Document:

ptn_ex102.htm

  
 EXHIBIT 10.2
 
 EMPLOYMENT AGREEMENT
  
 THIS EMPLOYMENT AGREEMENT (the “Agreement”), effective as of this 1st day of July, 2022, is entered into by Palatin Technologies, Inc., a Delaware corporation with its principal place of business at 4B Cedar Brook Drive, Cranbury, NJ, 08512 (the “Company”), and Stephen T. Wills (“Employee”).
  
 The Company desires to continue employing the Employee, and the Employee desires to continue to be employed by the Company. In consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties agree that the following terms of this Employment Agreement shall supersede in all respects any prior agreements governing employment between the parties:
  
 1.0 Term of Employment. The Company hereby agrees to continue employing the Employee, and the Employee hereby accepts the continuation of employment with the Company, upon the terms set forth in this Agreement, for the period commencing on July 1, 2022 (the “Commencement Date”) and ending on June 30, 2025 unless sooner terminated in accordance with the provisions of Section 4 (the “Employment Period”). 
  
 2.0 Position Title & Capacity.
  
 2.1 The Employee shall serve as Chief Financial Officer and Chief Operating Officer, with responsibilities consistent with this position and as the Company’s Board of Directors (the “Board”) may determine from time to time, with powers and duties as may be determined, from time to time, by the Board, consistent with the Employee’s position. The Employee shall report to the Company’s Board of Directors. The Employee shall be based at the Company’s corporate headquarters, which is based in Cranbury, New Jersey. The Employee shall also be available for travel at such times and to such places as may be reasonably necessary in connection with the performance of his duties hereunder.
  
 	 
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 2.2 The Employee may serve as an employee director on the Board as determined and approved by the Board during the Employment Period and for no additional compensation; however, upon termination of employment for any reason, the Employee will no longer serve as a member of the Company’s Board of Directors and will take any and all actions necessary to effectuate such resignation as may be reasonably requested by the Company.
  
 2.3 The Employee hereby accepts such employment and agrees to undertake the duties and responsibilities inherent in such position and such other duties and responsibilities as the Board shall from time to time reasonably assign to him. The Employee agrees to devote substantially all of his business time, attention and energies to the business and interests of the Company during the Employment Period. The Employee agrees to abide by the rules, regulations, instructions, personnel practices and policies of the Company and any changes therein which may be adopted from time to time by the Company. The Employee acknowledges receipt of copies of all such rules and policies committed to writing as of the date of this Agreement.
  
 2.4 The Employee specifically covenants, warrants and represents to the Company that he has the full, complete and entire right and authority to enter into this Agreement, that he has no agreement, duty, commitment or responsibility of any kind or nature whatsoever with any corporation, partnership, firm, company, joint venture or other entity or other person which would conflict in any manner whatsoever with any of his duties, obligations or responsibilities to the Company pursuant to this Agreement, that he is not in possession of any document or other tangible property of any corporation, partnership, firm, company, joint venture or other entity or other person of a confidential or proprietary nature which would conflict in any manner whatsoever with any of his duties, obligations or responsibilities to the Company pursuant to his Agreement, and that he is fully ready, willing and able to perform each and all of his duties, obligations and responsibilities to the Company pursuant to this Agreement.
  
 	 
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 3.0 Compensation and Benefits. During the Employment Period, unless sooner terminated in accordance with the provisions of Section 4, the Employee shall receive the following compensation and benefits:
  
 3.1 Salary. The Company shall pay the Employee, in equal semi-monthly installments or otherwise in accordance with the Company’s standard payroll policies as such policies may exist from time to time, an annual base salary of $650,000. Such salary shall be subject to review, as determined by the Company’s Compensation Committee and approved by the Board, on an annual basis, but the Board shall not decrease the Employee’s annual base salary at any such annual review.
  
 3.2 Cash Performance Bonus. The Employee will be included in the Company’s annual bonus compensation program based on a June 30th year end in an amount to be decided by the Company’s Compensation Committee and approved by the Board, payable no later than September 30th of each year during the Employment Period. The annual incentive bonus target shall be set by the Compensation Committee, but shall be no less than sixty percent (60%) of annual base salary and will be based on specific performance objectives as predetermined by the Compensation Committee, with the Compensation Committee determining the June 30th year end percent achievement of performance objectives. The Compensation Committee may recommend a discretionary additional amount based on performance.
  
 3.3 Stock Options. As additional compensation for services rendered, the Company has granted to the Employee the right and option to purchase shares of the Company’s Common Stock and in the future may grant additional options to purchase shares of the Company’s Common Stock to the Employee in accordance with the terms of the Company’s stock plan then in effect. Notwithstanding any option certificate or agreement to the contrary, the following provisions apply to all options granted to the Employee either prior to or after the Commencement Date:
  
 (a) All such options that are not vested as of the Date of Termination (as defined in Section 6) shall immediately vest and become fully exercisable as of the Date of Termination, except in the case of termination: (i) for Cause (as defined in Section 6) or (ii) at the election of the Employee for any reason other than pursuant to Section 4.1 or for Good Reason pursuant to Section 4.4 or 4.5. Notwithstanding the foregoing if upon a Change in Control as defined in Section 6.5 (c) or (d), any of the options are terminated in connection with the Change in Control, then all such options that are not vested as of the date of the Change in Control shall immediately vest and become fully exercisable immediately prior to the Change in Control; and
  
 	 
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 (b) All of such options that are vested as of the Date of Termination and that were outstanding immediately prior to the Commencement Date shall expire on the first to occur of: (i) 24 months following the Employee’s retirement; (ii) 24 months following the Employee’s Date of Termination other than (A) for Cause (as defined in Section 6), or (B) termination at the election of the Employee pursuant to Section 4.6; (iii) the expiration date of the option as set forth in the applicable option certificate or agreement; or (iv) as otherwise provided in the applicable option plan in the event of the dissolution or liquidation of the Company, or a merger, reorganization or consolidation in which the Company is not the surviving corporation. For purposes of this subsection, “retirement” requires that the Employee not render services of any nature for any entity as a regular employee, and not render services of any nature for any entity for more than an average of twenty (20) hours per week as a consultant or term employee. All of such options that were granted on or after the Commencement Date shall expire on the expiration date of the option as set forth in the applicable option certificate or agreement in the event the Employee’s employment terminates other than (A) for Cause (as defined in Section 6), or (B) at the election of the Employee pursuant to Section 4.6.
  
 Nothing in this Section 3.3 shall apply to or affect any equity award that is not either an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) or a non-qualified stock option.
  
 3.4 Restricted Share Units. As additional compensation for services rendered, the Company has granted to the Employee restricted share units for the issuance of the Company’s Common Stock and in the future may grant additional restricted share units for the issuance of the Company’s Common Stock to the Employee in accordance with the terms of the Company’s stock plan then in effect. Notwithstanding any restricted share unit certificate or agreement to the contrary, all restricted share units granted to the Employee either prior to or after the Commencement Date that are not vested as of the Date of Termination (as defined in Section 6) shall immediately vest as of the Date of Termination, except in the case of termination: (a) for Cause (as defined in Section 6) or (b) at the election of the Employee for any reason other than pursuant to Section 4.1 or for Good Reason pursuant to Section 4.4 or 4.5. To the extent that vesting of any such restricted shares units otherwise would have been contingent upon the achievement of performance objectives, vesting of such restricted share units pursuant to this Section 3.4 shall be (i) at the “target” level, regardless of achievement of performance objectives, in the case of termination pursuant to Section 4.3 or 4.5; or (ii) based upon actual achievement of performance objectives as determined after the end of the applicable performance period, in the case of termination under any other circumstances entitling the Employee to accelerated vesting pursuant to this Section 3.4. Notwithstanding the foregoing, if upon a Change in Control as defined in Section 6.5 (c) or (d), any of the restricted share units are terminated in connection with the Change in Control, then all such restricted share units that are not vested as of the date of the Change in Control shall vest as of the date of the Change in Control.
  
 	 
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 3.5 Fringe-Benefits. The Employee shall be entitled to participate in all benefit programs that the Company establishes and makes available to its employees, if any, to the extent that the Employee’s position, tenure, salary, age, health and other qualifications make him eligible to participate. The Employee shall also be entitled to holidays and annual vacation leave in accordance with the Company’s policy as it exists from time to time.
  
 3.6 Reimbursement of Expenses. The Company shall reimburse the Employee for all reasonable travel, entertainment and other expenses incurred or paid by the Employee in connection with, or related to, the performance of his duties, responsibilities or services under this Agreement, upon presentation by the Employee of documentation, expense statements, vouchers and/or such other supporting information as the Company may request, provided however, that the amount available for such travel, entertainment and other expenses may be fixed in advance by the Board.
  
 3.7 Insurance. The Employee will be covered under the Company’s Directors’ and Officers’ liability insurance to the same extent the Company’s directors and other officers are covered.
  
 	 
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 4.0 Employment Termination. The employment of the Employee by the Company pursuant to this Agreement shall terminate upon the occurrence of any of the following:
  
 4.1 Expiration of the Employment Period in accordance with Section 1, unless the Company and Employee agree to extend the Agreement term or otherwise continue Employee’s employment on mutually agreeable terms.
  
 4.2 At the election of the Company, for Cause (as defined in Section 6), immediately upon written notice by the Company to the Employee, which notice of termination shall have been approved by a majority of the Board.
  
 4.3 Immediately upon the death or determination of Disability (as defined in Section 6) of the Employee.
  
 4.4 At the election of the Employee, for Good Reason (as defined in Section 6), immediately upon written notice of not less than sixty (60) days prior to termination by the Employee to the Company.
  
 4.5 At the election of the Company upon or within twelve (12) months following a Change in Control (as defined in Section 6), or at the election of the Employee for Good Reason (as defined in Section 6) upon or within twelve (12) months following a Change in Control (as defined in Section 6), immediately upon written notice of termination.
  
 4.6 At the election of either party, upon written notice of termination.
  
 5.0 Effect of Termination. 
  
 5.1 Compensation & Benefits.
  
 (a) As referenced in this section, compensation following the Employee’s termination shall be in the form of severance. Severance will be based on the employee’s base salary in effect as of the employee’s last day of employment (without regard to any reduction that constitutes Good Reason) and will be paid in one lump-sum amount.
  
 (b) Severance is not considered compensation for purposes of employee and employer matching contributions under the 401(k) plan.
  
 	 
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 (c) As referenced in this section, upon termination of the Employee’s employment with the Company, medical and dental benefits will be available to the Employee, at his election, solely pursuant to the provisions of COBRA with the Company paying the full cost of COBRA coverage for a period up to 24 months if employment is terminated for any reason except an Employee resignation without Good Reason (as defined in Section 6) and a Company discharge for Cause (as defined in Section 6). If the Employee is discharged for Cause or the Employee resigns without Good Reason, the Employee will be required to remit the COBRA cost (102% of total benefit cost) of coverage.
  
 (d) Upon termination of the Employee’s employment with the Company, apart from the Employee’s election under COBRA to continue medical and dental benefits (as described in Section 5.1(c)), the Employee will cease to be eligible for participation in the Company’s health and welfare insurance and any other fringe benefit programs that pursuant to their contracts or Company policy require an active employee status.
  
 5.2 Termination By The Company or at Election of the Employee (other than for Good Reason).
  
 (a) If the Employee elects to terminate his employment for any reason other than for Good Reason pursuant to Section 4.4 or 4.5, no severance and/or benefits shall be paid, and the Employee shall be entitled only to receive payment of his earned but unpaid salary, and accrued vacation, as of his last day of actual employment by the Company, which amounts shall be paid within ten (10) days after the Date of Termination;
  
 (b) If the Company elects to terminate the Employee (other than for Cause) pursuant to Section 4.6, or if the Employee’s employment terminates upon the expiration of this Agreement pursuant to Section 4.1, the Company shall pay to the Employee twenty-four (24) months of his salary in effect on the Date of Termination in one-lump sum amount within sixty (60) days after the Date of Termination, plus medical and dental benefits (as described in Section 5.1(c));
  
 (c) If the Company terminates the Employee for Cause pursuant to Section 4.2, no severance and/or benefits shall be paid, and the Employee shall be entitled only to receive payment of his earned but unpaid salary, and accrued vacation, as of the Date of Termination. Employee may elect COBRA medical and dental benefits, in which case the Employee will be required to remit the COBRA cost (102% of total benefit cost) of coverage.
   
 	 
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 5.3 Termination By Employee Election For Good Reason. If the Employee terminates employment at his election for Good Reason pursuant to Section 4.4, other than as provided for in Section 5.4, the Company shall pay to the Employee twenty-four (24) months of his salary in effect on the Date of Termination in one-lump sum amount within sixty (60) days after the Date of Termination, plus medical and dental benefits (as described in Section 5.1(c)).
  
 5.4 Termination Following a Change In Control. If the Company terminates the employment relationship upon or following a Change In Control pursuant to Section 4.5, or if the Employee terminates employment at his election for Good Reason upon or following a Change in Control pursuant to Section 4.5:
  
 (a) The Company shall pay to the Employee twenty-four (24) months of his salary in effect on the Date of Termination in one-lump sum amount, within sixty (60) days after the Date of Termination, plus medical/dental care benefits (as described in Section 5.1(c)); and
  
 (b) For a six (6) month period after the Date of Termination, the Company shall reimburse the Employee for reasonable fees and expenses actually incurred by him for outplacement services in an amount, not to exceed $25,000, mutually agreed upon by and between the Employee and the Company, promptly, within ten days, receipt by the Company of satisfactory evidence of payment of such fees and expenses, but in no event no later than March 15 of the year following the year in which the expenses were actually incurred.
  
 5.5 Termination by Reason of the Employee’s Death or Disability. If, prior to the expiration of the Employment Period, the Employee’s employment is terminated by the Employee’s death or Disability pursuant to Section 4.3, the Company shall pay to the Employee, or in the case of the Employee’s death, to the estate of the Employee, twenty-four (24) months of his salary in effect on the Date of Termination in one-lump sum amount within sixty (60) days after the Date of Termination, plus medical and dental benefits (as described in Section 5.1(c)).
  
 	 
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 5.6 Withholding and Deductions, 409A.
  
 (a) All payments hereunder shall be subject to withholding and to such other deductions as shall at the time of such payment be required pursuant to any income tax or other law, whether of the United States or any other jurisdiction, and, in the case of payments to the executors or administrators to the Employee’s estate, the delivery to the Company of all necessary tax waivers and other documents.
  
 (b) Notwithstanding anything in this Agreement to the contrary, in the event it shall be determined that any payment or distribution by the Company or any of its affiliated companies to or for the benefit of the Employee (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (a “Payment”) would be an excess parachute payment within the meaning of section 280G of the Code (such excess only, an “Excess Payment”), then the Employee shall forfeit the Excess Payments to the extent the after-tax value to the Employee of the Payments as reduced by such forfeiture would be greater than the after-tax value to the Employee of the Payments absent such forfeiture. The forfeiture of Excess Payments, if applicable, shall be applied by: first reducing the cash severance described in Section 5.4(a) hereof, then to cancellation of accelerated vesting of performance-based equity awards (based on the reverse order of the date of grant), then to cancellation of accelerated vesting of other equity awards (based on the reverse order of the date of grant), and then to any other Payments on a pro-rata basis. All determinations required to be made under this Section 5.6(b), and the assumptions to be used in arriving at such determination, shall be made by a major accounting firm with expertise in such matters designated by the Company and reasonably acceptable to the Employee (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and the Employee within 15 business days of the receipt of notice from the Employee that there has been (or that there is likely to be) a Payment, or such earlier time as is requested by the Company. In connection with making determinations under this Section 5.6(b), the Accounting Firm shall take into account the value of any reasonable compensation for services to be rendered by the Employee before or after the change in control, including any noncompetition provisions that may apply to the Employee (whether set forth in this Agreement or otherwise), and the Company shall cooperate in the valuation of any such services, including any noncompetition provisions. Any determination by the Accounting Firm in good faith shall be binding upon the Company and the Employee. All fees and expenses of the Accounting Firm for services performed pursuant to this Section 5.6(b) shall be borne solely by the Company.
  
 	 
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 (c) As provided herein, the Company shall pay the full cost of the Employee’s COBRA premiums under this Section 5.
  
 (d) The payments and benefits provided for in Sections 5.2(b), 5.3, 5.4, 5.5, 5.6(b) and 5.6(c) of this Agreement are intended to constitute a short-term deferral pursuant to Treas. Reg. § 1.409A-1(b)(4) and thus not “nonqualified deferred compensation” subject to Section 409A of the Code. If the payments and benefits provided for in Sections 5.2(b), 5.3, 5.4, 5.5, 5.6(b) and 5.6(c) of this Agreement are deemed to provide for the payment of non-qualified deferred compensation benefits in connection with a separation of service under Section 409A(2)(a)(i) of the Code, the following interpretations apply to Sections 5.2(b), 5.3, 5.4, 5.5, 5.6(b) and 5.6(c): (i) Any termination of the Employee’s employment triggering payment of benefits under Sections 5.2(b), 5.3, 5.4, 5.5, 5.6(b) and 5.6(c) must constitute a “separation from service” under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) before distribution of such benefits can commence. To the extent that the termination of Employee’s employment does not constitute a separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as the result of further services that are reasonably anticipated to be provided by Employee to the Company at the time the Employee’s employment terminates), any benefits payable under Sections 5.2(b), 5.3, 5.4, 5.5, 5.6(b) and 5.6(c) that constitute deferred compensation under Section 409A of the Code shall be delayed until after the date of a subsequent event constituting a separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h). For purposes of clarification, this Section 5.6(d) shall not cause any forfeiture of benefits on the Employee’s part, but shall only act as a delay until such time as a “separation from service” occurs; (ii) If the Employee is a “specified employee” (as that term is used in Section 409A of the Code and regulations and other guidance issued thereunder) on the date his separation from service becomes effective, any benefits payable under Sections 5.2(b), 5.3, 5.4, 5.5, 5.6(b) and 5.6(c) that constitute non-qualified deferred compensation under Section 409A of the Code shall be delayed until the earlier of (A) the business day following the six-month anniversary of the date his separation from service becomes effective, and (B) the date of his death, but only to the extent necessary to avoid such penalties under Section 409A of the Code. On the earlier of (A) the business day following the six-month anniversary of the date his separation from service becomes effective, and (B) the Employee’s death, the Company shall pay the Employee in a lump sum the aggregate value of the non-qualified deferred compensation that the Company otherwise would have paid to the Employee prior to that date under Sections 5.2(b), 5.3, 5.4, 5.5, 5.6(b) and 5.6(c) of this Agreement; (iii) It is intended that each installment of the payments and benefits provided under Sections 5.2(b), 5.3, 5.4, 5.5, 5.6(b) and 5.6(c) of this Agreement shall be treated as a separate “payment” for purposes of Section 409A of the Code; (iv) Neither the Company nor the Employee shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A of the Code); and (v) to the extent that the period between the Date of Termination and the date upon which payment is required to be made or commence begins in one calendar year and ends in a second calendar year, payment will be made or commence in the second calendar year.
 	 
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 5.7 Release of Claims. The Employee’s entitlement to severance, payment of COBRA premiums, and accelerated vesting of options, restricted share units and other equity incentive awards, is contingent upon the Employee’s execution, within 21 days after the Date of Termination (or such longer period as required by applicable law), and non-revocation of a general release of claims in a form prepared by the Company and presented to the Employee upon termination of his employment hereunder, as well as the Employee’s compliance with the provisions of Section 7 hereof.
  
 5.8 No Requirement to Mitigate. The Employee shall not be required to mitigate the amount of any payment provided for in this Section 5 by seeking other employment or otherwise.
  
 6.0 Definitions. For purposes of this Agreement the following definitions apply:
  
 6.1 “Cause” shall mean the occurrence of any of the following circumstances:
  
 (a) (i) the Employee’s material breach of, or habitual neglect or failure to perform the material duties which he is required to perform under, the terms of this Agreement; (ii) the Employee’s material failure to follow the reasonable directives or policies established by or at the direction of the Board; or (iii) the Employee’s engaging in conduct that is materially detrimental to the interests of the Company such that the Company sustains a material loss or injury as a result thereof, provided that the breach or failure of performance by the Employee under subparagraphs (i) through (iii) hereof is not cured, to the extent cure is possible, within ten (10) days of the delivery to the Employee of written notice thereof;
  
 (b) the willful breach by the Employee of Section 7 of this Agreement or any provision of any confidentiality, invention and non-disclosure, non-competition or similar agreement between the Employee and the Company; or
  
 (c) the conviction of the Employee of, or the entry of a pleading of guilty or nolo contendere by the Employee to, any crime involving moral turpitude or any felony.
  
 6.2 “Date of Termination” shall mean the Employee’s last day of actual employment by the Company (or its successor) for any reason including death or Disability.
  
 	 
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 6.3 “Disability” shall mean the inability of the Employee, by reason of illness, accident or other physical or mental disability, for a period of 120 days, whether or not consecutive, during any 360-day period, to perform the services contemplated under this Agreement. A determination of disability shall be made by a physician satisfactory to both the Employee and the Company; provided, however, that if the Employee and the Company do not agree on a physician, the Employee and the Company shall each select a physician and these two together shall select a third physician, whose determination as to disability shall be binding on all parties.
  
 6.4 “Good Reason” shall mean the occurrence of any of the following circumstances, and the Company’s failure to cure such circumstances within thirty (30) days of the delivery to the Company of written notice by the Employee of such circumstances; provided that the Employee gives notice to the Company of the existence of the event or condition constituting Good Reason within thirty (30) days after such event or condition initially occurs or exists, and the Employee terminates his employment within one hundred and twenty (120) days after the initial occurrence of the event or condition constituting Good Reason:
  
 (a) any material adverse change in the Employee’s duties, authority or responsibilities as described in Section 2.1 hereof which causes the Employee’s position with the Company to become of significantly less responsibility or assignment of duties and responsibilities inconsistent with the Employee’s position;
  
 (b) a material reduction in the Employee’s salary as in effect on the Commencement Date or as the same may be increased from time to time;
  
 	 
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 (c) the failure of the Company to continue in effect any material compensation or benefit plan in which the Employee participates as in effect on the Commencement Date, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Employee’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount of benefits provided and the level of the Employee’s participation relative to other participants, as in effect on the Commencement Date;
  
 (d) any material adverse change in the Employee’s compensation resulting from (i) the failure by the Company to continue to provide the Employee with benefits substantially similar to those enjoyed by the Employee under any of the Company’s health and welfare insurance, retirement and other fringe-benefit plans insurance, in which the Employee was participating as in effect on the Commencement Date, (ii) the taking of any action by the Company which would directly or indirectly materially reduce any of such benefits, or (iii) the failure by the Company to provide the Employee with the number of paid vacation days to which he is entitled in accordance with the Company’s normal vacation policy in effect on the Commencement Date or in accordance with any agreement between the Employee and the Company existing at that time; or
  
 (e) the relocation of the Employee to a location which is a material distance from Cranbury, New Jersey.
  
 (f) For purposes of this Agreement, “Good Reason” shall be interpreted in a manner, and limited to the extent necessary, so that it will not cause adverse tax consequences for either party with respect to Section 409A of the Code, and any successor statute, regulation and guidance thereto.
 	 
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 6.5 “Change in Control” shall mean the occurrence of any of the following events:
  
 (a) any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportion as their ownership of stock of the Company) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities;
  
 (b) the date the individuals who, during any twelve month period, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director during the twelve month period whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A under the Exchange Act) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board;
  
 (c) a merger or consolidation of the Company approved by the stockholders of the Company with any other corporation, other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) 50% or more of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation or (ii) a merger or consolidation effected to implement a re-capitalization of the Company (or similar transaction) in which no “person” (as defined in Section 6.4(a)) acquires more than 50% of the combined voting power of the Company’s then outstanding securities; or
  
 (d) a sale of all or substantially all of the assets of the Company.
  
 	 
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 7.0 Restrictive Covenants.
  
 (a) For the purposes of this Agreement:
  
 (i) “Competing Products” means any products or processes of any person or organization other than the Company in existence or under development, which are substantially the same, may be substituted for, or applied to substantially the same end use as the products or processes that the Company is developing or has developed or commercialized during the time of the Employee’s employment with the Company.
  
 (ii) “Competing Organization” means any person or organization engaged in, or with definitive plans to become engaged in, research or development, production, distribution, marketing or selling of a Competing Product.
  
 (b) The Employee acknowledges that he has, on or prior to the date of the Agreement, executed and delivered to the Company an Employee Agreement on Confidentiality, Intellectual Property, Debarment Certification and Conflict of Interest (the “Confidentiality Agreement”) and the Employee hereby affirms and ratifies his obligations thereunder; and the Employee agrees that after termination by the Company for Cause pursuant to Section 4.2 (except in the case where such termination occurs within 12 months following a Change in Control), by the Employee pursuant to Section 4.6, or by either party upon expiration of the Employment Period, he will not render services of any nature, directly or indirectly, to any Competing Organization in connection with any Competing Product within any geographical territory as the Company and such Competing Organization are or would be in actual competition, for a period of twenty-four (24) months, commencing on the Date of Termination.
  
 (c) The Employee agrees that he will not, during the Employment Period and for a period of nine (9) months commencing on the Date of Termination, directly or indirectly employ, solicit for employment, or advise or recommend to any other person that they employ or solicit for employment, any person whom he knows to be an employee of the Company or any parent, subsidiary or affiliate of the Company.
  
 	 
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 (d) In the event a court of competent jurisdiction should find any provision in this Section 7 to be unfair or unreasonable, such finding shall not render such provision unenforceable, but, rather, this provision shall be modified as to subject matter, time and geographic area so as to render the entire section valid and enforceable.
  
 8.0 Notices. All notices required or permitted under this Agreement shall be in writing and shall be deemed effective upon either: (a) personal delivery; or (b) three (3) days following deposit with the United States Postal Service for delivery by registered or certified mail, postage prepaid, or one (1) day following deposit with a reputable overnight courier service, addressed to the other party at the address shown above, or at such other address or addresses as either party shall designate to the other in accordance with this Section 8.
  
 9.0 Pronouns. Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns and pronouns shall include the plural, and vice versa.
  
 10.0 Entire Agreement. This Agreement, together with the Confidentiality Agreement, constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter of this Agreement, including the Employment Agreement between the Company and the Employee dated as of July 1, 2019.
  
 11.0 Amendment. This Agreement may be amended or modified only by a written instrument executed by both the Company and the Employee. Any such amendment shall comply with the requirements of Section 409A of the Code, if applicable.
  
 12.0 Governing Law. This Agreement shall be construed, interpreted and enforced in accordance with the laws of New Jersey, without regard to its principles of conflict of laws.
  
 13.0 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of both parties and their respective successors and assigns, including any corporation with which or into which the Company may be merged or which may succeed to its assets or business; provided, however, that the obligations of the Employee are unique and personal and shall not be assigned by him.
  
 	 
	Page 18 of 16
	

	 

  
 14.0 Waiver of Breach.
  
 14.1 Waiver by the Company. No delay or omission by the Company in exercising any right under this Agreement shall operate as a waiver of that or any other right. A waiver or consent given by the Company on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion. No waiver by the Company shall be valid unless in writing signed by an authorized officer of the Company and approved by a majority of the Board.
  
 14.2 Waiver by the Employee. No delay or omission by the Employee in exercising any right under this Agreement shall operate as a waiver of that or any other right. A waiver or consent given by the Employee on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion. No waiver by the Employee shall be valid unless in a writing signed by the Employee.
  
 15.0 Miscellaneous.
  
 15.1 The captions of the sections of this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement.
  
 15.2 In case any provision of this Agreement shall be invalid, illegal or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby.
  
 16.0 Survival. The provisions of Sections 3.3, 5, 6, 7 and 8 shall survive the termination of this Agreement.
  
 17.0 Timing of Reimbursements. All reimbursements made by the Company pursuant to this Agreement will be made within 30 days from the date the Employee submits documentation of the expenses. Employee will submit documentation substantiating expenses within 30 days from the date the expenses are incurred.
  
 	 
	Page 18 of 17
	

	 

  
 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as an instrument under seal effective as of the day and year set forth above.
  
 	 PALATIN TECHNOLOGIES, INC.
	 	EMPLOYEE	 
	  
	  
	  
	  

	 By:
		 		 
	 Name:
	Carl Spana	 	Stephen T. Wills	 
	 Title:
	Chief Executive Officer and President	 	 Executive V.P., Chief Financial Officer
 and Chief Operating Officer
	 
	 Date:
	 June __, 2022
	  
	 Date: June __, 2022
	  

   	 
	Page 18 of 18EX-10.1

 Exhibit 10.1 

CONFIDENTIAL 
 June 21, 2022 

Robert D. Kump 
 3 Kensington Place 

Westport, CT 06880 
 Dear Bob: 

As you are aware, on or around April 27, 2022, you provided notice to Avangrid Management Company (the “Company”) that you are
terminating your employment with the Company and retiring, effective June 24, 2022 (“Notice”). 
 The last day of your
employment with the Company will be June 24, 2022 (“Last Day of Employment”). The Company acknowledges that, as of the Last Day of Employment, you are eligible for payments and benefits as a retiree under the Company’s plans and
policies. Subject to the terms and limitations set forth herein, the Company is offering you certain consideration as set forth below in this Confidential Separation Agreement and Release (“Agreement”). This includes, but is not limited
to, certain compensation and benefits, as set forth in Section 7.2 of the Employment Agreement that you entered into on or around October 1, 2010 with Iberdrola USA, Inc. and Iberdrola USA Management Corporation (“Employment
Agreement”). Subject to the below terms and limitations, the Company agrees to provide you with the consideration, set forth herein, solely in recognition for your long years of service to the Company, and as is otherwise required under
Section 7.2 of the Employment Agreement. For the avoidance of doubt, none of the payments made to you by the Company under this Agreement arise under Section 7.1 of the Employment Agreement, i.e., the provision setting forth compensation
for a Good Reason termination, among other things. By executing this Agreement, you acknowledge and agree that none of the consideration referenced herein arises out of or relates in any way to your Employment Agreement’s provisions related to
a Good Reason termination. In addition, by execution of this Agreement you withdraw your Notice other than with respect to your notification that you intend to retire effective as of your Last Day of Employment. 

Your participation in the Retirement, 401(k), Disability, Personal Time programs and any other applicable benefits, will end on June 30,
2022 (i.e., the last day of the month of your Last Day of Employment). Your regular health insurance coverage will also end on that day. However, you will be entitled to continue your health care coverage at your own expense under the federal law
known as COBRA. Information concerning COBRA options and rates, and a COBRA enrollment form, will be provided by the Company’s Benefits Administrator (YBR) after your Last Day of Employment. You must enroll in COBRA coverage in order to
receive continued benefits; failure to timely complete a COBRA enrollment form will result in forfeiture of the coverage. 
 Of course,
regardless of whether or not you agree to the terms set forth in this letter, upon termination, you will receive all payments and benefits due to you as a retiree under plans and policies of the Company and Avangrid as set forth in Exhibit C
attached hereto and will receive all wages due and any accrued, as well as any unused paid time off, pursuant to Company policy. That payment will be made to you on the next regular Company pay date, following the last day of your employment (unless
state or other law requires payment on a different schedule). 
 The remaining pages of this document contain the terms and conditions of
this Agreement, as defined immediately below, and the consideration you will receive if you enter into and abide by this Agreement. 

  
 Internal Use 

 Confidential Separation Agreement and Release 

This CONFIDENTIAL SEPARATION AGREEMENT AND RELEASE (this “Agreement”) is made by and among Avangrid Management Company, LLC
(the “Company”) and Robert D. Kump (“Mr. Kump” or “you”) (together the “Parties”) as of June 21, 2022. 

WHEREAS Mr. Kump entered into a certain employment agreement with Iberdrola USA, Inc. and Iberdrola USA Management Corporation on
or about October 1, 2010 (the “Employment Agreement”). 
 WHEREAS on or about April 27, 2022, Mr. Kump
provided notice of the termination of the Employment Agreement, effective June 24, 2022 (“Notice”). 
 NOW, THEREFORE,
in connection with Mr. Kump’s Notice, and in exchange for the good and valuable consideration described below, the Parties hereby agree as follows: 
  

	1.	 Consideration 

In consideration of the promises and covenants set forth herein, including, but not limited to, your agreement to cooperate in any proceedings
as set forth more fully in Section 8 hereof, and your release of claims against the Company and the Releasees, as that term is defined herein and as set forth more fully in Section 5 hereof, and in recognition of your many years of service
to the Company, the Company shall do the following: 
 1.1      Pay you Nine Hundred Thousand Dollars
($900,000), as set forth in Section 7.2 of the Employment Agreement and in recognition of your many years of service to the Company (“Payment”). A true and accurate copy of the Employment Agreement is attached hereto as Exhibit
A. 
 1.2      Make the Payment to you on the first pay date following expiration of the revocation
period described in Section 11 hereof, and then only if you have not exercised your right of revocation. 

1.3      Pay your reasonable attorneys’ fees relating to or arising from your resignation/retirement
and this Agreement, up to a maximum of $20,000, such fees to be paid directly to your counsel within ten (10) business days after the Company receives from your counsel a summary invoice and a Form W-9.

  

	2.	 No Other Consideration 

Except for the consideration noted above in Section 1.1 of this Agreement and except for the payments and benefits set forth in Exhibit
C hereto, you expressly admit, acknowledge and agree that no other consideration, compensation or reimbursement of any kind shall be provided by the Company to you, and that you have no entitlement to, or any right to make a claim for, any
additional consideration, compensation or reimbursement by the Company, Avangrid, Inc. or Avangrid, Inc.’s affiliates, including their parents, subsidiaries and other entities of their corporate group, joint ventures, and their respective
current and former directors, officers, members, employees, agents, insurers stockholders, shareholders, representatives, predecessors, successors and assigns, of any kind or under any circumstance whatsoever. You further admit, acknowledge and
agree that no promises of any future payments have been made to you by the Company, Avangrid, Inc. or Avangrid, Inc.’s affiliates, 

  
 2 

 
including their parents, subsidiaries and other entities of their corporate group, joint ventures, and their respective current and former directors, officers, members, employees, agents,
insurers, stockholders, shareholders, representatives, predecessors, successors, and assigns. 
  

	3.	 Withdrawal and Notice of Resignation 

You agree that your execution of this Agreement acts as an automatic withdrawal, with prejudice, of your Notice. You also agree that no further
action by you or the Company is required to withdraw that Notice with prejudice. Additionally, by executing this Agreement, you agree that your departure from the Company operates (a) as a Termination Without Good Reason, as that term is
defined in Section 7.2 of the Employment Agreement (except for the additional payment that the Company is providing to you in recognition of your years of service to the Company) and (b) as a retirement under the plans, and policies of the
Company and Avangrid. 
  

	4.	 Confidentiality, Non-Disparagement, Forfeiture and Covenants

  

	 	4.1	 Proprietary Information 

You acknowledge and agree that the obligations set forth in Section 9 of the Employment Agreement and the obligations set forth in the
Employee Invention and Confidentiality Agreement that you entered into on or about February 8, 2001 with Energy East Management Corporation (“Invention and Confidentiality Agreement”) are still in full force and effect and are binding
upon you, except as provided in Section 4.4 of this Agreement. A true and accurate copy of the Invention and Confidentiality Agreement is attached hereto as Exhibit B. 

 

	 	4.2	 Confidentiality 

Unless and until any such information is publicly disclosed by the Company, you agree to keep confidential the terms and conditions of this
Agreement, as well as the content of discussions pertaining to this Agreement. You may, however, discuss this Agreement with your attorneys, financial advisors, and immediate family members. You agree to take all steps reasonably necessary to ensure
that such parties to whom disclosure is authorized maintain the confidentiality of such information. 
 You acknowledge and agree that the
confidentiality obligations set forth in Section 9 of the Employment Agreement and the obligations set forth in the Invention and Confidentiality Agreement are still in full force and effect and are binding upon you. 

You further agree not to disclose or disseminate to anyone other than authorized representatives of the Company and the Company’s
affiliates, unless required to do so by law, nonpublic information concerning (1) business plans or strategic plans of the Company, Avangrid, Inc. or its affiliates; (2) trade secrets, defined as , information that derives or maintains
economic value, actual or potential, from not being generally known to the public or other persons who can obtain economic value from its disclosure or use; or (3) any other confidential or proprietary information concerning the Company,
Avangrid, Inc., its affiliates or customers, including, but not limited to, proprietary processes and procedures, financial and accounting information, strategic planning information, human resources information, the Company, Avangrid, Inc. or its
affiliates’ policies, the Company, Avangrid, Inc. or its affiliates’ operating information, and customer and supplier information (“Confidential Information”). 

  
 3 

 You understand that your disclosure of Confidential Information to anyone may subject you
and any other user of that information to legal and equitable claims by the Company and/or Avangrid, Inc. or its affiliates. 
 You are
hereby advised that, notwithstanding your non-disclosure obligations: (1) an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a
trade secret that (A) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation
of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal; and (2) an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation
of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (A) files all documents containing the trade secret under seal; and (B) does not
disclose the trade secret, except pursuant to court order. 
  

	 	4.3	 Non-Disparagement 

You further agree that you will not make any disparaging or false statements to any person or entity concerning the Company, Avangrid, Inc. or
any of its affiliates, including their parents, subsidiaries and other entities of their corporate group, joint ventures, and their respective current and former employees, officers or directors. In no manner shall this obligation prevent you from
responding to any government agency, court order or subpoena with truthful and accurate information. The Company also agrees that its officers and the officers of Avangrid, Inc. will not make any disparaging or false statements to any person or
entity concerning you. 
  

	 	4.4	 Non-Solicitation,
Non-Competition 

 You acknowledge and agree that the obligations set forth in
Section 9 of the Employment Agreement, and the obligations set forth in the Invention and Confidentiality Agreement, are still in full force and effect and are binding upon you, provided however that the Company hereby waives your compliance
with Section 9 of the Invention and Confidentiality Agreement relating to non-competition. 
  

	 	4.5	 Forfeiture 

You understand and acknowledge that if you materially breach Section 4 hereof, including any of its subparts, any other term of this
Agreement, Section 9 of the Employment Agreement, or any term of the Invention and Confidentiality Agreement, that you shall immediately forfeit all benefits granted to you under this Agreement. 

Before the Company can take any action against you pursuant to this Section 4, it must first provide written notice to you
(i) setting forth with particularity the factual bases for the Company’s position that a material breach has occurred, (ii) stating specifically what provision(s) the Company contends you have breached, and (iii) providing you at
least twenty (20) business days to respond and/or to cure (if curable). 
  

	5.	 Release of Claims 

(a)      In consideration for the compensation and other consideration set forth above, you, for
yourself and your heirs, executors, administrators, successors, assigns and trustees, and anyone claiming for or through you (collectively, the “Employee Releasors”) hereby 

  
 4 

 
fully waive, release, give up and forever discharge the Company, including, without limitation, all of the Company’s and Avangrid, Inc.’s affiliates, including their parents,
subsidiaries and all other entities of their corporate group, Iberdrola USA, Inc., Iberdrola USA Management Corporation, joint ventures, and their respective current and former directors, officers, members, employees, agents, insurers, stockholders,
shareholders, representatives, predecessors, successors and assigns, and all persons acting by, through, under, or in concert with any of them (collectively the “Company Releasees”), of and from any and all rights, liabilities,
damages, claims, causes of action and demands of whatsoever kind, in law or in equity, under federal and state constitutions, statutes or common law, whether direct or indirect, known or unknown, arising out of or relating in any way to your
employment with the Company, any agreement concerning such employment (excepting this Agreement), or the termination of that employment and any other matter arising before the date of this Agreement. 

You acknowledge and understand that, by entering into this Agreement, you are waiving and releasing any legal claims you may have relating to
your employment at the Company and the termination of that employment. You acknowledge and agree that you have obtained the benefit of legal advice in connection with this Agreement. 

This release includes, but is not limited to, any claims for additional compensation, reimbursement, benefits, or wages in any form, as well as
damages, reemployment, or reinstatement. This release also includes, but is not limited to, all claims under any state, federal or local laws, including the Oregon Equality Act (Oregon Revised Statutes Chapter 659A); Oregon Revised Statutes Chapter
659; the Oregon Family Leave Act; the Oregon Military Family Leave Act; the New York State Human Rights Law; the New York Labor Law (including, but not limited to, the Retaliatory Action by Employers Law, the New York State Worker Adjustment and
Retraining Notification Act, all provisions prohibiting discrimination and retaliation, and all provisions regulating wage and hour law); the New York State Human Rights Law; Section 125 of the New York Workers’ Compensation Law; the New
York City anti-discrimination law, N.Y.C. Admin Code §§ 8-107, et seq. the Connecticut Family and Medical Leave Act, Conn. Gen. Stat. Ann. §§
31-51kk et seq.; Connecticut’s whistleblower law, Conn. Gen. Stat. Ann. § 31-51m; Connecticut’s free speech law, Conn. Gen. Stat. Ann. § 31-51q; the Connecticut Fair Employment Practices Act, Conn. Gen. Stat. Ann. §§ 46a-58, et seq.; Connecticut’s minimum wage and wage payment laws, Conn. Gen.
Stat. Ann. §§ 31-58 to 31-76m; the anti-retaliation provision of Connecticut’s workers’ compensation statute, Conn. Gen. Stat. Ann. § 31-290a; the Maine Whistleblower Protection Act; the Maine Human Rights Act; ERISA, 29 USC § 1001 et seq.; Title VII of the Civil Rights Act of 1964, 42 USC § 2000e et seq. as amended; the Pregnancy
Discrimination Act; the Post Civil War Civil Rights Acts, 42 USC §§ 1981-88; the Civil Rights Act of 1991; the Equal Pay Act; the Age Discrimination in Employment Act; the Americans with Disabilities
Act; the Federal Family and Medical Leave Act; the Worker Adjustment and Retraining Notification Act; the Rehabilitation Act of 1973; the Occupational Safety and Health Act; the Labor Management Relations Act; the National Labor Relations Act; the
Uniformed Services Employment and Reemployment Rights Act; the Fair Labor Standards Act; and Executive Order 11246, all as amended, including any regulations or guidelines thereunder, and any other applicable or analogous state or federal law, or
statutory, local or common law regulating employment, including claims for retaliation, wrongful discharge, contract and tort claims, and any and all claims under any other federal, state or local labor law, civil rights law, fair employment
practice law, and human rights law, any and all claims of slander, libel, defamation, invasion of privacy, intentional or negligent infliction of emotional distress, intentional or negligent misrepresentation, fraud, violation of public policy,
breach of contract, breach of implied covenant of good faith and fair dealing, personal injury, mental anguish, injury to health and/or personal reputation, prima facie tort, and any other claim arising out of your employment with or the termination
of your employment with the Company, or under any other facts or circumstances 

  
 5 

 
whatsoever related thereto, any and all claims for monetary recovery, including but not limited to, back pay, front pay, liquidated, compensatory, and punitive damages, and attorneys’ fees,
experts’ fees, disbursements and costs, which any of the Releasors ever had, now have, or hereafter can, shall, or may have, for, upon, or by reason of any matter, cause, or thing, whatsoever, from the execution date of this Agreement, against
any of the Releasees. 
 (b)      In consideration for the terms of this Agreement, the Company
Releasees (as defined earlier) hereby fully waive, release, give up and forever discharge the Employee Releasors (as defined earlier) from any and all rights, liabilities, damages, claims, causes of action and demands of whatsoever kind, in law or
in equity, under federal and state constitutions, statutes or common law, whether direct or indirect, known or unknown, arising out of or relating in any way to your employment with the Company, any agreement concerning such employment (excepting
this Agreement), or the termination of that employment and any other matter arising before the date of this Agreement, provided however that the Company expressly reserves any claims it may have against you for any acts of fraud, theft, defalcation,
or comparable misconduct arising out of or relating to your employment with the Company about which the Company is presently unaware; provided further that the Company warrants and represents that, after due diligence, it is presently unaware of any
factual basis for any such claim against you. 
  

	6.	 Exceptions to Release 

Notwithstanding the foregoing, you do not waive your right to (i) any rights and obligations under this Agreement, (ii) any vested
rights to benefits in the Company’s 401(k) Plan or applicable Retirement Plan(s) or policies, (iii) any rights to benefits or payments as described in Exhibit C attached hereto, (iv) any rights to defense and indemnity or
to liability insurance coverage (e.g., directors’ and officers’ liability insurance), or (v) any claims that cannot be waived by law. 

The Company and you agree that this Agreement shall not release any claim that cannot be released by private agreement. Also, this Agreement
will not affect either party’s ability to challenge the enforceability of this Agreement under the Older Workers’ Benefit Protection Act. 
  

	7.	 Return of Company Property and Surrender of Records 

You agree on or before the Last Day of Employment to return all property of the Company, Avangrid, Inc. and its affiliates that you may have in
your possession, including, but not limited to, any employee identification cards, Company credit cards, computer equipment, cell phones, and keys, on or before your final active day of employment. 

You also acknowledge and agree that the obligations regarding the return of documents, set forth in the Invention and Confidentiality
Agreement, are still in full force and effect and are binding upon you. 
  

	8.	 Cooperation 

You agree to cooperate to a reasonable extent with the Company’s and its counsel’s reasonable requests for information or assistance,
including any such requests related to any Company review of compliance, legal or any other issues, for a response to any lawfully served civil or criminal subpoenas, and for participation in any administrative, regulatory, judicial, or other
proceeding arising from any charge, complaint or other action, which has been or may be filed and about which you may have knowledge as a result of your employment with the Company, including, but not limited to, any claims with the American
Arbitration Association. Such cooperation may include, but is not limited to, 

  
 6 

 
attending interviews or meetings with in-house or external legal counsel, reviewing documents, or otherwise providing information to the Company. In any
communications during any of the aforementioned proceedings, you agree to use your best efforts to be truthful. 
  

	9.	 Arbitration 

You acknowledge and agree that the obligations set forth in Section 14 of the Employment Agreement are still in full force and effect and
are binding upon you. 
 In the event of any dispute arising out of or relating to this Agreement that is not informally resolved, such
dispute shall be fully and finally resolved, as set forth in Section 14 of the Employment Agreement. Notwithstanding the foregoing, disputes that cannot be arbitrated or subjected to pre-dispute
arbitration agreements under controlling federal statute are expressly exempted from this Section. 
  

	10.	 Older Workers’ Benefit Protection Act 

In accordance with the Older Workers’ Benefit Protection Act (the “Act”), you acknowledge that (1) you were advised in
writing to consult with your attorney before signing this Agreement; (2) you are aware of your rights under the Act; (3) you understand you are releasing certain legal rights, including rights under the Age Discrimination in Employment
Act, and you are choosing to do so voluntarily; (4) as consideration for executing this Agreement, you have received additional benefits and compensation of value to which you would otherwise not be entitled; (5) you have been given a
period of at least twenty-one (21) days to consider this offer; and (6) you have a period of seven (7) days from the date immediately following execution of this Agreement in which you may
revoke this Agreement by written notice. In the event you sign this Agreement and do not exercise your right to revoke, this Agreement shall become effective on the date immediately following the seven (7) day waiting period described
above. 
  

	11.	 Time for Consideration of Offer and Additional Acknowledgements 

You acknowledge that you received this Agreement and offer on June 21, 2022. This offer shall remain open to you for your consideration
for a period of twenty-one (21 days), and shall expire at 5:00 PM (Eastern Time) on July 11, 2022. In the event you have not executed this Agreement by the time of its expiration, the offer shall be
closed. You are free, of course, to accept the offer earlier by executing this Agreement. If you choose to sign this Agreement before the twenty-one (21) day period expires, in so doing, you acknowledge
that you did so voluntarily and with the benefit of advice from your own counsel, and that you had the opportunity to take twenty-one (21) days to consider this Agreement. 

If you accept the Company’s offer by executing this Agreement, you shall have a period of seven (7) days from the day immediately
following the date of your execution of this Agreement in which you may revoke this Agreement, at your sole election. Notice of revocation of this Agreement shall be made by you, in writing, to Kyra Patterson, Chief Human Resources Officer, 180
Marsh Hill Road, Orange, CT 06477-3629. 
  

	12.	 No Admissions 

This Agreement shall not, in any way, be construed as an admission of any kind by the Company, Avangrid, Inc. or its affiliates, or by
Iberdrola USA, Inc. or Iberdrola USA Management Corporation. The Company, Avangrid Inc. and its affiliates, and Iberdrola USA, Inc. and Iberdrola USA Management Corporation specifically deny wrongdoing of any kind with respect to you, your
employment and/or 

  
 7 

 
your Employment Agreement. You further agree that this Agreement and its contents shall not be introduced in any proceeding as evidence of any fact or conclusion, except only that this Agreement
may be introduced in a proceeding arising from a breach of this Agreement, or as a defense, by either you, the Company, Avangrid, Inc. or its affiliates. 
  

	13.	 Severability 

If any portion or provision of this Agreement is held invalid or unenforceable, the remainder of this Agreement will be deemed severable, will
not be affected and will remain in full force and effect. 
  

	14.	 Entire Agreement; Applicable Law 

All agreements and understandings between the parties to this Agreement are embodied and expressed in this Agreement and in certain provisions
of the Employment Agreement and the Invention and Confidentiality Agreement. The Employment Agreement shall remain in full force and effect until the Date of Termination, June 24, 2022. Following the Date of Termination, June 24, 2022,
provisions in the Employment Agreement and the Invention and Confidentiality Agreement which, by their nature and terms, survive the termination of your employment, shall also survive except as modified by this Agreement. This Agreement shall also
survive the termination of your employment and remain in full force and effect. You acknowledge that no representations have been made to you, by the Company, Avangrid, Inc. or any of its affiliates, including their parents, subsidiaries and other
entities of their corporate group, joint ventures, or their respective current and former directors, officers, employees, agents, insurers, stockholders, shareholders, representatives, successors and assigns, other than those set forth herein. The
terms of this Agreement are contractual and are not mere recitals. This Agreement shall be governed, construed, interpreted, performed and enforced by and under the laws of the United States and the State of New York, without giving effect to
conflicts of law principles. 
  

	15.	 Existing and Newly Initiated Suits 

You confirm that you have not initiated and have no current claim, grievance, arbitration, charge, complaint, action or proceeding whatsoever,
in any forum or form, against the Company, Avangrid, Inc. or its affiliates, including their parents, subsidiaries or other entities of their corporate group, joint ventures, or their respective current and former directors, officers, employees,
agents, insurers, stockholders, shareholders, representatives, successors or assigns. In the event that any such action does exist or is initiated by you against the Company, Avangrid, Inc. or its current and former affiliates, including their
parents, subsidiaries, and other entities of their corporate group, joint ventures, or their respective current and former officers, directors, employees, agents, insurers, stockholders, shareholders, representatives, successors or assigns, at any
time in the future, based on any right or claim that arose on or before your execution of this Agreement, you shall not be entitled to recover any relief or recovery there from, including costs and attorneys’ fees, and you shall immediately
terminate any such proceeding. To the extent that the law prohibits you from waiving your right to bring and/or participate in the investigation of a claim, you nevertheless waive your right to seek or accept any damages or relief in any
proceeding by another individual or entity. 

  
 8 

	16.	 Waiver 

Waiver of any breach of any provision of this Agreement shall not be deemed as a waiver of any other breach of the same, or of any other
provision of this Agreement. 
  

	17.	 Counterparts 

This Agreement may be executed in one or more counterparts, all of which together shall constitute a single document. 

 

	18.	 Voluntary and Knowing Execution 

This Agreement includes a release of all known and unknown claims and has other important legal consequences. You expressly acknowledge that
you have carefully read this Agreement and understand it, that you have had ample time to consider this Agreement, that you have had a full opportunity to review this Agreement with an attorney of your choice, and that you are entering into it
voluntarily, knowingly and with such advice from your attorney as you deem appropriate. 
 To formally accept the terms of this Agreement and the
consideration provided under this Agreement, please sign and return this Agreement to me on or before the end of the consideration period described in Section 11 hereof. We recommend that you keep a copy of this document for your records. 

 

	
	 Sincerely,

	
	 /s/ Kyra Patterson

	
	 Kyra Patterson

	 Senior Vice President – Chief Human Resources Officer

 Accepted this 24th day of June, 2022 by: 

 

					
	 Robert D. Kump
	 		  	 /s/ Robert D. Kump

			
	[Printed Name]	 		  	[Signature]

  

					
		 	  

Sign and Return This Agreement to:
  

Kyra Patterson
 Chief Human
Resources Officer
 180 Marsh Hill Road

Orange, CT06477
  
	 	

  
 9 

 Exhibit A 
  

  
 10 

 EMPLOYMENT AGREEMENT 

This EMPLOYMENT AGREEMENT (the “Agreement”) is entered into by and among Iberdrola USA, Inc., a New York corporation (the
“Company”), Iberdrola USA Management Corporation, a Delaware corporation (“IUMC”), and Robert D. Kump (the “Executive”) as of October 1, 2010. 

The Board of Directors of the Company (the “Board”) and the Board of Directors of IUMC have determined that it is in the best
interests of the Company and IUMC, respectively, that the Executive continue his employment as a member of the management of the Company and of IUMC. 

The Executive is willing to commit himself to serve the Company and IUMC, on the terms and conditions herein provided. 

In order to effect the foregoing, the Company, IUMC and the Executive wish to enter into an employment agreement on the terms and conditions
set forth below. Accordingly, in consideration of the premises and the respective covenants and agreements of the parties herein contained, and intending to be legally bound hereby, the parties hereto agree as follows: 

1.      Defined Terms. The definitions of capitalized terms used in this Agreement, unless otherwise
defined herein, are provided in Section 15 hereof. 
 2.      Employment. IUMC hereby agrees to
employ the Executive, and the Executive hereby agrees to serve the Company and IUMC, on the terms and conditions set forth herein, during the term of this Agreement (the “Term”). 

3.      Term of Agreement. The Term will commence on the date hereof and end on the Date of Termination.

 4.      Position and Duties. The Executive shall serve as Chief Executive Officer of the Company and
shall have such responsibilities, duties and authority that are consistent with such position as may from time to time be assigned to the Executive by the Board. The Executive shall devote substantially all his working time and efforts to the
business and affairs of the Company and its subsidiaries and affiliates. The Executive recognizes that his duties will require, at the Company’s expense, travel to domestic and international locations. 

5.      Compensation and Related Matters. 

5.1.     Base Salary. IUMC shall pay the Executive a base salary (“Base Salary”) during the period of the
Executive’s employment hereunder, which shall be at an initial rate of Six Hundred Thousand Dollars ($600,000.00) per annum. The Base Salary shall be paid in accordance with the Company’s standard payroll practices. The Base Salary shall
not be decreased during the Term. 
 5.2.     2010 Annual Bonus. The Company shall pay to Executive a bonus in
respect of his work under this Agreement during 2010 in accordance with this Section 5.2 (the “2010 Bonus”). 

 Executive shall be eligible to receive a bonus in respect of the period from October 1, 2010 through
December 31, 2010 of up to One Hundred Fifty Thousand Dollars ($150,000), as determined by the Company based upon the achievement at the “Good” level of Iberdrola-wide and Company-wide objectives set in connection with the
Company’s Annual Executive Incentive Plan (the “AEIP”) and individual objectives set by the Company. Any bonus awarded under this paragraph shall be payable at the time the Company generally pays such bonuses to participants in the
AEIP, but in no event later than March 15, 2011. 
 The 2010 Bonus shall be in lieu of any participation by the Executive in the AEIP
and Executive hereby forfeits and waives any participation in the AEIP in respect of 2010. 
 5.3.     Annual
Bonus. Beginning in 2011 and thereafter for each year during the Term, Executive shall be eligible to participate in the Annual Executive Incentive Plan (“AEIP”), Executive’s AEIP opportunity at target under the AEIP shall be
equal to 55% of his Base Salary at the beginning for such year, and the maximum opportunity shall be equal to 110% of the Base Salary. 

5.4.     Strategic Bonus Program. Executive shall be eligible to participate in the Iberdrola, S.A. Strategic
Bonus Program and any successor thereto (the “Program”) beginning with new grants that occur after the date hereof, the first of which is expected to occur in 2011. The Executive’s maximum opportunity for the first award under the
Program shall be decided upon approval of the new Program by the Remuneration Committee of Iberdrola SA and will be set with reference to Executive’s level according to the Iberdrola Group classification system. Participation in the Program
shall be in lieu of any participation in the Company’s Performance Share Plan. In the event Executive’s employment continues beyond March 31, 2011 and he shall not have received a grant under the Program by such date, then in lieu of
participation in the Program the Company shall continue to make annual grants to the Executive under its Performance Share Plan (or any successor thereto) in an amount at least as much as the grant received by the Executive in 2010 until such time
as the Executive begins participation in the Program. 
 5.5.    
Non-qualified Individual Account Balance Deferred Compensation Arrangement. 
  

	 	(A)	 As of the date first mentioned above, Executive will be a participant in an employer-funded non-qualified individual account deferred compensation arrangement (the “Arrangement”) to be provided by the Company. Benefits will be payable to the Executive or his designated beneficiary under the terms
of the Arrangement. The Arrangement may be subject to an agreement whereby a financial vehicle within the Company’s best practice principles (“the Vehicle”) is constituted, and under which contributions will be set aside to fund the
Executive’s benefits under the Arrangement. Funds within the Vehicle may be invested as directed by the Fiduciary Committee of the Company, including investments held by insurance companies. The Arrangement will be put in place on or before
December 31, 2010 and contributions in respect of 2010 shall be made on or before such date. 

  
 2 

	 	(B)	 The Company shall make contributions under the Arrangement for the Executive’s benefit in an annual amount
equal to 10% of the Base Salary. Contributions under the Arrangement shall be made not less than annually. 

  

	 	(C)	 The Company shall use its best efforts to structure the Vehicle in a manner that will defer inclusion of
Arrangement benefits in the Executive’s taxable income until such amounts are actually received by the Executive. 

  

	 	(D)	 Upon Executive’s termination of employment with the Company or upon Executive’s retirement, the
Company will make one final contribution corresponding to the year of termination. The final contribution will be calculated on a prorated basis, based on the portion of the contribution period during which Executive was employed by the Company.
Other than as stated in this Section 5.5(D), all of the Company’s obligations to make contributions under the Arrangement will immediately cease upon termination of the Executive’s employment for any reason. 

 

	 	(E)	 The form of payment to Executive or his designated beneficiary shall be as specified in the Arrangement and may
be made as a single lump sum, instalment payments, a life annuity, a joint and survivor annuity, or any combination thereof, as timely elected by the Executive in accordance with the Arrangement. 

 

	 	(F)	 Executive shall not be eligible to participate in the Energy East Supplemental Executive Retirement Plan (the
“SERP”) or the Energy East Excess Plan (the “Excess Plan”), and Executive agrees to, and hereby does, waive, relinquish and forfeit all rights to participation in the SERP and the Excess Plan. 

5.6.     Amounts Owed Pursuant to Agreement and Release. Executive and the Company acknowledge and agree that the
Agreement and Release between Executive and the Company executed on September 25, 2009 shall remain in full force and effect (to the extent not previously satisfied) except as amended herein. Executive and the Company agree that the amount
payable to Executive pursuant to. Paragraph 2(B) of the Agreement and Release shall be increased by an amount equal to the amount earned by the Energy East Management Corporation Benefit Trust on its investment of $3,333,241 in a financial vehicle
to be selected by the Company in a commercially reasonable manner consistent with the goal of obtaining a net guaranteed level of interest without risk of loss of principal. In the event Executive’s employment hereunder is terminated by the
Company for Cause or by Executive without Good Reason and early termination or redemption fees are incurred in connection with the financial vehicle referenced in this Section, the amount of such early termination or redemption fees shall be
deducted from the amount otherwise payable to Executive hereunder; in any other circumstances, no such early termination or redemption fees may be deducted from the amount otherwise payable to the Executive hereunder. Under no circumstances will any
losses with respect to any such investment be passed along to Executive; rather, the Company guarantees that Executive shall receive not less than $3,333,241 at the time payment is due. 

  
 3 

 5.7.     Benefit and Long-Term Incentive Plans. The Executive
shall continue to be entitled to participate in or receive compensation and/or benefits, as applicable, under all “employee benefit plans” (as defined in section 3(3) of the Employee Retirement Income Security Act of 1974, as amended from
time to time (“ERISA”)) subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements; provided, however, that Executive shall not be eligible to participate in any compensation
plans (except as explicitly referenced in this Agreement) or nonqualified pension benefit plans; and provided further that there shall be no duplication of the compensation and benefits created by this Agreement. 

5.8.     Expenses. Upon presentation of reasonably adequate documentation to IUMC, the Executive shall receive
prompt reimbursement from IUMC for all reasonable and customary business expenses incurred by the Executive in accordance with IUMC policy in performing services hereunder or prior to the date hereof. In addition, IUMC shall pay Executive’s
reasonable attorneys’ fees incurred in connection with the negotiation and drafting of this agreement in an amount not to exceed $5,000. 

6.      Compensation Related to Disability. During the Term of this Agreement, during any period that the
Executive fails to perform the Executive’s full-time duties with the Company and IUMC as a result of incapacity due to physical or mental illness, IUMC shall pay the Executive’s Base Salary to the Executive at the rate in effect at the
commencement of any such period, together with all compensation and benefits payable to the Executive under the terms of any compensation or benefit plan, program or arrangement maintained by the Company or any affiliate during such period, until
the Executive’s employment is terminated by the Company for Disability; provided, however, that such Base Salary payments shall be reduced by the sum of the amounts, if any, payable to the Executive at or prior to the time of any such Base
Salary payment under disability benefit plans of the Company or under the Social Security disability insurance program, which amounts were not previously applied to reduce any such Base Salary payment. 

7.      Compensation Related to Termination. 

7.1.     Termination by the Company Without Cause, by Executive for Good Reason, or by Reason of Executive’s Death
or Disability. If the Executive’s employment shall be terminated by the Company without Cause, by Executive for Good Reason, or by reason of the Executive’s death or disability, Executive shall be entitled to receive (a) a lump
sum payment payable six months and one day after the Date of Termination equal to the sum of (i) the Base Salary and (ii) an amount equal to Executive’s AEIP award for the prior year; (b) amounts payable under the AEIP, the
Program, and the Performance Share Plan in accordance with their terms; and (c) all compensation and benefits payable to the Executive through the Date of Termination under any compensation or benefit plan, program or arrangement maintained by
the Company or IUMC during such period and in which Executive participated as of the Date of Termination. In addition, unless IUMC elects to waive Executive’s compliance with the provisions of Section 9 of the Employee Invention and
Confidentiality Agreement made as of February 8, 2001 between Executive and IUMC from and after the date that is six months after the Date of Termination, IUMC shall make an additional lump sum payment to the Executive equal to six months of
the Base Salary, payable on the date that is nine months after the Date of Termination; provided that IUMC must give notice of such election no later than three months after the Date of Termination. 

  
 4 

 7.2.     Termination by the Company for Cause; Termination by
Executive Without Good Reason. If the Executive’s employment shall be terminated by the Company for Cause or by Executive without Good Reason, IUMC shall pay (a) the Executive’s Base Salary through the Date of Termination at the
rate in effect at the time the Notice of Termination is given; and (b) all compensation and benefits payable to the Executive through the Date of Termination under the terms of the Agreement or any compensation or benefit plan, program or
arrangement maintained by the Company or IUMC during such period and in which Executive participated as of the Date of Termination. 

7.3.     No Further Liability; Release. Other than providing the compensation and benefits provided for in
accordance with this Section 7, the Company and its directors, officers, employees, subsidiaries, affiliates, stockholders, successors, assigns, agents and representatives shall have no further obligation or liability to Executive or any other
person under this Agreement. The payment of any amounts pursuant to this Section 7 (other than payments required by law) is expressly conditioned upon the delivery by Executive to the Company of a release in a form to be provided by the Company
of any and all claims Executive may have against the Company and its directors, officers, employees, subsidiaries, affiliates, stockholders, successors, assigns, agents and representatives arising out of or related to Executive’s employment by
the Company and the termination of such employment. The Company shall provide such release to Executive not more than fifteen days after the Date of Termination. 

8.      Termination Procedures. 

8.1.     Notice of Termination. During the Term of this Agreement, any purported termination of the
Executive’s employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other parties hereto in accordance with Section 11 hereof. For purposes of this Agreement, a
“Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and, if the termination is purported to be by the Company for Cause or by Executive for Good Reason, shall
set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment. 

8.2.     Date of Termination. “Date of Termination,” with respect to any purported termination of the
Executive’s employment during the Term of this Agreement, shall mean (i) if the Executive’s employment is terminated by his death, the date of his death, (ii) if the Executive’s employment is terminated for Disability,
thirty (30) days after Notice of Termination is given (provided that the Executive shall not have returned to the fulltime performance of the Executive’s duties during such thirty (30) day period), and (iii) if the
Executive’s employment is terminated for any other reason, the date specified in the Notice of Termination, which shall not (except in the case of a termination for Cause) be less than thirty or more than sixty days (except in the case of a
termination without Cause, in which event such date shall be no more than ninety days) from the date such Notice of Termination is given. 

  
 5 

 9.      Employee Invention and Confidentiality
Agreement. Executive agrees that he continues to be bound by the Employee Invention and Confidentiality Agreement made as of February 8, 2001 between Executive and IUMC (the “Confidentiality Agreement”). Notwithstanding the
foregoing, the parties agree that, in light of the consideration Executive is receiving under this Agreement, Executive shall in no event be eligible to receive any payments pursuant to Section 10 of the Confidentiality Agreement, including but
not limited to Special Severance Payments (as defined therein). In addition, the parties agree that the definition of “Territory” in Section 17.12 thereof shall be deleted and replaced with the following language:
“‘Territory’ shall mean every state in which the Company or any of its direct or indirect subsidiaries operates as of the Date of Termination, which as of October 15, 2010 comprises Connecticut, Massachusetts, Maine, and New
York.” 
 10.    Successors: Binding Agreement. 

10.1.     In addition to any obligations imposed by law upon any successor to the Company or IUMC, the Company or IUMC
will 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 or IUMC, to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Company or IUMC would be required to perform it if no such succession had taken place. 

10.2.     This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amount would still be payable to the Executive hereunder (other than amounts which, by their terms, terminate
upon the death of the Executive) if the Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives or administrators of
the Executive’s estate. 
 11.    Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses
set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon actual receipt: 

To the Company and IUMC: 

Iberdrola USA, Inc. 
 Iberdrola
USA Management Corporation 
 18 Link Drive; P.O. Box 5224 

Binghamton, NY 13902-5224 

Attention: Vice President – Human Resources 

  
 6 

 With a copy to: 

Robert N. Holtzman, Esq. 

Kramer Levin Naftalis & Frankel LLP 

1177 Avenue of the Americas 

New York, New York 10036 
 To
the Executive: 
 Robert D. Kump 

77 Woodlands Drive 
 Falmouth,
Maine 04105 
 With a copy to: 

Wayne N. Outten, Esq. 

Outten & Golden LLP 
 3
Park Avenue, 29th Floor 
 New York, New York 10016 

12.     Miscellaneous. 

12.1.   No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and such officers as may be specifically designated by the Board. No waiver by any party hereto at any time of any breach by any other party hereto of, or compliance with, any condition or provision
of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by any party which are not expressly set forth in this Agreement. This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto; and any prior agreement of the parties hereto
in respect of the subject matter contained herein, except as otherwise specifically provided in this Agreement, is hereby terminated and cancelled. The validity, interpretation, construction and performance of this Agreement shall be governed by the
laws of the State of New York. There shall be withheld from any payments provided for hereunder any amounts required to be withheld under federal, state or local law and any additional withholding amounts to which the Executive has agreed. The
obligations under this Agreement of the Company, IUMC or the Executive which by their nature and terms require satisfaction after the end of the Term shall survive such event and shall remain binding upon such party. 

12.2.   References in this Agreement to employee benefit plans, compensation plans, incentive plans, pension plans, disability
policies or similar plans, programs or arrangements of the Company include such plans, programs or arrangements of IUMC if maintained for the benefit of the Company’s executives or employees of IUMC. 

  
 7 

 12.3.   This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Facsimile or electronically transmitted signatures shall be treated as original signatures for all purposes. 

13.     Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 

14.     Settlement of Disputes; Arbitration. All claims by the Executive, for benefits under this Agreement shall
be directed to and determined by the Board and shall be in writing. Any denial by the Board of a claim for benefits under this Agreement shall be delivered to the Executive in writing and shall set forth the specific reasons for the denial and the
specific provisions of this Agreement relied upon. The Board shall afford a reasonable opportunity to the Executive for a review of the decision denying a claim and shall further allow the Executive to appeal to the Board a decision of the Board
within sixty (60) days after notification by the Board that the Executive’s claim has been denied. Any further dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in New
York, New York in accordance with the Employment Dispute Resolution rules of the American Arbitration Association then in effect. The arbitrator shall award attorneys’ fees and costs to the prevailing party in any such arbitration proceeding.
Judgment may be entered on the arbitrator’s award in any court having jurisdiction. 
 15.     Definitions.
For purposes of this Agreement, the following terms shall have the meaning indicated below: 
 (A)     “Base
Salary” shall have the meaning stated in Section 5.1 hereof. 
 (B)     “Board” shall mean the Board
of Directors of the Company. 
 (C)     “Cause” for termination by the Company of the Executive’s
employment, for purposes of this Agreement, shall mean (i) the willful and continued failure by the Executive to substantially perform the Executive’s duties with the Company and IUMC (other than any such failure resulting from the
Executive’s incapacity due to physical or mental illness or Executive’s resignation for Good Reason) after a written demand for substantial performance is delivered to the Executive by the Board, which demand specifically identifies the
manner in which the Board believes that the Executive has not substantially performed the Executive’s duties, or (ii) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the Company or its
subsidiaries, monetarily or otherwise. For purposes of clauses (i) and (ii) of this definition, no act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that the Executive’s act, or failure to act, was in the best interest of the Company. 

  
 8 

 (D)     “Company” shall mean Iberdrola USA, Inc. and any
successor to its business and/or assets which assumes and agrees to perform this Agreement by operation of law, or otherwise. 

(E)     “Date of Termination” shall have the meaning stated in Section 8.2 hereof. 

(F)     “Disability” shall be deemed the reason for the termination by the Company of the Executive’s
employment if, as a result of the Executive’s incapacity due to physical or mental illness, the Executive shall have been absent from the full-time performance of the Executive’s duties with the Company and IUMC for a period of at least
four months, the Company shall have thereafter given the Executive a Notice of Termination for Disability, and, within thirty (30) days after such Notice of Termination is given, the Executive shall not have returned to the full-time
performance of the Executive’s duties. 
 (G)     “Executive” shall mean the individual named in the first
paragraph of this Agreement. 
 (H)     “Good Reason” for termination by the Executive of the Executive’s
employment shall mean the occurrence (without the Executive’s express written consent), of any of the following acts by the Company, unless such act is corrected prior to the Date of Termination specified in the Notice of Termination given in
respect thereof: 
  

	 	(a)	 the removal from Executive of his title of Chief Executive Officer; 

 

	 	(b)	 the assignment to Executive of duties, responsibilities, or authorities, or failure to assign to Executive
duties, responsibilities, or authorities, consistent with his position as the chief executive officer of the Company; or 

  

	 	(c)	 the Company requires Executive, without his consent, to move his principal office to a location that would
cause Executive’s regular commute to be both (i) substantially longer than his commute prior to such move and (ii) in excess of one hour. 

(I)     “Notice of Termination” shall have the meaning stated in Section 8.1 hereof. 

(J)     “Term” shall have the meaning stated in Section 3 hereof. 

16.     Section 409A of the Code. It is the intention of the parties that this letter comply with the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and applicable guidance issued thereunder (“Section 409A”), and this letter will be interpreted in a manner intended to comply with Section 409A.
All payments under this letter are intended to be excluded from the requirements of Section 409A or be payable on a fixed date or schedule in accordance with Section 409A(a)(2)(iv). The Company shall be solely responsible and liable for
the satisfaction of all taxes and penalties that may be imposed on you 

  
 9 

 
in connection with this letter (including any taxes and penalties under Section 409A), and shall indemnify and hold you (or any beneficiary) harmless from any or all of such taxes or
penalties. Notwithstanding anything in this letter to the contrary, in the event that you are deemed to be a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) and you are not “disabled” within the meaning
of Section 409A(a)(2)(C), no payments hereunder that are “deferred compensation” subject to Section 409A shall be made to you prior to the date that is six (6) months after the date of your “separation from
service” (as defined in Section 409A and any Treasury Regulations promulgated thereunder) or, if earlier, your date of death. Following any applicable six (6) month delay, all such delayed payments will be paid in a single lump sum on
the earliest permissible payment date. For purposes of this letter, with respect to payments of any amounts that are considered to be “deferred compensation” subject to Section 409A, references to “termination of employment”
(and substantially similar phrases) shall be interpreted and applied in a manner that is consistent with the requirements of Section 409A. 

[Remainder of the page intentionally left blank.] 

  
 10 

 IN WITNESS WHEREOF, the parties have executed and delivered this Agreement. 

 

			
	IBERDROLA USA, INC.

 
			
		
	By:	 	 /s/ Paul K. Connolly, Jr.

			
	Name:	 	Paul K. Connolly, Jr.
	Title:	 	Vice President, General Counsel, and Secretary
	
	IBERDROLA USA MANAGEMENT CORPORATION

 
			
		
	By:	 	 /s/ Paul K. Connolly, Jr.

			
	Name:	 	Paul K. Connolly, Jr.
	Title:	 	Vice President, General Counsel, and Secretary
	
	EXECUTIVE
	
	 /s/ Robert D. Kump

	Robert D. Kump

  
 11 

 Exhibit B 
  

  
 12 

 EMPLOYEE INVENTION AND CONFIDENTIALITY AGREEMENT EXECUTIVE 

THIS EMPLOYEE INVENTION AND CONFIDENTIALITY AGREEMENT (this “Agreement,” which includes all appendices and schedules) is made as of
this 8th day of February, 2001, by and between ENERGY EAST MANAGEMENT CORPORATION (the “Company”) and Robert D. Kump (“me” or “I”). 

WHEREAS, during the course of my employment, the Company will entrust to me as a corporate executive highly sensitive confidential and
proprietary information and will make a substantial investment in developing my skills and expertise as a Manager; 
 WHEREAS, the Company
has a vital interest in maintaining its confidential information and trade secrets, as well as rights to inventions, since doing so allows the Company to compete fairly and enhances the value of the Company to shareholders and job security for
employees; 
 WHEREAS, the Company invests substantial resources in developing the skills and expertise of its employees and in forging
strong and profitable relationships with its customers; and 
 WHEREAS, the Company desires to continue to procure my services and I am
willing to be employed with the Company upon the terms and subject to the conditions set forth below; 
 NOW, THEREFORE, in consideration of
my continued employment with the Company and the other good and valuable consideration described in this Agreement, I agree to be employed by the Company, upon the following terms and conditions: 

1.      Definitions. The definitions of certain capitalized terms used in this Agreement are provided in
Section 17 hereof or parenthetically in the body of this Agreement. 
 2.      Disclosure and
Assignment of Inventions. With respect to Inventions made or conceived by me, whether or not during my hours of employment or with the use of Company facilities, materials, or personnel, either solely or jointly with another or others, during
(i) my employment with the Company, or (ii) within one (1) year after termination of my employment, without royalty or other consideration to me therefor: 

2.1.    I shall inform the Company promptly and fully of such Invention by a written report setting forth in detail the
procedures employed and the results achieved. I shall submit a report to the Company upon completion of any and all studies or research projects undertaken on the Company’s behalf, whether or not a given project has, in my opinion, resulted in
an Invention. 

 2.2.    I shall apply, at the Company’s request and expense, for
United States and foreign letters patent or copyright registration either in my name or otherwise as the Company shall desire. 

2.3.    I shall assign to the Company all of my rights to such Inventions, and to applications for United States and/or
foreign letters patent and copyrights, and to United States and/or foreign letters patent and copyrights granted upon or issued in respect of such Inventions. 

2.4.    I shall acknowledge and deliver promptly to the Company (without charge to the Company but at its expense) such
written instruments and do such other acts, such as giving testimony in support of my inventorship or original authorship, as may be necessary in the opinion of the Company to obtain and maintain United States and/or foreign letters patent and
copyright registrations and to vest the entire right and title thereunto in the Company. 
 2.5    I will not disclose
to any third party outside of the Company, or otherwise publish, any Invention without the Company’s prior written permission. These restrictions will not apply to Inventions in the public domain through disclosures authorized by the Company.

  

	 	3.	 Rights in Other Matter. I agree that: 

3.1.    The Company shall have the royalty-free right to use in its businesses, and to use, make, and sell products,
processes, and/or services derived from any inventions, discoveries, concepts, and ideas, whether or not patentable or copyrightable, including but not limited to processes, methods, formulas, and techniques, as well as improvements thereof or know-how related thereto, which are not within the scope of Inventions but which are conceived or made by me during the hours which I am employed by the Company or with the use or assistance of the Company’s
facilities, materials, or personnel. 
 3.2.    All Works created by me, both past and future, during my employment by
the Company will be and remain exclusively the property of the Company. Each such Work is a “work made for hire” and the Company may file applications to register copyright as author thereof. I assign to the Company all rights, including
all copyright rights throughout the world, including all renewals and extensions thereof, in and to all Works created by me, both past and future, during my employment by the Company. I will take whatever steps and do whatever acts the Company
requests, including but not limited to, placement of the Company’s proper copyright notice on such Works to secure or aid in securing copyright protection and will assist the Company or its nominees in filing applications to register claims of
copyright in such Works. I will not reproduce, distribute, display publicly, or perform publicly, alone or in combination with any data processing or network system, any Works of the Company without the written permission of the Company. 

4.      Confidentiality. I acknowledge that all Confidential Information is and shall at all times remain
the property of the Company. I agree that, except as required in my duties to the Company, I will never, directly, indirectly or otherwise use, disseminate, disclose, lecture upon or 

  
 2 

 
publish articles concerning, Confidential Information without having first obtained written permission from the Company to do so. I will safeguard and maintain on Company premises, to the extent
possible in the performance of my work for the Company, all documents and things that contain or embody Confidential Information. These restrictions will not apply, however, to any information in the public domain through disclosure authorized by
the Company. 
 5.      Return of Documents. Upon termination of my employment with the Company, I will
return to or leave with the Company all documents, records, notebooks, and other repositories of or containing Confidential Information, including all copies thereof, as well as all originals and all copies of Works, or other tangible Company
property, whether prepared by me or others, then in my possession or under my control. 

6.      Nonassertion. Except for matters listed in Appendix A to this Agreement, I will not assert any
rights under any inventions, discoveries, concepts, or ideas or improvements thereof, or know how related thereto, as having been made or acquired by me prior to my being employed by the Company, or since the date of my employment and not otherwise
covered by the terms of this Agreement. 
 7       Nonsolicitation. Subject to the provisions of
Section 10 and independent of any obligations I might have under Section 9, for a period of one (1) year after termination of my employment with the Company for any reason or for no reason, I will not, directly or indirectly,
(a) divert or attempt to divert any person, concern or entity which is furnished services by the Company from doing business with the Company or otherwise to change its relationship with the Company; or (b) induce or attempt to induce any
customer or supplier of the Company to cease being a customer or supplier of the Company or otherwise to change its relationship with the Company; or (c) render services, directly or indirectly, to any Conflicting Organization in connection
with the sale, merchandising, or promotion of a Conflicting Product to any customer or supplier, or prospective customer or supplier, of the Company with whom I had direct or indirect contact or about whom I may have acquired any knowledge during
the two (2) years prior to termination of my employment with the Company. 
 8.      Solicitation of
Employees. I agree that, during my employment with the Company and for a period of one (1) year following termination of my employment with the Company for any or no reason, I shall not, directly or indirectly, solicit or induce, or attempt
to solicit or induce, any employee of the Company to leave the Company for any reason whatsoever, or hire or solicit the services of any employee of the Company. 

9.      Restrictions on Competition. Subject to the provisions of Section 10 and independent of any
obligations that I might have under Section 7, for a period of one (1) year after termination of my employment with the Company for any reason or for no reason, I will not render services, directly or indirectly, within the Territory to or
for any Conflicting Organization, whether as principal or as agent, officer, director, employee, consultant, shareholder, or otherwise, alone or in association with any other person, corporation, or entity. I may, however, accept employment or

  
 3 

 
perform services in the Territory to or for a Conflicting Organization whose business is diversified, and which as to the part of the business in which I am engaged is not a Conflicting
Organization, provided that the Company, prior to my accepting such employment or performing such services, shall receive separate written assurances satisfactory to the Company from such Conflicting Organization and from me, that I will not render
services directly or indirectly in connection with any Conflicting Product. I recognize that the Company conducts or intends to conduct business within the Territory, and therefore, I agree that this restriction is reasonable and necessary to
protect the Company’s business. 
  

	 	10.	 Consideration And Wage Maintenance. 

10.1    If I am entitled to receive Severance Payments as defined in the Severance Agreement based upon the circumstances
surrounding termination of my employment with the Company, then such Severance Payments, and other rights and benefits to which I am entitled under the Severance Agreement, shall constitute additional consideration for my covenants, obligations and
agreements contained in this Agreement and I will not be entitled to receive any payments set forth in Section 10.2 or 10.2.1, below. 

10.2    If I am not entitled to receive Severance Payments as defined in the Severance Agreement based upon the
circumstances surrounding termination of my employment with the Company, then as additional consideration for entering into this Agreement, should the Company terminate my employment for any or no reason, the Company will pay me upon termination of
my employment, severance benefits calculated using the table set forth in Appendix C, attached hereto and incorporated herein (the “Separation Payments”). The Separation Payments will be paid in installments equal to my Company Monthly
Base Pay until paid in full (the “Severance Period”). 
 10.2.1  If my employment terminates, whether voluntarily or
involuntarily, and if I shall be unable to obtain employment consistent with my training and education because of Sections 7 and/or 9 of this Agreement, the Company shall, except as provided in Section 10.1 above, make payments to me equal to
my Company Monthly Base Pay at termination for each month, or pro rata periods less than a month, of unemployment (the “Special Severance Payments”). The Special Severance Payments shall be paid monthly commencing the month after the
Severance Period ends or, if I am not eligible for Separation Payments under Section 10.2, then upon my termination of employment. The Special Severance Payments will cease on the date of the earlier of: (a) the date one year after the
date of my termination of employment; or (b) the date on which I obtain new employment not in conflict with this Agreement (the “Special Severance Period”). The Special Severance Payments shall be made subject to the terms and
conditions of this Agreement. 
 The Company will pay premiums and other payments required for continuation coverage, in accordance with
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (hereinafter “COBRA”) for the duration of the Severance Period and Special Severance period. Thereafter, premiums and other payments required for any further
continuation coverage, in accordance with COBRA, shall be my sole responsibility. 

  
 4 

 10.2.2  Before the close of each month of the Special Severance Period, I will
give to the Company a written account of my employment status substantially in the form of Appendix D, attached hereto and incorporated herein, and such account shall include a statement by me that I was unable to obtain employment because of the
provisions of Sections 7 and/or 9 of this Agreement. Such statement shall be binding on the Company absent a showing by the Company of bad faith by me. 

10.2.3  The Company shall, at its option, be relieved of making any Special Severance Payment for any month during which I have
failed to account to the Company in accordance with Section 10.2.2. 
 10.2.4  If the Company so authorizes, I may accept
employment not necessarily consistent with my training and education, and my Special Severance Payment shall be the difference between the New Monthly Base Pay earned thereby and my Company Monthly Base Pay at termination, and shall be paid for
whichever of the following periods shall be the shortest: (i) the period of time that I shall be so employed, or (ii) the Special Severance Period. 

10.2.5  If the Company so authorizes, I may accept available employment consistent with my training and education and the Company
shall not be obligated to make Special Severance Payments if the Company gives me written permission to accept such available employment. 

11.      Assignability. All my obligations under this Agreement shall be binding upon my heirs, assigns,
and legal representatives and all of the obligations of the Company shall be binding upon its successors and assigns. The Company shall have the right to assign this Agreement to a successor to all or substantially all of the business or assets of
the Company or any division or part of the Company with which I shall be employed. 
 12.      Obligations
Survive Termination of Employment. Termination of my employment, whether voluntary or involuntary, whether for any or no reason, shall not impair or relieve me of my obligations hereunder. 

13.      Governing Law. This Agreement shall be construed in accordance with and governed for all
purposes by the law of the state of New York. The parties believe that the restrictions and covenants in this Agreement are, under the circumstances, reasonable and enforceable. However, if any one or more of the provisions contained in this
Agreement shall, for any reason under the law as it shall then be construed, be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions of this Agreement,
but this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein. Moreover, if any one or more of the 

  
 5 

 
provisions contained in this Agreement shall for any reason be held to be excessively broad as to time, duration, geographical scope, activity, or subject, it shall be construed by limiting and
reducing it, so as to be enforceable to the extent compatible with the applicable law as it shall then appear. 

14.      At-Will Employment. I shall be employed at the pleasure
of the Company, for no definite term, unless otherwise provided by a separate writing authorized by me and the Company. This means that either party may terminate the employment relationship at any time for any or no reason. 

15.      Merger. This Agreement is duly signed by the authorized representatives of the parties and
supersedes and replaces any existing Agreement, written or otherwise, entered into by me and the Company relating generally to the same subject matter. This Agreement does not supersede or modify our respective rights and obligations under the
Severance Agreement. If I am entitled to receive Separation Payments and/or Special Severance Payments pursuant to this Agreement, I will not be eligible for severance or termination payments under any other company plan. However, nothing in this
Agreement shall affect any post-termination compensation and benefits to which I am entitled under the Company’s retirement, insurance and/or benefit plans. 

16.      Remedy. Any breach or violation by me of the Agreement, including but not limited to Sections 7
and 9, will result in immediate and irreparable injury to the Company in amounts difficult to ascertain Therefore, should I breach any portion of this Agreement, I agree that the Company shall be entitled to proceed directly to court to obtain the
remedies of specific performance and injunctive relief (including but not limited to temporary restraining orders, preliminary injunctions and permanent injunctions) without the necessity of posting a bond or other undertakings therewith. 

17.      Definitions. In this Agreement, the following terms shall have the meanings here supplied. Terms
may be used in the singular or plural. 
 17.1.    “Company” means Energy East Management Corporation, its
successors and assigns, and any of its current or future subsidiaries, or organizations controlled by, controlling, or under common control with it. 

17.2.    “I” means the captioned employee, who is also referred to by the use of first person pronouns, such as
“me” and “my.” 
 17.3.    “Confidential Information” means information disclosed to me or
known by me as a consequence of, or through, my employment with the Company (including information conceived, originated, discovered, or developed in whole or in part by me), not generally known in the relevant trade or industry, about the
Company’s business, products, processes, and services, including but not limited to information relating to research, development, inventions, computer program designs, flow charts, source and object codes, products and services under
development, 

  
 6 

 
pricing and pricing strategies, marketing and selling strategies, power generating, servicing, purchasing, accounting, engineering, cost and costing strategies, sources of supply, customer lists,
customer requirements, business methods or practices, training and training programs, and the documentation thereof. 

17.4.    “Inventions” means discoveries, concepts, and ideas, whether or not patentable, copyrightable, or
protectable as a mask work, including but not limited to processes, methods, formulas, and techniques, as well as improvements thereof or know-how related thereto, relating to any current or prospective
activities of the Company with which activities I am acquainted as a consequence of my employment by the Company. 

17.5.    “Conflicting Product” means any product, process, or service of any person or organization other than
the Company, in existence or under development, which substantially resembles and competes with a product, process, or service upon or with which I work during the one (1) year prior to the termination of my employment by the Company or about
which I acquire (at any time) Confidential Information. 
 17.6.    “Conflicting Organization” means any
person or organization or any person or organization controlled by, controlling, or under common control with such person or organization, which is engaged in, or is about to become engaged in, research on or development, production, marketing, or
selling of, a Conflicting Product. 
 17.7.    “Company Monthly Base Pay” means the average monthly stated
remuneration for the period in the twelve (12) months prior to termination of my employment with the Company computed before federal, state, and/or local taxes and other withholding, and exclusive of extra compensation, such as that
attributable to bonuses or overtime, or employee benefits, such as retirement or pension benefits. 
 17.8.    “New
Monthly Base Pay” means my initial monthly remuneration with a subsequent employer. If I shall then be a salesperson paid by my subsequent employer entirely or partially on a commission basis, my New Monthly Base Pay shall be estimated, and
adjusted thereafter, quarterly to conform to my average monthly remuneration from the subsequent employer actually earned for the initial six (6) months in that employ. 

17.9.    “Works” means all material and information created by me in the course of or as a result of my
employment by the Company which is fixed in a tangible medium of expression, including, but not limited to, notes, drawings, memoranda, correspondence, documents, records, notebooks, flow charts, computer programs, and source and object codes,
regardless of the medium m which they are fixed. 
 17.10    “Severance Payments” shall have the meaning set
forth in the Severance Agreement (defined below). 

  
 7 

 17.11    “Severance Agreement” shall mean that Agreement
titled “Severance Agreement” between the Company and me describing our respective rights and obligations in the event of a Change In Control (as defined therein). 

17.12    “Territory” shall mean the states of the United States of America set forth in Appendix B, attached
hereto and incorporated herein. 
 18.      Employee Acknowledgments. I acknowledge that I have read
and understand the provisions of this Agreement, that I have been given an opportunity for my legal counsel to review this Agreement, that the provisions of this Agreement are reasonable, and that I have received a copy of this Agreement. 

WITNESS our hands as of the 15th day of February, 2001. 

 

			
	 

  

	EMPLOYEE
	
	ENERGY EAST MANAGEMENT CORPORATION
		
	By:	 	 

  

	Title:	 	

  
 8 

 APPENDIX A 

List any unpatented or uncopyrighted inventions, discoveries, concepts, ideas, improvements, and developments, whether patentable or unpatentable, copyrighted
or uncopyrightable, made or conceived prior to the date of execution of this Agreement which are excluded from this Agreement. 
  

	
	 None

	    
	    
	    
	    
	    

  

	NOTE:	 If none, state “NONE.” Also, it is not necessary to record issued patents or
copyrights, pending patent or copyright applications, or prior inventions previously assigned or agreed to be assigned to others. 

  

			
	Signed:	 	 

  

	EMPLOYEE
	
	ENERGY EAST MANAGEMENT CORPORATION
		
	By:	 	 

  

	Title:	 	 

  

 APPENDIX B 

The territory shall be the states of: 

Connecticut 
 Maine 

Maryland 
 Massachusetts 

New Hampshire 
 New Jersey 

New York 
 Pennsylvania 

Rhode Island 
 Vermont 

 

			
	Signed:	 	 

  

	EMPLOYEE
	
	ENERGY EAST MANAGEMENT CORPORATION
		
	By:	 	 

  

	Title:	 	

 APPENDIX C 

Separation Payments will be based on the following schedule: 
  

			
	 Service
	 	 Separation Payment

		
	less than 2 years	 	1/2 months’ base pay
	2 but less than 4 years	 	1 months’ base pay
	4 but less than 6 years	 	1-1/2 months’ base pay
	6 but less than 8 years	 	2 months’ base pay
	8 but less than 10 years	 	2-1/2 months’ base pay
	10 but less than 12 year	 	3 months’ base pay
	12 but less than 15 years	 	3-1/2 months’ base pay
	15 or more	 	3-1/2 months’ base pay,
		 	Plus one additional weeks’
		 	base pay for each full year
		 	of service beyond 14 years

 Separation Payments will be computed as of the termination date. Monthly allowances will be determined by dividing the
employee’s current annual base pay by 12 and weekly allowances by dividing the annual base pay by 52. 
  

			
	Signed:	 	 

  

	EMPLOYEE
	
	ENERGY EAST MANAGEMENT CORPORATION
		
	By:	 	 

  

	Title:	 	

 APPENDIX D 

Special Severance Payment Notice Letter 

Energy East Management Corporation 

[                          
                  ] 

[                          
                  ] 
  

	 	Attn.:	 Vice President -
[                            ] 

 

	 	Re.	 Special Severance Payment Notice Letter 

Dear
                                 

By this letter I request that ENERGY EAST MANAGEMENT CORPORATION (EEMC) issue to me a Special Severance Payment as set forth in my agreement with EEMC
titled “Employee Invention and Confidentiality Agreement” dated                             
(the “Agreement”). In support of this request, and as required by Section 10 of the Agreement, I hereby certify that I am currently unemployed and that: 
  

	 	(a)	 during the month of             ,
200      , I made the following efforts to obtain employment: 

 [Describe efforts
made and steps taken to obtain employment.]; and 
  

	 	(b)	 I was unable to obtain employment because of the provisions of Sections 7 and/or 9 of the Agreement.

 Please direct the Special Severance Payment to the address printed beneath my signature. 

 

	
	Very truly yours,
	
	  
 [Name]

	[Address]
	[Phone]

			
	

	  	  
  

Richard R. Benson

Vice President
 Chief
Administrative Officer
  
 1387 Ithaca-Dryden Road / Ithaca, NY
14850-8810
 (607) 347-2351

Fax (607) 347-2568
  

February 20, 2007

 Robert D. Kump 
 77 Woodlands
Drive 
 Falmouth, ME 04105 
 Dear Bob: 

As you are aware, in 2004 a new Section 409A was added to the Internal Revenue Code by the American Jobs Creation Act of 2004 (the
“Act”). The Act has made significant changes in the tax law as it is applied to executive compensation. In late September of 2005 the Internal Revenue Service published proposed regulations relating to compliance with the Act. As a
“key employee” under the Act, if severance payments are made to you after termination from employment under the terms of your current Employee Invention and Confidentiality Agreement with Energy East Management Corporation (the
“Company”) dated February 8, 2001 (“Agreement”) such payments must be made in compliance with the Act or an excise tax equal to 20% plus interest penalties (payable by you) will be imposed on all such payments. 

Under Section 10 of your Agreement you would be entitled to Separation Payments and/or Special Severance Payments if your employment
terminates either voluntarily or involuntarily (and you are not eligible for Severance Payments under your Severance Agreement dated February 8, 2001). These payments commence immediately upon termination of employment. 

If the Separation Payments and/or Special Severance Payments provided for in your Agreement were made as described therein, these payments
could be subject to the excise tax and penalties set forth in the Act and described above. 
 Under the Act, one of the ways to avoid
application of the excise tax and interest penalties to severance due a “key employee” under the terms of an employment agreement such as yours is to defer commencement of payment for six (6) months after separation from employment. We
have agreed that, Section 10.2 of your Agreement will be amended to provide as follows: 
 A. 10.2 If I am not entitled to
receive Severance Payments as defined in the Severance Agreement based upon the circumstances surrounding termination of my employment with the Company, then as additional consideration for entering into this Agreement in the event my employment
terminates either voluntarily or involuntarily I will receive Separation Pay, in a lump sum: (i) one (1) year’s base salary, plus (ii) an amount equal to the self-

 
insured premium equivalent for one (1) year of continuation coverage for health care benefits in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”). This Separation pay will be paid by the Company six (6) months after my employment terminates, subject to withholding for state, federal and local taxes and such other deductions as are required by law. 

B. Sections 10.21 through 10.25 and Appendices “C” and “D” are deleted. 

In all other respects, your Agreement remains in full force and effect. 

Please sign the acknowledgement and agreement set forth below and return one original to me. The other original is for your file. 

 

	
	Very truly yours,
	
	

  

	
	Acknowledged and Agreed:
	 

  

	Robert D. Kump
	
	Date: 2/28/07

 Exhibit C 

Robert D. Kump 
 Expected payments post-retirement 

Based on a retirement date of June 24, 2022, the Company confirms/estimates payments due or payouts eligible and timing per retirement and incentive
plans as follows: 
 Days employed during 2022 (175 days/365) = 47.95% 

2022 EVP– Executive will be eligible for Executive Variable Pay (“EVP”) payout based on objective results/performance calculated using
current salary $705,738, (67.5% target/135% max.) x 47.95% to be paid in March 2023 or when other participants are paid. 
 ’20-’22 LTIP – Executive’s maximum potential shares will be 68,611 (906 days/1096 x 83,000) based on Company performance results to be paid equally in 2023, 2024, 2025 less shares withheld
for applicable taxes. 
 Deferred Comp. Plan – Top-up payment to be made into retiree’s account of
$33,837on June 24, 2022. (Salary $705,738 x 10% x 47.95%) – Account balance to be paid on the first business day after 6 months +1 day post retirement. (Dec. 27, 2022) 

Accrued and Unused Paid Time-off – 109 Hours of PTO will be paid out less any hours used between
June 14 and June 24, 2022. Paid first payroll post retirement date. 
 SERP Account – To be paid on the first business day after 6
months + 1 day post retirement. (December 27, 2022). Amount will reflect closing balance on 10/24/2022 plus interest credited at a rate compounded daily, equivalent to an effective annual rate of 2.34%, consistent with the terms of the current
policy. 
 Pension – Calculation recently provided by HR (100% J & S with 5-year pop-up) - $11,553/mo. 

  
 12

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