AMENDMENT TO
EMPLOYMENT AGREEMENT
WHEREAS, E. Xxxxx Xxxxxxx (the "Executive") entered into an Employment
Agreement ("Agreement") with Public Service Enterprise Group Incorporated, a New
Jersey Corporation ("Enterprise"), dated as of June 16, 1998, covering the
Executive's services as Chairman of the Board and Chief Executive Officer of
Enterprise, and
WHEREAS, the terms of such Agreement cover the employment of Executive
from June 16, 1998 until March 31, 2005, and
WHEREAS, Enterprise and the Executive agree that the Executive will
make his services available to Enterprise for an additional two years beyond the
expiration date of the Agreement in accordance with the Agreement as amended
hereby;
NOW, THEREFORE, IN CONSIDERATION of the mutual premises, Enterprise and
the Executive hereby agree to amend the Employment Agreement as follows:
First
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Section 1(b) of the Agreement is amended to read as follows:
(b) Term. The term of the Executive's employment under this
Agreement (the "Employment Period") shall commence as of the date
hereof and shall continue until March 31, 2007. If the Executive elects
to retire prior to March 31, 2007, the Employment Period shall end on
the date of retirement.
Second
------
Section 3(d) of the Agreement is amended to read as follows:
(d) Stock Award. In consideration of the commitment he will
assume during the Employment Period, the Executive shall be granted an
award (the "Stock Award") with respect to 210,000 shares of the Common
Stock without nominal or par value of Enterprise ("Stock"). The initial
150,000 shares granted pursuant to the Agreement were effective as of
the Effective Date. The 60,000 additional shares granted with this
Amendment are granted effective as of the date of this Amendment. The
shares of the Stock Award shall be restricted and shall be subject to
the following terms and conditions:
(i) The shares for the Stock Award shall be purchased
by Enterprise or its agent on the open market or issued from
Treasury shares. In the event any of the shares of the Stock
Award shall be forfeited, Enterprise may apply such shares for
its corporate purposes in its discretion.
(ii) The Executive's right to the Stock Award 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 Number of Shares
---- ----------------
3/31/2002 60,000
3/31/2003 20,000
3/31/2004 30,000
3/31/2005 40,000
3/31/2006 30,000
3/31/2007 30,000
The shares of Stock vesting in any one year are referred to as
an "Annual Award".
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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 March 31, 2007, the Executive
shall forfeit all right to all shares of the Stock Award that
are not 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
right to receive all shares of the Stock Award shall vest as
of the Date of Termination.
(iii) Except as provided in (x), below, shares of the
Stock Award will be issued in the name of the Executive, but
will be held by Enterprise for the account of the Executive
together with a stock power that the Executive shall execute
and deliver to Enterprise. The shares shall bear a restrictive
legend indicating that they are subject to the terms,
conditions and limitations of this Agreement.
(iv) Except as provided in (x), below, once shares of
the Stock Award shall vest, Enterprise shall promptly issue to
the Executive a certificate for such shares without any legend
or restriction (other than may be required by law) and
Enterprise shall return to the Executive or shall destroy the
related stock power previously executed by the Executive.
(v) Shares of Stock held by Enterprise or by a
trustee as provided in (x) below, for the account of the
Executive prior to distribution to the Executive, 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.
(vi) Except as otherwise provided herein, the
Executive shall have all of the rights of a stockholder with
respect to the shares of the Stock Award issued in his name,
including the right to vote the shares, to receive dividends
and other distributions thereon and to participate in any
change in capitalization of Enterprise. In the event of any
change in
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capitalization resulting in the issuance of additional
shares to the Executive, such shares shall be subject to the
same terms, conditions and restrictions as the shares in
respect to which they are issued, and the Executive shall
execute and deliver to Enterprise stock powers in respect
thereto. If the Executive elects to reinvest dividends on
the shares of the Stock Award, or if he shall receive rights
or warrants in respect to any shares of the Stock Award, the
shares acquired by dividend reinvestment or through the
exercise of rights may be held, sold or otherwise disposed
of by the Executive, free and clear of any restrictions
created by this Agreement.
(vii) Unless the shares of the Stock Award 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 the Company 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
Enterprise with such other documentation as may be required by
Enterprise, unless in the opinion of counsel to the Enterprise
such representation, agreement or documentation is not
necessary to comply with the Securities Act of 1933 and the
rules and regulations thereunder.
(viii) Enterprise shall not be required to deliver
any shares of the Stock Award until they have been listed on
each securities exchange on which shares of the Stock are
listed or until there has been qualification under or
compliance with such state and federal laws, rules or
regulations that Enterprise may deem applicable. Enterprise
will use its best efforts to obtain such listing,
qualification and compliance.
(ix) 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 Stock 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
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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.
(x) Notwithstanding the foregoing provisions of
Section 3(d), the Executive may elect to defer the delivery of
any Annual Award that vests under Section 3(d)(ii), provided
that the Executive's election is made before January 1 of the
year in which the Annual Award vests, in accordance with the
terms and conditions imposed by the Company. In the event of
such election, the shares of deferred Company Stock shall be
issued in the name of a trustee selected by the Company, and
the provisions of Section 3(d)(v) shall continue to apply to
the shares of Stock held by such trustee. If the Executive
defers delivery of the Annual Award beyond the vesting date
under Section 3(d)(ii), the Executive shall not be deemed to
have, by virtue of his deferral agreement or the establishment
of a trust, any claim on any specific assets of the Company or
to the assets of such trust, and shall have no rights other
than as a general unsecured creditor of the Company with
respect to such deferred Annual Award. Subject to the terms of
the trust instrument, the trustee holding a deferred Stock
Award shall have all of the rights of a stockholder with
respect to the shares of the Annual Award issued in its name,
including the right to vote the shares, to receive dividends
and other distributions thereon and to participate in any
change in capitalization of Enterprise.
In the event of any Change in Control or change in
capitalization resulting in the issuance of additional or
different shares to the trustee during the term of the
deferral, such shares shall be subject to the same terms,
conditions and restrictions as the shares in respect to which
they are issued. If the trustee elects to reinvest dividends
on shares of Stock held in the Trust, or if the trustee shall
receive rights or warrants in respect to any shares of the
Stock, the shares acquired by dividend reinvestment or through
the exercise of rights shall also be subject to the same
terms, conditions and restrictions to the shares with respect
to which they are issued, unless otherwise provided in the
trust agreement.
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Ratification
------------
All of the provisions of the Employment Agreement not hereby expressly
modified are hereby ratified and affirmed.
Adopted this 20th day of November, 2001.
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E. Xxxxx Xxxxxxx
PUBLIC SERVICE ENTERPRISE GROUP
INCORPORATED
By
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Xxxxxxx X. Xxxxxxxxx,
Chairman of the Organization
and Compensation Committee
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