Exhibit 10.2
SEVERANCE AND RELEASE AGREEMENT
PARTIES
The parties to this Severance and Release Agreement ("Agreement") are Sierra
Pacific Resources and its affiliates Nevada Power Company and Sierra Pacific
Power Company (collectively referred to as "Company"), and Steven C. Oldham
("Employee").
BASIS
(a) Employee currently holds the position of Senior Vice President, Energy
Supply, with the Company.
(b) Employee has had access to Confidential Information, as hereinafter
defined. Employee has occupied a position of trust and confidence with
respect to such Confidential Information.
(c) This Agreement is intended as a final settlement of any and all claims,
known or unknown, that Employee may have against Company arising out of
or related to his employment with Company and the termination of that
employment, including, but not limited to all rights Employee may have
pursuant to any express or implied Employment Agreement or any Change
In Control Agreement or severance plan or agreement. This Agreement
provides Employee with benefits that exceed the benefits contained in
the Employment Agreement, as defined below, and is adequate
consideration for this Agreement.
TERMS OF AGREEMENT
1. DEFINED TERMS
1.1 "COMPETING ORGANIZATION" means persons or organizations,
including Employee, engaged in, or who may become engaged in,
research or development, production, distribution, marketing,
providing or selling of a Competing Product or Service.
1.2 "COMPETING PRODUCTS OR SERVICES" means products, processes, or
services of any person or organization, other than Company, in
existence or under development, which are substantially the
same as or which compete with the products, processes, or
services being developed, manufactured, or sold by Company
during the time of Employee's
employment with Company, including, but not limited to,
products, processes, and services related to the generation,
transmission, or distribution of electric energy and/or the
buying, selling, scheduling of electric energy or capacity, or
any risk management activities associated therewith.
1.3 "CONFIDENTIAL INFORMATION" means any plan, specification,
pattern, procedure, profile, design, device, list,
compilation, data, or information relating to the present or
planned business of Company which has not been released
publicly by authorized representatives of Company, including,
but not limited to trade secrets as defined in NRS 600A.010 et
seq. Confidential Information may include inventions;
marketing and sales plans or programs; customer and supplier
information; financial data; purchasing, pricing, or supply
information; product engineering information; technological
know-how; designs, plans or specifications regarding products
and materials; manufacturing processes and techniques;
regulatory approval strategies; computer programs, data,
formulae and compositions; service techniques and protocols;
and new product strategies, plans and designs. Confidential
Information also includes information that if disclosed, could
negatively affect the Company's reputation and it's
relationship with business, governmental agencies and
customers. Confidential Information includes all information
received by Company under an obligation of confidentiality to
a third party.
1.4 "EMPLOYMENT AGREEMENT" means all previous agreements, express
or implied, between Company and Employee.
1.5 "RESTRICTED AREA" means the State of Nevada and the service
territories of the Company.
2. TERMINATION OF EMPLOYMENT
2.1 Company shall terminate Employee's employment with Company
effective May 20, 2002 ("Termination or Separation Date"). Any
accrued and unused Paid Time Off will be included in
Employee's final paycheck. Employee agrees not to seek
re-employment with Company or any of its subsidiaries or
affiliates.
3. BENEFITS TO EMPLOYEE
3.1 Company shall pay to Employee severance in the amount of
$245,000.00 ("Severance"), payable on the condition that in
Company's reasonable judgment Employee is in full compliance
with the confidentiality, non-competition, and
non-disparagement provisions of the Agreement, one-half at
separation, one-quarter 90 days after the date of separation,
and
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one-quarter on the first anniversary of his date of
separation. The Severance shall be subject to withholding,
deductions, assessments and taxes, if applicable.
3.2 Commencing on the Termination Date, the Company shall continue
to cover Employee and Employee's dependants as defined in the
Health Plan under its medical, prescriptive drugs, dental,
vision and EAP employee welfare benefit plans ("Health Plans")
to the same extent as Employee and his dependents are covered
immediately prior to the Termination Date until July 31, 2005,
to the same extent as Employee and his dependents are covered
immediately prior to the Termination Date. Company shall pay
all costs incurred in providing the above-described coverage
for Employee. Employee shall be eligible to participate in
open enrollment and is subject to any amendments or changes
that would apply to other covered employees. If Employee
becomes eligible for similar coverage through another employer
or disability, then Employee shall notify Company of such
coverage and Company shall be entitled to terminate coverage
under this Agreement and/or offer Employee COBRA in the form
and manner required by law.
3.3 On July 9, 2005, Employee shall be 55 years old. As of that
date, Employee is eligible with 30 years of service to receive
benefits under vested pension under the Sierra Pacific
Resources Retirement Plan ("Retirement Plan"). Beginning
August 1, 2005, the Company shall provide Employee with
coverage under its Medical Plans in the same form and manner
as employees who elect retiree medical coverage with 30 years
of service. Employee shall be required to reimburse the
Company for Employee's portion of the costs of coverage in the
form and manner as employees who elect retiree medical
coverage with 30 years of service. Medical benefits provided
to Employee pursuant to this section may be subject to federal
taxes and the Company must report premium payments and paid
claims to the IRS. Coverage and benefits are subject to any
and all changes in said plans and benefits as may be made by
Company after the date of Termination.
3.4 Employee's accrued Supplemental Executive Retirement Plan
("SERP") benefits shall be fully vested as of the Termination
Date, and Employee may elect to be paid, in cash, the present
value of his vested SERP within seven days of his Termination
Date as allowed by the Plan. Alternatively, Employee may elect
to begin receiving the appropriate annuity when he reaches age
55. The SERP payment shall include new provisions in the Plan
which includes the 2000 and 2001 STIPs as though said STIPs
had been paid and, in addition, shall include a payment which
will grant Employee additional years of service under the SERP
from the Termination Date to the date Employee reaches the age
of 55. After
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payment, Employee shall have no further claims or benefits
under the SERP.
3.5 All Non-Qualified Stock Options ("Options") will automatically
vest on Employee's Termination Date, and Employee shall have
the right to exercise said options in accordance with the
terms of their original grant and the terms of the Executive
Long-Term Incentive Plan.
3.6 Employee is covered under Supplemental Executive Life
insurance. Employee shall continue to be covered under such
insurance until May 31, 2002, at which time Employee shall
have the option of converting such insurance in strict
accordance with the terms of such policy and paying the
premiums thereon.
3.7 If ever in the future the Company's officers are paid a STIP
for the year 2000 ("2000 STIP"), then the Employee shall be
paid the 2000 STIP at the same time and in the form and manner
paid to the other officers. The 2000 STIP shall be subject to
withholding, deductions, assessments, and taxes, if
applicable. If ever the Company's officers are paid a STIP for
the year 2001 ("2001 STIP"), then the Employee shall be paid
the 2001 STIP at the same time and in the form and manner paid
to the other officers. The 2001 STIP shall be subject to
withholding, deductions, assessments, and taxes, if
applicable. If ever the Company's officers are paid a STIP for
the year 2002 ("2002 STIP"), then the Employee shall be paid a
prorated portion of the 2002 STIP at the same time and in the
form and manner paid to the other officers. Employee's
prorated portion of the 2002 STIP shall be calculated by
dividing the number of hours credited to Employee during 2002
(1/1/02 through Termination Date) by 2080, and Employee shall
be entitled to receive the resulting percentage of the 2002
STIP. The 2002 STIP shall be subject to withholding,
deductions, assessments, and taxes, if applicable.
3.8 Subject to the express condition that in Company's reasonable
judgment at the time of each payment that Employee is in full
compliance with the confidentiality, non-competition, and
non-disparagement provisions of this Agreement, beginning on
the first day of the month after the Termination Date and on
the first day of each month thereafter, ending on the first
day of the month in which Employee reaches age 55, Employee
shall be paid a monthly payment of $4,300.00.
4. CONFIDENTIALITY
4.1 Employee shall preserve as confidential all Confidential
Information. Employee shall not use Confidential Information
for the benefit of Employee or any third party. Employee shall
not disclose to others any Confidential Information or any
copy or notes made from any Item
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embodying Confidential Information. If Employee is required to
disclose Confidential Information pursuant to a valid order of
a court or other governmental entity or any political
subdivision thereof; then Employee shall first give notice to
Company so that Company shall have a reasonable opportunity to
interpose an objection or obtain a protective order requiring
that the Confidential Information and/or documents so
disclosed be used only for the purposes for which the order
was issued.
5. NON-DISPARAGEMENT
5.1 Employee agrees to not make disparaging statements about the
Company or its officers and/or directors to third parties such
as the news media, governmental officials, or governmental
agencies. This section does not apply to testimony made under
oath before a court or governmental entity. This section does
not apply to statements of opinion made to family and friends
so long as they are not news media, governmental officials, or
governmental agencies.
6. NON-COMPETITION
6.1 Without express consent of the Company's CEO for a period of
one year after Employee's Termination Date, Employee shall
not, directly or indirectly, assist, provide services or
consultation to, enter into, engage in or acquire any
ownership interest in, or become employed by or associated
with, any Competing organization doing business or seeking to
commence doing business in the Restricted Area. This includes,
but is not limited to, services rendered to such Competing
organization in an executive, managerial, administrative, or
consulting capacity in connection with Competing Products or
Services in support of actual competition in geographic areas
other than where the services are performed and thus may fall
within the prohibition of this Agreement, regardless of where
such services physically are rendered. This limitation
includes, but is not limited to, any contact or solicitation,
either for Employee's benefit or for the benefit of any other
person or entity, and Employee will not in any manner assist
any person or entity in making any such contact or
solicitation.
6.2 Employee shall not solicit any employee of Company to
terminate his or her employment or relationship with Company
or to perform any service for Employee or for any Competing
Organization.
6.3 Employee agrees that the restrictions set forth in paragraphs
6.1 and 6.2 are fair and reasonable and are reasonably
required for the protection of the interests of the Company.
Employee agrees that compliance with the provisions of
paragraphs 6.1 and 6.2 will not cause Employee undue
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hardship nor unreasonably interfere with Employee's ability to
earn a livelihood.
7. RELEASE
7.1 Employee hereby waives and releases Company and its officers,
directors, agents, and employees (collectively referred to as
"Company Agents") from any claims, rights, contracts or causes
of action existing or accrued as of the date this Agreement is
signed that Employee may have against Company or Company
Agents (collectively referred to as "Claims") which arise out
of or are related to Employee's employment with Company
(collectively referred to as "Release") or the termination of
said employment. This Release includes, but is not limited to,
the following:
7.1.1 Claims which are known or unknown at the time of the
signing of this Agreement;
7.1.2 Claims which arise under any state or federal laws,
including, but not limited to, the Civil Rights Act
of 1964, as amended, and the Age Discrimination in
Employment Act of 1967, as amended, which have arisen
on or before the date of execution of this Agreement;
and
7.1.3 Claims based upon any contract of employment,
including but not limited to, the Change in Control
Agreement, except as set forth herein.
7.2 Employee shall not commence any action against Company or
Company Agents in violation of this Release.
7.3 Employee does not waive any Claim which arises after the
effective date of this Agreement.
7.4 Employee further expressly acknowledges and agrees that:
7.4.1 In consideration for this Waiver, Employee shall
receive compensation beyond that which Employee was
otherwise entitled to receive before entering into
this Agreement;
7.4.2 Employee has been advised to consult with an attorney
before signing this Agreement;
7.4.3 This Agreement is being offered only to Employee at
this time.
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7.4.4 Employee was given a copy of the Agreement on or
about May 10, 2002. Employee was informed that
Employee had 21 days within which to consider the
Agreement. If Employee fails to execute this
Agreement within said 21-day period, then the terms
and conditions contained in this Agreement are
automatically withdrawn without further action or
notice by Company.
7.4.5 Employee was informed and understands that Employee
has seven days following the date Employee executes
this Agreement in which to revoke this Agreement. Any
revocation of the Agreement must be in writing and
delivered to the Acting Vice-President of Human
Resources of Company during the revocation period.
This Agreement will become effective and enforceable
seven days following execution by Employee, unless it
is revoked during the seven-day period.
8. MISCELLANEOUS PROVISIONS
8.1. AGREEMENT IS CONFIDENTIAL: Unless and until the terms of this
Agreement, and the amount of any payment eligible to be paid
or actually paid under this Agreement, are disclosed in
writing to the public by Company pursuant to any applicable
legal duty to disclose such information, it shall be a
condition of eligibility to receive or retain any payment
pursuant to this Agreement that Employee hold the terms of
this Agreement and the amount of any payment hereunder in
strict confidence. Employee may disclose such information on a
confidential basis to Employee's spouse and to any financial
counselor, tax advisor or legal counsel retained by Employee.
8.2 ASSIGNMENT BY COMPANY: The obligations of Company hereunder
shall be the obligations of any and all successors and assigns
of Company. Company may assign this Agreement without
Employee's consent to any affiliate or subsidiary of Company.
Company may assign this Agreement without Employee's consent
to any company that acquires all or substantially all of the
stock or assets of Company, or into which or with which
Company is merged or consolidated. The Employee may not assign
the Agreement, and no person other than Employee or Employee's
estate may enforce the rights of Employee under this
Agreement.
8.3 WAIVER: The waiver by Company of a violation by Employee of
any provision of this Agreement shall not be construed as a
waiver of any subsequent violation.
8.4 SEVERABILITY: The provisions of this Agreement shall be
severable, and in the event that any portion or provision of
it is found by any court to be
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unenforceable, in whole or in part, the remainder of this
Agreement shall nevertheless be enforceable and binding on the
parties. In the event that any restriction set forth in this
Agreement shall be declared by a court of competent
jurisdiction to exceed the maximum restriction such court
deems reasonable and enforceable, the restriction deemed
reasonable and enforceable by the court shall become and
thereafter be the maximum restriction hereunder.
8.5 REVIEW OF AGREEMENT: Employee acknowledges that Employee had
sufficient opportunity to review this Agreement with an
attorney or, if Employee did not do so, it is because Employee
read and understands this Agreement and did not believe that
legal advice was necessary. Employee agrees that the
restrictions contained in this Agreement are fair and
appropriate under the circumstances.
8.6 DISPUTE RESOLUTION: Any dispute between the parties which is
covered by, arises out of, or is based upon this Agreement
shall be settled by final and binding arbitration. Any award
or determination rendered by the arbitrator may be entered as
a judgment in any court having jurisdiction thereof. The
arbitration is subject to the following:
8.6.1 The arbitration shall be administered by the American
Arbitration Association ("AAA") in accordance with
its Employment Dispute Resolution Rules ("Rules") in
effect at the time of the arbitration.
8.6.2 The arbitration shall be heard by one neutral
arbitrator. The arbitrator shall be an attorney
admitted to the practice of law in at least one
state.
8.6.3 The arbitrator shall have the authority to award any
remedy or relief that a state or federal court having
jurisdiction over the persons and subject matter is
authorized to grant.
8.6.4 The Company shall pay all of the costs and/or fees
charged by AAA and the arbitrator. The arbitrator
shall have the authority to award attorney's fees and
costs pursuant to sub-section 8.6.3 above.
8.7 JURISDICTION: This Agreement shall be construed under the laws
of the State of Nevada except where Federal laws are
applicable. Venue for any arbitration or action to enforce the
arbitration provisions of this Agreement shall be in the State
of Nevada.
8.8 EFFECTIVE DATE: This Agreement shall become effective on the
date it is signed by the Employee.
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8.9 FINAL AGREEMENT: This Agreement supercedes all prior
understandings, statements or agreements concerning the
subject matter of this Agreement, including the Employment
Agreement or Change in Control Agreement. Any amendment to
this Agreement shall be in writing and signed by both parties.
This Agreement contains all of the terms and conditions agreed
upon by the parties. There are no understandings or agreements
which conflict or modify the terms of this Agreement. Company
has made no representations or promises upon which Employee
relies in signing this Agreement except the terms set forth
herein. Company has made no representations upon which
Employee relies concerning the tax characteristics or status
of the benefits described in this Agreement.
COMPANY STEVEN C. OLDHAM
By:
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Date: May __, 2002 Date: May __, 2002
SCO-SEVAGRMT02
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