (30) days of
its receipt of such notice and (Z) Employee resigns his/her employment
with the Company not more than fifteen (15) days following the expiration
of the thirty (30) day period described in the foregoing clause (Y). The
failure of Employee to effect a termination for Good Reason as to any one
event described in clauses (i) through (iv) above shall not affect his/her
entitlement to effect a termination for Good Reason as to any other such
event.
7. PARACHUTE PAYMENT LIMITATION: Notwithstanding any provision of
this Agreement to the contrary, the aggregate present value of all parachute
payments payable to or for the benefit of Employee, whether payable pursuant to
this Agreement or otherwise, shall be one dollar less than three (3) times
Employee's base amount and, to the extent necessary, payments under this
Agreement ("Severance Benefits") and any parachute payments payable under any
other agreement between Employee and the Company shall be reduced in order that
this limitation not be exceeded. The terms parachute payment, base amount and
present value shall have the meanings assigned thereto under Section 280G of the
Code. It is the intention of this paragraph 7 to avoid excise taxes on Employee
under Section 4999 of the Code or the disallowance of a deduction to the Company
pursuant to Section 280G of the Code. The determination of whether any reduction
in the amount of parachute payments is required under this paragraph 7 shall be
made by the Company's independent accountants, and Employee shall be entitled to
select the parachute payments that will remain payable after the application of
this paragraph 7. The fact that Employee has his/her Severance Payment reduced
as a result of the limitations set forth in this paragraph 7 will not of itself
limit or otherwise affect any rights of Employee arising other than pursuant to
this Agreement.
8. NO MITIGATION OBLIGATION: The Company acknowledges that it will be
difficult and may be impossible (i) for Employee to find reasonably comparable
employment following termination of her Executive Employment and (ii) to measure
the amount of damages which Employee may suffer as a result of termination of
her Executive Employment. Accordingly, the payment of the Severance Payment
provided under this Agreement is acknowledged by the Company to be reasonable
and to be liquidated damages, and Employee will not be required to mitigate the
amount of the Severance Payment by seeking other employment or otherwise, nor
will any profits, income, earnings or other benefits from any source whatsoever
create any mitigation, offset, reduction or any other obligation on the part of
Employee under this Agreement.
9. LEGAL FEES AND EXPENSES: (a) In the event any dispute in
connection with this Agreement arises with respect to obligations of the
Employee or the Company that were required to be performed prior to a Change in
Control of the Company, all costs, fees and expenses, including attorney fees,
of any litigation, arbitration or other legal action in connection with
such matters in which the Employee substantially prevails, shall be borne by,
and be the obligation of, the Company.
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(b) After a Change in Control of the Company has occurred it is the
intent of the Company that Employee not be required to incur legal fees and the
related expenses associated with the interpretation, enforcement or defense of
Employee's rights under this Agreement by litigation or otherwise, because the
cost and expense thereof would substantially detract from the benefits intended
to be extended to Employee under this Agreement. Accordingly, if it should
appear to Employee that, following a Change in Control of the Company, the
Company has failed to comply with any of its obligations under this Agreement or
the Company or any other person takes or threatens to take any action to declare
this Agreement void or unenforceable or in any way reduce the possibility of
collecting the amounts due hereunder, or institutes any litigation or other
action or proceeding designed to deny, or to recover from, Employee the benefits
provided or intended to be provided under this Agreement, the Company
irrevocably authorizes Employee from time to time to retain counsel of
Employee's choice, at the expense of the Company as hereafter provided, to
advise and represent Employee in connection with any such interpretation,
enforcement or defense, including without limitation the initiation or defense
of any litigation, arbitration or other legal action, whether by or against the
Company or any director, officer, stockholder or other person affiliated with
the Company, in any jurisdiction. The Company will pay and be solely financially
responsible for any and all attorneys' and related fees and expenses incurred by
Employee in connection with any of the foregoing without respect to whether
Employee prevails, in whole or in part.
(c) In no event shall the Employee be required to reimburse the
Company for any of the costs and expenses incurred by the Company relating to
arbitration, litigation or other legal action in connection with this Agreement.
10. NON-DISCLOSURE:
(a) Employee recognizes and acknowledges that in the course of
his/her employment and as a result of the position of trust she holds
under this Agreement he/she has obtained private or confidential
information and proprietary data relating to the Company,
including without limitation financial information, customer lists, patent
information and other data which are valuable assets and property rights
of the Company. All of such private or confidential information and
proprietary data is referred to herein as "Confidential Information";
provided, however, that Confidential Information will not include any
information known generally to the public (other than as a result of
unauthorized disclosure by Employee).
(b) Employee agrees that he/she will not, during his/her Executive
Employment or any time after the termination of his/her Executive
Employment, either directly or indirectly, disclose or use Confidential
Information acquired during his/her employment with the Company, except
with the prior written consent of the Chief Executive Officer of the
Company.
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11. NON-COMPETITION: Employee agrees that he/she will not, for a period of
one (1) year after the voluntary termination of his/her Executive Employment
(except termination for Good Reason pursuant to Section 6) or the involuntary
termination of her employment by the Company due to a Material Breach of this
Agreement, in Employee's individual capacity or on behalf of another (i) hire or
offer to hire any of the Company's officers, employees or agents, (ii) persuade
or attempt to persuade in any manner any officer, employee or agent of the
Company to discontinue any relationship with the Company, or (iii) solicit or
divert or attempt to divert any customer or supplier of the Company.
12. ASSISTANCE WITH LITIGATION: For a period of one (1) year after the end
of the last period for which Employee will have received any compensation under
this Agreement, Employee will furnish such information and proper assistance as
may be reasonably necessary in connection with any litigation in which the
Company is then or may become involved.
13. NO SET-OFF RIGHTS: There will be no right of set-off or counterclaim
in respect of any claim, debt or obligation against any payment to Employee
provided for in this Agreement.
14. SOURCE OF PAYMENTS:
(a) All payments provided in this Agreement will be paid in cash from
the general funds of the Company. Employee's status with respect to
amounts owed under this Agreement will be that of a general unsecured
creditor of the Company, and Employee will have no right, title, or
interest whatsoever in or to any, investments which the Company may make
to aid the Company in meeting its obligations hereunder. Nothing contained
in this Agreement, and no action taken pursuant to this provision, will
create or be construed to create a trust of any kind or a fiduciary
relationship between the Company and Employee or any other person.
(b) Notwithstanding the provisions of paragraph 14(a), the Board of
Directors of the Company may establish a trust or trusts out of which
benefits provided under this Agreement may be paid.
15. FEDERAL INCOME TAX WITHHOLDING: The Company may withhold from any
benefits payable under this Agreement all federal, state, city or other taxes
that will be required pursuant to any law or governmental regulation or ruling.
16. ASSIGNMENT: Neither Employee, his/her spouse, nor their estates will
have any right to anticipate, encumber or dispose of any payment under this
Agreement, which payments and the rights to such payments are expressly declared
non-assignable and non-transferable, except as otherwise specifically provided
in this Agreement.
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17. BINDING EFFECT: This Agreement will inure to the benefit of and be
binding upon the Company, its subsidiaries, successors and assigns, including,
without limitation, any person, partnership, Company or corporation which may
acquire substantially all of the Company's assets or business or with or into
which the Company may be liquidated, consolidated, merged or otherwise combined,
and will inure to the benefit of and be binding upon Employee, his/her heirs,
distributees, and personal representatives. If payments become payable to
Employee's surviving spouse or other assigns and such person will thereafter
die, such payment will revert to Employee's estate.
18. SEVERABILITY: If any provision of this Agreement is held to be
invalid, illegal, or unenforceable, in whole or part, such invalidity will not
affect any otherwise valid provision, and all other valid provisions will remain
in full force and effect.
19. SURVIVAL OF CERTAIN PROVISIONS: Notwithstanding anything herein to the
contrary, to the extent applicable, the obligations of the Company under
paragraphs 4, 5, 6 and 9, and the obligations of the Employee under paragraphs
10 and 11, will remain operative and in full force and effect regardless of the
expiration of the Term of Employment.
20. COUNTERPARTS: This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, and all of which
together will constitute one document.
21. TITLES: The titles and headings preceding the text of the paragraphs
and subparagraphs of this Agreement have been inserted solely for convenience of
reference and do not constitute a part of this Agreement or affect its meaning,
interpretation or effect.
22. WAIVER: The failure of either party to insist in any one or more
instances upon performance of any terms or conditions of this Agreement will not
be construed as a waiver or future performance of any such term, covenant, or
condition and the obligations of either party with respect to such term,
covenant or condition will continue in full force and effect.
23. NOTICES: All notices required or permitted to be given under this
Agreement will be given in writing and will be deemed sufficiently given if
delivered by hand or mailed by registered mail, return receipt requested, to
Employee's address set forth at the beginning of this Agreement and to the
Company's principal executive offices. Either party may, by giving notice to the
other party in accordance with this paragraph, change the address at which it is
to receive notices hereunder.
24. ENTIRE AGREEMENT; MODIFICATION: This Agreement supersedes all previous
agreements, negotiations, or communications between Employee and the Company and
contains the complete and exclusive expression of the understanding between the
parties. This Agreement cannot be amended, modified, or supplemented in any
respect except by a subsequent written agreement entered into by both parties.
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25. GOVERNING LAW: This Agreement will be construed and enforced in
accordance with the laws of the State of Louisiana.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date and year first above written.
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
By _____________________________________
President
ATTEST:
_____________________________
Assistant Corporate Secretary
EMPLOYEE
____________________________________
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