EXHIBIT 10(l)
AMENDMENT
TO
SEVERANCE PROTECTION AGREEMENT
The Agreement dated February 25, 1997, between New England Electric
System, a Massachusetts business trust (the Company), and Xxxxxxxx X. Xxxxxx
(the Executive) is hereby amended by amending Section 6.2 to read as follows:
6.2 Notwithstanding any other provisions of this Agreement, in the
event that any payment or benefit received or to be received by the
Executive in connection with a Change in Control or a Major Transaction,
or the termination of the Executive's employment (whether pursuant to the
terms of this Agreement or any other plan, arrangement or agreement with
the System, any Person whose actions result in a Change in Control or a
Major Transaction or any Person affiliated with the System or such Person)
(all such payments and benefits, including the Severance Payments, being
hereinafter called Total Payments) would be subject (in whole or part), to
the Excise Tax, then the Severance Payments shall be reduced to the extent
necessary so that no portion of the Total Payments is subject to the
Excise Tax (after taking into account any reduction in the Total Payments
provided by reason of section 280G of the Code in such other plan,
arrangement or agreement) if (A) the net amount of such Total Payments, as
so reduced, (and after deduction of the net amount of federal, state and
local income tax on such reduced Total Payments) is greater than (B) the
excess of (i) the net amount of such Total Payments, without reduction
(but after deduction of the net amount of federal, state and local income
tax on such Total Payments), over (ii) the amount of Excise Tax to which
the Executive would be subject in respect of such Total Payments. For
purposes of determining whether and the extent to which the Total Payments
will be subject to the Excise Tax, (i) no portion of the Total Payments
the receipt or enjoyment of which the Executive shall have effectively
waived in writing prior to the Date of Termination shall be taken in to
account, (ii) no portion of the Total Payments shall be taken into account
which in the opinion of tax counsel selected by the Company does not
constitutes a "parachute payment" within the meaning of section 280G(b)(2)
of the Code, (including by reason of section 280G(b)(4)(A) of the Code)
and, in calculating the Excise Tax, no portion of such Total Payments
shall be taken into account which constitutes reasonable compensation for
services actually rendered, within the meaning of section 280G(b)(4)(B) of
the Code, in excess of the Base Amount allocable to such reasonable
compensation, and (iii) the value of any noncash benefit or any deferred
payment or benefit included in the Total Payments shall be determined by
the Company in accordance with the principles of sections 280G(d)(3) and
(4) of the Code. Prior to the payment date set forth in Section 6.3
hereof, the Company shall provide the Executive with its calculation of
the amounts referred to in this Section and such supporting materials as
are reasonably necessary for the Executive to evaluate the Company's
calculations. If the Executive objects to the Company's calculations, the
Company shall pay to the Executive such portion of the Severance Payments
(up to 100% thereof) as the Executive determines is necessary to result in
the Executive receiving the greater of clauses (A) and (B) of this
Section.
Dated: 12/9/98
/s/ Xxxxxx X. Xxxx
--------------------------------
Chairman, Compensation Committee
/s/ Xxxxxxxx X. Xxxxxx
--------------------------------
Executive
Amendment to Severance Protection Agreement
This Amendment is made and entered into by and between National Grid USA
and Xxxxxxxx X. Xxxxxx (the Executive).
WHEREAS, National Grid Group plc, the predecessor of National Grid Transco
plc, and New England Electric System merged on Xxxxx 00, 0000 (Xxxxxx).
WHEREAS, as a result of the Merger, the Executive became an employee of
National Grid USA, a subsidiary of National Grid Group plc;
WHEREAS, New England Electric System and the Executive entered into a
Severance Protection Agreement dated February 25, 1997 and amended on December
9, 1998 (the Agreement) to which National Grid USA became the successor.
WHEREAS, as a result of the Merger, a Change in Control occurred under the
Agreement which would cause the Agreement to terminate on March 22, 2003.
WHEREAS, the parties would like to extend the term of the Agreement,
effective March 15, 2003, and amend the Agreement, in part, to reflect these
events.
NOW, THEREFORE, National Grid USA and the Executive hereby agree to amend
the Agreement as follows:
1. The Company and the Executive agree that all references to a Change
in Control, a Potential Change in Control, a Major Transaction, or a
Potential Major Transaction in the Agreement shall mean a Change in
Control, Potential Change in Control, Major Transaction or a
Potential Major Transaction that occurs after the effective date of
this Amendment; and that in order for the Executive to be eligible
for benefits under the Agreement a Potential Change in Control,
Change in Control, a Potential Major Transaction or a Major
Transaction must occur after the effective date of this Amendment.
2. Section 2. Term of Agreement shall be amended to read as follows:
This Amendment shall commence on March 15, 2003 and shall continue
in effect through March 30, 2005; provided, however, commencing on
March 1, 2004 and each March 1st thereafter, the term of this
Agreement shall automatically be extended for one additional year
unless, not later than December 31st of the preceding year, the
Company or the Executive shall have given notice not to extend this
Agreement or a Change in Control or a Major Transaction shall have
occurred prior to such March 1st; provided, however, if a Change in
Control or a Major Transaction shall have occurred during the term
of this Agreement, this Agreement shall continue in effect for a
period of thirty-six months beyond the month in which such Change in
Control or Major Transaction occurred.
3. Section 5.3 shall be amended to read as follows:
If the Executive's employment shall be terminated for any reason
following a Change in Control or a Major Transaction and during the
term of the Agreement, the Company shall pay to the Executive the
normal post-termination compensation and benefits due the Executive
as such payments become due. Such post-termination compensation and
benefits shall be determined under, and paid in accordance with, the
System's applicable retirement, insurance and other compensation or
benefit plans, programs and arrangements. Provided that the benefits
payable to the Executive pursuant to National Grid USA Companies'
Basic Severance Plan for Non-Union Employees or its successor and/or
National Grid USA Companies' Executive Severance Plan or its
successor (the Severance Plans) do not exceed benefits payable to
the Executive under the Agreement, the Executive hereby waives all
rights to benefits pursuant to said Severance Plans.
4. In Section 6.1, in the tenth line after the word "Company" add "or
National Grid Transco plc".
5. Section 6.1 (A) shall be amended to read as follows:
(A) In lieu of any further salary payments to the Executive for
periods subsequent to the Date of Termination, the Company
shall pay to the Executive a lump sum severance payment, in
cash, equal to three times the sum of (i) the higher of the
Executive's annual base salary in effect as of the Date of
Termination or in effect immediately prior to the Change in
Control or Major Transaction, and (ii) the higher of the
average amount paid to the Executive pursuant to National Grid
USA Companies' Incentive Compensation Plan and National Grid
USA Companies' Incentive Share Plan or successors of any such
plans, with respect to the three years preceding the year in
which the Date of Termination occurs or the average amount
paid with respect to the three years preceding the year in
which the Change in Control or Major Transaction occurs.
6. In Sections 6.1 (B), (C), and (D) all references to "twenty-four
(24) months" shall be replaced with "thirty-six (36) months".
7. Section 7.1. Notice of Termination. The last sentence of this
Section shall be deleted and replaced with the following: "Further,
a Notice of Termination for Cause is required to include a statement
from the Chief Executive Officer of National Grid USA and the Chief
Executive Officer of National Grid Transco plc or his designee,
that, in the good faith opinion of the two (after reasonable notice
to the Executive and an opportunity for the Executive, together with
the Executive's counsel, to be heard) that the Executive was guilty
of conduct set forth in clause (i) or (ii) of the definition of
Cause set forth in Section 15 (C) of the Agreement. Said statement
shall specify the particulars thereof in detail.
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8. Section 10. Notices. The Company address shall read:
To the Company:
National Grid USA Service Company, Inc.
00 Xxxxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Attn: Sr. Vice President Human Resources
9. Section 15. Definitions. The following definitions shall be amended
to read:
(A) "Beneficial Owner" - delete and replace with a definition for
"Base Amount". "Base Amount" shall have the meaning defined in
Section 280 G (b) (3) of the Code.
(B) "Board" or "Board of Directors of the Company" - all
references to "Board" or "Board of Directors" shall be
replaced with Chief Executive Officer of National Grid USA and
Chief Executive Officer of National Grid Transco plc, or his
designee, unless otherwise specified in this Amendment.
(D) A "Change in Control" shall be deemed to have occurred if the
conditions set forth in any of the following paragraphs shall
have been satisfied:
(i) any Person or Persons in concert obtains Control (as
defined in Section 840 of the United Kingdom's Income
and Corporation Taxes Act 1988) of National Grid Transco
plc as a result of making a general offer to acquire
shares in National Grid Transco plc or having obtained
Control, makes such an offer;
(ii) the consummation of the sale or disposition by National
Grid Transco plc of National Grid USA to a
non-affiliated entity (whether by merger, sale of all or
substantially all of the capital stock or assets of
National Grid USA or otherwise);
(iii) the complete liquidation, dissolution or winding up of
National Grid Transco plc and/or of National Grid USA;
or
(iv) the acquisition by National Grid Transco plc or National
Grid USA or their successors of all or substantially all
of the assets of or ownership of all or substantially
all of the outstanding shares of a U.S. electric and/or
gas utility company which would increase the size or
revenues of National Grid USA by 25% or more.
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A Change in Control shall not be deemed to have
occurred if the events referred to above are part of an
arrangement ("a Reorganization") which will mean that
National Grid Transco plc and/or National grid USA will
be under the Control of another company or the business
of National Grid Transco plc is carried on by another
company, and the Persons who owned the shares in
National Grid Transco plc immediately before the Change
in Control will immediately afterwards own more than 50%
of the shares in that other company.
(F) "Company" shall mean National Grid USA and any successor to
its business and/or assets which assumes and agrees to perform
the Agreement by operation of law, or otherwise.
(J) "Employer" shall mean the National Grid USA company by which
the Executive is employed at the time of termination.
(K) "Exchange Act" - delete and replace with a definition for
"Excise Tax". "Excise Tax" shall mean any excise tax imposed
under Section 4999 of the Code.
(M) "Good Reason" - delete (i) "the assignment to the Executive of
duties substantially inconsistent with the Executive's status
as an executive officer of the system" and all references
thereto.
(N) A "Major Transaction" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs
shall have been satisfied:
(i) any Person becomes bound or entitled to acquire shares
in National Grid Transco plc under Sections 428 to 430F
of the United Kingdom's Companies Xxx 0000, or a scheme
of arrangement or compromise under Section 425 of the
United Kingdom's Companies Xxx 0000 is proposed for
National Grid Transco plc;
(ii) National Grid Transco plc shareholders, National Grid
USA's shareholders and/or the Board of Directors of
National Grid USA approve the sale of National Grid USA
to a non-affiliated entity (whether by merger, sale of
all or substantially all of the capital stock or assets
of National Grid USA, or otherwise);
(iii) National Grid Transco plc passes a resolution for
voluntary winding up, or an order is made for the
compulsory winding up of National Grid Transco plc
and/or National Grid USA;
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(iv) the shareholders of National Grid Transco plc, the
shareholders of National Grid USA and/or the Board of
Directors of National Grid USA approve an event the
consummation of which would result in the occurrence of
a Change in Control; or
(v) the Board of Directors of National Grid Transco plc
adopts a resolution that, for purposes of this
Agreement, a Major Transaction has occurred.
A Major Transaction shall not be deemed to have
occurred if the events referred to above are part of an
arrangement ("a Reorganization") which will mean that
National Grid Transco plc and/or National Grid USA will
be under the Control of another company or the business
of National Grid Transco plc is carried on by another
company, and the Persons who owned the shares in
National Grid Transco plc immediately before the series
of transactions are consummated will immediately after
consummation own more than 50% of the shares in that
other company.
(O) "XXXX Companies" - all references to "XXXX Companies" shall be
replaced with "National Grid USA companies, collectively".
(P) "XXXX Company" - all references to "XXXX Company" shall be
replaced with "National Grid USA company".
(S) "Person" shall mean any individual, corporation, partnership,
trust, unincorporated association, business or other legal
entity, and any government or any governmental agency or
political subdivision thereof.
(T) A "Potential Change in Control" shall be deemed to have
occurred if the conditions set forth in any one of the
following paragraphs shall have been satisfied:
(i) the Company or National Grid Transco plc enters into an
agreement, the consummation of which would result in the
occurrence of a Change in Control;
(ii) the Company, National Grid Transco plc or any Person
publicly announces an intention to take or to consider
taking actions which, if consummated, would constitute a
Change in Control;
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(iii) any Person who is not, as of the date hereof, the owner,
directly or indirectly, of securities constituting 10%
or more of the combined voting power of all of the
outstanding voting securities of National Grid Transco
plc or any successor thereof (a "10% Holder") becomes a
10% Holder;
(iv) any Person who is, as of the date hereof, a 10% Holder,
acquires (whether in a single transaction or a series of
transactions), directly or indirectly, additional
securities constituting 5% or more of the combined
voting power of all of the outstanding voting securities
of National Grid Transco plc or any successor thereof
(for purposes hereof, a Person who, as of any particular
date, holds, directly or indirectly, options to purchase
securities that are exercisable within 60 days of such
date shall be deemed to own such securities as of such
date); or
(v) the Board of Directors of National Grid Transco plc
adopts a resolution to the effect, that for purposes of
this Agreement, a potential Change in Control has
occurred.
A Potential Change in Control shall not be deemed to
have occurred if the events referred to above are part
of an arrangement ("a Reorganization") which will mean
that National Grid Transco plc and/or National Grid USA
will be under the control of another company or the
business of National Grid Transco plc is carried on by
another company, and the Persons who owned the shares in
National Grid Transco plc immediately before the series
of transactions are consummated will immediately after
consummation own more than 50% of the shares in that
other company.
(U) A "Potential Major Transaction" shall be deemed to have
occurred if the conditions set forth in any one of the
following paragraphs shall have been satisfied:
(i) the Company enters into an agreement, the consummation
of which would result in the occurrence of a Major
Transaction;
(ii) the Company or any Person publicly announces an
intention to take or consider taking actions which, if
consummated, would constitute a Major Transaction; or
(iii) the Board of Directors of National Grid Transco plc
adopts a resolution to the effect that, for purposes of
this Agreement, a Potential Major Transaction has
occurred.
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(X) "System" shall mean the Company and the National Grid USA
companies, collectively.
This Amendment supersedes the Agreement in so far as it conflicts with any
terms and conditions of the Agreement. All other terms and conditions of the
Agreement remain unchanged.
National Grid USA
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Chief Executive Officer
By: /s/ Xxxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxxx X. Xxxxxx
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