Exhibit 10.2
AGREEMENT AND WAIVER OF RIGHTS AND CLAIMS
This Agreement dated March 24, 2006 is by and between Lenore F. Puleo
residing at (Address) (Social Security No) ("Ms. Puleo") and KEYSPAN
CORPORATION, or its subsidiaries, affiliated companies, its successors or its
assigns ("KeySpan" or "the Company"), a New York corporation with offices at One
MetroTech Center, Brooklyn, New York 11201.
WHEREAS, The Company and Ms. Puleo have agreed that Ms. Puleo will
terminate her employment with the Company effective April 1, 2006 (the
"Termination Date");
WHEREAS the Company and National Grid, PLC and National Grid US8, Inc. have
entered into an Agreement and Plan of Merger, dated as of February 25, 2006 (the
"Merger Agreement");
WHEREAS, Ms. Puleo has been designated as a Participant under the Company's
Senior Executive Change of Control Severance Plan (the "Severance Plan") with an
entitlement to receive benefits at a 3X Multiple pursuant to and subject to the
terms and conditions of such Severance Plan;
WHEREAS the consummation of the merger (the "Merger") contemplated under
the Merger Agreement will constitute a ("Change of Control") within the meaning
of the Severance Plan;
WHEREAS, Ms. Puleo's termination of employment as of the Termination Date
will constitute a retirement pursuant to the Employees Retirement Plan of
KeySpan (the "ERP");
WHEREAS, KeySpan has agreed to provide Ms. Puleo with certain career
transition benefits in connection with her termination of employment and, in the
event that the Merger is consummated within two years following the date hereof,
certain additional supplemental change of control severance benefit, and
NOW THEREFORE, in consideration of the mutual agreement herein set forth
and the General Release attached hereto, the parties agree as follows:
1. KeySpan agrees that Ms. Puleo shall be paid transition benefits
("Transition Benefits") in connection with her retirement on April 1,
2006 as follows:.
(a) If Ms. Puleo continues employment through March 31, 2006,
Ms. Puleo will receive a lump sum transition cash benefit in
the amount of $423,000 (representing one year's base salary)
(the Cash Benefit") within 30 days following the Termination
Date. This Cash Benefit will not be considered Compensation
under the provisions of the ERP or under the provisions of
the KeySpan Energy Supplemental Pension Plan.
(b) In the event of death before April 1, 2006, the Transition
Benefits shall be paid as a separation benefit under this
agreement.
(c) In the event Ms. Puleo is terminated for "Cause" before the
Termination Date or voluntarily terminates her employment
without KeySpan's consent prior to the Termination Date, the
Transition Benefit will not be paid. "Cause" is defined
under the Severance Plan. Ms. Puleo will be entitled to
receive Transition Benefits in the event that she is
involuntarily terminated prior to the Termination Date.
(d) All unused and accrued vacation pay for the year 2006 will
be paid in a lump sum as soon as possible after the
Termination Date.
(e) All stock options, restricted stock and performance shares
currently held by Ms. Puleo will continue to be governed by
the respective plan's grant agreement letters governing the
terms of such awards.
(f) KeySpan shall make available and pay for outplacement
assistance services for a six month period provided by the
firm of Mullen and Associates.
(g) (g) KeySpan agrees to pay Ms. Puleo's 2006 KeySpan Annual
Gainsharing and Incentive Compensation Plan Award determined
based upon the actual plan's performance results. This
amount will be determined on a pro rata basis for the period
January 1, 2006 through March 31, 2006. This Award, if any,
will be payable to Ms. Puleo during March 2007.
2. Ms. Puleo currently leases a 2005 Lexus RX 330 under the KeySpan
Executive Lease Vehicle Program. KeySpan's records indicate the
vehicle was leased on May 10, 2005 and Ms. Puleo made a payment of
$8,350 at that time. Upon retirement, KeySpan will make a payment of
$18,803.06, which includes sales tax, towards the purchase price of
the vehicle of $28,285.87. In addition, Ms Puleo will make a payment
including sales tax, in the amount of $9,482.81. KeySpan will then
terminate the lease and transfer ownership of the vehicle to Ms.
Puleo. The Internal Revenue Code requires KeySpan to impute income to
Ms. Puleo based upon the greater of either (i) the amount of the lease
buy out payment made by KeySpan ($18,803.06) or (ii) the Kelly Blue
Book value $31,770 less any payments made by Ms. Puleo towards the
purchase of the vehicle The Company has notified Ms. Puleo that the
imputed income amount for income tax purposes, will be the $18,803.06
paid by KeySpan.
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3. A. In the event that Ms. Puleo remains employed through the
Termination Date (or is involuntarily terminated by KeySpan without
Cause prior to such date) and the Merger is consummated on or prior to
March 31, 2008, the Company shall pay, or otherwise provide to Ms.
Puleo supplemental change of control severance benefits ("Change of
Control Severance Benefits") equal to the excess of the (i) the cash
lump sum payment (as defined in the Severance Plan under 4.2(B)) that
Ms. Puleo would have been entitled to receive under the Severance Plan
(without regard to this Agreement) if her employment had been
involuntarily terminated without Cause by the Company on the
Termination Date over (ii) the Cash Benefit as provided under 1(a) of
this Agreement.
B. In addition to the cash lump sum payment, Ms. Puleo shall be entitled
to receive the following Equity Component upon consummation of the
Merger. This Equity Component (the "Equity Component") shall be a cash
payment for options or performance shares that Ms. Puleo would have
vested in had she continued in the employment through the consummation
of the Merger. This Equity Component will be the aggregate of the
option cash payment in section 3B.1.(iii) and the performance share
cash payment in section 3B.2(iii) which will be determined as follows
relative to:
1. Options
(i) 31,689 options granted in 2005 with an exercise price of
$39.25; which would have vested at Change of Control.
(ii) 15,700 options granted in 2004 with an exercise price of
$37.54; which would have vested at Change of Control
(iii) Ms. Puleo will receive a cash payment which represents the
excess value of the options that would have vested at Change
of Control utilizing the Merger Consideration (as defined in
the Merger Agreement) over their respective exercise prices
multiplied by the actual number of the respective shares in
(i) and (ii)above, and;
2. Performance Shares
(i) 3,733 performance shares granted in 2005 which would
have vested at the Change of Control.
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(ii) 1,690 performance shares granted in 2004 which may have
vested, at the earlier of either (i) the end of the
performance period or (ii) Change of Control. The
actual vested performance shares, if any, will be based
upon the actual performance results achieved for the
three year period ending 12/31/06.
(iii) Ms. Puleo will receive a cash payment which represents
the value of the 5,423 performance shares in (i) and
(ii) which would have vested determined utilizing the
Merger Consideration upon the consummation of the
Merger multiplied by the 5,423 shares as adjusted in
accordance with the Performance Share Award Agreement.
C. In addition, in the event that Ms. Puleo becomes entitled to receive
the Change of Control Severance Benefits described above she will be
entitled to the enhancement in Section 4.2(C) (1) set forth in the
Severance Plan with respect to enhanced pension benefits retroactive
to April 1, 2006 as well entitlement to any and all additional
benefits, features or rights pursuant to the Severance Plan.
D. Any and all payments as provided under paragraph 3 shall be paid to
Ms. Puleo within 10 days following consummation of such Merger and the
other payments and benefits shall be paid to Ms. Puleo at such times
as provided under the terms of the Severance Plan. Ms. Puleo
acknowledges and agrees that she shall not be entitled to receive any
additional payments or benefits under the Severance Plan, other than
to the extent specifically provided under the Severance Plan and Ms.
Puleo shall have no rights to receive the Change of Control Severance
Benefit or any other payment or benefits under the Severance Plan in
the event that the Merger is not consummated on or prior to March 31,
2008.
4. All payments to Ms. Puleo pursuant to this Agreement shall be reduced
by the applicable tax withholdings.
5. a. Ms. Puleo affirms that she has returned to KeySpan; any KeySpan
property in her possession, including, but not limited to, beepers,
cell phones personal digital assistants, computer and peripheral
equipment, keys, credit cards, expense accounts and identification
cards and that he will reimburse KeySpan for any sums that she owes to
KeySpan and authorizes KeySpan to deduct an amount equal to any such
sums from any amounts to be paid her under this Agreement and Release
if she fails to reimburse the Company for such expenses.
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b. Ms. Puleo has not and shall not take any original or copy of any
document or other papers, computer diskettes, methods, procedures,
etc., containing or disclosing confidential information or documents
or summaries containing the substance of any part thereof. Any record
of confidential information prepared by Ms. Puleo or which came into
her possession during the period of employment with KeySpan are and
remains the property of KeySpan and upon Ms. Puleo's retirement, all
such records, diskettes and copies thereof shall either be deleted,
destroyed or returned to KeySpan as agreed to by the parties.
6. This Agreement settles any and all claims and disputes Ms. Puleo has
or may have against KeySpan and its subsidiaries and affiliated
companies and their employees, directors, agents relating to her
employment except items set forth in paragraph 14c hereof and those
claims or disputes not released or waived in the General Release.
7. KeySpan does not waive any claim it may have against Ms. Puleo for
reimbursement of any sums that may be owed to it by Ms. Puleo.
8. Ms. Puleo and KeySpan hereby expressly agree that it is not the
intention of either party to violate any public policy, statute or
common law by the representations, warranties and covenants contained
herein. In this connection, the parties hereto believe that the
provisions of this Agreement concerning disclosure are fair and
reasonable in light of the relationship of Ms. Puleo and KeySpan.
9. This Agreement shall be binding upon and inure to the benefit of the
parties hereto, their respective heirs, successors, and assigns.
10. Ms. Puleo agrees that she will not disparage or make derogatory
remarks concerning KeySpan or its subsidiaries, affiliated companies,
successors or assigns or any of their employees, directors and agents
to any third party.
11. Ms. Puleo agrees to keep this Agreement and the separate Release and
each and every term thereof confidential and shall not disclose same
to any third party, except to Ms. Puleo's spouse, accountant or
attorney as required to review the terms and conditions of this
Agreement.
12. Ms. Puleo represents and warrants that she has not filed or caused to
be filed any complaints, charges or lawsuits with any federal, state
or local court or administrative agency relating to her employment
with KeySpan, MarketSpan Corporation or Brooklyn Union Gas Company or
the termination of that employment or to any claims being released by
Ms. Puleo in this Agreement and separate Release, and that she will
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not file or authorize or cause to be filed on her behalf any such
complaints, charges or lawsuits at any time hereafter relating to her
employment with Brooklyn Union Gas Company, KeySpan or the termination
of that employment or to any claims being released in this Agreement
and the separate Release, and further represents and warrants that, to
the extent permitted by law, Ms. Puleo will not participate in any
proceeding of any kind (i) related to her employment with KeySpan or
Brooklyn Union Gas Company, or (ii) against Brooklyn Union Gas
Company, KeySpan and their officers, employees, directors and agents.
13. This Agreement and the separate Release represent a settlement between
the parties, and Ms. Puleo and KeySpan are entering into this
Agreement and the separate Release knowingly and voluntarily. Ms.
Puleo has had sufficient time to review this Agreement and the
separate Release and to consult with anyone with whom Ms. Puleo wished
to discuss this matter, including an attorney, before signing this
Agreement and the separate Release. Ms. Puleo acknowledges that if she
executes this Agreement and the separate Release and she chooses to
forego the advice of an attorney, she does so freely, knowingly and
voluntarily, and waives any and all future claims that such action or
actions would affect the validity of this Agreement and the separate
Release. Ms. Puleo has discussed all aspects of the Agreement and
Separate Release with her attorney and/or her representatives.
14. Ms. Puleo specifically acknowledges and agrees that:
a. she is waiving any right or claim that she has against KeySpan
and its subsidiaries, affiliated companies, successors, assigns
and their employees, directors and agents including any and all
claims for any type of employment discrimination, claims under
the Age Discrimination in Employment Act; 29 U.S.C. sections 621,
et seq., and the Older Workers Benefit Protection Act; Title VII,
the Americans with Disabilities Act of 1990, as amended, New York
State Human Rights law;
b. she understands the meaning and effect of this Agreement and the
separate Release;
c. she is not waiving any rights or claims against KeySpan and its
subsidiaries, affiliated companies, successors, assigns and their
employees, directors and agents that may arise after the date on
which this Agreement and the separate Release become effective;
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d. Ms. Puleo is receiving the above consideration, her qualified
pension benefit and KESPP benefit allowances and she has no
entitlement to any additional retirement benefit from the
Company;
e. Ms. Puleo as a retiree will be entitled to:
1. (i) Company provided Officer GRIP Life Insurance coverage
with the Company paying premiums until age 65. The benefit
coverage after retirement will be three times base salary
and bonus in effect at retirement to a cap of $500,000 while
under age 66. At age 66, the coverage reduces 10% each year
between age 66 to age 70 to a final coverage cap of
$250,000.
(ii) During the period of the pending Merger pursuant to the
Merger Agreement, no reduction will be made to Ms. Puleo's.
Officer GRIP Life Insurance coverage.
(iii) Upon consummation of such Merger and for a period up
to three years following retirement, coverage will continue
at the active employee level of 3 times base pay and bonus
at retirement in effect to a cap of $1.5 million. At the end
of the three year period, the reduction set forth in
paragraph 1(i) above will commence;
(iv) In the event that it is confirmed that the Merger will
not take place, coverage will be immediately adjusted to the
level set forth in accordance with paragraph 1(i) above;
This is an individual policy which you own and it will have
sufficient cash value at age 65 to continue to provide for
your final benefit as illustrated under the policy;
2. The KeySpan medical plan and the KeySpan dental plan
available to all retirees on April 1, 2006. Ms. Puleo is
entitled to continuation of the medical and dental benefits
at the required retiree contribution rate. However, in the
event of a Change of Control, Ms. Puleo will resume
participation in the active employee plan with employee
contributions pursuant to the benefit continuation
provisions of the Severance Plan After the benefit
continuation period, required retiree contributions will be
adjusted in accordance with terms of the respective plans;
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Ms. Puleo acknowledges that the plans identified in section
14(e)(1) and section14(e)(2) may be amended, modified or
terminated as set forth in these KeySpan plans. KeySpan
acknowledges that Ms. Puleo's benefits will only be amended,
modified or terminated if the existing benefit plans are
amended, modified or terminated with respect to retiree
coverages for other management retirees who retired during
2006.
3. Ms. Puleo may continue to maintain her account in the
KeySpan Energy 401(k) Plan for Management Employees.
4. Ms. Puleo has been afforded twenty-one days to review the
Agreement and separate Release.
15. The Company acknowledges that after retirement and for a period
through six years from the Merger, Ms. Puleo will continue to be
indemnified to the maximum extent permitted under the Company's
Certificate of Incorporation (which provides for indemnification to
the maximum extent permitted under the New York State Business
Corporation Law) for any losses or damages (including reasonable
attorneys' fees and expenses) resulting from claims related to any
acts or omissions of Ms. Puleo while an officer of the Company. The
Company further acknowledges that it maintains errors and omissions
policies of insurance that provides insurance to officers and
directors for any losses or damages (including reasonable attorneys'
fees) resulting from claims related to acts or omissions of Ms. Puleo,
while an officer of the Company, to the extent that Ms. Puleo is not
entitled to indemnification from the Company, except that such
insurance does not extend (other than for reasonable attorneys' fees
and expenses) to losses or damages resulting from active and
deliberate dishonesty or illegal gain. The indemnification and
insurance coverage described in this paragraph is the same as
indemnification and insurance coverage applicable to all officers of
the Company.
16. Ms. Puleo and KeySpan acknowledge and agree that this settlement shall
not be construed as an admission of any fault, wrongdoing or liability
whatsoever on the part of Ms. Puleo or KeySpan and its subsidiaries
and affiliated companies and their employees, directors and agents,
and that Ms. Puleo and KeySpan and its subsidiaries and affiliated
companies and their employees, directors and agents expressly deny
that they violated any law or had any liability to Ms. Puleo.
17. Ms. Puleo agrees that from the Termination Date through the 1st
anniversary thereof, Ms. Puleo will not directly or indirectly (a) in
any area wherein KeySpan and its affiliates own and operate lines of
business, canvas or advertise for, or otherwise assist, render
services to, become employed by, become a consultant to, or invest in
any business entity or with any individual engage in, or engage in,
any line or lines of business carried on or contemplated which,
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directly or indirectly, are in competition with KeySpan, its
subsidiaries, affiliated companies, successors or assigns, (b) solicit
business or otherwise deal directly or indirectly with any customers
or persons who were employees of customers or vendors of KeySpan, its
subsidiaries, affiliated companies and assigns, at any time, (c)
divert or attempt to divert from KeySpan, any business in which it has
been engaged during the term of Ms. Puleo's employment with KeySpan,
or in which it might reasonably be expected to become engaged, (d)
interfere or attempt to interfere with the relationships between
KeySpan, its subsidiaries, affiliated companies and assigns, and their
customers, employees of customers or vendors, (e) interfere or attempt
to interfere with the relationship of employer-employee or principal
and agent of any person bearing such relationship to KeySpan, its
subsidiaries, affiliated companies and assigns, nor (f) divert or
attempt to divert any such person from employment or representation of
KeySpan, its subsidiaries, affiliated companies and assigns; provided,
however, that Ms. Puleo shall not be prohibited by the terms of this
Paragraph from investing in and owning not more than one percent (1%)
of the outstanding shares of common stock of any corporation, the
shares of which are publicly traded pursuant to the Securities
Exchange Act of 1934, and/or passively investing as a limited partner
in any non-publicly traded security. Damages cannot compensate KeySpan
in the event of a breach or violation of this Paragraph and,
injunctive relief being essential for the protection of KeySpan and
its successors and assigns, in addition to other applicable remedies,
KeySpan may obtain such injunctive relief in the event of any such
breach or violation and may assert any other remedies it may have at
law or in equity.
18. The unenforceability or invalidity of any provision hereof shall in no
way affect the enforceability or validity of any other provision.
19. This Agreement constitutes the entire Agreement between the parties
and supersedes any prior or contemporaneous agreement among the
parties. This Agreement may not be modified, altered or amended except
by a written instrument signed by the parties.
20. The provisions of this Agreement shall be governed by and construed in
accordance with the Laws of the State of New York. Any action in law
or equity relating to this Agreement shall be commenced in the New
York State or Federal court of appropriate jurisdiction.
21. Ms. Puleo may revoke this Agreement and separate Release within seven
(7) days of her signing it after which it shall be in full force and
effect. Revocation can be made by delivering written notice of
revocation via certified United States mail to the Office of General
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Counsel KeySpan, One MetroTech Center, Brooklyn, N.Y. 11201. For such
revocation to be effective, notice must be received no later than 3:00
p.m. on the seventh calendar day after Ms. Puleo signs and dates her
signature on the Agreement.
22. Notwithstanding anything herein to the contrary, if at the time of Ms.
Puleo's termination of employment with the Company, she is a specified
employee" as defined in Section 409A of the Internal Revenue Code, as
amended (the "Code") and the deferral in the commencement of any
payment or benefits otherwise payable hereunder as a result of such
termination of employment is necessary in order to prevent any
accelerated or additional tax under Section 409A of the Code, then the
Company will defer commencement of the payment of any such benefit or
payment hereunder ( without any reduction in such payment or benefit
ultimately paid or provided to Ms. Puleo) until the date that is six
months following Ms. Puleo's termination of employment with the
Company (or the earliest date as is permitted under Section 409A of
the Code.)
KEYSPAN CORPORATION
By: /s/
---------------
/s/Lenore F. Puleo
------------------
Lenore F. Puleo
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GENERAL RELEASE
To all to whom these Presents shall come or may Concern, Know That
Lenore F. Puleo, a KeySpan Corporation employee residing at (Address)
(Social Security No)
as RELEASOR
in consideration of being paid career transition benefits as described in
paragraph one, three and fourteen of the Agreement and Waiver of Rights and
Claims dated March 24, 2006 between Ms. Puleo and KeySpan Corporation (the "2006
Agreement"); and other good and valuable consideration received from KeySpan
Corporation and its subsidiaries and affiliated companies and their employees,
directors and agents,
as RELEASEE
receipt whereof is hereby acknowledged, releases and discharges the RELEASEE,
RELEASEE's heirs, executors, administrators, successors and assigns from all
actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments, extents,
executions, claims, and demands whatsoever, in law, admiralty or equity, which
against the RELEASEE, the RELEASOR, RELEASOR's heirs, executors, administrators,
successors and assigns ever had, now have or hereafter can, shall or may, have
for, upon, or by reason of anything arising from RELEASOR's employment,
including but not limited to any and all claims of discrimination based upon
age, sex, race, color, religion, creed, disability, marital status, sexual
orientation, conviction or arrest record, national origin, and alienage or
citizenship status, or any other kind of discrimination including but not
limited to any claim of discrimination under the Mass. Gen. L. ch. 151B or the
New York State Human Rights Law, violation of the Age Discrimination in
Employment Act of 1967, as amended, and the Older Workers Benefit Protection
Act, Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act
of 1991, the Americans with Disabilities Act of 1990, as amended, the Family and
Medical Leave Act, and any and all federal, state and local discrimination laws,
wrongful discharge, breach of contract, and any claim under the Employee
Retirement Income Security Act of 1974, as amended, or any and all claims
relating to monies owed by RELEASEE to RELEASOR as of this date, whether filed
or to be filed with any and all federal, state or local administrative agencies
or courts, including but not limited to the EEOC, the U.S. Department of Labor,
the New York State Division of Human Rights and the New York City Commission on
Human Rights but subject, in all events to the following exception and
reservation of rights. RELEASOR understands that the only rights or claims which
RELEASOR has at this time which RELEASOR is not releasing and waiving are
RELEASOR's rights to receive that which RELEASOR is entitled to receive under
the 2006 Agreement, the Severance Plan, any right Ms. Puleo has as a retiree to
Officer GRIP insurance benefits, the KeySpan medical plan and the KeySpan dental
available to all management retirees who retired during 2006, any right she may
have to receive her vested pension benefits under the Employees Retirement Plan
of KeySpan, supplemental allowance pursuant to the KeySpan Executive
Supplemental Pension Plan ("KESPP"), and her vested account balance under the
terms of KeySpan 401(k) Plan for Management Employees or its predecessor plan
and any other KeySpan plans which Ms. Puleo participated in at the time of her
retirement. RELEASOR consulted with attorney with whom RELEASOR discussed this
matter. RELEASOR has had full opportunity and sufficient time (at least 21 days)
to review this Release. RELEASOR acknowledges that if RELEASOR executes this
Release prior to the expiration of the 21-day period or if she chooses to forego
the advice of her attorney, RELEASOR does so freely, knowingly and voluntarily,
and waives any and all claims that such action or actions would affect the
validity of this Release. This Release was arrived at through negotiation.
RELEASOR fully intends to abide by the terms of this Release. RELEASOR
understands that this form is a general Release of all RELEASOR's claims against
RELEASEE relating to her employment with RELEASEE, and RELEASOR freely,
knowingly and voluntarily agrees to its terms.
The Words "RELEASOR" and "RELEASEE" include all releasors and all releasees
under this RELEASE. This RELEASE may not be changed orally.
In Witness Whereof, the RELEASOR has hereunto set RELEASOR's hand and seal this
24th day of March 2006.
In presence of
/s/ L.S.
-------------------------
STATE OF NEW YORK)
: ss.:
COUNTY OF KINGS)
On March 24, 2006 before me personally came Lenore P. Puleo, to me known,
and known to me to be the individual described in, and who executed the
foregoing RELEASE, and duly acknowledged to me that she executed the same.
/s/
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