Exhibit 10.2
EMPLOYMENT AGREEMENT
     THIS EMPLOYMENT AGREEMENT dated as of June 4, 2010, by and between PIEDMONT
NATURAL GAS COMPANY, INC., a North Carolina corporation (the “Corporation”),
and, KARL W. NEWLIN, (the “Officer”).
W I T N E S S E T H:
     WHEREAS, the Board of Directors of the Corporation has determined that the
continued retention of the services of the Officer on a long-term basis as
described herein is in the best interest of the Corporation in that (a) it
promotes the stability of senior management of the Corporation; (b) it enables
the Corporation to obtain and retain the services of a well-qualified executive
officer with extensive contacts in the natural gas industry; and (c) it secures
the continued services of the Officer notwithstanding any change in control of
the Corporation; and
     WHEREAS, the services of the Officer, his experience and knowledge of the
Corporation’s industry, and his reputation and contacts in the Corporation’s
industry are valuable to the Corporation; and
     WHEREAS, the Corporation considers the establishment and maintenance of a
sound and vital management to be part of its overall corporate strategy and to
be essential to protecting and enhancing the best interests of the Corporation
and its stockholders; and
     WHEREAS, the parties desire to enter into this Agreement in order to
clearly set forth the terms and conditions of the Officer’s employment
relationship with the Corporation; and
     WHEREAS, contemporaneous with this Agreement, the parties have entered into
a Severance Agreement (the “Severance Agreement”), which sets forth certain
rights and obligations of the Officer and certain rights and obligations of the
Corporation in the event of a “Potential Change of Control” (as defined in the
Severance Agreement) or following a “Change in Control” (as defined in the
Severance Agreement). Use of the phrases “Potential Change of Control” and
“Change in Control” herein shall have the meanings ascribed to those phrases in
the Severance Agreement.
     NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereby agree as follows:
     1. Employment. The Corporation hereby employs the Officer and the Officer
hereby accepts such employment, upon the terms and conditions stated herein, as
Senior Vice President — Corporate Planning & Business Development of the
Corporation. The Officer shall render such administrative and management
services to the Corporation as are customarily performed by persons situated in
a similar executive capacity. The Officer shall promote the business of the
Corporation and perform such other duties as shall from time to time be
reasonably prescribed by the Directors or the Chief Executive Officer of the
Corporation. It is understood that the Officer’s continued election as an
officer of the Corporation is dependent upon action by the Board of Directors of
the

 

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Corporation from time to time and that, subject to the provisions of Section 7
of this Agreement, the Officer’s title and/or duties may change from time to
time; provided that following a Change in Control and during the term of the
Severance Agreement any action affecting a change in title and/or duties shall
be subject to the Severance Agreement.
     2. Base Salary. The Corporation shall pay the Officer during the term of
this Agreement as compensation for all services rendered by him to the
Corporation a base salary in such amounts and at such intervals as shall be
commensurate with his duties and responsibilities hereunder. Initially such base
salary shall be at the rate of $310,000 per year. The Officer’s base salary may
be increased from time to time to reflect the duties required of the Officer. In
reviewing the Officer’s base salary, the Board of Directors of the Corporation
shall consider the overall performance of the Corporation, the overall
performance of the Officer and the service of the Officer rendered to the
Corporation and its subsidiaries and changes in the cost of living. The Board of
Directors may also provide for performance or merit increases. Participation by
Officer in any incentive, deferred compensation, stock option, stock purchase,
bonus, pension, life insurance or other employee benefit plans which may be
offered by the Corporation from time to time and participation in any fringe
benefits provided by the Corporation shall not cause a reduction of the base
salary payable to the Officer. The Officer will be entitled to such customary
fringe benefits, vacation and sick leave as are consistent with the normal
practices and established policies of the Corporation.
     3. Participation in Incentive, Retirement and Employee Benefit Plans;
Fringe Benefits. The Officer shall be entitled to participate in any plan
relating to incentive compensation, stock options, stock purchase, pension,
thrift, profit sharing, group life insurance, medical coverage, disability
coverage, education, or other retirement or employee benefits that the
Corporation has adopted, or may from time to time adopt, for the benefit of its
executive employees and for employees generally, subject to the eligibility
rules of such plans.
     The Officer shall also be entitled to participate in any other fringe
benefits which are now or may be or become applicable to the Corporation’s
executive employees, including the payment of reasonable expenses for attending
annual and periodic meetings of trade associations, and any other benefits which
are commensurate with the duties and responsibilities to be performed by the
Officer under this Agreement. Additionally, the Officer shall be entitled to
such vacation and sick leave as shall be established under uniform employee
policies promulgated by the Board of Directors. The Corporation shall reimburse
the Officer for all out-of-pocket reasonable and necessary business expenses
which the Officer may incur in connection with his service on behalf of the
Corporation.
     4. Term. The initial term of employment under this Agreement shall be for a
one-year period commencing May 10, 2010; provided that this Agreement shall
automatically be extended to a full one-year period on each successive day
during the term of this Agreement. The effect hereof shall be that the Agreement
shall at all times remain subject to a term of one year, unless (i) written
notice has been given that the Agreement shall not be extended as provided in
this Section 4, or (ii) the Agreement is terminated pursuant to Section 7. If
written notice from the Corporation or the Officer is delivered to the other
party advising the other party that this Agreement is not to be further
extended, then upon such notice, the Agreement shall terminate on the
anniversary of the date of notice. Provided, further, no extension shall cause
this Agreement to extend beyond the date on which the Officer reaches 65 years
of age. Upon any extension, the base salary of the extended

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agreement shall be the base salary in effect on the effective date of such
extension.
     5. Loyalty; Noncompetition
          (a) The Officer shall devote his best efforts to the performance of
his duties and responsibilities under this Agreement.
          (b) During the term of this Agreement, or any renewals hereof, the
Officer agrees he will not, own, manage, operate, join, control or participate
in the management, operation or control of, or be employed by or connected in
any manner with any business which competes with the Corporation or any of its
subsidiary corporations without the prior written consent of the Corporation.
Notwithstanding the foregoing, the Officer shall be free, without such consent,
to purchase or hold as an investment or otherwise, up to five percent of the
outstanding stock or other securities of any corporation which has its
securities publicly traded on any recognized securities exchange or in any
established over-the-counter market.
          The Officer shall hold in confidence all knowledge or information of a
confidential nature with respect to the business of the Corporation or any
subsidiary of the Corporation received by him during the term of this Agreement
and will not disclose or make use of such information without the prior written
consent of the Corporation.
          The Officer acknowledges that it would not be possible to ascertain
the amount of monetary damages in the event of a breach by the Officer under the
provisions of this Section 5 and agrees that, in the event of a breach of this
Section, injunctive relief enforcing the terms of this Section is an appropriate
remedy.
     6. Standards. The Officer shall perform his duties and responsibilities
under this Agreement in accordance with such reasonable standards expected of
employees with comparable positions in comparable organizations and as may be
established from time to time by the Board of Directors. The Corporation will
provide the Officer with the working facilities and staff customary for similar
executives and necessary for him to perform his duties.
     7. Termination and Termination Pay.
          (a) Change of Control. Following a Change in Control and during the
term of the Severance Agreement, this Agreement shall become null and void
except with respect to any rights or obligations accruing prior to the Change in
Control and the rights and obligations of the Officer and the Company, including
any termination of the Officer, shall be subject to the provisions of the
Severance Agreement.
          (b) By Death. The Officer’s employment under this Agreement shall be
terminated upon the death of the Officer during the term of this Agreement, in
which event the Officer’s estate shall be entitled to receive all compensation
due the Officer through the last day of the calendar month in which his death
shall have occurred.
          (c) By Total Disability. Except for that period of time following a
Change in

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Control and during the term of the Severance Agreement, the Officer’s employment
under this Agreement shall be terminated upon the total permanent disability of
the Officer during the term of this Agreement, in which event the Officer shall
receive all compensation, including bonuses, through the date of determination
of such disability and for a period of 90 days thereafter. For purposes of this
Section, the Officer shall be deemed to have suffered permanent disability upon
the determination of such status by the United States Social Security
Administration or a certification to such effect by the Officer’s regular
physician.
          (d) By Officer. Except as provided in Section 4 of the Severance
Agreement, the Officer’s employment under this Agreement may be terminated at
any time by the Officer upon 60 days’ written notice to the Board of Directors.
Upon such termination, the Officer shall be entitled to receive all
compensation, including bonuses, through the effective date of such termination.
          (e) By Corporation. Except for that period of time following a Change
of Control and during the term of the Severance Agreement, the Board of
Directors may terminate the Officer’s employment at any time, but any such
termination by the Board of Directors, other than termination for cause, shall
not prejudice the Officer’s right to continue to receive payment of all
compensation and the continuance of benefits for a period of 12 months from the
effective date of termination or until such time as the Officer reaches 65 years
of age (whichever is less). The Officer shall have no right to receive
compensation or other benefits (other than vested benefits) for any period after
“termination for cause.” Termination for cause shall mean termination because of
the Officer’s personal dishonesty, incompetence, willful material misconduct,
breach of fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful material violation of a law, rule or regulation
(other than traffic or traffic-related violations or similar offenses) or final
cease-and-desist order, or material breach of any provisions of this Agreement.
          (f) Costs and Expenses. In the event any dispute shall arise between
the Officer and the Corporation as to the terms or interpretation of this
Agreement, including this Section 7, whether instituted by formal legal
proceedings or otherwise, including any action taken by Officer to enforce the
terms of this Section 7 or in defending against any action taken by the
Corporation, the Corporation shall reimburse the Officer for all costs and
expenses, proceedings or actions in the event the Officer prevails in any such
action.
     8. Successors and Assigns.
          (a) This Employment Agreement shall inure to the benefit of and be
binding upon any corporate or other successor of the Corporation that shall
acquire, directly or indirectly, by conversion, merger, consolidation, purchase
or otherwise, all or substantially all of the assets of the Corporation.
          (b) Since the Corporation is contracting for the unique and personal
skills of the Officer, the Officer shall be precluded from assigning or
delegating his rights or duties hereunder without first obtaining the written
consent of the Corporation.
     9. Code Section 409A.

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     (a) Delay of Certain Payments. Notwithstanding anything in this Agreement
to the contrary, if any amount or benefit that the Company determines would
constitute non-exempt “deferred compensation” for purposes of Section 409A of
the Internal Revenue Code of 1986 (the “Code”) would otherwise be payable or
distributable under this Agreement by reason of the Officer’s termination of
employment, then to the extent necessary to comply with Code Section 409A:
     (i) if the payment or distribution is payable in a lump sum, the Officer’s
right to receive payment or distribution of such non-exempt deferred
compensation will be delayed until the earlier of the Officer’s death or the
seventh month following the Officer’s termination of employment; and
     (ii) if the payment or distribution is payable over time, the amount of
such non-exempt deferred compensation that would otherwise be payable during the
six (6) month period immediately following the Officer’s termination of
employment will be accumulated and the Officer’s right to receive payment or
distribution of such accumulated amount will be delayed until the earlier of the
Officer’s death or the seventh month following the Officer’s termination of
employment and paid on the earlier of such dates, without interest, and the
normal payment or distribution schedule for any remaining payments or
distributions will commence.
     (b) Expense Reimbursements. To the extent any expense reimbursement or
in-kind benefit to which the Officer is or may be entitled to receive under this
Agreement constitutes non-exempt “deferred compensation” for purposes of
Section 409A of the Code, then (i) such reimbursement shall be paid to the
Officer as soon as administratively practicable after the Officer submits a
valid claim for reimbursement, but in no event later than the last day of the
Officer’s taxable year following the taxable year in which the expense was
incurred, (ii) the amount of expenses eligible for reimbursement, or in-kind
benefits provided, during any taxable year of the Officer shall not affect the
expenses eligible for reimbursement, or in-kind benefits to be provided, in any
other taxable year of the Officer, and (iii) the Officer’s right to
reimbursement or in-kind benefits shall not be subject to liquidation or
exchange for another benefit.
     10. Modification; Waiver; Amendments. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing, signed by the Officer and on behalf of the Corporation by
such officer as may be specifically designated by the Board of Directors. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. No amendments or additions to this Agreement shall be binding unless in
writing and signed by both parties, except as herein otherwise provided. Any
modification, waiver or amendment shall be made consistent with the terms and
conditions of the Severance Agreement.
     11. Applicable Law. This Agreement shall be governed in all respects
whether as to validity, construction, capacity, performance or otherwise, by the
laws of North Carolina.

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     12. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first hereinabove written.

                          CORPORATION:
 
                ATTEST:       Piedmont Natural Gas Company, Inc.
 
               
/s/ Jane Lewis-Raymond
 
               
Secretary
               
 
      By:   /s/ Thomas E. Skains
 
Thomas E. Skains    
 
          President and Chief Executive Officer    
 
                        OFFICER:
 
               
 
      By:   /s/ Karl W. Newlin
 
   
 
          Karl W. Newlin    

                 
 
      Address:   4625 Piedmont Row    
 
          Unit 408    
 
          Charlotte, NC 28211    

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