Exhibit 10-25
EMPLOYMENT AGREEMENT
Agreement made as of the 1st day of January, 1993, between
Niagara Mohawk Power Corporation (the "Company"), and Robert J.
Patrylo (the "Executive").
WHEREAS, the Company desires to employ the Executive, and the
Executive desires to accept/continue employment with the Company,
on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, the Company and the Executive
hereby agree as follows:
1. The Company shall employ the Executive, and the
Executive shall serve the Company, for the period beginning January
1, 1993 and expiring on December 31, 1995. The term of this
Agreement will be extended by one year at the completion of each
full year of employment, unless either party notifies the other to
the contrary not later than sixty (60) days prior to the completion
of the full year of employment.
2. The Executive shall serve the Company as its Senior Vice
President - Gas Customer Service. During the term of this
Agreement, the Executive shall, except during vacation or sick
leave, devote the whole of the Executive's time, attention and
skill during usual business hours (and outside those hours when
reasonably necessary to the Executive's duties hereunder);
faithfully and diligently perform such duties and exercise such
powers as may be from time to time assigned to or vested in the
Executive by the Company's Board of Directors (the "Board") or by
any officer of the Company superior to the Executive; obey the
directions of the Board and of any officer of the Company superior
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to the Executive; and use the Executive's best efforts to promote
the interests of the Company. The Executive may be required in
pursuance of the Executive's duties hereunder to perform services
for any company controlling, controlled by or under common control
with the Company (such companies hereinafter collectively called
"Affiliates") and to accept such offices in any Affiliates as the
Board may require. The Executive shall obey all policies of the
Company and applicable policies of its Affiliates.
3. a. During the term of this Agreement, the Company
shall pay the Executive a salary at an annual rate of $173,200,
which shall be payable periodically in accordance with the
Company's then prevailing payroll practices, or such greater amount
as the Company may from time to time determine.
b. The Executive shall be entitled to participate in
the Company's Supplemental Executive Retirement Plan ("SERP")
according to its terms, as modified by Schedule A hereto.
c. The Executive shall be entitled to participate in
the Company's Officers Incentive Compensation Plan, Stock Option
Plan and Performance Share Unit Plan, and any successors thereto,
in accordance with the terms thereof.
d. The Executive shall be entitled to such expense
accounts, vacation time, sick leave, perquisites of office, fringe
benefits, insurance coverage, and other terms and conditions of
employment as the Company generally provides to its employees
having rank and seniority at the Company comparable to the
Executive.
4. Unless terminated in accordance with the following
provisions of this paragraph 4, the Company shall continue to
employ the Executive and the Executive shall continue to work for
the Company, during the term of this Agreement.
a. This Agreement shall terminate automatically upon
the death of the Executive.
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b. Upon the Executive's "Disability" (as defined
below) the payment of benefits under the Company's short-term and
long-term disability plans shall satisfy the Company's obligations
under Section 3a hereof. The Executive shall be deemed to be under
a Disability if (i) a physician selected by the Company advises the
Company that the Executive's physical or mental condition will
render the Executive unable to perform the Executive's duties for a
period exceeding 12 consecutive months, or (ii) due to a physical
or mental condition, the Executive has not substantially performed
the Executive's duties hereunder for a period of 12 consecutive
months.
c. The Company may terminate the Executive's
employment at any time for "Cause"; Cause shall mean (i) a
material default or other material breach by the Executive of his
obligations under this Agreement, (ii) material failure by the
Executive diligently and competently to perform the Executive's
duties under this Agreement, or (iii) misconduct, dishonesty,
insubordination or other act by the Executive detrimental to the
good will of the Company or damaging to the Company's relationships
with its customers, suppliers or employees.
d. If any of the following events, any of which shall
constitute "Good Reason", occurs within twenty-four full calendar
months after a Change in Control (as that term is defined in
Schedule B hereto), the Executive may voluntarily terminate the
Executive's employment for Good Reason within 90 days after the
occurrence of such event and be entitled to the severance benefits
set forth in subsection e. below.
(i) The Company assigns any duties to the Executive which
are materially inconsistent with the Executive's position, duties,
offices, responsibilities or reporting requirements immediately
prior to a Change in Control; or
(ii) the Company reduces the Executive's base salary,
including deferrals, as in effect immediately prior to a Change in
Control; or
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(iii) the Company discontinues any bonus or other
compensation plan or any other benefit, stock ownership plan, stock
purchase plan, stock option plan, life insurance plan, health plan,
disability plan or similar plan (as the same existed immediately
prior to the Change in Control) in which the Executive participated
or was eligible to participate in immediately prior to the Change
in Control and in lieu thereof does not make available plans
providing at least comparable benefits; or
(iv) the Company takes action which adversely affects the
Executive's participation in, or eligibility for, or materially
reduces the Executive's benefits under, any of the plans described
in (iii) above, or deprives the Executive of any material fringe
benefit enjoyed by the Executive immediately prior to the Change in
Control, or fails to provide the Executive with the number of paid
vacation days to which the Executive was entitled in accordance
with normal vacation policy immediately prior to the Change in
Control; or
(v) the Company requires the Executive to be based at any
office or location other than one within a 50-mile radius of the
office or location at which the Executive was based immediately
prior to the Change in Control; or
(vi) the Company purports to terminate the Executive's
employment otherwise than as expressly permitted by this Agreement;
or
(vii) the Company fails to comply with and satisfy paragraph
5 hereof, provided that such successor has received prior written
notice from the Company or from the Executive of the requirements
of paragraph 5 hereof.
The Executive shall have the sole right to determine, in
good faith, whether any of the above events has occurred.
e. The Company may terminate the Executive's
employment at any time without Cause. In the event that the
Executive's employment is terminated by the Company without Cause
or by the Executive for Good Reason following a Change in Control
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as set forth above, the Company shall pay the Executive a severance
benefit, payable in twenty-four equal monthly installments, equal
to two years' base salary, plus the greater of (i) two times the
most recent annual bonus or (ii) two times the average annual bonus
for the three prior years. In addition, the Executive will be
entitled to continue participation in the Company's benefit plans
for a two-year period, provided, however, that such benefit
continuation will terminate upon the Executive's coverage under
comparable plans. The payments and benefits continuation provided
to the Executive by the Company pursuant to this subsection will be
in full and complete satisfaction (except as provided in
subsections f and i below and Schedule A hereto) of any and all
obligations owing to the Executive pursuant to this Agreement.
f. Upon termination pursuant to a, b, c, d, or e
above, the Company shall pay the Executive or the Executive's
estate any salary earned and unpaid to the date of termination, and
any outstanding funds advanced by the Company to or on behalf of
the Executive shall become immediately due and payable.
g. It is the intention of the parties to this
Agreement that no severance benefits hereunder will be paid to the
extent that such benefits (either alone or when aggregated with
other benefits contingent on a Change in Control) and paid to or
for benefit of the Executive) constitute "excess parachute
payments" within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"). Accordingly, under
the circumstances set forth below, severance benefits payable under
this Agreement shall be subject to the following ceiling
notwithstanding anything in this Agreement to the contrary: The
"aggregate present value" of severance benefits payable under this
Agreement which, together with all other payments to the Executive
or for the Executive's benefit, would be "parachute payments" if
their "aggregate present value" equalled or exceeded 300% of the
Executive's "base amount" shall in no event exceed 295% of the
Executive's "base amount" (within those terms' meaning under
Section 280G of the Code).
h. The determination of any reduction in the payments
under this Agreement, or in payments made other than pursuant to
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this Agreement, pursuant to the foregoing proviso, including
apportionment among specific payments and benefits, shall be made
by the Executive in good faith, and such determination shall be
conclusive and binding on the Company. The Company shall make the
calculations referred to above within thirty days following the
termination of the Executive's employment and shall provide such
calculations and the basis therefor to the Executive within such
period. In the event the foregoing limit is exceeded, the
Executive shall give notice to the Company within 20 days of the
Executive's receipt of such calculations and related information of
the Executive's determination of the reduction of benefits.
i. Subject to and contingent upon the occurrence of a
Change in Control the Company agrees to pay promptly as incurred,
to the full extent permitted by law, all legal fees and expenses
which the Executive may reasonably thereafter incur as a result of
any contest, litigation or arbitration (regardless of the outcome
thereof) by the Company, by the Executive or by any third party of
the validity of, or liability under, this Agreement or the SERP
(including any contest by the Executive about the amount of any
payment pursuant to this Agreement or pursuant to the SERP), plus
in each case interest on any delayed payment at the rate of 150% of
the Prime Rate posted by the Chase Manhattan Bank, N.A., provided,
however, that the Company shall not be liable for the Executive's
legal fees and expenses if the Executive's position in such
contest, litigation or arbitration is found by the neutral
decision-maker to be frivolous.
5. The Company shall require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in
the same manner and to the same extent that the Company would be
required to perform. As used in this Agreement, "Company" shall
mean the company as hereinbefore defined and any successor to its
business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
6. The Executive shall not divulge or communicate to any
person (except in performing the Executive's duties under this
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Agreement) or use for the Executive's own purposes trade secrets,
confidential commercial information, or any other information,
knowledge or data of the Company or of any of its Affiliates which
is not generally known to the public and shall use the Executive's
best efforts to prevent the publication or disclosure by any other
person of any such secret, information, knowledge or data. All
documents and objects made, compiled, received, held or used by the
Executive while employed by the Company in connection with the
business of the Company shall be and remain the Company's property
and shall be delivered by the Executive to the Company upon the
termination of the Executive's employment or at any earlier time
requested by the Company. It is understood that the Executive
shall retain ownership of the Executive's personal property,
including the Executive's private working papers not containing
proprietary information of or about the Company.
7. The Executive agrees that during the Executive's
employment at the Company and for a period of one year after the
termination of the Executive's employment, the Executive will not
directly or indirectly, whether or not for compensation and whether
or not as an employee, be engaged in or have any financial interest
in any business competing with or which may compete with the
business of the Company (or with any business of any Affiliate for
which the Executive performed services hereunder) within any state,
region or locality in which the Company or such Affiliate is then
doing business or marketing its products, as the business of the
Company or such Affiliates may then be constituted. For purposes
of this Agreement, the Executive shall be deemed to be engaged in
or to have a financial interest in such a business if the Executive
is an employee, officer, director, or partner, of any person,
partnership, corporation, trust or other entity which is engaged in
such a business, or if the Executive directly or indirectly
performs services for such entity or if the Executive or any member
of the Executive's immediate family beneficially owns an equity
interest, or interest convertible into equity, in any such entity;
provided, however, that the foregoing shall not prohibit the
Executive or a member of the Executive's immediate family from
owning, for the purpose of passive investment, less than 5% of any
class of securities of a publicly held corporation. The Executive
recognizes that a breach or threatened breach by the Executive of
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the Executive's obligations under this paragraph 7 would cause
irreparable injury to the Company, and the Company shall be
entitled to preliminary and permanent injunctions enjoining the
Executive from violating this paragraph 7 in addition to any other
remedies which may be available.
8. The Executive agrees that the Executive shall not, for a
period of one year after the termination of this Agreement, employ
any person who was employed by the Company or any of its Affiliates
or induce such person to accept employment other than with the
Company and its Affiliates.
9. The Executive hereby agrees that any and all
improvements, inventions, discoveries, formulae, processes,
methods, know-how, confidential data, trade secrets and other
proprietary information (collectively, "Work Products") within the
scope of any business of the Company or any Affiliate which the
Executive may conceive or make or have conceived or made during the
Executive's employment with the Company shall be and are the sole
and exclusive property of the Company, and that the Executive
shall, whenever requested to do so by the Company, at its expense,
execute and sign any and all applications, assignments or other
instruments and do all other things which the Company may deem
necessary or appropriate (i) in order to apply for, obtain,
maintain, enforce, or defend letters patent of the United States or
any foreign country for any Work Product, or (ii) in order to
assign, transfer, convey or otherwise make available to the Company
the sole and exclusive right, title and interest in and to any Work
Product.
10. Any dispute or controversy between the parties relating
to this Agreement (except any dispute relating to paragraph 6, 7 or
8 hereof) or relating to or arising out of the Executive's
employment with the Company, shall be settled by binding
arbitration in the City of Syracuse, State of New York, pursuant to
the governing rules of the American Arbitration Association and
shall be subject to the provisions of Article 75 of the New York
Civil Practice Law and Rules. Judgment upon the award may be
entered in any court of competent jurisdiction. Notwithstanding
anything herein to the contrary, if any dispute arises between the
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parties under paragraph 6, 7 or 8 hereof, or if the Company makes
any claim under paragraph 6, 7, or 8, the Company shall not be
required to arbitrate such dispute or claim but shall have the
right to institute judicial proceedings in any court of competent
jurisdiction with respect to such dispute or claim. If such
judicial proceedings are instituted, the parties agree that such
proceedings shall not be stayed or delayed pending the outcome of
any arbitration proceedings hereunder.
11. Any notice or other communication required or permitted
under this Agreement shall be effective only if it is in writing
and delivered personally or sent by registered or certified mail,
postage prepaid, addressed as follows:
If to the Company:
Niagara Mohawk Power Corporation
300 Erie Boulevard West
Syracuse, New York 13202
ATTN: Corporate Secretary
If to the Executive:
7111 Thorntree Hill Drive
Fayetteville, N.Y. 13066
or to such other address as either party may designate by notice to
the other, and shall be deemed to have been given upon receipt.
12. This Agreement constitutes the entire agreement between
the parties hereto with respect to the Executive's employment by
the Company, and supersedes and is in full substitution for any and
all prior understandings or agreements with respect to the
Executive's employment.
13. This Agreement may be amended only by an instrument in
writing signed by the parties hereto, and any provision hereof may
be waived only by an instrument in writing signed by the party or
parties against whom or which enforcement of such waiver is sought.
The failure of either party hereto at any time to require the
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performance by the other party hereto of any provision hereof shall
in no way affect the full right to require such performance at any
time thereafter, nor shall the waiver by either party hereto of a
breach of any provision hereof be taken or held to be a waiver of
any succeeding breach of such provision or a waiver of the
provision itself or a waiver of any other provision of this
Agreement.
14. This Agreement is binding on and is for the benefit of
the parties hereto and their respective successors, heirs,
executors, administrators and other legal representatives. Neither
this Agreement nor any right or obligation hereunder may be
assigned by the Company (except to an Affiliate) or by the
Executive.
15. If any provision of this Agreement, or portion thereof,
is so broad, in scope or duration, so as to be unenforceable, such
provision or portion thereof shall be interpreted to be only so
broad as is enforceable.
16. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
17. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
18. The Executive represents and warrants that the
Executive is not party to any agreement which would prohibit the
Executive from entering into this Agreement or performing fully the
Executive's obligations hereunder.
19. The obligations of the Executive set forth in
paragraphs 6, 7, 8, 9 and 10 represent independent covenants by
which the Executive is and will remain bound notwithstanding any
breach by the Company, and shall survive the termination of this
Agreement.
IN WITNESS WHEREOF, the Company and the Executive have
executed this Agreement as of the date first written above.
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__________________________ NIAGARA MOHAWK POWER CORPORATION
ROBERT J. PATRYLO
By:______________________________
DAVID J. ARRINGTON
Senior Vice President -
Human Resources
SCHEDULE A
Modifications in Respect of Robert J. Patrylo ("Executive")
to the
Supplemental Executive Retirement Plan ("SERP")
of the
Niagara Mohawk Power Corporation ("Company")
I. Subsection 1.8 of Section I of the SERP is hereby modified to
provide that the term "Earnings" shall mean the sum of the (i)
Executive's base annual salary averaged over the final 36 months of
the Executive's employment with the Company and (ii) average of the
annual bonus earned by the Executive under the Corporation's Annual
Officers Incentive Compensation Plan in respect of the final 36
months of the Executive's employment with the Company.
II. Subsection 2.1 of Section II of the SERP is hereby modified
to provide that full SERP benefits are vested following ten (10)
years of continuous service with the Company.
III. Subsection 4.3 of Section IV of the SERP is hereby modified
to provide that in the event of (x) the Executive's involuntary
termination of employment by the Company, at any time, other than
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for Cause, (y) the Executive's Disability (as defined in Section 4b
of this Agreement) or (z) the Executive's termination of employment
for Good Reason within the 24 full calendar month period following
a Change in Control (as defined in Schedule B of this Agreement),
the Executive shall be 100% vested in his full SERP benefit (i.e.,
60% of Earnings (as modified above)) regardless of the Executive's
years of continuous service with the Company. If the Executive is
less than age 55 at the date of such termination of employment, the
Executive shall be entitled to receive benefits commencing no
earlier than age 55, calculated pursuant to Section III of the
SERP.
IV. Except as provided above, the provisions of the SERP shall
apply and control participation therein and the payment of benefits
thereunder.
__________________________ NIAGARA MOHAWK POWER CORPORATION
Robert J. Patrylo
By:______________________________
DAVID J. ARRINGTON
Senior Vice President -
Human Resources
SCHEDULE B
For purposes of this Agreement, the term "Change in Control"
shall mean:
(1) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"))
(a "Person") of beneficial ownership (within the meaning of Rule
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13d-3 promulgated under the Exchange Act) of 20% or more of either
(i) the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined voting
power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, that
the following acquisitions shall not constitute a Change of
Control: (i) any acquisition directly from the Company (excluding
an acquisition by virtue of the exercise of a conversion
privilege), (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company or (iv) any acquisition by any
corporation pursuant to a reorganization, merger or consolidation,
if, following such reorganization, merger or consolidation, the
conditions described in clauses (i), (ii) and (iii) of subparagraph
(3) of this subsection (A) are satisfied; or
(2) Individuals who, as of the date hereof, constitute the
Company's Board of Directors (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board; or
(3) Approval by the shareholders of the Company of a
reorganization, merger or consolidation, in each case, unless,
following such reorganization, merger or consolidation, (i) more
than 75% of, respectively, the then outstanding shares of common
stock of the corporation resulting from such reorganization, merger
or consolidation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
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generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
reorganization, merger or consolidation in substantially the same
proportions as their ownership, immediately prior to such
reorganization, merger or consolidation, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case
may be, (ii) no Person (excluding the Company, any employee benefit
plan (or related trust) of the Company or such corporation
resulting from such reorganization, merger or consolidation and any
Person beneficially owning, immediately prior to such
reorganization, merger or consolidation, directly or indirectly,
20% or more of the Outstanding Company Common stock or Outstanding
Voting Securities, as the case may be) beneficially owns, directly
or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such
reorganization, merger or consolidation or the combined voting
power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors and (iii)
at least a majority of the members of the board of directors of the
corporation resulting from such reorganization, merger or
consolidation were members of the Incumbent Board at the time of
the execution of the initial agreement providing for such
reorganization, merger or consolidation; or
(4) Approval by the shareholders of the Company of (i) a
complete liquidation or dissolution of the Company or (ii) the sale
or other disposition of all or substantially all of the assets of
the Company, other than to a corporation, with respect to which
following such sale or other disposition, (A) more than 75% of,
respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such sale or other disposition in
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substantially the same proportion as their ownership, immediately
prior to such sale or other disposition, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case
may be, (B) no Person (excluding the Company and any employee
benefit plan (or related trust) of the Company or such corporation
and any Person beneficially owning, immediately prior to such sale
or other disposition, directly or indirectly, 20% or more of the
Outstanding Company Common Stock or Outstanding Company Voting
Securities, as the case may be) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of such corporation and the combined voting
power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors and (C) at
least a majority of the members of the board of directors of such
corporation were members of the Incumbent Board at the time of the
execution of the initial agreement or action of the Board providing
for such sale or other disposition of assets of the Company.
January 24, 1994
Robert J. Patrylo
Niagara Mohawk Power Corporation
300 Erie Boulevard West
Syracuse, New York 13202
Re: Employment Agreement
Dear Mr. Patrylo:
This letter sets forth certain obligations of Niagara Mohawk
Power Corporation (the "Company") under the Employment Agreement
between the Company and you, dated as of January 1, 1993 (the
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"Agreement") in the event of your death while you are employed by
the Company.
Subparagraph 4.a. of the Agreement provides that the
Agreement shall terminate automatically upon the death of the
executive. Accordingly, under subparagraph 4.a. of the Agreement
any right or benefit you accrue or to which you are entitled under
the terms of the Agreement prior to your death, other than payment
of salary in respect of the period following your death, will not
be extinguished by reason of your death. Neither will your death
extinguish the Company's obligation to you in respect of any such
right or benefit. It is understood that pursuant to Subparagraph
4.f. of the Agreement, the Company will pay your estate any salary
earned and unpaid as of your death.
Kindly sign the attached copy of this letter on the line
reading "Acknowledgment of Receipt" and return it to me.
If you have any questions or comments please feel free to
contact me.
Sincerely,
DAVID J. ARRINGTON
Senior Vice President -
Human Resources
Acknowledgment of Receipt: ____________________________
Date: ____________________________