EXHIBIT 10.29
THE UNITED ILLUMINATING COMPANY
PHANTOM STOCK OPTION AGREEMENT
THIS AGREEMENT, made as of February 23, 1998, by and between THE UNITED
ILLUMINATING COMPANY (the Company), a Connecticut corporation, and NATHANIEL D.
WOODSON (the Executive), an individual,
W I T N E S S E T H T H A T,
Whereas, the Company and the Executive have entered into an Employment
Agreement as of the date hereof (the Employment Agreement), whereby the Company
has employed the Executive, and the Executive has agreed to serve the Company,
as its President; and
Whereas, in Section (4)(b) of the Employment Agreement, the Company has
agreed to award the Executive eighty thousand (80,000) phantom stock options on
shares of the Company's Common Stock, under which the option price is $45.1563
(the Exercise Price), which was the average of the high and low per share sale
prices of said Common Stock on the New York Stock Exchange on February 20,
1998), vesting at the rate of sixteen thousand (16,000) options on each of the
first five anniversaries of February 23, 1998 occurring during the term of the
Employment Agreement, and exercisable by the Executive and/or his personal
representative only during a period ending on the earlier of (A) 2400 hours on
the first anniversary of the Date of Termination of the Employment Agreement (as
defined in Section (5)(e) of the Employment Agreement), or (B) 2400 hours on
February 23, 2008;
Whereas, the Company and the Executive desire to enter into this
Agreement evidencing the terms and provisions governing the aforesaid phantom
stock options,
NOW THEREFORE, the parties hereby agree as follows:
1. Options. This Agreement evidences the grant to the Executive of eighty
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thousand (80,000) Phantom Common Stock Options (the Options, and each an
Option).
2. Exercisability and Duration.
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a. Generally. None of the Options shall be exercisable until February 23,
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1999. On that date, sixteen
thousand (16,000) of the Options shall first become exercisable. Thereafter, an
additional sixteen thousand (16,000) Options shall first become exercisable on
each of February 23, 2000, February 23, 2001, February 23, 2002 and February 23,
2003. Once exercisable, each Option shall remain exercisable, unless sooner
terminated pursuant to the terms and provisions of this Agreement, until 2400
hours on February 23, 2008.
b. Upon A Change of Control. In the event of a Change in Control (as
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defined in Section (7) of the Employment Agreement) of the Company, the Options
shall become exercisable pursuant to and in accordance with Section (8)(a) of
the Employment Agreement.
c. Upon Certain Other Events. Upon the Date of Termination of the
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Employment Agreement (as defined in Section (5)(e) of the Employment Agreement),
all of the Options that are not then exercisable shall automatically expire, and
all of the Options that are then exercisable shall remain exercisable by the
Executive and/or his personal representative until the earlier of (A) 2400 hours
on the first anniversary of said Date of Termination or (B) 2400 hours on
February 23, 2008.
3. Payment Upon Exercise. On each date that the Executive or his personal
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representative exercises one or more Options, the Company shall become obligated
to pay the Executive or his personal representative, in cash, an amount equal to
the excess of the fair market value of the Company's Common Stock on that date
over the Exercise Price, multiplied by the number of Options exercised. "Fair
market value" shall be the average of a high and low sale prices of shares of
the Company's Common Stock on the New York Stock Exchange composite tape on the
exercise date or, if there is no sale on such date, then such average price on
the last previous day on which at least one sale shall have been reported. The
Company shall discharge each payment obligation to the Executive or his personal
representative on or before the second business day following the exercise date.
4. Documentation of Exercise. In order to exercise an Option, the Executive or
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his personal representative shall deliver to the Secretary of the Company a
signed notice of exercise; and the Option shall be deemed exercised on the date
when such notice is received by the Secretary of the Company. During the life of
the Executive, the Options may be exercised only by the Executive or his
guardian or legal representative.
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5. Transferability. The Options may not be assigned or transferred by the
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Executive, except by will or the laws of descent and distribution. Any other
purported transfer or assignment of an Option shall automatically terminate it.
6. Adjustments. In the event of a recapitalization, reclassification, stock
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split, stock dividend, combination of shares, or any other similar change in the
Company's capital structure, an appropriate adjustment shall be made in the
number and/or kind of shares of the Company's stock covered by the Options
and/or in the Exercise Price of the Options. In the event of any merger,
consolidation or other reorganization in which the Company is not the surviving
or continuing corporation, all Options shall be assumed by the surviving or
continuing corporation.
7. Funding; Right to Assets. Except as provided in Section (6) of the Employment
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Agreement, the Company's obligations under this Agreement shall be unfunded; and
the Company is not, under any circumstances except those referred to in said
Section (6), required to fund its obligations hereunder. The Company may, in its
sole discretion, set aside or invest funds to meet its obligations under this
Agreement, in whole or in part, in circumstances other than those referred to in
said Section (6); but if the Company determines to take such action, the method
and manner thereof and the continuance or discontinuance thereof shall be within
the sole discretion of the Company. This Agreement confers on the Executive no
right, title or interest whatsoever in or to any shares of the Company's stock
or any specific funds or assets of the Company. If any funds or assets are
acquired by the Company in connection with its obligations under this Agreement,
they shall be and remain subject to the claims of all of the creditors of the
Company.
8. Non-expansion of Rights. Nothing contained in this Agreement shall afford the
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Executive any right to be employed by the Company.
9. Binding Effect. The provisions of this Agreement shall be binding upon and
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inure to the benefit of the Company, its successors and assigns, and the
Executive and his guardians, legal representatives and personal representatives.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
THE UNITED ILLUMINATING COMPANY
By /s/ Richard J. Grossi
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Its Chairman of the Board of
Directors and Chief Executive Officer
/s/ Nathaniel D. Woodson
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Nathaniel D. Woodson
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