SEVERANCE PROGRAM FOR OFFICERS OF
CONSOLIDATED EDISON, INC. AND ITS SUBSIDIARIES
I. Purpose.
The purpose of this Severance Program for Officers of Consolidated
Edison, Inc. and its Subsidiaries (the "Program") is to provide certain
Participants with severance payments and benefits in the event of a "Termination
of Employment", including additional severance payments and benefits in the
event of a "Termination upon a Change of Control", each as hereinafter defined.
The Program is not intended to meet the qualification requirements of Section
401 of the Code or to be an "employee pension benefit plan" as defined in ERISA.
The Program is not intended to affect eligibility for or payment of any other
compensation or benefits in accordance with the terms of any applicable plans or
programs of the Company.
II. Definitions.
When used herein with initial capital letters, each of the following
terms shall have the corresponding meaning set forth below unless a different
meaning is plainly required by the context in which the term is used:
"Administrator" shall mean the Vice President, Human Resources of
CECONY or such other person designated by the Committee.
"Affiliate" shall mean an "affiliate" as defined in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act.
"Base Compensation" for any Participant shall mean the Participant's
annualized base rate of salary received by the Participant in all capacities
with the Company (before any and all salary reduction authorized amounts under
any of the Company's benefit plans or programs) as in effect immediately prior
to the Effective Date as the same may be increased from time to time. "Base
Compensation" shall not include the value of any target bonuses or other short
term incentive compensation, stock options, stock appreciation rights,
restricted stock, or restricted stock units granted to a Participant by the
Company.
"Board" shall mean the Board of Directors of the Company.
"Cause" with respect to the Termination of Employment of a Participant
shall mean (i) the conviction of the Participant of a felony or the entering by
the Participant of a plea of nolo contendere to a felony, in either case having
a significant adverse effect on the business and affairs of the Company, (ii)
the willful and continued failure by the Participant to substantially perform
his duties in the course of his employment with the Company (other than any such
failure resulting from incapacity due to physical or mental illness), after a
written demand for substantial performance is delivered to the Participant by
the Board or the Chief Executive Officer of the Company which specifically
identifies the manner in which the Board or Chief Executive Officer believes
that the Participant has not substantially performed the Participant's duties;
or (iii) the willful engaging by the Participant in illegal conduct or in gross
misconduct which is materially and demonstrably injurious to the Company. No act
or failure to act on the part of the Participant shall be considered "willful"
unless it is done, or omitted to be done, by the Participant in bad faith or
without reasonable belief that the Participant'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 fully adopted by the Board, or the
advice of counsel for the Company, shall, for purposes of this Program, be
conclusively presumed to be done, or omitted to be done, by the Participant in
good faith and in the best interests of the Company. The Company expressly
acknowledges that Cause will not exist merely because of a failure of the
Company or its affiliates to meet budgeted results.
"CECONY" shall mean Consolidated Edison Company of New York, Inc., a
New York corporation.
"Change of Control" shall mean the occurrence of any of the following
events:
(i) any "person" (within the meaning of Section 13(d) of the Act) is or
becomes the beneficial owner within the meaning of Rule 13d-3 under the Act (a
"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) representing 20% or more
of the combined voting power of the Company'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 then serving: individuals who, on the date
hereof, 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 the Company) whose appointment or election by
the Board or nomination for election by the Company'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 the Company or any
direct or indirect subsidiary of the Company with any other corporation, 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 or any subsidiary of
the Company, at least 65% of the combined voting power of the 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 the combined voting power of the Company's
then outstanding securities; or
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(iv) the stockholders of the Company approve a plan of complete liquidation
or dissolution of the Company or there is consummated 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 75% of the combined voting
power of the voting securities of which are owned by stockholders of the Company
in substantially the same proportions as their ownership of the Company
immediately prior to such sale.
Notwithstanding the foregoing, a "Change of 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 the Company 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.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean the Executive Personnel and Pension Committee
that has been established by the Board, or any subsequent committee of the Board
that has primary responsibility for compensation policies. In the absence of
such a committee, "Committee" shall mean the Board or any committee of the Board
designated by the Board to perform the functions of the Committee under the
Program.
"Company" includes, individually and/or collectively as the context
requires, Consolidated Edison, Inc., Consolidated Edison Company of New York,
Inc. and all other subsidiaries of the Company that have approved and adopted
this Program pursuant to Article VIII, whether or not such entity directly
compensates the Participant or the Participant appears on the payroll of such
entity; provided, however, that, for purposes of the definition of a "Change of
Control", "Company" shall mean Consolidated Edison, Inc. (or, following the
Merger, New CEI).
"Disability" shall mean the inability of a Participant substantially to
perform his or her duties and responsibilities to the full extent required by
the Board, by reason of illness, injury or incapacity for six consecutive
months, or for more than six months in the aggregate during any period of twelve
calendar months.
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"Effective Date" shall mean September 1, 2000.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Good Reason" shall mean:
(i) any (A) decrease in the Participant's Base Compensation, or (B)
decrease in the Participant's Target Bonus (if any) or (C) material decrease in
the benefits provided to the Participant as in effect immediately prior to the
Effective Date, except, in each case, for across-the-board decreases uniformly
affecting similarly situated employees of the Company or the business unit in
which the Participant is then employed;
(ii) any failure by the Company to comply with any of the material
provisions of this Agreement, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Participant;
(iii) the Company's requiring the Participant to be based at any office
or location more than 50 miles from the location at which the Participant is
employed immediately prior to the Change of Control;
(iv) any purported termination by the Company of the Participant's
employment otherwise than as expressly permitted by this Program;
(v) any failure by the Company to comply with and satisfy Section IX F
of this Program; or
(vi) the assignment to the Participant of any duties materially
inconsistent in any respect with the Participant's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities of the Participant as in effect immediately prior to the Change
of Control, or any other action by the Company which results in a significant
diminution in such position, authority, duties or responsibilities, excluding,
for this purpose, an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Participant.
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"Merger" shall mean the consummation of the merger of the Company and
Northeast Utilities pursuant to the Amended and Restated Agreement and Plan of
Merger dated as of January 11, 2000.
"New CEI" shall, upon the Merger, mean Consolidated Edison, Inc.
"Notice of Termination" means a written notice given in accordance with
Section IX E which (i) indicates the specific termination provision in this
Program relied upon, (ii) briefly summarizes the facts and circumstances deemed
to provide a basis for a Termination of Employment and the applicable provision
hereof, and (iii) if the Termination Date is other than the date of receipt of
such notice, specifies the Termination Date (which date shall not be more than
15 days after the giving of such notice).
"Participant" at any time shall mean each person who (a) (i) is an
officer of CECONY or is then holding the office of president or higher level of
each subsidiary of the Company and (ii) is designated by the Committee to be a
participant under the Program, or (b) is an officer or key employee of New CEI
or any or its direct or indirect subsidiaries who is designated by the chief
executive officer of New CEI to be a participant under the Program; provided,
however, that any individual who would otherwise be a participant shall not be
eligible to receive any severance payments or benefits hereunder (x) unless such
individual has signed a release agreement with the Company in the form of Annex
1 hereto or in such form as has been approved by the Administrator for this
purpose from time to time prior to a Change of Control, or (y) if such
individual is a party to a then effective separate written agreement with the
Company which has been authorized or adopted by the Board or the Committee which
expressly provides for severance payments or benefits (unless such agreement
expressly provides for participation in this Program) or (z) if such individual
is an employee of Northeast Utilities who is eligible to participate in a
Northeast Utilities Severance plan or program prior to the termination of such
plan or program.
"Target Bonus" shall mean the target bonus opportunity (if any) in
effect for a Participant in respect of the calendar year in which the
Participant's Termination of Employment occurs or, if no such target bonus
opportunity has been established by the Company, the average of the two annual
bonuses, if any, paid or awarded to the Participant in respect of the most
recent two (2) calendar years immediately preceding the calendar year in which
occurs the Participant's Termination Date or preceding the Change of Control, if
higher.
"Termination Date" with respect to any Participant shall mean the date
of any action by the Company constituting a Termination of Employment of such
Participant.
"Termination of Employment" of a Participant shall mean (i) the
involuntary termination of the Participant's actual employment relationship with
the Company occasioned by the Company's action other than (w) an involuntary
termination for Cause, (x) due to a Participant's Disability or death, (y) due
to a sale, merger, acquisition or other transaction (1) in which the Participant
is employed or is offered the opportunity to become employed by another employer
in a position with the same or similar duties to the Participant's duties with
the Company immediately prior to the termination of employment and without any
decrease in the Participant's Base Compensation or Target Bonus or (2) accepts
employment in any position with the new employer or (z) due to a Participant's
retirement (voluntary at any time or mandatory at or after attainment of age 65)
or (ii) a termination initiated by a Participant on or within 24 months
following a Change of Control for Good Reason. The Company in its sole
discretion shall determine whether a Participant's termination of employment is
within the meaning of clauses (w), (x), (y) or (z) of subdivision (i).
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"Termination upon a Change of Control" of a Participant shall mean a
Termination of Employment upon or within 24 months following a Change of
Control.
III. Benefits.
A. Benefits Following a Termination of Employment.
1. Before a Change of Control. Subject to a Participant executing a
written release substantially in the form of Annex 1 hereto, if, prior
to a Change of Control, the Participant shall incur a Termination of
Employment:
a. the Company shall pay to the Participant in a lump sum in
cash, within 15 days after the Date of Termination, the
aggregate of the following amounts:
(1) the sum of (a) the Participant's Base Compensation
through the Date of Termination to the extent not
theretofore paid, (b) the product of (i) the sum of
the Participant's Target Bonus, and (ii) a fraction,
the numerator of which is the number of days in the
calendar year in which the Date of Termination occurs
through the Date of Termination, and the denominator
of which is 365 and (c) any accrued vacation pay, in
each case to the extent not theretofore paid (the sum
of the amounts described in clauses (a), (b), and (c)
shall be hereinafter referred to as the "Accrued
Obligations"); and
(2) 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 Participant 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 Participant than
those in effect under the Retirement Plan immediately
prior to the Effective Date), any excess or
supplemental nonqualified defined benefit retirement
plan in which the Participant participates (together,
the "SERP") and, to the extent applicable, any other
defined benefit retirement arrangement between the
Participant and the Company ("Other Pension
Benefits") which the Participant would receive if the
Participant's employment continued for one additional
year beyond the Date of Termination, assuming for
this purpose that all accrued benefits are fully
vested, and, assuming that the Participant's
compensation for such deemed additional period was
the Participant's Base Compensation 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 Participant's actual
benefit (paid or payable), if any, under the
Retirement Plan, the SERP 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 Participant than those in effect
under the Retirement Plan immediately prior to the
Effective Date); and
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b. the Company shall pay to the Participant in a lump sum in
cash, within 30 days after the Date of Termination, an amount
equal to one times the sum of the Participant's Base
Compensation and Target Bonus;
c. for a period of one year following the Date of Termination,
the Company shall continue to provide medical, dental and
Company-provided life insurance benefits to the Participant
and/or the Participant's eligible dependents at least equal to
those which would have been provided to them in accordance
with the Company's plans, programs, practices and policies if
the Participant's employment had not been terminated (at the
same contribution rate between the Participant and the Company
as is applicable for the Participant while actively employed
immediately prior to the Date of Termination); provided,
however, that if the Participant becomes employed by 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. Such period shall be counted as part of the
Participant's right to continued eligibility under the
Company's medical and dental plans under Section 4980B of the
Code. For purposes of determining eligibility (but not the
time of commencement of benefits) of the Participant for
retiree benefits pursuant to such plans, practices, programs
and policies, the Participant shall be considered to have
remained employed until one year following the Date of
Termination and to have terminated on the last day of such
period;
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d. the Company shall, at its sole expense as incurred, provide
the Participant with outplacement services suitable to the
Participant's position for a period not to exceed one year
with a nationally recognized outplacement firm;
e. any compensation previously deferred (other than pursuant to a
tax-qualified plan) by or on behalf of the Participant
(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;
f. to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Participant any other
amounts or benefits required to be paid or provided or which
the Participant is eligible to receive under any plan,
program, policy or practice or contract or agreement of the
Company and its affiliated companies, including earned but
unpaid stock and similar compensation (such other amounts and
benefits shall be hereinafter referred to as the "Other
Benefits"); and
g. for purposes of the Company's stock option and other equity
incentive plans and the options, benefits and rights granted
to the Participant thereunder, the Participant shall be deemed
to have terminated employment with the consent of the Company.
2. Following a Change of Control. Upon a Termination upon a Change of
Control, the provisions of Section III.A.1. shall apply, except that
references to "one" in clauses a.(2), b. and c., respectively, of
Section III A.1. shall be increased to "two".
B. Certain Reduction of Payments.
1. Anything in this Program to the contrary notwithstanding, in the event
that it shall be determined that any payment or distribution by the
Company to or for the benefit of a Participant, whether paid or payable
or distributed or distributable pursuant to the terms of this Program
or otherwise (the "Payment"), would constitute an "excess parachute
payment" within the meaning of Section 280G of the Code, and that such
Participant would receive a greater net after-tax amount if the Payment
to Participant were reduced to avoid the taxation of excess parachute
payments under Section 4999 of the Code, the aggregate present value of
amounts payable or distributable to or for the benefit of Participant
pursuant to this Program (such payments or distributions pursuant to
this Program are hereinafter referred to as "Program Payments") shall
be reduced (but not below zero) to the Reduced Amount. The "Reduced
Amount" shall be an amount expressed in present value which maximizes
the aggregate present value of Program Payments without causing any
Payment to be subject to the taxation under Section 4999 of the Code.
For purposes of this Section III B, present value shall be determined
in accordance with Section 28OG(d)(4) of the Code.
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2. All determinations to be made under this Section III B shall be made by
the Company's independent public accountant immediately prior to the
Change of Control (the "Accounting Firm"), which firm shall provide its
determinations and any supporting calculations both to the Company and
the affected Participant within 10 days of the Termination Date of such
Participant. Any such determination by the Accounting Firm shall be
binding upon the Company and the Participant; provided, however, that
Participant shall, in his or her sole discretion, determine whether,
which and how much of the Program Payments shall be eliminated or
reduced consistent with the requirements of this Section III B. Within
five days after the Participant's determination, the Company shall pay
(or cause to be paid) or distribute (or cause to be distributed) to or
for the benefit of the Participant such amounts as are then due to the
Participant under this Program.
3. As a result of the uncertainty in the application of Section 280G of
the Code at the time of the initial determination by the Accounting
Firm hereunder, it is possible that Program Payments will have been
made by the Company which should not have been made ("Overpayment") or
that additional Program Payments which have not been made by the
Company could have been made ("Underpayment"), in each case, consistent
with the calculations required to be made hereunder. Within two years
after the Termination of Employment of any Participant, the Accounting
Firm shall review the determination made by it pursuant to subsection
III B.2. above. In the event that the Accounting Firm determines that
an overpayment has been made, any such Overpayment shall be treated for
all purposes as a loan to the Participant which the Participant shall
repay to the Company together with interest at the applicable Federal
rate provided for in Section 7872(f)(2) of the Code (the "Federal
Rate"); provided, however, that no amount shall be payable by the
Participant to the Company if and to the extent such payment would not
increase the net amount which is payable to the Participant after
taking into account the provisions of Section 4999 of the Code. In the
event that the Accounting Firm determines that an Underpayment has
occurred, any such Underpayment shall be promptly paid by the Company
to or for the benefit of the Participant together with interest at the
Federal Rate.
4. All of the fees and expenses of the Accounting Firm in performing the
determinations referred to in subsections III B.2. and III B.3. above
shall be borne solely by the Company. The Company agrees to indemnify
and hold harmless the Accounting Firm of and from any and all claims,
damages and expenses resulting from or relating to its determinations
pursuant to subsections III B.2. and III B.3. above, except for claims,
damages or expenses resulting from the gross negligence or wilful
misconduct of the Accounting Firm.
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C. Vesting. Except as provided in Article V hereof, a Participant shall be
vested and shall have a nonforfeitable right with respect to the
benefits to be provided hereunder from and after the Termination Date.
The respective rights and obligations of the Company and the
Participant under this Program shall survive any termination of
Participant's employment to the extent necessary to the intended
preservation of such rights and obligations.
D. Non-Exclusivity of Rights. Nothing in this Program shall prevent or
limit any Participant's continuing or future participation in or rights
under any benefit, bonus, incentive or other plan or program provided
by the Company and for which such Participant may qualify; provided,
however, that if such Participant becomes entitled to and receives all
of the payments provided for in this Program, the Participant hereby
waives his or her right to receive payments under any other plan,
program, agreement or arrangement of the Company providing severance
benefits.
E. Notice of Termination. No Termination upon a Change of Control shall be
effective unless accompanied or preceded by a Notice of Termination.
IV. Confidential Information.
A. Each Participant 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 Participant during the Participant'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 Participant or
representatives of the Participant in violation of this Agreement).
Upon termination of the Participant's employment, he or she shall
return to the Company all Company information. After termination of the
Participant's employment with the Company, the Participant 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 (a) otherwise publicly available
information, or (b) 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.
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 a Participant prior to
employment with the Company, and information received by the
Participant from sources other than the Company or its affiliates and
subsidiaries, without obligation of confidentiality.
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V. Funding.
Benefits payable under this Program shall be unfunded, as that term is
used in Sections 201(2), 301(a)(3), 401(a)(1) and 4021(a)(6) of ERISA, with
respect to unfunded plans maintained primarily for the purpose of providing
deferred compensation to a select group of management or highly compensated
employees, and the Administrator shall administer this Program in a manner that
will ensure that benefits are unfunded and that Participants will not be
considered to have received a taxable economic benefit prior to the time at
which benefits are actually payable hereunder. Accordingly, the Company shall
not be required to segregate or earmark any of its assets for the benefit of
Participants or their spouses or other beneficiaries, and each such person shall
have only a contractual right against the Company for benefits hereunder. The
Company may from time to time establish a trust and deposit with the trustee
thereof funds to be held in trust for the payment of benefits hereunder;
provided, that the use of such funds for such purpose shall be subject to the
claims of the Company's general creditors as set forth in the agreement
establishing any such trust. The rights and interests of a Participant under
this Program shall not be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge or encumbrance by a Participant or any person
claiming under or through a Participant, nor shall they be subject to the debts,
contracts, liabilities or torts of a Participant or anyone else prior to
payment. The Administrator may from time to time appoint an investment manager
or managers for the funds held in any such trust.
VI. Administration.
The Program shall be operated under the direction of the Committee and
administered by the Administrator. The calculation of all benefits payable under
the Program shall be performed by the Administrator, subject to the review of
the Committee.
VII. Claims Procedure.
All claims for benefits under this Program shall be determined under
the claims procedure in effect under the Company's tax-qualified defined benefit
pension plan on the date that such claims are submitted, except that the
Administrator shall make initial determinations with respect to claims hereunder
and the Committee shall decide appeals of such determinations. In the event that
any dispute under the provisions of this Program is not resolved to the
satisfaction of the affected Participant, other than a dispute in which the
primary relief sought is an equitable remedy such as an injunction, the parties
shall be required to have the dispute, controversy or claim settled by
arbitration in New York City, New York in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. Any award entered by
the arbitrator shall be final, binding and nonappealable and judgment may be
entered thereon by either party in accordance with applicable law in any court
of competent jurisdiction. This arbitration provision shall be specifically
enforceable. The arbitrator shall have no authority to modify any provision of
this Program or to award a remedy for a dispute involving this Program other
than a benefit specifically provided under or by virtue of the Program. If a
Participant prevails on any material issue which is the subject of any such
arbitration or lawsuit, the Company shall be responsible for all of the fees of
the American Arbitration Association and the arbitrator and any expenses
relating to the conduct of the arbitration (including the Company's and the
Participant's reasonable attorneys' fees and expenses). Otherwise, each party
shall be responsible for its own expenses relating to the conduct of the
arbitration (including reasonable attorneys' fees and expenses) and shall share
the fees of the American Arbitration Association.
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VIII. Adoption by Company: Obligations of Company.
A. At the earliest feasible time or times, the Company shall cause each
entity in which it now or hereafter holds, directly or indirectly, more
than a 50 percent voting interest to approve and adopt this Program
and, by such approval and adoption, to be bound by the terms hereof.
B. Benefits under this Program shall, in the first instance, be paid and
satisfied by the Company. If the Company shall be dissolved or for any
other reason shall fail to pay and satisfy such benefits, each
individual entity referred to in (a) above shall pay and satisfy its
share of such benefits, such share to be the ratio of the Participant's
Base Compensation charged to such entity during the three calendar
years immediately preceding the Participant's Termination Upon a Change
of Control to the total of the Participant's Base Compensation charged
to all such entities during the same period.
IX. Miscellaneous.
A. Amendment or Termination. Prior to the occurrence of a Change of
Control, the Board may amend or discontinue this Program at any time.
Prior to the occurrence of a Change in Control, the Administrator may
amend the Program to facilitate the administration of the Program. Upon
and following a Change of Control, this Program may not be amended or
terminated in any way that would adversely affect the rights of
Participants under the Program.
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B. Headings. Headings are included in the Program for convenience only and
are not substantive provisions of the Program.
C. Applicable Law. The interpretation of the provisions and the
administration of the Program shall be governed by the laws of the
State of New York without giving effect to any conflict of laws
provisions, and to the extent applicable, the United States of America.
D. Mitigation. No Participant shall be required to mitigate the amount of
any payment or benefit provided for in this Program by seeking other
employment or otherwise and there shall be no offset against amounts
due any Participant under this Program on account of any remuneration
attributable to any subsequent employment that may be obtained.
E. Notices. All notices and other communications required or permitted
under this Program or necessary or convenient in connection herewith
shall be in writing and shall be deemed to have been given when hand
delivered or mailed by registered or certified mail to the last known
address of the Company or the Participant, as the case may be,
reflected upon Company records. Notices to the Company shall be
addressed to:
Consolidated Edison, Inc.
4 Irving Place
New York, NY 10003
Attention: General Counsel
F. Binding Effect; Successors and Assigns. All of the terms and provisions
of this Program shall be binding upon and inure to the benefit of and
be enforceable by the respective heirs, executors, administrators,
legal representatives, successors and assigns of the parties hereto,
except that the duties and responsibilities of the Participants under
this Program are of a personal nature and shall not be assignable or
delegatable in whole or in part by the Participants. The Company shall
require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all
of the business or assets of the Company, by agreement in form and
substance satisfactory to the Participants, expressly to assume and
agree to perform this Program in the same manner and to the extent the
Company would be required to perform if no such succession had taken
place.
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G. Severability. If any provision of this Program or application thereof
to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability
shall not affect any other provision or application of this Program
which can be given effect without the invalid or unenforceable
provision or application and shall not invalidate or render
unenforceable such provision or application in any other jurisdiction.
If any provision is held void, invalid or unenforceable with respect to
particular circumstances, it shall nevertheless remain in full force
and effect in all other circumstances.
H. Remedies Cumulative; No Waiver. No remedy conferred upon a party by
this Program is intended to be exclusive of any other remedy, and each
and every such remedy shall be cumulative and shall be in addition to
any other remedy given under this Program or now or hereafter existing
at law or in equity. No delay or omission by a party in exercising any
right, remedy or power under this Program or existing at law or in
equity shall be construed as a waiver thereof, and any such right,
remedy or power may be exercised by such party from time to time and as
often as may be deemed expedient or necessary by such party in its sole
discretion.
I. Beneficiaries/References. Each Participant shall be entitled, to the
extent permitted under any applicable law, to select and change a
beneficiary or beneficiaries to receive any compensation or benefit
payable under this Program following his or her death by giving the
Company written notice thereof. In the event of a Participant's death
or a judicial determination of a Participant's incompetence, reference
in this Program to "Participant" shall be deemed, where appropriate, to
refer to such Participant's beneficiary, estate or other legal
representative.
J. Withholding. The Company may withhold from any payments under this
Program all federal, state and local taxes as the Company is required
to withhold pursuant to any law or governmental rule or regulation.
Each Participant shall bear all expense of, and be solely responsible
for, all federal, state and local taxes due with respect to any payment
received under this Program.
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Annex 1
RELEASE AND WAIVER AGREEMENT
This Release and Waiver Agreement ("Agreement") is between Consolidated
Edison, Inc. ("Company") and ______________________ ("Employee") and is being
entered into by the Employee in consideration for the Company's providing the
Employee with severance payments and benefits under the Severance Program for
Officers of Consolidated Edison, Inc. (the "Program"). The parties hereto agree
as follows:
1. Employee agrees to waive, release and discharge the Company
and its subsidiaries and affiliates, and their respective legal
representatives, successors and assigns, agents, past, present and
future employees, directors, officers, shareholders and trustees, from
any and all actions, causes of action, claims, cross-claims, third
party claims, counterclaims, contribution claims, debts, demands,
actions, promises, judgments, trespasses, extents, executions, awards,
damages, liabilities of any kind or nature whatsoever, which Employee
and his/her successors and assigns may have or have had against the
Company or the above-referenced entities and individuals for all times
in the past to the date that this Agreement is signed. This release and
discharge is specifically understood to apply to, but is not limited
to, claims for alleged oral, written or implied contract of employment,
claims for salary or wages, severance payments, bonuses or other
compensation of any kind, claims for libel, slander, defamation and
attorneys' fees, claims of wrongful discharge, claims of discriminatory
treatment based upon any one or combination of the factors of age, sex,
race, religion, handicap, national origin and any and all other claims
arising under federal, state or local law, whether such claims arise at
common law (whether sounding in tort or contract) or by constitution,
statute or ordinance, including, by way of illustration, Title VII of
the Civil Rights Act of 1964, as amended, 42 U.S.C. 2000(e) et seq.,
the Civil Rights Act of 1991, the federal Fair Labor Standards Act, the
Employee Retirement Income Security Act of 1974, as amended, the
Americans with Disabilities Act, the Age Discrimination in Employment
Act of 1967, as amended, 29 U.S.C. 621 et seq., the New York State
Human Rights Law and the New York City Human Rights Law, each as
amended from time to time; provided, however, that this waiver, release
and discharge shall not apply to any compensation and benefits payable
under the Program.
2. Employee acknowledges that he/she is entering into this
Agreement voluntarily and of his/her own free will. Employee also
agrees that this Agreement contains the parties' complete understanding
and that there are no other agreements, oral or written, pertaining to
the subject matter of this Agreement. Any amendment or modification of
this Agreement must be made in writing and signed by both Employee and
the Company.
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3. The parties hereto agree that this Agreement shall be
governed by and construed in accordance with the laws of the State of
New York. The parties further agree that should any part or provision
of this Agreement be held unenforceable or in conflict with controlling
law, the validity of the remaining parts and provisions shall be
unaffected.
4. The parties expressly agree that this Agreement shall inure
to the benefit of and be binding upon the parties hereto and their
respective heirs, successors and assigns.
5. Employee acknowledges that he/she was provided a copy of
this Agreement on _________ and that he/she has until [21][45] days
from such date to sign and return it to the Company. The Employee shall
have seven days from the date on which he/she signs and returns this
Agreement, to revoke said Agreement. It is agreed that this Agreement
shall not become effective or enforceable until this seven-day
revocation period has passed. Any such revocation within this period
must be submitted in writing to the Company and signed by the Employee.
6. Employee acknowledges that he/she has been advised to
consult with an attorney and other advisors of his/her choice prior to
signing this Agreement and that his/her execution of this Agreement is
made voluntarily and with a full understanding of its consequences and
has not been coerced in any way.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of _____.
CONSOLIDATED EDISON, INC.
By _________________________
-------------------------
Employee
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