Use these links to rapidly review the documentExhibit 4.5



Exhibit 4.5

8 July 2004

National Grid Transco plc

and

National Grid USA

and

Michael E. Jesanis

Service Agreement

1

---



Index



|Index |  | 1                                      
|----- |  | ---------------------------------------
|1     |  | Interpretation                         
|2     |  | Commencement of Employment             
|3     |  | Appointment and Duties of the Executive
|4     |  | Hours                                  
|5     |  | Interests of the Executive and Code    
|6     |  | Location                               
|7     |  | Salary and Benefits                    
|8     |  | Expenses                               
|9     |  | Confidentiality                        
|10    |  | Intellectual Property Rights           
|11    |  | Termination and Suspension             
|12    |  | Garden Leave                           
|13    |  | Protection of interests of the Group   
|14    |  | Offers on Liquidation                  
|15    |  | Return of Company Property             
|16    |  | Directorships                          
|17    |  | Notices                                
|18    |  | Data Protection Act 1998               
|19    |  | Third Party Claims                     
|20    |  | Miscellaneous                          

2

---





This Agreementis made
onbetween

This
agreement records the terms on which the Executive will be employed by the US Company and the terms pursuant to which the Executive will provide his services as an Executive
Director to the UK Company.

1      Interpretation

In this agreement (and any schedules to it):



3

---





2      Commencement of Employment

2.1The Executive shall be employed by the US Company as President and CEO of the US Company and as an Executive Director of
the UK Company, as provided in this agreement. The Executive shall not be an employee of the UK Company, however the Executive's salary and other benefits may be provided by the UK Company on behalf
of the US Company.

2.2The Employment as President will start on 26 July 2004 (the "Commencement
Date"). The Employment will continue until termination in accordance with the provisions of this agreement. For purposes of 'continuous service' previous employment with
National Grid USA or any of its predecessor companies will count as continuous.

3      Appointment and Duties of the Executive

3.1The Executive will serve as President and Chief Executive Officer of the US Company and as an Executive Director of the
UK Company.

3.2In accordance with the UK Company's Articles of Association, the Executive's appointment as an Executive Director is
subject to ratification by shareholders in General Meeting.

3.3The Executive will:



3.4The Executive accepts that:



4

---





3.5The Executive will keep the US Board and/or the UK Board as appropriate (and, where appropriate, the board of directors
of any other Group Company) fully informed of his conduct of the business, finances or affairs of the US Company and/or the UK Company or any other Group Company in a prompt and timely manner. He will
provide information to the relevant board in writing if requested.

3.6The Executive will promptly disclose to the US Board and/or the UK Board as appropriate full details of any wrongdoing by
any employee of any Group Company where that wrongdoing is material to that employee's employment by the relevant company or to the interests or reputation of any Group Company.

3.7At any time during the Employment the US Company or the UK Company may require the Executive to undergo a medical
examination by a medical practitioner appointed by that company. The Executive authorises that medical practitioner to disclose to the US Company or the UK Company (as appropriate) any report or test
results prepared or obtained as a result of that examination in so far as such report or test results contain medical information that is relevant to the performance of the Executive's duties..

4      Hours

4.1The Executive will comply with the US Company's and the UK Company's normal hours of work (as appropriate) and will also
work any additional hours which may be reasonably necessary to perform his duties to the satisfaction of the relevant board. He will not receive any further remuneration for any hours worked in
addition to the normal working hours.

5      Interests of the Executive and Code

5.1The Executive will disclose promptly in writing to the US Board and/or to the UK Board (as appropriate) all his interests
and those of his spouse and dependent children (for example, shareholdings or directorships) whether or not of a commercial or business nature except his interests in any Group Company.

5.2Subject to clause 5.3, during the Employment the Executive will not be directly or indirectly engaged or concerned
in the conduct of any business activity (except as a representative of the US Company or the UK Company, as provided for in this agreement, or otherwise with the written consent of the relevant
board).

5.3The Executive may not hold or be interested in investments which amount to more than three per cent. of the issued
investments of any class of any one company whether or not those investments are listed or quoted on any recognised stock exchange.

5.4The Executive will (and will procure that his spouse and dependent children) comply with all rules of law, including but
not limited to Rule 10b 5-1 of the Securities Exchange Act of 1934 and the applicable provisions of the New York Stock Exchange Listed Company Manual as well as other applicable
rules or company policies pertaining to the holding or trading of securities including compliance with the spirit as well as the letter of those rules. In relation to overseas dealings, he will

5

---



also
comply with all laws of the country and all regulations of the stock exchange, market or dealing system in which such dealings take place.

5.5The UK Company's Code of Corporate Governance provides that the Executive, in furtherance of his duties as a director of
the UK Company, may take independent professional advice, if necessary, at the UK Company's expense. This step should only be taken if it is in the best interests of the UK Company to do so and, in
any event, the Chairman or Group Company Secretary should be notified.

5.6As a director of the UK Company, the Executive is bound by the provisions of company law and to the Stock Exchange
Listing requirements, details of which are available from the Group General Counsel and Group Company Secretary. The Executive should seek the advice of the Chairman on the interpretation of these
provisions in the event of any uncertainty.

6      Location

6.1The Executive will work at the headquarters of the US Company, although he will be required to travel to the UK from time
to time and may also be required to travel and work (subject to clause 3.4.2) elsewhere from time to time.

7      Salary and Benefits

7.1The US Company will pay the Executive a salary of $800,000 per annum. Salary will be paid in accordance with the US
Company's then prevailing payroll practices for salaried employees. Salary will be reviewed, for increases, annually commencing in 2005. The review will usually take place in April of each year.

7.2The salary referred to in clause 7.1 includes director's fees from the Group Companies and any other companies in
which the Executive is required to accept a directorship under the terms of this Employment. To achieve this:



7.3The Executive shall be entitled to participate in the Group's Incentive Share Plans and Schemes on the same basis as
other Executive Directors of the UK Company and subject to the rules and conditions agreed by the Remuneration Committee for the relevant plan from time to time.



7.4The Executive is and will continue to be a participant in National Grid USA Companies' Executive Supplemental Retirement
Plan (the "ESRP"); and he will continue to be eligible for and may participate in other incentive, savings and retirement plans, programs and policies
of the US Company and its subsidiaries to the same extent as other senior officers of the US Company. Notwithstanding anything contained in the ESRP or clause 20.4 of this agreement to the
contrary, the parties agree that Section 6.01 of the ESRP (Vesting and Forfeiture of Benefits) is hereby amended with respect to the Executive to provide that the second paragraph thereof will
not apply to any ESRP benefits accrued prior to the Commencement Date of this agreement, and that with respect to ESRP benefits accrued on or after the Commencement Date the provisions of the second
paragraph of Section 6.01 will apply

6

---



by
substituting the words "six (6) months" for the words "five years" where they appear in the second paragraph of Section 6.01 of the ESRP.

7.5Without prejudice to the US Company's right to terminate the Employment at any time in accordance with clause 11,
if the Executive complies with the eligibility or other conditions set by the US Company or its insurers, the Executive and the .Executive's family, as the case may be, shall be eligible for and may
participate in all applicable welfare benefit plans, programs, and policies provided by the US Company and its subsidiaries, including, without limitation, medical, retiree medical, prescriptions,
dental, disability, sick leave, employee life insurance, group life insurance, accidental death and travel accident insurance plans and programs, to the same extent as other senior officers of the US
Company.



7.6The US Company will reimburse the Executive in full for subscriptions for any professional memberships which, in the
opinion of the UK Company or US Company, are relevant to the Executive's role as an Executive Director or role as President and Chief Executive Officer of the US Company.

The
Executive is entitled to participate in the vacation policy of the US Company and receive fringe benefits and paid holidays on the same terms and conditions as other senior officers
of the US Company.

7.7In the event that it is determined that any payment or benefit provided by any Group Company to or for the benefit of the
Executive, either under this agreement or otherwise, will be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code or any similar or successor provision
("Secion 4999") the US Company will, prior to the date on which any amount of the excise tax must be paid or withheld, make an additional lump-sum payment (the "Gross-Up
Payment") to the Executive in an amount sufficient, after giving effect to all federal, state, and other taxes and charges (including interest and penalites, if any) with respect to the
Gross-Up Payment, to

7

---



make
the Executive whole for all taxes (including withholding taxes) and any associated interest and penalties imposed under or as a result of Section 4999. This clause will only apply if the
current limits under Section 4999 are not increased. In the event that they change significantly in the future, the Company reserve the right to review this clause.

8      Expenses

8.1The US Company will refund to the Executive all reasonable expenses properly incurred by him in performing his duties as
an Executive Director of the UK Company and as President and CEO of the US Company, provided that these are incurred in accordance with UK or US Company policy, as applicable. The US Company (or the
UK Company on its behalf) will require the Executive to produce receipts or other documents as proof that he has incurred any expenses he claims.

9      Confidentiality

9.1Without prejudice to the common law duties which he owes to the US Company or the UK Company, the Executive agrees that
he will not, except in the proper performance of his duties, copy, use or except as required by law or legal process disclose to any person any of the US Company's or the UK Company's trade secrets or
confidential information ("confidential information"). This restriction will continue to apply after the termination of the Employment without limit in time but will not apply to confidential
information which



The
Executive will use his best endeavours to prevent the unauthorised copying, use or disclosure of such information.

For
the purposes of this agreement confidential information includes but will not be limited to business plans, US Company, UK Company and Group Company forecasts, details of trading
levels, customer and other third party contracts, pricing structures and arrangements, and any other information in whatever form (written, oral, visual or electronic) concerning the confidential
affairs of the US Company and/or the UK Company.

9.2In the course of the Employment the Executive is likely to obtain trade secrets and confidential information belonging or
relating to other Group Companies and other persons. He will treat such information as if it falls within the terms of clause 9.1 and clause 9.1 will apply with any necessary amendments
to such information. If requested to do so by either the US Company or the UK Company the Executive will enter into an agreement with other Group Companies and any other persons on the same terms as
clause 9.1 with any amendments necessary to give effect to this provision.

10    Intellectual Property Rights

10.1The Executive will promptly inform the US Company and the UK Company if he makes or is involved in making an Invention
during the Employment and will give the companies sufficient details of it to allow them to assess the Invention and to decide whether the Invention belongs to either company. The companies will treat
any Invention which does not belong to them (or either of them) as confidential.

8

---





"Invention" means any invention (whether patentable or not within the meaning of the US Patents Act as amended or other applicable
legislation in any other country) relating to the business of the US Company and/or the UK Company and/or made in the course of the Executive's employment.

10.2If an Invention belongs to either or both of the US Company or the UK Company, the Executive will act as a trustee for
that company in relation to that Invention and will, at the request and expense of that company, do everything necessary to vest all right, title and interest in it in that company or its nominee with
full title guarantee and to secure full patent or other appropriate protection anywhere in the world.

10.3If the Executive creates or is involved in creating any Work during the Employment (including during the provision of
his services as an Executive Director of the UK Company), the Executive will promptly give the US Company and the UK Company full details of it.



10.4The Executive:



10.5If the Executive becomes aware of any infringement or suspected infringement of any intellectual property
right in any Invention or Work he will promptly notify the US Company in writing.

10.6The Executive will not copy, disclose or make use of any Invention or Work without the US Company's prior
written consent unless the disclosure is necessary for the proper performance of his duties.

10.7So far as permitted by law the Executive irrevocably waives any rights he may have under Chapter IV
(Moral Rights) of part 1 of the Copyright, Designs and Patents Act 1988 and any foreign corresponding rights in respect of all Works.

10.8Rights and obligations under this clause 10 will continue after the termination of this agreement
in respect of all Inventions and Works made or obtained during the Employment and will be binding on the personal representatives of the Executive.

10.9The Executive agrees that he will not by his acts or omissions do anything which would or might prejudice
the rights of the US Company or the UK Company under this clause 10.

10.10The Executive will not make copies of any computer files belonging to any Group Company or their service
providers unless he has obtained the consent of the US Board or of the UK Board, except for working files copied to a laptop or home computer solely to the extent necessary to perform his duties under
this agreement.

9

---



10.11By entering into this agreement the Executive irrevocably appoints the US Company to act on his behalf to
execute any document and do anything in his name for the purpose of giving the US Company (or its nominee) the full benefit of the provision of this clause 10 or the US Company's entitlement
under statute. If there is any doubt as to whether such a document (or other thing) has been carried out within the authority conferred by this clause 10.12, a certificate in writing (signed by
any director or the secretary of the US Company) will be sufficient to prove that the act or thing falls within that authority.

11    Termination and Suspension

11.1The Employment will continue until terminated by either the US Company or the Executive giving written
notice as set out in this clause 11.

11.2Either the US Company or the Executive may terminate the Employment by giving not less than
12 months' written notice to the other.

11.3The US Company may at its discretion pay the Executive in lieu of any unexpired period of notice (whether
given by the US Company or Executive) (less any deductions the US Company is required by law to make): Such discretion will be subject to approval by the Group's Remuneration Committee who, in
determining payment, will have regard to current Group policy and comments, and recommendations of the UK Listing Authority's Listing Rules and associated guidance and good governance.

11.4The US Company may terminate the Employment with immediate effect upon the "Disability" of the Executive.
The Executive shall be deemed to incur a Disability when (i) the US Company's medical department or its representative advises the US Company that the Executive's physical or mental condition
has rendered the Executive unable to perform the essential functions of the Executive's position in a reasonable manner, with or without reasonable accommodation, and will continue to render him
unable to perform the essential functions of the Executive's position in such manner for a period of at least twelve (12) consecutive months, or (ii) due to a physical or mental
condition, the Executive has not performed the essential functions of the Executive's position in a reasonable manner, with or without reasonable accommodation, for a period of twelve
(12) consecutive months.



11.5The US Company may terminate the Employment with immediate effect by giving written notice if the
Executive:



10

---





11.6The Executive will have no claim for damages or any other remedy against the US Company or the UK Company
if the Employment is terminated for any of the reasons set out in clause 11.5, provided said termination is based on the good faith opinion of no less than 3/4 of the US Board, after the
Executive has been given the opportunity to be heard, that the Executive was guilty of conduct set forth in clause 11.5.

11.7The Executive may terminate the Employment for Good Reason with immediate effect if the US Company does
not cure within thirty (30) days of receipt of the Executive's notice of termination. In such instance, the US Company shall pay the Executive the amounts set forth in clause 11.3.
above.

11.8When the Employment terminates the US Company may deduct from any money due to the Executive (including
remuneration) any amount which he owes to any Group Company.

11.911.9 The US Company may suspend the Executive from the Employment at any time, and for any reason for a
reasonable period to investigate any matter in which the Executive is implicated or involved (whether directly or indirectly) and to conduct any related disciplinary proceedings. During said
investigative period the Executive shall continue to receive his salary and benefits.

12    Garden Leave

12.1At any time after notice to terminate the Employment is given by either the US Company or the Executive
under clause 11 above (except as provided for in clause 11.7), or if the Executive resigns without Good Reason or without giving due notice and the US Company does not accept his
resignation, the US Company may require the Executive to comply with any or all of the provisions in clauses 12.2 and 12.3 for a maximum period of six months (the
"Garden Leave Period").

12.2The Executive will not, without prior written consent of the US Board, be employed or otherwise engaged in
the conduct of any activity, whether or not of a business nature during the Garden Leave Period. Further, the Executive will not, unless requested by the US Company:



12.3The US Company may require the Executive:



11

---





12.4During the Garden Leave Period, the Executive will be entitled to receive his salary and benefits. Any
unused holiday accrued at the commencement of the Garden Leave Period and any holiday accrued during any such Period will be deemed to be taken by the Executive during the Garden Leave Period.

12.5At the end of, or at any time during, the Garden Leave Period, the US Company may, at its sole and
absolute discretion, pay the Executive salary and benefits as set forth in clause 11.3 in lieu of the balance of any period of notice given by the US Company or the Executive (less any
deductions required by law).

12.6All duties of the Employment (whether express or implied), including without limitation the Executive's
duties of fidelity, good faith and exclusive service, shall continue throughout the Garden Leave Period save as expressly varied by this clause.

13    Protection of interests of the Group

13.1In this Clause the expressions following bear the meanings ascribed to them respectively below, namely:



13.2Since the Executive is likely to obtain in the course of his duties under this Agreement Confidential
Information and personal knowledge of and influence over employees of Group Companies the Executive hereby agrees with the US Company and the UK Company that in addition to the other terms of this
Agreement and without prejudice to other restrictions imposed upon him by law, he will be bound by the following covenants:



12

---





13.3The Executive agrees that each of the paragraphs contained in Clause 13.2 above constitute an
entirely separate and independent covenant on his part and the validity of one paragraph shall not be affected by the validity or unenforceability of another.

13.4The Executive agrees that he will at the request and cost of the US Company or the UK Company enter into a
direct agreement or undertaking with any Relevant Group Company whereby he will accept restrictions and provisions corresponding to the restrictions and provisions above (or such of them as may be
reasonable and appropriate in the circumstances) in relation to such activities and such areas and for such a period as such company may reasonably require for the protection of its legitimate
interests.

13.5The Executive agrees that, having regard to the facts and matters set out above, the restrictive covenants
contained in this Clause 13 are necessary for the protection of the business and Confidential Information of the US Company and the UK Company and Relevant Group Companies.

13.6The Executive and the US Company and the UK Company agree that while the restrictions imposed in this
Clause are considered necessary for the protection of the US Company, the UK Company and Relevant Group Companies, it is agreed that if any one or more of such restrictions shall either taken by
itself or themselves together be adjudged to go beyond what is reasonable in all the circumstances for the protection of the US Company, the UK Company or any Relevant Group Company's legitimate
interest but would be adjudged reasonable if any particular restriction or restrictions were deleted or if any part or parts of the wording thereof were deleted, restricted or limited in a particular
manner then the said restrictions shall apply with such deletions, restrictions or limitations as the case may be.

13.7Any benefit given or deemed to be given by the Executive to any Group Company under the terms of
Clause 13 is received and held on trust by the US Company and the UK Company for the relevant Group Company.

13

---



14    Offers on Liquidation

The Executive will have no claim against the US Company or the UK Company if the Employment is terminated by reason of liquidation in order to reconstruct or
amalgamate the US Company or by reason of any reorganisation of the US Company and the Executive is offered Employment with the company succeeding to the US Company upon such liquidation or
reorganisation and the new terms of Employment offered to the Executive are no less favourable to him than the terms of this agreement.

15    Return of Company Property

15.1At any time during the Employment (at the request of the US Company or the UK Company) and in any event
when the Employment terminates, the Executive will immediately return to the relevant Company:



15.2If the Executive commences a Garden Leave Period in accordance with clause 12 he may be required to
comply with the provisions of clause 15.1.

16    Directorships

16.1The Executive's office as a director of the UK Company or any other Group Company is subject to the
Articles of Association of the relevant company (as amended from time to time). If the provisions of this agreement conflict with the provisions of the Articles of Association, the Articles of
Association will prevail.

16.2The Executive must resign from any office held in any Group Company if he is asked to do so by the US
Company or the UK Company.

16.3If the Executive does not resign as an officer of a Group Company, having been requested to do so in
accordance with clause 16.2, the US Company will be appointed as his attorney to effect his resignation. By entering into this agreement, the Executive irrevocably appoints the US Company as
his attorney to act on his behalf to execute any document or do anything in his name necessary to effect his resignation in accordance with clause 16.2. If there is any doubt as to whether such
a document (or other thing) has been carried out within the authority conferred by this clause 16.3, a certificate in writing (signed by any director or the secretary of the US Company) will be
sufficient to prove that the act or thing falls within that authority.

16.4During the Employment the Executive will not knowingly do anything which could cause him to be
disqualified from continuing to act as a director of any Group Company.

16.5The Executive must not resign his office as a director of any Group Company without the agreement of the
US Company or the UK Company.

17    Notices

17.1Any notices given under this agreement must be given by letter or fax. Notice to the US Company must be
addressed to 25 Research Drive, Westborough, MA 01582 at the time the notice is given. Notice to the Executive must be given to him personally or sent to his last known address.

14

---





17.2Except for notices given by hand, notices given by post will be deemed to have been given on the next
working day after the day of posting and notices given by fax will be deemed to have been given in the ordinary course of transmission.

18    Data Protection Act 1998

18.1For the purposes of the Data Protection Act 1998 (the
"Act") the Executive gives his consent to the holding, processing and disclosure of personal data (including sensitive data within the meaning of the
Act) provided by the Executive to the US Company and to the UK Company to the extent required to carry out the applicable provisions of this agreement including, but not limited to:



18.2The Executive acknowledges that during his Employment he will have access to and process, or authorise the
processing of, personal data and sensitive personal data relating to employees, customers and other individuals held and controlled by the US Company and/or the UK Company. The Executive agrees to
comply with the terms of the Act in relation to such data and to abide by the US Company's and/or the UK Company's data protection policy issued from time to time.

19    Third Party Claims



15

---





20    Miscellaneous

20.1This agreement may only be modified by the written agreement of the parties.

20.2This agreement shall be binding upon and shall inure to the benefit of the parties and their respective
successors, heirs (in the case of the Executive), and assigns; provided, however, that no rights or obligations under this Agreement may be assigned by the Executive other than his rights to
compensation and benefits which may be transferred only by will or operation of law. In the event of the Executive's death, references in this Agreement shall be deemed, where appropriate, to refer to
his beneficiary, estate, or other legal representative.

20.3References in this agreement to rules, regulations, policies, handbooks or other similar documents which
supplement it, are referred to in it or describe any pensions or other benefits arrangement are references to the versions or forms of the relevant documents as amended or updated from time to time.

20.4This agreement supersedes any previous written or oral agreement between the parties in relation to the
matters dealt with in it. It contains the whole agreement between the parties relating to the Employment at the date the agreement was entered into (except for those terms implied by law which cannot
be excluded by the agreement of the parties or for those terms which are contained in other plans, policies or arrangements referenced in but not included in this agreement). The Executive
acknowledges that he has not been induced to enter into this agreement by any representation, warranty or undertaking not expressly incorporated into it. The Executive agrees and acknowledges that his
only rights and remedies in relation to any representation, warranty or undertaking made or given in connection with this agreement (unless such representation, warranty or undertaking was made
fraudulently) will be for breach of the terms of this agreement, to the exclusion of all other rights and remedies (including those in tort or arising under statute).

20.5None of the parties' rights or powers under this agreement will be affected if:



20.6References to any statutory provisions include any modifications or amendments to those provisions.

20.7Headings will be ignored in construing this agreement.

20.8If any party agrees to waive his or its rights under a provision of this agreement, that waiver will only
be effective if it is in writing and it is signed by the party against whom or which such waiver is sought. A party's agreement to waive any breach of any term or condition of this agreement will not
be regarded as a waiver of any subsequent breach of the same term or condition or a different term or condition.

16

---



20.9This agreement is governed by and will be interpreted in accordance with the laws of the Commonwealth of
Massachusetts.

|EXECUTEDon behalf of                             |  | /s/ R. J. Urwin     
|------------------------------------------------ |  | --------------------
|NATIONAL GRID TRANSCO PLC                        |  |                     
|                                                 |  |                     
|EXECUTEDon behalf of                             |  | /s/ John G. Cochrane
|NATIONAL GRID USA                                |  |                     
|                                                 |  |                     
|                                                 |  |                     
|EXECUTEDby MICHAEL E. JESANISin the presence of: |  | }
}
}               
|Witness's signature                              |  |                     
|Name                                             |  |                     
|Address                                          |  |                     
|Occupation                                       |  |                     

17

---