Exhibit 10.6

 

RESTRICTED STOCK UNIT AWARD AGREEMENT

 

AGREEMENT by and between Consolidated Edison, Inc., a New York Corporation
(“CEI”), and Robert Hoglund (the “Executive”), dated as of April 1, 2004.

 

WHEREAS, the Executive will be serving as Senior Vice President of Finance of
Consolidated Edison Company of New York, Inc., a New York corporation and
subsidiary of CEI, (CEI and its subsidiaries and affiliates hereinafter
collectively referred to as the “Company”); and

 

WHEREAS, the parties desire to enter into this Agreement providing for the
granting of restricted stock units (“Units”) pursuant to the terms and
conditions set forth below.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual promises, covenants and
agreements set forth below, it is hereby agreed as follows:

 

1. Restricted Stock Unit Awards. In consideration of his continued employment
from the date of this Agreement through April 1, 2007, and through April 1, 2009
(“Employment Period”), the Executive shall be granted two awards (the
“Restricted Stock Unit Awards” or “Awards”) of restricted stock units (“Units”)
each with respect to 15,000 shares of the Common Shares ($.10 par value) of CEI
(“Stock”), effective as of the date of this Agreement, under the Consolidated
Edison, Inc. Long Term Incentive Plan (the “Plan”). These Awards are subject to
the terms and conditions set forth in the Plan, which are incorporated herein by
reference. All capitalized terms not otherwise defined shall have the same
meanings as set forth in the Plan. The Awards are also subject to the following
terms and conditions:

 

(a) Each Unit shall represent the right, upon vesting, to receive one Share of
Stock or the cash value of one Share of Stock, or a combination thereof. The
cash value of a Unit shall equal the closing price of a Share of Stock in the
Consolidated Reporting System as reported in the Wall Street Journal or in a
similarly readily available public source for the trading day immediately prior
to the applicable transaction date. If no trading of Shares of Stock occurred on
such date, the closing price of a Share of Stock in such System as reported for
the preceding day on which sales of Shares of Stock occurred shall be used.

 

(b) The Executive’s Units shall vest in accordance with the following schedule,
provided that the Executive has remained continuously employed by the Company,
or its successor through the dates indicated below:

 

Vesting Date

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Number of Units

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4/1/2007

  15,000

4/1/2009

  15,000

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(c) If, during the Employment Period and prior to a Change in Control, the
Company terminates the Executive’s employment without Cause, the Executive shall
fully and immediately vest in twenty percent of the total Units awarded, for
each completed year of employment during the Employment Period as of the Date of
Termination, reduced by the Units, if any, that have vested in accordance in
Section 1. (b) above. If, during the Employment Period and prior to a Change in
Control, the Executive terminates his employment, the Executive shall forfeit
all right to Units that are not vested as of the Date of Termination. If, during
the Employment Period and following a Change in Control, the Company shall
terminate the Executive’s employment without Cause or the Executive terminates
his employment for Good Reason, the Executive’s Units shall fully and
immediately vest as of the Date of Termination. If, during the Employment
Period, the Executive’s employment terminates by reason of death or Disability,
the Executive’s Units shall fully and immediately vest as of the Date of
Termination. If, during the Employment Period the Company terminates the
Executive’s employment for Cause, the Executive shall forfeit all right to Units
that are not vested as of the Date of Termination.

 

(d) Subject to any deferral election made pursuant to Section 1. (g), once Units
shall vest, the Company shall promptly: 1) issue to the Executive a certificate
for the Shares of Stock represented by the Units without any legend or
restriction (other than may be required by law); 2) pay the Executive the cash
value of the Shares of Stock represented by the Units; or 3) do a combination of
the above. Prior to vesting, the Units shall represent an unfunded and unsecured
promise to deliver certificates for Shares of Stock upon vesting thereof or to
pay the Executive the cash value of Shares of Stock upon vesting thereof.

 

  (e) (i) Except as otherwise provided herein, the Executive shall have no
rights of a stockholder with respect to the Shares of Stock represented by
Units, including no right to vote the Shares, to receive dividends and other
distributions thereon and to participate in any change in capitalization of the
Company.

 

(ii) In the event of any change in capitalization resulting in the issuance of
additional shares to the Company’s stockholders, the Shares of Stock represented
by his Units shall be equitably adjusted as determined in good faith by the
Company’s Management Development and Compensation Committee.

 

  (f) Dividend Equivalent Payments prior to Vesting of Units.

 

(i) Dividend Equivalent payments are made on the Dividend Payment Date, which
for purposes of this Agreement is the date the Company pays any dividend on
outstanding Shares based on the number of Units owned as of the record date for
such dividend. Prior to the delivery of Shares of Stock or the cash value of the
Shares of Stock upon vesting of Units, at the time of each distribution of any
regular cash dividend

 

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paid by the Company in respect of Stock, the Executive shall be entitled to
receive a cash payment from the Company equal to the aggregate regular cash
dividend payment that would have been made in respect of the Shares of Stock
represented by Units which have not yet vested, as if the Shares represented by
such Units had been actually delivered to the Executive, provided, that no such
payment in respect of Shares of Stock represented by Units shall be made if,
prior to the Dividend Payment Date, the Executive’s rights with respect to such
Units have previously terminated under this Agreement.

 

(ii) In the event of a dividend payable in Shares of Stock (“Stock Dividend”)
instead of cash, the Executive shall be entitled to receive on the Dividend
Payment Date additional Units in such number that would equal the Stock Dividend
that would have been received in respect of the Shares of Stock represented by
Units that have not yet vested, as if the Shares represented by such Units had
actually been delivered to the Executive. The Units that are received as a
result of a Stock Dividend shall be immediately vested.

 

(iii) Simultaneously with the signing of this Agreement, the Executive may make
an irrevocable election to defer the receipt of any Dividend Equivalent cash
payments or Dividend Equivalent payments resulting from Stock Dividends that may
become payable to the Executive on the Units granted to the Executive in this
Agreement. The Executive may also elect to have the cash payment invested under
the Company’s Deferred Income Plan as of the date such amounts may become so
payable according to the terms and conditions of the Deferred Income Plan. If no
such deferral election is made, the Executive will receive the Dividend
Equivalent payments in cash.

 

(g) At least twelve months prior to the date the Award of Units vest, the
Executive will have a one-time opportunity to make an irrevocable election:

 

(i) to receive, upon vesting, all or a portion of his Units in (a) Shares of
Stock, (b) cash, or (c) in a combination thereof, and

 

(ii) to defer the receipt of all or a portion of (a) Shares of Stock for up to
10 years after Termination of Employment, (b) the cash value of the Units into
the Company’s Deferred Income Plan according to the terms and conditions of the
Deferred Income Plan, or (c) any combination of the above listed options.

 

(iii) If no such deferral election is made, upon vesting the Executive will
automatically receive a lump sum distribution of the Shares of Stock represented
by the Units.

 

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(h) If upon the vesting of Units the Executive elects to receive Shares of
Stock, he will be entitled to receive dividends on the Shares of Stock when
dividends are paid. If the Executive elects to defer the receipt of Shares of
Stock upon the vesting of his Units, he will be entitled to receive Dividend
Equivalent payments on the vested Units. The Dividend Equivalent Payments on the
vested Units can be received as cash or as cash deferred into the DIP and are
payable on the Dividend Payment Date.

 

(i) It is agreed that the Restricted Stock Unit Awards (including the grants of
Units and any Dividend Equivalents or other distributions in respect of the
Units) shall not be included in the Executive’s pension calculation.

 

(j) The Company’s Management Development and Compensation Committee may make
such provisions and establish such terms and conditions as it may deem necessary
or appropriate to implement the terms of this Agreement and the Vice President –
Human Resources of Consolidated Edison Company of New York, Inc. may develop
such forms and take such other administrative actions as necessary to administer
the terms of this Agreement.

 

2. Change in Control. Upon the occurrence of a Change in Control during the
Employment Period, the Restricted Stock Unit Awards shall continue in effect and
vest (or be forfeited) in accordance with provisions of this Agreement as though
no Change in Control had occurred, except that, as appropriate, the Shares of
Stock represented by the Restricted Stock Unit Awards shall be treated the same
as all other Shares of Stock of the Company in any transaction constituting a
Change in Control. The Executive’s rights upon a termination of employment by
the Company without Cause, by reason of death or Disability or by the Executive
for Good Reason, which termination occurs following a Change in Control, shall
be as specified above in Section 1. (c).

 

3. Termination Definitions and Procedures. For purposes of this Agreement the
following definitions and procedures apply:

 

(a) Death or Disability. The Executive’s employment shall terminate
automatically upon the Executive’s death during the Employment Period. If the
Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice in accordance of
its intention to terminate the Executive’s employment. In such event, the
Executive’s employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the Executive (the “Disability Effective
Date”), provided that, within the 30 days after such receipt, the Executive
shall not have returned to full-time performance of the Executive’s duties. For
purposes of this Agreement, “Disability” means that (i) the Executive has been
unable, for the period, if any, specified in the Company’s disability plan for
senior executives, but not less than a period of 180 consecutive days, to
perform the Executive’s duties under this Agreement and (ii) a physician
selected by the Company or its insurers, and acceptable to the Executive or the
Executive’s legal representative, has determined that the Executive is disabled
within the meaning of the applicable disability plan for senior executives.

 

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  (b) By the Company.

 

(i) The Company may terminate the Executive’s employment during the Employment
Period for Cause or without Cause. For purposes of this Agreement, “Cause” shall
mean (A) willful and continued failure by the Executive to substantially perform
his duties or (B) the conviction of the Executive of a felony or the entering by
the Executive of a plea of nolo contendere to a felony, in either case having a
significant adverse effect on the business and affairs of the Company. No act or
failure to act on the part of the Executive shall be considered “willful” unless
it is done, or omitted to be done, by the Executive in bad faith or without
reasonable belief that the Executive’s action or omission was in the best
interests of the Company. Any act or failure to act that is based upon authority
given pursuant to a resolution duly adopted by the Board, or the advice of
counsel for the Company, shall be conclusively presumed to be done, or omitted
to be done, by the Executive in good faith and in the best interests of the
Company. The Company expressly acknowledges that Cause will not exist merely
because of a failure of the Company or its affiliates to meet budgeted results.

 

(ii) A termination of the Executive’s employment for Cause shall be effected in
accordance with the following procedures. The Company shall give the Executive
written notice (“Notice of Termination for Cause”) of its intention to terminate
the Executive’s employment for Cause, setting forth in reasonable detail the
specific conduct of the Executive that it considers to constitute Cause. Such
notice shall be given no later than 60 days after the act or failure (or the
last in a series of acts or failures) that the Company alleges to constitute
Cause. The Executive shall have 30 days after receiving the Notice of
Termination for Cause in which to cure such act or failure, to the extent such
cure is possible. If the Executive fails to cure such act or failure to the
reasonable satisfaction of the Board, the Company shall give the Executive a
second written notice stating the date, time and place of a special meeting of
the Board called and held specifically for the purpose of considering the
Executive’s termination for Cause, which special meeting shall take place not
less than ten and not more than twenty business days after the Executive
receives notice thereof. The Executive shall be given an opportunity, together
with counsel, to be heard at the special meeting of the Board. The Executive’s
termination for Cause shall be effective when and if a resolution is duly
adopted at such special meeting by the affirmative vote of a majority of the
Board stating that in the good faith opinion of the Board, the Executive is
guilty of the conduct described in the Notice of Termination for Cause and that
such conduct constitutes Cause under this Agreement.

 

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  (c) Good Reason.

 

(i) The Executive may terminate his employment for Good Reason following a
Change in Control or without Good Reason. For purpose of this Agreement, “Good
Reason” following a Change in Control shall mean:

 

(A) any adverse change in the Executive’s titles, authority, duties,
responsibilities and reporting lines as in effect immediately prior to a Change
in Control, or the assignment to the Executive of any duties or responsibilities
inconsistent in any respect with those customarily associated with the positions
held by the Executive immediately prior to a Change in Control;

 

(B) the appointment of any person other than the Executive to the position held
by the Executive immediately prior to a Change in Control or any other position
or title conferring similar status or authority;

 

(C) any reduction in the Executive’s salary, target annual bonus, target
long-term incentive or Retirement benefit as in effect immediately prior to a
Change in Control;

 

(D) any requirement by the Company that the Executive’s services be rendered
primarily at an office or location that is more than 50 miles from the
Executive’s employment office or location immediately prior to a Change in
Control;

 

(E) any purported termination of the Executive’s employment by the Company for a
reason or in a manner not expressly permitted by this Agreement;

 

(F) any failure by the Company to require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place; or

 

(G) any other material breach of this Agreement by the Company that either is
not taken in good faith or, even if taken in good faith, is not remedied by the
Company promptly after receipt of notice thereof from the Executive.

 

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Following a Change in Control, the Executive’s determination that an act or
failure to act constitutes Good Reason shall be conclusively presumed to be
valid unless such determination is decided to be unreasonable by the Management
Development and Compensation Committee.

 

(ii) A termination of employment by the Executive for Good Reason shall be
effectuated by giving the Company written notice (“Notice of Termination for
Good Reason”) of the termination, setting forth in reasonable detail the
specific acts or omissions of the Company that constitute Good Reason. Unless
the Board determines otherwise, a Notice of Termination for Good Reason by the
Executive must be made within 60 days after the Executive first has actual
knowledge of the act or omission (or the last in a series of acts or omissions)
that the Executive alleges to constitute Good Reason, and the Company shall have
30 days from the receipt of such Notice of Termination for Good Reason to cure
the conduct cited therein. A termination of employment by the Executive for Good
Reason shall be effective on the final day of such 30-day cure period unless
prior to such time the Company has cured the specific conduct asserted by the
Executive to constitute Good Reason to the reasonable satisfaction of the
Executive (unless the notice sets forth a later date (which date shall in no
event be earlier than 30 days after the notice is given) as of which such
termination shall be effective).

 

(iii) A termination of the Executive’s employment by the Executive without Good
Reason shall be effected by giving the Company written notice specifying the
effective date of termination.

 

(d) Date of Termination. The “Date of Termination” means the date of the
Executive’s death, the Disability Effective Date, the date on which the
termination of the Executive’s employment by the Company for Cause or without
Cause or by the Executive for Good Reason is effective, or the effective date
specified in a notice of a termination of employment without Good Reason from
the Executive to the Company.

 

4. No Right to Continued Employment. Nothing contained in this Agreement shall
confer on the Executive any right to continue in the employ of the Company or
shall limit the Company’s rights to terminate the Executive at any time,
provided, however, that nothing in this Agreement shall affect any other
contractual rights existing between the Executive and the Company.

 

5. Leave of Absence. If the Executive is officially granted a leave of absence
for illness, military or governmental service or other reasons by the Company,
for purposes of this Awards, such leave of absence shall not be treated as
termination of employment.

 

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6. Transferability. Except as may otherwise be authorized by the Committee in
accordance with the Plan, these Awards shall not be transferable other than by
will or the laws of descent and distribution. Any attempted transfers shall be
null and void and of no effect.

 

7. Tax Withholding. The Company’s Management Development and Compensation
Committee may make such provisions and take such steps as it may deem necessary
or appropriate for the withholding of any taxes that the Company is required by
law or regulation of any governmental authority, whether federal, state or
local, domestic or foreign, to withhold in connection with the Restricted Stock
Unit Awards, including, but not limited to: (1) withholding delivery of the
certificates for shares of Stock until the Executive reimburses the Company for
the amount it is required to withhold with respect to such taxes, (2) the
canceling of any number of shares of Stock issuable to the Executive in an
amount necessary to reimburse the Company for the amount it is required to so
withhold, (3) withholding the amount due from the distribution of the cash value
of the Units, (4) withholding the amount due from the Executive’s other
compensation, or (5) a combination of the above.

 

8. Miscellaneous. The Agreement: (a) shall be binding upon and inure to the
benefit of any successor of the Company; (b) shall be governed by the laws of
the State of New York, and any applicable laws of the United States of America;
(c) may not be amended or modified except in writing, signed by the parties; and
(d) shall in no way affect the Executive’s participation or benefits under any
other plan or benefit program maintained or provided by the Company. In the
event of a conflict between this Agreement and the Plan, the terms and
conditions of the Plan shall govern.

 

9. Notices. All notices required to be given by this Agreement shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:

 

If to the Executive:    4 Irving Place      New York, NY 10003 If to the
Company:    4 Irving Place      New York, NY 10003,      Attention: Vice
President – Human Resources

 

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

 

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10. Acknowledgement. The Executive acknowledges that he may request a copy of
the Plan from the Company’s Secretary at any time.

 

IN WITNESS WHEREOF, the Executive and, pursuant to due authorization from its
Board of Directors, the Company have caused this Agreement to be executed as of
the day and year first above written.

 

CONSOLIDATED EDISON, INC. By:  

/s/    Eugene R. McGrath

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    Eugene R. McGrath     Chairman of the Board and Chief Executive Officer    

/s/    Robert Hoglund

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    Robert Hoglund

 

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