EXHIBIT 10(o)
NATIONAL GRID USA COMPANIES'
EXECUTIVE SEVERANCE PLAN
Adopted April 1, 2000
Amended and Restated March 1, 2003
NATIONAL GRID USA COMPANIES
EXECUTIVE SEVERANCE PLAN
TABLE OF CONTENTS
ARTICLE I PREAMBLE................................................... 1
1.1 Purpose................................................... 1
ARTICLE II DEFINITIONS............................................... 2
2.1 Base Pay.................................................. 2
2.2 Benefits Appeal Committee................................. 2
2.3 Bonus Average............................................. 2
2.4 CEO....................................................... 2
2.5 Change in Control......................................... 2
2.6 Code...................................................... 3
2.7 Company................................................... 3
2.8 Eligible Executive........................................ 3
2.09 ERISA..................................................... 3
2.10 Excise Tax................................................ 3
2.11 Executive................................................. 3
2.12 Health Plan............................................... 3
2.13 Incentive Compensation Plan............................... 3
2.14 ICP....................................................... 3
2.15 ICP I, ICP II, and ICP III................................ 3
2.16 A Major Transaction....................................... 3
2.17 National Grid............................................. 4
2.18 Plan Year................................................. 4
2.19 Severance Committee....................................... 4
2.20 Termination Date.......................................... 4
2.21 Total Compensation........................................ 4
2.22 Total Payments............................................ 4
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2.23 Undue Hardship............................................ 4
ARTICLE III ELIGIBILITY FOR BENEFITS................................. 5
3.1 Eligibility............................................... 5
3.2 Notification of Eligible Executives....................... 6
3.3 Acceptance of Severance Pay............................... 6
ARTICLE IV BENEFITS.................................................. 7
4.1 Severance Pay............................................. 7
4.2 Healthcare................................................ 7
4.3 Insurance................................................. 8
4.4 Outplacement.............................................. 8
4.5 Nonduplication of Benefits................................ 9
ARTICLE V PAYMENT.................................................... 10
5.1 Payment................................................... 10
5.2 Limitation on Payments.................................... 10
5.3 Source of Payment......................................... 11
5.4 Contributions............................................. 11
ARTICLE VI ADMINISTRATION OF THE PLAN................................ 12
6.1 Severance Committee's Discretionary Powers and Duties..... 12
6.2 Indemnification........................................... 13
ARTICLE VII DENIED CLAIMS............................................ 14
7.1 Denied Claims............................................. 14
7.2 Claims Appeal Procedure................................... 14
7.3 Delay in Payment Pending Resolution of Claim.............. 14
ARTICLE VIII GENERAL PROVISIONS...................................... 15
8.1 Nonguarantee of Employment................................ 15
8.2 Nonalienation of Benefits................................. 15
8.3 Governing Law............................................. 15
8.4 Participation............................................. 15
8.5 Separability.............................................. 15
8.6 Titles of Articles and Sections........................... 15
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8.7 Agent for Service of Legal Procedures..................... 15
ARTICLE IX AMENDMENT OR TERMINATION OF PLAN.......................... 16
9.1 Amendment of Plan......................................... 16
9.2 Termination of Plan....................................... 16
9.3 Limitation on Amendment or Termination.................... 16
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ARTICLE I
PREAMBLE
1.1 Purpose. The purpose of this Executive Severance Plan (the Plan) is to
provide severance benefits to participants in the National Grid USA
Companies' Incentive Compensation Plan who do not have individual change
in control agreements or other individual agreements which provide for
severance payments and who are permanently released from the Company for
reasons beyond their control. The Plan is an unfunded severance benefit
plan which is intended to be a welfare benefit plan within the meaning of
Section 3(I) of the Employment Retirement Income Security Act (ERISA) but
is maintained primarily for the purpose of providing benefits for a select
group of management or highly compensated employees. The severance
benefits paid under the Plan are intended to assist employees in making a
transition to new employment and are not intended to be a reward for prior
service with the Company.
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ARTICLE II
DEFINITIONS
2.1 Base Pay shall mean the higher of the Executive's "annual rate" recorded
in the Company's payroll system immediately preceding the Executive's
Termination Date or the "annual rate" in the payroll system at any time
during the two years prior to the Executive's Termination Date.
2.2 Benefits Appeal Committee shall mean the committee by that name
established in accordance with the National Grid USA Companies' Final
Average Pay Pension Plan.
2.3 Bonus Average shall mean the average plan payout percentage under National
Grid USA Companies' Incentive Compensation Plan combined with the payout
percentage under the National Grid USA Companies' Incentive Share Plan for
the three completed Plan Years prior to the Termination Date, for which a
calculation is available at the time of determination.
2.4 CEO shall mean the Chief Executive Officer of National Grid USA.
2.5 Change in Control occurs when the conditions set forth in any of the
following sections shall have been satisfied:
(a) any person or persons in concert obtains Control (as defined in
Section 840 of the United Kingdom's Income and Corporation Taxes Act
1988) of National Grid Transco plc as a result of making a general
offer to acquire shares in National Grid Transco plc, or having
obtained Control, makes such an offer; or
(b) the consummation of the sale or disposition by National Grid Transco
plc of all or substantially all of the assets of National Grid USA
to a non-affiliated entity; or
(c) the complete liquidation, dissolution or winding up of National Grid
Transco plc and/or of National Grid USA, or
(d) the acquisition by National Grid Transco plc or National Grid USA or
their successors of all or substantially all of the assets of or
ownership of all or substantially all of the outstanding shares of a
U.S. electric and/or gas utility company which would increase the
size or revenues of National Grid USA by 25% or more.
A Change in Control shall not be deemed to have occurred if the
events referred to above are part of an arrangement ("a Reorganisation")
which will mean that National Grid Transco plc and/or National Grid USA
will be under the Control of another
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company, or the business of National Grid Transco plc is carried on by
another company, and the persons who owned the shares in National Grid
Transco plc immediately before the Change in Control will immediately
afterwards own more than 50% of the shares in that other company.
2.6 Code shall mean the Internal Revenue Code, as adopted from time to time.
2.7 Company shall mean the National Grid USA company that employed the
Executive on the day immediately prior to his/her termination provided
said company adopted the Plan.
2.8 Eligible Executive shall mean an Executive employed by the Company as a
regular full time or part time employee immediately prior to his/her
termination who meets all the requirements and conditions set forth under
the Plan and is notified of his/her eligibility in accordance with Article
III.
2.09 ERISA shall mean the Employment Retirement Income Security Act of 1974, as
amended.
2.10 Excise Tax shall mean any excise tax imposed under section 4999 of the
Code.
2.11 Executive shall mean a participant in the ICP.
2.12 Health Plan shall mean the Company provided healthcare plan in which the
Executive was enrolled immediately prior to his/her Termination Date.
2.13 Incentive Compensation Plan shall mean National Grid USA Companies'
Incentive Compensation Plan which is comprised of two parts (a) the
Incentive Compensation Plan or Cash Plan and (b) the Incentive Share Plan
or Share Plan.
2.14 ICP shall mean National Grid USA Companies' Incentive Compensation Plan
(Incentive Compensation Plan).
2.15 ICP I, ICP II, and ICP III shall have the meaning set forth in the
Incentive Compensation Plan.
2.16 A Major Transaction shall be deemed to have occurred if the conditions set
forth in any one of the following sections shall have been satisfied:
(a) any person becomes bound or entitled to acquire shares in National
Grid Transco plc under Sections 428 to 430F of the United Kingdom's
Companies Act 1985, or a scheme of arrangement or compromise under
Section 425 of the United Kingdom's Companies Act 1985 is proposed
for National Grid Transco plc, or
(b) National Grid Transco plc's shareholders approve the sale or
disposition of all or substantially all of the assets of National
Grid USA to a non-affiliated entity, or
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(c) National Grid Transco plc passes a resolution for voluntary winding
up, or an order is made for the compulsory winding up of National
Grid Transco plc and/or National Grid USA or
(d) The shareholders of National Grid Transco plc, approve an event the
consummation of which would result in the occurrence of a Change in
Control, or
(e) The Board adopts a resolution that, for purposes of the Incentive
Compensation Plan, a Major Transaction has occurred.
A Major Transaction shall not be deemed to have occurred if the
events referred to above are part of an arrangement ("a Reorganisation")
which will mean that National Grid Transco plc and/or National Grid USA
will be under the Control of another company or the business of National
Grid Transco plc is carried on by another company, and the persons who
owned the shares in National Grid Transco plc immediately before the
series of transactions are consummated will immediately after consummation
own more than 50% of the shares in that other company.
2.17 National Grid shall mean National Grid USA and any affiliate, subsidiary,
or parent company.
2.18 Plan Year shall mean a twelve month period beginning on April 1 of any
year.
2.19 Severance Committee shall mean the committee made up of at least three
individuals appointed by the CEO, from time to time.
2.20 Termination Date shall mean the date established by the Company as of
which the Executive is no longer employed by the Company.
2.21 Total Compensation shall mean the sum of (a) one year's Base Pay plus (b)
the product of one year's Base Pay times the Bonus Average.
2.22 Total Payments shall have the meaning provided in section 5.2 hereof.
2.23 Undue Hardship shall mean relocation to a position that is located more
than 50 miles from the location where the Executive worked immediately
prior to termination, or such other circumstances as determined by the
Severance Committee.
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ARTICLE III
ELIGIBILITY FOR BENEFITS
3.1 Eligibility. All regular full time or part time Executives who have been
with the Company for six months or more who (i) do not have individual
change in control agreements or other individual agreements which provide
for severance payments and (ii) are permanently released from employment
for reasons beyond their control are eligible for the benefits of the
Plan, except for those who:
(a) are offered, but do not accept, a position with a National Grid
company that is at least substantially equivalent to the position
held by the Executive immediately prior to the offer unless
acceptance would cause Undue Hardship;
(b) voluntarily leave (whether or not eligible for pension benefits),
(c) are transferred from one Company to another affiliated company in at
least a substantially equivalent position regardless of whether the
transfer would cause an undue hardship unless the transfer is part
of a company-wide reorganization in which case, undue hardship will
be deemed relevant;
(d) are offered employment by a successor of the Company or a Company
affiliate in a position that is at least substantially equivalent to
the position held by the Executive immediately prior to the offer
unless such acceptance would cause Undue Hardship;
(e) are offered employment by a Purchaser of all or a substantial
portion of the Company's assets or a Purchaser of all or a
substantial portion of a Company affiliate's assets in a position
that is at least substantially equivalent to the position held by
the Executive immediately prior to the offer unless such acceptance
would cause Undue Hardship.
(f) leave for medical reasons including disability,
(g) die prior to their Termination Date;
(h) are terminated for cause;
(i) take a Company approved leave of absence and fail to return to work
from the leave of absence by the expiration date of said leave
(except as otherwise required by law);
(j) receive benefits under any other National Grid severance plan; or
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(k) fail to return all Company property including but not limited to,
badges, computers, phones, keys, documents and records.
3.2 Notification of Eligible Executives. Each Executive who the Company
determines has met the eligibility criteria for benefits under the Plan
shall be notified in writing. Such notice shall provide each Executive
with a description of the terms of the Plan and the conditions the
Executive must satisfy for payment of benefits.
3.3 Acceptance of Severance Pay. As a condition of acceptance of the benefits
under the Plan, an Eligible Executive shall be required to sign an
Agreement and Release prepared by and provided by the Company. Among other
things, said Agreement and Release waives any claims the Eligible
Executive or his/her representatives may have against National Grid, and
releases them from any liability for any such claims, to the fullest
extent permitted by law. An Eligible Executive shall be required to return
a signed copy of said Agreement and Release to National Grid USA Service
Company, Inc. within 21 days from the date of receipt if the severance is
on an individual basis, or 45 days from the date of receipt if the
severance is part of a group process. After signature, the Executive will
have seven days to revoke the Agreement and Release. To do so the
Executive must notify National Grid USA Service Company, Inc. in writing.
In the event an Eligible Executive fails to sign and return said Agreement
and Release within said 21 or 45-day period, as applicable, or revokes the
Agreement and Release within the 7-day revocation period, the Eligible
Executive shall still be terminated but shall be deemed to have forfeited
any rights to benefits under the Plan and shall only be eligible for
reduced severance pay as set forth in Section 4.1(a) of the National Grid
USA Companies' Basic Severance Plan for Non-Union Employees.
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ARTICLE IV
BENEFITS
Subject to the Article V, an Eligible Executive who provides a valid Agreement
and Release in accordance with Section 3.3 above shall be entitled to the
following benefits as of the Eligible Executive's Termination Date.
4.1 Severance Pay
(a) An Eligible Executive in ICP I shall receive a payment equal to two
times his or her Total Compensation.
(b) An Eligible Executive in ICP II or III shall receive a payment equal
to his or her Total Compensation.
(c) An Eligible Executive in ICP I, II, or III shall receive a Bonus
Award as defined in the Incentive Compensation Plan and Share Plan,
prorated, to reflect the number of months worked during the Plan
Year, provided however if the Executive's Termination Date occurs
prior to the determination of the Bonus Award for said Plan Year,
the Participant shall receive a pro-rated Bonus Award for said Plan
Year based upon the applicable Target Payout, as defined in Section
7.04 of the Incentive Compensation Plan.
4.2 Healthcare
(a) An Eligible Executive in ICP I, who was a participant in a Company
Health Plan up until his/her Termination Date, shall receive a
payment in an amount equal to 18 times the Employer's monthly
contribution toward the cost of the Health Plan, grossed up to
reflect applicable payroll withholding taxes on such payment. Said
lump sum is intended to supplement the Eligible Executive's cost of
COBRA coverage, but need not necessarily be used by the Eligible
Executive for that purpose.
(b) An Eligible Executive in ICP II or III who was a participant in a
Company Health Plan up until his/her Termination Date, shall receive
a payment in an amount equal to 12 times the Employer's monthly
contribution toward the cost of the Health Plan, grossed up to
reflect any state or Federal income taxes on such payment. Said lump
sum is intended to supplement the Eligible Executive's cost of COBRA
coverage, but need not necessarily be used by the Eligible Executive
for that purpose.
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(c) An Eligible Executive who was not a participant in a Company Health
Plan up until his/her Termination Date, shall receive a lump sum
payment equal to 1 -1/2 times the amount of his/her annual opt-out
payment if the Eligible Executive is in ICP I and an amount equal to
his/her annual opt-out payment if the Eligible Executive is in ICP
II or III.
4.3 Insurance
(a) If an Eligible Executive in ICP I is a participant in the New
England Electric System Companies Life Insurance Program for
Executives I or II (Program), the Company shall provide the same
dollar amount of life insurance in effect for an additional 18
months, either by maintaining the policy provided under that plan,
or by providing the Eligible Executive with a lump sum payment in an
amount equal to eighteen months' premiums on the policy, grossed up
for taxes. Notwithstanding the foregoing, if the Eligible
Executive's Program agreement provides for the continuation of
premium payments following his/her termination of employment the
Eligible Employee shall not receive a payment under this Section 4.3
(a).
(b) If an Eligible Executive in ICP II or III is a participant in the
Program, the Company shall provide the same dollar amount of life
insurance in effect for an additional 12 months, either by
maintaining the policy provided under that plan, or by providing the
Eligible Executive with a lump sum payment in an amount equal to
twelve months' premiums on the policy, grossed up for taxes.
Notwithstanding the foregoing, if the Eligible Executive's Program
agreement provides for the continuation of premium payments
following his/her termination of employment the Eligible Employee
shall not receive a payment under this Section 4.3 (b).
4.4 Outplacement
(a) Outplacement services of the Company's choice shall be made
available to an Eligible Executive in ICP I for eighteen months from
the Eligible Executive's Termination Date.
(b) Outplacement services of the Company's choice shall be made
available to an Eligible Executive in ICP II or III for twelve
months from the Eligible Executive's Termination Date.
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4.5 Nonduplication of Benefits. To the fullest extent permitted by law, an
Executive who receives benefits under the Plan shall not be entitled to
any other benefits that are duplicative. An Executive who receives
benefits under any other National Grid company severance plan, program, or
arrangement that provides severance payments or benefits duplicative of
benefits hereunder shall not be entitled to such benefits hereunder.
Payments from incentive or other employee benefit plans occurring
automatically upon a Change of Control or Major Transaction shall not be
considered duplicative hereof.
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ARTICLE V
PAYMENT
5.1 Payment. Severance pay and healthcare, and/or insurance pay, if
applicable, shall be paid to the Eligible Executive in one lump sum within
approximately 14 days of receipt by the Company of a an irrevocable signed
Agreement and Release unless the Executive requests and the Company
approves, in its sole discretion, payment of all or a portion of said
payment at a later date. Approval of a later date will be subject to the
receipt of such further documentation as may be required by the Company,
including a second signed Agreement and Release delivered at said later
date. If payment at a later date has been approved, no interest or other
earnings will be credited to said payment. Said payment shall be subject
to all applicable Federal, state, and local withholding requirements.
5.2 Limitation on Payments. Notwithstanding any other provisions of the Plan,
in the event that any payment or benefit received or to be received by the
Executive under other National Grid plans in connection with a Change in
Control or a Major Transaction, as defined therein, or the termination of
the Executive's employment (whether pursuant to the terms of the Plan or
any other plan, arrangement, or agreement with National Grid, any Person
whose actions result in a Change in Control, or a Major Transaction or any
Person affiliated with National Grid or such Person) (all such payments
and benefits, including the payments under the Plan, being hereinafter
called Total Payments) would be subject (in whole or part), to the Excise
Tax, then the payments under the Plan shall be reduced to the extent
necessary so that no portion of the Total Payments is subject to the
Excise Tax (after taking into account any reduction in the Total Payments
provided by reason of section 280G of the Code in such other plan,
arrangement, or agreement) if (A) the net amount of such Total Payments,
as so reduced, (and after deduction of the net amount of federal, state,
and local income tax on such reduced Total Payments) is greater than (B)
the excess of (i) the net amount of such Total Payments, without reduction
(but after deduction of the net amount of federal, state, and local income
tax on such Total Payments), over (ii) the amount of Excise Tax to which
the Executive would be subject in respect of such Total Payments. For
purposes of determining whether and the extent to which the Total Payments
will be subject to the Excise Tax, (i) no portion of the Total Payments
the receipt or enjoyment of which the Executive shall have effectively
waived in writing prior to the Date of Termination shall be taken into
account, (ii) no portion of the Total Payments shall be taken into account
which in the opinion of tax counsel selected by the Company does not
constitute a "parachute payment" within the meaning of section 280G(b)(2)
of the Code, (including by reason of section 280G(b)(4)(A) of the Code)
and, in calculating the Excise Tax, no portion of such Total Payments
shall be taken into account which constitutes reasonable compensation for
services actually rendered, within the meaning of section 280G(b)(4)(B) of
the Code, in excess of the base amount allocable to such reasonable
compensation, and (iii) the value of any noncash benefit or any deferred
payment or benefit included in the Total Payments shall be determined by
the Company in accordance with the principles of sections 280G(d)(3) and
(4) of the Code.
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5.3 Source of Payment. All benefits under the Plan shall be payable solely
from the Company's general assets which include operating revenues. The
Company shall not be required to set aside or segregate any assets of any
kind to meet any obligations under the Plan. All obligations of the
Company shall be reflected by bookkeeping entries only. The rights of a
Participant under the Plan shall be those of a general, unsecured creditor
of the Company.
5.4 Contributions. There shall be no contributions to the Plan by Executives.
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ARTICLE VI
ADMINISTRATION OF THE PLAN
6.1 Severance Committee's Discretionary Powers and Duties. The Severance
Committee shall be responsible for the administration of the Plan and
shall be the "administrator" within the meaning of Section 3(16) of ERISA.
The Severance Committee shall have such discretionary powers as may be
necessary to discharge its duties hereunder, including, but not by way of
limitation, the following powers and duties:
(a) to construe and interpret the Plan, including questions of
eligibility, and the amount, manner, and time of payment of any
benefits hereunder;
(b) to prescribe rules for the operation of the Plan;
(c) to receive from the Company and Eligible Executives such information
as shall be necessary for the proper administration of the Plan;
(d) to delegate to one or more of the members of the Severance Committee
or other persons the right to act in its behalf in all matters
connected with the administration of the Plan, except with respect
to any matters described in (a) and (b) above;
(e) to appoint or employ for the Plan any agents it deems advisable,
including, but not limited to, legal counsel;
(f) to file with the appropriate government agency (or agencies)
pertinent documents and other items which may be required by law or
duly requested;
(g) to furnish each Eligible Executive a plan description explaining the
Plan;
(h) to maintain all records necessary for verification of information
required to be filed with the appropriate government agency (or
agencies); and
(i) to report to the Company all available information regarding the
amount of benefits payable to each Executive, and to provide any
other information which the Company may require in order to operate
the Plan.
To the fullest extent permitted by law, the Severance Committee shall have
the discretion to determine all matters relating to eligibility or
benefits under the Plan and the Severance Committee shall have the
discretion to determine all matters relating to the interpretation,
construction, and administration of the Plan. Any determination by the
Severance Committee shall be final and binding in the absence of clear and
convincing evidence that the Severance Committee acted arbitrarily and
capriciously.
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6.2 Indemnification. To the maximum extent permitted by law, no member of the
Severance Committee or any other Executive of the Company or National Grid
USA Service Company, Inc. who has been assigned authority or
responsibility to act on behalf of the Severance Committee, the Company,
or National Grid USA Service Company, Inc. hereunder, shall be personally
liable by reason of any contract instrument, communication, or other
document executed or approved by the Severance Committee member or on
behalf of the Severance Committee member made in good faith in his or her
capacity as a member of the Severance Committee; nor for any mistake of
judgment made in good faith. National Grid USA Service Company, Inc. shall
indemnify and hold harmless each member of the Severance Committee; and
the Company or National Grid USA Service Company, Inc. shall indemnify
each of its officers, Executives, employees, or directors to whom any duty
or power relating to the administration or interpretation of the Plan may
be delegated or allocated, against any claims, damages, costs or expenses
(legal or otherwise), or liability (including any sum paid in settlement
of a claim with approval of the Company or National Grid USA Service
Company, Inc.), as the case may be, arising out of any act or omission to
act in connection with the Plan unless arising out of such person's fraud,
or bad faith.
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ARTICLE VII
DENIED CLAIMS
7.1 Denied Claims. If a claim for benefits has been denied by the Severance
Committee, the Severance Committee shall notify the claimant in writing
within 90 days if the claim is denied in whole or in part, provided that
if special circumstances warrant an extension of the time for reviewing
the claim, the Severance Committee may extend the review period by an
additional 90 days by so notifying the claimant in writing before the
expiration of the initial 90-day period.
If a claim is denied in whole or in part by the Severance Committee, the
notice to the claimant shall specify the reason or reasons for the denial,
reference the specific Plan provisions on which the denial is based,
describe any additional material or information necessary for the claimant
to perfect said claim, explain why such material or information is
necessary, and describe the steps which should be taken if the claimant
wishes to appeal the claim.
7.2 Claims Appeal Procedure. A claimant or his/her representative may appeal
the Severance Committee's denial of his/her claim, such appeal shall be
subject to the following rules:
(a) The appeal shall be submitted to the Benefits Appeal Committee in
writing no later than 60 days after the claimant or his/her
representative receives written notice of the denial.
(b) The Benefits Appeal Committee shall review the appeal and provide
the claimant or his/her representative with written notice of its
decision no later than 60 days after it receives notification of the
appeal which may be extended to 120 days if the Severance Committee
determines it to be necessary.
(c) The decision on an appeal shall be in writing in a manner calculated
to be understood by the claimant or his/her representative.
(d) The decision shall include reasons for the decision and specific
references to the Plan provisions on which the decision is based.
7.3 Delay in Payment Pending Resolution of Claim. Any payment otherwise due
hereunder may be delayed pending resolution of any claim.
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ARTICLE VIII
GENERAL PROVISIONS
8.1 Nonguarantee of Employment. Nothing contained in the Plan shall be
construed as a contract of employment between the Company and Executive,
or as a right of any Executive to continued employment with the Company,
or as a limitation of the right of the Company to discharge any of its
Executives, with or without cause.
8.2 Nonalienation of Benefits. Except as related to orders for child support
and/or alimony, or federal or state tax levies, to the fullest extent
permitted by law, benefits payable under the Plan shall not be subject in
any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, charge, garnishment, execution, or levy of any kind,
either voluntary or involuntary. Any attempt to anticipate, alienate,
sell, transfer, assign, pledge, encumber, charge, garnish, execute, levy,
or otherwise dispose of any rights to benefits payable hereunder shall be
void. The Company shall not in any manner be liable for, or subject to,
the debts, contracts, liabilities, engagements, or torts of any person
entitled to benefits hereunder. None of the Plan benefits or Company
assets shall be considered an asset of an Executive in the event of his or
her insolvency or bankruptcy.
8.3 Governing Law. The Plan and each of its provisions shall be construed and
their validity determined by the application of the laws of The
Commonwealth of Massachusetts, except to the extent such laws are
preempted by Federal statute. It is intended that ERISA, as amended, shall
fully preempt any and all state laws relating to the Plan.
8.4 Participation. Any Company may discontinue its participation in the Plan
by appropriate action of its Board of Directors.
8.5 Separability. In case any one or more of the provisions of the Plan (or
part thereof) shall be held to be invalid, illegal or otherwise
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect the other provisions hereof, and the
Plan shall be construed as if such invalid, illegal or unenforceable
provisions (or part thereof) never had been contained herein.
8.6 Titles of Articles and Sections. Titles of Articles and Sections herein
are for convenience only and shall not be construed as part of the Plan.
Words used in the singular or plural may be construed as though in the
plural or singular when they would so apply.
8.7 Agent for Service of Legal Procedures. Legal process with respect to
claims under the Plan may be served upon the Severance Committee.
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ARTICLE IX
AMENDMENT OR TERMINATION OF PLAN
9.1 Amendment of Plan. The CEO may amend the Plan, in whole or in part, at any
time subject to Section 9.3 below.
9.2 Termination of Plan. Any participating Company may at any time terminate
the Plan with respect to its Executives. Such termination shall be
effected by a written instrument of termination executed by an authorized
officer of the Company. A copy of such instrument shall be delivered to an
officer of National Grid USA Service Company, Inc.
9.3 Limitation on Amendment or Termination. If a Change in Control or a Major
Transaction shall have occurred, the Plan may not be amended or terminated
for a period of 36 months beyond the month in which such Change in Control
or Major Transaction occurred.
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IN WITNESS WHEREOF, each of the following companies has caused the Amended
and Restated Plan, effective as of March 1, 2003 to be duly executed on its
behalf.
GRANITE STATE ELECTRIC COMPANY NATIONAL GRID USA SERVICE
COMPANY, INC.
By: /s/ Cheryl A. LaFleur By: /s/ John G. Cochrane
--------------------- ----------------------
Date: 4/3/03 Date: 3/11/03
MASSACHUSETTS ELECTRIC COMPANY NANTUCKET ELECTRIC COMPANY
By: /s/ Cheryl A. LaFleur By: /s/ Cheryl A. LaFleur
--------------------- ----------------------
Date: 4/3/03 Date: 4/3/03
THE NARRAGANSETT ELECTRIC NIAGARA MOHAWK POWER
COMPANY CORPORATION
By: /s/ Cheryl A. LaFleur By: /s/ John G. Cochrane
--------------------- ---------------------
Date: 4/3/03 Date: 3/11/03
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Amendment to National Grid USA Companies'
Executive Severance Plan
Pursuant to the provisions of Article IX of the National Grid USA
Companies' Executive Severance Plan, said Plan is hereby amended effective
September 1, 2003 as follows:
1. Section 2.5 is amended to read:
2.5 A Change in Control shall be deemed to have occurred if the
conditions set forth in any of the following paragraphs shall
have been satisfied:
(a) any Person or Persons in concert obtains Control (as
defined in Section 840 of the United Kingdom's Income
and Corporation Taxes Act 1988) of National Grid Transco
plc as a result of making a general offer to acquire
shares in National Grid Transco plc or having obtained
Control, makes such an offer;
(b) the consummation of the sale or disposition by National
Grid Transco plc of National Grid USA to a
non-affiliated entity (whether by merger, sale of all or
substantially all of the capital stock or assets of
National Grid USA or otherwise);
(c) the complete liquidation, dissolution or winding up of
National Grid Transco plc and/or of National Grid USA;
or
(d) the acquisition by National Grid Transco plc or National
Grid USA or their successors of all or substantially all
of the assets of or ownership of all or substantially
all of the outstanding shares of a U.S. electric and/or
gas utility company which would increase the size or
revenues of National Grid USA by 25% or more.
A Change in Control shall not be deemed to have
occurred if the events referred to above are part of an
arrangement ("a Reorganization") which will mean that
National Grid Transco plc and/or National grid USA will
be under the Control of another company or the business
of National Grid Transco plc is carried on by another
company, and the Persons who owned the shares in
National Grid Transco plc immediately before the Change
in Control will immediately afterwards own more than 50%
of the shares in that other company.
2. Section 2.16 is amended to read:
2.16 A Major Transaction shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs
shall have been satisfied:
(a) any Person becomes bound or entitled to acquire shares
in National Grid Transco plc under Sections 428 to 430F
of the United Kingdom's Companies Act 1985, or a scheme
of arrangement or compromise under Section 425 of the
United Kingdom's Companies Act 1985 is proposed for
National Grid Transco plc;
(b) National Grid Transco plc shareholders, National Grid
USA's shareholders and/or the Board of Directors of
National Grid USA approve the sale of National Grid USA
to a non-affiliated entity (whether by merger, sale of
all or substantially all of the capital stock or assets
of National Grid USA, or otherwise);
(c) National Grid Transco plc passes a resolution for
voluntary winding up, or an order is made for the
compulsory winding up of National Grid Transco plc
and/or National Grid USA;
(d) the shareholders of National Grid Transco plc, the
shareholders of National Grid USA and/or the Board of
Directors of National Grid USA approve an event the
consummation of which would result in the occurrence of
a Change in Control; or
(e) the Board of Directors of National Grid Transco plc
adopts a resolution that, for purposes of this
Agreement, a Major Transaction has occurred.
A Major Transaction shall not be deemed to have
occurred if the events referred to above are part of an
arrangement ("a Reorganization") which will mean that
National Grid Transco plc and/or National Grid USA will
be under the Control of another company or the business
of National Grid Transco plc is carried on by another
company, and the Persons who owned the shares in
National Grid Transco plc immediately before the series
of transactions are consummated will immediately after
consummation own more than 50% of the shares in that
other company.
By: /s/ Richard P. Sergel
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Chief Executive Officer
National Grid USA
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