THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into this 12th
day of February, 2001, by and between TEXAS EASTERN PRODUCTS PIPELINE COMPANY,
LLC, ("TEPPCO") a Delaware limited liability company with its principal
executive offices in Houston, Texas and Barry R. Pearl ("Executive").
WHEREAS, TEPPCO and Executive desire to enter into an agreement for the
full time services of Executive; and
WHEREAS, the parties desire that this Agreement set forth the terms and
conditions of Executive's employment by TEPPCO and that it represents the entire
agreement of the parties with respect to that subject;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Employment. TEPPCO hereby employs Executive, and Executive hereby
accepts such employment, upon the terms and conditions set forth herein.
Attached hereto as Exhibit A is a summary of Executive's compensation package.
2. Position and Duties.
(a) Position. At all times during the term of
employment under this Agreement, Executive shall serve as
President and Chief Operating Officer of TEPPCO ("COO") and
shall report directly to the Chief Executive Officer ("CEO")
of TEPPCO, provided that in the event the Board of Directors
of TEPPCO ("Board") subsequently shall appoint Executive to a
more senior position with TEPPCO, the Executive shall
serve in such position. It is expressly understood that
nothing in the immediately foregoing sentence shall preclude
the CEO from making such organizational and reporting changes
as well as promotions as the CEO may in good faith deem
desirable for the good of TEPPCO.
(b) Duties. Executive's duties shall include, in
addition to those enumerated in the Limited Liability
Agreement of TEPPCO, managing such functions or segments of
TEPPCO's or TEPPCO Partners, L.P.'s ("Partnership") business
as may be directed from time-to-time by the CEO or the Board.
Executive acknowledges and agrees that whatever his duties
hereunder may be, he owes TEPPCO a duty of loyalty, fidelity
and allegiance to act at all times in the best interests of
TEPPCO and the Partnership and to do no act that would injure
TEPPCO's or the Partnership's reputation.
(c) Performance. Throughout the period of employment
Executive shall devote his full time and undivided attention
during normal business hours to the business and affairs of
TEPPCO and the Partnership except for reasonable vacation
periods and except for periods of illness or incapacity.
Executive may reasonably participate as a member in community,
civic or similar organizations and may pursue personal
investments that do not interfere with the normal business
activities of TEPPCO or the Partnership.
(d) Loyal and Conscientious Performance. Executive
shall act at all times in compliance with the policies, rules
and decisions adopted
from time-to-time by TEPPCO and perform all duties and
obligations required of him by this Agreement in a loyal and
(e) Location. Executive's office shall be located in
Houston, Texas, or such other place as CEO shall designate.
(f) Authority. Executive shall be vested with all
authority reasonably necessary to carry out his duties and
responsibilities as set forth in this Section 2.
3. Term of Employment. The term of employment pursuant to this
Agreement shall commence on February 12, 2001 and shall continue until
terminated as hereinafter provided.
4. Base Compensation. Executive's base annual salary is $220,000. This
base compensation will be payable in equal installments as specified by the
policies of TEPPCO and subject to applicable state and federal income tax and
social security tax withholding requirements. Executive's base annual salary
shall be subject to increases by the Compensation Committee of the Board of
Directors of TEPPCO ("Compensation Committee"), which shall review the
Executive's salary and total compensation periodically.
5. Bonus. Executive shall be eligible to participate in the annual
bonus program for employees of TEPPCO. Such bonus shall be determined under the
terms of the Management Incentive Compensation Plan, Long Term Incentive
Compensation Plan, and any other bonus or compensation plan (whether in effect
on the date of this Agreement or thereafter) which shall be approved by the
Compensation Committee in January of each year.
6. Executive Benefits. Executive shall participate in all benefit plans
that are available to officers of TEPPCO. The availability and terms of such
benefit plans are set by the
Compensation Committee and subject to change from time-to-time. There is no
assurance that the benefit plans will not be changed or eliminated.
7. Relocation Expenses. TEPPCO will pay or reimburse Executive
(promptly after receipt of supporting documentation from time to time) for
expenses incurred by Executive in relocating his principal residence to Houston,
Texas, in accordance with the Duke Energy Employee Relocation Policy ("Guide");
provided that in the event Executive terminates employment hereunder before two
full years of the employment has been completed due to Executive's resignation
or early termination pursuant to subsection 9(a)(iii) as set forth below,
Executive shall promptly repay to TEPPCO a lump sum amount equal to the full
costs incurred by TEPPCO in providing Executive with homesale assistance, as
described in the Guide.
8. Confidentiality. Executive shall not, at any time, use (other than
in the ordinary course of fulfilling his duties as an employee of TEPPCO),
divulge or otherwise disclose, either directly or indirectly, any confidential
or proprietary information (including without limitation any customer or
prospect list, supplier list, acquisition or merger targets, business plans or
strategies, data, records, or financial information) concerning the business,
policies or operations of TEPPCO, Partnership or their affiliates, which
Executive may have learned on or prior to the date hereof or during the term of
Executive's employment by TEPPCO (as employee, consultant, shareholder, officer,
controlling person, agent or otherwise) and which information is not generally
known to the public. Executive's obligations under this Section 8 shall survive
any termination of his employment.
(a) Notwithstanding anything to the contrary
contained herein, Executive may terminate his employment at
any time by resigning, and Executive's employment may be
terminated by TEPPCO at any time as follows:
(i) due to the death of Executive;
(ii) due to a disability which prevents
Executive from performing the essential functions of
his full duties for a period of ninety (90)
consecutive business days at anytime during the term
of this Agreement;
(iii) for cause, which shall mean (w) the
willful and continued failure by Executive to
substantially perform his duties with TEPPCO or the
Partnership or their affiliates (other than any such
failure resulting from his incapacity due to physical
or mental illness) after demand for substantial
performance is delivered to him by the CEO which
specifically identifies the manner in which the CEO
believes the Executive has not substantially
performed his duties, (x) the willful engaging by the
Executive in gross misconduct materially and
demonstrably injurious to the property or business of
TEPPCO, Partnership or any of their affiliates, (y)
the willful material violation of Section 8, or (z)
fraud, misappropriation or commission of a felony.
For purposes of this subsection, no act or failure to
act on the
Executive's part will be considered "willful" unless
done or omitted to be done, by him not in good faith
and without reasonable belief that his action or
omission was in the best interest of the TEPPCO or
the Partnership or not opposed to the interests of
TEPPCO or the Partnership.
(iv) for any reason other than death,
disability or for cause.
(b) In the event of Executive's resignation or early
termination pursuant to subsections 9(a)(i), (ii), or (iii)
directly above, Executive shall be entitled only to his base
salary earned through the date of termination. Executive's
rights to any bonus shall be forfeited, but the termination
shall not affect any rights of Executive that have become
vested under any employee benefit plan or arrangement. In the
event that TEPPCO terminates Executive pursuant to subsection
9(a)(iv) above, Executive shall be entitled to his base salary
earned through the date of termination plus a severance
payment calculated in accordance with the provisions of
Section 10(a) hereof.
(c) This Agreement does not create any obligation on
the part of TEPPCO or Executive for continued employment for a
fixed period of time and in that regard, Executive shall be an
employee-at-will whose employment can be terminated at any
time for any reason by TEPPCO or Executive. If TEPPCO decides
to terminate Executive, TEPPCO will cooperate with Executive
in determining when and how to announce such
termination. Executive shall not receive any compensation for
any period of time post-termination, except for the severance
benefits provided in Section 10 hereof.
10. Severance Payment.
(a) In the event that within twelve (12) months
following a change in control as set forth in Section 10(b),
Executive's employment shall be involuntarily terminated or
Executive shall have a reduction in responsibility, he shall
be entitled to a lump sum severance payment equal to two (2)
times his base annual salary plus two (2) times target bonus.
For the purposes of this Section 10(a), target bonus will be
the dollar amount approved under the MICP at the most recent
January meeting of the Compensation Committee.
(b) For the purposes of this Section 10, a "change in
control" shall be deemed to have occurred if:
(i) any person becomes the beneficial owner,
directly or indirectly, of securities of Partnership
representing 66 2/3% or more of the Partnership's
then outstanding units of limited partnership
interests (the "Units"); or
(ii) any person becomes the beneficial
owner, directly or indirectly, of 50% or more of the
Units and TEPPCO delivers notice of withdrawal or is
otherwise removed as the general partner of the
(iii) the merger or consolidation of
Partnership with one or more corporations, business
trusts, common law trusts or unincorporated
businesses, including, without limitation, a general
partnership, limited liability company or limited
partnership, pursuant to a written agreement of
merger or consolidation in accordance with Article 16
of the Second Amended and Restated Agreement of
Limited Partnership of TEPPCO Partners, L.P., dated
November 30, 1998, as may from time-to-time be
amended and TEPPCO delivers notice of withdrawal or
is otherwise removed as the general partner of the
(iv) any person is or becomes the beneficial
owner, directly or indirectly, of securities of
TEPPCO representing more than 50% of the combined
voting power of TEPPCO's then outstanding voting
(v) all or substantially all of the assets
and business of TEPPCO, or the Partnership are sold,
transferred or assigned to, or otherwise acquired by,
any other person or persons; or
(vi) the dissolution or liquidation of
Partnership or TEPPCO; or
(vii) adoption by the Board of a resolution
to the effect that any person has acquired effective
control of the business and affairs of TEPPCO, or the
(c) The term "beneficial owner" shall have the
meaning set forth in Section 13(d) of the Securities Exchange
Act of 1934, as amended and in the regulations promulgated
thereunder. The term "person" shall mean an individual,
corporation, partnership, trust, unincorporated business
organization, association or other entity provided that the
term "person" shall not include (i) Duke Energy Corporation
("Duke"), (ii) any affiliate of Duke, or (iii) any employee
benefit plan maintained by Duke or any affiliate of Duke. The
term "affiliate" or "affiliated" as used in this Agreement
shall mean when used with respect to a specified person or
entity, any other person or entity directly or indirectly
controlled by, controlling, or under direct or indirect common
control with the specified person or entity. For the purpose
of this Section 10, "control" or "controlled" when used with
respect to any specified person or entity means the power to
direct the management and policies of that person or entity
whether through the ownership of voting securities, membership
interest or by contract.
11. Notice. Any notice to be given hereunder by either party to the
other party may be effectuated either by personal delivery in writing or by
mail, registered or certified, postage prepaid, with return receipt requested.
Mailed notices shall be addressed to the parties at the following addresses:
If to TEPPCO:
Mr. William L. Thacker
Texas Eastern Products Pipeline Company, LLC
2929 Allen Parkway
Houston, Texas 77019
If to Executive:
Mr. Barry R. Pearl
12. Waiver of Breach. The waiver by any party to a breach of any
provision in this Agreement cannot operate or be construed as a waiver of any
subsequent breach by a party.
13. Severability. The invalidity or unenforceability of any particular
provision in this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if the invalid or
unenforceable provision were omitted.
14. Entire Agreement. Except as otherwise provided herein, this
Agreement contains the entire understanding of the parties as to the employment
of Executive, superseding all prior understandings and agreements, and no
modifications or amendments of the terms and conditions herein shall be
effective unless in writing and signed by the parties or their respective duly
15. Governing Law. This Agreement shall be interpreted, construed and
governed according to the laws of the State of Texas, without reference to
conflicts of law principles thereof.
16. Dispute Resolution. In the event any dispute arises concerning the
provisions of this Agreement or Executive's employment with TEPPCO, the parties
agree that such dispute shall be resolved in accordance with the Employment
Dispute Resolution procedures of theAmerican Arbitration Association and that any arbitration pursuant to such
procedures shall be held in Houston, Texas.
17. Consent to Jurisdiction. Executive hereby consents to the
nonexclusive jurisdiction of any state court within Houston, Texas or any
federal court located within the same city for any proceeding instituted
hereunder or arising out of or in connection with this Agreement.
18. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their permitted successors,
assigns, legal representatives and heirs, but neither this Agreement nor any
rights hereunder shall be assignable by Executive.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
TEXAS EASTERN PRODUCTS PIPELINE COMPANY, LLC
By: /s/ WILLIAM L. THACKER
Chief Executive Officer
Barry R. Pearl