Exhibit 10.2

 

Amendment No. 2 to

Eugene R. McGrath Employment Agreement

 

The EMPLOYMENT AGREEMENT by and between Consolidated Edison, Inc., a New York
Corporation (“CEI”), and Eugene R. McGrath (the “Executive”), dated as of
September 1, 2000 and amended effective May 31, 2002, is amended effective
September 1, 2005, as follows:

 

WHEREAS, the Executive and CEI entered into an Employment Agreement effective
September 1, 2000 (the “Agreement”);

 

WHEREAS, the Executive and CEI amended the Agreement as of May 31, 2002 to
provide for an additional grant of restricted stock units;

 

WHEREAS, the Board of Directors of CEI (the “Board”) has elected a new Chief
Executive Officer effective September 1, 2005;

 

WHEREAS, the parties desire to further amend the Agreement to provide for the
change in Executive’s title, duties and responsibilities;

 

NOW, THEREFORE, in consideration of the foregoing, the parties hereto agree as
follows:

 

1. Section 1(b) of the Agreement is amended to add the following at the end of
the paragraph:

 

“Notwithstanding the foregoing, effective September 1, 2005, the Executive or
CEI may terminate the Employment Period on thirty 30 days advance written
notice.”

 

2. Section (2)(a) of the Agreement is amended to add the following at the end of
the paragraph:

 

“Notwithstanding the foregoing, effective September 1, 2005, the Executive shall
no longer serve as Chief Executive Officer of CEI or Chief Executive Officer of
CECONY but shall serve as Executive Chairman of CEI, Executive Chairman of
CECONY, and Chairman of the Board of CEI.”

 

3. The second sentence of Section 2(b) of the Agreement shall be deleted and
replaced with the following:

 

“As Executive Chairman of CEI and CECONY, effective September 1, 2005, the
Executive shall provide transition assistance and advice and guidance to the new
Chief Executive Officer of CEI and such other services as may reasonably be
determined by the Board.”

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4. The first sentence of paragraph 2(e) of the Agreement is amended to provide
the following:

 

“In addition to serving as Executive Chairman of CEI, the Executive shall also
serve as Executive Chairman of CECONY.”

 

5. The reference in the second sentence of paragraph 3 of the Agreement is
amended to substitute the phrase “Management Development and Compensation
Committee” for the phrase “Executive Personnel and Pension Committee.”

 

Section 3(b) of the Agreement is amended by adding the following at the end of
the paragraph:

 

“The Executive’s percentage award levels applied against the pool for 2006 will
not be less than that for 2005.”

 

8. Section 3(c) of the Agreement is amended by deleting the third sentence
thereof and substituting the following at the end of the paragraph:

 

“The Board, subject to any required shareholder approval, will determine the
Company’s long term incentive compensation program, and the type and amount of
equity and any other long-term incentive grants provided under the program will
be determined by the Compensation Committee from time to time provided that upon
Executive’s retirement (i) any performance-based equity awards shall fully vest
and be paid out within 30 days of the date employment terminates as if targeted
performance had been achieved through the applicable performance period and (ii)
any non-performance based awards granted to Executive, including restricted
stock awards, restricted stock units and options, shall fully vest and (A) be
paid out within 30 days of the date Executive’s employment terminates and (B)(x)
in the case of options granted prior to April 19, 2001, be exercisable until the
third anniversary of the Executive’s date of retirement and (y) in the case of
options granted after April 19, 2001 be exercisable until the tenth anniversary
of the grant date, provided, however, that in no event shall options be
exercisable beyond the expiration of their term.” Notwithstanding anything to
the contrary in this Agreement, in the event the Executive is

 

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terminated by the Company without Cause or terminates his employment for Good
Reason prior to his retirement, his equity awards shall be treated as provided
in the preceding sentence.

 

6. A new Section 3(k) shall be added to provide as follows:

 

“To the fullest extent permitted by applicable law, the Company shall (a)
indemnify the Executive as an officer or director of the Company or a trustee or
fiduciary of an employee benefit plan of the Company against all liabilities and
reasonable expenses that the Executive may incur in any threatened, pending, or
completed action, suit or proceeding, whether civil, criminal or administrative,
or investigative and whether formal or informal, because the Executive is or was
an officer or director of the Company or a trustee or fiduciary of such employee
benefit plan, (b) pay for or reimburse the Executive’s reasonable expenses
incurred in the defense of any proceeding to which the Executive is a party
because he is or was an officer or director of the Company or a trustee or
fiduciary of such employee benefit plan and (c) if the Company maintains
directors and officers liability insurance, to cover the Executive under such
insurance to the same extent it covers other officers and directors. The
Executive’s rights under this Section 3(k) shall survive the termination of the
Executive’s employment by the Company.”

 

7. Section 4(c)(i)(B) of the Agreement shall be deleted and replaced with the
following:

 

“the failure by the Board to elect the Executive to the positions of Executive
Chairman of CEI and of CECONY and Chairman of the Board during the Employment
Period.”

 

8. Section 4(c)(i)(D) is deleted in its entirety.

 

9. The phrase “his executive position with the surviving parent corporation is
Chief Executive Officer or Chief Operating Officer” in the second sentence of
paragraph 4(c)(i) is replaced with “his executive position with the surviving
parent is Executive Chairman.”

 

10. A new Section 12(h) shall be added to provide as follows:

 

“JOBS Act Compliance. If any provision of this Agreement would result in
unintended or adverse tax consequences to the Executive or would contravene the
regulations anticipated to be promulgated

 

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under Section 409A of the American Jobs Creation Act of 2004 (the “JOBS Act”),
or other Department of Treasury guidance, the parties shall reform this
Agreement or any provisions hereof to maintain to the maximum extent practicable
the original purpose of the provision without violating the provisions of the
JOBS Act or creating unintended or adverse tax consequences to the Executive.”

 

11. Executive acknowledges that the provisions of this Amendment No. 2 shall not
constitute Good Reason to terminate employment under the Agreement.

 

IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by its
duly authorized director and its corporate seal to be affixed hereto, and the
Executive has hereto set his hand as of July 22, 2005.

 

CONSOLIDATED EDISON, INC. By:  

/s/ George Campbell, Jr.

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    George Campbell, Jr.     Chairman, Management     Development and
Compensation     Committee    

/s/ Eugene R. McGrath

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Eugene R. McGrath

 

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