EXHIBIT 10(dd)
SEPARATION AND RELEASE AGREEMENT
Dated as of 31 December 2006
This Separation and Release Agreement (hereinafter "AGREEMENT") among Xxxxxxx X.
Xxxxxxx ("EXECUTIVE"), National Grid plc and National Grid USA (together
"NATIONAL GRID" and, collectively with their affiliates, the "GROUP") is reached
in settlement of any and all disputes between Executive and the Group.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings set
forth herein, the parties agree as follows:
1. Executive's employment with National Grid USA terminated as of December
31, 2006 (the "TERMINATION Date").
2. Provided Executive accepts, executes and delivers this Agreement to
National Grid and provided further that Executive (and his UK legal
adviser) accept, execute and deliver the Settlement and Compromise
Agreement (in the form attached hereto as Exhibit 1 for which separate
consideration is payable) (the "SETTLEMENT AND COMPROMISE AGREEMENT") to
National Grid, National Grid USA will provide Executive with a payment in
the amount of $2,598,711 (the "TERMINATION PAYMENT") plus a payment in the
amount of $528,000 representing the prorated bonus in respect of the
2006-2007 fiscal year (the "2006-07 PRO RATA BONUS"), for an aggregate
lump sum amount of $3,126,711 less any applicable tax withholding, in full
settlement of all sums that Executive claims or may claim are due him from
the Group. The Termination Payment and the 2006-07 Pro rata Bonus will be
made within five days following the Effective Date (as defined in Section
23 below), or as soon as reasonably practicable thereafter (but in no
event later than 10 days after the Effective Date).
3. The treatment of Executive's outstanding awards under National Grid's
Executive Share Option Plan, Performance Share Plan and Deferred Share
Plan (collectively, the "INCENTIVE PLANS" ) as a "good leaver" (as defined
in the applicable Incentive Plans), shall be as set forth in Appendix A
hereto.
4. Executive will continue to participate as an employee in National Grid
USA's group health insurance plan through December 31, 2006. As of January
1, 2007 (or as soon as practicable thereafter), Executive will be provided
the notice required by the Consolidated Omnibus Budget Reconciliation Act
("COBRA") as it relates to coverage continuation and Executive agrees that
he will elect eighteen months of COBRA coverage for himself and his
eligible dependents. In addition, following
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the Termination Date, Executive will be entitled to reimbursement for
outplacement assistance up to a maximum of $50,000; financial services
advice for 2006 and 2007 through the standard Senior Executive AYCO
package currently offered by National Grid USA; and reimbursement of
reasonable legal fees in connection with negotiating this Agreement, the
Settlement and Compromise Agreement and the Consulting Agreement (in the
form attached hereto as Exhibit 2) up to a maximum of $30,000. (Your
attorney's invoice for legal fees should be submitted to the attention of
Xxxxx Xxxxxx, Esq., Linklaters, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX
00000.) Executive has accrued vested benefits under the National Grid USA
Companies' Executive Supplemental Retirement Plan ("SUPPLEMENTAL
RETIREMENT PLAN"), the National Grid USA Companies' Deferred Compensation
Plan ("DEFERRED COMPENSATION PLAN"), various tax-qualified pension, profit
sharing and 401(k) plans maintained by National Grid USA (collectively,
"TAX-QUALIFIED RETIREMENT PLANS"), the National Grid USA retiree health
plan ("RETIREE HEALTH PLAN"), and the Life Insurance Program for Xxxxxxx
X. Xxxxxxx ("LIFE INSURANCE PROGRAM"), which benefits shall be paid in
accordance with the terms and conditions of such plans and program (as
such plans and program may be amended from time to time in accordance with
the terms thereof). The Group confirms that in the event that Executive
were to die after the Termination Date but prior to the first day of the
month following the date on which he would have attained age 55, his legal
spouse at the time of death will receive a monthly benefit from National
Grid USA for her lifetime in the amount of $22,726.27 commencing on the
first day of the month following the date on which Executive would have
attained age 55, but offset by any benefit payable to her as a result of
such death under the terms of the Supplemental Retirement Plan. In
addition, National Grid USA confirms that after the Termination Date it
will recommence premium contributions under the Life Insurance Program in
accordance with the terms thereof and, after due consultation with the
insurance carrier, will pay future premiums as necessary to fund the
Target Benefit (as defined therein), consistent with applicable law. All
amounts payable hereunder are subject to applicable tax withholdings.
5. The parties acknowledge that Executive previously resigned, effective as
of the Termination Date, from all Board of Directors positions (including
Board committee positions) he has with National Grid plc and certain other
members of the Group. Effective as of the Termination Date, Executive
hereby irrevocably resigns from (1) all Board of Directors positions
(including Board committee positions) he has with National Grid USA,
National Grid USA Service Company, Inc. and any other member of the Group
with respect to which he has not already resigned, and (2) all fiduciary
positions (including as trustee) he holds with respect to any pension
plans or trusts established by any member of the Group. Executive agrees
that this Agreement will serve as his written notice of resignation and
that he will execute any documents necessary to formalize or carry out
such resignations.
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6. Except as set forth in Section 8 below, Executive knowingly and
voluntarily waives, terminates, cancels, releases and discharges forever
any and all actions, causes of action, claims, allegations or rights
(collectively, "CLAIMS") he (or his heirs, executors, administrators,
successors, assigns and legal representatives) may have or may yet have
against National Grid plc, National Grid USA and their respective
affiliates, subsidiaries, successors, assigns, and its and their current
and former officers, directors, trustees, agents, representatives,
attorneys, fiduciaries, managers and employees (the "RELEASED PARTIES"),
whether known or unknown, based upon any matter, cause or thing occurring
at any time before and including the Effective Date.
7. Subject to Sections 8 and 10 below, section 6 above includes, but is not
limited to, (1) all Claims under federal, state or local law or the
national or local law of any other country (statutory or decisional) for
breach of contract, for tort, for wrongful or abusive or unfair discharge
or dismissal, for impairment of economic opportunity or for defamation,
for intentional infliction of emotional distress, or for discrimination
based upon race, color, ethnicity, sex, age, national origin, religion,
disability, sexual orientation or any other unlawful criterion or
circumstance; (2) Claims for compensation, bonuses or benefits; (3) Claims
under any service agreement, severance program, compensation or benefit
plan or arrangement maintained by the Group; (4) Claims for sexual
harassment; (4) Claims related to whistleblowing; (5) Claims for punitive
or exemplary damages; (6) Claims for violations of any of the following
laws (as amended): the Equal Pay Act, Title VII of the Civil Rights Act of
1964, the Civil Rights Act of 1991, the Age Discrimination in Employment
Act of 1967, the Americans with Disabilities Act of 1991, the Employee
Retirement Income Security Act of 1974, the Worker Adjustment Retraining
and Notification Act, the Family Medical Leave Act, Massachusetts General
Laws c. 151B; Claims of unfair dismissal pursuant to Part X of the UK
Employment Rights Xxx 0000; Claims pursuant to Part II of the UK
Employment Rights Xxx 0000 that an unauthorized deduction from wages has
been made; Claims of race discrimination pursuant to Parts I and II of the
UK Race Relations Xxx 0000; Claims of age discrimination pursuant to parts
I and II of the UK Employment Equality (Age) Regulations 2006; Claims that
Executive has been subjected to a detriment having made a protected
disclosure, in contravention of the UK Employment Rights Xxx 0000; and (7)
Claims for violations of any other applicable employment statute or law.
In addition, the Executive waives any and all rights under the laws of any
jurisdiction in the United States, England and Wales, the European Union
or any other country, that limit a general release to those Claims that
are known or suspected to exist in his favor as of the date of this
Agreement.
8. Notwithstanding anything contained in Section 2 to the contrary, Executive
does not release the following Claims: Claims that arise after the
Effective Date of this Agreement (but any Claims for acts or omissions
that occurred before the Effective Date are released); Claims to
outstanding awards in accordance with the terms of the Incentive Plans and
Appendix A hereto; Claims to
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benefits under the Supplemental Retirement Plan and the Deferred
Compensation Plan; Claims to benefits under the Tax-Qualified Retirement
Plans; Claims to benefits under the Life Insurance Program; Claims to
benefits or coverages under the Retiree Health Plan; Claims relating to
indemnification under Section 19.1.2 of the Service Agreement dated 8 July
2004 between Executive and National Grid ("SERVICE AGREEMENT"); and Claims
to enforce National Grid's obligations under this Agreement, the
Settlement and Compromise Agreement, or the Consulting Agreement
(collectively, "SECTION 8 CLAIMS").
9. Executive represents and warrants that as of the date of his execution of
this Agreement he has no actual knowledge (determined without inquiry,
investigation, or due diligence) of any violation by himself or the Group
of any applicable law or regulation or threatened litigation against the
Group, that in either case (whether individually or in the aggregate)
would be reasonably likely to have a material adverse effect upon the
business or reputation of the Group and that is not known by a member of
the board of directors, senior executive or in-house legal counsel of the
Group. Executive represents and warrants that he has not filed any civil
action, suit, arbitration, administrative charge, or legal proceeding
against any Released Party, that he has not assigned, pledged, or
hypothecated any Claim to any person and that no other person has an
interest in the Claims that he is releasing in this Agreement. Executive
agrees that if any person or entity files or causes to be filed any civil
action, suit, arbitration or other legal proceeding seeking equitable or
monetary relief concerning any Claim released in this Agreement, he will
not seek or accept any personal relief from or as a result of the action,
suit, arbitration or proceeding. For the avoidance of doubt, this
Agreement is not intended to restrict Executive's right to participate in
an Equal Employment Opportunity Commission investigation or proceeding,
but Executive hereby waives any and all rights to monetary damages in
connection with any such investigation or proceeding.
10. The Service Agreement terminated on the Termination Date, provided,
however, that Executive's obligations under Section 10 (Intellectual
Property Rights), Section 13 (Protection of Interests of the Group), and
Section 18 (Data Protection Act 1998) of the Service Agreement and the
Group's obligations under Section 7.7 (relating to Section 4999 of the
Internal Revenue Code of 1986, as amended ("CODE")), and Section 19.1.2
(Third Party Claims) of the Service Agreement is incorporated herein by
reference and will survive termination of Executive's employment and the
Service Agreement. The "Restricted Period" will be the period beginning on
January 1, 2007 and ending on June 30, 2007. In addition, Executive agrees
that he will not be employed by, or provide professional or consultancy
services to, any regulatory body, state or federal, that regulates a
member of the Group, nor appear before any such body (unless instructed to
do so (i) by that body, and in such case will give National Grid prompt
notice of such instruction or (ii) by National Grid pursuant to the
Consulting Agreement), until the earlier of December 31, 2007 and the
completion date of the KeySpan acquisition by National Grid.
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11. Executive understands and agrees that, in the course of his employment
with National Grid, Executive has acquired confidential business
information and trade secrets concerning business, financial, technical
and other information and material pertaining to the Group, including the
Group's operations, processes, technology, contracts, personnel,
advertiser and customer lists, future plans and methods of doing business,
which are the property of National Grid and which involve the Group and
the Group's employees, which information Executive understands and agrees
would be extremely damaging to the Group if disclosed to a competitor or a
third party (collectively, "CONFIDENTIAL INFORMATION"). Executive
understands and agrees that such Confidential Information has been
divulged to him in confidence, and Executive agrees to forever keep such
Confidential Information secret and confidential, and that Executive shall
not communicate or disclose to any third party, or use for his own
account, without prior written consent of National Grid, any of the
aforementioned Confidential Information. The restrictions set forth in
this Section 11 will not, however, apply to Confidential Information which
(i) becomes public other than through unauthorized disclosure by
Executive, (ii) is lawfully and in good-faith made available to Executive
outside the scope of his employment by a third party who did not derive it
from the Group, and who imposes no obligation of confidence on Executive,
(iii) was already known by him at the time it was disclosed to him, or
(iv) is required to be disclosed by a governmental authority, regulatory
body, or by order or subpoena of a court of competent jurisdiction,
provided that prior to such disclosure, except as otherwise prohibited by
law, Executive shall give National Grid reasonable advance notice and an
opportunity to take adequate measures to preserve the confidential nature
of the information sought by such authority, body or court. In view of the
nature of Executive's employment and the information and trade secrets
which he has received during the course of his employment, Executive
likewise agrees that the Group would be irreparably harmed by any
violation, or threatened violation, of the prohibited disclosure of trade
secrets and that, therefore, National Grid shall be entitled to an
injunction prohibiting Executive from any violation or threatened
violation of such disclosure restrictions.
12. Executive will not make any public statement (including instigating or
participating in the making of any public statement) that would libel,
slander, or disparage (whether or not the disparagement legally
constitutes libel or slander) any member of the Group or any of their
respective past or present officers, directors, or employees. The Group
shall not authorize the making of, and the Group shall use all reasonable
efforts to cause the members of the boards of directors and senior
executives of each Group member not to make, any public statement
(including instigating or participating in the making of any public
statement) that would libel, slander, or disparage (whether or not the
disparagement legally constitutes libel or slander) Executive. Unless
otherwise authorized in writing by Executive, in response to reference
inquiries from prospective employers of Executive, National Grid agrees to
provide only dates of employment and position held. Executive and National
Grid have decided to part ways on agreed terms and shall so state publicly
if
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requested to comment upon Executive's separation from service.
Notwithstanding the foregoing, National Grid shall be permitted to respond
to any regulatory, stock exchange or investor queries for additional
information regarding Executive's employment or separation, if National
Grid determines in good faith that such response is necessary or
appropriate, provided that prior to such disclosure, to the extent
reasonably practicable, National Grid shall (except as otherwise
prohibited by law) give Executive reasonable advance notice of the
additional information that National Grid intends to disclose .
13. To the extent any payments under this Agreement, the Settlement and
Compromise Agreement, or the Consulting Agreement of even date herewith
are found to be subject to Section 409A of the Code, Executive agrees to
indemnify and hold harmless the Released Parties against all judgments,
damages, costs, penalties or losses of any kind (including but not limited
to reasonable attorneys' and experts' fees and interest) that may be
imposed upon the Released Parties in connection with such payments on any
Released Party by the Internal Revenue Service, another taxing authority
or a court of competent jurisdiction, pursuant to or in connection with
Section 409A and the applicable guidance thereunder. For the avoidance of
doubt, Executive confirms that he will not assert any Claim pursuant to or
in connection with Section 409A against the Group.
14. Prior to the Termination Date, Executive agrees to return to National Grid
USA all Group documents (whether in hard copy or soft copy), and other
materials (including office keys or access cards, company provided credit
cards, laptop, etc.), that Executive received or obtained from the Group
during the course of his employment with the Group or that otherwise
belong to the Group. Executive will not retain any hard or soft copies of
any materials or other information that belongs to the Group.
15. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF MASSACHUSETTS APPLICABLE TO CONTRACTS BETWEEN MASSACHUSETTS RESIDENTS
MADE AND TO BE PERFORMED IN MASSACHUSETTS.
16. Executive agrees to arbitrate any and all disputes, Claims, or
controversies relating to or arising out of this Agreement before a single
arbitrator (the "ARBITRATION"). The Arbitration shall be submitted to the
American Arbitration Association for binding arbitration in accordance
with the AAA Employment Arbitration Rules and Mediation Procedures. The
location of the Arbitration shall be the City of Boston in the State of
Massachusetts, and the Arbitration shall proceed in English.
Notwithstanding the foregoing, the parties acknowledge and agree that they
will have no adequate remedy at law for any breach or alleged breach of
Section 10, Section 11 or Section 12 of this Agreement and that each party
shall be entitled to seek injunctive relief in court, in addition to any
other remedies available at law or hereunder, in connection with any
breach or alleged breach by another party of its obligations under Section
10, Section 11 or Section 12 of this Agreement. For
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the purposes of any suit, action or proceeding involving a right to
injunctive relief, the parties each hereby submit to the jurisdiction of
federal and state courts sitting in the City of Boston in the State of
Massachusetts, and they each further agree that such courts shall have
exclusive jurisdiction over any suit, action or proceeding involving a
right to injunctive relief. To the extent permitted by law, Executive and
the Group waive any and all rights to a jury trial with respect to any
matter.
17. This Agreement, together with the Settlement and Compromise Agreement and
the Consulting Agreement, sets forth the entire agreement between
Executive and the Group and supersedes any and all prior oral or written
agreements and representations between them.
18. The Agreement may not be altered, amended or modified except by a further
writing signed by Executive and National Grid. No failure or delay by
Executive or National Grid to exercise any right or remedy under the
Agreement will operate as a waiver, and no partial exercise of any right
or remedy will preclude any further exercise.
19. If any of the provisions, terms or clauses of the Agreement are declared
illegal, unenforceable or ineffective in a legal forum, those provisions,
terms and clauses shall be deemed severable, such that all other
provisions, terms and clauses of the Agreement shall remain valid and
binding upon all parties.
20. Executive represents and warrants that: (i) he has read and, following
consultation with counsel, fully understands the terms of the Agreement
and that the payments, benefits, and covenants described above constitute
sufficient consideration for this Agreement; (ii) he has the requisite
power and authority to enter into this Agreement; (iii) his signature is
binding on him and on his successors, assigns, and any other person
claiming rights on his behalf; and (iv) that he was given a period of not
fewer than 21 days to consider the terms of the Agreement and to consult
with an attorney of his choice with respect thereto. His signature below
indicates that he entered into the Agreement freely, knowingly and
voluntarily with a full understanding of its terms and the resultant
waiver and release of all Claims he may have against National Grid, and
that the waiver and release creates a total and unlimited release of all
Claims, whether known or unknown, that he may have against National Grid
existing as of the date of the Agreement, except as set forth in Section 8
of the Agreement. Executive further acknowledges that he has not relied on
any representations or statements not set forth in the Agreement.
21. It is understood and agreed that this Agreement does not constitute and is
not to be inferred or construed as an admission (express or implied) by
National Grid of any violation of any legal, equitable or contractual
obligation owed to Executive.
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22. Executive and National Grid agree that neither of them shall disclose the
existence or terms of this Agreement to any person or entity other than
the parties' counsel, auditors, accountants, insurers, financial advisors,
family members; or as required by law, the applicable rules (including
listing rules) of any stock exchange on which the Group's shares are
traded, if necessary or appropriate in the context of the Group's investor
relations or the applicable rules of any governmental authority or
regulatory body; or as necessary to administer or enforce this Agreement.
It is Executive and National Grid's intention that this Agreement not be
construed more strictly with regard to either party. This Agreement may be
executed in counterparts, each of which will constitute an original and
all of which, when taken together, will constitute one agreement.
23. This Agreement may be revoked by Executive within the 7-day period
commencing on the date that he signs this Agreement (the "REVOCATION
PERIOD"). In the event of such revocation by Executive, all obligations of
the parties under this Agreement shall terminate and be other no further
effect as of the date of such revocation. No such revocation by Executive
shall be effective unless it is signed and in writing and received by
National Grid prior to the expiration of the Revocation Period. The
EFFECTIVE DATE shall be the next business day following the expiration of
the Revocation Period.
[Signature Page Follows]
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By signing the Agreement below, the parties indicated hereunder agree to and
accept the provisions contained herein.
Dated: January 17, 2007
/s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxxx
NATIONAL GRID PLC
By: /s/ Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: Group H.R. Director
NATIONAL GRID USA
By: /s/ Xxxx Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx
Title: Senior V.P.
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APPENDIX A
AWARD DATE AWARD TREATMENT IN CONNECTION WITH
SHARE PLAN DD/MM/YY DETAILS STATUS TERMINATION OF EMPLOYMENT
---------- -------- ------- ------ -------------------------
Performance Share Plan 8/6/2004 19,987 ADSs Performance Award lapses.
criteria not
met as at 31
December 2006.
Performance Share Plan 28/6/2005 21,634 ADSs TSR performance Executive to receive 5,408 ADSs due
partially met to satisfaction of EPS measurement
(60.3% vesting) as at 31 March 2006.
as at 31
December 2006
and EPS Executive to receive a further
measure met for 3,261ADSs in respect of the TSR
1st year. component, measured as at 31
December 2006.
Awards remain subject to the
applicable plan rules.
Performance Share Plan 27/6/2006 20,435 ADSs TSR performance Executive to receive 1,702 ADSs in
measure fully respect of the TSR component,
met as at measured as at 31 December 2006.
December 2006. Executive may receive a further
EPS will not be 1,703 ADSs in respect of the EPS
measured until component, the performance against
March 2007. which is not known at this time, but
will be measured as at 31 March 2007.
Awards remain subject to the
applicable plan rules.
Deferred Share Plan 15/6/2006 6,203 ADSs No performance Executive receives 6,203 ADSs.
criteria.
Awards remain subject to the
applicable plan rules.
NOTE: The Plans are subject to Section 409A; accordingly, delivery of the awards
will be subject to the 6-month delay imposed by Section 409A.
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