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Exhibit 10
AGREEMENT
THIS AGREEMENT, dated as of March 15, 1999 (this "Agreement"), is made
by and between Florida Progress Corporation, having its principal offices at
One Progress Plaza, St. Petersburg, Florida 33701 (the "Corporation"), and
Edward W. Moneypenny, residing at 4712 Stonehollow Way, Dallas, Texas 75287
(the "Executive").
WHEREAS, the Corporation considers it essential to the best interests
of its shareholders to foster the continued employment of key executive and
management personnel; and
WHEREAS, the Board of Directors of the Corporation (the "Board")
recognizes that the possibility of a Change in Control (as defined in Section
1.3 below) of the Corporation exists from time to time and that such
possibility, and the uncertainty, instability and questions that it may raise
for and among key executive and management personnel, may result in the
premature departure or significant distraction of such individuals to the
material detriment of the Corporation and its shareholders; and
WHEREAS, the Board has determined that appropriate steps should be
taken to reinforce, focus and encourage the continued attention and dedication
of key executive and management personnel of the Corporation and its
subsidiaries, such as the Executive, to their assigned duties without
distraction in the face of potentially disturbing or unsettling circumstances
arising from the possibility of a Change in Control of the Corporation;
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Corporation and the Executive hereby agree as
follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the meanings set forth below:
1.1 "ANNUAL BASE SALARY" shall mean the Executive's rate of
regular base annual compensation (prior to any reduction under (i) a salary
reduction agreement pursuant to section 401(k) or section 125 of the Internal
Revenue Code of 1986, as amended from time to time (the "Code") or (ii) any
plan or arrangement deferring any base salary or bonus payments), and shall not
include (without limitation) allowances, fees, retainers, reimbursements,
bonuses, incentive awards, prizes or similar payments.
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1.2 "CAUSE" shall mean:
(i) the Executive engaging in fraud, misappropriation or
willful misconduct that is demonstrably and materially injurious to
the property or business of the Corporation and/or its subsidiaries,
monetarily or otherwise; or
(ii) the Executive's conviction of, or plea of no contest
to, a felony.
For purposes of clause (i) of this definition, no act, or failure to act, on
the Executive's part shall be deemed "willful" unless done, or omitted to be
done, by the Executive in bad faith and without reasonable belief that the
Executive's act, or failure to act, was in the best interest of the Corporation
or its subsidiaries. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the instructions of
the Board (or a committee thereof), the Corporation's chief executive officer
or other duly authorized senior officer of the Corporation (as appropriate) or
based upon the advice of counsel for the Corporation shall be conclusively
presumed to be done, or omitted to be done, by the Executive in good faith and
in the best interests of the Corporation or its subsidiaries. The cessation of
employment of the Executive shall not be deemed to be for Cause unless and
until there shall have been delivered to the Executive a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters (3/4) of
the entire membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice of any such meeting is provided to
the Executive and the Executive is given an opportunity, together with counsel,
to be heard before the Board) finding that, in the good faith opinion of the
Board, (a) the Executive has acted in a manner described in clause (i) above,
and specifying the particulars thereof in detail, or (b) one of the events set
forth in (ii) has occurred.
1.3 "CHANGE IN CONTROL" shall mean and be deemed to have
occurred if:
(i) any Person is or becomes, after the date of this
Agreement, the Beneficial Owner (as that term is defined in Rule 13d-3
under the Securities Exchange Act of 1934 (the "Exchange Act")),
directly or indirectly, of securities of the Corporation (not
including in the securities beneficially owned by such Person any
securities acquired directly from the Corporation) representing
twenty-five percent (25%) or more of the combined voting power of the
Corporation's then outstanding securities; or
(ii) during any period of twenty-four (24) consecutive
months (not including any period prior to January 1, 1998),
individuals who at the beginning of such period constitute the Board
and any new director (other than a director designated by a Person who
has entered into an agreement with the Corporation to effect a
transaction described in clause (i), (iii) or (iv) of this definition
or any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or
consents) whose election by the Board or
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nomination for election by the Corporation's stockholders was approved
by a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of such period or
whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority of the Board; or
(iii) the shareholders of the Corporation approve a
reorganization, merger or consolidation, other than a reorganization,
merger or consolidation with respect to which all or substantially all
of the individuals and entities who were Beneficial Owners,
immediately prior to such reorganization, merger or consolidation, of
the combined voting power of the Corporation's then outstanding
securities beneficially own, directly or indirectly, immediately after
such reorganization, merger or consolidation, more than seventy-five
percent (75%) of the combined voting power of the securities of the
corporation resulting from such reorganization, merger or
consolidation in substantially the same proportions as their
respective ownership, immediately prior to such reorganization, merger
or consolidation, of the combined voting power of the Corporation's
securities; or
(iv) the shareholders of the Corporation approve (a) the
sale or disposition by the Corporation (other than to a subsidiary of
the Corporation) of all or substantially all of the assets of the
Corporation (or any such sale or disposition is effected through
condemnation proceedings), or (b) a complete liquidation or
dissolution of the Corporation.
Notwithstanding the foregoing, a Change in Control shall not include any event,
circumstance or transaction which results from the action (excluding the
Executive's employment activities with the Corporation, Florida Power
Corporation or any of their respective subsidiaries) of any Person or group of
Persons which includes, is directly affiliated with or is wholly or partly
controlled by one or more executive officers of the Corporation or its
subsidiaries and in which the Executive actively participates.
1.4 "CORPORATION" shall include Florida Progress Corporation and
any successor to its business and/or assets which assumes (either expressly, by
operation of law or otherwise) and/or agrees to perform this Agreement by
operation of law or otherwise (except in determining, under Section 1.3 hereof,
whether or not any Change in Control of the Corporation has occurred in
connection with such succession).
1.5 "DISABILITY" shall mean and be deemed the reason for the
termination by the Corporation of the Executive's employment, if, as a result
of the Executive's incapacity due to physical and/or mental illness, (i) the
Executive shall have been absent from the full-time performance of the
Executive's duties with the Corporation or any affiliate of the Corporation for
a period of six (6) consecutive months, (ii) the Corporation and/or such
affiliate gives the Executive a Notice of Termination for Disability, and (iii)
within thirty (30) days after such Notice of Termination is given, the
Executive does not return to the full-time performance of the Executive's
duties.
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1.6 "EMPLOYMENT PERIOD" shall mean the period commencing on the
date of any Change in Control until the earliest to occur of (i) the date which
is thirty-six (36) months from the date of any such Change in Control, (ii) the
date of termination by the Executive of the Executive's employment for Good
Reason, or (iii) the termination by the Corporation of the Executive's
employment for any reason.
1.7 "GOOD REASON" shall mean the occurrence (without the
Executive's express written consent) of any one of the following acts, or
failures to act, unless, in the case of any act or failure to act described in
clauses (i), (iv), (v) or (vi) below, such act or failure to act is corrected
by the Corporation prior to the Date of Termination specified in the Notice of
Termination given by the Executive in respect thereof not later than six (6)
months after the occurrence of the event that serves as the basis for the
Notice of Termination:
(i) the assignment to the Executive of any duties
materially inconsistent with those described in Section 3.2 below or
with the Executive's position(s) or status (including, without
limitation, offices, titles, and reporting relationships) as an
executive officer of the Corporation and/or its primary subsidiaries
or a substantial adverse alteration in the nature of the Executive's
authorities, duties, responsibilities, position(s) or status from
those described in Section 3.2 below or otherwise;
(ii) a reduction in the Executive's Annual Base Salary or
annual bonus opportunity as in effect on the date of this Agreement or
as the same may be increased at any time thereafter and from time to
time;
(iii) the relocation of the Corporation's principal
executive offices to a location more than thirty (30) miles from its
location on the date of this Agreement (or, if different, more than
thirty (30) miles from where such offices are located immediately
prior to any Potential Change in Control) or the Corporation's
requiring the Executive to be based anywhere other than the
Corporation's principal Florida executive offices, except for required
travel on the Corporation's business to an extent substantially
consistent with the Executive's business travel obligations as of the
date of this Agreement;
(iv) the failure by the Corporation or a subsidiary to
continue in effect any pension benefit or deferred compensation plan
in which the Executive participates immediately prior to any Potential
Change in Control which is material to the Executive's total
compensation, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan or arrangement) has been made with
respect to such plan, or the failure by the Corporation or a
subsidiary to continue the Executive's participation therein (or in
such substitute or alternative plan or arrangement) on a basis not
materially less favorable, both in terms of the amount of benefits
provided and the level of the Executive's participation relative to
other participants, as existed at the time of the Potential Change in
Control;
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(v) the failure by the Corporation or a subsidiary to
continue to provide the Executive with health and welfare benefits
substantially similar to those enjoyed by the Executive under any
retirement, life insurance, medical, health and accident, or
disability or similar plan of the Corporation or a subsidiary in which
the Executive was participating at the time of any Potential Change in
Control, the taking of any action by the Corporation or a subsidiary
which would directly or indirectly materially reduce any of such
benefits or deprive the Executive of any material fringe benefit
enjoyed by the Executive at the time of the Potential Change in
Control, or the failure by the Corporation or a subsidiary to provide
the Executive with the greater number of paid vacation days to which
the Executive is entitled pursuant to the terms of the Executive's
employment agreement or in accordance with the Corporation's or a
subsidiary's normal vacation policy, in either case, as in effect at
the time of the Potential Change in Control;
(vi) any purported termination of the Executive's
employment which is not effected pursuant to a Notice of Termination
satisfying the requirements of Section 7.1;
(vii) the failure of the Corporation to obtain a written
agreement reasonably satisfactory to the Executive from any successor
to the Corporation (as described in Section 9.1) to perform this
Agreement; and/or
(viii) any termination of employment by the Executive which
occurs during the one-month period commencing on the first anniversary
of the consummation of the transaction that produced the Change in
Control.
1.8 "PERSON" shall have the meaning ascribed thereto in Section
3(a)(9) of the Exchange Act, as modified, applied and used in Sections 13(d)
and 14(d) thereof; provided, however, that a Person shall not include (i) the
Corporation or any of its subsidiaries, (ii) a trustee or other fiduciary
holding securities under an employee benefit plan of the Corporation or any of
its subsidiaries (in its capacity as such), (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (iv) a
corporation owned, directly or indirectly, by the stockholders of the
Corporation in substantially the same character and proportions as their
ownership of stock of the Corporation.
1.9 "POTENTIAL CHANGE IN CONTROL" shall mean and be deemed to
have occurred if:
(i) the Corporation enters into an agreement, the
consummation of which would result in the occurrence of a Change in
Control;
(ii) the Corporation or any Person publicly announces an
intention to take actions which, if consummated, would constitute a
Change in Control; and/or
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(iii) any Person becomes the Beneficial Owner, directly or
indirectly, of securities of the Corporation representing fifteen (15)
percent or more of the combined voting power of the Corporation's then
outstanding securities, or any Person increases such Person's
beneficial ownership of such securities by ten (10) percentage points
or more over the percentage so owned by such Person on December 31,
1997.
1.10 "RETIREMENT" shall mean and be deemed the reason for the
termination by the Executive of the Executive's employment if such employment
is terminated upon or after normal retirement age pursuant to the pension plan
of the Corporation or any subsidiary of the Corporation in which the Executive
participates, not including any early retirement or so-called "window period"
retirements, generally applicable to its officers, as in effect immediately
prior to any Potential Change in Control.
2. TERM OF THIS AGREEMENT. This Agreement shall commence on the date
hereof and shall continue in effect through December 31, 2001; provided,
however, that the term of this Agreement shall automatically be extended each
January 1 after the date hereof for an additional period of one (1) year
unless, not later than 6 months prior to such January 1, the Corporation gives
written notice to the Executive that it does not wish to continue such
automatic extension; and provided, further, however, that if a Change in
Control shall have occurred during the term of this Agreement, this Agreement
shall continue in effect for a period of not less than thirty-six (36) months
beyond the month in which such Change in Control occurred or, if later,
eighteen (18) months after the consummation within such thirty-six (36) month
period of the transaction that produced the Change in Control (the "Term").
Notwithstanding the foregoing provisions of this Section 2, the Term shall
terminate upon attainment of normal retirement age as defined in the pension
plan of the Corporation.
3. CORPORATION'S COVENANTS.
3.1 SEVERANCE PAYMENTS. In order to induce the Executive to
remain in the employ of the Corporation and/or one or more of its subsidiaries
and in consideration of the Executive's covenants set forth in Section 4 below,
the Corporation agrees, under the terms and conditions described herein and in
addition to the amounts payable to the Executive under Section 5 below, to pay
the Executive the "Severance Payments" described in Section 6.1 below and the
other payments and benefits described herein in the event the Executive's
employment is terminated during the Employment Period or under the other
circumstances set forth in Section 6.1 below.
3.2 POSITION AND DUTIES. During the Employment Period, (i) the
Executive's position (including status, offices, titles and reporting
relationships), authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of those held,
exercised and assigned at any time during the one hundred eighty (180) day
period immediately preceding any related Potential Change in Control, and (ii)
the Executive's services shall be performed at the location where the Executive
was employed immediately preceding any
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such Potential Change in Control, or any office location less than thirty (30)
miles from such location.
3.3 BASE SALARY. During the Employment Period, the Executive
shall receive Annual Base Salary at least equal to twenty-six (26) times the
highest bi-weekly base salary paid or payable, including (without limitation)
any base salary which has been earned but deferred, to the Executive by the
Corporation and its affiliated companies in respect of the twelve (12) month
period immediately preceding the month in which any related Potential Change in
Control occurs. The Executive's Annual Base Salary shall be reviewed annually
for potential increase. In addition, Annual Base Salary shall not be reduced
after the occurrence of a Potential Change in Control. As used in this
Agreement, the term "affiliated companies" shall include any company controlled
by, controlling or under common control with the Corporation.
3.4 INCENTIVE PLANS.
a. MICP. The Executive shall be awarded for each fiscal
year ending within the Employment Period an annual bonus (the "Annual Bonus")
in cash at least equal to the target annual incentive bonus of the Executive
under the Corporation's Management Incentive Compensation Plan (the "MICP"), or
any other annual incentive bonus plan maintained by the Corporation from time
to time for the fiscal year in which the Change in Control occurs. Each Annual
Bonus shall be paid no later than the end of the third month of the fiscal year
next following the fiscal year for which the Annual Bonus is awarded, unless
the Executive shall elect to defer the receipt of such Annual Bonus in
accordance with rules established by the Corporation for that purpose.
b. LTIP. The Executive shall be awarded for each award
period that begins within the Employment Period a grant of performance shares at
least equal to the annual long-term incentive award received by the Executive
(not taking into account any pro-ration) under the Corporation's Long-Term
Incentive Plan or any other long-term incentive bonus plan maintained by the
Corporation from time to time (the "LTIP") for the fiscal year in which the
Change in Control occurs, and such shares shall be subject to performance goals
consistent with those established by the Corporation for the fiscal years prior
to the fiscal year in which the Change in Control occurs.
3.5 SAVINGS AND RETIREMENT PLANS. During the Employment Period,
the Executive (in addition to the Incentive Plans) shall be entitled to
participate in all other incentive, savings and retirement plans, practices,
policies and programs applicable generally to other peer executives of the
Corporation and its subsidiaries, but in no event shall such plans, practices,
policies and programs provide the Executive with incentive opportunities
(measured with respect to both regular and special incentive opportunities, to
the extent, if any, that such distinction is applicable), savings opportunities
and retirement benefit opportunities, in each case, less favorable, in the
aggregate, than the most favorable of those provided by the Corporation and its
affiliated companies for the Executive under such plans, practices, policies
and programs as in effect at any time during the one hundred eighty (180) day
period immediately preceding any related Potential Change in Control or, if
more favorable to the Executive, those provided
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generally at any time thereafter to other peer executives of the Corporation
and its affiliated companies.
3.6 WELFARE BENEFIT PLANS. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall be entitled
to participate in and shall receive all benefits under all of the health and
welfare benefit plans, practices, policies and programs provided by the
Corporation and its affiliated companies (including, without limitation,
medical, prescription, dental, disability, employee life, group life,
accidental death and travel accident insurance plans and programs) to the
extent (and at the same cost, excluding increases in the employee contribution
amounts which are consistent with and equivalent to the historical rates of
increase imposed by the Corporation in respect thereof) applicable generally to
other peer executives of the Corporation and its subsidiaries, but in no event
shall such plans, practices, policies and programs provide the Executive with
benefits that are less favorable, in the aggregate, than the most favorable of
such plans, practices, policies and programs in effect for the Executive at any
time during the one hundred eighty (180) day period immediately preceding any
related Potential Change in Control or, if more favorable to the Executive,
those provided generally at any time thereafter to other peer executives of the
Corporation and its affiliated companies.
3.7 EXPENSES. During the Employment Period, the Executive shall
be entitled to receive prompt reimbursement for all reasonable business expenses
incurred by the Executive in accordance with the most favorable policies,
practices and procedures of the Corporation and its affiliated companies in
effect for the Executive at any time during the one hundred eighty (180) day
period immediately preceding any related Potential Change in Control or, if
more favorable to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Corporation and its affiliated
companies.
3.8 OFFICE SUPPORT; PERQUISITES. During the Employment Period,
the Executive shall be entitled to secretarial support and other facilities,
perquisites and programs to enable the Executive to be able to discharge the
Executive's responsibilities hereunder in accordance with the most favorable
plans, practices, programs and policies of the Corporation and its affiliated
companies in effect for the Executive at any time during the one hundred eighty
(180) day period immediately preceding any related Potential Change in Control
or, if more favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Corporation and its
affiliated companies.
3.9 VACATION. During the Employment Period, the Executive shall
be entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Corporation and its affiliated
companies, or pursuant to the terms and provisions of any employment agreement,
as in effect for the Executive at any time during the one hundred eighty (180)
day period immediately preceding any related Potential Change in Control or, if
more favorable to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Corporation and its affiliated
companies.
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4. THE EXECUTIVE'S COVENANTS.
4.1 EMPLOYMENT. The Executive agrees that, subject to the terms
and conditions of this Agreement, in the event of a Change in Control during
the Term the Executive will remain in the employ of the Corporation during any
related Employment Period.
4.2 TIME AND ATTENTION. During the Employment Period, and
excluding any periods of vacation and sick leave to which the Executive is
entitled, the Executive agrees to devote reasonable attention and time during
normal business hours to the business and affairs of the Corporation and to use
the Executive's reasonable best efforts to perform faithfully and efficiently
the responsibilities and duties assigned to the Executive hereunder. During the
Employment Period it shall not be a violation of this Agreement for the
Executive to (i) serve on corporate, civic or charitable boards or committees,
(ii) deliver lectures and fulfill speaking engagements and (iii) manage
personal investments, so long as such activities do not significantly interfere
with the performance of the Executive's responsibilities as an employee of the
Corporation and its subsidiaries in accordance with this Agreement. It is
expressly understood and agreed that to the extent that any such activities
have been conducted by the Executive prior to any Potential Change in Control,
the reinstatement or continued conduct of such activities (or the reinstatement
or conduct of activities similar in nature and scope thereto) subsequent to any
related Potential Change in Control shall not thereafter be deemed to interfere
with the performance of the Executive's responsibilities to the Corporation and
its subsidiaries.
4.3 NON-INTERFERENCE; CONFIDENTIAL INFORMATION; NON-COMPETITION
(a) NO INTERFERENCE. For so long as the Executive is
employed by the Corporation, and for a period of one (1) year thereafter, the
Executive shall not, whether for his own account or for the account of any
other individual, partnership, firm, corporation or other business organization
(other than the Corporation or one of its affiliates), directly or indirectly,
intentionally solicit, endeavor to entice away from the Corporation (or any of
its affiliates), or otherwise interfere with the relationship of the
Corporation (or any of its affiliates) with, any person who is employed by or
otherwise engaged to perform services for the Corporation (or any of its
affiliates) including, but not limited to, any independent representatives or
organizations, or any person or entity that is a customer of the Corporation
(or any of its affiliates); provided, however, that if a customer of the
Corporation (or any of its affiliates) also engages in business in areas
outside of Florida that are not served by the business of the Corporation
(and/or any of its affiliates) with which the Executive is involved, the Board
of Directors may determine, in an appropriate situation, that the solicitation
of such customer in such areas does not violate the restrictions of this
Section 4.3(a). The Executive understands and agrees that the rights and
obligations set forth in this Section 4.3(a) could extend beyond the Term.
(b) CONFIDENTIAL INFORMATION. The Executive covenants and
agrees with the Corporation that he will not at any time, during or after
employment with the Corporation, except in performance of the Executive's
obligations to the Corporation or with the prior express written consent of the
Board of Directors, directly or indirectly, intentionally or unintentionally,
disclose any Confidential Information that he may learn or has learned by
reason of his employment or association with the Corporation or any of its
affiliates, or any predecessors to its business, or use
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any such information for his own personal benefit or gain. The term
"Confidential Information" includes, without limitation, information not
previously disclosed to the public or to the trade by the Corporation's
management with respect to the products, facilities and methods, trade secrets
and other intellectual property, systems, procedures, manuals, confidential
reports, fee or rate information, customer lists, financial information
(including without limitation the revenues, costs or profits associated with
any of the Corporation's (or any of its affiliates') activities or products),
business plans, prospects, opportunities or other information of the
Corporation or any of its affiliates. Confidential Information shall not
include information which (i) is or becomes generally available to the public
other than as a result of disclosure by the Executive in violation of this
Section 4.3(b) or (ii) the Executive is required to disclose under any
applicable laws, regulations or directives of any government agency, tribunal
or authority having jurisdiction in the matter or under subpoena or other
process of law. The Executive understands and agrees that the rights and
obligations set forth in this Section 4.3 (b) shall extend beyond the Term.
(c) EXCLUSIVE PROPERTY. The Executive confirms that all
Confidential Information is and shall remain the exclusive property of the
Corporation or any of its affiliates. All business records, papers and
documents kept or made by the Executive relating to the business of the
Corporation (or any of its affiliates) or any Confidential Information shall be
and remain the property of the Corporation and/or any such affiliates. Upon
termination of employment or upon the request of the Corporation at any time,
the Executive shall promptly deliver to the Corporation, and shall not without
the prior express written consent of the Corporation retain, any and all copies
of (i) any written materials not previously made available to the public, or
(ii) records and documents made by the Executive or coming into his possession
concerning any Confidential Information or the business or affairs of the
Corporation or any predecessors to its business, or any of its affiliates. The
Executive understands and agrees that the rights and obligations set forth in
this Section 4.3(c) shall extend beyond the Term.
(d) COVENANT NOT TO COMPETE. During the Employment Period
and for one (1) year after termination of the Executive's employment for any
reason, the Executive shall not compete, directly or indirectly, with the
Corporation or its affiliates within fifty (50) miles of any geographic area in
which the Corporation or its affiliates has material business interests with
which the Executive is involved at the time of the termination of the
Executive's employment. If it is judicially determined that this provision, or
any portion thereof, is unenforceable under applicable law(s) (statute, common
law or otherwise), then it is hereby agreed by the Executive and the
Corporation that the unenforceable portion shall be redrafted to the extent
necessary to render it enforceable, while leaving the remaining portions
intact. By agreeing to this contractual modification prospectively at this
time, the parties intend to make this provision enforceable under the law(s) of
all applicable states so that the entire agreement not to compete and/or this
Agreement as prospectively modified shall remain in full force and effect and
shall not be rendered void or illegal. Such modifications shall not affect the
payments made to the Executive under this Agreement. The Executive acknowledges
that his skills are such that he can be gainfully employed in noncompetitive
employment and that the agreement not to compete will in no way prevent him
from earning a living. The Executive understands and agrees that the rights and
obligations set forth in this Section 4.3(d) shall extend beyond the Term.
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(e) INJUNCTIVE RELIEF. Without intending to limit the
remedies available to the Corporation, the Executive acknowledges that a breach
of any of the covenants contained in this Section 4.3 may result in material
irreparable injury to the Corporation or its affiliates for which there is no
adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of such a breach or threat
thereof, the Corporation shall be entitled to obtain a temporary restraining
order and/or a preliminary or permanent injunction restraining the Executive
from engaging in activities prohibited by this Section 4.3 or such other relief
as may be required to specifically enforce any of the covenants in this Section
4.3.
5. COMPENSATION OTHER THAN SEVERANCE PAYMENTS.
5.1 DISABILITY. Following a Potential Change in Control and
during the Term, during any period that the Executive fails to perform the
Executive's full-time duties with the Corporation as a result of incapacity due
to physical or mental illness, the Executive's full salary shall be paid to the
Executive at a rate no less than the rate in effect at the commencement of any
such disability period, together with all compensation and benefits payable to
the Executive under the terms of any compensation or benefit plan, program or
arrangement maintained by the Corporation or its subsidiaries during such
disability period, until the Executive's employment is terminated by the
Corporation for Disability.
5.2 BASE SALARY. If the Executive's employment shall be
terminated for any reason following a Potential Change in Control and during
the Term, the Executive's full salary shall be paid to the Executive through
the Date of Termination (as defined below in Section 7.2) at the rate in effect
at the time the Notice of Termination is given, together with all compensation
and benefits payable to or with respect to the Executive through the Date of
Termination under the terms of any compensation or benefit plan, program or
arrangement maintained by the Corporation or its subsidiaries during such
period.
5.3 BENEFITS. If the Executive's employment shall be terminated
for any reason following a Potential Change in Control and during the Term, the
Executive's normal post-termination compensation and benefits shall be paid to
the Executive as such payments become due. Such post-termination compensation
and benefits shall be determined under, and paid in accordance with, the
retirement, health insurance, life insurance and other compensation (including
without limitation any bonus and/or incentive compensation) or benefit plans,
programs and arrangements maintained by the Corporation or its subsidiaries or
affiliates.
6. SEVERANCE PAYMENTS.
6.1 SEVERANCE. The Corporation shall pay the Executive the
payments and benefits described in Section 6.1(a), (b) and (c) (the "Severance
Payments") upon the termination of the Executive's employment following a
Change in Control and during the Term, in addition to the payments and benefits
described in Section 5 hereof, unless such termination is (i) by the
Corporation for Cause, (ii) by reason of Retirement, (iii) by the Executive
without Good Reason, (iv) due to death, or (v) due to Disability. In addition,
the Executive's employment shall be
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deemed to have been terminated following a Change in Control by the Corporation
without Cause or by the Executive with Good Reason (a) if the Executive
reasonably demonstrates that the Executive's employment was terminated prior to
a Change in Control without Cause (1) at the request of a Person who has
entered into an agreement with the Corporation the consummation of which will
constitute a Change in Control (or who has taken other steps reasonably
calculated to effect a Change in Control) or (2) otherwise in connection with,
as a result of or in anticipation of a Change in Control, or (b) if the
Executive terminates his employment for Good Reason prior to a Change in
Control and the Executive reasonably demonstrates that the circumstance(s) or
event(s) which constitute such Good Reason occurred (1) at the request of such
Person or (2) otherwise in connection with, as a result of or in anticipation
of a Change in Control. The Executive's right to terminate the Executive's
employment for Good Reason shall not be affected by the Executive's incapacity
due to physical or mental illness. The Executive's continued employment shall
not constitute consent to, or a waiver of rights with respect to, any act or
failure to act constituting Good Reason hereunder. In the event of Disability
or death of the Executive after the Date of Termination in respect of any
termination without Cause or any termination for Good Reason, payments and
benefits shall be made to the Executive, or the Executive's beneficiaries or
legal representative, as the case may be.
(a) LUMP SUM PAYMENT. A lump sum payment equal to two and
one-half (2.50) times the highest "total 12-month compensation" of the
Executive (whether or not deferred) for any 12-month period during the
five (5) completed calendar years prior to the Date of Termination,
where "total 12-month compensation" means the sum of the Executive's
Annual Base Salary during such 12-month period and the full amount of
the Executive's MICP award (target or actual, whichever is greater)
that was payable during such 12-month period (or annualized 12-month
period if the Executive has not completed 12 months of employment).
(b) WELFARE PLAN CONTINUATION. For a thirty (30) month
period after the Date of Termination, or if sooner, until the
Executive reaches the age of sixty-five (65) years, the Corporation
shall provide the Executive (at no cost to the Executive) with life,
disability, accident and health insurance benefits substantially
similar to those that the Executive is receiving immediately prior to
any related Potential Change in Control or the receipt of the Notice
of Termination (without giving effect to any reduction in such
benefits subsequent to a Change in Control which reduction constitutes
Good Reason), whichever is greater; provided, however, that the final
18 months of the continued coverage period hereunder shall be deemed
to constitute the full amount of the Executive's entitlement to COBRA
benefits as a result of the Executive's termination of employment.
Upon the termination of the Executive's continued benefits provided
under the prior sentence, the Executive shall be eligible to continue
such benefits (at the Executive's cost) to the same extent that such
benefits are provided by the Corporation thereafter (the "Continued
Access Period") to comparable executives and, after the Executive
attains age 65, to retired executives. Benefits otherwise receivable
by the Executive pursuant to the first
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sentence of this Section 6.1(b) shall be reduced to the extent
comparable benefits are actually received by or made available to the
Executive without cost during such period following the Executive's
termination of employment (and any such benefits actually received by
the Executive shall be reported to the Corporation by the Executive).
Continued coverage during the Continued Access Period shall terminate
if comparable benefits are made available to the Executive under any
other policy or program (and the availability of any such benefits
shall be reported to the Corporation by the Executive).
(c) LTIP. Performance shares granted to the Executive under
the LTIP for performance cycles commencing after a Change in Control
has occurred and remaining uncompleted will be deemed earned as of the
Date of Termination to the extent of one hundred fifty percent (150%)
of target under each award agreement, and the value of each such award
will be paid out to the Executive in a lump-sum cash payment.
Performance shares granted to the Executive under the LTIP for
performance cycles which commenced after a Change in Control occurred
and were completed before the Date of Termination will be paid out to
the extent earned, and the value of such award will be paid out to the
Executive in a lump-sum cash payment.
(d) SERP; OTHER DEFERRED COMPENSATION. The Executive shall
receive credit under the Corporation's Supplemental Executive
Retirement Plan ("SERP") for three (3) additional years of service and
shall immediately become 100% vested in the Executive's accrued
benefit and/or account balance to date under the SERP and any
non-qualified deferred compensation plan, and any amendment,
modification or termination of any such plan occurring during the Term
of this Agreement after any Change in Control shall not be effective
against the Executive to decrease or change any of the Executive's
rights thereunder.
(e) RELOCATION AND OTHER ASSISTANCE. Should the Executive
be required to move his or her primary residence in order to pursue
other business opportunities within two (2) years of the Date of
Termination, the Company will reimburse the Executive for any expenses
(not in excess of $10,000) incurred in that relocation that are not
reimbursed by another employer, including, without limitation,
assistance in selling the Executive's home and all other assistance
and benefits that were customarily provided by the Corporation to
transferred executives prior to the Change in Control. In addition, if
the Executive retains legal counsel with respect to the taxation of
payments to be made to the Executive under this Agreement, the
Corporation shall reimburse the Executive for such reasonable legal
fees and disbursements (but not in excess of $15,000).
6.2 SPECIAL REIMBURSEMENT. (a) Notwithstanding any other
provisions of this Agreement, in the event that any payment or benefit received
or to be received by the Executive in connection with a Change in Control or
the termination of the Executive's employment (whether pursuant to the terms of
this Agreement or any other plan, arrangement or agreement with the Corporation
or any of its subsidiaries, any Person whose actions result in a Change in
Control or any Person affiliated with the Corporation or such Person) (all such
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payments and benefits, including the Severance Payments, being hereinafter
called "Total Payments") would subject the Executive to the excise tax imposed
under Section 4999 of the Code or any successor section thereto (the "Excise
Tax"), the Corporation shall pay to the Executive an additional amount (the
"Gross-Up Payment") such that the net amount retained by the Executive, after
deduction of any Excise Tax on the Total Payments and any federal, state and
local income tax and Excise Tax upon the payment provided for by this Section
6.2(a), shall be equal to the Total Payments.
(b) For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amount of such Excise Tax,
(i) the Total Payments shall be treated as "parachute payments" within the
meaning of section 280G(b)(2) of the Code, and all "excess parachute payments"
within the meaning of section 280G(b)(1) of the Code shall be treated as
subject to the Excise Tax, unless in the opinion of tax counsel selected by the
Corporation's general counsel and reasonably acceptable to the Executive such
Total Payments (in whole or in part) do not constitute parachute payments,
including by reason of Section 280G(b)(4)(A) of the Code, or such excess
parachute payments (in whole or in part) represent reasonable compensation for
services actually rendered, within the meaning of section 280G(b)(4)(B) of the
Code, in excess of the Base Amount allocable to such reasonable compensation,
or are otherwise not subject to the Excise Tax, and (ii) the value of any
non-cash benefits or any deferred payment or benefit shall be determined by the
Corporation's independent auditors in accordance with the principles of
sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount
of the Gross-Up Payment, the Executive shall be deemed to pay federal income
taxes at the highest marginal rate of federal income taxation in the calendar
year in which the Gross-Up Payment is to be made and applicable state and local
income taxes at the highest marginal rate of taxation, net of the maximum
reduction in federal income taxes which could be obtained from deduction of
such state and local taxes.
(c) In the event that the Excise Tax is subsequently
determined to be less than the amount taken into account hereunder at the time
of termination of the Executive's employment, the Executive shall repay to the
Corporation, at the time that the amount of such reduction in Excise Tax is
finally determined, the portion of the Gross-Up Payment attributable to such
reduction plus interest on the amount of such repayment at the rate provided in
section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is
determined to exceed the amount taken into account hereunder at the time of the
termination of the Executive's employment (including by reason of any payment
the existence or amount of which cannot be determined at the time of the
Gross-Up Payment), the Corporation shall make an additional Gross-Up Payment in
respect of such excess (plus any interest, penalties or additions payable by
the Executive with respect to such excess) at the time that the amount of such
excess is finally determined. The Executive and the Corporation shall each
reasonably cooperate with the other in connection with any administrative or
judicial proceedings concerning the existence or amount of any such subsequent
liability for Excise Tax with respect to the Total Payments.
6.3 DATE OF PAYMENT. The payments provided for in Section 6.2
hereof shall be made not later than the fifteenth (15th) day following the Date
of Termination; provided, however, that if the amounts of such payments cannot
be finally determined on or before such day, the Corporation shall pay to the
Executive on such day an estimate, as determined in good faith by the
Corporation, of the minimum amount of such payments to which the Executive is
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likely to be entitled to and shall pay the remainder of such payments (together
with interest at the rate provided in section 1274(b)(2)(B) of the Code) as
soon as the amount thereof can be determined but in no event later than the
sixtieth (60th) day after the Date of Termination. In the event that the amount
of the estimated payments exceeds the amount subsequently determined to have
been due, such excess shall constitute a loan by the Corporation to the
Executive, payable on the tenth (10th) business day after demand by the
Corporation (together with interest at the rate provided in section
7872(f)(2)(A) of the Code). At the time that payments are made under this
Section 6.3, the Corporation shall provide the Executive with a detailed
written statement setting forth the manner in which such payments were
calculated and the basis for such calculations including, without limitation,
any opinions or other advice the Corporation has received from outside counsel,
auditors or consultants (and any such opinions or advice which are in writing
shall be attached to the statement).
6.4 LEGAL COSTS. The Corporation shall reimburse the Executive
for reasonable legal fees and expenses incurred in good faith by the Executive
as a result of any dispute with any party (including, but not limited to, the
Corporation or any subsidiary of the Corporation) regarding the payment or
receipt of any benefit provided for in this Agreement (including, but not
limited, all such fees and expenses incurred in disputing any termination or in
seeking in good faith to obtain or enforce any benefit or right provided by
this Agreement or in connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the Code) plus in each case
interest on any delayed payment at the applicable Federal rate provided for in
section 7872(f)(2)(A) of the Code. Such payments shall be made within five (5)
business days after delivery of the Executive's written requests for payment
accompanied by such evidence of fees and expenses incurred as the Corporation
reasonably may require.
7. TERMINATION PROCEDURES AND COMPENSATION DURING DISPUTE.
7.1 NOTICE OF TERMINATION. After a Change in Control and during
the Term, any purported termination of the Executive's employment (other than by
reason of death) shall be communicated by written Notice of Termination from
one party hereto to the other party hereto in accordance with Section 10
hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. Further, a Notice of Termination
for Cause is required to include a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters (3/4) of the entire membership
of the Board at a meeting of the Board which was called and held for the
purpose of considering such termination (which meeting may be a regular meeting
of the Board where prior notice of consideration of such termination is given
to members of the Board) finding that, in the good faith opinion of the Board,
(i) the Executive engaged in conduct set forth in clause (i) or (ii) of the
definition of Cause herein, and specifying the particulars thereof in detail,
or (ii) one of the events set forth in clause (ii) of such definition has
occurred. For purposes of this Agreement, any purported termination not
effected in accordance with this Section 7.1 shall not be considered effective.
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7.2 DATE OF TERMINATION. "Date of Termination", with respect to
any purported termination of the Executive's employment after a Potential
Change in Control and during the Term, shall mean (i) if the Executive's
employment is terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that the Executive shall not have returned to
the full-time performance of the Executive's duties during such thirty (30) day
period), and (ii) if the Executive's employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in the case of
a termination by the Corporation, shall not be less than thirty (30) days
(except in the case of a termination for Cause) and, in the case of a
termination by the Executive, shall not be less than fifteen (15) days nor more
than sixty (60) days, respectively, after the date such Notice of Termination
is given).
7.3 DISPUTE CONCERNING TERMINATION. If within fifteen (15) days
after any Notice of Termination is given, or, if later, prior to the Date of
Termination (as determined without regard to this Section 7.3), the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall be the date on
which the dispute is finally resolved either by mutual written agreement of the
parties or by a final judgement, order, or decree of an arbitrator or a court
of competent jurisdiction (which is not appealable or with respect to which the
time for appeal therefrom has expired and no appeal has been perfected);
provided, however, that the Date of Termination shall not be extended by a
notice of dispute if the basis for such notice, as determined in good faith by
the party receiving such notice is not given in good faith or the party giving
such notice does not pursue the resolution of such dispute with reasonable
diligence. Subject to the rights granted by Section 4.3, any controversy or
claim arising out of, or relating to, any provision of this Agreement shall be
settled by binding arbitration in accordance with the laws of The State of
Florida by three arbitrators, one of whom shall be appointed by the
Corporation, one by the Executive, and the third by the first two arbitrators.
If the first two arbitrators cannot agree on the appointment of a third
arbitrator, then the third arbitrator shall be appointed by the American
Arbitration Association. Such arbitration shall be conducted in Florida in
accordance with the rules of the American Arbitration Association, except with
respect to the selection of arbitrators which shall be as provided in this
Section. Judgment on the award rendered by the arbitrators may be entered in
any court having jurisdiction thereof.
7.4 COMPENSATION DURING DISPUTE. If a purported termination
occurs following a Change in Control and during the Term, and such termination
is disputed in accordance with Section 7.3 above (and pursuant thereto the Date
of Termination is extended), the Corporation shall continue to pay the
Executive the full Annual Base Salary in effect at the time of any related
Potential Change in Control or when the notice giving rise to the dispute was
given (whichever is greater). Amounts paid under this Section 7.4 are in
addition to all other amounts due under this Agreement (other than those due
under Section 5.2 hereof) and shall not be offset against or reduce any other
amounts due under this Agreement or any other plan, agreement or arrangement.
8. NO MITIGATION. The Corporation agrees that, if the Executive's
employment is terminated during the Term, the Executive is not required to seek
other employment or to attempt in any way to reduce any amounts payable to the
Executive by the Corporation pursuant to
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Section 6 or Section 7.4. Further, the amount of any payment or benefit
provided for in Section 6 (other than pursuant to Section 6.1.(b)) or Section
7.4 shall not be reduced by any compensation earned by the Executive as the
result of employment by another employer, by retirement benefits, or offset
against any amount claimed to be owed by the Executive to the Corporation or
any of its subsidiaries, or otherwise.
9. SUCCESSORS; BINDING AGREEMENT.
9.1 SUCCESSORS. In addition to any obligations imposed by law
upon any successor to the Corporation, the Corporation will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Corporation to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Corporation would be required to perform
it if no such succession had taken place. Failure of the Corporation to obtain
such assumption and agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement and shall entitle the Executive to
compensation from the Corporation in the same amount and on the same terms as
the Executive would be entitled to hereunder if the Executive were to terminate
employment with the Corporation for Good Reason after a Change in Control,
except that, for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination.
9.2 BINDING AGREEMENT. This Agreement shall inure to the benefit
of and be enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive shall die while any amount would still be payable to
the Executive hereunder (other than amounts which, by their terms, terminate
upon the death of the Executive) if the Executive had continued to live, all
such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to the beneficiary (or beneficiaries)
designated by the Executive from time to time in accordance with the procedures
for notice set out in Section 10; provided, however, that if there shall be no
effective designation of beneficiary by the Executive, such amounts shall be
paid to the executors, personal representatives or administrators of the
Executive's estate.
10. NOTICES; OTHER COMMUNICATIONS. For the purpose of this Agreement,
notices and all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when delivered or mailed by
United States certified mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth below, or to such other address
as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
actual receipt:
To the Corporation: Florida Progress Corporation
P.O. Box 33042
St. Petersburg, Florida 33733
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With a copy to: Mr. William G. Kelley
Vice President, Human Resources
Florida Progress Corporation
P.O. Box 14042
St. Petersburg, Florida 33733
To the Executive: Edward W. Moneypenny
4712 Stonehollow Way
Dallas, Texas 75287
11. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this Agreement.
The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Florida without regard to the
principles of conflict of laws thereof. All references to sections of the
Exchange Act or the Code (or the rules and/or regulations under either) shall
be deemed also to refer to and include any successor provisions to such
sections. Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law and any
additional withholding to which the Executive has agreed. The rights and
obligations of the Corporation and the Executive under this Agreement shall
survive the expiration of the Term and the Employment Period.
12. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, all of which shall remain in full force and
effect.
13. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
14. NO LIMITATION. Nothing in this Agreement shall prevent or limit
the Executive's continuing or future participation in any plan, program, policy
or practice provided by the Corporation or any of its affiliated companies and
for which the Executive may qualify, nor shall anything herein limit or
otherwise affect such rights as the Executive may have under any other contract
or agreement with the Corporation or any of its affiliated companies. Amounts
which are vested benefits or which the Executive is otherwise entitled to
receive under any plan, policy, practice or program of or any contract or
agreement with the Corporation or any of its affiliated companies at or
subsequent to the Date of Termination shall be payable in accordance with such
plan, policy, practice or program or contract or agreement as in effect from
time to time except as explicitly modified by this Agreement
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15. OTHER AGREEMENTS. This Agreement contains the entire agreement
between the parties concerning the subject matter hereof and supersedes all
prior agreements understandings, discussions, negotiations and undertakings,
whether written or oral, between the parties with respect thereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the date first above written.
FLORIDA PROGRESS CORPORATION
By: /s/ RICHARD KORPAN
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RICHARD KORPAN
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
/s/ EDWARD W. MONEYPENNY
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EDWARD W. MONEYPENNY
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