CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
THE CON EDISON SEVERANCE PAY PLAN
FOR MANAGEMENT EMPLOYEES
1. Purpose; Effective Date
A. The Con Edison Severance Pay Plan for Management Employees ( the
"Severance Pay Plan") is designed to provide specified post-employment payments
to eligible management employees of Consolidated Edison Company of New York,
Inc. (the "Company").
B. This Severance Pay Plan is effective as of June 1, 1997 and replaces
and supersedes any other management severance or separation pay plan or program
currently in effect in the Company.
2. Type of Plan
The Severance Pay Plan is classified as a welfare plan under the provisions of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). It is
intended to be a severance pay plan as defined in Federal Regulations 29 CFR
2510.3-2(b) for eligible management employees of the Company.
3. Participation
A "Participant" means a regular non-bargaining unit employee working as a full
time employee or a part time employee, whose regularly scheduled hours of annual
service are 1,000 hours or more in a 12-month period, of the Company who is on
the active payroll or who is on a leave of absence with a right to reemployment.
Participant shall exclude officers of the Company, temporary workers (agency or
independent), independent contractors, cooperative or student employees,
employees with an agreement providing for severance benefits, or employees
covered by a collective bargaining agreement that does not provide for
participation in the Severance Pay Plan. For purposes of the Severance Pay Plan
the Company in its sole discretion shall determine who is a Participant.
4. Eligibility
In order to be eligible to receive benefits under the Severance Pay Plan a
Participant must be involuntarily separated from service with the Company
because of a reduction in staffing levels or any other reasons which the Company
in the exercise of its business judgment may deem appropriate.
5. Exclusions
Benefits under this Severance Pay Plan shall not be payable to
Participants:
(1) whose employment terminates due to death prior to the Participant's
Termination Date;
(2) who are discharged for misconduct or cause or who resign in lieu
of being discharged for misconduct or cause, as determined by the Company
in its sole discretion, or who are discharged or who resign in lieu of
being discharged for any other reason except those pursuant to Section 4
above, as determined by the Company in its sole discretion;
(3) who transfer or are offered the opportunity to transfer from the
Comapny to a company affiliated (directly or indirectly) with the Company;
(4) who transfer or are offered the opportunity to transfer from the
Company to another employer as a result of a sale, merger, acquisition or
other transaction, provided the Participant continues to perform or is
offered the opportunity to continue to perform the same or similar duties
immediately following the transfer; whether the Participant is offered the
opportunity to transfer and \or continues to perform or is offered the
opportunity to continue to perform the same or similar duties immediately
following the transfer shall be determined by the Company in its sole
discretion;
(5) whose employment is terminated in connection with the expiration
of a sick or other authorized leave of absence; or
(6) who voluntarily terminate employment with the Company, except if
the Company in its sole discretion decides otherwise.
6. Plan Benefits
A. For purposes of determining Plan Benefits, the following shallapply:
(1) "Salary" means a Participant's base annual salary as of the
Participant's Termination Date including shift differential and
salary reduction contributions under Sections 125 and 401(k) of the
Internal Revenue Code of 1986, as amended, to an employee benefit
plan of the Company, but excluding bonuses, incentive compensation,
overtime pay and other pay or allowances.
(2) "Equivalent Week's Salary" means Salary divided by 52.
(3) "Termination Date" means the date set by the Company as the date
the Participant terminates employment with the Company for any
reason consistent with the terms of the Severance Pay Plan. The
Company reserves the right to alter the Termination Date at its sole
discretion for any reason it deems appropriate.
(4) "Years of Service" means a Participant's completed years of
service with the Company ending on the Termination Date computed
under the Company's adjusted service credit rules for computing
continuous service. If a Participant has previously been paid a
benefit under this Severance Pay Plan, the Participant's Years of
Service will be computed from the date of the Participant's
reemployment by the Company, and not from the Participant's original
continuous service date.
. B. (1) A payment will be made in one lump sum as soon as practicable after the
Participant's Termination Date based upon the guidelines indicated below. The
Company may pay amounts over a period of time and may pay amounts other than the
indicated guidelines taking all pertinent facts and circumstances into
consideration. The Company may determine, on a case by case basis, whether a
Participant is eligible for an additional, a reduced, or no severance payment.
Guideline A- Guideline B-
Without a Release With a Release
Number of Equivalent Number of Equivalent
Years of Service Week's Salary Week's Salary
Less than 1 0 0
1 but less than 10 2 The sum of 4 and one
times the number of Years of
10 and over 4 Service up to a maximum
sum of 30 Equivalent Week's
Salary.
(2) Participants who sign a release of all known and unknown claims
in such form as the Company in its sole discretion shall determine
may receive a payment based upon Guideline B in subdivision (1)
above. Other Participants may receive a payment based upon Guideline
A in subdivision (1) above. As additional benefits to Participants
who sign a release, the Company shall offer to continue the
Participant's group health and employee group life insurance
coverage with the Participant contributing the same amount as if he
or she were an active employee for a period equal to the
Participant's number of Equivalent Week's Salary. The Company may
deduct the Participant's contributions for such continued insurance
coverage from any payment made to the Participant under subdivision
(1) above. Any such extended period of group health insurance
coverage shall be considered part of the Participant's COBRA
continuation period of coverage. As additional benefits to
Participants who sign a release the Company may provide outplacement
services to such extent and level as the Company in its sole
discretion shall determine.
(3) If a Participant who receives a payment under this Severance Pay
Plan is re-employed in a comparable position by the Company or an
affiliate of the Company, the Participant shall repay to the Company any
amount of the severance payment attributable to the number of Equivalent
Weeks in excess of the number of weeks from the Participant's Termination
Date to the re-employment date.
7. Effect of Plan Benefits on Other Benefits
Payment under this Severance Pay Plan will not be considered in determining a
Participant's benefits under the Company's Retirement Plan for Management
Employees, Thrift Savings Plan for Management Employees, Group Life Insurance
Plan or any other employee benefit plan of the Company.
8. Tax Withholding
Payments made pursuant to this Severance Pay Plan are subject to the withholding
of federal, state and local taxes, FICA (Social Security taxes), and FUTA and
SUTA (unemployment taxes) at the time of payment and will be reported to the IRS
on form W-2.
9. Payment Upon Death, Disability or Leave of Absence
If a Participant dies prior to the specified Termination Date, no payments will
be made under this Severance Pay Plan to the Participant or the Participant's
heirs or estate. If a Participant dies after terminating service but before
payment is made, payment will be made to the Participant's spouse or, if the
Participant leaves no surviving spouse, the Participant's estate in a single
lump sum as soon as practicable after the Participant's death.
If a Participant is on sick leave or other leave of absence at the time of
receiving official notification of his or her Termination Date, or if a
Participant goes on sick leave or other leave of absence after receiving
official notification of his or her Termination Date, the Participant's
employment and sick pay will be terminated as of the Participant's Termination
Date and any payment under the Severance Pay Plan to Participant shall be paid
as soon as practicable after the Termination Date.
10. Financing of Benefits
Plan Benefits shall be payable out of the Company's general assets.
11. Administration
The Company's Vice President-Employee Relations is the named fiduciary and Plan
Administrator under the Severance Pay Plan who shall determine conclusively any
and all questions arising from the administration of the Severance Pay Plan and
shall have sole and complete discretionary authority and control to manage the
operation and administration of the Severance Pay Plan, including but not
limited to, the determination of all questions relating to eligibility for
participation and benefits, interpretation of all Plan provisions, determination
of the amount of benefits payable to any Participant, spouse, heirs or estate,
and construction of disputed or ambiguous terms.
The named fiduciary and Plan Administrator may delegate responsibilities under
the Severance Pay Plan.
12. Claims Procedure
A Participant, or any person duly authorized by such a Participant, may file a
written claim for benefits under this Severance Pay Plan if the Participant
believes he/she has been treated unfairly under the Severance Pay Plan. Such
claim may only relate to a benefit under the Severance Pay Plan and not any
matter under any other policy, practice or guideline of the Company.
The written claim shall be sent to the Plan Administrator-Severance Pay Plan,
c/o Employee Benefits, Con Edison, Office E, 4 Irving Place, New York, New York
10003. Such claim must be received within 60 days of the event which gave rise
to the claim.
If the claim is denied the claimant will receive written notice of the decision,
including the specific reason for the decision, within 90 days of the date the
claim was received.
In some cases, more than 90 days may be needed to make a decision. In such cases
the claimant will be notified in writing, within the initial 90-day period, of
the reason more time is needed. An additional 90 days may be taken to make the
decision if the claimant is sent such a notice. The extension notice will show
the date by which the decision will be sent.
13. Procedure to Appeal Claim Denial
The "Review Procedure" which follows gives the rules for appealing a denied
claim.
(i) A claimant may use this Procedure if:
no reply at all is received by the claimant within 90 days after
filing the claim;
a notice has extended the time an additional 90 days and no reply is
received within 180 days after filing the claim; or
written denial of the claim for benefits or other matters is received
within the proper time limit and the claimant wishes to appeal
the written denial.
If the claim for benefits or review of any other matter under the Severance Pay
Plan is denied, the Participant, or other duly authorized person, may appeal
this denial in writing within 60 days after it is received. Written request for
review of any denied claim should be sent directly to the Plan
Administrator-Severance Pay Plan, c/o Employee Benefits, Con Edison, Office E, 4
Irving Place, New York, New York 10003.
The Plan Administrator serves as the final review committee under the Severance
Pay Plan for all Participants. Unless the Plan Administrator sends notice in
writing that the claim is a special case needing more time, the Plan
Administrator will conduct a review and decide on the appeal of the denied claim
within 60 days after receipt of the written request for review. If more time is
required to make a decision, the Plan Administrator will send notice in writing
that there will be a delay and give the reasons for the delay. In such cases,
the Plan Administrator may have 60 days more, or a total of 120 days, to make a
decision.
If the claimant sends a written request for review of a denied claim, the person
sending the request has the right to:
(i) review pertinent Severance Pay Plan documents which may be obtained by
writing to the to the Plan Administrator and
(ii) send to the Plan Administrator a written statement of the issues and any
other documents in support of the claim for benefits or other matters under
review.
The Plan Administrator's decision shall be given to the claimant in writing
within 60 days or, if extended, 120 days, and shall include specific reasons for
the decision. If the Plan Administrator does not give his decision on review
within the appropriate time span, the claimant may consider the claim denied.
The decision of the Plan Administrator is final and binding on all parties.
A Participant in the Severance Pay Plan may have further rights under ERISA, as
described in Section 20 entitled "Rights of a Plan Participant."
14. Legal Service
Process can be served on the Severance Pay Plan Administrator by directing such
service to Vice President-Employee Relations, Con Edison, 4 Irving Place, New
York, New York 10003.
15. Benefits Not Assigned or Alienated
Assignment or alienation of any benefits provided by the Severance Pay Plan will
not be permitted or recognized except as otherwise authorized by applicable law.
This means that, except as required by applicable law, benefits provided under
the Severance Pay Plan may not be sold, assigned, or otherwise transferred by or
on behalf of a Participant.
16. Plan Records
The Severance Pay Plan and all of its records are kept on a calendar year basis
beginning January 1 and ending December 31 of each year.
17. Plan Identification Numbers
This Severance Pay Plan is identified by the following numbers under the
Internal Revenue Service (IRS) Rules.
Number 13-5009340 assigned by the IRS. Number 557 assigned by the
Company.
18. Plan Continuance
The Company may amend or terminate this Severance Pay Plan at any time. Any
amendments or the termination of the Severance Pay Plan shall not result in the
forfeiture of the benefits previously awarded under the Severance Pay Plan.
19. Plan Documents
This document is both the Severance Pay Plan and a Summary Plan Description as
such terms are defined in ERISA.
20. Rights of a Plan Participant
As a Participant in this Severance Pay Plan, you are entitled to certain rights
and protection under the Employee Retirement Income Security Act of 1974
(ERISA). ERISA provides that all Severance Pay Plan Participants shall be
entitled to:
(i) Examine, without charge, all Severance Pay Plan documents and copies of all
documents filed by the Severance Pay Plan with the U.S. Department of Labor, if
any;
(ii) Obtain copies of all Severance Pay Plan documents and other Plan
information upon written request to the Severance Pay Plan Administrator.
There may be a reasonable charge for such copies.
In addition to creating rights for Severance Pay Plan Participants, ERISA
imposes duties upon these who are responsible for the operation of employee
benefit plans. The people who operate your Severance Pay Plan, called
"Fiduciaries" of the Plan, have a duty to do so prudently and in the interest of
you and other Severance Pay Plan Participants. No one, including your employer,
or any other person, may terminate your employment or otherwise discriminate
against you in any way to prevent you from obtaining a benefit or exercising
your right under ERISA. If your claim for benefits is denied, in whole or in
part, you have certain rights of review as described under Claims and Procedure
to Appeal Claim Denial Sections 12 and 13, respectively, of this Plan.
Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request materials from the Plan Administrator and do not
receive them within 30 days, you may file suit in a federal court. In such case,
the court may require the Plan Administrator to provide the materials and pay up
to $100 a day until you receive the materials, unless the materials were not
sent because of reasons beyond the control of the Plan Administrator. If you
have a claim for benefits which is denied or ignored, in whole or in part, you
may file suit in a state or federal court. If you are discriminated against for
asserting your rights, you may seek assistance from the U.S. Department of Labor
or you may file suit in a federal court. The court will decide who will pay
court costs and legal fees. If you are successful, the court may order the
person you have sued to pay these costs and fees. If you lose, the court may
order you to pay these costs and fees if, for example, it finds your claim is
frivolous.
If you have any questions about the Severance Pay Plan, you should contact the
Severance Pay Plan Fiduciary. If you have any questions about this statement of
your rights, or about your rights under ERISA, you should contact your nearest
Area Office of the U. S. Labor Management Services Administration, Department of
Labor.
21. Statement of Employer's Rights
A Participant's eligibility for benefits under this Severance Pay Plan shall not
be considered a guarantee of continued or lifetime employment with the Company
and shall not change the fact that a Participant shall be considered an employee
at will. A Participant's employment by the Company may be terminated by the
Company whenever the Company in its sole discretion considers that to be in its
best interest, subject to applicable law.