EXHIBIT 10(ii)
EMPLOYMENT AGREEMENT
BETWEEN
CAROLINA POWER & LIGHT COMPANY
AND
WILLIAM S. "SKIP" ORSER
AUGUST 1, 2000
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT ("Agreement"), dated as of the ____________ day of
_____________, 2000, between Carolina Power & Light Company, a North Carolina
corporation headquartered in Raleigh, North Carolina, and a subsidiary of CP&L
Energy, its successors or assigns and William S. "Skip" Orser ("Orser").
Carolina Power & Light and CP&L Energy shall be referred to as CP&L throughout.
Recitals
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1. The Company and Orser wish to enter into an employment relationship
whereby Orser will be employed initially as Executive Vice President -- Energy
Supply at Carolina Power & Light.
2. Orser will be employed as an "at will" employee of Carolina Power & Light.
The parties wish to enter into this Agreement to set forth certain terms related
to that relationship.
Provisions
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NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and accepted, the parties hereto
hereby agree as follows:
1. TERM OF THE AGREEMENT:
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(a) The Agreement becomes effective on August 1, 2000, and
shall remain in effect for a three-year period;
(b) Each year, the Agreement will be extended such that
prospective term will always be three years forward ("Evergrow provisions") on
the anniversary date of the effective date.
(c) Company may elect to not extend Agreement and must notify
Orser at least 60 days prior to the annual anniversary date of the Agreement's
effective date. In each event, the Agreement will be effective for the remainder
of its term.
(d) The Agreement cannot extend beyond Orser's normal
retirement date unless Orser is requested to serve in his full-time position for
a defined period as set forth by the Board of Directors.
2. RESPONSIBILITIES; OTHER ACTIVITIES.
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Orser shall initially occupy the position of Executive Vice
President - Energy Supply at Carolina Power & Light, and shall undertake the
general responsibilities and duties of such position as directed by CP&L. During
the Employment Term, Orser shall perform faithfully the duties of Orser's
position, devote all of Orser's working time and energies to the business and
affairs of CP&L and shall use Orser's best efforts, skills and abilities to
promote CP&L's. CP&L reserves the right to reassign Orser to other positions.
3. SALARY.
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As compensation for the services to be performed hereunder:
Orser will be paid a salary at the annual rate of Four Hundred Seventy Five
Thousand Dollars ($475,000) (less applicable withholdings) beginning on August
1, 2000. Annual salary for each subsequent year of the Employment Term shall be
subject to adjustment by CP&L at the annual salary review period for all
similarly situated executives as determined by CP&L in its discretion. Annual
Salary shall be deemed earned proportionally as Orser performs services over the
course of the Salary Year. Payments of annual Salary shall be made, except as
otherwise provided herein, in accordance with CP&L's standard payroll policies
and procedures.
4. BENEFITS
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During the Employment Term, Orser shall be entitled to
participate in all Company sponsored benefits programs as CP&L may have in
effect upon terms and in accordance with policies and procedures substantially
equivalent to those then in effect and applicable generally to employees of
CP&L. Provided, however, that nothing contained in this Agreement shall require
CP&L to continue to offer such benefits or programs or to limit CP&L's absolute
right to modify or eliminate these benefits.
(a). Management Incentive Compensation Plan. Orser will be
eligible to participate in the Management Incentive Compensation Plan (MICP).
Pursuant to the terms of MICP, Orser's target compensation under such plan will
be 40% of base salary earnings. The annual target will increase to 45% effective
January 1, 2001, contingent upon the closing of the Florida Progress Corporation
("FPC") acquisition.
(b). Long Term Incentives. Orser will be eligible to
participate in the Performance Share Sub-Plan under the 1997 Equity Incentive
Plan in accordance with the terms of the plan. Pursuant to the terms of the
plan, Orser's target compensation under such plan will be 50% of Orser's base
salary at the time of the award. Orser's target compensation shall increase to
100% effective January 1, 2001, contingent upon the closing of the FPC
acquisition.
(c). Restricted Share Grant. Orser will be eligible to
participate in the Restricted Share Grant Plan under the 1997 Equity Incentive
Plan in accordance with the terms of the plan. Additionally, Orser has
previously received other grants of CP&L restricted common
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stock pursuant to Restricted Stock Agreement(s). Restrictions are based on
continued employment.
(d). Management Deferred Compensation Plan. Orser will be
eligible for participation in CP&L's Management Deferred Compensation Plan
(MDCP), subject to its terms. Additionally, Orser has a vested benefit under the
suspended CP&L Deferred Compensation Plan for Key Management Employees.
Furthermore, Orser has a recruitment bonus with the Deferred Compensation Plan
for Key Management Employees pursuant to an April 1, 1993 Employment Agreement.
You are credited with nine years of service solely for determining your benefits
with this latter bonus.
(e). Supplemental Retirement Plan. Pursuant to its terms,
Orser is eligible for participation in CP&L Supplemental Retirement Plan (SRP),
subject to its terms.
(f). Restoration Retirement Plan. Orser shall be eligible for
participation in CP&L's Restoration Retirement Plan, subject to its terms. If
Orser becomes eligible for benefits under CP&L's Supplemental Senior Executive
Retirement Plan, Orser forfeits all benefits under the Restoration Retirement
Plan.
(g). Supplemental Senior Executive Retirement Plan. Orser
shall be eligible for participation in CP&L's Supplemental Senior Executive
Retirement Plan (SERP), subject to its terms. Orser is automatically deemed
vested for his benefits under SERP pursuant to an April 1, 1993 Employment
Agreement. Additionally, you will be deemed eligible for early retirement
benefits under the SERP at age 60, assuming continued employment until age 60.
(h). Executive Permanent Life Insurance Plan. Orser shall be
eligible to participate in CP&L's Executive Permanent Life Insurance Plan
subject to its terms.
(i). Executive AD&D Life Insurance. Orser shall be eligible to
participate in CP&L's Executive AD&D Life Insurance Plan, subject to its terms.
(j). Stock Purchase-Savings Plan. Orser shall be eligible to
participate in CP&L's Stock Purchase-Savings Plan, subject to its terms.
(k). Financial Planning. Consistent with CP&L's practice with
respect to other senior executives, Orser will be reimbursed for financial
planning and tax preparation.
(l). Vacation. Orser shall be entitled to four (4) weeks of
paid vacation days.
(m). Holiday. Orser will be eligible for eleven (11) paid
holidays in each calendar year as provided in the CP&L Handbook.
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(n). Automobile Allowance. Orser will be eligible to receive
an automobile allowance of One Thousand Three Hundred Fifty Dollars ($1350) per
month (less withholdings) subject to the terms of CP&L's policies. Orser will
also be eligible for a cellular phone and reserved parking at CP&L's expense.
(o). Annual Physical. CP&L will pay for an annual physical
examination by a physician of Orser's choice.
(p). Health Club Membership. CP&L shall pay the initiation fee
and monthly dues to a health club membership for Orser.
(q). Capital City Club. CP&L will pay an initiation fee and
monthly dues for a membership at the Capital City Club for Orser.
(r). Air Travel.
(i). CP&L will provide airline club membership in
accordance with CP&L's policy.
(ii). CP&L will reimburse Orser's spouse's travel
expenses when she accompanies Orser to business meetings where spousal
attendance is customary.
(iii). CP&L will provide chartered aircraft for Orser's
business related travel as needed.
(iv). CP&L will allow Orser to travel first class at his
discretion for business related travel.
(s). Country Club Membership. At Orser's option, if joined,
CP&L will pay an initiation fee and monthly dues for a membership for Orser at a
country club approved by CP&L. Business related expenses will be reimbursed
consistent with CP&L's expense account guidelines.
(t). Personal Computer. CP&L will provide a personal computer
to Orser to be used at his personal residence.
(u). Home Security. CP&L will install a home security system
at Orser's personal residence.
(v). Other Benefits. Orser shall be eligible for participation
in other CP&L benefit plans, subject to the terms of the respective plans, as
described in more detail in the Employee Handbook or Summary Plan Descriptions.
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5. TERMINATION OF EMPLOYMENT.
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(a). Termination Without Cause. During the terms of this
Agreement, if Orser's employment is terminated without cause, then Orser will be
provided with his base salary at Orser's current rate for the remainder of the
term of this Agreement. If Orser is between the ages of 55-60, this Paragraph
5(a) shall apply and Paragraph 5(g) shall also apply. In addition, Orser will be
entitled to the same medical and dental coverage provided to future retirees,
provided that to the extent any such benefit may not be provided to Orser due to
statutory or regulatory limitation, CP&L will obtain substantially equivalent
coverage on an insured basis. Receipt of these benefits is subject to the
requirements of paragraph 5(h), (i) and (j) of this Agreement. In addition,
Orser will be eligible to retain all benefits under existing benefit programs to
the extent vested within the terms of those programs.
(b) Termination for Cause. During the term of this Agreement,
CP&L may elect at any time to terminate Orser's employment immediately hereunder
and remove Orser from employment for cause. For purposes of this paragraph 5,
cause for the termination of employment shall be defined as: (i) any act of
Orser's including, but not limited to, misconduct, negligence, unlawfulness,
dishonesty or inattention to the business, which is detrimental to CP&L's
interests; or (ii) Orser's unsatisfactory job performance or failure to comply
with CP&L's direction, policies, rules or regulations. If Orser is terminated
for Cause as defined, then he shall be eligible to retain all benefits under
existing benefit programs which he has vested pursuant to those plans, but he
shall not be entitled to any form of salary continuance or any form of severance
benefits. Upon such termination, Orser shall be entitled to any earned but
unpaid salary accrued to the date of termination. Any continued rights or
benefits Orser's legal representatives may have under employee benefit plans and
programs of CP&L upon Orser's termination for cause shall be determined in
accordance with the terms or provisions of the plan or program.
(c). Constructive Termination.
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(i) Within the term of this Agreement, if Orser's
employment is constructively terminated, then Orser will be provided with his
base salary at the current rate for the remainder of the term of this Agreement.
If Orser is between the ages of 55-60, this paragraph 5(c)(i) shall apply and
Paragraph 5(g) shall also apply. In addition, Orser will be entitled to the same
medical and dental coverage provided to future retirees, provided that to the
extent any such benefit may not be provided to Orser due to statutory or
regulatory limitation, CP&L will obtain substantially equivalent coverage on an
insured basis. Receipt of these benefits is subject to the requirements of
paragraph 5(h), (i) and (j) of this Agreement. In addition, Orser will be
eligible to retain all benefits under existing benefit programs to the extent
vested within the terms of those programs.
(ii) For the purposes of paragraph 5 of this
Agreement, a constructive termination will be deemed to occur if: aa) there is a
change in the form of ownership of CP&L (e.g., CP&L is acquired, enters into a
business combination with another company or otherwise
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changes form of ownership) and bb) Orser is offered a new position with a
material change in authority, duties, wages or benefits, or Orser is asked to
relocate more than 50 miles. If Orser's employment is constructively terminated
under this paragraph, Orser is entitled to the greater of either the benefits
contained in this paragraph or the benefits he is entitled to, if any, under the
CP&L Management Change-in-Control Plan, according to the terms of the Plan.
Changes to the corporation structure of CP&L not related to an acquisition of
CP&L shall not constitute grounds for constructive termination.
(d). Voluntary Termination - If Orser terminates his
employment voluntarily for any reason at any time, except as provided in
paragraphs 5(c) and 5(g) of this Agreement, then he shall be eligible to retain
all benefits under existing benefit plans which have vested pursuant to the
terms of those plans, but he shall not be entitled to any form of salary
continuance or any form of severance benefit. If Orser terminates his employment
voluntarily between ages 55-60, paragraph 5(g) shall apply. Orser will be
entitled to the same medical and dental coverage provided to future retirees,
provided that to the extent any such benefit may not be provided to Orser due to
statutory or regulatory limitation, CP&L will obtain substantially equivalent
coverage on an insured basis.
(e). Termination Due to Death. In the event of the death of
Orser during the Employment Term, Orser's employment hereunder shall terminate
and CP&L shall have no further obligation to Orser under this Agreement except
as specifically provided in this Agreement. Orser's estate shall be entitled to
receive all earned but unpaid Salary accrued to the date of termination and any
Bonus for a prior fiscal year that has been earned but not paid. The Bonus, if
any, for the current fiscal year shall be calculated on a pro rata basis for the
portion of the fiscal year in which death occurred and shall be paid at the
regularly scheduled time for the payment of the Bonus. Any rights and benefits
Orser, or Orser's estate or other legal representatives, may have under employee
benefit plans and programs of CP&L upon Orser's death during the Employment
Term, if any, shall be determined in accordance with the terms and provisions of
such plans and programs.
(f). Termination Due to Medical Condition.
(i). CP&L may terminate Orser's employment hereunder,
subject to the Americans With Disabilities Act or other applicable law, due to
medical condition if (i) for a period of 180 consecutive days during the
Employment Term, Orser is totally and permanently disabled as determined in
accordance with the Company's long-term disability plan, if any, as in effect
during such time or (ii) at any time during which no such plan is in effect,
Orser is substantially unable to perform Orser's duties hereunder because of a
medical condition for a period of 180 consecutive days during the Employment
Term. Provided, however, that if Orser applies for and is deemed eligible for
benefits under CP&L's Long-Term Disability Plan (LTD Benefits), Orser shall
receive such benefits and his employment will not be terminated as long as he is
receiving LTD Benefits.
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(ii). Upon the termination of Orser's employment due to
medical condition or placement of Orser on Long Term Disability (LTD), CP&L
shall have no further obligation to Orser under this Agreement except as
specifically provided in this Agreement. Upon such termination or placement on
LTD, Orser shall be entitled to all earned but unpaid Salary accrued to the date
of termination or placement on LTD and any Bonus for a prior fiscal year that
has been earned but not paid. The Bonus, if any, for the current fiscal year
shall be calculated on a pro rata basis for the portion of the fiscal year Orser
was employed or placed on LTD by CP&L and shall be paid at the regularly
scheduled time for the payment of the Bonus. Any continued rights and benefits
Orser, or Orser's legal representatives, may have under employee benefit plans
and programs of CP&L upon Orser's termination or placement on LTD due to medical
condition, if any, shall be determined in accordance with the terms and
provisions of such plans and programs.
(g). Termination between ages 55-60: If Orser's employment is
terminated without cause as defined in paragraph 5(a), voluntarily terminated
his employment under 5(d), or constructively terminated under paragraph 5(c),
Orser will receive One Hundred Fifty Three Thousand, Nine Hundred Twelve Dollars
($153,912) (less applicable taxes) a year for life, less benefits payable under
the SRP and in lieu of any SERP benefit. In addition, Orser will be entitled to
the same medical and dental coverage provided to future retirees, provided that
to the extent any such benefit may not be provided to Orser due to statutory or
regulatory limitation, CP&L will obtain substantially equivalent coverage on an
insured basis. Receipt of these benefits is subject to the requirements of
paragraph 5(h), (i) and (j) of this Agreement. In addition, Orser will be
eligible to retain all benefits under existing benefit programs to the extent
vested within the terms of those programs.
(h). Release of Claims - In order to receive continuation of
salary under this paragraph 5(a), 5(c) and 5(g), Orser agrees to execute a
written release of all claims against CP&L, and its employees, officers,
directors, subsidiaries and affiliates, on a form acceptable to CP&L.
(i) Covenant Not to Compete. If CP&L terminates Orser's
employment without Cause under paragraph 5(a), Constructively terminates Orser's
employment under paragraph 5(c) of this Agreement or Orser's employment is
terminated under 5(g) of this Agreement, Orser, for one year after the
Termination Date, shall not compete directly or indirectly with the Company or
its affiliates within fifty (50) miles of any geographic area in which the
Company or its affiliates has a material business interest with which Orser is
involved at the time of the termination of Orser's employment.
(j) Non Interference. If CP&L terminates Orser's employment
without Cause under paragraph 5(a), Constructively terminates Orser's employment
under paragraph 5(c) of this Agreement or Orser's employment is terminated under
5(g) of this Agreement, Orser, for one year after the Termination Date, shall
not whether on his own account or on the account of another individual,
partnership, firm, corporation, or other business organization (other than the
Company and its affiliates), directly or indirectly, intentionally solicit,
endeavor to entice away
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from the Company or any of its affiliates, or otherwise interfere with the
relationship of the Company or its affiliates with, any person who is employed
by or otherwise engaged to perform services for the Company or its affiliates
including but not limited to, any independent representatives or organizations,
or any person or entity that is a customer of the Company or its affiliates.
6. ASSIGNABILITY.
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No rights or obligations of Orser under this Agreement may be assigned
or transferred by Orser, except that (a) Orser's rights to compensation and
benefits hereunder may be transferred by will or laws of intestacy to the extent
specified herein and (b) Orser's rights under employee benefit plans or programs
described in Section 4(a) may be assigned or transferred in accordance with the
terms of such plans or programs, or regular practices thereunder. The Company
may assign or transfer its rights and obligations under this Agreement.
7. CONFIDENTIALITY. Orser will not disclose the terms of this Agreement
except (i) to financial and legal advisors under an obligation to maintain
confidentiality, or (ii) as required by a valid court order or subpoena (and in
such event will use Orser's best efforts to obtain a protective order requiring
that all disclosure be kept under court seal) and will notify CP&L promptly upon
receipt of such order or subpoena.
8. MISCELLANEOUS.
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(a) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of North Carolina without
reference to laws governing conflicts of law.
(b) Entire Agreement. This Agreement contains all of the
understandings and representations between the parties hereto pertaining to the
subject matter hereof and supersedes all undertakings and agreements, whether
oral or in writing, if any, previously entered into by them with respect
thereto.
(c) Amendment or Modification; Waiver. No provision in this
Agreement may be amended or waived unless such amendment or waiver is agreed to
in writing, signed by Orser and by an officer of CP&L thereunto duly authorized
to do so. Except as otherwise specifically provided in the Agreement, no waiver
by a party hereto of any breach by the other party hereto of any condition or
provision of the Agreement to be performed by such other party shall be deemed a
wavier of a similar or dissimilar provision or condition at the same or any
prior or subsequent time.
(d) Notice. Any notice (with the exception of notice of
termination by CP&L, which may be given by any means and need not be in writing
except that if termination is for Cause, oral notice must be followed by written
notice required under Section 5(c) hereof) or other
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document or communication required or permitted to be given or delivered
hereunder shall be in writing and shall be deemed to have been duly given or
delivered if (i) mailed by United States mail, certified, return receipt
requested, with proper postage prepaid, or (ii) otherwise delivered by hand or
by overnight delivery, against written receipt, by a common carrier or
commercial courier or delivery service, to the party to whom it is to be given
at the address of such party as set forth below (or to such other address as a
party shall have designated by notice to the other parties given pursuant
hereto):
If to Orser:
William S. "Skip" Orser
Carolina Power & Light
411 Fayetteville Street Mall
Raleigh, North Carolina 27602
If to CP&L:
CP&L Service Company
411 Fayetteville Street Mall
Raleigh, North Carolina 27602
Attn.: Vice President of Human Resources
Any such notice, request, demand, advice, schedule, report, certificate,
direction, instruction or other document or communication so mailed or sent
shall be deemed to have been duly given, if sent by mail, on the third business
day following the date on which it was deposited at a United States post office,
and if delivered by hand, at the time of delivery by such commercial courier or
delivery service, and, if delivered by overnight delivery service, on the first
business day following the date on which it was delivered to the custody of such
common carrier or commercial courier or delivery service, as all such dates are
evidenced by the applicable delivery receipt, airbill or other shipping or
mailing document.
(e) Severability. In the event that any provision or portion
of this Agreement shall be determined to be invalid or unenforceable for any
reason, the remaining provisions or portions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law.
(f) References. In the event of Orser's death or a judicial
determination of Orser's incompetence, reference in this Agreement to Orser
shall be deemed, where appropriate, to refer to Orser's legal representative,
or, where appropriate, to Orser's beneficiary or beneficiaries.
(g) Headings. Headings contained herein are for convenient
reference only and shall not in any way affect the meaning or interpretation of
this Agreement.
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(h) Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
(i) Rules of Construction. The following rules shall apply to
the construction and interpretation of this Agreement:
(i) Singular words shall connote the plural number as
well as the singular and vice versa, and the masculine shall include the
feminine and the neuter.
(ii) All references herein to particular articles,
paragraphs, sections, subsections, clauses, Schedules or Exhibits are references
to articles, paragraphs, sections, subsections, clauses, Schedules or Exhibits
of this Agreement.
(iii) Each party or its counsel have reviewed and revised
(or requested revisions of) this Agreement, and therefore any rule of
construction requiring that ambiguities are to be resolved against a particular
party shall not be applicable in the construction and interpretation of this
Agreement or any exhibits hereto or amendments hereof.
(iv) As used in this Agreement, "including" is
illustrative, and means "including but not limited to."
(j) Remedies. Remedies specified in this Agreement are in
addition to any others available at law or in equity.
(k) Withholding Taxes. All payments under this Agreement shall
be subject to applicable income, excise and employment tax withholding
requirements.
IN WITNESS WHEREOF, the parties hereto have executed, or have caused
this Agreement to be executed by their duly authorized officer, as the case may
be, all as of the day and year written below.
By: William S. Orser Date: August 29, 2000
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William S. "Skip" Orser
By: /s/William Cavanaugh III Date: September 29, 2000
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Carolina Power & Light Company
Title: Chairman, President & CEO
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