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EXHIBIT 10.34
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated as of May 31, 1996, by and between
PIEDMONT NATURAL GAS COMPANY, INC., a North Carolina corporation (the
"Corporation"), and XXX X. XXXXXXXX, a resident of Mecklenburg County, North
Carolina (the "Officer").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Corporation has determined that
the continued retention of the services of the Officer on a long-term basis as
described herein is in the best interest of the corporation in that (a) it
promotes the stability of senior management of the Corporation, (b) it enables
the Corporation to retain the services of a well-qualified Senior Vice President
with extensive contacts in the natural gas industry, and (c) it secures the
continued services of the Officer notwithstanding any change in control of the
Corporation; and
WHEREAS, the services of the Officer, his experience and knowledge of
the affairs of the Corporation, and his reputation and contacts in the
Corporation's industry are extremely valuable to the Corporation; and
WHEREAS, the Corporation considers the establishment and maintenance of
a sound and vital management to be part of its overall corporate strategy and to
be essential to protecting and enhancing the best interests of the Corporation
and its stockholders; and
WHEREAS, the parties desire to enter into this Agreement in order to
clearly set forth the terms and conditions of the Officer's employment
relationship with the Corporation.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereby agree as follows:
1. Employment. The Corporation hereby employs the Officer and the
Officer hereby accepts such employment, upon the terms and conditions stated
herein, as Senior Vice President of the Corporation. The Officer shall render
such administrative and management services to the Corporation as are
customarily performed by persons situated in a similar executive capacity. The
Officer shall promote the business of the Corporation and perform such other
duties as shall from time to time be reasonably prescribed by the Directors. It
is understood that the Officer's continued election as an officer of the
Corporation is dependent upon action by the Board of Directors of the
Corporation from time to time and that, subject to the provisions of Section 7
of this Agreement, the Officer's title and/or duties may change from time to
time.
2. Base Salary. The corporation shall pay the Officer during the
term of this Agreement as compensation for all services rendered by him to the
Corporation a base salary in such amounts and at such intervals as shall be
commensurate with his duties and responsibilities hereunder. Initially
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such base salary shall be at the rate of $185,000 per year. The Officer's base
salary may be increased from time to time to reflect the duties required of the
Officer. In reviewing the Officer's base salary, the Board of Directors of the
Corporation shall consider the overall performance of the Officer and the
service of the Officer rendered to the Corporation and its subsidiaries and
changes in the cost of living. The Board of Directors may also provide for
performance or merit increases. Participation by Officer in any incentive,
deferred compensation, stock option, stock purchase, bonus, pension, life
insurance or other employee benefit plans which may be offered by the
Corporation from time to time and participation in any fringe benefits provided
by the Corporation shall not cause a reduction of the base salary payable to the
Officer. The Officer will be entitled to such customary fringe benefits,
vacation and sick leave as are consistent with the normal practices and
established policies of the Corporation.
3. Participation in Incentive, Retirement and Employee Benefit
Plans; Fringe Benefits. The Officer shall be entitled to participate in any plan
relating to incentive compensation, stock options, stock purchase, pension,
thrift, profit sharing, group life insurance, medical coverage, disability
coverage, education, or other retirement or employee benefits that the
Corporation has adopted, or may from time to time adopt, for the benefit of its
executive employees and for employees generally, subject to the eligibility
rules of such plans.
The Officer shall also be entitled to participate in any other fringe
benefits which are now or may be or become applicable to the Corporation's
executive employees, including the payment of reasonable expenses for attending
annual and periodic meetings of trade associations, and any other benefits which
are commensurate with the duties and responsibilities to be performed by the
Officer under this Agreement. Additionally, the Officer shall be entitled to
such vacation and sick leave as shall be established under uniform employee
policies promulgated by the Board of Directors. The Corporation shall reimburse
the Officer for all out-of-pocket reasonable and necessary business expenses
which the Officer may incur in connection with his service on behalf of the
Corporation.
4. Term. The initial term of employment under this Agreement shall
be for a one-year period commencing June 1, 1996; provided, however, this
Agreement shall automatically be extended to a full one-year period on each
successive day during the term of this Agreement. The effect hereof shall be
that the Agreement shall at all times remain subject to a term of one year,
unless (i) written notice has been given that the Agreement shall not be
extended as provided in this Section 4, or (ii) the Agreement is terminated
pursuant to Section 7. If written notice from the Corporation or the Officer
is delivered to the other party advising the other party that this Agreement
is not to be further extended, then upon such notice, the Agreement shall
terminate on the first anniversary of the date of notice. Provided, further,
no extension shall cause this Agreement to extend beyond the date on which the
Officer reaches 65 years of age. Upon any extension, the base salary of the
extended agreement shall be the base salary in effect on the effective date of
such extension.
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5. Loyalty; Noncompetition
(a) The Officer shall devote his best efforts to the
performance of his duties and responsibilities under this Agreement.
(b) During the term of this Agreement, or any renewals
hereof, the Officer agrees he will not, own, manage, operate, join, control or
participate in the management, operation or control of, or be employed by or
connected in any manner with any business which competes with the Corporation or
any of its subsidiary corporations without the prior written consent of the
Corporation. Notwithstanding the foregoing, the Officer shall be free, without
such consent, to purchase or hold as an investment or otherwise, up to five
percent of the outstanding stock or other securities of any corporation which
has its securities publicly traded on any recognized securities exchange or in
any established over-the-counter market.
The Officer shall hold in confidence all knowledge or
information of a confidential nature with respect to the business of the
Corporation or any subsidiary of the Corporation received by him during the term
of this Agreement and will not disclose or make use of such information without
the prior written consent of the Corporation.
The Officer acknowledges that it would not be possible to
ascertain the amount of monetary damages in the event of a breach by the Officer
under the provisions of this Section 5 and agrees that, in the event of a breach
of this Section, injunctive relief enforcing the terms of this Section is an
appropriate remedy.
6. Standards. The Officer shall perform his duties and
responsibilities under this Agreement in accordance with such reasonable
standards expected of employees with comparable positions in comparable
organizations and as may be established from time to time by the Board of
Directors. The Corporation will provide the Officer with the working facilities
and staff customary for similar executives and necessary for him to perform
his duties.
7. Termination and Termination Pay.
(a) By Death. The Officer's employment under this Agreement
shall be terminated upon the death of the Officer during the term of this
Agreement, in which event the Officer's estate shall be entitled to receive all
compensation due the Officer through the last day of the calendar month in which
his death shall have occurred.
(b) By Total Disability. The Officer's employment under this
Agreement shall be terminated upon the total permanent disability of the Officer
during the term of this Agreement, in which event the Officer shall receive all
compensation, including bonuses, through the date of determination of such
disability and for a period of 90 days thereafter. For purposes of this Section,
the Officer shall be deemed to have suffered permanent disability upon the
determination of such status by the United States Social Security Administration
or a certification to such effect by the Officer's regular physician.
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(c) By Officer. The Officer's employment under this
Agreement may be terminated at any time by the Officer upon 60 days' written
notice to the Board of Directors. Upon such termination, the Officer shall be
entitled to receive all compensation, including bonuses, through the effective
date of such termination.
(d) By Corporation. The Board of Directors may terminate the
Officer's employment at any time, but any termination by the Board of Directors,
other than termination for cause, shall not prejudice the Officer's right to
continue to receive payment of all compensation and the continuance of benefits
for a period of 12 months from the effective date of termination or until such
time as the Officer reaches 65 years of age (whichever is less) as provided
below. The Officer shall have no right to receive compensation or other benefits
(other than vested benefits) for any period after termination for "cause."
Termination for cause shall mean termination because of the Officer's personal
dishonesty, incompetence, willful material misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties, willful
material violation of an law, rule or regulation (other than traffic or
traffic-related violations or similar offenses) or final cease-and-desist order,
or material breach of any provisions of this Agreement.
(e) Change of Control. In the event of involuntary
termination of the Officer's employment under this Agreement in connection
with, or at any time following, any Change of Control of the Corporation, or
in the event of voluntary termination by the Officer in connection with, or
within 12 months after, any Change in Control of the Corporation, the Officer
shall be paid the following amount for a period of 12 months from the effective
date of termination or until such time as the Officer reaches 65 years of age
(whichever is less):
(i) base salary plus
(ii) all amounts to which he may be or may become
entitled to under any incentive or bonus plan
plus
(iii) participation in all welfare benefit plans,
practices, policies and programs at least as
favorable as the most favorable of such
plans, practices, policies and programs in
effect at any time during the 90-day period
preceding his termination and with the costs
of such benefits paid in the same manner as
prior to this termination.
The Officer's base salary shall be paid in the same periodic payments over the
remaining term of this Agreement. If the Officer is involuntarily terminated
after a Change in Control, he shall be paid all base salary, incentive
compensation and bonuses in a lump sum.
In connection with this Agreement the term "Change in Control"
shall mean (i) the adoption of a plan or merger or consolidation of the
Corporation with any other corporation or association as a result of which the
holders of the voting capital stock of the Corporation as a group would receive
less than 50% of the voting capital stock of the surviving or resulting
corporation; and (ii) the acquisition of more than 20% of the voting capital
stock of the Corporation by any person
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within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended. The term "person" means an individual or a corporation, partnership,
trust, association, joint venture, pool, syndicate, sole proprietorship,
unincorporated organization or any other form of entity not specifically listed
herein.
(f) Reduction of Duties. Notwithstanding any other provision
of this Agreement to the contrary, the Officer may voluntarily terminate his
employment under this Agreement following a Change in Control of the
Corporation, whether approved in advance by the Board of Directors or otherwise,
and shall thereupon be entitled to receive the payments described in Section
7(e) of this Agreement, upon the occurrence, or within 30 days thereafter, of
any of the following events, which have not been consented to in advance by the
Officer in writing; (i) if the Officer would be required to move his personal
residence or perform his principal executive functions more than 20 miles from
the city limits of Charlotte, North Carolina; (ii) if in the organization
structure of the Corporation, the Officer would be required to report to a
person or persons other than the Board of Directors, Chairman of the Board,
President, or Executive Vice President; (iii) if the Corporation should fail to
maintain employee benefits and welfare benefit plans, including incentive
compensation, vacation, fringe benefit, stock option and retirement plans
providing at least the same level of benefits afforded Officer as of the date
hereof; (iv) if the Officer would be assigned duties and responsibilities other
than those normally associated with his position as Senior Vice President; or
(v) if the Officer's responsibilities or authority have in any way been
diminished.
(g) Costs and Expenses. In the event any dispute shall arise
between the Officer and the Corporation as to the terms or interpretation of
this Agreement, including this Section 7, whether instituted by formal legal
proceedings or otherwise, including any action taken by Officer to enforce the
terms of this Section 7 or in defending against any action taken by the
Corporation, the Corporation shall reimburse the Officer for all costs and
expenses, proceedings or actions in the event the Officer prevails in any such
action.
8. Successors and Assigns.
(a) This Employment Agreement shall inure to the benefit of
and be binding upon any corporate or other successor of the Corporation which
shall acquire, directly or indirectly, by conversion, merger, consolidation,
purchase or otherwise, all or substantially all of the assets of the
Corporation.
(b) Since the Corporation is contracting for the unique and
personal skills of the Officer, the Officer shall be precluded from assigning or
delegating his rights or duties hereunder without first obtaining the written
consent of the Corporation.
9. Modification; Waiver; Amendments. No provision of this
Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing, signed by the Officer and
on behalf of the Corporation by such Officer as may be specifically designated
by the Board of Directors. 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
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conditions at the same or at any prior or subsequent time. No amendments or
additions to this Agreement shall be binding unless in writing and signed by
both parties, except as herein otherwise provided.
10. Applicable Law. This Agreement shall be governed in all
respects whether as to validity, construction, capacity, performance or
otherwise, by the laws of North Carolina.
11. Severability. The provision of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first hereinabove written.
CORPORATION:
ATTEST: Piedmont Natural Gas Company, Inc.
/s/ Xxxxxx X. Xxxxxxxxxx
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Secretary
By: /s/ Xxxx X. Xxxxxxx
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OFFICER:
/s/ Xxx X. Xxxxxxxx (SEAL)
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Employment Agreement reviewed and approved by the Board of Directors this 31st
day of May, 1996.
BY: /s/ Xxxx X. XxXxxx III
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