LONG ISLAND LIGHTING COMPANY
EXECUTIVE RETENTION AGREEMENT
This Employment Agreement is entered into as of the first day of July,
1997, by and between Xxxxxxxx X. Xxxxxxx ("Executive") and Long Island Lighting
Company ("Employer"), a New York corporation with its principal place of
business at 000 Xxxx Xxx Xxxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxx 00000.
WITNESSETH:
WHEREAS, Executive is currently employed by the Employer as Vice President and
Treasurer, and the Employer and Executive desire to continue the employment
relationship; and
WHEREAS, Employer's current Executive compensation program provides total
compensation which is less than that offered by other comparable businesses; and
WHEREAS, Employer is in a period of transition and Employer believes that giving
reasonable assurances of employment security and additional compensation to
secure the continued services of Executive throughout a period of uncertainty is
in the best interest of Employer and its present and future shareholders;
NOW, THEREFORE, in consideration of the premises hereof and of the mutual
promises and agreements contained herein, the parties hereto, intending to be
legally bound, agree as follows:
1. EMPLOYMENT. Employer currently employs Executive, and Executive hereby
agrees to continue his employment with Employer on and after the Effective Date
(as defined in Section 3 below) under the terms and conditions hereinafter set
forth.
2. DUTIES. Executive's powers and duties shall continue to be those
normally associated with his current position or as may be delegated or assigned
to Executive. It is understood and agreed that changes in the reporting
relationships, title, or job duties of Executive during the term of this
Agreement will not result in a termination of this Agreement and will not effect
a termination of employment under any section of this Agreement. Executive shall
also serve without additional compensation in such other offices of the Employer
or its subsidiaries, affiliates, successors or assigns to which he may be
elected or appointed by the Chief Executive Officer of Employer or by the Board
of Directors of Employer or its subsidiaries, affiliates, successors or assigns
respectively.
1
3. EFFECTIVE DATE. This Agreement shall be effective as of the date set
forth above (the "Effective Date").
4. TERM OF AGREEMENT. Subject to the terms and conditions set forth herein,
Executive shall be employed hereunder for a term of one year beginning on the
Effective Date.
5. BASE COMPENSATION. For all duties rendered by Executive, Employer shall
continue to pay Executive his current base salary ("Base Salary") annually, to
be reviewed on an annual basis in accordance with Employer's existing salary
review practices based on the performance of Executive. Base salary shall be
paid to Executive in equal monthly payments in accordance with Employer's normal
payroll policies.
6. ADDITIONAL COMPENSATION. During the period of this Agreement and as a
result of employment under this Agreement, Executive shall receive or be
eligible for the following additional compensation:
(a) RETENTION BONUS: Executive shall receive a retention bonus ("Retention
Bonus") in the amount of twenty percent (20%) of job value or salary
whichever is greater to be paid in full on July 1, 1998 or as soon as
administratively practicable thereafter ("Payment Date"), if Executive
is and has been continuously employed with Employer from the Effective
Date to the Payment Date.
(b) INCENTIVE COMPENSATION: Executive shall be eligible to participate in
the annual and long term incentive programs of Employer as such may be
in effect during the term of this Agreement for officers of the
Employer and will be eligible to receive incentive compensation in
accordance therewith, as determined by the Compensation and Benefits
Committee of the Board of Directors of Employer.
(c) OTHER BENEFITS: Executive will also be eligible to participate in any
employee benefit plans or programs (including paid vacation and auto
lease) available to managerial or executive employees of Employer as
such may be in effect from time to time as provided in Section 17
below.
7. EXPENSES. Executive shall be reimbursed for ordinary and necessary
business expenses incurred by Executive on behalf of
2
Employer and its subsidiaries or affiliates upon presentation of vouchers in
accordance with the usual and customary procedure of Employer in relation to
such expense items, except that Employer may elect, at its option, to pay such
expense items directly rather than reimburse Executive therefor.
8. EXTENT OF SERVICE. Executive shall devote substantially all of his
working time, attention and energies to the business of the Employer and shall
not, during the term of this Agreement, take, directly or indirectly, an active
role in any other business activity without prior consent of the Employer; but
this Section shall not prevent Executive from serving as director of other
entities not affiliated with Employer, from making real estate or other
investments of a passive nature, or from participating in the activities of a
nonprofit charitable organization where such participation does not require a
substantial amount of time and does not adversely affect Executive's ability to
perform his duties under this Agreement.
9. TERMINATION FOR CAUSE. This Agreement shall immediately be terminated
and neither party shall have any obligation hereunder if the Executive's
employment is terminated for cause as determined by the Chief Executive Officer.
10. INVOLUNTARY TERMINATION WITHOUT CAUSE BY THE EMPLOYER. The Company
reserves the right to terminate the employment of Executive at any time for any
reason. If Executive's employment is involuntarily terminated without cause as
such term is defined in Section 9 above, any unpaid amount described in Section
6(a) of this Agreement will be accelerated and paid to him in a lump sum cash
payment within five (5) business days of the termination. In addition, the
Executive will be eligible to be receive an Award under the Officers' Annual
Stock Incentive Plan and the Officers' Long-Term Incentive Plan (or successor
plan, if any) of the Employer based on the target award for the year or
performance period in which the involuntary termination occurs, prorated for the
Executive's active employment during such year or performance period and
adjusted for Executive's performance. Except as stated in the foregoing
sentence, the provisions of the Officers' Annual Stock Incentive Plan and the
Officers' Long-Term Incentive Plan shall be applicable to Executive. Involuntary
termination includes divesture of the operating company or division employing
Executive, unless Executive is offered other employment by the Employer after
such divestiture.
11. VOLUNTARY TERMINATION BY EXECUTIVE. The Executive reserves the right to
voluntarily terminate his employment at any time for any reason (including
retirement), provided, he shall
3
give the Company not less than 60 days written notice thereof, unless the
Employer consents to a shorter notice period. Sixty days after the Employer
receives such notice, this Agreement shall cease, all obligations of the Company
hereunder shall be canceled automatically, and the Executive shall not be
entitled to any form of compensation under this Agreement, except for payout of
benefits accrued under the employee benefit plans of the Employer.
12. DISABILITY. The event of physical or mental disability of a nature that
entitles Executive to sick pay or benefits under the Company's Long-Term
Disability Plan is not a termination of employment under any section of this
Agreement. This Agreement shall remain in effect notwithstanding Executive's
disability
13. DEATH. In the event of Executive's death during the term of this
Agreement, his spouse or beneficiary shall be entitled to the Retention Bonus's
referred to in paragraph 6 (a) above. If the Executive is unmarried at his
death, beneficiary shall mean his designated beneficiary under the executive
life insurance plan of Employer in which Executive participates. Any benefit
payable under this Section 13 shall be in addition to any other benefit due to
Executive his spouse or beneficiary from Employer, including but not limited to,
payments under any Officer Incentive Plan.
14. CONFIDENTIALITY AND CONDUCT. The Executive warrants that he will not
disclose to any other person (other than a person to whom disclosure is
necessary in connection with the performance of his duties as an Employee of
Employer) any material confidential information or trade secrets concerning the
Employer or any of its subsidiaries, successors or assigns at any time during or
after the term of this Agreement including, but not limited to, strategic plans,
customer lists, contract terms, financial costs, pricing terms, sales data or
business opportunities, whether for existing, new or developing businesses.
Executive will at all times refrain from taking any action or making any
statements, written or oral, which are intended to and do disparage the goodwill
or reputation of the Employer or its directors, officers, or executives or which
could adversely affect the morale of employees of the Employer.
15. NON-SOLICITATION. During the term of employment provided for
hereunder, and for a period of one year after termination of employment with
Employer, Executive will not (i) directly or indirectly solicit business which
could reasonably be expected to conflict with the interest of Employer or any
subsidiary, successor or assign of Employer from any entity,
4
organization or person which has been doing business with the Employer, from
which the Employer was soliciting business at the time of the termination of
employment, or from which Executive knew or had reason to know that Employer was
going to solicit business at the time of termination of employment, or (ii)
employ or solicit for employment or advise or recommend to any other persons
that they employ or solicit for employment, any employee of the Employer, its
subsidiaries, successors or assigns.
16. ENFORCEMENT. Notwithstanding anything to the contrary contained
herein, Executive and the Employer acknowledge and agree that any of the
covenants contained in Sections 14 and 15 of this Agreement will survive
termination of the Agreement and may be specifically enforced by the Employer
through injunctive relief but such right to injunctive relief shall not preclude
the Employer from other remedies which may be available to it.
17. EMPLOYEE BENEFIT PLANS. In addition to the benefits specifically
provided for herein, Executive and his family will be entitled to participate in
all health and welfare benefit plans maintained by the Employer for executive or
managerial employees according to the terms of such plans. Executive shall also
be entitled to participate in any profit-sharing, retirement or similar plans
established by the Employer in which executive or managerial employees of
Employer participate, including any such plan intended to comply with Section
401(k) of the Internal Revenue Code of 1986, as amended, and any plan providing
supplemental executive retirement benefits.
18. WITHHOLDING. The Employer shall withhold the amount of any Federal,
state or local income taxes attributable to any amounts payable under this
Agreement.
19. EXCESS PARACHUTE PAYMENTS. If, for any reason, payments made pursuant
to this Agreement are determined to be "excess parachute payments" subject to an
excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended,
the provisions of Paragraph 2.(F) of the LONG ISLAND LIGHTING COMPANY EXECUTIVE
EMPLOYMENT AGREEMENT shall apply to such payment.
20. NO ASSIGNMENT. No right, benefit or interest hereunder shall be
subject to assignment, encumbrance, charge, pledge, hypothecation or set-off by
Executive in respect of any claim, debt, or obligation or similar process. The
Executive acknowledges that the services to be rendered by him are unique and
personal, and Executive may not assign any of his rights or delegate any of his
duties under this Agreement.
5
21. AMENDMENT. This Agreement may not be amended, modified, or canceled
except by written agreement of the parties.
22. SEVERABILITY. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall remain in full force and effect to
the fullest extent permitted by law.
23. ARBITRATION. Any dispute or controversy arising out of or in connection
with this Agreement which cannot be settled by the parties hereto within thirty
(30) days after the same shall arise shall be settled exclusively by arbitration
in New York , New York in accordance with the rules of the American Arbitration
Association rules for consensual arbitration.
24. BINDING EFFECT/SUCCESSORS. This Agreement shall be binding upon and
inure to the benefit of Executive, the Employer, its subsidiaries or affiliates,
and any successor organization or organizations which shall succeed to the
business, personnel, property or assets of the Employer, whether by means of
direct or indirect purchase, merger, consolidation or otherwise and/or which
shall succeed Employer as the employer of some or all of the current employees
of Employer. Any such successor shall expressly assume and agree to perform this
Agreement in the same manner and to the same extent as Employer would be
required to perform hereunder if no such succession had taken place.
25. UNSECURED PROMISE. No amounts payable pursuant to this Agreement shall
be secured by any specific assets of the Employer. All rights of the Executive,
his spouse or other beneficiary shall at all times be entirely unfunded and no
provision shall at any time be made with respect to segregating any assets of
Employer for payment of any amounts due hereunder. Neither Executive, nor his
spouse or other beneficiary shall have any interest in or rights against any
specific assets of Employer, and Executive and his spouse or other beneficiary
shall have only the rights of a general unsecured creditor of Employer.
26. SET-OFF. Payments to or with respect to Executive under this Agreement
shall be reduced by the amount of any debt or obligation of Executive owed to
Employer.
27. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and sent by registered or certified
mail to his residence in the case of the Executive, or to its principal office
in the case of the Employer and the date of receipt shall be deemed the date
which
6
such notice has been provided.
28. WAIVER OF BREACH. The waiver by either party of any provision of this
Agreement shall not operate as a waiver of any subsequent breach by any other
party.
29. ENTIRE AGREEMENT. This instrument contains the entire agreement of the
parties and supersedes the existing agreement providing for employment at will
and may not be changed orally but only by an agreement in writing signed by the
party against whom enforcement of any waiver, change, modification, extension or
discharge is sought. Except as provided in Paragraph 19 herein, this Agreement
shall have no effect on any other provision of the LONG ISLAND LIGHTING COMPANY
EXECUTIVE EMPLOYMENT AGREEMENT.
30. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and entirely performed within the state.
31. HEADINGS. The sections, subjects and headings of this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
32. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first written above.
/S/ XXXXXXXX X. XXXXXXX
-----------------------
Executive
LONG ISLAND LIGHTING COMPANY
By: /S/ XXXXXXX X. XXXXXXXXXXX
------------------------------
Xxxxxxx X. Xxxxxxxxxxx
Chairman, Board of Directors
7
