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EMPLOYMENT AGREEMENT
AGREEMENT, by and between Consolidated Edison, Inc., a New York
corporation ("CEI"), and Eugene R. McGrath (the "Executive"), dated as of
September 1, 2000.
WHEREAS, the Executive is currently serving as Chairman of the Board of
Directors of CEI (the "Board"), President and Chief Executive Officer of CEI,
and as Chairman of the Board of Trustees and Chief Executive Officer of its
subsidiary, Consolidated Edison Company of New York, Inc. ("CECONY"), a New York
corporation, such corporations hereinafter collectively referred to as the
"Company";
WHEREAS, the Executive is willing to commit himself to be employed by
the Company on the terms and conditions herein set forth; and
WHEREAS, the parties desire to enter into this Agreement setting forth
the terms and conditions for the employment relationship of the Executive with
the Company during the Employment Period (as hereinafter defined).
NOW, THEREFORE, IN CONSIDERATION of the mutual premises, covenants and
agreements set forth below, it is hereby agreed as follows:
1. General.
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(a) Employment. The Company agrees to employ the Executive, and the
Executive agrees to be employed by the Company, in accordance with the terms and
provisions of this Agreement during the Employment Period.
(b) Term. The term of the Executive's employment under this Agreement
(the "Initial Employment Period") shall commence as of the date hereof (the
"Effective Date") and shall continue until August 31, 2005. If the Executive
elects to retire prior to such date, the Initial Employment Period shall end on
the date of retirement. The Initial Employment Period shall be automatically
extended without further action of either party for additional one year periods,
unless written notice of either party's intention not to extend has been given
to the other party at least six months prior to the expiration of the Initial
Employment Period or any such one year extension; provided that the maximum
number of such one year extensions shall not exceed two and the second extension
shall expire on February 28, 2007. Collectively, the Initial Employment Period
and each such extension (if any) are herein referred to the "Employment Period".
2. Position, Duties and Powers of the Executive.
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(a) Position. During the Employment Period, the Executive shall serve
as Chairman of the Board and Chief Executive Officer of CEI and as Chairman of
the Board and Chief Executive Officer of CECONY.
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(b) Reporting, Duties and Powers. During the Employment Period, the
Executive shall report directly to the Board of Directors of CEI (the "Board").
As Chief Executive Officer of CEI, he shall be the highest ranking officer of
CEI with plenary powers of the supervision and direction of the business and
affairs of CEI and its subsidiaries and affiliates.
(c) End of Employment Period. Upon his Date of Termination, as
hereinafter defined, whether before or at the end of the Employment Period (the
"Retirement Date"), the Executive will retire from all offices held with the
Company and shall be entitled to a pension unreduced for early retirement and
calculated in accordance with Section 3(f) hereof (hereinafter referred to as
"Retirement").
(d) Board Membership. The Executive shall continue as a member of, and
as Chairman of, the Board on the first day of the Employment Period through the
end of his current term ending with the Annual Meeting of Stockholders in 2001.
Thereafter, the Board shall nominate the Executive for re-election to the Board
throughout the Employment Period in accordance with its customary practice for
nominations to the Board, and shall elect him Chairman of the Board if elected
as a director by the shareholders. At the end of the Employment Period, the
Executive may continue as a member of the Board and be considered for nomination
for reelection to the Board thereafter, in accordance with the Board's customary
practice for nominations and its Retirement Policy.
(e) Other Positions. In addition to serving as Chairman and Chief
Executive Officer of CEI, the Executive is also presently serving as President
of CEI and as Chairman of the Board and Chief Executive Officer of CECONY. The
Executive agrees to serve, if elected, at no additional compensation in the
position of officer or director of any direct or indirect subsidiary or
affiliate of CEI.
(f) Attention. During the Employment Period, and excluding any periods
of vacation and sick leave to which the Executive is entitled, the Executive
agrees to devote full attention and time during normal business hours to the
business and affairs of the Company and to use his reasonable best efforts to
perform such responsibilities in a professional manner. It shall not be a
violation of this Agreement for the Executive to (i) serve on corporate, civic
or charitable boards or committees, (ii) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (iii) manage personal
investments, so long as such activities do not significantly interfere with the
performance of the Executive's responsibilities as an officer and director of
the Company in accordance with this Agreement and are in compliance with the
Company's Code of Conduct.
(g) Location. During the Employment Period, the Company's headquarters
shall be located in New York, New York, and the Executive shall be employed at
such headquarters, except for reasonably required travel on the Company's
business.
3. Compensation.
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Except as modified by this Agreement, the Executive's compensation
shall be provided in accordance with the Company's standard compensation and
payroll practices as in effect from time to time. The aggregate of Base Salary,
Annual Incentive Compensation and Long-Term Incentive Compensation in paragraphs
(a), (b) and (c) below shall be determined by the Executive Personnel and
Pension Committee of the Board (the "Compensation Committee") based upon
competitive practices for chief executive officers of companies of comparable
size and standing in the same industry.
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(a) Base Salary. The annual rate of base salary payable to the
Executive during the Employment Period (the "Annual Base Salary") shall be his
annual rate of base salary approved by the Board, effective as of September 1,
2000. During the Employment Period, the Annual Base Salary shall be reviewed by
the Compensation Committee for possible increase at least annually. Any increase
in Annual Base Salary shall be approved by the Board. Annual Base Salary shall
not be reduced after any such increase, and the term "Annual Base Salary" shall
thereafter refer to the Annual Base Salary as so increased.
(b) Annual Incentive Compensation. The Board has established and
intends to continue an annual incentive compensation plan for the benefit of the
officers and other key employees of the Company, including the Executive, based
on competitive practices for companies of comparable size and standing in the
same industry. Any performance objectives for the Executive in respect of such
incentive compensation plan will be determined by the Compensation Committee in
accordance with past practices. Currently, the Executive participates in
CECONY's annual incentive plan, the Executive Incentive Plan. In the event that
the Executive's employment ends for any reason, all mandatorily deferred amounts
under such Plan shall be immediately vested and nonforfeitable and paid to him
in accordance with his applicable payment election then in effect.
(c) Long-Term Incentive Compensation. CEI currently has, and the Board
intends to continue, a long-term incentive compensation program, currently
consisting of a stock option plan, for the benefit of the officers and other key
employees of the Company, including the Executive, based on competitive
practices for companies of comparable size and standing in the same industry. In
addition to stock options, such program may in the future provide for stock
appreciation rights, restricted stock or stock units, performance stock or units
and/or other types of long-term incentive awards. The Board, subject to any
required shareholder approval, will determine the Company's long term incentive
compensation program, and the type and amount of equity and any other long-term
incentive grants provided under the program will be determined by the
Compensation Committee from time to time, provided that any such award shall
provide by its terms that it will either (i) vest and/or become exercisable upon
the Executive's retirement and remain exercisable until the third anniversary of
the Executive's date of retirement or (ii) remain outstanding notwithstanding
the Executive's termination of employment and continue to vest and/or become
exercisable, as though the Executive's employment had not terminated, until the
later of (x) the third anniversary of the Executive's date of retirement and (y)
90 days from the date that a stock option or other award (or portion thereof)
first becomes exercisable, but in no event beyond the original term thereof.
(d) Stock Award. In consideration of the commitment he will assume
during the Employment Period, the Executive shall be granted an award (the
"Restricted Stock Unit Award") of restricted stock units ("Units") with respect
to 200,000 shares of the Common Shares ($.10 par value) of CEI ("Stock"),
effective as of the Effective Date, in accordance with the following terms and
conditions:
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(i) Each Unit shall represent the right, upon vesting, to receive one
share of Stock. The shares of Stock issuable in respect of the vesting of
Units shall be shares purchased by the Company or its agent on the open
market. In the event any of the shares issuable in respect of Units
pertaining to the Restricted Stock Unit Award shall be forfeited, CEI may
re-apply such shares for its corporate purposes in its discretion.
(ii) The Executive's Units shall vest in accordance with the following
schedule, provided that the Executive has remained continuously employed by
the Company, or its successor, during the Employment Period through the
dates indicated below:
Date Percentage of Then Outstanding NonVested Units
(which shall include any dividend equivalents
credited thereon)
08/31/2003 50%
08/31/2004 50%
08/31/2005 100%
If, during the Employment Period, the Company terminates the Executive's
employment for Cause or the Executive terminates his employment without Good
Reason, including Retirement prior to September 1, 2003, the Executive shall
forfeit all right to Units that are not then vested as of the Date of
Termination. If, during the Employment Period, the Company shall terminate the
Executive's employment without Cause or the Executive terminates his
employment for Good Reason, or the Executive's employment terminates by reason
of death or Disability, the Executive's Units shall fully and immediately vest
as of the Date of Termination.
(iii) Once Units shall vest, CEI shall promptly issue to the Executive
a certificate for the shares of Stock represented thereby without any
legend or restriction (other than may be required by law). Prior to
vesting, Units shall represent an unfunded promise to deliver Stock upon
vesting thereof.
(iv) Units may not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of, except by will or the laws of
descent and distribution. Any attempted sale, assignment, transfer, pledge,
hypothecation or disposition in contravention of the foregoing shall be
null and void and of no effect.
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(v) Except as otherwise provided herein, the Executive shall have no
rights of a stockholder with respect to the shares of Stock represented by
Units, including no right to vote the shares, to receive dividends and
other distributions thereon and to participate in any change in
capitalization of CEI. In the event of any change in capitalization
resulting in the issuance of additional shares to the CEI shareholders, the
shares of Stock represented by the Executive's Units shall be equitably
adjusted as determined in good faith by the Compensation Committee. Prior
to the delivery of shares of Stock upon vesting of Units, at the time of
each distribution of any regular cash dividend paid by CEI in respect of
Stock, the Executive shall be entitled to receive a cash payment from the
Company equal to the aggregate regular cash dividend payment that would
have been made in respect of the shares of Stock subject to Units that have
not yet vested, as if the shares subject to such Units had actually been
delivered to the Executive, provided, that no such payment in respect of
Units shall be made if, prior to the time such payment is due, the
Executive's rights with respect to such Units have previously terminated
under this Agreement. In the event of a dividend payable in shares of Stock
instead of cash, the Executive shall be entitled to receive on the
distribution date additional Units in such number that would have been
received in respect of the shares of Stock represented by Units that have
not yet vested, as if the shares represented by such Units had actually
been delivered to the Executive. Prior to the commencement of a calendar
year, beginning with calendar year 2002, the Executive shall have the right
to elect to defer the receipt of any dividend equivalent cash payments that
may become payable to the Executive in the calendar year and to have such
cash payments invested under the Company's Deferred Income Plan according
to the terms and conditions of the Deferred Income Plan.
(vi) Unless the shares of Stock represented by his Units that are to be
issued to the Executive have been registered pursuant to a registration
statement under the Securities Act of 1933, prior to receiving such shares
the Executive shall represent in writing to CEI that such shares are being
acquired for investment purposes only and not with a view towards the
further sale or distribution thereof and shall supply CEI with such other
documentation as may be required by CEI, unless in the opinion of counsel
to the CEI such representation, agreement or documentation is not necessary
to comply with the Securities Act of 1933 and the rules and regulations
thereunder.
(vii) CEI shall not be required to deliver any shares subject to this
Restricted Stock Unit Award until the shares have been listed on each
securities exchange on which shares of Stock are listed or until there has
been qualification under or compliance with such state and federal laws,
rules or regulations that CEI may deem applicable. CEI will use its best
efforts to obtain such listing, qualification and compliance.
(viii) The Compensation Committee may make such provisions and take
such steps as it may deem necessary or appropriate for the withholding of
any taxes that the Company is required by law or regulation of any
governmental authority, whether federal, state or local, domestic or
foreign, to withhold in connection with the Restricted Stock Unit Award,
including, but not limited to (1) withholding delivery of the certificate
for shares of Stock until the Executive reimburses the Company for the
amount it is required to withhold with respect to such taxes, (2) the
canceling of any number of shares of Stock issuable to the Executive in an
amount necessary to reimburse the Company for the amount it is required to
so withhold, or (3) withholding the amount due from the Executive's other
compensation.
(ix) The Executive may elect to defer all or a portion of the receipt
of Stock in respect of Units according to terms and conditions established
by the Compensation Committee for such deferrals.
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(e) Employee Benefit Programs. During the Employment Period, (i) the
Executive shall be eligible to participate in all savings and retirement plans,
practices, policies and programs to the same extent as other senior executives
of the Company and (ii) the Executive and/or the Executive's family, as the case
may be, shall be eligible for participation in and shall receive all benefits
under welfare benefit plans, practices, policies and programs provided by the
Company, other than severance plans, practices, policies and programs but
including, without limitation, medical, prescription, dental, disability, salary
continuance, employee life insurance, group life insurance, accidental death and
travel accident insurance plans and programs, and, upon retirement, all
applicable retirement benefit plans to the same extent and subject to the same
terms, conditions, cost-sharing requirements and the like, as other senior
executives of the Company, as such plans may be amended from time to time, and
as supplemented hereby. During the Employment Period, no benefit coverage
available to the Executive and/or to his family under any such plan, practice,
policy or program shall be materially reduced without the prior written consent
of the Executive, unless a substantially equivalent reduction is applied to the
other senior executives of the Company, provided, however, that the exception
for across-the-board reductions shall not apply following a Change in Control
(as defined below) and, further provided, that the Executive shall be provided
during the Employment Period with life insurance providing for a death benefit,
as a multiple of Annual Base Salary, at least equal to the insurance coverage
provided by the Company to the Executive immediately prior to the date hereof,
including the cash value feature. To the extent not inconsistent with the
provisions of this Agreement, the provisions of Section 3(d) of the CECONY
Employment Agreement defined below are incorporated herein by reference.
(f) Supplemental Retirement Benefits. During the Employment Period, the
Executive shall participate in CECONY's Retirement Plan for Management
Employees, and also in CECONY's Supplemental Retirement Income Plan and such
other supplemental executive retirement plans as may be adopted and amended by
the Company from time to time ("SERPs"), such that the aggregate value of the
retirement benefits that he and his beneficiaries will receive at the end of the
Employment Period under all pension benefit plans of the Company and its
affiliates (whether qualified or not) will not be less than the benefits he
would have received had he continued, through the end of the Employment Period,
to participate in such plans, as in effect immediately before the date hereof
and giving effect to the benefit calculation, deferral, service credits and
payment terms set forth in Section 3(c) of the employment agreement dated May
22, 1990, as amended by Amendment Nos. 1-11, between CECONY and the Executive
(the "CECONY Employment Agreement"), the terms of which Section 3(c) are
incorporated herein by reference. It is agreed that the Restricted Stock Unit
Award and any dividends or other distributions in respect of the Restricted
Stock Unit Award shall not be included in SERP or other any pension calculation.
(g) Expenses. The Executive is authorized to incur reasonable expenses
in carrying out his duties and responsibilities under this Agreement. The
Company shall promptly reimburse him for all such expenses in accordance with
the policies of the Company in effect from time to time for reimbursement of
expenses for senior executives, and subject to documentation provided by the
Executive in accordance with such Company policies.
(h) Fringe Benefits. During the Employment Period, the Executive shall
be furnished with such fringe benefits and perquisites as are customary for the
Chairman and Chief Executive Officer of a corporation of the size and nature of,
and in the same industry as, the Company and shall participate in all fringe
benefits and perquisites available to senior executives of the Company on terms
and conditions that are commensurate with his positions and responsibilities at
the Company.
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(i) Vacation. During the Employment Period, the Executive shall be
entitled to paid vacation in accordance with Company policy for its most senior
executives as in effect from time to time, but not less than five weeks'
vacation per annum.
(j) Deferred Compensation. The Executive will retain all of his rights
in any compensation deferred prior to the date hereof in accordance with Section
4 of the CECONY Employment Agreement, including earnings thereon, and CECONY's
Executive Incentive Plan and Deferred Income Plan, including earnings thereon,
and following the date hereof the obligations of CECONY to pay such deferred
compensation at the times and in the manner specified in such Agreement and
Plans will continue; provided that in lieu of the payment and valuation
provisions in Section 4 of the CECONY Employment Agreement, the Executive may
elect to have such deferred compensation invested and paid under CECONY's
Deferred Income Plan. Section 4 of the CECONY Employment Agreement is
incorporated herein by reference, and CEI will cause CECONY to fulfill all its
obligations under such Section 4 in accordance with their terms.
4. Termination of Employment.
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(a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period. If the
Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice in accordance with
Section 4(b) of this Agreement of its intention to terminate the Executive's
employment. In such event, the Executive's employment with the Company shall
terminate effective on the 30th day after receipt of such notice by the
Executive (the "Disability Effective Date"), provided that, within the 30 days
after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" means that (i) the Executive has been unable, for the period, if
any, specified in the Company's disability plan for senior executives, but not
less than a period of 180 consecutive days, to perform the Executive's duties
under this Agreement and (ii) a physician selected by the Company or its
insurers, and acceptable to the Executive or the Executive's legal
representative, has determined that the Executive is disabled within the meaning
of the applicable disability plan for senior executives.
(b) By the Company.
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(i) The Company may terminate the Executive's employment during the
Employment Period for Cause or without Cause. For purposes of this
Agreement, "Cause" shall mean (A) willful and continued failure by the
Executive to substantially perform his duties under this Agreement or (B)
the conviction of the Executive of a felony or the entering by the
Executive of a plea of nolo contendere to a felony, in either case having a
significant adverse effect on the business and affairs of the Company. No
act or failure to act on the part of the Executive shall be considered
"willful" unless it is done, or omitted to be done, by the Executive in bad
faith or without reasonable belief that the Executive's action or omission
was in the best interests of the Company. Any act or failure to act that is
based upon authority given pursuant to a resolution duly adopted by the
Board, or the advice of counsel for the Company, shall be conclusively
presumed to be done, or omitted to be done, by the Executive in good faith
and in the best interests of the Company. The Company expressly
acknowledges that Cause will not exist merely because of a failure of the
Company or its affiliates to meet budgeted results.
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(ii) A termination of the Executive's employment for Cause shall be
effected in accordance with the following procedures. The Company shall
give the Executive written notice ("Notice of Termination for Cause") of
its intention to terminate the Executive's employment for Cause, setting
forth in reasonable detail the specific conduct of the Executive that it
considers to constitute Cause and the specific provision(s) of this
Agreement on which it relies. Such notice shall be given no later than 60
days after the act or failure (or the last in a series of acts or failures)
that the Company alleges to constitute Cause. The Executive shall have 30
days after receiving the Notice of Termination for Cause in which to cure
such act or failure, to the extent such cure is possible. If the Executive
fails to cure such act or failure to the reasonable satisfaction of the
Board, the Company shall give the Executive a second written notice stating
the date, time and place of a special meeting of the Board called and held
specifically for the purpose of considering the Executive's termination for
Cause, which special meeting shall take place not less than ten and not
more than twenty business days after the Executive receives notice thereof.
The Executive shall be given an opportunity, together with counsel, to be
heard at the special meeting of the Board. The Executive's termination for
Cause shall be effective when and if a resolution is duly adopted at such
special meeting by the affirmative vote of a majority of the Board stating
that in the good faith opinion of the Board, the Executive is guilty of the
conduct described in the Notice of Termination for Cause and that such
conduct constitutes Cause under this Agreement.
(c) Good Reason.
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(i) The Executive may terminate his employment for Good Reason or
without Good Reason. For purpose of this Agreement, "Good Reason" shall
mean:
(A) any adverse change in the Executive's titles, authority, duties,
responsibilities and reporting lines as specified in Sections 2(a) and 2(b)
of this Agreement, or the assignment to the Executive of any duties or
responsibilities inconsistent in any respect with those customarily
associated with the positions to be held by the Executive pursuant to this
Agreement;
(B) the failure by the Board to elect the Executive to the positions of
Chairman and Chief Executive Officer of CEI and of CECONY during the
Employment Period;
(C) the failure by the Board to nominate the Executive for reelection
to the Board at any annual meeting of CEI's shareholders during the
Employment Period at which the Executive's term as a director is scheduled
to expire;
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(D) the appointment, without the Executive's prior written consent, at
any time during the Employment Period of any person other than the
Executive to (x) the positions specified in Sections 2(a) and 2(e) or (y)
any other position or title conferring similar status or authority;
(E) any reduction in the Executive's salary, target annual bonus,
target long-term incentive or Retirement benefit;
(F) any requirement by the Company that the Executive's services be
rendered primarily at a location or locations other than that provided for
in Section 2(g);
(G) any purported termination of the Executive's employment by the
Company for a reason or in a manner not expressly permitted by this
Agreement;
(H) any failure by CEI to comply with Section 10(c) of this Agreement;
or
(I) any other material breach of this Agreement by the Company that
either is not taken in good faith or, even if taken in good faith, is not
remedied by the Company promptly after receipt of notice thereof from the
Executive.
Following a Change in Control that is recommended to the Board by the Executive,
Sections 4(c)(i) (A), (B), (C) and (D) shall not permit the Executive to
terminate his employment for Good Reason so long as during the remainder of the
Employment Period, the Board nominates the Executive as a director of the
surviving parent corporation, his office with the surviving parent corporation
is Chairman, Vice Chairman or President, and his executive position with the
surviving parent corporation is Chief Executive Officer or Chief Operating
Officer; and the provisions of Sections 2(a), (b) and (d) shall be deemed
modified to reflect such offices, positions and duties as are so held by the
Executive.
Following a Change in Control, the Executive's determination that an act or
failure to act constitutes Good Reason shall be conclusively presumed to be
valid unless such determination is decided to be unreasonable by an arbitrator
pursuant to Section 9.
(ii) A termination of employment by the Executive for Good Reason shall
be effectuated by giving the Company written notice ("Notice of Termination
for Good Reason") of the termination, setting forth in reasonable detail
the specific acts or omissions of the Company that constitute Good Reason
and the specific provision(s) of this Agreement on which the Executive
relies. Unless the Board determines otherwise, a Notice of Termination for
Good Reason by the Executive must be made within 60 days after the
Executive first has actual knowledge of the act or omission (or the last in
a series of acts or omissions) that the Executive alleges to constitute
Good Reason, and the Company shall have 30 days from the receipt of such
Notice of Termination for Good Reason to cure the conduct cited therein. A
termination of employment by the Executive for Good Reason shall be
effective on the final day of such 30-day cure period unless prior to such
time the Company has cured the specific conduct asserted by the Executive
to constitute Good Reason to the reasonable satisfaction of the Executive
(unless the notice sets forth a later date (which date shall in no event be
later than 30 days after the notice is given) as of which such termination
shall be effective).
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(iii) A termination of the Executive's employment by the Executive
without Good Reason shall be effected by giving the Company written notice
specifying the effective date of termination.
(d) Date of Termination. The "Date of Termination" means the date of
the Executive's death, the Disability Effective Date, the date on which the
termination of the Executive's employment by the Company for Cause or without
Cause or by the Executive for Good Reason is effective, or the effective date
specified in a notice of a termination of employment without Good Reason from
the Executive to the Company, or Retirement, as the case may be.
5. Obligations of the Company upon Termination.
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(a) Good Reason; Other Than for Cause, Death or Disability. If, during
the Employment Period, the Company shall terminate the Executive's employment
other than for Cause, death or Disability, or the Executive shall terminate his
employment for Good Reason:
(i) the Company shall pay to the Executive in a lump sum in cash,
within 15 days after the Date of Termination, the aggregate of the amounts
set forth in clauses A, B and C below:
A. The sum of:
(1) the Executive's Annual Base Salary through the Date of
Termination;
(2) the product of (x) the "target" annual bonus as in effect
under the Company's annual incentive plan for the calendar
year in which occurs the Date of Termination or, if no such
target annual bonus has been established for the Executive
for that year, for the immediately preceding calendar year
(the "Target Bonus") and (y) a fraction, the numerator of
which is the number of days in the current calendar year
through the Date of Termination, and the denominator of
which is 365; and
(3) any accrued vacation pay;
in each case to the extent not theretofore paid (the sum of
the amounts described in clauses (1), (2) and (3) shall be
hereinafter referred to as the "Accrued Obligations");
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B. the amount equal to the product of (1) two and (2) the sum of (x)
the Executive's Annual Base Salary and (y) the Target Bonus; and
C. an amount equal to the excess of (1) the actuarial equivalent of
the benefit under the Company's applicable qualified defined
benefit retirement plan in which the Executive is participating
immediately prior to his Date of Termination (the "Retirement
Plan") (utilizing the rate used to determine lump sums and, to
the extent applicable, other actuarial assumptions no less
favorable to the Executive than those in effect under the
Retirement Plan immediately prior to the date of this Agreement),
any nonqualified defined benefit SERPs in which the Executive
participates and, to the extent applicable, any other defined
benefit retirement arrangement between the Executive and the
Company ("Other Pension Benefits") which the Executive would
receive if the Executive's employment continued for two
additional years beyond the Date of Termination, assuming for
this purpose that all accrued benefits are fully vested, and,
assuming that the Executive's compensation for such deemed
additional period was the Executive's Annual Base Salary as in
effect immediately prior to the Date of Termination and assuming
a bonus in each year during such deemed additional period equal
to the Target Bonus, over (2) the actuarial equivalent of the
Executive's actual benefit (paid or payable), if any, under the
Retirement Plan, the nonqualified defined benefit SERPs and Other
Pension Benefits as of the Date of Termination (utilizing the
rate used to determine lump sums and, to the extent applicable,
other actuarial assumptions no less favorable to the Executive
than those in effect under the Retirement Plan immediately prior
to the date of this Agreement).
(ii) the Restricted Stock Unit Award shall vest in accordance with
Section 3(d)(ii) above;
(iii) any stock awards (other than the Restricted Stock Unit Award),
stock options, stock appreciation rights or other equity-based awards that
were outstanding immediately prior to the Date of Termination ("Prior
Equity Awards") shall vest as of the Date of Termination and shall remain
outstanding and shall be exercisable as though the Executive's employment
had not terminated until the later of (x) the third anniversary of the Date
of Termination and (y) 90 days from the date that the Prior Equity Award
(or portion thereof) first becomes exercisable, but in no event beyond the
end of the original term thereof, and the Company shall take all such
actions as may be necessary to effectuate the foregoing;
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(iv) for two years after the Executive's Date of Termination or such
longer period as may be provided by the terms of the appropriate plan,
program, practice or policy, the Company shall continue benefits to the
Executive and/or the Executive's family at least equal to those which would
have been provided to them in accordance with the medical, prescription,
dental and life insurance plans, programs, practices and policies described
in Section 3(e) of this Agreement if the Executive's employment had not
been terminated or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies and their families, provided
however, that if the Executive becomes re-employed with another employer
and is eligible to receive medical, prescription or dental benefits under
another employer-provided plan, the medical, prescription and dental
benefits described herein shall be secondary to those provided under such
other plan during such applicable period of eligibility. The Executive's
right to continued eligibility under the Company's medical, prescription
and dental plans under Section 4980B of the Internal Revenue Code of 1986,
as amended (the "Code"), shall commence at the end of the period described
hereinabove in this clause (iv). For purposes of determining eligibility
(but not time of commencement of benefits) of the Executive for retiree
benefits pursuant to such plans, practices, programs and policies, the
Executive shall be considered to have remained employed until two years
after the Date of Termination and to have retired on the last day of such
period;
(v) any compensation previously deferred (other than pursuant to a
tax-qualified plan) by or on behalf of the Executive (together with any
accrued interest or earnings thereon), whether or not then vested, shall
become vested on the Date of Termination and shall be paid in accordance
with the terms of the plan, policy or practice under which it was deferred;
(vi) the Company shall, at its sole expense as incurred, provide the
Executive with outplacement services suitable to the Executive's position
for a period not to exceed two years or until the Executive reaches age 65,
whichever shall first occur, with a nationally recognized outplacement
firm; and,
(vii) to the extent not theretofore paid or provided, the Company shall
timely pay or provide to the Executive any other vested amounts or vested
benefits required to be paid or provided or which the Executive is entitled
to receive under any plan, program, policy, practice, contract or agreement
of the Company and its affiliated companies (other than medical,
prescription or dental benefits if the Executive is eligible for such
benefits to be provided by a subsequent employer), including earned but
unpaid stock and similar compensation but excluding any severance plan or
policy (such other amounts and benefits shall be hereinafter referred to as
the "Other Benefits").
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(b) Cause; Other than for Good Reason. If the Executive's employment
shall be terminated for Cause during the Employment Period, or if the Executive
voluntarily terminates employment during the Employment Period, excluding a
resignation for Good Reason, this Agreement shall terminate without further
obligations to the Executive other than for amounts described in Sections
5(a)(i)(A)(1) and 5(a)(i)(A)(3) and the timely payment or provision of Other
Benefits (unless the terms of such Other Benefits provide for forfeiture upon
termination for Cause or termination for other than Good Reason). In such case,
all such amounts shall be paid to the Executive in a lump sum within 30 days of
the Date of Termination.
(c) Death. If the Executive's employment terminates by reason of the
Executive's death during the Employment Period, all Accrued Obligations as of
the time of death shall be paid to the Executive's estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination and
the Executive's estate or beneficiary shall be entitled to any Other Benefits in
accordance with their terms. In addition, the Restricted Stock Unit Award shall
vest in accordance with Section 3(d)(ii) above. Any Prior Equity Awards shall
vest and/or become exercisable, as the case may be, as of the Date of
Termination and the Executive's estate or beneficiary, as the case may be, shall
have the right to exercise any such stock option, stock appreciation right or
other exercisable equity-based award until the earlier of (A) one year from the
Date of Termination (or such longer period as may be provided under the terms of
any such stock option, stock appreciation right or other equity-based award) and
(B) the normal expiration date of such stock option, stock appreciation right or
other equity-based award.
(d) Disability. If the Executive's employment is terminated by reason
of Disability during the Employment Period, all Accrued Obligations shall be
paid to the Executive in a lump sum in cash within 30 days of the Date of
Termination, and the Executive shall be entitled to any Other Benefits in
accordance with their terms. In addition, the Restricted Stock Unit Award shall
vest in accordance with Section 3(d)(ii) above. Any Prior Equity Awards shall
vest immediately and/or become exercisable, as the case may be, and the
Executive shall have the right to exercise any such stock option, stock
appreciation right or other exercisable equity-based award until the earlier of
(A) one year from the Date of Termination (or such longer period as may be
provided under the terms of any such stock option, stock appreciation right or
other equity-based award) and (B) the normal expiration date of such stock
option, stock appreciation right or other equity-based award.
(e) Retirement. If the Executive's employment terminates at the
expiration of the Employment Period (or at any earlier date at which the
Executive elects to retire under any retirement plan maintained by the Company),
the Executive shall be paid the Accrued Obligations in a lump sum in cash within
30 days of the Date of Termination and the Executive shall be entitled to any
Other Benefits in accordance with their terms. Upon the Executive's retirement,
unless the Board otherwise determines, there shall be no acceleration of vesting
of any portion of the Restricted Stock Unit Award not yet earned. The Executive
agrees not to retire (except for any Disability) prior to September 1, 2003.
6. Change in Control.
-----------------
(a) Benefits Upon a Change in Control. Upon the occurrence of a Change
in Control during the Employment Period, the Restricted Stock Unit Award shall
continue in effect and vest (or be forfeited) in accordance with provisions of
this Agreement as though no Change in Control had occurred, except that, as
appropriate, the shares of Stock represented by the Restricted Stock Unit Award
shall be treated the same as all other shares of Stock of CEI in any transaction
constituting a Change in Control. The Executive's rights upon a termination of
employment that occurs following a Change in Control shall be as specified in
Section 5 generally for termination of employment, except (i) the amount payable
under Section 5(a)(i)(B) shall be three times the sum of (x) the Executive's
Annual Base Salary and (y) the Target Bonus; (ii) the amount payable under
Section 5(a)(i)(C) shall be determined as if the Executive had remained employed
for three additional years after the Date of Termination and (iii) the benefits
under Section 5(a)(iv) shall be provided for three years after the Date of
Termination and the Executive's eligibility (but not the time of commencement of
such benefits) for retiree benefits pursuant to such plans, practices, programs
and policies shall be determined as if the Executive had remained employed until
three years after the Date of Termination and to have retired on the last day of
such period.
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(b) Definition. For purposes of this Agreement, a "Change in Control"
shall mean the occurrence of any of the following events after the date of this
Agreement:
(i) any "person" (within the meaning of Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") is or becomes the
beneficial owner within the meaning of Rule 13d-3 under the Exchange Act (a
"Beneficial Owner"), directly or indirectly, of securities of CEI (not
including in the securities beneficially owned by such person any
securities acquired directly from CEI or its affiliates) representing 20%
or more of the combined voting power of CEI's then outstanding securities,
excluding any person who becomes such a Beneficial Owner in connection with
a transaction described in clause (A) of paragraph (iii) below; or
(ii) the following individuals cease for any reason to constitute a
majority of the number of directors of CEI then serving: individuals who,
on the date of this Agreement, constitute the Board and any new director
(other than a director whose initial assumption of office is in connection
with an actual or threatened election contest, including but not limited to
a consent solicitation, relating to the election of directors of CEI) whose
appointment or election by the Board or nomination for election by CEI's
stockholders was approved or recommended by a vote of at least two-thirds
(2/3) of the directors then still in office who either were directors on
the date hereof or whose appointment, election or nomination for election
was previously so approved or recommended; or
(iii) the shareholders of CEI approve or there is consummated a merger
or consolidation of CEI or any direct or indirect wholly-owned subsidiary
of CEI with any other corporation, other than (A) a merger or consolidation
which would result in the voting securities of CEI outstanding immediately
prior to such merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or any parent thereof), in combination with the ownership
of any trustee or other fiduciary holding securities under an employee
benefit plan of CEI or any subsidiary of CEI, at least 65% of the combined
voting power of the securities of CEI or such surviving entity or any
parent thereof outstanding immediately after such merger or consolidation,
or (B) a merger or consolidation effected to implement a recapitalization
of CEI (or similar transaction) in which no person is or becomes the
Beneficial Owner, directly or indirectly, of securities of CEI representing
20% or more of the combined voting power of CEI's then outstanding
securities; or
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(iv) the shareholders of CEI approve a plan of complete liquidation or
dissolution of CEI or there is consummated an agreement for the sale or
disposition by CEI of all or substantially all of CEI's assets, other than
a sale or disposition by CEI of all or substantially all of CEI's assets to
an entity, at least 75% of the combined voting power of the voting
securities of which are owned by stockholders of CEI in substantially the
same proportions as their ownership of CEI immediately prior to such sale.
Notwithstanding the foregoing, a "Change in Control" shall not be deemed to have
occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of CEI immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of CEI immediately
following such transaction or series of transactions.
7. Confidential Information; No Competition.
----------------------------------------
(a) The Executive shall hold in a fiduciary capacity for the benefit of
the Company all confidential information, knowledge or data (defined below)
relating to the Company or any of its affiliates or subsidiaries, and their
respective businesses, which shall have been obtained by the Executive during
the Executive's employment by the Company or any of its affiliated companies and
which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement).
Upon termination of the Executive's employment, he shall return to the Company
all Company information. After termination of the Executive's employment with
the Company, the Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it, except (x) otherwise publicly available information,
or (y) as may be necessary to enforce his rights under this Agreement or
necessary to defend himself against a claim asserted directly or indirectly by
the Company or its affiliates. Unless and until a determination has been made in
accordance with Section 7(d) or Section 9 hereof that the Executive has violated
this Section 7, an asserted violation of the provisions of this Section 7 shall
not constitute a basis for deferring or withholding any amounts otherwise
payable to the Executive under this Agreement.
(b) As used herein, the term "confidential information, knowledge or
data" means all trade secrets, proprietary and confidential business information
belonging to, used by, or in the possession of the Company or any of its
affiliates and subsidiaries, including but not limited to information, knowledge
or data related to business strategies, plans and financial information,
mergers, acquisitions or consolidations, purchase or sale of property, leasing,
pricing, sales programs or tactics, actual or past sellers, purchasers, lessees,
lessors or customers, those with whom the Company or its affiliates and
subsidiaries has begun negotiations for new business, costs, employee
compensation, marketing and development plans, inventions and technology,
whether such confidential information, knowledge or data is oral, written or
electronically recorded or stored, except information in the public domain,
information known by the Executive prior to employment with CECONY, and
information received by the Executive from sources other than the Company or its
affiliates and subsidiaries, without obligation of confidentiality.
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(c) The confidential knowledge, information and data, as defined in the
previous paragraph, gained in the performance of the Executive's duties
hereunder may be valuable to those who are now, or might become, competitors of
the Company or its affiliates and subsidiaries. Accordingly, the Executive
agrees that he will not, for the period of two years from Date of Termination,
directly own, manage, operate, join, control, become employed by, consult to or
participate in the ownership, management, or control of any business which is in
direct competition with any business maintained by the Company and/or its
affiliates and subsidiaries as of the Date of Termination. Further, the
Executive agrees that, for two years following the Date of Termination, he will
not, directly or indirectly, solicit or hire, or encourage the solicitation or
hiring of any person who was a managerial or higher level employee of the
Company at any time during the term of the Executive's employment by the Company
by any employer other than the Company for any position as an employee,
independent contractor, consultant or otherwise. The foregoing agreement of the
Executive shall not apply to any person after 6 months have elapsed subsequent
to the date on which such person's employment by the Company has terminated. In
the case of any such prohibited activity, the Executive shall not be entitled to
post-employment payments under this Agreement (including any unpaid installments
of the Restricted Stock Unit Award), and the Executive shall return or repay to
the Company a portion of any installments of the Restricted Stock Unit Award
that have vested in accordance with Section 3(d) (ii) during the two year period
immediately preceding such prohibited activity which is equal to the amount of
such installments paid within such two year period times a fraction, the
numerator of which is the number of months from the commencement of such
activity to the date that is 24 months after the Date of Termination and the
denominator of which is 24. This Section 7(c) shall be inapplicable upon the
occurrence of a Change in Control.
(d) In the event of a breach by the Executive of any of the agreements
set forth in Paragraphs (a), (b) or (c) above, it is agreed that the Company
shall suffer irreparable harm for which money damages are not an adequate
remedy, and that, in the event of such breach, the Company shall be entitled to
obtain an order of a court of competent jurisdiction for equitable relief from
such breach, including, but not limited to, temporary restraining orders and
preliminary and/or permanent injunctions against the breach of such agreements
by the Executive. In the event that the Company should initiate any legal action
for the breach or enforcement of any of the provisions contained in this Section
7 and the Company does not prevail in such action, the Company shall promptly
reimburse the Executive the full amount of any court costs, filing fees,
attorney's fees which the Executive reasonably incurs in defending such action,
and any loss of income during the period of such litigation.
8. Full Settlement.
---------------
(a) No Duty to Mitigate; No Reduction. Except as provided in Section
7(c), and except to the extent that a Court under Section 7(d) or an arbitrator
appointed under Section 9 shall determine to permit an offset in respect of a
violation by the Executive of his obligations under Section 7, the Company's
obligation to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and, except as specifically provided in Section
5(a)(iv) and Section 5(a)(vii) with respect to certain medical and dental
benefits, such amounts shall not be reduced whether or not the Executive obtains
other employment.
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(b) Non-exclusivity of Rights. Except as provided in Section 7(c),
nothing in the Agreement shall prevent or limit the Executive's continuing or
future participation in any plan, program, policy or practice provided by the
Company or any of its affiliated companies for which the Executive may qualify,
nor, subject to Section 12(g), shall anything in this Agreement limit or
otherwise affect such rights as the Executive may have under any contract or
agreement with the Company or any or its affiliated companies. Vested benefits
and other amounts that the Executive is otherwise entitled to receive under the
incentive compensation plans referred to in Section 3(c), the SERPs, or any
other plan, policy, practice or program of, or any contract or agreement with,
the Company or any of its affiliated companies on or after the Date of
Termination shall be payable in accordance with the terms of each such plan,
policy, practice, program, contract or agreement, as the case may be, except as
explicitly modified by this Agreement.
9. Disputes.
--------
Except with respect to equitable relief provided for in Section 7(d),
any dispute about the validity, interpretation, effect or alleged violation of
this Agreement shall be resolved by confidential binding arbitration to be held
in New York, New York, in accordance with the Commercial Arbitration Rules of
the American Arbitration Association. Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereover. All
costs and expenses incurred by the Company or the Executive or the Executive's
beneficiaries in connection with any such controversy or dispute, including
without limitation reasonable attorney's fees, shall be borne by the Company as
incurred, except that the Executive shall be responsible for any such costs and
expenses incurred in connection with any claim determined by the arbitrator(s)
to have been without reasonable basis or to have been brought in bad faith. The
Executive shall be entitled to interest at the applicable Federal rate provided
for in Section 7872(f)(2)(A) of the Code, on any delayed payment which the
arbitrator(s) determine he was entitled to under this Agreement.
10. Successors.
----------
(a) No Assignment by Executive. This Agreement is personal to the
Executive and without the prior written consent of CEI shall not be assignable
by the Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be binding upon and enforceable
by the Executive's legal representatives.
(b) Successors to CEI. This Agreement shall inure to the benefit of and
be binding upon and enforceable by CEI and its successors and assigns.
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(c) Performance by a Successor to CEI. CEI will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of CEI to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that CEI would be required to perform it if no such succession had taken
place. As used in this Agreement, "CEI" shall mean CEI as hereinbefore defined
and any successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or otherwise, including
New CEI which is to be established upon consummation of the merger with
Northeast Utilities pursuant to the Amended and Restated Agreement and Plan of
Merger, dated as of January 11, 2000, among CEI, Northeast Utilities, CWB
Holdings, Inc. and N Acquisition LLC if such transaction is consummated.
11. Certain Additional Payments by the Company.
------------------------------------------
(a) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution by the Company to
or for the benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section
11) (a "Payment") would be subject to the excise tax imposed by Section 4999 of
the Code or any interest or penalties are incurred by the Executive with respect
to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then
the Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income and employment taxes (and any interest
and penalties imposed with respect thereto) and Excise Tax imposed upon the
Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 11(c), all determinations
required to be made under this Section 11, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by the Company's
independent auditors or such other certified public accounting firm as may be
jointly designated by the Executive and the Company (the "Accounting Firm"),
which shall provide detailed supporting calculations both to the Company and the
Executive. All fees and expenses of the Accounting Firm shall be borne solely by
the Company. Any Gross-Up Payment, as determined pursuant to this Section 11,
shall be paid by the Company to the Executive within 15 days of the receipt of
the Accounting Firm's determination. Any determination by the Accounting Firm
shall be binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 11(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.
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(c) The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which he gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such
claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively to
contest such claim, and
(iv) permit the Company to participate in any proceedings relating to
such claim;
provided however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 11(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.
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(d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 11(c), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the Company's
complying with the requirements of Section 11(c)) promptly pay to the Company
the amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 11(c), a determination is
made that the Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify the Executive in writing of its intent to
contest such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.
12. Miscellaneous.
-------------
(a) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements
executed and performed entirely therein. The captions of this Agreement are not
part of the provisions hereof and shall have no force or effect.
(b) Notices. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive: 4 Irving Place
New York, NY 10003
If to the Company: 4 Irving Place
New York, NY 10003,
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) Invalidity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement. If any provision of this Agreement shall be held
invalid or unenforceable in part, the remaining portion of such provision,
together with all other provisions of this Agreement, shall remain valid and
enforceable and continue in full force and effect to the fullest extent
consistent with law.
(d) Tax Withholding. Notwithstanding any other provision of this
Agreement, the Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) Failure to Assert Rights. Except as provided in Section 4(b)(ii)
and 4(c)(ii), the Executive's or the Company's failure to insist upon strict
compliance with any provisions of, or to assert any right under, this Agreement
shall not be deemed to be a waiver of such provision or right or of any other
provision of or right under this Agreement.
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(f) No Alienation. The rights and benefits of the Executive under this
Agreement may not be anticipated, assigned, alienated or subject to attachment,
garnishment, levy, execution or other legal or equitable process except as
required by law. Any attempt by the Executive to anticipate, alienate, assign,
sell, transfer, pledge, encumber or charge the same shall be void. Payments
hereunder shall not be considered assets of the Executive in the event of
insolvency or bankruptcy.
(g) Entire Agreement. This Employment Agreement represents the complete
agreement between the Executive and the Company relating to employment and
termination and may not be altered or changed except by written agreement
executed by the parties hereto or their respective successors or legal
representatives. This Agreement supersedes all prior agreements and other
understandings between the parties with respect to the subject matter herein,
including the CECONY Employment Agreement, except for the portions thereof which
have been incorporated by reference in this Agreement.
IN WITNESS WHEREOF, the Executive and, pursuant to due authorization
from its Board of Directors, the Company have caused this Agreement to be
executed as of the day and year first above written.
CONSOLIDATED EDISON, INC.
By: E. Virgil Conway
E. Virgil Conway, Chairman
Executive Personnel and Pension Committee
By: Eugene R. McGrath
Eugene R. McGrath
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