EXHIBIT 10.28
STATE OF GEORGIA
COUNTY OF DEKALB
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, ("Agreement"), is made and entered into this
the 20th day of December, 1995 by and between OGLETHORPE POWER CORPORATION
(an Electric Membership Generation and Transmission Corporation), organized
and existing under Title 46 of the Official Code of Georgia Annotated
("Employer") and T.D. KILGORE, ("Employee");
WITNESSETH:
WHEREAS, Employer is engaged in the business of providing electric
energy and services to its Member Systems;
WHEREAS, the Board of Directors of Employer recognizes that the electric
utility industry is undergoing rapid and unpredictable change;
WHEREAS, Employer believes that the continued availability of Employee's
service is vitally important to Employer's continued corporate growth and
success; and
WHEREAS, Employee desires to formalize his employment with Employer and
to ensure the security of his position.
NOW THEREFORE, in consideration of the promises and other good and
valuable consideration, the parties agree as follows:
the parties agree as follows:
SECTION 1 - EMPLOYMENT
Employer employs Employee and Employee accepts employment upon the terms
and conditions set forth herein.
SECTION 2 - TERM
(a) Subject to the provisions for termination and extension as provided
herein below, the initial term of this Agreement shall begin on January 1,
1996 and shall terminate on December 31, 1998.
(b) Unless earlier terminated by a voluntary resignation by Employee,
termination of Employee by Employer, or action by either the Employee or
Employer pursuant to Section 2(c), the initial three-year term of this
Agreement shall be automatically extended for an additional year on each
anniversary date of the Agreement, beginning with the January 1, 1997
anniversary.
By: JCE TDK
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Employer Employee Page 1 of 8
(c) Unless earlier terminated by a voluntary resignation by Employee,
or termination of Employee by Employer, sixty days prior to each anniversary
date either the Employee or Employer by written notice to the other may elect
not to allow an automatic extension under Section 2(b). Such notice shall be
effective on the date it is either hand-delivered or sent by certified or
registered mail.
(d) In the event the Employee or Employer makes election under Section
2(c) the remaining term of the contract shall remain in full force or effect.
(e) Notwithstanding the language of this Section 2, no extension of
this Agreement shall operate to extend the term of the Agreement past
Employee's 65th birthday on March 11, 2013.
(f) Subject to Section 11, Employee agrees that during the initial
twelve (12) months of this Agreement, and during the first ten (10) months
following an anniversary date at which a one-year extension of the term of
this Agreement has occurred, he will not accept employment from any other
employer.
SECTION 3 - COMPENSATION
For all services rendered by Employee under this Agreement, Employer
shall pay Employee an annual base salary to be determined by its Board of
Directors, but in no event shall the annual base salary be less than Two
Hundred Forty Thousand dollars ($240,000) per year payable in equal
installments on the 15th and last business day of each month. The Board of
Directors of Employer shall meet at least annually for the purpose of
determining Employee's next year's annual base salary based upon the value of
his services as determined by the Board of Directors. At this same meeting,
the Board of Directors shall also consider what, if any, bonus should be paid
to Mr. Kilgore. This paragraph shall not be interpreted to create any
obligation on the part of the Board of Directors of Employer to increase
Employee's base salary or to pay any bonus whatsoever. Both parties to this
Agreement recognize these determinations to be totally within the discretion
of the Board of Directors.
SECTION 4 - DUTIES
Employee shall serve as the President and Chief Executive Officer of
Employer. In this role he shall manage the day-to-day affairs of Employer as
Employer's Chief Executive. Employee shall have such other duties and
responsibilities as from time-to-time may be reasonably assigned to him by
Employer's Board of Directors and are consistent with Employee's role as
Chief Executive Officer.
SECTION 5 - BENEFITS
Employer currently provides to all employees a comprehensive benefits
package including, but not limited to, paid vacation, health and disability
insurance, life insurance and Employer funded pension plan, a 401K plan and
for key employees, a deferred compensation plan. During the term of his
employment, Employee shall be entitled to receive and shall be allowed to
participate in these benefits on the terms and conditions as provided in the
human resources policies and practices of Employer as the same may be
modified from time-to-time by the Board of Directors. Employee
By: JCE TDK
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Employer Employee Page 2 of 8
recognizes that it is within the sole discretion of the Board of Directors to
modify the benefits of Employer from time-to-time and agrees that no claim
will arise against Employer by virtue of the Board of Directors' exercise of
its rights to modify Employer's benefits package for Employee as a member of
Employer's Executive group. Employer specifically grants Employee unlimited
accrual of vacation time not taken.
SECTION 6 - AUTOMOBILE
In addition to the benefits provided under Section 5 above, Employer
shall provide to Employee an automobile for his personal and business use.
Title to said automobile will remain with Employer. Employer will pay all ad
valorem taxes, maintenance, and gas and will provide appropriate insurance
coverage. Employee will bear all cost of personal use consistent with
Internal Revenue Guidelines and corporate policies as the same may exist from
time-to-time.
SECTION 7 - EXPENSES
Employee is authorized to incur reasonable expenses on behalf of
Employer in performing his duties. Such reasonable expenses shall be
promptly paid (or reimbursed as applicable) by Employer.
SECTION 8 - TERMINATION BY EMPLOYER
(a) Employee's employment may be terminated by Employer at any time for
cause upon written notice to Employee. Cause shall exist if Employee
intentionally commits an act or acts of dishonesty which constitute a felony
or job-related misdemeanor, or an act or acts which breach Employee's
fiduciary duties to Employer, and which either: (1) cause intentional or
material harm to Employer; (2) materially and lawfully impair the reputation
of Employer; or (3) materially interfere with the operations of Employer.
Said written notice shall specify with particularity the actions or inactions
constituting cause. Employee shall have the right, but not the obligation,
to appear with or without counsel, as he elects, before Employer's Board of
Directors to respond to any allegation that serves as the basis for the
termination prior to the effective date of termination. The failure of
Employee to make such appearance shall in no way affect or prejudice the
right of either party to arbitrate any dispute under Section 12, below.
Employee shall be given at least ten days actual written notice of the date,
terms and place of such hearing.
(b) In the event of a termination for cause, Employer shall pay
Employee all amounts due which are then accrued but unpaid, within thirty
(30) days after the date of notice. Employer shall have no additional or
further liability to Employee if cause be sustained.
(c) In the event Employee is terminated by Employer without cause, he
shall be entitled to receive, in addition to accrued salary and benefits, all
salary and benefits he would have received between the date of his
termination and the ending date of the Agreement. Employee acknowledges that
the receipt of such compensation is in lieu of any other amounts that he may
be entitled to receive for any reason related to his employment by Employer
and in lieu of any monies he would otherwise be entitled to receive under any
then applicable corporate policy. If Employer terminates Employee's
employment without cause or meaningfully reduces his stated duties or
prerogatives within three (3)
By: JCE TDK
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Employer Employee Page 3 of 8
months prior to or twenty-four (24) months subsequent to a Change in Control
of Employer, the severance payment shall not be less than the amount
equivalent to two times Employee's annual base salary on the date of
termination or the date on which Employee's duties or prerogatives are
reduced, whichever is applicable. If such reduction in duties occurs,
Employee shall be entitled to severance regardless whether he is terminated
or resigns. Said payment must be provided within thirty (30) days from
Employee's last day of employment. As used herein, a "Change in duties
occurs, Employee shall be entitled to severance regardless whether he is
terminated or resigns. Said payment must be provided within thirty (30)
days from Employee's last day of employment. As used herein, a "Change in
Control" occurs if, during any twelve-month period, there is either (1) a
change in ownership of Employer such that owners of the Employer prior to the
twelve-month period cease to constitute at least seventy percent (70%) of the
owners after the twelve-month period; or (2) a change in the Board of
Directors such that the Board Members prior to the twelve-month period cease
to constitute at least fifty percent (50%) of the Directors at the end of the
twelve-month period. However, Employer and Employee agree that a reduction
in the size of the Board of Directors as contemplated by Section 11 below
shall not constitute a Change in Control.
(d) Employee agrees that in the event of a termination without cause,
as a condition precedent to receipt of the monies described under Section
8(b), he will execute a mutual release of all claims (other than vested
benefits) against Employer, its members, affiliates, directors, officers,
agents, employees and attorneys, and VICE VERSA. The Employer's failure to
execute and provide a fully mutual release shall eliminate Employee's duty to
do same, but shall not delay Employer's duty to pay the monies as provided
herein.
SECTION 9 - NOTICE TO EMPLOYER UPON VOLUNTARY RESIGNATION
Employee agrees that should he choose to voluntarily separate himself
from Employer, he will provide Employer with a minimum of sixty (60) days
written notice. Said notice to be provided in accordance with the terms of
this Agreement.
SECTION 10 - COVENANT NOT TO COMPETE
(a) Employee agrees that in the event he voluntarily separates himself
from Employer during the time periods covered by Section 2(f), or after
Employee makes the election under Section 2(c), he will not, for a period of
one (1) year thereafter, unless he obtains prior written consent of the
Chairman of the Board of Employer, which consent shall not be unreasonably
withheld, become an officer, director, contractor, consultant or employee or
in any way be employed with or for any competitor of Employer or any of its
competitor's, affiliates or members. By way of example, and not by way of
limitation, this shall include:
include:
(1) Georgia Power Company;
(2) The Municipal Electric Authority of Georgia;
(3) Dalton Utilities;
(4) National Power PLC; or
(5) Any of the above-named entities' affiliates;
(b) Employee acknowledges that the provisions specified herein
regarding his non-competition are fair and equitable under the circumstances
and agrees that the period for such
By: JCE TDK
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Employer Employee Page 4 of 8
undertaking may be tolled or suspended pursuant to a court order for any
period of time during which he is found by a court of competent jurisdiction
to be in violation of this Section 10. Moreover, Employee acknowledges that
should he be in violation of this Section, Employer shall be entitled to seek
injunctive or monetary relief in a court of competent jurisdiction.
(c) In the event that Employee voluntarily separates himself from
Employer (unless such separation is in violation of Section 2(f)), and
Employer does not provide written consent waiving the provisions of
subsection (a) above, Employer shall provide compensation equivalent to
Employee's salary, most recent bonus, and benefits on the date of the
termination of his employment for the entire period covered by subsection
(a). Such payment shall be made regardless whether Employee obtains
employment which does not violate subsection (a).
SECTION 11 - BOARD OF DIRECTORS
Employer will engage in a good faith effort to reduce the size of
the Board of Directors to fifteen (15) or less. Failure to engage in such
good faith efforts shall permit Employee, at his election by written notice,
to void this entire Agreement immediately. Such notice must be sent pursuant
to Section 13 on or before December 31, 1997.
SECTION 12 - ARBITRATION
Except as otherwise provided in this Agreement, Employer and
Employee hereby consent to the resolution by arbitration of all claims or
controversies for which a court otherwise would be authorized by law to grant
relief, in any way arising out of, relating to or associated with Employee's
employment with Employer or its termination, whether actual, or alleged, that
Employer may have against Employee or that Employee may have against Employer
or against its members, officers, directors, employees or agents in their
capacity as such or otherwise, whether or not such dispute concerns the
formation or terms of this Agreement. Any such arbitration shall be in
accordance with the then procedures of the American Arbitration Association
("AAA"). The arbitration hearing will be held before an experienced
employment arbitrator or panel of such arbitrators licensed to practice law
in the State of Georgia and selected by and in accordance with the rules of
the AAA, as the exclusive remedy for such claim or dispute. The forum for
such arbitration shall be Atlanta, Georgia. The party seeking arbitration of
a dispute, claim or controversy as required by this Section must give
specific written notice of any claim to the other party within twelve (12)
months of the date the party seeking arbitration first has knowledge of the
event giving rise to a claim or dispute; otherwise, the claim shall be void
and deemed waived, even if there is a federal or state statute of limitations
which would have given more time to pursue the claim. Notwithstanding the
foregoing, Employer shall have the right to seek temporary and/or preliminary
injunctive relief in a court of competent jurisdiction to enforce the terms
of Section 10 hereof. The ultimate resolution of the underlying issues in
such litigation, shall, however, be subject to this Agreement by the parties
to resolve any disputes by arbitration as set forth herein. In the event
that Employee prevails in said arbitration or litigation, whether wholly or
in part, he shall be entitled to prompt full reimbursement by Employer of his
legal costs as incurred.
By: JCE TDK
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Employer Employee Page 5 of 8
SECTION 13 - NOTICES
Any notice required or permitted to be given under this Agreement shall
be sufficient if in writing and sent by Certified or Registered Mail to
Employee's residence then on file with Employer, in the case of Employee, or
its principal office at OGLETHORPE POWER CORPORATION, 2100 East Exchange
Place, P.O. Box 1349, Tucker, Georgia 30085-1349, Attention: Chairman of the
Board, in the case of Employer.
SECTION 14 - WAIVER OF BREACH
The waiver of Employer or Employee of a breach of any provision of this
Agreement by Employee or Employer shall not operate or be construed as a
waiver of any subsequent breach by Employee or Employer, respectively.
SECTION 15 - ASSIGNMENT
The rights and obligations of Employer under this Agreement shall inure
to the benefit of and shall be binding upon Employer's successors and assigns.
SECTION 16 - GOVERNING LAW
This Agreement shall be governed by, construed under, performed and
enforced in accordance with the laws of the State of Georgia.
SECTION 17 - EMPLOYEE'S ATTORNEYS' FEES
Employer agrees to reimburse Employee for the attorneys' fees incurred
in obtaining legal advice regarding this Agreement, up to a maximum of
$2,500.00.
SECTION 18 - SEVERABILITY
Should any provision of this Agreement or portion thereof, be ruled
void, invalid, unenforceable or contrary to public policy by any court of
competent jurisdiction, then any remaining portion of such provision and all
other provisions of this Agreement shall survive and be applied and any
invalid or unenforceable portion shall be construed or performed to preserve
as much of the original words, terms, purpose and intent as shall be
permitted by law.
SECTION 19 - COUNTERPARTS
This Agreement shall be executed in duplicate counterparts. Each
counterpart is deemed an original of equal dignity with the other. The
official executing this Agreement on behalf of Employer represents and
warrants that he has full requisite authority to do so.
By: JCE TDK
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Employer Employee Page 6 of 8
SECTION 20 - ENTIRE AGREEMENT
This Agreement sets forth the entire understanding and agreement of
Employer and Employee with respect to the subject of this Agreement. All
courses of dealing, and prior representations, promises, understandings and
agreements, if any, whether oral or written, are suspended by and merged into
this Agreement. No modification of or amendment to this Agreement shall be
binding upon Employer or Employee unless in writing and signed by both
parties hereto. No provision of this Agreement shall be construed against or
interpreted to the advantage or disadvantage of either party by any court,
judicial or other governmental authority by reason of such party having been
deemed to have structured, written, drafted or dictated such provision.
SECTION 21 - CAPTIONS
The brief underlined headings and titles preceding each Section of this
Agreement are for the purpose of section identification, convenience and ease
of reference, and shall be completely disregarded in the construction of this
Agreement.
SECTION 22 - RURAL UTILITIES SERVICE REQUIREMENTS
This Agreement shall not become effective until approved by the Rural
Utilities Service (the "RUS") in accordance with the consolidated Mortgage
and Security Agreement, dated September 1, 1994, by and between OPC, as
Mortgagor, and the United States of America, National Bank for Cooperatives,
Credit Suisse, acting by and through its New York branch, and Trust Company
Bank, as trustee under certain Bond Indentures, all as Mortgagees
("Mortgage").
In the event that OPC is in default under the Mortgage and if the RUS
requires termination of the Employee's employment or of this Agreement
notwithstanding any other language in this Agreement, Employer may
immediately upon notice to Employee terminate this Agreement and/or the
employment of the Employee. Termination under this provision shall be deemed
a termination without cause, unless the default is caused by actions of
Employee which permit termination with cause under Section 8(a). In either
case, Employee's right to compensation will be governed by Section 8.
By: JCE TDK
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Employer Employee Page 7 of 8
IN WITNESS WHEREOF, Employer and Employee have caused these presents to
be executed as of the date first stated above.
EXECUTED this 20th day of December, 1995.
/s/ T. D. Kilgore T.D. KILGORE
- ----------------------------- Social Security Number: ###-##-####
/s/ Lynda Clark
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Witness:
/s/ J. Calvin Earwood OGLETHORPE POWER CORPORATION
- -----------------------------
Title: Chairman of Board
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/s/ Julie Martin Witnessed and approved:
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Witness: /s/ Charles T. Autry
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General Counsel
Oglethorpe Power Corporation
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