Exhibit 12
THIRD AMENDMENT TO EMPLOYMENT AGREEMENT
THIS THIRD AMENDMENT TO EMPLOYMENT AGREEMENT ("Third Amendment"),
dated as of the ___ day of _______________, 1997, is made and entered into by
and between New York State Electric & Gas Corporation, a New York corporation
(the "Company"), and Xxxxxx X. xxx Xxxxxx (the "Executive") and amends certain
provisions of the Employment Agreement, dated as of August 7, 1996, as amended
("Employment Agreement"), by and between the Company and the Executive.
WHEREAS, the Company, in consultation with outside advisors, has
determined that it is in the best interest of the Company and its shareholders
to amend the Employment Agreement to clarify and to modify certain provisions.
NOW, THEREFORE, the parties hereto agree as follows:
1. Section 10.1(D) of the Employment Agreement is hereby amended by
adding the following words after the word "Payment" at the end of the last
sentence thereof: ", but only if, and to the extent, the Executive receives a
refund of any Excise Tax previously paid by the Executive pursuant to Section
10.2 hereof".
2. The first sentence of Section 10.2(B) of the Employment Agreement
is hereby amended to read in its entirety as follows:
Subject to the provisions of Section 10.2(C) hereof, all
determinations required to be made under this Section 10.2, including
whether a Gross-Up Payment is required and the amount of such Gross-Up
Payment and the assumptions to be used in arriving at such determinations,
shall be made by the Company's principal outside accounting firm (the
"Accounting Firm") which shall provide detailed supporting calculations
both to the Board and the Executive within fifteen (15) business days of
the Date of Termination and/or such earlier date(s) as may be requested by
the Company or the Executive (each such date and the Date of Termination
shall be referred to as a "Determination Date", for purposes of this
Section 10.2(B) and Section 10.3 hereof).
3. Section 10.3 is hereby amended by replacing the words "the Date
of Termination," wherever they may appear in such Section, with the words "each
Determination Date".
4. Section 13.2 of the Employment Agreement is hereby amended to
read in its entirety as follows:
13.2 If, at any time prior to the end of the Term (or, if later, the
end of the Change-in-Control Protective Period), the Executive terminates
his own employment without Good Reason (and not in connection with his
Disability, Retirement or death) or the Company terminates his employment
with Cause, then for a twelve-month period immediately following his Date
of Termination, the Executive shall not, except as permitted by the Company
upon its prior written consent, enter, directly or indirectly, into the
employ of or render or engage in, directly or indirectly, any services to
any person, firm or corporation within the "Restricted Territory," which is
a major competitor of the Company with respect to products which the
Company is then producing or services the Company is then providing (a
"Competitor"). However, it shall not be a violation of the immediately
preceding sentence for the Executive to be employed by, or render services
to, a Competitor, if the Executive renders those services only in lines of
business of the Competitor which are not directly competitive with the
primary lines of business of the Company or are outside of the Restricted
Territory. For purposes of this Section 13.2, the "Restricted Territory"
shall be the states of Maryland, New Jersey, New York and Pennsylvania.
5. Paragraph (II) of Section 20(E) of the Employment Agreement is
hereby amended to read in its entirety as follows:
(II) during any period of two consecutive years (not including any
period prior to the date of this Agreement), individuals who at the
beginning of such period constitute the Board and any new director (other
than a director designated by a Person who has entered into an agreement
with the Company to effect a transaction described in paragraph (I), (III)
or (IV) of this Change-in-Control definition or a director whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other
actual or threatened solicitations of proxies or consents by or on behalf
of a Person other than the Board) whose election by the Board or nomination
for election by the Company's stockholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who either
were directors at the beginning of the period or whose election or
nomination for election was previously so
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approved, cease for any reason to constitute a majority thereof; or
6. Section 20(F) of the Employment Agreement is hereby amended to
read in its entirety as follows:
(F) "Change-in-Control Protective Period" shall mean the period from
the occurrence of a Change-in-Control until the later of (i) the second
anniversary of such Change-in-Control or, (ii) if such Change-in-Control
shall be caused by the shareholder approval of a merger or consolidation,
as described in Section 15(E)(III) hereof, the second anniversary of the
consummation of such merger or consolidation, provided, however, that in
the event that the agreement providing for such merger or consolidation, as
described in Section 15(E)(III) hereof, is terminated without consummation
of such merger or consolidation, the Change-in-Control Protective Period
shall expire 90 days following such termination, unless there has occurred
another event constituting a Change-in-Control, in which case the
Change-in-Control Protective Period shall expire upon the date described
herein with respect to such subsequent Change-in-Control.
7. Section 20(N)(I) of the Employment Agreement is hereby amended to
read in its entirety as follows:
(I) the assignment to the Executive of any duties inconsistent with
the Executive's status as an executive officer of the Company or a
substantial alteration in the nature or status of the Executive's
responsibilities from those in effect immediately prior to the
Change-in-Control (including, without limitation, any such alteration
attributable to the fact that the Company may no longer be a public
company);
8. Section 20(N)(II) of the Employment Agreement is hereby amended
to read in its entirety as follows:
(II) a reduction by the Company in the Executive's annual base salary
as in effect on the date hereof or as the same may be increased from time
to time;
9. Section 20(N)(IV) of the Employment Agreement is hereby amended
to read in its entirety as follows:
(IV) the failure by the Company, without the Executive's consent, to
pay to the Executive any portion of the Executive's current compensation,
or to pay to the Executive any portion of an installment of deferred
compensation under any deferred compensation program of the
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Company, within seven (7) days of the date such compensation is due.
10. The Employment Agreement is hereby further amended by deleting
Exhibit I thereto in its entirety.
11. Except as expressly modified hereby, the terms and provisions of
the Employment Agreement remain in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Third Amendment to be
duly executed and delivered as of the date first above written.
NEW YORK STATE ELECTRIC EXECUTIVE
& GAS CORPORATION
By:
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