EXHIBIT 10.16
Date: 28th October 2002
PRIVATE & CONFIDENTIAL
Mr S Lewis
28 Mickleton Road
Earlsdon
Coventry
CV5 6PQ
Dear Steve,
Further to our recent discussions, I take pleasure in offering you a Temporary
International Assignment in the USA on accompanied status.
In addition, National Grid (USA) will provide employment for your accompanying
partner/spouse, Karen Manukonga, currently an employee of National Grid UK. With
minor exception, Karen's expatriate contract will mirror that of an accompanying
partner/spouse for as long as you remain on expatriate assignment and she
remains your partner/spouse.
If you accept this offer, with effect from 1st November 2002 you will take up
the position of VP and Head of Northeast Transmission Business for the National
Grid (USA) Inc in Westborough, USA. You will report to the Executive Vice
President and Chief Operating Officer National Grid (USA), currently Mike
Jesanis.
Your UK base salary will remain as (pound)80,000 gross pa. This gives a Net
Assignment Salary of (pound)71,687 per annum, other eligible benefits are as
indicated in the attached Temporary International Assignment Contract.
The Statement sets out your terms and conditions of employment. During your
assignment, your existing UK contract with the Company will be varied in
accordance with the Statement and the following documents:
- NGG International Assignment Policy document;
- Financial summary;
- Tax Equalisation Policy
- Code of Conduct.
For the duration of the assignment you and your accompanying partner/spouse will
be entitled to home leave return trips to the UK as set out in the NG policy
document. However, I am pleased to inform you that in recognition of your
forthcoming wedding you and your accompanying partner/spouse will be entitled to
an additional home leave return trip to the UK in 2003.
This offer is subject to the following conditions:
(i) You and your partner holding valid passports
(ii) The Company obtaining any necessary work and residency permit or other
appropriate visa from the host country for you and your accompanying
partner
(iii) You and your accompanying partner consulting the Company's own medical
adviser and a) being passed as fit for this assignment and b) receiving
all inoculations/immunisations recommended by him [in accordance with good
medical practice] for the area you are visiting. Any costs incurred in
meeting any necessary medical requirements may be recovered from the
Company.
If you have any questions regarding the temporary International Assignment
please let me know as soon as possible and I will do all I can to ensure they
are answered.
If you would like to accept this offer I should be grateful if you would sign
and return a copy of this letter as confirmation that you agree with the terms
of this offer by no later than 31st October 2002.
Yours sincerely
Maggie Hurt
Director of Human Resources
I accept the employment terms set out in this letter and the enclosed temporary
international assignment contract. I have also enclosed, duly signed by myself,
a copy of the contract signature acceptance sheet.
Signed: /s/ S. Lewis
Print Name Stephen P. Lewis
Dated: 29th October 2002
TEMPORARY INTERNATIONAL ASSIGNMENT CONTRACT
THE NATIONAL GRID GROUP plc (the "Company") and THE NATIONAL GRID COMPANY plc
whose registered offices are at 15 Marylebone Road, London NW1 5JD and National
Grid House, Kirby Comer Road, Coventry, CV4 8JY respectively and
TO THE.EMPLOYEE: Stephen Lewis of 28 Mickleton Road, Earlsdon, Coventry, CV5
6PQ.
ON 21st October 2003
1. Appointment and Term
1.1 You will be appointed to undertake a temporary overseas assignment VP and
Head of Northeast Transmission Business for the National Grid (USA) Inc
based in Westborough, USA. During the assignment you will report to the
Executive Vice President and Chief Operating Office National Grid (USA),
currently Mike Jesanis, who will discuss the precise nature of your duties
and responsibilities with you. For all practical assignment issues covered
in this contract you should refer to International Personnel Management
Ltd (IPM), whom National Grid have appointed to undertake all expatriate
administration. IPM can be contacted on +44 1733 352235.
1.2 This assignment and the provisions in this contract are effective from 1st
November 2002. The assignment is expected to last for a period of 3 years,
however, the Company may vary the duration of the contract if required.
Any substantial alteration or variation to the length of the assignment
will be by agreement and fully discussed with you before the changes are
made.
1.3 This is an accompanied assignment. Your assignment terms and conditions as
set out in this document have been prepared on that basis.
1.4 Throughout the period of your assignment the terms and conditions of your
existing UK employment contract with the Company shall be varied in
accordance with the terms and conditions placed on you while overseas as
set out or referred to in this contract. But otherwise the terms and
conditions of your existing UK employment contract shall continue to
apply. At the expiration of this temporary international assignment
contract, and subject to clause 10, you will return to the UK, and your
existing UK employment contract will be modified to include any
modifications made to the employment conditions of the Company's UK staff
in the period of absence will become fully effective once again.
1.5 For the duration of your assignment John Carlton, Director of Network
Strategy, will act in the role of mentor. This role will be to maintain
regular professional contact with you during the assignment and to take
managerial responsibility for your career management and repatriation.
2. Hours of Work.
The normal hours of work will be the same as those applying to local staff
of the overseas company. However, you will be expected to work such other
hours as may be
required for the proper performance of your duties and you will not be
entitled to receive additional remuneration for work over and above normal
hours.
3. Pay
3.1 Salary
3.1.1 During the assignment you will receive a salary equivalent to your
Base Salary (specified in your Assignment Offer letter enclosed with
this contract) net of Hypothetical Tax in accordance with the NG's
International Tax Policy referred to in clause 7.
3.1.2 In addition to your Base Salary, you will receive International
Allowances as appropriate, which are calculated by reference to your
Base Salary, and benefits, as set out below. These allowances will
be paid to you without deducting hypothetical tax.
3.1.3 Your Base Salary will be used to calculate your pension
contributions throughout the period of your assignment in accordance
with the NG's normal UK salary review policy.
3.2 Bonus
For the duration of the assignment you will be eligible for a bonus. The
maximum bonus you may earn is that percentage of your Base Salary set out
in the attached financial summary based on achieving the performance
targets agreed with Mike Jesanis. The amount of your bonus earned whilst
on an international assignment will be subject to a hypothetical tax
deduction at the time it is paid, as detailed in the International Tax
Policy.
4. International Allowances
4.1 International and Cost of Living Allowances
You are entitled to receive an international and cost of living
allowances in accordance with NG's policy on your overseas location.
Details of the allowances applicable to your assignment location are
set out in the attached financial summary document. These allowances
are paid to the individual monthly in arrears for the period of the
assignment spent overseas in rented accommodation. The Company will
be responsible for any taxes payable on these allowances.
4.2 Disturbance Allowance
4.2.1 A disturbance allowance of (pound)8,000 will be paid to you at
the start of your assignment, as set out in the attached
Financial Summary document. This amount will be made as a lump
sum upon you signing the contract.
This is an accompanied level allowance to account for Karen
Manukonga, a National Grid employee, as your partner/spouse.
4.2.2 This is intended to assist with the cost of settling into
overseas accommodation and in defraying the additional expense
incurred in moving away from the UK. The Company will be
responsible for any taxes payable on this allowance.
4.3 Terminal Bonus
4.3.1 10% of your Base Salary per annum pro rata for the duration of the
assignment will be paid to you as a one-off lump sum on completion
of the assignment up to a maximum of three years. The Company will
be responsible for any taxes payable on this bonus.
4.3.2 No payment will be made if you terminate the assignment before the
agreed term has been completed or if NG terminate the assignment in
circumstances including gross misconduct by you or a serious or
repeated breach by you of the Code of Conduct.
5. Benefits
5.1 Accommodations/Utilities
5.1.1 You will be responsible for determining arrangements for your UK
home and all costs, taxes or other expenses related to your UK home
are to your account.
5.1.2 You may be required to spend a short period of time in hotel
accommodation on arrival in the overseas location while furnished
rented accommodation is secured. Details of NG's policy on temporary
accommodation are set out in the NG policy document.
5.1.3 NG will assist you in finding suitable fully furnished or
unfurnished (as appropriate) accommodation in the overseas country.
NG's policy on accommodation/rent allowance is set out in the NG
policy document.
5.1.4 The cost of reasonable utilities i.e. gas, water, electricity,
telephone rental and business calls will be paid by NG in accordance
with the NG policy document.
5.1.5 You will remain responsible for obtaining appropriate Household
Contents insurance as stated in the NG policy document.
5.2 Travel and Transport
Air tickets to the destination at the start and end of the assignment will
be provided for you and your partner/spouse. Details of NG's policy on
flights, company cars and local transportation are set out in the NG
policy document.
5.3 Freight Allowances and Storage in the UK
The Company will provide for the transportation of your personal baggage
from the UK to the overseas country and subsequent return to the UK at the
end of your assignment. Storage of some personal effects in the UK may be
supported. Details of this policy are set out in the NG policy document.
5.4 Pension
For the period of the assignment you will remain a member of the National
Grid section of the Electricity Supply Pension Scheme. The Company will
continue to make contributions and the appropriate deductions for your
contributions will be made based on your Base salary.
5.5 Insurance
Private international medical and dental insurance, including emergency
repatriation, will be provided for you and your accompanying
partner/spouse from the respective times of departure from your UK home to
your destination and subsequent return. Further details of this general
insurance coverage are set out in NG's policy document.
6. Payment Arrangements
6.1 You should indicate the monthly amount in (pound) sterling, which you wish
to be paid into a local bank account in the USA. This amount will be paid
in local currency, calculated by reference to the exchange rate determined
by our bankers in the UK on the day it is transferred. All transfer costs
will be borne by the Company. The balance of your monthly salary will be
paid into your nominated UK bank account in UK Sterling. Any changes to
the location for payment should be made in line with NG's policy document.
6.2 The international and cost of living allowances ("the combined
allowances") will be reviewed annually, currently in July. In this review
the Company will take account of data provided by ECA International in
respect of exchange rate movements, inflation and changes in any other
appropriate measures. As a result of this review, the Company reserves the
right to make changes to the amount of the combined allowances as
appropriate. These changes will be implemented with immediate effect. You
accept that your combined allowances may fluctuate up or down in July of
each year and you accept that this fluctuation, if any, is in accordance
with NG's policy as set out in the NG policy document.
7. Taxation
7.1 The Company's approach to taxation is set out in the attached
"International Tax" Policy.
7.2 In that you are on accompanied status with a National Grid employee, the
Company may allocate shared non-salary benefits in kind for tax efficiency
purposes.
8. National Insurance Contributions
8.1 NG will apply for the necessary certificate of coverage to exempt you from
contributions to the Social Security Scheme.
8.2 In the unlikely event that any social security federal, state or local
taxes equivalent to UK National Insurance Contributions become payable in
the USA, the Company will reimburse you for those payments.
9. Leave
9.1 Annual Leave: Your annual leave will remain unchanged from your total UK
entitlement.
9.2 Public Holidays: During your assignment in the USA, UK fixed public
holidays will be replaced by local public holidays. These days will be
taken either as local holidays arise or as agreed with the Assignment
Manager.
9.3 Home Leave: With effect from 1st November 2002 for the duration of the
assignment you and your accompanying partner/spouse will be entitled to
home leave return trips to the UK as set out in the NG policy document. In
recognition of your forthcoming wedding you and your accompanying
partner/spouse will be entitled to an additional home leave return trip to
the UK in 2003.
10. Termination
10.1 For the avoidance of doubt, the termination provisions in your existing UK
contract will continue to apply notwithstanding your temporary assignment
overseas.
10.2 Where possible, reasonable notice of any premature termination of
assignment will always be given. However, the company reserves the right
to terminate the Temporary Overseas Assignment at any time without
indemnity, compensation or notice where NG deems it necessary or
desirable. Non-exhaustive examples of reasons for termination are as
follows:
(a) serious or repeated breach of the Code of Conduct;
(b) behaviour by you or accompanying partner/spouse in a manner which
will bring you, the Company, or Overseas Company into disrepute;
(c) any change in the business need for the assignment or in the
contractual/financial relationships supporting a particular project;
(d) if the company received advice that your continued employment in the
USA would be likely to endanger your health or safety or that of
accompanying partner/spouse.
10.3 Your return to the United Kingdom on premature termination or expiry of
your assignment will be dealt with in accordance with Section 8.11 of the
NG International Assignment Policy.
11. Company Credit Card
You will be issued with a company credit card to facilitate business
expenditure abroad in accordance with NG's policy as set out in the NG
policy document.
12. Financial
You will be responsible for all financial obligations incurred by you
during the term of your assignment, except where this expressly provides
that the Company shall be liable for such expenses.
13. Repatriation
Prior to the end of your assignment, discussions will take place with NG
Representatives to explore your skills, experience and aspirations as well
as potential opportunities within National Grid Group to try to find you a
suitable position within the Group, either in the UK, or elsewhere, as
appropriate. Details of your repatriation are set out in the NG policy
document.
14. Jurisdiction
Your assignment shall be governed by and all assignment documents shall be
interpreted in accordance with the laws of England and Wales. All
disputes, claims or proceedings between the parties relating to the
validity, construction or performance of this Agreement are subject to the
non-exclusive jurisdiction of the High Court of Justice in England and
Wales.
Signed for and on behalf of The National Grid Company plc
Signed /s/ Maggie Hurt
Maggie Hurt
Director of Human Resources
Date 23.10.02
I have read the foregoing terms and conditions of employment and wish to accept
the temporary overseas assignment with the National Grid Group plc on those
terms and conditions.
Signed /s/ S Lewis
Stephen Lewis
Date 28.10.2002
FINANCIAL SUMMARY
YOUR ASSIGNMENT CONTRACT, EXCLUSIVE OF BENEFITS, IN THE FIRST
YEAR, IS WORTH APPROXIMATELY P 79,687
RENUMERATION ANNUAL
------------ ------
Assignment Salary
Base Salary P 80,000.00
Deductions
Hypothetical Tax/PAYE P 25,409.84
SUB TOTAL P 54,590.16
Assignment Allowances
International allowance P 8,000.00
Cost of living adjustment P 9,096.90
TOTAL RENUMERATION P 71,687.06
TOTAL RENUMERATION (MONTHLY) P 5,973.92
Other Assignment Benefits:
Disturbance Allowance (tax free) P 8,000.00
One off payment at start of assignment
Bonuses
Performance
Potential to achieve a maximum of 25%
annual bonus, a notional tax of 40% will
be deducted from your bonus earned
whilst on assignment
Terminal
10% p.a. payable upon completion of this assignment
These other benefits provide additional value and support to you and your
family:
Pre Assignment Visit
Cultural Briefing
Accommodation costs
Utility Costs
Removal costs
One return Business Class flight per annum to the UK for yourself and your
accompanying partner/spouse (or equivalent value in economy class tickets)
One additional flight to the UK for yourself and your accompanying
partner/spouse in 2003 for your wedding (this will be Economy Class)
Tax Assistance with tax returns for UK in the year of departure and return and
host country in each relevant year or part year
BUPA International Healthcare cover
Company Car/Transport Allowance
Assistance selling a privately owned car in the UK up to P 2,000 Two return
Economy flights per annum for each of your two dependent children to enable them
to visit you in the US