In October 2008, the Compensation
Committee (the “Compensation Committee”) of the Board of Directors of
Cleco Corporation (the “Company”) approved a new form of Executive
Employment Agreement for Level 1 officers (the
“Agreement”). This new agreement is intended to replace
executive employment agreements by and between the Company and each of
Dilek Samil, George W. Bausewine and Michael H. Madison (each, an
“Executive”), dated January 1, 2002, May 5, 2005, and October 1, 2003,
respectively, upon the expiration of such current employment
agreements. On January 5, 2009, the Company entered into the
Agreement with Ms. Samil. Ms. Samil will serve as the President
and Chief Operating Officer for Cleco Power LLC (“Cleco Power”), a wholly
owned subsidiary of the Company. The Company expects to enter
into the Agreement with each of Messrs. Bausewine and Madison upon the
expiration of their current employment agreements in May and October 2009,
respectively. Pursuant to the Agreements, it is expected that
Mr. Bausewine will serve as Senior Vice President of Corporate Services
for the Company and Cleco Power and that Mr. Madison will serve as
President and Chief Executive Officer of the Company and Chief Executive
Officer of Cleco Power.
Pursuant to the terms of the
Agreement, Ms. Samil’s annual salary shall be equal to her annual base
salary in effect as of January 1, 2009, which is
$323,500. Messrs. Bausewine and Madison’s annual salary is
expected to be equal to their base salaries in effect as of the effective
date of their Agreements, which amounts are expected to be set forth in
the Company’s definitive proxy statement relating to its Annual Meeting of
Shareholders to be held on April 24, 2009. Each Executive is
eligible to participate in the Company’s Annual Incentive Compensation
Plan, 2000 Long-Term Incentive Compensation Plan and Supplemental
Executive Retirement Plan. Each Executive’s base salary, bonus
and participation in the Company’s incentive compensation programs will be
reviewed at least annually by the Compensation Committee.
If an Executive’s employment is
terminated by the Company without Cause, such Executive will receive (a)
Base Compensation payable until the Termination Date and (b) Incentive
Bonus payable in the target amount for the year in which the termination
occurs. In addition, at such Executive’s written request, the
Company shall, pursuant to certain conditions, purchase the Executive’s
principal residence and pay or reimburse the Executive for the cost of
relocation. Also, the Company shall, pursuant to certain
conditions, pay the continuation coverage premium if such Executive and/or
their dependents elect to continue group medical coverage.
If an Executive’s employment is
terminated by the Company for Good Reason, a term used in connection with
a Change in Control, or without Cause at anytime within the 60-day period
preceding or 36-month period following a Change in Control such Executive
will receive (a) an amount equal to three times the sum of their base
compensation and target bonus (as defined in the Agreement), (b)
coverage, for a certain period of time, for the Executive and their
dependents under the Company’s or an Affiliate's group medical plan and
(c) an amount equal to three times the Company’s maximum matching
contribution obligation under the Company’s 401(k) Savings and Investment
Plan. In addition, the vesting shall be accelerated, any
restrictions shall lapse and all performance objectives shall be deemed
satisfied as to any outstanding grants or awards made to the departing
Executive under the 2000 Long-Term Incentive Compensation
Plan. The Executive shall
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