Exhibit 10.16

 

SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is
effective as of September 26, 2018 (“Effective Date”) between Oglethorpe Power
Corporation (An Electric Membership Corporation) (“the Company”) and Elizabeth
Bush Higgins (“Employee”).  This Agreement amends and restates the amended and
restated employment agreement, effective January 1, 2017, between the Company
and the Employee, in its entirety.  The Company desires to employ Employee, and
Employee desires to accept employment with the Company, under the following
terms and conditions.  Therefore, in consideration of Employee’s employment with
the Company and the mutual promises and conditions contained in this Agreement,
the adequacy of which the parties hereby acknowledge, Employee and the Company
agree as follows:

 

1.              Term.  Subject to the provisions for automatic renewal and
termination as provided below, the term of this Agreement shall commence on the
Effective Date and shall terminate at 12:01 a.m. on December 31, 2020.

 

(a)         Automatic Renewal.  This Agreement shall be automatically extended
for an unlimited number of one-year periods, unless on or before December 31,
2018 (for the initial term), or thereafter on or before the December 31st that
is twenty-four (24) months before the expiration of any extended term, either
Party provides to the other written notice of its desire not to automatically
renew this Agreement.

 

2.              Position and Duties.

 

(a)         Employee’s Title; Duties.  Employee shall serve the Company in the
position of Executive Vice President and Chief Financial Officer.  Employee
shall perform all duties of this position, as assigned by the President and
Chief Executive Officer or the Board of Directors of the Company (or other
designee).

 

(b)         Conflict of Interest.  During Employee’s employment, Employee shall
not engage in any business activity which, in the reasonable judgment of the
President and Chief Executive Officer, conflicts with the duties of the Employee
under this Agreement, whether or not such activity is pursued for gain, profit
or other pecuniary advantage.

 

(c)          Participation in Other Boards or Similar Activities. 
Notwithstanding subsection 2(b), Employee may receive compensation for
participation on boards of directors or similar part-time associations, provided
that such participation does not interfere with the performance of Employee’s
employment obligations to the Company and that such participation has been
approved in advance by the Company’s President and Chief Executive Officer.  The
foregoing restrictions also shall not limit or prohibit Employee from engaging
in passive investment and community, charitable and social activities not
interfering with Employee’s performance and obligations under this Agreement.

 

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3.              Compensation and Related Matters.

 

(a)         Base Salary.  For all services rendered by Employee during the term
of this Agreement, the Company shall pay Employee a minimum annual base salary
of $448,250.00, payable in equal semi-monthly installments, less applicable
withholdings.  Employee’s base salary will be subject to review and possible
upward adjustment, subject to the sole discretion of the President and Chief
Executive Officer.

 

(b)         Benefits.  During the term of employment, Employee shall be entitled
to receive and shall be allowed to participate in the Company’s standard
comprehensive benefits package on the terms and conditions as provided in the
policies and practices of the Company, which may be modified from time-to-time
in the sole discretion of the Company’s Board of Directors.  Employee agrees
that no claim will arise against the Company by virtue of its Board of
Directors’ exercise of its rights to modify the Company’s benefits package. 
Employee shall be entitled to a minimum of twenty-eight (28) days of paid time
off, which shall not be reduced during the term of this Agreement (including any
extensions).

 

(c)          Bonus Eligibility; Performance Pay Program.  Employee will be
eligible for consideration for an annual bonus and other incentive compensation
plans generally available to other similarly situated employees, including but
not limited to the OPC Performance Pay Program.  Such a bonus, if awarded, will
be an amount determined by the President and Chief Executive Officer in his sole
discretion.  Employee must be employed by the Company as of December 31st of the
award year in order to receive it; however, in the event Employee is terminated
not for Cause during the last quarter of an award year, Employee will be
eligible to receive a prorated bonus based on attainment of the applicable goals
during Employee’s employment.  Any prorated bonus will be paid in accordance
with the Company’s regular bonus payment schedule.

 

(d)         Business Expenses. Employee is authorized to incur reasonable and
documented business expenses incurred or paid by Employee on behalf of the
Company in performing Employee’s duties.  Such reasonable expenses shall be
promptly paid (or reimbursed as applicable) by the Company upon presentation of
expense statements in accordance with the Company’s policy.

 

4.              Termination and Severance.

 

(a)         Termination for Cause.  The Company may terminate Employee’s
employment with the Company at any time if it believes in good faith that it has
Cause to do so.  “Cause” shall be defined as: (i) Employee’s failure to perform
Employee’s duties which causes or is likely to cause material harm to the
Company or material interference with its operations; (ii) Employee’s
substantial, material failure to comply with the Company’s written directions or
policies; or (iii) Employee’s engaging in conduct that is unlawful or
disreputable, to the possible material detriment of the Company, its affiliates,
its predecessors or successors, or Employee’s own reputation; provided, however,
that with respect to (i) and (ii) above, Employee has been given prompt notice
of the failure and a reasonable opportunity to cure it.  In the event of a
termination for Cause, or in the event of Employee’s death or disability (which
shall be defined as an inability to perform the essential functions of
Employee’s position, with or without

 

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accommodation, consistent with the Company’s obligations under the Americans
With Disabilities Act), all salary and other benefits provided to Employee under
this Agreement shall cease as of the date of termination except for any portion
of Salary that is accrued and owing and any life and/or disability insurance
proceeds that become payable by reason of Employee’s death or disability.

 

(b)         Termination Not for Cause; Resignation with Good Reason.  The
Company may terminate Employee’s employment at any time upon two weeks’ notice
to the Employee.  In the event the Company terminates Employee’s employment not
for Cause or in the event Employee resigns with Good Reason (as defined below),
Employee shall receive as severance pay (in addition to accrued salary and
benefits, including amounts earned during the previous year but unpaid) the
following amounts in lump-sum form payable within thirty (30) days of such
termination without Cause or resignation for Good Reason: all Base Salary (at
the then applicable yearly rate) she would be entitled to receive through the
then applicable term of this Agreement, provided, however, in no event shall
this amount be greater than two (2) years’ Base Salary nor less than one
(1) year’s Base Salary (at the then applicable yearly rate, less applicable
withholdings) (referred to as “Severance Pay”).

 

i)                                        Definition of “Good Reason”.  For
purposes of this Section, “Good Reason” shall be defined as: (a) a demotion or
material reduction or alteration of Employee’s job title or job duties and
responsibilities inconsistent with Employee’s current position; (b) a material
reduction of Employee’s base salary; or (c) a relocation of Employee’s principal
office by more than fifty (50) miles; and further provided that Good Reason may
be found under this subsection 4(b)(i) without regard to whether there has been
a sale or transfer of any or all of the Company’s assets.

 

ii)                                    Medical Allowance and Outplacement
Services.  In addition to the payment provided in subsection 4(b), the Company
will provide (i) one year’s outplacement services to be determined by the
Company and (ii) an amount equal to the Employee’s cost for medical and dental
continuation coverage pursuant to COBRA for one year at the coverage type and
level as is in effect as of the date of the Employee’s termination of
employment.  Such amount pursuant to this subsection 4(b)(ii) will be payable in
lump-sum form, less applicable withholdings, within thirty (30) days of such
termination without Cause or resignation for Good Reason.

 

iii)                                Release.  Employee will only receive
Severance Pay and the additional benefits provided in subsection 4(b)(ii) if
Employee signs a form releasing all claims against the Company which shall be
furnished by the Company no later than 20 days after the effective termination
date (or within 20 days after an arbitrator determines that Employee is entitled
to such payments).  Employee must sign the release within 45 days after receipt
and must not thereafter revoke the release within the 7-day period following
signature.

 

iv)                                 No Duty to Mitigate.   In the event
Employee’s employment is terminated in a manner that gives Employee a right to
receive payment described in subsections 4(b) and 4(b)(ii) (collectively,
“damages”), Employee shall have no obligation to mitigate such damages through
subsequent employment or other earnings.

 

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(c)          Resignation Without Good Reason.  Employee may resign employment at
any time upon sixty (60) days’ notice to the Company.  In such event, if
requested by the Company, Employee shall continue to render services and shall
be paid Employee’s regular salary and receive normal benefits up to the
effective date of termination.  In the event of a resignation without Good
Reason, all salary and other benefits provided to Employee under this Agreement
shall cease as of the date of termination.

 

5.              This Agreement to be Kept Confidential.  As a material condition
to this Agreement, Employee agrees not to disclose the terms of this Agreement,
without the Company’s prior written permission, to anyone other than an
immediate family member or an attorney, accountant or other professional advisor
who agrees in advance to honor this confidentiality requirement.  Employee
further understands that, so long as the Company has reporting obligations under
SEC regulations, the Company is not prohibited from disclosing the terms of this
Agreement to the extent legally required by applicable reporting requirements. 
This Agreement also does not prohibit Employee from disclosing the terms of this
Agreement to the extent necessary to enforce this Agreement or disclosures to
the extent legally required by a subpoena or court order, provided that the
Company is notified in writing of such a disclosure obligation within five
(5) days after it arises.  In the event that Employee violates the
confidentiality obligations of this Section, the Company reserves the right to
cancel this Agreement.

 

6.              Inventions and Confidential Information Agreement.  As a
pre-condition to the effectiveness of this Agreement, Employee has executed or
shall execute a standard Company Inventions and Confidential Information
Agreement.  Employee acknowledges and agrees that any breach by Employee of such
Agreement shall constitute a violation of subsection 4(a)(ii) of this Agreement
for Cause, and the Company shall have all rights and obligations provided for.

 

7.              Arbitration of Disputes.  Final and binding arbitration shall be
the exclusive remedy for all disputes between the Company and Employee regarding
the validity, interpretation or effect of this Agreement.

 

(a)         Procedure.  Any such arbitration shall be in accordance with the
procedures of the American Arbitration Association (“AAA”).  The arbitration
hearing will be held before an experienced employment arbitrator or panel of
arbitrators licensed to practice law in the state of Georgia and selected in
accordance with the rules of the AAA.  The forum for such arbitration shall be
Atlanta, Georgia.

 

(b)         Required Notice.  The party seeking arbitration of a dispute under
this Section must give specific written notice of any claim to the other party
within six (6) months of the date the party seeking arbitration first has
knowledge of the event giving rise to the 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.

 

(c)          Expenses.  The Company shall initially be responsible for payment
of arbitration costs, excluding Employee’s attorneys’ fees; provided, however,
that the arbitrator shall have the authority to fashion an equitable division of
costs if the arbitrator finds that such costs are unduly burdensome with respect
to either party.  All other costs and expenses

 

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associated with the arbitration, including but not limited to attorneys’ fees,
shall be borne by the party incurring the expense, unless applicable law
provides for a different allocation, in which event the arbitrator can order
that costs and expenses be allocated in accordance with applicable law.  In any
arbitration related to the breach of the terms of this Agreement, the arbitrator
shall have the authority to award attorneys’ fees and costs to the prevailing
party.

 

8.              Miscellaneous.

 

(a)         Governing Law.  This Agreement shall be construed under, governed
by, and enforced in accordance with the laws of the State of Georgia, without
regard to its choice of law provisions.  The Agreement shall further be
construed to be exempt from or comply with Section 409A of the Internal Revenue
Code of 1986, as amended (“409A”), and shall be interpreted accordingly.  To the
extent (a) any payments or benefits to which Employee becomes entitled under
this Agreement, or under any agreement or plan referenced herein, in connection
with Employee’s termination of employment constitute deferred compensation
subject to 409A and (b) Employee is deemed at the time of such termination of
employment to be a “specified employee” under 409A, such payments shall not be
made or commence or benefits provided until the earliest of (i) the expiration
of the six (6)-month period measured from the date of Employee’s “separation
from service”; or (ii) the date of Employee’s death following such separation
from service; provided, however, that such deferral shall only be effected to
the extent required to avoid adverse tax treatment to Employee, including
(without limitation) the additional twenty percent (20%) tax for which Employee
would otherwise be liable under Section 409 in the absence of such deferral. 
Upon the expiration of the applicable deferral period, any payments which would
have otherwise been made or benefits provided during that period in the absence
of this subsection shall be paid to Employee or Employee’s beneficiary in one
lump sum (without interest).  Any termination of Employee’s employment is
intended to constitute a “separation from service” as such term is defined in
Treasury Regulation Section 1.409A-1.  The Company may, but is not required to,
amend the Agreement to avoid imposition of any additional tax or income
recognition prior to the actual payment to the Employee under 409A and any
Treasury Regulations and Internal Revenue Service guidance thereunder.  Neither
the Company nor any of its affiliates shall have any liability to any person
with respect to the failure of the Agreement to comply with 409A.

 

(b)         Notice.  Any notice required or desired to be given under this
Agreement by Employee to the Company shall be provided in writing via
hand-delivery, facsimile (with confirmation of delivery), recognized express
courier, or Certified Mail to President and Chief Executive Officer, Oglethorpe
Power Corporation, 2100 East Exchange Place, Tucker, Georgia 30084-5336, fax
number: 770-270-7022.  Any notice required or desired to be given under this
Agreement by Company to the Employee shall be provided in writing via
hand-delivery, recognized express courier, or Certified Mail to Employee at the
address listed below Employee’s signature or at Employee’s Company office. 
Notice shall be deemed given upon the date of delivery.  Addresses or facsimile
numbers may be changed by providing notice in accordance with this Section.

 

(c)          Assignment and Successorship.  The rights and obligations of the
Company under this Agreement shall inure to the benefit of, and shall be binding
upon, the successors and assigns of the Company.  This Agreement shall also be
binding upon and shall inure to the

 

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benefit of Employee and Employee’s estate, but Employee may not assign any
rights or delegate any duties or obligations under this Agreement, except to the
extent permitted under the Company’s benefit plans.

 

(d)         Complete Agreement.  This Agreement shall constitute the entire
agreement between the parties with respect to the subjects addressed in this
Agreement.  Any subsequent alteration or modification to this Agreement must be
made in writing and signed by both parties.

 

(e)          Severability.  Should any provision of this Agreement or portion 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.

 

(f)           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 the Company
represents and warrants that he or she has full requisite authority to do so.

 

(g)         Waiver of Breach.  The waiver by the Company or Employee of a breach
of any provision of this Agreement by the other shall not operate or be
construed as a waiver of any subsequent breach by Employee or the Company,
respectively.

 

(h)         Prior Employment Contract.  This Agreement shall supersede and
replace any and all prior contracts for employment between the Company and
Employee.

 

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So agreed, effective as of the date written on page 1 above.

 

EMPLOYEE:

COMPANY:

 

 

 

 

 

/s/ Elizabeth B. Higgins

 

/s/ Michael L. Smith

Elizabeth B. Higgins

 

Michael L. Smith

 

 

 

Date:

September 27, 2018

Date:

September 27, 2018

 

 

 

Address:

Title:

President and Chief Executive Officer

 

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