EMPLOYMENT AGREEMENT
This Agreement (the "Agreement") dated as of November 8, 2000 (the
"Effective Date") between KeySpan Corporation ("KeySpan") and Xxxxxxx X. Xxxxxx
XX (the "Executive") sets forth the understanding and agreement of the parties
as to the terms on which the Executive is to be employed by KeySpan and its
subsidiaries from and after the Effective Date.
1. Certain Recitals. Prior to the Effective Date, the Executive was
an executive employee of Eastern Enterprises ("Eastern"). Upon the Effective
Date, Eastern was acquired and merged with and into a merger subsidiary of
KeySpan, KeySpan Energy Delivery New England ("KeySpan N.E."). The Executive and
KeySpan as successor by merger are parties to an employment agreement dated
September 22, 1999 (the "1999 Agreement"), pursuant to which the Executive is
entitled to certain compensation and benefits during employment and in certain
cases thereafter as set forth in Appendix 1.
2. Terms of Employment; In General. The Executive acknowledges that
subject to Section 2(b) he has agreed to serve KeySpan from and after the
Effective Date at an annual rate of base salary, determined by KeySpan, that is
not less than $366,100 base salary with an annual target incentive of 50% and
long-term incentive opportunity of 100% of base pay in 2001 and for the year
2000, target annual and long-term incentive opportunities no less than the level
of award opportunity currently provided by Eastern by taking on the following
responsibilities: President, KeySpan N.E. for a period of two years from the
Effective Date. The Executive agrees that the terms of the Executive's
employment hereunder shall be governed by the 1999 Agreement, subject to the
following modifications:
(a) References in the 1999 Agreement to employment by
Eastern Enterprises shall be deemed modified as appropriate to
reflect the fact that the Executive is employed hereunder by KeySpan
N.E.
(b) The parties acknowledge that a "change in control" of
Eastern has occurred. If the Executive terminates his employment with
KeySpan, for "Good Reason" or is terminated by KeySpan "without
cause" (as those terms are defined in the 1999 Agreement) from the
Effective Date and during the term of this Agreement or if the
Executive terminates his employment with KeySpan for any reason
during the period between the start of the 20th month and the end of
the 24th month of this Agreement with written notice to the KeySpan
Board of Directors, he will be entitled to certain benefits as set
forth in Section 9 and Section 10 of the 1999 Agreement, which
benefits in the aggregate will be no less than those benefits to
which Executive was entitled pursuant to the 1999 Agreement in effect
on the Effective Date. Notwithstanding the foregoing, the Executive
agrees that his employment by KeySpan in accordance with the terms of
this Agreement (including, without limitation, the Executive's job
responsibilities, compensation, benefits and perquisites as described
herein) shall not constitute "Good Reason" for purposes of the 1999
Agreement.
-1-
(i) If the KeySpan Board determines that Executive is
permanently and totally disabled after the expiration of a 90 day
period, KeySpan will pay Executive benefits provided for in
accordance with section 9 and section 10 of the Agreement upon
the termination of Executive's employment. The Company will
maintain long-term disability coverage at a benefit level equal
to 70% of base pay, such benefits will commence upon the
expiration of a 180-day disability period. As part of such
disability benefit, Executive agrees to enroll in the KeySpan
contributory plan, which provides a benefit level of 60% of base
pay to a maximum of $200,000. This insured benefit will be
supplemented by KeySpan to provide you the total 70% described
above.
(ii) If Executive should die before the expiration of this
Agreement, his spouse or designated beneficiary pursuant to the
Agreement will receive change of control payments in the amount
of three times his base pay and target bonus ("Change of Control
Benefits") in addition to the life insurance benefits set forth
in Appendix I.
(a) The Change of Control Benefits set forth above will
be paid directly to his designated beneficiary from
corporate assets. The Executive acknowledges and agrees that
KeySpan may fund these Change of Control Benefits through
the purchase of life insurance. Executive understands and
agrees that KeySpan is the owner and beneficiary of the
insurance contract and KeySpan has all rights, title and
interest therein and thereto. Executive will cooperate fully
with KeySpan and the insurance company in the application
and the purchase of such life insurance policy.
(iii) Additionally, if Executive should die before the
expiration of this Agreement, KeySpan will provide medical and
dental benefits to Executive's spouse for the maximum period of
three years from the Effective Date together with whatever
benefits are otherwise available under applicable retirement
plans. KeySpan agrees that Executive's spouse, or his estate
shall receive the right to purchase his auto in accordance with
the terms of the 1999 Agreement.
(c) Executive acknowledges that he has an outstanding
loan pursuant to the Eastern Officer Loan Program, which
will be paid to KeySpan within 210 days of the Effective
Date.
(d) Section 12 and Section 24 of the 1999 Agreement are
amended and restated to delete all references to
Massachusetts and insert New York in their place. The
Company agrees to reimburse Executive's attorney for
reasonable fees incurred for the sole purpose of reviewing
the application of New York law to this Agreement. KeySpan
will pay such attorney directly within thirty days after
receipt of this xxxx.
-2-
3. Conversion to KeySpan Agreement. Upon or at any time prior to the
second anniversary of the Effective Date (the "Expiration Date"), the Executive,
if at the time he is still employed by KeySpan N.E., may be permitted to enter
into a change of control agreement with KeySpan in the form then generally in
effect between the Company and similarly situated officers (a "Replacement
Agreement") in lieu of the 1999 Agreement.
4. Termination of Agreement and 1999 Agreement. This Agreement and
the 1999 Agreement, notwithstanding any provision in the 1999 Agreement to the
contrary, shall terminate and be of no further force and effect upon the earlier
to occur of the Expiration Date or the execution by the Executive and KeySpan of
a Replacement Agreement.
Notwithstanding the above, if the Executive terminates his employment
with KeySpan, for "Good Reason" or is terminated by KeySpan "without cause" (as
those terms are defined in the 1999 Agreement) from the Effective Date and
during the term of this Agreement or if the Executive terminates his employment
with KeySpan for any reason during the period between the start of the 20th
month and the end of the 24th month of this Agreement with written notice to the
KeySpan Board of Directors, the obligations of KeySpan under section 9, section
10 and section 12 of the 1999 Agreement and Section 2b. of this Agreement. will
survive the expiration or termination of this Agreement.
5. Duty to Mitigate and Right of Offset. KeySpan and the Executive
hereby stipulate that all payments and benefits contemplated by this Agreement
and the 1999 Agreement shall be payable without any duty on the Executive's part
to mitigate damages and without offset by any earnings which the Executive may
receive from other employment subsequent to the termination of his employment.
Nothing in this Agreement will prevent KeySpan from having a right of offset,
counterclaim, self-help or other like remedies on KeySpan's part with respect to
payment owed by Executive in connection with his employment by KeySpan, Eastern
and with respect to any other employment based claims involving payment and
benefits not contemplated by this Agreement.
6. Miscellaneous. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York and may be modified only by
a written instrument executed by the parties. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement and each of which shall be deemed an original.
-3-
IN WITNESS WHEREOF, KeySpan has caused this Agreement to be executed
by a duly authorized officer and the Executive has executed this Agreement, all
as of the Effective Date.
KEYSPAN CORPORATION
-------------------
Xxxxxx X. Xxxxxx
--------------------
Xxxxxxx X. Xxxxxx XX
