ORANGE AND ROCKLAND UTILITIES, INC.
ELIGIBLE EMPLOYEES' INSURANCE PROGRAM
Effective July 1, 1997
ORANGE AND ROCKLAND UTILITIES, INC.
ELIGIBLE EMPLOYEES' INSURANCE PROGRAM
1. Eligibility
Each Officer of Orange and Rockland Utilities, Inc.
(the "Company"), or an Affiliate (as defined below) which has
been designated as a participating entity by the Company's Board
of Directors (a "Designated Affiliate"), is eligible to
participate in the Orange and Rockland Utilities, Inc. Eligible
Employees' Insurance Program (the "Program"). In addition, each
non-Officer employee of the Company or a Designated Affiliate who
is in salary grade 14 or above and who is designated for
participation by the Company's Vice President of Human Resources
shall be eligible to participate in the Program. Any individual
who is eligible to participate hereunder shall be referred to as
an "Eligible Employee".
For purposes of this Program, an "Affiliate" is an
entity which must be aggregated with the Company in accordance
with Sections 414(b), 414(c), 414(m), or 414(o) of the Internal
Revenue Code of 1986, as amended.
2. Participation
Each Eligible Employee shall become a participant in
the Program (a "Participant") immediately upon becoming an
Eligible Employee, provided that such Eligible Employee is then
insurable at standard life insurance rates. Notwithstanding the
foregoing, no Eligible Employee shall become a Participant
hereunder prior to the later of (i) July 1, 1997, or (ii) the
issuance of an insurance policy providing the benefits payable
under the Program with respect to that Eligible Employee.
An Eligible Employee who becomes a Participant shall
remain a Participant until the earlier of (i) his or her death,
or (ii) his or her termination of employment from the Company and
all Designated Affiliates prior to retirement under the terms of
the qualified retirement plan of the Company or Designated
Affiliate that covers the Participant ("Retirement").
3. Life Insurance Benefit
(a) Each Participant shall receive life insurance
coverage which will provide a death benefit equal to: (1) two
times the Participant's base salary from the Company or a
Designated Affiliate as in effect at the date of the
Participant's death, if the Participant dies while employed by
the Company or a Designated Affiliate; or (2) $25,000, if the
Participant dies after Retirement. A Participant under the
Program will not be eligible to participate in the basic group
life insurance program that is maintained for other employees of
the Company or its Affiliates, but will be eligible to purchase
supplemental life insurance coverage in accordance with the terms
of the separate supplemental life insurance program that is
maintained for employees of the Company or its Affiliates.
(b) Any life insurance policy purchased to provide
benefits under this Section 3 (a "Policy") shall be subject to
certain conditions set forth in a "Split-Dollar Life Insurance
Agreement" between the Participant, the Company, and the trustee
of any trust which holds the Policy, pursuant to which the
Participant may designate a beneficiary (the "Beneficiary") with
respect to the portion of the Policy proceeds payable in
accordance with the preceding paragraph in the event the
Participant dies while life insurance coverage is in effect. The
Participant shall have the right to designate and change such
Beneficiary in accordance with the terms of the Split-Dollar Life
Insurance Agreement, with such change to be effective when
received by the insurance company. If no such Beneficiary
designation is on file with the insurance company as of the
Participant's date of death, the death benefit described in the
preceding paragraph shall be paid in accordance with the terms of
the Policy.
(c) The death benefit payable pursuant to paragraph
(a) shall not be paid if the insurance company fails to issue a
Policy on the life of the Participant and shall be subject to all
conditions and exceptions set forth in the applicable Policy.
(d) Notwithstanding any provision of this Program or
any other document to the contrary, the life insurance death
benefit provided under paragraph (a) shall be payable solely from
the proceeds of the Policy, if any.
4. Miscellaneous
(a) Each Participant is responsible for the payment of
any current taxes which are imposed upon such Participant as a
result of the life insurance coverage provided to such
Participant under this Program.
(b) Copies of the Program and any and all amendments
thereto shall be made available to all Participants and
Beneficiaries at all reasonable times at the office of the Vice
President of Human Resources.
(c) The Program shall be administered by the Orange
and Rockland Utilities, Inc. Retirement Committee (the
"Committee"), which shall have full power, discretion, and
authority to interpret, construe, and administer the Program and
any part thereof. The Committee's interpretations and
constructions of the Program, and the actions taken thereunder by
the Committee, shall, except as otherwise determined by the Board
of Directors of the Company, be binding and conclusive on all
persons for all purposes. Any Participant or Beneficiary claims,
except for those claims regarding the benefits payable under a
Policy, shall be resolved by the Committee in accordance with
procedures which it shall establish.
To the extent that a Participant or Beneficiary has a
claim regarding the benefits payable under a Policy, such claim
shall be filed with the insurance company issuing such policy,
and such insurance company shall be responsible for making a
decision with respect to such claim.
(d) The Board of Directors may at any time prior to a
Change in Control or Potential Change in Control (as defined in
Section 5) amend or terminate the Program. After a Change in
Control or Potential Change in Control, the Board of Directors
may not terminate or amend the Program, other than to make
amendments which are necessary in order to comply with applicable
law.
(e) The Company, its officers, and its Board of
Directors shall have the right to rely upon a written opinion of
legal counsel, which may be independent legal counsel or legal
counsel regularly employed by the Company, if any question should
arise as to any obligation under the Program.
(f) All elections, designations, requests, notices,
instructions and other communications from an Eligible Employee,
Participant, Beneficiary, or other person to the Committee or the
Board of Directors of the Company, required or permitted under
the Program, shall be in such form as is prescribed from time to
time by the Committee and shall be mailed by first class mail or
delivered to such location as shall be specified by the
Committee.
(g) The terms of the Program shall be binding upon the
Company and its successors and assigns.
(h) The Program shall be governed by and construed in
accordance with the laws of the State of New York, as from time
to time in effect, and any applicable federal laws.
(i) The Program is effective as of July 1, 1997.
5. Change in Control
(a) Notwithstanding anything else herein to the
contrary, in the event of the occurrence of a Change in Control
or Potential Change in Control, if any, the Company shall
continue to make premium payments to keep life insurance coverage
in force with respect to each Participant, for so long as that
Participant remains entitled to coverage hereunder.
(b) A "Change in Control" shall be deemed to have
occurred if the event set forth in any one of the following
paragraphs shall have occurred:
(i) any Person is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company
(not including in the securities beneficially owned by such
Person any securities acquired directly from the Company or
its affiliates other than in connection with the acquisition
by the Company or its affiliates of a business) representing
20% or more of either the then-outstanding Company Common
Stock, $5 par value per share (or any successor common
stock) ("Shares") or the combined voting power of the
Company's then-outstanding securities;
(ii) the following individuals cease for any
reason to constitute a majority of the number of Directors
then serving: individuals who, on April 1, 1997,
constituted the Board of Directors of the Company and any
new Director (other than a Director whose initial assumption
of office is in connection with an actual or threatened
election contest, including, but not limited to, a consent
solicitation, relating to the election of Directors of the
Company (as such terms are used in Rule 14a-11 of Regulation
14A under the Exchange Act)) whose appointment or election
by the Board or nomination for election by the Company's
shareholders was approved by a vote of at least two-thirds
(2/3) of the Directors then still in office who either were
Directors on April 1, 1997 or whose appointment, election or
nomination for election was previously so approved;
(iii) the shareholders of the Company approve a
merger or consolidation of the Company with any other
corporation or approve the issuance of voting securities of
the Company in connection with a merger or consolidation of
the Company (or any direct or indirect subsidiary of the
Company) pursuant to applicable stock exchange requirements,
other than (A) a merger or consolidation which would result
in the voting securities of the Company outstanding
immediately prior to such merger or consolidation continuing
to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or
any parent thereof), in combination with the ownership of
any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, at least 65% of the
combined voting power of the voting securities of the
Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation,
or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in
which no Person is or becomes the Beneficial Owner, directly
or indirectly, of securities of the Company (not including
in the securities beneficially owned by such Person any
securities acquired directly from the Company or its
affiliates other than in connection with the acquisition by
the Company or its affiliates of a business) representing
20% or more of either the then-outstanding Shares or the
combined voting power of the Company's then-outstanding
securities; or
(iv) the shareholders of the Company approve a
plan of complete liquidation or dissolution of the Company
or an agreement for the sale or disposition by the Company
of all or substantially all of the Company's assets, other
than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity, at
least 65% of the combined voting power of the voting
securities of which are owned by Persons in substantially
the same proportions as their ownership of the Company
immediately prior to such sale.
Notwithstanding the foregoing, no "Change in Control"
shall be deemed to have occurred if there is consummated any
transaction or series of integrated transactions immediately
following which the record holders of Shares immediately prior to
such transaction or series of transactions continue to have
substantially the same proportionate ownership in an entity which
owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions.
(c) "Potential Change in Control" shall be deemed to
have occurred if the event set forth in any one of the following
paragraphs shall have occurred:
(i) the Company enters into an agreement, the
consummation of which would result in the occurrence of a
Change in Control;
(ii) the Company or any Person publicly announces
an intention to take or to consider taking actions which if
consummated, would constitute a Change in Control;
(iii) any Person becomes the Beneficial Owner,
directly or indirectly, of securities of the Company
representing 10% or more of either the then-outstanding
securities; or the combined voting power of the Company's
then-outstanding securities; or
(iv) the Board of Directors adopts a resolution
to the effect that, for purposes of any severance agreement
to which the Company is a party, a Potential Change in
Control has occurred.
(d) "Beneficial Owner" shall have the meaning set forth
in Rule 13d-3 under the Exchange Act.
(e) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(f) "Person" shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used in
Sections 13(d) and 14(d) thereof, except that such term shall not
include (i) the Company or any of its affiliates (as defined in
Rule 12b-2 promulgated under the Exchange Act), (ii) a trustee or
other fiduciary holding securities under an employee benefit plan
of the Company or any of its affiliates, (iii) an underwriter
temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly,
by the shareholders of the Company in substantially the same
proportions as their ownership of stock of the Company.