Exhibit 10.3

 

FORM OF SUPPLEMENTAL AGREEMENT TO

EMPLOYMENT AGREEMENT FOR VICE PRESIDENTS

 

SUPPLEMENTAL AGREEMENT

 

This SUPPLEMENTAL AGREEMENT No. 1 supplements and amends that certain EMPLOYMENT
AGREEMENT, entered into the         day of               ,          by and
between TEXAS EASTERN PRODUCTS PIPELINE COMPANY, LLC (“TEPPCO”), a Delaware
limited liability company with its principal executive offices in Houston,
Texas, and                      (“Executive”).

 

1.             SECTION 9 OF THE EMPLOYMENT AGREEMENT IS HEREBY DELETED IN ITS
ENTIRETY AND A NEW SECTION 9 SHALL BE SUBSTITUTED IN PLACE OF THE PRIOR, DELETED
SECTION 9 AND THE NEW, SUBSTITUTED SECTION 9 SHALL PROVIDE AS FOLLOWS:

 

(A)           IN THE EVENT THAT FOLLOWING A CHANGE IN CONTROL AS SET FORTH IN
SECTION 9(B), EXECUTIVE’S EMPLOYMENT SHALL BE INVOLUNTARILY TERMINATED OR
EXECUTIVE SHALL (I) HAVE A SIGNIFICANT REDUCTION IN RESPONSIBILITIES OR
REPORTING LEVEL, (II) HAVE A REDUCTION IN BASE OR INCENTIVE COMPENSATION AT
TARGET BY FIVE PERCENT (5%) OR MORE OR (III) BE REQUIRED TO RELOCATE FROM THE
REGULAR ASSIGNED WORK PLACE BY MORE THAN FIFTY (50) ADDITIONAL MILES FROM THE
EXECUTIVE’S CURRENT WORK LOCATION, 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.  IN ORDER TO QUALIFY FOR A SEVERANCE BENEFIT ON ACCOUNT OF BEING REQUIRED
TO RELOCATE BY MORE THAN FIFTY (50) ADDITIONAL MILES FROM EXECUTIVE’S RESIDENCE,
EXECUTIVE MUST PROVIDE NOTICE TO TEPPCO PURSUANT TO SECTION 10 WITHIN THIRTY
(30) DAYS AFTER EXECUTIVE RECEIVES NOTICE PURSUANT TO SECTION 10 THAT HE IS
REQUIRED TO RELOCATE.  IN ADDITION, IF EXECUTIVE IS ENROLLED IN ANY OF TEPPCO’S
MEDICAL AND/OR DENTAL PLAN COVERAGES AS AN ACTIVE EMPLOYEE, TEPPCO SHALL CREDIT
EXECUTIVE WITH A LUMP SUM IN AN AMOUNT THAT WILL PROVIDE AN AFTER-TAX LUMP SUM
(ASSUMING EXECUTIVE IS IN THE HIGHEST MARGINAL INCOME TAX BRACKET) EQUAL TO THE
CURRENT MONTHLY COBRA CONTINUATION COVERAGE COST OF EXECUTIVE’S COVERAGE(S) AT
THE TIME SUCH AMOUNT IS CREDITED (INCLUDING, WHERE APPLICABLE, AN HMO OPTION,
BUT EXCLUDING ANY CAFETERIA PLAN – MEDICAL SPENDING ACCOUNT) FOR TWENTY-FOUR
(24) CONSECUTIVE MONTHS FROM THE TERMINATION OF EXECUTIVE’S EMPLOYMENT WITH
TEPPCO.  TEPPCO WILL PROMPTLY REMIT THE INCOME TAXES DUE ON SUCH AMOUNT DIRECTLY
TO THE APPROPRIATE TAXING AUTHORITY.  SHOULD EXECUTIVE OBTAIN SUBSEQUENT
EMPLOYMENT AND BECOME ELIGIBLE FOR MEDICAL AND/OR DENTAL COVERAGES AVAILABLE TO
EMPLOYEES OF THE NEW EMPLOYER OR OTHERWISE CEASE TO BE COVERED UNDER TEPPCO’S
MEDICAL AND/OR DENTAL PLANS, EXECUTIVE SHALL IMMEDIATELY NOTIFY TEPPCO WHICH
SHALL IMMEDIATELY TERMINATE EXECUTIVE’S COVERAGE(S) IN ITS MEDICAL AND/OR DENTAL
PLANS, AS APPROPRIATE.  EXECUTIVE SHALL HAVE NO FURTHER RIGHT TO ANY AMOUNTS
THAT OTHERWISE WOULD HAVE BEEN APPLIED TO PAY THE MONTHLY COBRA CONTINUATION
COVERAGE COST OF MEDICAL AND/OR DENTAL CONTINUATION COVERAGE PROVIDED
HEREUNDER.  SHOULD EXECUTIVE BE ELIGIBLE FOR RETIREE COVERAGES UNDER THE TEPPCO
MEDICAL AND DENTAL PLANS AT THE TERMINATION OF EMPLOYMENT, TEPPCO AND EXECUTIVE
WILL TAKE THE SAME ACTIONS WITH RESPECT TO THE RETIREE COVERAGES UNDER THE
TEPPCO MEDICAL AND DENTAL PLAN AS WOULD HAVE BEEN TAKEN UNDER THE ABOVE
PROVISIONS HEREOF HAD EXECUTIVE BEEN ENROLLED AS AN ACTIVE EMPLOYEE EXCEPT THAT
THE LUMP SUM TO BE CREDITED TO EXECUTIVE WILL BE DETERMINED WITH REFERENCE TO
THE CURRENT MONTHLY COST OF

 

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EXECUTIVE’S COST OF RETIREE COVERAGE AT THE TIME SUCH LUMP SUM AMOUNT IS
CREDITED.  ALL PAYMENTS UNDER THIS SECTION 9(A) SHALL BE MADE NOT LATER THAN
THIRTY (30) DAYS AFTER THE TERMINATION OF EMPLOYMENT.

 

(B)           FOR THE PURPOSES OF THIS SECTION 9, A “CHANGE IN CONTROL” SHALL BE
DEEMED TO HAVE OCCURRED IF:

 

(I)            ANY PERSON IS OR BECOMES THE BENEFICIAL OWNER, DIRECTLY OR
INDIRECTLY, OF SECURITIES OF TEPPCO REPRESENTING MORE THAN FIFTY PERCENT
(50%) OF THE COMBINED VOTING POWER OF TEPPCO’S THEN OUTSTANDING VOTING
SECURITIES; OR

 

(II)           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

 

(III)          THE DISSOLUTION OR LIQUIDATION OF PARTNERSHIP OR TEPPCO; OR

 

(IV)          ADOPTION BY THE BOARD OF DIRECTORS OF TEPPCO OF A RESOLUTION TO
THE EFFECT THAT ANY PERSON HAS ACQUIRED EFFECTIVE CONTROL OF THE BUSINESS AND
AFFAIRS OF TEPPCO, OR THE PARTNERSHIP.

 

(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, INCLUDING BUT
NOT LIMITED TO DUKE ENERGY FIELD SERVICES, L.P., OR (III) ANY EMPLOYEE BENEFIT
PLAN MAINTAINED BY DUKE OR ANY AFFILIATE OF DUKE.  FOR THE PURPOSE OF THIS
SECTION 9, “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.

 

2.             EXCEPT AS HEREBY AMENDED BY THIS SUPPLEMENTAL AGREEMENT NO. 1,
THE EMPLOYMENT AGREEMENT IS HEREBY RATIFIED AND AFFIRMED IN ALL RESPECTS.

 

IN WITNESS WHEREOF, the parties hereto have executed this SUPPLEMENTAL AGREEMENT
No. 1 this          day of                     , 200    .

 

TEXAS EASTERN PRODUCTS

EXECUTIVE:

PIPELINE COMPANY, LLC

 

 

 

 

 

By:

 

 

 

 

Title:

 

 

Printed Name:

 

 

 

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