EXHIBIT 10.63
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of the 23rd day
of November, 1998, by and among OLD DOMINION ELECTRIC COOPERATIVE, a generation
and transmission electric cooperative organized under the laws of the
Commonwealth of Virginia ("Old Dominion"), and VIRGINIA, MARYLAND AND DELAWARE
ASSOCIATION OF ELECTRIC COOPERATIVES, a non-stock corporation organized under
the laws of the Commonwealth of Virginia ("the Association") (collectively, the
"Employer"), and Jackson E. Reasor, Jr. (the "Executive").
In consideration of the mutual covenants contained herein, Employer and
Executive agree as follows:
1. Employment. Employer agrees to employ Executive and Executive
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agrees to continue in the employ of Employer on the terms and conditions
hereinafter set forth.
2. Capacity. Executive shall serve Employer as President and Chief
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Executive Officer of Old Dominion and the Association, with such powers and
duties as may be prescribed from time to time by Employer, which duties shall
include, without limitation, strategic and long range planning for, and
oversight of the day to day operations of, Employer. Executive's continued
employment with Employer is conditioned upon performance and results as set
forth herein.
3. Effective Date and Term. The commencement date of this Agreement
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shall be as of November 23, 1998 (the "Commencement Date"). Subject to the
provisions of Section 6, the term of Executive's employment hereunder shall be
for three (3) years from the Commencement Date, and shall be automatically
extended for an additional one year period unless either the Executive or the
Employer gives written notice 30 days prior the Expiration Date of such party's
election not to extend the terms of this Agreement. Such three year period, as
extended shall hereafter be referred to as the "Term." The last day of the Term
is herein sometimes referred to as the "Expiration Date."
4. Compensation and Benefits. The regular compensation and benefits
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payable to Executive under this Agreement shall be as follows:
(a) Salary. For all services rendered by Executive under this
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Agreement, Employer shall pay Executive a salary at the rate of $200,000 per
year. Executive's salary shall be payable bi-weekly, in accordance with
Employer's usual
practice for its officers. Performance reviews shall be conducted after six
months, twelve months and then every twelve months thereafter. Salary increases
shall be considered at each twelve month anniversary and shall be awarded at the
discretion of the Boards of Directors of Employer.
(b) Regular Benefits. Executive shall also be entitled to
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participate in all benefit plans available to employees of Employer, all as more
specifically outlined in the Employee Benefits Package (a copy of which has been
provided to Executive), including medical insurance, basic life insurance,
long-term disability, retirement and security plans, savings plans (401K),
business travel accident insurance, exercise club privileges and other benefit
plans that may from time to time be approved or in effect for senior executives
of Employer. Such participation shall be subject to (i) the terms of the
applicable plan documents, (ii) generally applicable policies of Employer and
(iii) the discretion of the Boards of Directors of Employer or the
administrative or other committee provided for in or contemplated by such plan.
Such benefits shall be subject to review, alteration and/or cancellation in the
discretion of the Boards of Directors of Employer, in accordance with the usual
practice of Employer with respect to review of benefits for its officers.
(c) Bonus Availability. Executive shall have the opportunity to earn
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a bonus of up to $35,000 for the first year of the Term contingent upon
Executive's performance in three separate categories. These categories, as well
as, the percentage of available bonus assigned to each category are set forth on
attached Exhibit A. The amount of available bonus and the categories of
performance for the second and third years of the Term shall be set by the
Boards of Directors of Employer.
(d) Relocation Benefits. In connection with the relocation of
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Executive's principal residence from Bluefield to Richmond, Virginia, Employer
shall reimburse Executive for normal and reasonable temporary living expenses up
to $2,000 per month from December, 1998 through May, 1999. Employer shall also
reimburse Executive for normal and reasonable moving expenses up to $10,000
incurred by Executive in moving his family and property from Bluefield to
Richmond, Virginia.
(e) Business Expenses. Employer shall reimburse Executive for all
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reasonable travel and other business expenses incurred by him in the performance
of his duties and responsibilities, subject to such reasonable requirements with
respect to substantiation and documentation as may be specified by Employer.
(f) Vacation and Sick Leave. Executive shall be entitled to four (4)
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weeks of vacation during each calendar year commencing January 1, 1999.
Executive shall enter the Employer's standard vacation policy as a sixteen (16)
year
employee. Executive's sick leave accrual shall follow the standard sick leave
policy except that he shall have ten days posted on his first day of employment.
(g) Automobile. Employer shall provide Executive, for his personal
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use, a new, American-made sedan at a cost not-to exceed $25,000. Replacement of
the vehicle during the Term of the Agreement shall be at the discretion of the
Boards of Directors of Employer. "Personal use" excludes all non-business use by
individuals other than Executive except in the case of an emergency. Such
personal use of the vehicle shall be permitted (i) for trips to and from
Bluefield, Virginia, during the six (6) months transition period for relocation
of Executive's family and (ii) in and around the greater Richmond area at all
other times. Executive shall be responsible for paying the tax on income
attributable to the provision of such vehicle.
5. Extent of Service. During his employment hereunder, Executive shall,
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subject to the discretion and supervision of the Boards of Directors of
Employer, devote his full business time, best efforts and business judgment,
skill and knowledge to the advancement of Employer's interest and to the
discharge of his duties and responsibilities hereunder. He shall not engage in
any other business activity, except as may be approved by the Boards of
Directors of Employer. "Business Activity" shall not include Executive's
investment or ownership in publicly held corporations or entities whose
securities are tracked on recognized national or regional stock exchanges;
provided such investment or ownership is at all times during the term of this
agreement less than 5% of the outstanding shares of said corporation or entity.
6. Termination and Termination of Benefits.
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Notwithstanding the provisions of Section 3, Executive's employment
hereunder shall terminate under the following circumstances and shall be subject
to the following provisions:
(a) Death. In the event of Executive's death during Executive's
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employment hereunder, Executive's employment shall terminate on the date of his
death without further liability of the part of the Employer under this
Agreement.
(b) Termination by Employer for Cause. Executive's employment
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hereunder may be terminated without further liability on the part of Employer
effective immediately by a majority vote of the Boards of Directors of Employer
for Cause by written notice to Executive setting forth in reasonable detail the
nature of such Cause. Only the following shall constitute "Cause" for such
termination:
(i) gross incompetence, insubordination, gross
negligence, willful misconduct in office or breach of a material
fiduciary duty, which includes a
breach of confidentiality as defined in Section 8(b), owed to Employer or any
subsidiary or affiliate thereof;
(ii) conviction of a felony, a crime of moral turpitude or
commission of an act of embezzlement or fraud against Employer or any subsidiary
or affiliate thereof;
(iii) Executive's material failure to perform a substantial
portion of his duties and responsibilities hereunder; but only after Employer
provides Executive written notice of such failure and gives him thirty (30) days
to remedy the situation.
(iv) deliberate dishonesty of Executive with respect to
Employer or any subsidiary or affiliate thereof.
(c) Termination by Executive. Executive may terminate his employment
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hereunder with or without Good Reason (as defined below) by written notice to
the Boards of Directors of Employer effective 30 days after receipt of such
notice by the Boards of Directors. In the event that Executive terminates his
employment hereunder for Good Reason, Executive shall be entitled to the salary
specified in Section 6(e). Executive shall not be required to render any further
services to Employer. Upon termination of employment by Executive without Good
Reason, Executive shall be entitled to no further compensation under this
Agreement. "Good Reason" shall be the failure by Employer to comply with the
provisions of Section 4(a) or material breach by Employer of any other provision
of this Agreement, which failure or breach shall continue for more than 30 days
after the date on which the Boards of Directors of Employer receives such
notice.
(d) Termination by Employer Without Cause. Executive's employment
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with Employer may be terminated without Cause by a majority of each of the
Boards of Directors of Employer, effective immediately upon delivery of written
notice of such termination to Executive.
(e) Certain Termination Payments. In the event of termination of
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Executive's employment hereunder by Employer without Cause or by Executive with
Good Reason, Executive shall be entitled to the following:
(i) For and during the one-year period immediately following
the date of termination, Employer shall continue to pay Executive a salary at
the rate in effect on the date of termination. Payment of such salary shall be
made on the same periodic dates as salary payments would have been made to
Executive had he not been terminated. Employer shall also provide medical
insurance to Executive for this one year period on the same basis as if
Executive were still employed, except that Employer's obligation to provide such
medical insurance shall
cease if Executive becomes eligible for such coverage by virtue of his
employment with another Company or entity.
(ii) In the event that Executive becomes employed in any
capacity during the one-year period immediately following the date of
termination, employer's obligation to pay Executive's salary pursuant to Section
6(e)(i) hereof shall be reduced by the amount of Executive's compensation at his
new employer.
(f) Expiration Payments. In the event the Executive's employment is
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not continued with Employer beyond the Expiration Date on mutually agreeable
terms and conditions, the Employer shall continue to pay Executive a salary at
the rate in effect at the Expiration Date for a period of six months on the same
periodic dates as salary payments would have been made to Executive had his
employment continued. The provisions set forth in Section 6(e)(ii) also apply to
the six-month post-expiration period.
(g) Litigation and Regulatory Cooperation. Executive shall cooperate
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fully with Employer in the defense or prosecution of any claims or actions now
in existence or which may be brought in the future against or on behalf of
Employer that relate to events or occurrences that transpired while Executive
was employed by Employer. Executive's full cooperation in connection with such
claims or actions shall include, but not be limited to, being available to meet
with counsel to prepare for discovery or trial and to act as a witness on behalf
of Employer at mutually convenient times. Executive shall also cooperate fully
with Employer in connection with any examination or review of any federal or
state regulatory authority as any such examination or review relates to events
or occurrences that transpired when Executive was employed by Employer. If such
cooperation is required after Executive ceases to be employed by Employer,
Employer shall pay Executive for such cooperation a fee of seventy-five dollars
($75) per hour, payable monthly in arrears, and will reimburse Executive for any
reasonable out-of-pocket expenses incurred in connection therewith.
7. Disability. If, due to physical or mental illness, Executive shall
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be disabled so as to be unable to perform substantially all of his duties and
responsibilities hereunder, which disability lasts for an uninterrupted period
of at least 180 days or a total of at least 240 days in any calendar year (as
determined by the opinion of an independent physician selected by the Boards of
Directors of the Company), Employer, acting though its Boards of Directors, may
designate another executive to act in his place without further liability under
this Agreement except for those continuing obligations imposed upon Employer
pursuant to its long-term disability plan.
8. Noncompetition and Confidential Information.
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(a) Noncompetition. During a period of one year following the date
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of termination of Executive's employment with Employer occasioned by a failure
to extend employment beyond the Expiration Date or termination by Employer for
Cause pursuant to Section 6(b) hereof, or by Executive in the event that such
termination is not for Good Reason, Executive will not, directly or indirectly,
whether as owner, partner, shareholder, consultant, agent, employee, co-venturer
or otherwise, or though any Person (as defined in Section 10), compete in
Delaware, Maryland or Virginia or any other state contiguous to Virginia during
the period in which this covenant of noncompetition is in effect, with
Employer's business of marketing and provision of electricity and electrical
services or any other business conducted by Employer during the period of
Executive's employment hereunder, nor will he attempt to hire any employee of
Employer, assist in such hiring by any other Person, or solicit or encourage any
customer of Employer to terminate its relationship with Employer or to conduct
with any other Person any business or activity that such customer conducts or
could conduct with Employer.
(b) Confidential Information. Executive agrees and acknowledges
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that, by reason of his employment by and service to Employer, he will have
access to confidential information of Employer (and its affiliates, vendors,
customers, and others having business dealings with it) including, without
limitation, information and knowledge pertaining to products, sales and profit
figures, customer and client lists and information related to relationships
between Employer and its affiliates, customers, vendors, and others having
business dealings with it (collectively, the "Confidential Information").
Executive acknowledges that the Confidential Information is a valuable and
unique asset of Employer (and its affiliates, vendors, customers, and others
having business dealings with it) and covenants that, both during and after the
term of his employment by Employer, he will not disclose any Confidential
Information to any person or use any Confidential Information (except as his
duties as an employee of Employer may require) without the prior written
authorization of the Boards of Directors of Employer. Executive further agrees
that all files, letters, memoranda, reports, records, data, sketches, drawings,
program listings or other written, photographic, or other tangible materials
containing Confidential Information, whether created by Executive or others,
that shall come into his custody or possession, shall be delivered to Employer,
upon the earlier of (i) a request by Employer or (ii) termination of Executive's
employment. After such delivery, Executive shall not retain any such records or
copies thereof or any such tangible property. The obligation of confidentiality
imposed by this Section shall not apply to information that is required by law,
regulation or judicial or governmental authorities to be disclosed or that
otherwise becomes part of the public domain by means other than Executive's
non-observance of his obligations hereunder.
(c) Rights and Remedies Upon Breach. If Executive breaches, or
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threatens to commit a breach of, any of provisions of Section 8 hereof
(collectively,
the "Restrictive Covenants"), Employer shall have the following rights and
remedies, each of which shall be independent of the other and severally
enforceable, and all of which shall be in addition to, and not in lieu of, any
other rights and remedies available to Employer under law or in equity:
(i) Specific Performance. Executive recognizes and agrees that
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the violation of the Restrictive Covenants may not be reasonably or adequately
compensated in damages and that, in addition to any other relief to which
Employer may be entitled by reason of such violation, it shall also be entitled
to injunctive and equitable relief and, pending determination of any dispute
with respect to such violation, no bond or security shall be required in
connection herewith. If any dispute arises with respect to this Section 8,
without limiting in any way any other rights or remedies to which Employer may
be entitled, Executive agrees that the Restrictive Covenants shall be
enforceable by a decree of specific performance.
(ii) Accounting. Employer shall have the right and remedy to
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require Executive to account for any pay over to Employer all compensation,
profits, monies, accruals, increments or other benefits (collectively,
"Benefits") derived or received by Executive as a result of any transactions
constituting a breach of any of the Restrictive Covenants, and Executive shall
account for and pay overall such Benefits to the Company.
(d) Severability of Covenants. If any of the Restrictive Covenants,
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or any part thereof, or any of the other provisions of this Section 8 is held by
a court of competent jurisdiction or any other governmental authority to be
invalid, void, unenforceable or against public policy for any reason, the
remainder of the Restrictive Covenants or such other provisions shall remain in
full force and effect and shall in no way be affected, impaired or invalidated,
and such court or authority shall be empowered to substitute, to the extent
enforceable, provisions similar thereto or other provisions so as to provide to
Employer, to the fullest extent permitted by applicable law, the benefits
intended by such provisions.
(e) Definition and Survival. For purposes of this Section 8 only,
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the term "Employer" shall mean Old Dominion and the Association, and any
subsidiary and affiliate of the Old Dominion and the Association. All provisions
of this Section 8 shall survive termination of this Agreement.
9. Conflicting Agreements. Executive hereby represents and warrants
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that the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which he
is a party or by which he is bound, and that he is not subject to any covenants
against competition or similar covenants that would affect the performance of
his obligations hereunder.
10. Definition of "Person". For all purposes of this Agreement, the
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term "Person" shall mean an individual, a corporation, an association, a
partnership, an estate, a trust and any other entity or organization.
11. Withholding. All payments made by Employer under this Agreement
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shall be net of any tax or other amounts required to be withheld by Employer
under applicable law.
12. Assignment; Successors and Assigns, etc. Neither Employer nor
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Executive may make any assignment of this Agreement or any interest herein, by
operation of law or otherwise, without the prior written consent of the other
party; provided, however, that Employer may assign its rights under this
Agreement without the consent of Executive in the event that Employer shall
hereafter effect a reorganization, consolidate with or merge into any other
Person, or transfer all or substantially all of its properties or assets to any
other Person. This Agreement shall inure to the benefit of and be binding upon
Employer and Executive, their respective successors, executors, administrators,
heirs and permitted assigns. In the event of Executive's death prior to the
completion by Employer of all payments due him under this Agreement, Employer
shall continue such payments to Executive's beneficiary designated in writing to
Employer prior to his death (or to his estate, if he fails to make such
designation).
13. Enforceability. If any portion or provision of this Agreement shall
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to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
14. Waiver. No waiver of any provision hereof shall be effective unless
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made in writing and signed by the waiving party. The failure of any party to
require the performance of any term or obligation of this Agreement, or the
waiver by any party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
15. Notices. Any notices, requests, demands and other communications
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provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by registered or certified mail, postage prepaid (in which
case notice shall be deemed to have been given on the third day after mailing),
or by overnight delivery by a reliable overnight courier service (in which case
notice shall be deemed to have been given on the day after delivery to such
courier service) to Executive at the last address Executive has filed in writing
with Employer or, in the case of
Employer, at the main offices of the Old Dominion or the Association, to the
attention of the Board of Directors.
16. Amendment. This Agreement may be amended or modified only by a
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written instrument signed by Executive and by a duly authorized representative
of Employer.
17. Governing Law. This is a Virginia contract and shall be
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construed under and be governed in all respects by the laws of the Commonwealth
of Virginia, without regard to its conflict of laws provisions.
18. Entire Agreement. This Agreement constitutes the entire
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understanding among the parties, superseding any previous understandings, oral
or written, pertaining to the subject matter contained herein. No party has
relied or will rely upon any oral or other written representation or oral or
written information made or given to such party by any other party,
representative of such party or anyone acting on its behalf.
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IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by Employer, by its duly authorized officers, and by Executive, as of
the date first above written.
OLD DOMINION ELECTRIC COOPERATIVE
By: /s/ Cecil E. Viverette
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Cecil E. Viverette, Jr.
Title: Chairman of the Board
Date: 2/26/99
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VIRGINIA, MARYLAND AND DELAWARE
ASSOCIATION OF ELECTRIC OPERATIVES
By: /s/ Frank W. Bacon
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Frank W. Bacon
Title: Chairman of the Board
Date: 2/28/99
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/s/ Jackson E. Reasor, Jr.
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Jackson E. Reasor, Jr.
Date: 2/11/99
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Address: 620 Summit St.
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Bluefield, VA 24605
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Exhibit A
Bonus Availability
The Agreement provides the Executive an opportunity to earn up to a
$35,000 bonus for the first year of the Term by achieving the objectives set
forth below. The percentages establish the portion of the available bonus which
may be earned for each category. The bonus scale in each category shall range
from 0 to 10. A rating of 10 would provide the full bonus in that category.
Ratings shall be awarded by the Boards of Directors of Employer.
1. Legislation - based on success in General Assembly 25%
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A. Proposed Co-op Legislation (develop legislation).
B. Success in defeating legislation harmful to co-ops.
2. Cost of Purchase Power 50%
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Provide a leadership role in reducing cost of controllable expenses
which would result in a reduction to members' cost of power. The
reduction in members' rates must be beyond the future reductions which
have been identified in the stranded cost reduction strategy.
A. Reduction in cost of power through contracts.
B. Reduction in cost of ODEC owned generation cost. Excluding
fuel cost.
C. Success at stranded cost reduction through the existing plan,
or modified version thereof.
3. Develop Strategy for Survival after Deregulation 25%
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A. Develop 5 and 10-year strategies.
B. Demonstrate ability to bring co-ops together to work as one,
and build consensus on difficult issues.
C. Introduction of new services and products consistent with the
long range plan.