EMPLOYMENT AGREEMENT
AGREEMENT, by and between Public Service Enterprise Group
Incorporated, a New Jersey Corporation ("Enterprise") and E. James Ferland (the
"Executive"), dated as of June 16, 1998.
WHEREAS, the Executive is currently serving as Chairman of the
Board, President and Chief Executive Officer of Enterprise, and as Chairman of
the Board and Chief Executive Officer of its subsidiaries Public Service
Electric and Gas Company ("PSE&G"), a New Jersey corporation, and PSEG Energy
Holdings Inc. ("Energy Holdings"), a New Jersey corporation, all such
corporations hereinafter collectively referred to as the "Company".
WHEREAS, the Executive is willing to commit himself to be
employed by the Company on the terms and conditions herein set forth; and
WHEREAS, the parties desire to enter into this Agreement
setting forth the terms and conditions for the employment relationship of the
Executive with the Company during the Employment Period (as hereinafter
defined):
NOW, THEREFORE, IN CONSIDERATION of the mutual premises,
covenants and agreements set forth below, it is hereby agreed as follows:
1. General.
(a) Employment. The Company agrees to employ the Executive,
and the Executive agrees to be employed by the Company, in accordance with the
terms and provisions of this Agreement during the Employment Period.
(b) Term. The term of the Executive's employment under this
Agreement (the "Employment Period") shall commence as of the date hereof (the
"Effective Date") and shall continue until March 31, 2005. If the Executive
elects to retire prior to March 31, 2005, the Employment Period shall end on the
date of retirement.
2. Position, Duties and Powers of the Executive.
(a) Position. During the Employment Period, the Executive
shall serve as Chairman of the Board and Chief Executive Officer of Enterprise.
(b) Reporting Duties and Powers. During the Employment Period,
the Executive shall report directly to the Board of Directors of Enterprise (the
"Board"). As Chief Executive Officer of Enterprise, he shall be the highest
ranking officer of Enterprise with plenary powers of the supervision and
direction of the business and affairs of Enterprise and its subsidiaries and
affiliates.
(c) End of Employment Period. At the end of the Employment
Period (the "Retirement Date"), the Executive will retire from all offices held
with the Company and shall be entitled to a pension unreduced for early
retirement and calculated in accordance with Section 3(f) hereof (hereinafter
referred to as "Retirement").
(d) Board Membership. The Executive shall continue as a member
of and Chairman of the Board on the first day of the Employment Period through
the end of his current term ending with the Annual Meeting of Stockholders in
2001. Thereafter, the Board shall consider the Executive for re-election to the
Board throughout the Employment Period in accordance with its customary practice
for nominations to the Board, and shall elect him Chairman of the Board if
elected as a director by the shareholders. At the end of the Employment Period,
the Executive may continue as a member of the Board and be considered for
nomination for reelection to the Board thereafter on the same basis as the other
directors who are former CEOs, in accordance with the Board's customary practice
for nominations and its Retirement Policy.
(e) Other Positions. In addition to serving as Chairman and
Chief Executive Officer of Enterprise, the Executive is also presently serving
as President of Enterprise and as Chairman of the Board and Chief Executive
Officer of PSE&G and Energy Holdings. The Executive agrees to serve, if elected,
at no additional compensation in the position of officer or director of any
direct or indirect subsidiary or affiliate of the Company.
(f) Attention. During the Employment Period, and excluding any
periods of vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote full attention and time during normal business hours
to the business and affairs of the Company and to use his reasonable best
efforts to perform such responsibilities in a professional manner. It shall not
be a violation of this Agreement for the Executive to (i) serve on corporate,
civic or charitable boards or committees, (ii) deliver lectures, fulfill
speaking engagements or teach at educational institutions and (iii) manage
personal investments, so long as such activities do not interfere with the
performance of the Executive's responsibilities as an officer and director of
the Company in accordance with this Agreement.
3. Compensation.
Except as modified by this Agreement, the Executive's
compensation shall be provided in accordance with the Company's standard
compensation and payroll practices as in effect from time to time. The aggregate
of Base Salary, Annual Incentive Compensation and Long-Term Incentives in
paragraphs (a), (b) and (c) below shall be determined based upon competitive
practices for chief executive officers of companies of comparable size and
standing.
(a) Base Salary. The annual rate of base salary payable to the
Executive during the Employment Period (the "Annual Base Salary") shall be
established by the Organization and Compensation Committee of the Board (the
"Compensation Committee"). During the Employment Period, the Annual Base Salary
shall be reviewed by the Compensation Committee for possible increase at least
annually. Annual Base Salary shall not be reduced after any such increase, and
the term "Annual Base Salary" shall thereafter refer to the Annual Base Salary
as so increased.
(b) Annual Incentive Compensation. The Board has established
and intends to continue an annual incentive compensation plan for the benefit of
the officers and other key employees of the Company, including the Executive,
based on competitive practices for companies of comparable size and standing.
The performance objectives for the Executive in respect of such incentive will
be determined by the Compensation Committee in accordance with past practices.
(c) Long-Term Incentives. The Board has established and
intends to continue a long-term incentive plan for the benefit of the officers
and other key employees of the Company, including the Executive, based on
competitive practices for companies of comparable size and standing. Such plan
may, in the judgment of the Compensation Committee, provide for stock options,
stock appreciation rights, restricted stock or stock units, performance stock or
units and/or other type of long-term incentive awards. The type and amount of
equity and any other long-term incentive grants will be determined by the
Compensation Committee from time to time, and awards thereunder shall be payable
to the Executive in accordance with the long-term incentive plan or plans in
effect from time to time.
(d) Stock Award. In consideration of the commitment he will assume
during the Employment Period, the Executive shall be granted an award (the
"Stock Award") with respect to 150,000 shares of the Common Stock without
nominal or par value of Enterprise ("Stock"), effective as of the Effective
Date, the shares of which Stock Award shall be restricted and shall be subject
to the following terms and conditions:
(i) The shares for the Stock Award shall be purchased by
Enterprise or its agent on the open market. In the event any of the
shares of the Stock Award shall be forfeited, Enterprise may apply such
shares for its corporate purposes in its discretion.
(ii) The Executive's right to the Stock Award shall vest in
accordance with the following schedule, provided that the Executive has
remained continuously employed by the Company, or its successor, during
the Employment Period through the dates indicated below:
Date Number of Shares
3/31/2002 60,000
3/31/2003 20,000
3/31/2004 30,000
3/31/2005 40,000
If, during the Employment Period, the Company terminates the
Executive's employment for Cause or the Executive terminates his
employment without Good Reason, including Retirement prior to March 31,
2005, the Executive shall forfeit all right to all shares of the Stock
Award that are not vested as of the Date of Termination. If, during the
Employment Period, the Company shall terminate the Executive's
employment without Cause or the Executive terminates his employment for
Good Reason, or the Executive's Employment terminates by reason of
death or Disability, the Executive's right to receive all shares of the
Stock Award shall vest as of the Date of Termination.
(iii) Shares of the Stock Award will be issued in the name of the
Executive, but will be held by Enterprise for the account of the
Executive together with a stock power that the Executive shall execute
and deliver to Enterprise. The shares shall bear a restrictive legend
indicating that they are subject to the terms, conditions and
limitations of this Agreement.
(iv) Once shares of the Stock Award shall vest, Enterprise shall
promptly issue to the Executive a certificate for such shares without
any legend or restriction (other than may be required by law) and
Enterprise shall return to the Executive or shall destroy the related
stock power previously executed by the Executive.
(v) Shares of Stock held by Enterprise for the account of the Executive
prior to distribution to the Executive may not be sold assigned,
transferred, pledged, hypothecated or otherwise disposed of, except by
will or the laws of descent and distribution. Any attempted sale,
assignment, transfer, pledge, hypothecation or disposition in
contravention of the foregoing shall be null and void and of no effect.
(vi) Except as otherwise provided herein, the Executive shall have all
of the rights of a stockholder with respect to the shares of the Stock
Award issued in his name, including the right to vote the shares, to
receive dividends and other distributions thereon and to participate in
any change in capitalization of Enterprise. In the event of any change
in capitalization resulting in the issuance of additional shares to the
Executive, such shares shall be subject to the same terms, conditions
and restrictions as the shares in respect to which they are issued, and
the Executive shall execute and deliver to Enterprise stock powers in
respect thereto. If the Executive elects to reinvest dividends on the
shares of the Stock Award, or if he shall receive rights or warrants in
respect to any shares of the Stock Award, the shares acquired by
dividend reinvestment or through the exercise of rights may be held,
sold or otherwise disposed of by the Executive, free and clear of any
restrictions created by this Agreement.
(vii) Unless the shares of the Stock Award to be issued to the
Executive have been registered pursuant to a Registration Statement
under the Securities Act of 1933, prior to receiving such shares the
Executive shall represent in writing to the Company that such shares
are being acquired for investment purposes only and not with a view
towards the further sale or distribution thereof and shall supply
Enterprise with such other documentation as may be required by
Enterprise, unless in the opinion of counsel to the Enterprise such
representation, agreement or documentation is not necessary to comply
with the Securities Act of 1933 and the rules and regulations
thereunder.
(viii) Enterprise shall not be required to deliver any shares of the
Stock Award until they have been listed on each securities exchange on
which shares of the Stock are listed or until there has been
qualification under or compliance with such state and federal laws,
rules or regulations that Enterprise may deem applicable. Enterprise
will use its best efforts to obtain such listing, qualification and
compliance.
(ix) The Compensation Committee may make such provisions and take such
steps as it may deem necessary or appropriate for the withholding of
any taxes that the Company is required by law or regulation of any
governmental authority, whether federal, state or local, domestic or
foreign, to withhold in connection with the Stock Award, including, but
not limited to (1) withholding delivery of the certificate for shares
of Stock until the Executive reimburses the Company for the amount it
is required to withhold with respect to such taxes, (2) the canceling
of any number of shares of Stock issuable to the Executive in an amount
necessary to reimburse the Company for the amount it is required to so
withhold, or (3) withholding the amount due from the Executive's other
compensation.
(e) Employee Benefit Programs. During the Employment Period,
(i) the Executive shall be eligible to participate in all savings and retirement
plans, practices, policies and programs to the same extent as other senior
executives of the Company and (ii) the Executive and/or the Executive's family,
as the case may be, shall be eligible for participation in and shall receive all
benefits under welfare benefit plans, practices, policies and programs provided
by the Company, other than severance plans, practices, policies and programs but
including, without limitation, medical, prescription, dental, disability, salary
continuance, employee life insurance, group life insurance, accidental death and
travel accident insurance plans and programs, and, upon retirement, all
applicable retirement benefit plans to the same extent and subject to the same
terms, conditions, cost-sharing requirements and the like, as other senior
executives of the Company, as such plans may be amended from time to time, and
as supplemented hereby. Following a Change in Control (as defined below), no
benefit coverage available to the Executive and/or to his family under any such
plan, practice, policy or program shall be materially reduced without the prior
written consent of the Executive.
(f) Retirement Benefit. During the Employment Period, the
Executive shall participate in PSE&G's Pension Plan, and also in PSE&G's Limited
Supplemental Benefits Plan, Mid-Career Hire Plan, Reinstatement Plan and such
other supplemental executive retirement plans as may be adopted and amended by
the Company from time to time ("SERPs"), such that the aggregate value of the
retirement benefits that he and his beneficiaries will receive at the end of the
Employment Period under all pension benefit plans of the Company and its
affiliates (whether qualified or not) will not be less than the benefits he
would have received had he continued, through the end of the Employment Period,
to participate in such plans, as in effect immediately before the date hereof
and giving effect to the service credits and payment terms set forth in Section
4 of the employment agreement dated April 16, 1986 between PSE&G and the
Executive (the "PSE&G Employment Agreement"), the terms of which Section 4 are
incorporated herein by reference, and a copy of which PSE&G Employment Agreement
is attached hereto. It is agreed that the Stock Award and any dividends or other
distributions in respect of the Stock Award shall not be included in any pension
calculation.
(g) Expenses. The Executive is authorized to incur reasonable
expenses in carrying out his duties and responsibilities under this Agreement.
The Company shall promptly reimburse him for all such expenses in accordance
with the policies of the Company in effect from time to time for reimbursement
of expenses for senior executives, and subject to documentation provided by the
Executive in accordance with such Company policies.
(h) Fringe Benefits. During the Employment Period, the
Executive shall be furnished with such fringe benefits and perquisites as are
customary for the Chairman and Chief Executive Officer of a corporation of the
size and nature of the Company and shall participate in all fringe benefits and
perquisites available to senior executives of the Company on terms and
conditions that are commensurate with his positions and responsibilities at the
Company.
(i) Vacation. During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with Company policy for its
most senior executives as in effect from time to time.
(j) Deferred Compensation. The Executive will retain all of
his rights in any compensation deferred prior to the date hereof in accordance
with the Deferred Compensation Plan, including earnings thereon, and following
the date hereof the obligations of PSE&G to pay such deferred compensation at
the times and in the manner specified in the Deferred Compensation Plan will
continue.
4. Termination of Employment.
(a) Death or Disability. The Executive's employment shall
terminate automatically upon the Executive's death during the Employment Period.
If the Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice in accordance with
Section 4(b) of this Agreement of its intention to terminate the Executive's
employment. In such event, the Executive's employment with the Company shall
terminate effective on the 30th day after receipt of such notice by the
Executive (the "Disability Effective Date"), provided that, within the 30 days
after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" means that (i) the Executive has been unable, for the period, if
any, specified in the Company's disability plan for senior executives, but not
less than a period of 180 consecutive days, to perform the Executive's duties
under this Agreement and (ii) a physician selected by the Company or its
insurers, and acceptable to the Executive or the Executive's legal
representative, has determined that the Executive is disabled within the meaning
of the applicable disability plan for senior executives.
(b) By the Company.
(i) The Company may terminate the Executive's employment
during the Employment Period for Cause or without Cause. For purposes of this
Agreement, "Cause" shall mean (A) willful and continued failure by the Executive
to substantially perform his duties under this Agreement, (B) the willful
engaging by the Executive in gross misconduct which is materially and
demonstrably injurious to the Company, or (C) the conviction of the Executive of
a felony. No act or failure to act on the part of the Executive shall be
considered "willful" unless it is done, or omitted to be done, by the Executive
in bad faith or without reasonable belief that the Executive's action or
omission was in the best interests of the Company. Any act or failure to act
that is based upon authority given pursuant to a resolution duly adopted by the
Board, or the advice of counsel for the Company, shall be conclusively presumed
to be done, or omitted to be done, by the Executive in good faith and in the
best interests of the Company.
(ii) A termination of the Executive's employment for Cause
shall be effected in accordance with the following procedures. The Company shall
give the Executive written notice ("Notice of Termination for Cause") of its
intention to terminate the Executive's employment for Cause, setting forth in
reasonable detail the specific conduct of the Executive that it considers to
constitute Cause and the specific provision(s) of this Agreement on which it
relies. Such notice shall be given no later than 60 days after the act or
failure (or the last in a series of acts or failures) that the Company alleges
to constitute Cause. The Executive shall have 30 days after receiving the Notice
of Termination for Cause in which to cure such act or failure, to the extent
such cure is possible. In the case of a termination under Section 4(b)(i)(A) or
Section 4(b)(i)(B), if the Executive fails to cure such act or failure to the
reasonable satisfaction of the Board, the Company shall give the Executive a
second written notice stating the date, time and place of a special meeting of
the Board called and held specifically for the purpose of considering the
Executive's termination for Cause, which special meeting shall take place not
less than ten and not more than twenty business days after the Executive
receives notice thereof, and the Executive shall be given an opportunity,
together with counsel, to be heard at the special meeting of the Board. The
Executive's termination for Cause shall be effective when and if a resolution is
duly adopted by the affirmative vote of a majority of the Board stating that in
the good faith opinion of the Board, the Executive is guilty of the conduct
described in the Notice of Termination for Cause and that such conduct
constitutes Cause under this Agreement.
(c) Good Reason.
(i) The Executive may terminate his employment for Good Reason
or without Good Reason. For purpose of this Agreement, "Good Reason" shall mean:
(A) any adverse change in the Executive's titles, authority,
duties, responsibilities and reporting lines as specified in Sections
2(a) and 2(b) of this Agreement, or the assignment to the Executive of
any duties or responsibilities inconsistent in any respect with those
customarily associated with the position of Chief Executive Officer of
Enterprise to be held by the Executive pursuant to this Agreement;
(B) the failure by the Board to elect the Executive to the
positions of Chairman and Chief Executive Officer of Enterprise during
the Employment Period;
(C) the failure by the Board to nominate the Executive for
reelection to the Board at any annual meeting of Enterprise's
shareholders during the Employment Period at which the Executive's term
as a director is scheduled to expire, and if elected a director by the
shareholders, to elect the Executive as Chairman of the Board;
(D) the appointment at any time during the Employment Period
of any person other than the Executive to (x) the position specified in
Section 2(a) or (y) any other position or title conferring similar
status or authority;
(E) any reduction in the Executive's salary, target annual
bonus, target long-term incentive or Retirement benefit;
(F) any requirement by the Company that the Executive's
services be rendered primarily at a location or locations other than in
New Jersey;
(G) any purported termination of the Executive's employment by
the Company for a reason or in a manner not expressly permitted by this
Agreement;
(H) any failure by Enterprise to comply with Section 10(c) of
this Agreement; or
(I) any other material breach of this Agreement by the Company
that either is not taken in good faith or, even if taken in good faith,
is not remedied by the Company promptly after receipt of notice thereof
from the Executive;
provided that following a Change in Control which is recommended to the Board by
the Executive, Sections 4(c)(i)(A), (B), (C) and (D) shall not permit the
Executive to terminate his employment for Good Reason so long as during the
remainder of the Employment Period, the Board nominates the Executive as a
director of the surviving parent corporation, his office with the surviving
parent corporation is Chairman, Vice Chairman or President, and his executive
position with the surviving parent corporation is Chief Executive Officer or
Chief Operating Officer; and the provisions of Sections 2(a), (b) and (d) shall
be deemed modified to reflect such offices, positions and duties as are so held
by the Executive.
Following a Change in Control, the Executive's determination that an act or
failure to act constitutes Good Reason shall be conclusively presumed to be
valid unless such determination is decided to be unreasonable by an arbitrator
pursuant to Section 9.
(ii) A termination of employment by the Executive for Good
Reason shall be effectuated by giving the Company written notice
("Notice of Termination for Good Reason") of the termination, setting
forth in reasonable detail the specific acts or omissions of the
Company that constitute Good Reason and the specific provision(s) of
this Agreement on which the Executive relies. Unless the Board
determines otherwise, a Notice of Termination for Good Reason by the
Executive must be made within 60 days after the Executive first has
actual knowledge of the act or omission (or the last in a series of
acts or omissions) that the Executive alleges to constitute Good
Reason, and the Company shall have 30 days from the receipt of such
Notice of Termination for Good Reason to cure the conduct cited
therein. A termination of employment by the Executive for Good Reason
shall be effective on the final day of such 30-day cure period unless
prior to such time the Company has cured the specific conduct asserted
by the Executive to constitute Good Reason to the reasonable
satisfaction of the Executive.
(iii) A termination of the Executive's employment by the
Executive without Good Reason shall be effected by giving the Company
written notice specifying the effective date of termination.
(d) Date of Termination. The "Date of Termination" means the
date of the Executive's death, the Disability Effective Date, the date on which
the termination of the Executive's employment by the Company for Cause or
without Cause or by the Executive for Good Reason is effective, the effective
date specified in a notice of a termination of employment without Good Reason
from the Executive to the Company, or Retirement, as the case may be.
5. Obligations of the Company upon Termination.
(a) Good Reason; Other Than for Cause. If, during the
Employment Period, the Company shall terminate the Executive's employment other
than for Cause, death or Disability, or the Executive shall terminate his
employment for Good Reason:
(i) the Company shall pay to the Executive in a lump sum in
cash, within 15 days after the Date of Termination, the aggregate of
the amounts set forth in clauses A and B below:
A. The sum of:
(1) the Executive's Annual Base Salary through
the Date of Termination;
(2) the product of (x) the "target" annual bonus
under Section 3(b) (the "Target Bonus") and
(y) a fraction, the numerator of which is
the number of days in the current calendar
year through the Date of Termination, and
the denominator of which is 365; and
(3) any accrued vacation pay;
in each case to the extent not theretofore paid (the sum of
the amounts described in clauses (1), (2) and (3) shall be
hereinafter referred to as the "Accrued Obligations"); and
B. the amount equal to the product of (1) two and (2)
the sum of (x) the Executive's Annual Base Salary and
(y) the Target Bonus.
(ii) the Stock Award shall vest in accordance with
3(d)(ii);
(iii) any stock awards, other than the Stock Award, stock
options, stock appreciation rights or other equity-based awards that
were outstanding immediately prior to the Date of Termination ("Prior
Equity Awards") shall remain outstanding and shall continue to vest
and/or become exercisable as though the Executive's employment had not
terminated until the later of (x) the third anniversary of the Date of
Termination and (y) 90 days from the date that a stock option or other
award (or portion thereof) first becomes exercisable but in no event
beyond the original term thereof, and the Company shall take all such
actions as may be necessary to effectuate the foregoing;
(iv) for two years after the Executive's Date of Termination
or such longer period as may be provided by the terms of the
appropriate plan, program, practice or policy, the Company shall
continue benefits to the Executive and/or the Executive's family at
least equal to those which would have been provided to them in
accordance with the welfare plans, programs, practices and policies
described in Section 3(e) of this Agreement if the Executive's
employment had not been terminated or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect
to other peer executives of the Company and its affiliated companies
and their families, provided however, that if the Executive becomes
reemployed with another employer and is eligible to receive medical or
dental benefits under another employer provided plan, the medical and
dental benefits described herein shall be secondary to those provided
under such other plan during such applicable period of eligibility.
(v) any compensation previously deferred (other than pursuant
to a tax-qualified plan) by or on behalf of the Executive (together
with any accrued interest or earnings thereon), whether or not then
vested, shall become vested on the Date of Termination and shall be
paid in accordance with the terms of the plan, policy or practice under
which it was deferred;
(vi) the Company shall, at its sole expense as incurred,
provide the Executive with outplacement services suitable to the
Executive's position for a period not to exceed two years with a
nationally recognized outplacement firm; and,
(vii) to the extent not theretofore paid or provided, the
Company shall pay or provide to the Executive any other amounts or
benefits required to be paid or provided or which the Executive is
entitled to receive under any plan, program, policy, practice, contract
or agreement of the Company and its affiliated companies (other than
medical or dental benefits if the Executive is eligible for such
benefits to be provided by a subsequent employer), including earned but
unpaid stock and similar compensation but excluding any severance plan
or policy (such other amounts and benefits shall be hereinafter
referred to as the "Other Benefits").
(b) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated for Cause during the Employment Period,
or if the Executive voluntarily terminates employment during the
Employment Period, excluding a resignation for Good Reason, this
Agreement shall terminate without further obligations to the Executive
other than for amounts described in Sections 5(a)(i)(A)(1) and
5(a)(i)(A)(3) and the timely payment or provision of Other Benefits. In
such case, all such amounts shall be paid to the Executive in a lump
sum within 30 days of the Date of Termination.
(c) Death. If the Executive's employment terminates by reason
of the Executive's death during the Employment Period, all Accrued
Obligations as of the time of death shall be paid to the Executive's
estate or beneficiary, as applicable, in a lump sum in cash within 30
days of the Date of Termination and the Executive's estate or
beneficiary shall be entitled to any Other Benefits in accordance with
their terms. In addition, the Stock Award shall vest in accordance with
3(d)(ii). Any Prior Equity Awards shall vest and/or become exercisable,
as the case may be, as of the Date of Termination and the Executive's
estate or beneficiary, as the case may be, shall have the right to
exercise any such stock option, stock appreciation right or other
exercisable equity-based award until the earlier of (A) one year from
the Date of Termination (or such longer period as may be provided under
the terms of any such stock option, stock appreciation right or other
equity-based award) and (B) the normal expiration date of such stock
option, stock appreciation right or other equity-based award.
(d) Disability. If the Executive's employment is terminated by
reason of Disability during the Employment Period, all Accrued
Obligations shall be paid to the Executive in a lump sum in cash within
30 days of the Date of Termination, and the Executive shall be entitled
to any Other Benefits in accordance with their terms. In addition, the
Stock Award shall vest in accordance with 3(d)(ii). Any Prior Equity
Awards shall vest immediately and/or become exercisable, as the case
may be, and the Executive shall have the right to exercise any such
stock option, stock appreciation right or other exercisable
equity-based award until the earlier of (A) one year from the Date of
Termination (or such longer period as may be provided under the terms
of any such stock option, stock appreciation right or other
equity-based award) and (B) the normal expiration date of such stock
option, stock appreciation right or other equity-based award.
(e) Retirement. If the Executive's employment terminates at
the expiration of the Employment Period (or at any earlier date at
which the Executive elects to retire under any retirement plan
maintained by the Company), the Executive shall be paid the Accrued
Obligations in a lump sum in cash within 30 days of the Date of
Termination and the Executive shall be entitled to any Other Benefits
in accordance with their terms. Upon the Executive's retirement, unless
the Board otherwise determines, there shall be no acceleration of
vesting of any portion of the Stock Award not yet earned. The Executive
agrees not to retire (except for any Disability) prior to March 31,
2002.
6. Change in Control.
(a) Benefits Upon a Change in Control. Upon the occurrence of
a Change in Control during the Employment Period, the Stock Award shall continue
in effect and vest (or be forfeited) in accordance with provisions of this
Agreement as though no Change in Control had occurred, except that, as
appropriate, the shares of Stock of the Stock Award shall be treated the same as
all other shares of Stock of Enterprise. The Executive's rights upon a
termination of employment that occurs following a Change in Control shall be as
specified in Section 5 generally for termination of employment, except (i) the
amount payable under 5(a)(i)(B) shall be three times the sum of (x) the
Executive's Annual Base Salary and (y) the Target Bonus; (ii) the benefits under
Section 5(a)(iv) shall be provided for three years after the Date of Termination
and the Executive's eligibility (but not the time of commencement of such
benefits) for retiree benefits pursuant to such plans, practices, programs and
policies shall be determined as if the Executive had remained employed until
three years after the Date of Termination and to have retired on the last day of
such period, and (iii) the Executive shall be paid within 15 days after the Date
of Termination, an amount equal to the excess of
(A) the actuarial equivalent of the benefit under the
Company's applicable qualified defined benefit retirement plan
in which the Executive is participating immediately prior to
his Date of Termination (the "Retirement Plan") (utilizing the
rate used to determine lump sums and, to the extent
applicable, other actuarial assumptions no less favorable to
the Executive than those in effect under the Retirement Plan
immediately prior to the Date of this Agreement), any SERPs in
which the Executive participates and, to the extent
applicable, any other defined benefit retirement arrangement
between the Executive and the Company ("Other Pension
Benefits") which the Executive would receive if the
Executive's employment continued for three additional years
beyond the Date of Termination, assuming for this purpose that
all accrued benefits are fully vested, and, assuming that the
Executive's compensation for such deemed additional period was
the Executive's Annual Base Salary as in effect immediately
prior to the Date of Termination and assuming a bonus in each
year during such deemed additional period equal to the Target
Bonus, over
(B) the actuarial equivalent of the Executive's
actual benefit (paid or payable), if any, under the Retirement
Plan, the SERPs and Other Pension Benefits as of the Date of
Termination (utilizing the rate used to determine lump sums
and, to the extent applicable, other actuarial assumptions no
less favorable to the Executive than those in effect under the
Retirement Plan immediately prior to the date of this
Agreement).
(b) Definition. For purposes of this Agreement, a "Change in
Control" shall mean the occurrence of any of the following events after the date
of this Agreement:
(i) any "person" (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") is or
becomes the beneficial owner within the meaning of Rule 13d-3 under the
Exchange Act (a "Beneficial Owner"), directly or indirectly, of
securities of Enterprise (not including in the securities beneficially
owned by such person any securities acquired directly from Enterprise
or its affiliates) representing 25% or more of the combined voting
power of Enterprise's then outstanding securities, excluding any person
who becomes such a Beneficial Owner in connection with a transaction
described in clause (A) of paragraph (iii) below; or
(ii) the following individuals cease for any reason to
constitute a majority of the number of directors of Enterprise then
serving: individuals who, on the date of this Agreement, constitute the
Board 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 Enterprise) whose appointment
or election by the Board or nomination for election by Enterprise's
stockholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors on the date hereof or whose appointment, election or
nomination for election was previously so approved or recommended; or
(iii) there is consummated a merger or consolidation of
Enterprise or any direct or indirect wholly-owned subsidiary of
Enterprise with any other corporation, other than (A) a merger or
consolidation which would result in the voting securities of Enterprise
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
Enterprise or any subsidiary of Enterprise, at least 75% of the
combined voting power of the securities of Enterprise 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 Enterprise (or similar transaction) in
which no person is or becomes the Beneficial Owner, directly or
indirectly, of securities of Enterprise representing 25% or more of the
combined voting power of Enterprise's then outstanding securities; or
(iv) the shareholders of Enterprise approve a plan of complete
liquidation or dissolution of Enterprise or there is consummated an
agreement for the sale or disposition by Enterprise of all or
substantially all of Enterprise's assets, other than a sale or
disposition by Enterprise of all or substantially all of Enterprise's
assets to an entity, at least 75% of the combined voting power of the
voting securities of which are owned by stockholders of Enterprise in
substantially the same proportions as their ownership of Enterprise
immediately prior to such sale.
Notwithstanding the foregoing, a "Change in Control" shall not be deemed to have
occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of Enterprise 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 Enterprise
immediately following such transaction or series of transactions.
7. Confidential Information; No competition.
(a) The Executive shall hold in a fiduciary capacity for the
benefit of the Company all confidential information, knowledge or data (defined
below) relating to the Company or any of its affiliates or subsidiaries, and
their respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation of this
Agreement). Upon Termination of the Executive's employment, he shall return to
the Company all Company information. After termination of the Executive's
employment with the Company, the Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those designated by it, except (x) otherwise publicly
available information, or (y) as may be necessary to enforce his rights under
this Agreement or necessary to defend himself against a claim asserted directly
or indirectly by the Company or its affiliates. Unless and until a determination
has been made in accordance with Section 7(d) or Section 9 hereof that the
Executive has violated this Section 7, an asserted violation of the provisions
of this Section 7 shall not constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement.
(b) As used herein, the term "confidential information,
knowledge or data" means all trade secrets, proprietary and confidential
business information belonging to, used by, or in the possession of the Company
or any of its affiliates and subsidiaries, including but not limited to
information, knowledge or data related to business strategies, plans and
financial information, mergers, acquisitions or consolidations, purchase or sale
of property, leasing, pricing, sales programs or tactics, actual or past
sellers, purchasers, lessees, lessors or customers, those with whom the Company
or its affiliates and subsidiaries has begun negotiations for new business,
costs, employee compensation, marketing and development plans, inventions and
technology, whether such confidential information, knowledge or data is oral,
written or electronically recorded or stored, except information in the public
domain, information known by the Executive prior to employment with PSE&G, and
information received by the Executive from sources other than the Company or its
affiliates and subsidiaries, without obligation of confidentiality.
(c) The confidential knowledge, information and data, as
defined in the previous paragraph, gained in the performance of the Executive's
duties hereunder may be valuable to those who are now, or might become,
competitors of the Company or its affiliates and subsidiaries. Accordingly, the
Executive agrees that he will not, for the period of two years from Date of
Termination, directly own, manage, operate, join, control, become employed by,
consult to or participate in the ownership, management, or control of any
business which is in direct competition with the Company and/or its affiliates
and subsidiaries. Further, the Executive agrees that, for two years following
the Date of Termination, he will not, directly or indirectly, solicit or hire,
or encourage the solicitation or hiring of any person who was a managerial or
higher level employee of the Company at any time during the term of the
Executive's employment by the Company by any employer other than the Company for
any position as an employee, independent contractor, consultant or otherwise.
The foregoing agreement of the Executive shall not apply to any person after 6
months have elapsed subsequent to the date on which such person's employment by
the Company has terminated. In the case of any such prohibited activity, the
Executive shall not be entitled to post-employment payments (including any
unpaid installments of the Stock Award), and the Executive shall return or repay
to the Company a portion of any installments of the Stock Award that have vested
in accordance with Section 3(d)(ii) during the two year period immediately
preceding such prohibited activity which is equal to the amount of such
installments paid within such two year period times a fraction, the numerator of
which is the number of months from the commencement of such activity to the date
that is 24 months after the Date of Termination and the denominator of which is
24.
(d) In the event of a breach by the Executive of any of the
agreements set forth in Paragraphs (a), (b) or (c) above, it is agreed that the
Company shall suffer irreparable harm for which money damages are not an
adequate remedy, and that, in the event of such breach, the Company shall be
entitled to obtain an order of a court of competent jurisdiction for equitable
relief from such breach, including, but not limited to, temporary restraining
orders and preliminary and/or permanent injunctions against the breach of such
agreements by the Executive. In the event that the Company should initiate any
legal action for the breach or enforcement of any of the provisions contained in
this Section 7 and the Company does not prevail in such action, the Company
shall promptly reimburse the Executive the full amount of any court costs,
filing fees, attorney's fees which the Executive incurs in defending such
action, and any loss of income during the period of such litigation.
8. Full Settlement.
(a) No Duty to Mitigate; No Reduction. Except as provided in
Section 7(c), and except to the extent that a Court under Section 7(d) or an
arbitrator appointed under Section 9 shall determine to permit an offset in
respect of a violation by the Executive of his obligations under Section 7, the
Company's obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and, except as specifically provided in Section
5(a)(iv) and Section 5(a)(vii) with respect to certain medical and dental
benefits, such amounts shall not be reduced whether or not the Executive obtains
other employment.
(b) Non-exclusivity of Rights. Except as provided in Section
7(c), nothing in the Agreement shall prevent or limit the Executive's continuing
or future participation in any plan, program, policy or practice provided by the
Company or any of its affiliated companies for which the Executive may qualify,
nor, subject to Section 12(g), shall anything in this Agreement limit or
otherwise affect such rights as the Executive may have under any contract or
agreement with the Company or any or its affiliated companies. Vested benefits
and other amounts that the Executive is otherwise entitled to receive under the
incentive compensation plans referred to in Section 3(c), the SERPs, or any
other plan, policy, practice of program of, or any contract of agreement with,
the Company or any of its affiliated companies on or after the Date of
Termination shall be payable in accordance with the terms of each such plan,
policy, practice, program, contract or agreement, as the case may be, except as
explicitly modified by this Agreement.
9. Disputes
Except with respect to equitable relief provided for in
Section 7(d), any dispute about the validity, interpretation, effect or alleged
violation of this Agreement shall be resolved by confidential binding
arbitration before one arbitrator to be held in Newark, New Jersey in accordance
with the Employment Dispute Resolution Rules of the American Arbitration
Association and the United States Arbitration Act. Judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereover. All costs and expenses incurred by the Company or the Executive or
the Executive's beneficiaries in connection with any such controversy or
dispute, including without limitation reasonable attorney's fees, shall be borne
by the Company as incurred, except that the Executive shall be responsible for
any such costs and expenses incurred in connection with any claim determined by
the arbitrator to have been without reasonable basis or to have been brought in
bad faith. The Executive shall be entitled to interest at the applicable Federal
rate provided for in Section 7872 (f) (2)(A) of the Internal Revenue Code of
1986, as amended (the "Code"), on any delayed payment which the arbitrator
determine he was entitled to under this Agreement.
10. Successors.
(a) No Assignment by Executive. This Agreement is personal to
the Executive and without the prior written consent of Enterprise shall not be
assignable by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
the Executive's legal representatives.
(b) Successors to Enterprise. This Agreement shall inure to
the benefit of and be binding upon Enterprise and its successors and assigns.
(c) Performance by a Successor to Enterprise. Enterprise will
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 Enterprise to assume expressly and agree to perform this Agreement in
the same manner and to the same extent that Enterprise would be required to
perform it if no such succession had taken place. As used in this Agreement,
"Enterprise" shall mean Enterprise 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.
11. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Company to or for the benefit of the Executive (whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 11) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred by
the Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income and employment taxes
(and any interest and penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 11(c), all
determinations required to be made under this Section 11, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by the Company's independent auditors or such other certified public accounting
firm as may be jointly designated by the Executive and the Company (the
"Accounting Firm"), which shall provide detailed supporting calculations both to
the Company and the Executive. All fees and expenses of the Accounting Firm
shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 11, shall be paid by the Company to the Executive
within 15 days of the receipt of the Accounting Firm's determination. Any
determination by the Accounting Firm shall be binding upon the Company and the
Executive. As a result of the uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made
by the Company should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to Section 11(c) and the Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.
(c) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than ten business days after the Executive
is informed in writing of such claim and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which he gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:
(i) give the Company any information reasonably requested
by the Company relating to such claim,
(ii) take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 11(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.
(d) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 11(c), the Executive becomes
entitled to receive any refund with respect to such claim, the Executive shall
(subject to the Company's complying with the requirements of Section 11(c))
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the
receipt by the Executive of an amount advanced by the Company pursuant to
Section 11(c), a determination is made that the Executive shall not be entitled
to any refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.
12. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey applicable to
agreements executed and performed entirely therein. The captions of this
Agreement are not part of the provisions hereof and shall have no force or
effect. This Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their respective successors
and legal representatives.
(b) Notices. All notices and other communications hereunder
shall be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive: 80 Park Plaza
P. O. Box 570
Newark, NJ 07101
If to the Company: 80 Park Plaza
P. O. Box 570
Newark, NJ 07101
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) Invalidity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement. If any provision of this Agreement shall
be held invalid or unenforceable in part, the remaining portion of such
provision, together with all other provisions of this Agreement, shall remain
valid and enforceable and continue in full force and effect to the fullest
extent consistent with law.
(d) Tax Withholding. Notwithstanding any other provision of
this Agreement, the Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) Failure to Assert Rights. Except as provided in Section
4(b)(ii) and 4(c)(ii), the Executive's or the Company's failure to insist upon
strict compliance with any provisions of, or to assert any right under, this
Agreement shall not be deemed to be a waiver of such provision or right or of
any other provision of or right under this Agreement.
(f) No Alienation. The rights and benefits of the Executive
under this Agreement may not be anticipated, assigned, alienated or subject to
attachment, garnishment, levy, execution or other legal or equitable process
except as required by law. Any attempt by the Executive to anticipate, alienate,
assign, sell, transfer, pledge, encumber or charge the same shall be void.
Payments hereunder shall not be considered assets of the Executive in the event
of insolvency or bankruptcy.
(g) Entire Agreement. This Employment Agreement represents the
complete agreement between the Executive and the Company relating to employment
and termination and may not be altered or changed except by written agreement
executed by the parties hereto or their respective successors or legal
representatives. This Agreement supersedes the PSE&G Employment Agreement, dated
April 16, 1986, except Paragraph 4 thereof relating to additional service credit
for retirement purposes which is hereby incorporated by reference in this
Agreement.
IN WITNESS WHEREOF, the Executive and, pursuant to due
authorization from its Board of Directors, the Company have caused this
Agreement to be executed as of the day and year first above written.
E. JAMES FERLAND
----------------
E. James Ferland
PUBLIC SERVICE ENTERPRISE
GROUP INCORPORATED
By: IRWIN LERNER
------------
Irwin Lerner, Chairman
Organization and Compensation Committee
April 16, 1986
E. James Ferland, President
Northeast Utilities
P. O. Box 270
Hartford, Connecticut 06141
Dear Mr. Ferland:
In conjunction with your employment as President and Chief Operating
Officer of PSE&G effective June 1, 1986 and as Chairman of the Board, President
and Chief Executive Officer commencing July 1, 1986, the agreed terms of
employment are as follows:
1. Your salary shall commence at the annual rate of $375,000 and may
be increased, but shall not be reduced, thereafter during the
three-year period commencing June 1, 1986. In addition, you shall
be entitled to those benefits from time to time available to
officers and employees of PSE&G generally.
2. If you should be discharged without cause during the three-year
period commencing June 1, 1986, PSE&G will pay to you the salary
which would have been payable pursuant to Paragraph 1 above for
the remainder of such three-year period. "Cause" shall mean (i)
the gross dereliction of, and continued failure by you to
substantially perform, your duties with PSE&G (other than any such
failure resulting form your incapacity due to physical or mental
illness), after a written demand for substantial performance is
delivered to you by the Board which specifically identifies the
manner in which the Board believes that you have not so performed
your duties, or (ii) any conduct constituting a felony or moral
turpitude.
3. Your participation in the Management Incentive Compensation Plan
will begin effective June 1, 1986, and any award available to you
with respect to calendar year 1986 shall be prorated to reflect
such effective date; provided that if for any of the periods
indicated below the amount of your award under the Plan as of the
date it is established is less than the amount specified below for
such period, PSE&G shall promptly pay to you as a lump sum in cash
the difference between the amount specified below for such period
and the amount of your award prorated for such period under the
Plan.
Period Amount
June 1, 1986 to December 31, 1986 $29,000
January 1, 1987 to December 31, 1987 $50,000
January 1, 1988 to May 31, 1988 $21,000
4. Your credited service of 22 years at Northeast Utilities shall be
utilized in determining the benefits to which you are and will be
entitled under PSE&G's various benefit plans in a manner as if you
had been a PSE&G employee for that entire 22-year period; except
that you agree to forego until at least June 1, 1996, election of
the option to retire when the sum of your age together with your
credited service (Northeast Utilities and PSE&G combined) equal
eighty. In addition, the amount of your pension or survivorship
benefits from Northeast Utilities shall be deducted from the
pension benefits payable to you or your beneficiary by PSE&G on
account of such service with Northeast.
5. In accordance with our relocation program, PSE&G will compensate
you for all reasonably incurred moving, relocation and temporary
housing expenses (including the reimbursement of any sales
commission on your existing house and including, if you desire,
the purchase of your present house) in conjunction with your
relocation from Connecticut to New Jersey for the purpose of
commencing employment with PSE&G effective June 1, 1986, except
that no payment shall be made for miscellaneous expenses in the
amount of one half a month's salary as provided in such program.
If the foregoing is in accordance with your understanding,
please sign the enclosed copy of this letter and return it to me.
Sincerely,
/s/ HAROLD W. SONN
Agreed to this 21
day of April, 1986
/s/ E. JAMES FERLAND
E. James Ferland