CLECO CORPORATION
EXECUTIVE EMPLOYMENT AGREEMENT
(Level 1)
THIS
AGREEMENT (the “Agreement”) is entered into as
of this 29 th day of
January, 2007, by and between Wade A. Hoefling
(“Executive”), and Cleco Corporation, a Louisiana
corporation (the “Company”).
1. EMPLOYMENT AND TERM
1.1
Position. The Company shall employ and
retain Executive as its Senior Vice President –
General Counsel, Director – Regulatory Compliance, and
Assistant Corporate Secretary or in such other capacity or
capacities as shall be mutually agreed upon, from time to time, by
Executive and the Company, and Executive agrees to be so employed,
subject to the terms and conditions set forth
herein. Executive’s duties and responsibilities
shall be those assigned to him hereunder, from time to time, by the
Chief Executive Officer of the Company and shall include such
duties as are the type and nature normally assigned to similar
executive officers of a corporation of the size, type and stature
of the Company. Executive shall report to the Chief
Executive Officer.
1.2
Concurrent Employment. During the term
of this Agreement, Executive and the Company acknowledge that
Executive may be concurrently employed by the Company and a
subsidiary or other entity with respect to which the Company owns
(within the meaning of Section 425(f) of the Internal Revenue Code
of 1986, as amended (the “Code”)) 50% or more of the
total combined voting power of all classes of stock or other equity
interests (an “Affiliate”), and that all of the terms
and conditions of this Agreement shall apply to such concurrent
employment. Reference to the Company hereunder shall be
deemed to include any such concurrent employers.
1.3
Full Time and Attention. During the
term of this Agreement and any extensions or renewals thereof,
Executive shall devote his full time, attention and energies to the
business of the Company and will not, without the prior written
consent of the Chief Executive Officer of the Company, be engaged
(whether or not during normal business hours) in any other business
or professional activity, whether or not such activities are
pursued for gain, profit or other pecuniary advantage.
Notwithstanding
the foregoing, Executive shall not be prevented from (a) engaging
in any civic or charitable activity for which Executive receives no
compensation or other pecuniary advantage, (b) investing his
personal assets in businesses which do not compete with the
Company, provided that such investment will not require any
services on the part of Executive in the operation of the affairs
of the businesses in which investments are made and provided
further that Executive’s participation in such businesses is
solely that of an investor, or (c) purchasing securities in any
corporation whose securities are regularly traded, provided that
such purchases will not result in Executive owning beneficially at
any time 5% or more of the equity securities of any corporation
engaged in a business competitive with that of the
Company.
1.4
Term. Executive’s employment
under this Agreement shall commence as of January 29, 2007 (the
“Effective Date”), and shall terminate on January 29,
2010 (such date or the last day of employment specified in any
renewal or amendment hereof referred to herein as the
“Termination Date”) (the period commencing as of the
Effective Date and ending as of the Termination Date referred to
herein as the “Employment Term”).
Commencing on
the second anniversary of the Effective Date and each anniversary
thereafter, Executive’s employment shall automatically be
extended for an additional one-year period; provided, however, that
either party may provide written notice to the other that the
Employment Term will not be further extended, such notice to be
provided not later than 30 days prior to the end of the then
current Employment Term.
2. COMPENSATION AND
BENEFITS
2.1
Base Compensation. The Company shall
pay Executive an annual salary equal to his annual base salary in
effect as of the Effective Date, such amount shall be prorated and
paid in equal installments in accordance with the Company’s
regular payroll practices and policies and shall be subject to
applicable withholding and other applicable taxes
(Executive’s “Base
Compensation”). Executive’s Base
Compensation shall be reviewed no less often than annually and may
be increased or reduced by the Board of Directors of the Company
(the “Board”), in its sole discretion; provided,
however, that Executive’s Base Compensation may not be
reduced at any time unless such reduction is part of a reduction in
pay uniformly applicable to all officers of the
Company.
2.2
Annual Incentive Bonus. In addition to
the foregoing, Executive shall be eligible for participation in the
Annual Incentive Compensation Plan or similar bonus arrangement
maintained by the Company or an Affiliate (as defined in Section
6.15) or such other bonus or incentive plans which the Company or
its Affiliates may adopt, from time to time, for similarly situated
executives (an “Incentive Bonus”).
2.3
Long-Term Incentives. In addition to
the foregoing, Executive shall be eligible for participation in the
2000 Long-Term Incentive Compensation Plan maintained by the
Company and such other long-term incentive plans which the Company
or its Affiliates may adopt, from time to time, for similarly
situated executives (a “Long-Term
Incentive”).
2.4
Supplemental Retirement Benefit. In
addition to the foregoing, Executive shall be eligible to
participate in the Supplemental Executive Retirement Plan
maintained by Cleco Utility Group Inc. or such other supplemental
retirement benefit plans which the Company or its Affiliates may
adopt, from time to time, for similarly situated executives (the
“Supplemental Plan”).
2.5
Other Benefits. During the term of this Agreement
and in addition to the amounts otherwise provided herein, Executive
shall participate in such plans, policies, and programs as may be
maintained, from time to time, by the Company or its Affiliates for
the benefit of senior executives or employees, including, without
limitation, profit sharing, life insurance, and group medical and
other welfare benefit plans. Any such benefits shall be
determined in accordance with the specific terms and conditions of
the documents evidencing any such plans, policies, and
programs.
2.6
Reimbursement of Expenses. The
Company shall reimburse Executive for such reasonable and necessary
expenses as are incurred in carrying out his duties hereunder,
consistent with the Company’s standard policies and annual
budget. The Company’s obligation to reimburse
Executive hereunder shall be contingent upon the presentment by
Executive of an itemized accounting of such
expenditures.
3. TERMINATION
3.1
Termination Payments to Executive. As
set forth more fully in this Section 3 and except as provided in
Sections 3.3 or 3.8 hereof, Executive shall be paid the greater of
the amounts or benefits set forth below or the amounts or benefits
provided under the terms of the separate severance plan or
arrangement maintained by the Company (or its Affiliates) on
account of termination of employment hereunder, but in no event
will Executive be entitled to recover under both:
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a.
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Executive’s Base Compensation accrued but not yet paid as of
the date of his termination.
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b.
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Executive’s Base Compensation payable until the Termination
Date (determined without regard to the automatic renewal provisions
of Section 1.4 hereof), but not less than 100% of such annual Base
Compensation.
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c.
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Executive’s Incentive Bonus payable with respect to the year
of his termination, prorated to reflect Executive’s actual
period of service during such year.
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d.
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Executive’s Incentive Bonus payable in the target amount for
the year in which his termination of employment
occurs.
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e.
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If Executive’s principal office is located in Pineville,
Louisiana, the Company shall, at the written request of
Executive:
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i.
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Purchase his principal residence if such residence is located
within 60 miles of the Company’s Pineville, Louisiana office
(the “Principal Residence”) for an amount equal to the
greater of (1) the purchase price of such Principal Residence plus
the documented cost of any capital improvements to the Principal
Residence made by Executive, or (2) the fair market value of such
Principal Residence as determined by the Company’s usual
relocation practice; and
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ii.
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Pay or reimburse Executive for the cost of relocating Executive,
his family and their household goods and other personal property,
in accordance with the Company’s usual relocation practice,
to any location in the United
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Notwithstanding the foregoing, the Company shall not be obligated
hereunder, unless, within 2½ months after the year in which
occurs the termination of his employment with the Company (and
its Affiliates), the Company is requested to purchase such
Principal Residence or Executive has actually relocated from the
Pineville, Louisiana area. Any payments by the Company
pursuant to this Section 3.1e shall be made no later than March 15
th
of the calendar year following the calendar year in which
Executive’s employment is terminated.
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f.
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If Executive and/or his dependents elects to continue group medical
coverage, within the meaning of Code Section 4980B(f)(2), with
respect to a group health plan sponsored by the Company or an
Affiliate (other than a health flexible spending account under a
self-insured medical reimbursement plan described in Code Sections
125 and 105(h)), the Company shall pay the continuation coverage
premium for the same type and level of group health plan coverage
received by Executive and his electing dependents immediately prior
to such termination of Executive’s employment for the maximum
period provided under Code Section 4980B or until the Executive
secures other employment where group health insurance is provided,
whichever period is shorter.
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g.
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Executive shall be fully vested for purposes of any service or
similar requirement imposed under the Cleco Utility Group Inc.
Supplemental Executive Retirement Plan (the "Supplemental Plan"),
regardless of the actual number of years of service attained by
Executive.
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Notwithstanding any provision to the contrary, the amounts set
forth in Sections 3.1a, b, c, d and e hereof shall be paid no later
than March 15 th of the
calendar year following the calendar year in which
Executive’s employment is terminated.
Except as expressly provided in Section 3.3 hereof, Executive shall
also be entitled to receive such compensation or benefits as may be
provided under the terms of a separate plan or amendment maintained
by the Company (or its Affiliates) to the extent such compensation
or benefits are not duplicative of the compensation or benefits
described above.
3.2
Termination for Death or Disability
. If Executive dies or becomes disabled during the
Employment Term, this Agreement and Executive’s employment
hereunder shall immediately terminate and the Company’s
obligations hereunder shall automatically cease. In such
event, the Company shall pay to Executive (or his estate) the
amounts described in Sections 3.1a and 3.1c
hereof. Payment shall be made in the form of one or more
single-sums as soon as practicable after Executive’s death or
disability or as and when such amounts are ascertainable, but in no
event later than March 15 th of the
calendar year following the Executive’s termination of
employment due to death or disability.
For purposes of
this Section 3.2, Executive shall be deemed “disabled”
if he is actually receiving benefits or is eligible to receive
benefits under the Company’s (or an Affiliate’s)
separate long-term disability plan. The Board shall determine
whether Executive is disabled hereunder.
3.3
Company’s Termination for Cause.
This Agreement and Executive’s employment hereunder may be
terminated by the Company on account of Cause. In such
event, the Company shall pay to Executive the amount described in
Section 3.1a hereof. Payment shall be made in the form
of a single-sum not later than three days after such
termination. Notwithstanding any provision of this
Agreement or any other plan, policy or agreement evidencing any
other compensation arrangement or benefit payable to Executive, no
additional amount shall be paid to Executive, except as may be
required by law.
For purposes of
this Agreement “Cause” means that Executive
has:
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a.
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Committed an intentional act of fraud, embezzlement or theft in the
course of his employment or otherwise engaged in any intentional
misconduct which is materially injurious to the Company’s (or
an Affiliate’s) financial condition or business
reputation;
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b.
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Committed intentional damage to the property of the Company (or an
Affiliate) or committed intentional wrongful disclosure of
Confidential Information (as defined in Section 5.2) which is
materially injurious to the Company’s (or an
Affiliate’s) financial condition or business
reputation;
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c.
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Intentionally refused to perform the material duties of his
position;
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d.
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Failed to fully cooperate to the extent requested by the Company
(or an Affiliate) with investigations by government or independent
agencies involving the Company (or an Affiliate); or
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e.
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Committed a material breach of this Agreement.
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No act or failure to act on the part of Executive will be deemed
“intentional” if it was due primarily to an error in
judgment or negligence, but will be deemed
“intentional” only if done or omitted to be done by
Executive not in good faith and without reasonable belief that his
action or omission was in the best interest of the Company (or an
Affiliate).
The Board,
acting in good faith, may terminate Executive’s employment
hereunder on account of Cause (or may determine that any
termination by the Company is on account of Cause). The
Board shall provide written notice to Executive, including a
description of the specific reasons for the determination of
Cause. Executive shall have the opportunity to appear
before the Board, with or without legal representation, to present
arguments and evidence on his behalf. Following such
presentation (or upon Executive’s failure to appear), the
Board, by an affirmative vote of not less than 66% of its members,
shall confirm whether the actions or inactions of Executive
constitute Cause hereunder.
3.4
Executive’s Constructive Termination.
Executive may terminate this Agreement and his employment hereunder
on account of a Constructive Termination upon 30 days prior written
notice to the Chief Executive Officer (or such shorter period as
may be agreed upon by the parties hereto.) In such
event, the Company shall provide to Executive (a) the amount
described in Section 3.1a hereof, payable not later than three days
after his termination of employment, (b) the amounts determined
under Sections 3.1b and 3.1d hereof, payable in not
more than two equal installments, one-half not later than 30 days
after termination and the other one-half six months after such
termination or, if earlier, on March 15 th of the
calendar year following the calendar year in which such termination
occurs, and (c) the benefits described in Sections 3.1e, 3.1f and
3.1g hereof.
For purposes of
this Agreement, “Constructive Termination”
means:
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a.
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A material reduction (other than a reduction in pay uniformly
applicable to all officers of the Company) in the amount of
Executive’s Base Compensation;
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b.
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A material reduction in Executive’s authority, duties or
responsibilities from those contemplated in Section 1.1 of this
Agreement; or
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c.
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A material breach of this Agreement by the Company or its
Affiliates.
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No event or condition described in this Section 3.4 shall
constitute a Constructive Termination unless (a) Executive promptly
gives the Company notice of his objection to such event or
condition, which notice may be provided orally or in writing to the
Chief Executive Officer or his designee, (b) such event or
condition is not corrected by the Company promptly after receipt of
such notice, but in no event more than 30 days after receipt of
notice, and (c) Executive resigns his employment with the Company
(and all Affiliates) not more than 15 days following the expiration
of the 30-day period described in subparagraph (b)
hereof.
3.5
Termination by the Company, without Cause.
The Company may terminate this Agreement and
Executive’s employment hereunder, without Cause, upon 30 days
prior written notice to Executive (or such sh
