Document:

Exhibit 4.6

 Exhibit 4.6 

 

EMPLOYMENT AGREEMENT

RICHARD P. SERGEL 

TABLE OF CONTENTS

	 	PAGE
	 	 
	Employment
       Period	1
	 	 
	Position
    and Duties	2
	 	 
	Compensation	3
	 	 
	Termination
       of Employment	4
	 	 
	Obligations of the Company upon Termination	8
	 	 
	Non-Exclusivity
    of Rights	10
	 	 
	Full Settlement	11
	 	 
	Non-Competition
      Provision and Confidential Information	11
	 	 
	Certain Additional
      Payments by the Company	12
	 	 
	Attorneys'
      Fees	15
	 	 
	Successors	15
	 	 
	Miscellaneous	16

Back to Contents

EMPLOYMENT
    AGREEMENT

THIS
  AGREEMENT by and between, THE NATIONAL GRID GROUP PLC, a public limited company
  incorporated under the laws of England and Wales with registration number 2367004
  ("National Grid") (solely for purposes of Section 3(b)(2) below), NEW
  ENGLAND ELECTRIC SYSTEM, a Massachusetts business trust (the "Company"), and
  RICHARD P. SERGEL (the "Executive"), dated as of the 22nd  day
  of March, 2000.

WITNESSETH THAT

WHEREAS,
  National Grid, IOSTA LLC, a Massachusetts limited liability company directly
  and indirectly wholly owned by National Grid ("IOSTA"),
  and the Company, have entered into an Agreement and Plan of Merger dated as
  of December 11, 1998 (the "Merger Agreement" and the consummation of the transactions
  contemplated by the Merger Agreement, the "Merger"), whereby IOSTA shall be
  merged with and into the Company, at which time
  the separate existence of IOSTA will cease and the Company will continue as the
  surviving entity (the "Surviving
Entity"); and 

  WHEREAS, the Company wishes
      to provide for the orderly succession of management of the
      Company following the effective date of the Merger (the "Effective Time");
  and 

WHEREAS,
    the Company further wishes to provide
    for the employment by the Company
    of the Executive, and the Executive wishes to serve the Company and its affiliated
    entities in the capacities and on the terms and conditions set forth in this
    Agreement; and 

  WHEREAS, this Agreement is the entire agreement between the parties concerning the subject matter hereof and supersedes all prior agreements concerning the same subject, including the severance agreement between the Company and the Executive, dated March 1,1998. 

NOW,
THEREFORE, it is hereby agreed as follows:

  1.     Employment
        Period.

  (a)     The
      Company shall employ the Executive, and the Executive shall serve the Company,
      on the terms and conditions set forth in this Agreement, from
      the
          Effective Time until the date which is the third (3rd) anniversary
      of the Effective Time or such later date as provided in paragraph (b) of
      this
      Section
  1 (the "Employment Period"). This Agreement shall not be
  effective prior
  to the Effective Time. For all periods prior to, but not including, the
  Effective Time, the severance agreement between the Company and the Executive,
  dated March 1, 1998, shall
  remain in full
  force and effect. 

 

Back to Contents

 

(b)     The
    Employment Period shall be extended automatically for one additional day
    as of the second anniversary of the Effective Time and on each day thereafter
    unless and until either the Company or the Executive gives written notice
    to the other that the Employment Period shall not be so
    extended. 

  (c)     Notwithstanding
      the other provisions of this
      Section 1, any termination of employment by the Executive other than for
      Good Reason shall require not less than
      six months' written notice. 

  2.     Position
    and
  Duties.

(a)     During
the Employment Period, the Executive shall serve as President and Chief
Executive Officer of the Company. The Executive's responsibilities as President
and Chief Executive
Officer shall include all aspects of the Company's and
its subsidiaries' businesses. The Executive
shall serve in each such case as an employee of the Company and with such duties
and
responsibilities as are customarily assigned to such positions, and such other
duties and responsibilities
not inconsistent therewith as may from time to time
be assigned to him by the
Board. As President and Chief Executive Officer,
the Executive shall report only to the Board. The Executive shall be a member
of the Board on the first day of the Employment Period, and the Board shall propose
the Executive for re-election to the Board throughout the
Employment Period, In addition, and without further compensation, the Executive
shall serve as an Executive Director
of National Grid, subject to ratification
of National Grid's shareholders, and shall serve as a director and/or officer
of one or more of the Company's other affiliates if so elected or appointed from
time to time. 

  (b)     During
      the Employment Period, and excluding any periods of vacation
      and sick leave to which the Executive is entitled, the Executive shall
      devote reasonable attention and time during normal business hours to the business and
      affairs of the
      Company and its affiliates, as directed by the Board, and, to the extent
      necessary to discharge the responsibilities assigned to the Executive under
      this Agreement, use the Executive's reasonable best efforts to carry out
      such responsibilities faithfully and efficiently. It shall not be considered
      a violation of the foregoing for the Executive to serve on corporate, industry,
      civic, or charitable boards or committees, so long as such activities do
      not materially interfere with the performance
      of the Executive's responsibilities as an employee of the Company
      in accordance with this Agreement.

 

2

Back to Contents

(c)     The
    Executive's services shall be performed primarily at the Company's headquarters,
    currently in Westborough, MA. 

  3.     Compensation. The
      Executive's compensation during the Employment Period shall be determined
      by, and in the sole discretion of, National Grid or any successor thereto,
      subject to Sections 3(a), 3(b), 3(c) and 3(d) and Sections 4(d)(iv), 5
      and 9 hereof. 

(a)     Annual
      Basic Salary. During
        the Employment
    Period, the Executive shall receive an annual base salary of not less than
    $550,000 (the annual base salary in effect from time to time, "Annual Base
    Salary").
    The Annual Base Salary shall be payable in accordance with the Company's
    regular payroll practice for its senior officers, as in effect from time
    to time. During the Employment Period, the Annual Base Salary shall be reviewed
    at least annually, shalll not be less than the minimum base salary set forth
    above. Any increase in the Annual Base Salary shall not limit or reduce any
other obligation of the Company under this Agreement.

  (b)     Incentive
        Compensation. (i) During the Employment Period, the Executive shall
        participate in annual bonus arrangements, the maximum opportunity for
        which shall comprise: (A) 50% of Annual Base Salary,
    payable in cash (the "Annual Cash Bonus")
  and (B) 60% of the Annual Cash Bonus, payable in phantom or similar shares
    of Company stock and subject to a three year vesting requirement and such
    other
  terms and conditions as such incentive plan may provide, based on Company performance
  goals and standards as determined by National Grid. The Executive shall be
    eligible to participate in the above arrangements at a level (in terms of
    the amount and
  types of compensation that the Executive has the opportunity to receive and
    the terms thereof) no less favorable in the aggregate than those arrangements
    which
  are provided to other senior officers of the Company. 

(ii)     During
    the Employment Period, the Executive shall participate in long-term equity
    incentive arrangements under National Grid's Executive Share Option Scheme
    or any successor plan or scheme thereto (the "Scheme"),
    which arrangements shall provide grants to the Executive
    of options (the "National Grid Options") to acquire the common stock of National
    Grid (the "National Grid Common Stock")
    on the same basis as other National Grid directors. National Grid shall grant
to the Executive,
under the
Scheme and
as soon as practicable
following the Effective Time, subject to U.K. and U.S. securities laws, a National
Grid Option, the number of shares of National Grid Common Stock
subject to which shall have an
aggregate fair market value (determined as of the
date of
grant) equal to three
times the Executive's Annual Base Salary (as in effect at the Effective Time).
Further grants under the Scheme shall be made at the sole discretion of National
Grid. For purposes of determining
the number of shares of National Grid Common Stock subject to National
Grid Options to be granted pursuant to the Scheme, the Executive's Annual Base
Salary shall be converted to U.K. Sterling based on the U.S. dollar exchange
rate at the mid-market London closing rate on the applicable date of grant, as
quoted in the Financial Times.

 

3

Back to Contents

 

(c)     Other
       Benefits.

  (i)   
    Supplemental Executive Retirement Plan. During the Employment Period, the
         Executive shall participate in a supplemental executive retirement plan
        ("SERP")
    such that the aggregate value of the retirement benefits that he and his
        spouse  will receive at the end of the Employment Period under all defined
        benefit
    plans of the Company and its affiliates (whether qualified or not) will be
         not less than the aggregate value of the benefits he and his spouse
        would
    have received (and with the same forms of benefit payments) had he continued,
         through the end of the Employment Period, to accrue the supplemental
        retirement
    benefits provided by the terns of the Supplemental Retirement Income Plan
         of the Company as in effect immediately before the Effective Time.

   (ii)   Without
      limiting the generality of the foregoing, during the Employment Period
      and
    thereafter, except to the extent the Executive is already covered under another
      National Grid-provided or employer-provided arrangement providing substantially
      similar payments
    or benefits: (A) the
    Executive shall be entitled to participate in all applicable incentive, savings
     and retirement plans, practices, policies and programs of the Company and

    its subsidiaries to the same extent as other senior officers of the Company;
     and (B) the Executive and/or the Executive's family, as the case may be,
    shall
    be eligible for participation in, and shall receive all benefits under, all
     applicable welfare benefit plans, practices, policies and programs provided

    by the Company and its subsidiaries, including, without limitation, medical,
     prescription, dental, disability, sick leave, employee life insurance,
    group
    life insurance, accidental death and travel accident insurance plans and
    programs,  to the same extent as other senior officers of the Company; provided,
    however,
    except as may be expressly set forth elsewhere in this
    Agreement, nothing contained in this
    section or any other section of this Agreement shall entitle the Executive
     to receive duplicate or multiple payments or benefits under
    the same
    plan or arrangement. 

  (d)     Fringe
        Benefits. During the Employment Period, the Executive shall be
    entitled to receive fringe benefits substantially similar to those enjoyed
    by the Executive immediately prior to the Effective Time and shall be entitled
    to participate in the vacation policy of the Company and avail himself of
    paid holidays (as determined from time to time by the Company) on the same
    terms and conditions as other senior officers of the Company. 

4

Back to Contents

4.   Termination 
  of  Employment. 

  (a)   
    Death or Disability. The Executive's employment shall terminate automatically
    upon the Executive's death during the Employment Period. The Company shall
    be entitled to terminate the Executive's employment because of the
    Executive's Disability during
    the Employment
    Period in accordance with the Company's
    long-term disability
    plan as in effect immediately prior to the Effective Date. 

  (b)   By
    the Company.
    

  (i)    The
      Company may terminate the Executive's employment during the Employment
      Period for
    Cause or without Cause. 

  (ii)   
    "Cause" means: (A) the willful and continued failure by the Executive to
    substantially  perform the Executive's duties hereunder (other than any such
    failure resulting
    from the Executive's incapacity due to physical or mental illness or any
    such  actual or anticipated failure after the issuance of a Notice of Termination

    for Good Reason by the Executive pursuant to Section 4(d)) 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 (B) the willful engaging by the Executive in conduct which is demonstrably
     and materially injurious to the Company and its affiliates taken as a whole,

    monetarily or otherwise. For purposes of the foregoing, 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. 

  (c)   By
    the Executive.

  (i)   The
      Executive may terminate employment for Good Reason or, upon six months'
      prior
    written notice, without Good Reason. 

   (ii)   
    "Good Reason" means the occurrence (without the Executive's express written
     consent) of any one of the following acts by the Company, or failures by
    the
    Company
    to act, unless, in
    the case of any act or failure
    to act
    described
    in paragraph (A), (B), (C)
    or (D) below, such act or failure to act is corrected within thirty days
    of  the Notice of
    Termination given in respect thereof:

5

Back to Contents

  (A)    the
      assignment to the Executive of duties substantially inconsistent with the
      Executive's status as a senior officer of the Company or the duties described
    in Section 2(a) above; 

   (B)    a
        reduction in the Executive's Annual Base Salary or any breach
    by the Company or National Grid of their respective obligations under Sections
    3(b), 3(c) and 3(d) above; 

   (C)    the
        Company requiring the Executive's principal place of employment to be
        anywhere other than at the Company's headquarters, wherever such headquarters
        may be located from time to time, or the relocation of the Company's
        headquarters
    to a location more than 150 miles from Westborough, Massachusetts;
    or 

  (D)    any
      purported termination of the Executive's employment which is not effected
         pursuant to a Notice of Termination satisfying the requirements of Section
        4(d);
    for purposes of this Agreement, no such purported termination shall be effective.

   The Executive's
       right to terminate his employment for Good Reason shall not be affected
      by the
    Executive's incapacity due to physical or mental illness. Except as provided
    below, the
    Executive's  continued employment shall not constitute consent to, or a waiver
    of rights
    with respect to, any act or failure to act constituting Good Reason hereunder.
     No such event described hereunder shall constitute Good Reason unless the

    Executive has given written notice to the Company specifying the event relied
     upon for such termination within one year (but in no event beyond the term

    of this Agreement) from the occurrence of such event. 

  (d)  
      Termination Procedures and Compensation During Dispute.

  (i)   
      Notice of Termination. 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 party hereto in
      accordance
    with Section 12(b) 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 shall set forth in reasonable detail the
    facts and circumstances claimed to provide a basis for termination of the
    Executive's employment under the provision so indicated. 

   A.   Termination
    for Cause.  A Notice of Termination for Cause shall also include
    a copy of a resolution duly adopted by the affirmative vote of not less than
    three-quarters (3/4) of the entire membership of the Board (excluding, for
    this purpose, the Executive if a Board member) (after reasonable notice to
    the Executive and an opportunity for the Executive, together
    with the Executive's counsel, to be heard before the Board) finding that,
    in
the good faith opinion of the Board, the Executive was guilty of
conduct set forth in the definition of Cause herein, and specifying the particulars
thereof in detail.  

 6 
  

Back to Contents

B.   Termination
for Good Reason. A
Notice of Termination for Good Reason shall specify in reasonable detail the
specific
provision(s) in this Agreement and the event(s) relied upon as the basis for
such termination. 

(ii)      Date
      of Termination. Except as otherwise provided in Section 11(c) of this
      Agreement, "Date of
      Termination", with respect
      to any purported termination of the
      Executive's
  employment during
  the Employment Period, shall mean (A)
  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 full-time performance of the Executive's duties during
  such thirty (30)
  day period), and (B) if the
  Executive's employment is terminated for any other reason,
  the date specified in the Notice of Termination (which, in
  the case of a termination by the Company for other than Cause, shall not be
  less than thirty (30) days and, in the case of a termination by the
  Executive other than
  for Good Reason, shall not be less than six (6) months, from the date such
  Notice of Termination is given). 

(iii)     Dispute Concerning
      Termination. If
      within fifteen (15) days
      after any Notice of Termination is given by the Executive
      for Good Reason under Section 4(c)(ii)(A) above ("Special Good Reason"),
      the Company notifies the Executive that
      a dispute
      exists concerning the termination, the Date of Termination
      shall be the date on which the
      dispute is finally resolved, either by mutual written agreement of the
      parties or by a final judgment, order or decree of a court of competent
      jurisdiction (which is not appealable or with respect to which the time
      for appeal therefrom has expired and no appeal has been perfected). 

(iv)     Compensation
      During Dispute. If a Special Good Reason termination is disputed in
      accordance with Section 4(d)(iii), the Company shall pay the Executive
      the full compensation in effect when the notice giving rise to
      such dispute was given
      (including, but not limited to, Annual Base Salary) and continue the Executive
      as a participant in all compensation, benefit and insurance plans in which
      the Executive was participating when the notice giving rise to the dispute
      was given,
      until the
      Date of Termination, as determined in accordance with Section 4(d)(iii).
      Amounts paid under this Section 4(d)(iv) are in addition to all other amounts
      due under this Agreement
      and shall not be offset against or reduce any other amounts due under this
      Agreement.

(v)     No Waiver. The failure to set forth any fact or circumstance in a Notice of Termination shall not constitute a waiver of the right to assert, and shall not preclude the party giving
    notice from asserting, such fact or circumstance in an attempt to enforce
  any right under or provision of this Agreement.  

7

Back to Contents

 

5.     Obligations
    of the Company upon
  Termination.

(a)     By
    the Company other than for Cause, Death or Disability, or by the Executive
    for Good Reason.

(i)     If
during the Employment Period, the Company terminates the Executive's employment,
other than
for Cause, death, or Disability, or the
Executive terminates his employment for Good Reason, the Company shall: (A) pay
the Executive
the Accrued Obligations (as defined in Section 5(b) below) in a lump sum cash
payment within five
(5) business
days of the Date of Termination; (B) pay the Executive the amounts the Executive
would have earned under paragraphs (a) and (b)(i) of
Section 3 (other than stock options) as if he had remained employed through the
end of the Severance Period (as defined below) in
a lump sum cash payment within five (5)
business days of
the Date of Termination and (C) continue to provide the Executive with the compensation
and benefits
set forth in paragraphs
(c) and (d) of Section 3 as if he had remained employed by the Company pursuant
to this Agreement (x) for a period of 36 months, if such termination of employment
occurs prior to the second anniversary of the Effective Time or within 2 years
following a Change in Control or (y) for a period of 18 months, if such termination
of employment occurs following the second anniversary of
the Effective
Time and either prior to a Change in Control or more than 2 years following a
Change in Control and, in either such case, the Executive had then terminated
employment with whatever rights and benefits would have been available to Executive
at that date (the period described in (x) or (y) above, as applicable, the "Severance
Period"); PROVIDED, however, that
for purposes of the foregoing, the Executive shall be deemed to earn, during
each year in such period, a bonus under Section 3(b)(i) equal to the greater
of the average bonus earned by the Executive under all incentive compensation
plans
of the Company in the three years
preceding the Effective Time or the three years preceding the Date of Termination;
PROVIDED further, however, that to the extent any benefits described in paragraphs
(b), (c) and (d) of Section 3 cannot be provided pursuant to the plan or program
maintained by the
Company for  its
executives, the Company shall provide such benefits outside such plan or program
at no additional cost (including, without limitation, tax costs) to the Executive
and his family; and PROVIDED further,
that during any period when the Executive is eligible to receive benefits of
the type
described in clause (B) of paragraph (c)(ii) of Section 3 under another employer-provided
plan, the benefits provided by the Company under this paragraph (a) of Section
5 may be made secondary to those provided under such other plan. In addition
to the foregoing, any restrictions on restricted stock outstanding on the Date
of Termination shall lapse as of the Date of Termination without regard to the
termination of the Executive's employment, any outstanding incentive
  compensation awards with vesting and/or payment contingent upon attainment
  of individual, Company, or affiliate performance goals shall, for purposes
  of awards considered short term by National Grid, be deemed satisfied at 90%
  of "Maximum" level and paid, in a lump sum cash payment within five (5) days
  of the Date of Termination, prorata for the portion of the performance year
  through the Date of Termination and all National Grid Options outstanding as
  of the Date of Termination under the Scheme shall be governed by the terms
  of the Scheme. The payments and benefits provided pursuant to this paragraph
  (a) of Section 5 are intended as liquidated damages for a termination of the
  Executive's employment by the Company other than for Cause, death, or Disability
  or for the actions of the Company leading to a termination of the Executive's
  employment by the Executive for Good Reason, and shall be the sole and exclusive
  remedy therefor. 

 8

Back to Contents

 

(ii)     For
      purposes of this Agreement. "Change in Control" shall mean:

A.     any
    person (as such term is used
    in Section 13(d) of the Securities Exchange
    Act of 1934 (the "Act"), excluding a corporation
    at least 80% of the ownership of which after acquiring its interest is owned
    directly by the holder of common stock of the Company immediately prior to
    such acquisition ("Person")),
    is the beneficial owner, directly or indirectly, of 20% or more of the outstanding
    stock of the Company requiring the filing of a report with the Securities
    and Exchange Commission under Section 13(d) of the 1934 Act; or 

B.     National
    Grid ceases to be the beneficial owner (within the meaning of Rule 13d-3
    under
    the Exchange Act) of more than 60% of the combined voting power of the voting
    securities of the Company; or 

C.     the
    stockholders of the Company approve a plan of complete liquidation or dissolution
    of the
    Company or there is consummated
    an agreement for the sale or disposition by the Company of all or substantially
    all of the Company's assets, other than a sale or disposition by
    the Company
    of all or substantially all of the Company's assets to an entity, more than
    50% of the combined voting power of the voting securities of which are owned
    by National Grid; or 

D.     the
    acquisition by National Grid, The Company, the Surviving Entity or any of
    their affiliates,
    whether by purchase, merger or otherwise, of any regulated utility company,
    the primary place of business of which is in the United States, for a purchase
    price in excess of $1.5 billion; or 

E.     any
    Person, other than a Person who beneficially owns more than 10% of the outstanding
    stock of National Grid at the Effecttive Time, becomes the beneficial
    owner, directly or indirectly, of 30% or more of the outstanding stock of
    National Grid.  

9 

Back to Contents

In no event shall the Merger or any transaction contemplated by the Merger Agreement
    constitute a Change in Control for purposes of this Agreement. 

(b)     Death
        or Disability.  If the Executive's employment is terminated by reason
        of the Executive's death or Disability during the Employment Period,
        the Company shall pay
        to the Executive or, in the case of the Executive's death, to the Executive's
        designated beneficiaries (or, if there is no such beneficiary, to the
        Executive's estate or legal representative) in a lump sum in cash within
        30 days after
        the Date of Termination, the sum of the following amounts (the "Accrued
        Obligations"):
        (i) any portion of the Executive's Annual Base Salary through the Date
        of Termination that has not yet been paid; (ii) in respect of incentives
        awarded under Section 3(b)(i) of this Agreement, an amount representing
        the target Incentive Compensation for the year that would otherwise vest
        and/or become payable within the year in which the Date of Termination
        occurs, computed by assuming that the amount of all such target Incentive
        Compensation would be equal to the amount of such target Incentive Compensation
        that the Executive would have been eligible to earn for such period,
        and multiplying that amount by a fraction, the numerator of which is
        the number
        of days in such period through the Date of Termination, and the denominator
        of which is the total number of days in the relevant period and incentives
        under the Scheme shall be governed by the rules of the Scheme; (iii)
        any compensation previously deferred by the Executive (together with
        any accrued
        interest or earnings thereon) that has not yet been paid; and (iv) any
        accrued but unpaid Incentive Compensation and vacation pay; and the Company
        shall have no further obligations under this Agreement, except as specified
        in Section 6 below. 

(c)     By
    the Company for Cause or by the Executive other than for Good Reason. If
    the Executive's employment is terminated by the Company for Cause during
    the Employment
Period, the Company shall pay the Executive the Annual Base Salary through the
Date of Termination and the amount of any compensation previously deferred by
the Executive (together with any accrued interest or earnings thereon), in each
case to the extent not yet paid, and the Company shall have no further obligations
under this Agreement, except as specified in Section 6 below. If the Executive
voluntarily terminates employment during the Employment Period other than for
Good Reason, the Company shall pay the Accrued Obligations to the Executive in
      a lump sum in cash within 30 days of the Date of Termination, and the Company
      shall
have no further obligations under this Agreement, except as specified in Section
6 below. 

10

Back to Contents

 6.     Non-Exclusivity
      of Rights.  Except as provided in Sections 1.3, and 12 of
      this Agreement, nothing in this Agreement
    shall prevent or limit the Executive's continuing or future participation
    in any plan, program, policy or practice provided by
    the Company or any of its affiliated companies for which the Executive may
    qualify, nor shall anything in this Agreement limit or otherwise affect such
    rights as the Executive may have
    under any contract or agreement with the Company or any of its affiliated
    companies. Vested benefits and other amounts that the Executive is otherwise
      entitled to receive under any other plan, policy, practice, or program
      of; or any
    contract or agreement with, the Company or any of its affiliated companies
    on or after the Date of Termination shall be payable in accordance with the
    terms of each such plan, policy, practice, program, contract, or agreement,
    as the case may be, except as explicitly modified by this Agreement. 

7.     Full
      Settlement.  The Company's obligation to make the payments
      provided for in, and otherwise to perform its obligations under, this Agreement
      shall
      not be affected
      by any set-off, counterclaim, recoupment, defense
      or other claim, right or action that the Company may have against the Executive
      or others. In no event shall the Executive be obligated to seek other employment
      or take any other action by way of mitigation of the amounts payable
      to the Executive under any of the provisions of this Agreement and, except
      as specifically provided in paragraph (a) of Section 5 with respect to
      benefits described in clause (B) of paragraph (c)(ii) of Section 3, the
      amount of any payment or benefit provided for in this Agreement shall not
      be reduced by any compensation earned by the Executive as the result of
      employment by another employer, by retirement benefits, by offset against
      any amount claimed to be owed by the Executive to the Company, or otherwise. 

8.     Non-Competition
Provision and Confidential Information.

        (a)     Without
    prior written consent of the Company, during the period of the Executive's
    employment with the Company and for one year thereafter, the
      Executive shall not, as a shareholder, officer, director, partner, consultant,
      or otherwise, engage directly or indirectly in any business or enterprise
      which is "in competition" with the Company or its successors
      or assigns or affiliates thereof or undertake any action which would be
      injurious
      to the Company or its affiliates or assist the Company's or its affiliates'
      competitors; provided, however, that the Executive's ownership of less
    than five percent of the issued and outstanding voting securities of a publicly
      traded company shall not be deemed to constitute such competition. A business
      or enterprise is deemed to be "in competition" if it is engaged in
      any material business in any state of the United States in which the Company
      or any of its affiliates operates at the "applicable time." "Applicable
      time" means
      (i) during the period of the Executive's employment hereunder, the specific
      date, and (ii) after the Date of Termination, the Date of Termination. 

11

Back to Contents

         (b)     The Executive
    shall hold in a fiduciary capacity for the benefit of the Company all secret
    or confidential information, knowledge or data relating to the
    Company or any of its affiliated companies and their respective businesses
    that the Executive obtains during the Executive's employment by the Company
    or any of its affiliated companies and that is not public knowledge (other
    than as a result of the Executive's violation of this Section 8) ("Confidential
    Information").
    The Executive shall not communicate, divulge, or disseminate Confidential
    Information at any time during or after the Executive's employment with the
    Company, except with the prior written consent of the Company or as
    otherwise required by law or legal process. In no event shall any asserted
    violation
    of the provisions of this Section 8 constitute a basis for deferring or withholding
    any amounts otherwise payable to the Executive under this Agreement. 

        (c)     (i)     The
    Executive acknowledges that if the Executive shall breach or threaten to
    breach any provision of this Section 8, the damages to the Company and its
affiliates may be substantial, although difficult to ascertain, and money damages
will not afford the Company and its affiliates an adequate remedy. Therefore,
if the provisions of this Section 8 are violated, in whole or in part,  the
    Company and its affiliates shall be entitled to specific performance and
    injunctive
relief, without prejudice to other remedies the Company and/or its affiliates
may have at law or in equity. 

                  (ii)     If
    any term or provision of this Section 8, or the application thereof to any
    person
    or circumstances shall, to any extent, be invalid or unenforceable,
    the remainder of this Section 8, or the application of such term or provision
    to persons or circumstances other than those as to which it is held invalid
    or unenforceable, shall not be affected thereby, and each term and provision
    of this Section 8 shall be valid and enforceable to the fullest extent permitted
    by law. Moreover, if a court of competent jurisdiction deems any provision
    hereof to be too broad in time, scope, or area, it is expressly agreed that
      such provision shall be reformed to the maximum degree that would not render
      it unenforceable. 

9.     Certain
      Additional Payments
by the Company.

        (a)     Anything
    in this Agreement to the contrary notwithstanding, in the event it shall
    be determined that any payment or distribution to or for the benefit of the
    Executive (whether
    paid or payable or distributed or distributable pursuant to the terms of
    this Agreement or any other plan, arrangement or agreement with the Company,
    any person whose actions result in a Change in Control or any Person affiliated
    with the Company or such Person, but determined without regard to any additional
    payments required under this Section 9) (a "Payment") would be subject
    to the excise tax imposed by Section 4999 of the Internal Revenue Code of
    1986,
    as amended (the "Code")
    or any interest or penalties are incurred by the Executive with respect to
    such excise tax (such excise tax, together with any such
    interest and penalties, are hereinafter collectively referred to as the "Excise
    Tax"), then the Executive shall be
    entitled to receive an additional payment (a "Gross-Up Payment") in an amount
    such that
after payment by
the Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including, without limitation, any income taxes (and
any interest and penalties imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments. 

12 

Back to Contents

 

(b)     Subject to the provisions of paragraph (c) of this Section 9, all determinations required to be made under this Section 9, including whether and when a Gross-Up Payment is required and the amount of such Gross-up Payment and the assumptions to be utilized in arriving at such determination, shall be made by a nationally recognized certified public accounting firm designated by the Executive (the "Accounting Firm"),
    which shall provide detailed supporting calculations both to the Company
    and the Executive within 15 business days of the receipt of notice from the
    Executive that there has been a Payment, or such earlier time as is requested
    by the Company. All fees and expenses of the Accounting Firm
    shall be borne solely by the Company. Any Gross-Up Payment, as determined
    pursuant to this Section 9, shall be paid by the Company to the Executive
    within five days of the receipt of the Accounting Firm's determination. Any
    determination by the
    Accounting Firm shall be binding upon the Company and the Executive.
    As a result of the
    uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which
    will not have been made by the Company should have been made ("Underpayment")
    consistent with the calculations required to be made hereunder. In the event
    that the
    Company exhausts its remedies pursuant to paragraph (c) of this Section 9
    and the Executive thereafter is required to make a payment of any Excise
    Tax, the Accounting Firm shall
  determine the amount of the Underpayment that has occurred and any such Underpayment
    shall be promptly paid by the Company to or for the benefit of the Executive. 

(c)     The
        Executive shall notify the Company in writing of any claim by the Internal
        Revenue
      Service that, if successful, would require the payment by the Company of
      the Gross-Up Payment. Such notification shall be given as soon as practicable
      but no later than ten business days after the Executive is informed in
      writing of such claim and shall apprise the Company of the nature of such
      claim and the date on which such claim is requested to be paid. The Executive
      shall not pay such claim prior to the expiration of the 30-day period following
      the date on which it gives such notice to the Company (or such shorter
      period ending on the date that any payment of taxes with respect to such
      claim is due). If the
      Company notifies the Executive in writing prior to the expiration of such
      period
      that it desires to contest such claim,
      the Executive shall: 

   13 

Back to Contents

(i)     give
        the Company any infoemation reasonably requested by the Company
  relating to such claim, 

(ii)     take
      such action in connection with contesting such claim as the Company shall
      reasonably request in writing from time to time, including, without limitation,
      accepting legal representation with respect to such claim by an attorney
      reasonably selected by the Company, 

(iii)     cooperate
      with the Company in good faith in order effectively
      to contest such claim, and 

(iv)     permit the
Company to participate in any
proceedings relating to such claim; 

PROVIDED, however, that
    the Company shall bear and pay directly all costs and expenses (including
    additional interest and penalties) incurred in connection
        with such
          contest and shall indemnify and hold the Executive harmless, on an
          after-tax basis, for any Excise
          Tax or income tax (including interest and penalties with respect thereto)
          imposed as a result of such representation and payment of costs and
          expenses. Without limitation on the foregoing provisions of this paragraph
          (c) of Section 9, the Company shall control all proceedings
          taken in connection with such contest and, at its sole option, may
          pursue or forego any and all administrative appeals, proceedings, hearings
          and conferences with the taxing authority in respect of such claim
          and may, at its sole option, either direct the Executive to pay the
          tax claimed and sue for a refund or contest the claim in any permissible
          manner, and the Executive agrees to prosecute such contest to a determination
          before any administrative tribunal, in a court of initial jurisdiction
          and in one or more appellate courts, as the Company shall determine;
          PROVIDED, however, that if the Company directs the Executive to pay
          such claim and sue for a refund, the Company shall advance the amount
          of such payment to the Executive, on an interest-free basis and shall
          indemnify and hold the Executive harmless, on an after-tax basis, from
          any Excise Tax or income tax (including interest or penalties with
          respect thereto) imposed with respect to such advance or with respect
    to any imputed income with respect to such advance; and PROVIDED, further,
    that any extension of the statute of limitations relating to payment of taxes
    for the taxable year of the Executive with respect to which such contested
    amount is claimed to
          be due is limited solely to such contested amount. Furthermore, the
          Company's control of the contest shall be limited to issues with respect
          to which a Gross-Up Payment would be payable hereunder and the Executive
          shall be entitled to settle or contest, as the case may be, any other
          issue raised by the Internal Revenue Service or any other taxing authority.

14

Back to Contents

  (d)     If, after
  the receipt by the Executive of an amount advanced by the Company pursuant
  to paragraph
  (c) of this Section 9, the Executive becomes
  entitled to receive any refund
  with respect to such claim, the Executive shall (subject to the Company's complying
  with the requirements of paragraph (c) of this Section 9) promptly pay to the
  Company the amount of such refund (together with any interest paid or credited
  thereon after taxes applicable thereto). If after the receipt by the Executive
  of an amount advanced by the Company pursuant to paragraph (c) of this Section
  9, a determination is made that the Executive shall not be entitled to any
  refund with respect to such claim and the Company does
  not notify the
  Executive in writing of its
  intent to contest
  such denial of
  refund prior to the
  expiration of 30 days after
  such determination, then such
  advance shall be forgiven and shall
  not be required to be repaid and the amount of such advance shall offset, to
  the extent thereof, the amount of Gross-Up Payment required to be paid. 

10.     Attorneys'
        Fees. The
          Company also shall pay to the Executive, at the conclusion of any contest,
          to the fullest extent permitted by law, all legal fees court costs
          and litigation expenses reasonably incurred by the Executive as a result
          of any contest by the Company, the Executive, or others regarding the
          validity or enforceability of or liability under, or otherwise involving,
          any provision of this Agreement (except to the extent it is determined
          by a court of competent jurisdiction, mediator or arbitrator, as the
          case may be, that the Executive's material claim is, or claims are,
          frivolous or without merit, in which case the Executive shall bear
          all such fees and expenses), together with interest on any delayed
          payment at the applicable federal rate provided for in Section 7872(f)(2)(A)
          of the Code. 

11.     Successors. 

(a)     This
      Agreement is personal to the Executive and, without the prior written consent
      of the Company, shall not be assignable by the Executive otherwise than
      by will or the laws of descent and distribution. This Agreement shall inure
      to the benefit of and be enforceable by the Executive's legal representatives.
      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. 

(b)     This
      Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. 

15 

Back to Contents

(c)     The
        Company shall 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 expressly to assume and agree to perform this
    Agreement in the
  same manner and to the same extent that the Company would have been required
  to perform it if no such succession had taken place. Failure of the Company
  to obtain such assumption and agreement prior to the effectiveness of any such
  succession shall be a breach of this Agreement and shall entitle the Executive
  to compensation from the Company in the same amount and on the same terms as
  the Executive would be entitled to hereunder if the Executive were to terminate
  the Executive’s employment for Good Reason after a Change in Control,
  except that, for purposes of implementing the foregoing, the date on which
  any such
  succession becomes effective shall be deemed the Date of Termination. As used
  in this Agreement, “Company” shall
  mean both the Company as defined above and any such successor that assumes
and agrees to perform this Agreement, by operation of law or otherwise.

12.     Miscellaneous. 

  (a)     This
  Agreement shall be governed by, and construed in accordance with, the laws
  of the Commonwealth of Massachusetts, without reference to principles of conflict
  of laws. The captions of this Agreement are not part of the provisions hereof
  and shall have no force
  or effect.
  This Agreement may not be amended or modified except by a written agreement
  executed by the parties hereto or their respective successors and legal representatives.
  Any action by the Company to amend or modify this Agreement must be approved
  by the Company’s Board of Directors, 

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

	If to the Executive:	Richard P. Sergel
	 	34 Brook Street
	 	Wellesley, MA 02482
	 	 
	If to the Company:	New England
    Electric System 
	 	25 Research
    Drive 
	 	Attention: General
       Counsel
	 	 
	With copy to:	The National
       Grid Group ple
	 	National
    Grid House 
	 	Kirby Corner
       Road 
	 	Coventry
    CV4 8JY
	 	United Kingdom
	 	Attention:
    General Counsel 

16

Back to Contents

	 	 
	 	 
	If to National
    Grid:  	The National
    Grid Group plc
	 	National
        Grid
House
	 	  Kirby
    Corner Road  
	 	Coventry
    CV4 8JY 
	 	United
    Kingdom 
	 	Attention:
    General Counsel 

or to such other address as either party furnishes to the other in writing in accordance with this paragraph (b) of Section 12. Notices and communications shall be effective when actually received by the addressee. 

  (c)     The
  invalidity or unenforceability of any provision of this Agreement shall not
  affect the
  validity or enforceability of any other provision of this Agreement.
  If any provision of this Agreement shall be held invalid or unenforceable in
  part, the remaining portion of such provision, together with all other provisions
  of this Agreement, shall remain valid and enforceable and continue in full
  force and effect to the fullest extent consistent with law. 

(d)     Notwithstanding
    any other provision of this Agreement, the Company may withhold from amounts
    payable under this Agreement all federal, state,
      local, and foreign taxes that are required to be withheld by applicable
        laws or regulations. All cash amounts required to be paid hereunder shall
        be paid in United States dollars. 

  (e)     The Executive’s
  or the Company’s failure to insist upon strict compliance with any provision
  of, or to assert any right under, this Agreement (including,
  without limitation, the right of the Executive to terminate employment for
  Good Reason pursuant to paragraph (c) of Section 4 of this Agreement) shall
  not be deemed to be a waiver of such provision or right or of any other provision
  of or right under this Agreement. 

(f)     The
    Executive and the Company acknowledge that this Agreement supersedes and
    terminates
    any other severance and employment agreements between the
      Executive and the Company or any Company affiliates. 

17 

Back to Contents

 

 
(g)     The
    rights and benefits of the Executive under this Agreement may not be anticipated,
    assigned, alienated or subject to attachment, garnishment, levy, execution
    or other legal or equitable
  process except as required by law. Any attempt by the Executive to anticipate,
  alienate assign, sell, transfer, pledge, encumber or charge the same shall
  be void. Payments
    hereunder shall not be considered assets of the Executive in the event of
    insolvency or bankruptcy. The obligations of the Company and the Executive
    under this Agreement which by their
    nature may require either partial or total performance after the expiration
    of the Employment Period (including, without limitation, those under Sections
  4, 5, 8 and 9 hereof) shall survive such expiration.  

 

  (h)     This
  Agreement may be executed in several counterparts, each of which shall be deemed
  an original, and said counterparts shall constitute but one and the same instrument.

  

  18 

Back to Contents

ASSUMPTION AGREEMENT 

The undersigned,
    NGG Holdings, Inc., as successor to New England Electric System (NEES),
    hereby expressly assumes and agrees to perform that certain Employment Agreement dated
    as of
    March 22, 2000, by and among The National Grid Group plc, NEES, and
    Richard P. Sergel (the Agreement) in the same manner and to the same extent
    that NEES would be required
    to perform said Agreement if no such succession had taken place. 

Dated: March 22,
2000

	 	NGG
          HOLDINGS, INC.
	 	 	 
	 	By:	
	 	  	

    
	 	 	Its:
        Vice President

Back to Contents

IN WITNESS WHEREOF,
    the Executive has hereunto set the Executive's hand and, pursuant to the
    authorization of their respective Boards of Directors, the Company and National
    Grid (with respect to Section 3(b)(ii) only) have caused this Agreement to
    be executed in their name on their behalf, all as of the day and year first
    above written. 

	 	RICHARD
    P. SERGEL
	 	 
	
	 	 	

	 	NEW
    ENGLAND ELECTRIC SYSTEM
	 	 	 
	 	By:	
	 	     	

    
	 	 	Its Sr.
        Vice President
	 	 	 
	 	THE
    NATIONAL GRID GROUP PLC
	 	(in
    respect of Section 3(b)(ii) only)
	 	 	 
	 	By:	
	 	     	

    
	 	 	Its Group
        Chief Executive

19Exhibit 4.7

	      Exhibit 4.7

 

	31 January 2001	 	 
	 	 	 
	 	
	  	 	 	National Grid
          

    Group plc
	 	 	 	 
	Private and Confidential

      

    Dr R J Urwin

c/o The National Grid Group plc

15 Marylebone Road

London NW1 5JD	James Ross	 	15 Marylebone
          Road
	Chairman 	 	London
	 	 	NW1 5JD
	 	 	 
	 	 	Tel +44 (0) 20
          7312 5721
	 	 	Fax +44 (0)20
          7312 5654
	  	 	 
	 	 	 
	 	 	 

 

 

 

	 
	Dear Roger,

	 
	I am delighted to tell you that the Remuneration Committee recently reviewed your salary, taking into account your new responsibilities as Group Chief Executive, and agreed that this should be increased to
 £500,000 with effect from 1 April 2001. This revised salary will be included in your April pay.

	 
	The Remuneration Committee also agreed changes to the annual bonus plans for next year. Details will follow but it was confirmed that the maximum cash bonus would be increased to 60% and the Share Match to
 33.3%.

	 
	I would like to take this opportunity to thank you for all your efforts over the last year and I look forward to working with you on the challenges of the coming year.

	 
	 	 
	With best personal regards
	 
	 
	 
	Yours,
	 
	 

	

	          	Registered Office:	Registered
        in
	15 Marylebone Road	England and Wales
	London	No 2367004
	NW1 5JD	 

 

	THE
 NATIONAL GRID GROUP plc
	 
	AND

	 
	THE NATIONAL GRID COMPANY
        plc
	 
	- and -
	 
	 
	 
	ROGER J
 URWIN      
	 
	 
	 
	 
	 
	 
	SERVICE AGREEMENT

 

INDEX

	Clause
	Description	Page No.
	 	 	 
	1.
	APPOINTMENT AND TERM	3
	 	 	 
	2.
	DUTIES	4
	 	 	 
	3.
	SALARY	5
	 	 	 
	4.
	PENSION	6
	 	 	 
	5.
	INSURANCE BENEFITS	6
	 	 	 
	6.
	PROFESSIONAL FEES	7
	 	 	 
	7.
	CAR	7
	 	 	 
	8.
	EXPENSES	7
	 	 	 
	9.
	HOLIDAYS	7
	 	 	 
	10.
	SICKNESS AND INJURY	8
	 	 	 
	11.
	CODE OF CORPORATE GOVERNANCE	9
	 	 	 
	12.
	INTERESTS IN OTHER BUSINESS	9
	 	 	 
	13.
	CONFIDENTIALITY	10
	 	 	 
	14.
	PROTECTION OF INTERESTS OF THE COMPANIES	11
	 	 	 
	15.
	TERMINATION	12
	 	 	 
	16.
	WAIVER OF RIGHTS	14
	 	 	 
	17.
	DISCIPLINE AND GRIEVANCES	14
	 	 	 
	18.
	INVENTIONS	15
	 	 	 
	19.
	ADDITIONAL PARTICULARS	16
	 	 	 
	20.
	INTERPRETATION	17
	 	 	 
	21.
	ENTIRE AGREEMENT CONTINUITY AND CONDITIONALITY	18
	 	 	 
	22.
	AMENDMENTS	18

-1-

 

Back to Index

 

	Clause
	Description	Page No.
	 	 	 
	23.
	NOTICES	19
	 	 	 
	24.
	JURISDICTION	19

 

-2-

 

Back to Index

	      THIS AGREEMENT BETWEEN:-

    

	 	 
	(1)	THE NATIONAL GRID GROUP plc AND THE NATIONAL GRID COMPANY plc whose registered offices are at National Grid House, Kirby Corner Road, Coventry, CV4 8JY (the “Companies”); and

	 	 
	
(2)	ROGER J URWIN of Treetops, 14 Whitehill Road, Kidderminister, Worcestershire, DY11 6JJ.

	 	 
	      IT IS AGREED as follows:-

    

	 	 
	
1.	APPOINTMENT AND TERM

	 	 
	
1.1	This Agreement is conditional upon the admission to the Official List of The International Stock Exchange of the United Kingdom and the Republic of Ireland Limited of all or any part of the issued ordinary share capital of The National Grid Group plc becoming effective.
 Upon satisfaction of the condition you will be employed by The National Grid Group plc and The National Grid Company plc as an Executive Director and will be appointed to the office of Managing Director Transmission. Your employment and appointment under this
 Agreement shall be deemed to have had effect as from 17 November 1995.

	 	 
	
1.2	Unless terminated in accordance with Clauses 1.3 or 15 hereof, this Agreement may be terminated by the Companies by them giving you not less than two years’ prior written notice at any time on or before 16th November 1996; thereafter by giving not less than one year’s
 prior notice, provided that such notice shall not expire earlier than 16 November 1998. You may terminate this Agreement by giving the Companies one year’s prior written notice, at any time.

	 	 
	
1.3	In any event, this Agreement shall terminate on the last day of the month in which you attain the normal retirement age of the Companies (as varied from

-3-

 

Back to Index

	
 	time to time and as distinct from the normal retirement date applicable to you) unless otherwise specifically agreed in writing between the Companies and you. Where the normal retirement age of the Companies, currently 63, is varied the Companies will make up any
 difference in your pension benefits to those which would have been earned had the normal retirement age of the Companies not been so varied. As outlined in Schedule 2, the normal retirement age for Directors, for pension purposes, is aged 60.

	 	 
	
2.	DUTIES

	 	 
	
2.1	During your employment
          you will:-

	 	 	 
	
 	
(a)	perform any duties as may from time to time be reasonably assigned to you by the Board whether those duties relate to the business of the Companies or to the business of any of their Subsidiaries or Associates (including the holding of offices therein);

	 	 	 
	
 	
(b)	in all respects comply with all lawful directions given by or under the authority of the Board;

	 	 	 
	
 	
(c)	use your best endeavours to promote, develop and extend the business and the interests of the Companies; and

	 	 	 
	
 	
(d)	unless prevented by sickness or injury and except during holidays, devote the whole of your time, attention and ability during your agreed hours of work to the performance of your duties under this Agreement.

	 	 
	
2.2	Your agreed hours of work will be normal business hours and such other hours as may be required for the proper performance of your duties.

-4-

 

Back to Index

	
2.3	You will be based at the Head Office of the Companies. If the Head Office is relocated to a different area of the United Kingdom you shall be entitled to reimbursement of your reasonable relocation expenses in accordance with the Companies’ policy relating to relocation
 expenses for Directors.

	 	 
	
3.	SALARY

	 	 
	
3.1	During your employment you will be entitled to a salary at the rate of £170,000 per annum (or such higher rate as may from time to time be agreed between you and the Companies). In addition, you will have a notional salary, for the purpose of determining Pensionable
 Salary, of £190,000 per annum which will be indexed in line with changes to the Retail Prices Index from 1st October 1995.

	 	 
	
3.2	Your salary will accrue from day to day, be payable by equal monthly instalments on or before the last day of each month, and be inclusive of any remuneration to which you may be or become entitled as a director of the Companies or of any of its subsidiaries or associates
 for the time being.

	 	 
	
3.3	The salary referred to in Clause 3.1 above shall be reviewed at least annually by the Remuneration Committee, the first review taking place on 1st April 1996.

	 	 
	
3.4	In addition to the salary under 3.1 above, subject to satisfying any eligibility criteria and to the rules of the Scheme as they may be altered or amended from time to time, as determined by the Remuneration Committee, you will be entitled to participate in the Group Directors’
 Bonus Scheme and be paid any bonus payment appropriate to your employment as a Director during the year. Any payments made under the Scheme are non-pensionable. A copy of the 1995/96 Scheme is attached at Schedule 1 for information. This will be reviewed by the
 Remuneration Committee annually and any changes will be notified to you in writing.

-5-

 

Back to Index

	
3.5	The Companies may introduce other incentive arrangements for Directors and/or employees, from time to time.

	 	 
	
4.	PENSION

	 	 
	
4.1	In this Clause the “ESPS” means
          the Electricity Supply Pension Scheme and words used in this Clause
          have the same meaning as they have under the provisions of the ESPS.

	 	 
	
4.2	Subject to the terms and conditions (both statutory and non-statutory) in force from time to time in respect of the ESPS Group in which the Companies participate or of which they are the Principal Employer you will be eligible (but not obliged) to be a Member of the ESPS.

	 	 
	
4.3	The Companies provide enhanced pension benefits for Executives as summarised in Schedule 2 attached. Full details relating to your personal position will be forwarded to you under separate cover.

	 	 
	
4.4	A Contracting-out certificate is in force in respect of your employment.

	 	 
	
5.	INSURANCE BENEFITS

	 	 
	
5.1	The Companies will provide you, your spouse and dependent children whilst you are employed under this Agreement with membership of a private medical expenses scheme details of which are available from the Director of Human Resources.

	 	 
	
5.2	The Companies will provide personal accident insurance to you whilst you are employed under this Agreement in accordance with the Companies’ scheme, details of which are available from the Director of Human Resources.

-6-

 

Back to Index

	
6.	PROFESSIONAL FEES

	 	 
	
6.1	The Companies will re-imburse you in full for professional subscriptions for relevant qualifications.

	 	 
	
7.	CAR

	 	 
	
7.1	The Companies will provide a suitable car for your use during the continuance of your employment in accordance with the policy laid down by the Companies from time to time and the Companies shall pay all standing and running costs relating to it (including the cost of
 fuel, road tax, insurance and maintenance). You shall comply with all rules laid down by the Companies from time to time in relation to the Companies vehicles and, unless otherwise agreed, shall return the car on termination of your employment.

	 	 
	
8.	EXPENSES

	 	 
	
8.1	The Companies will reimburse your reasonable travelling, hotel and other expenses properly incurred by you in the performance of your duties under this Agreement and you will provide the Companies with receipts or other evidence as the Board shall require of payment of
 the said expenses. The Companies will reimburse rental and cost of business calls in respect of your home telephone.

	 	 
	
9.	HOLIDAYS

	 	 
	
9.1	You will be entitled
          to 33 days’ holiday in each Holiday Year to be taken at such times
          as may be approved by the Group Chief Executive, in addition to public
          holidays. Holidays may not be carried forward from one Holiday Year
          to the next without the express permission of  the Group Chief Executive.
          No payment will be made by the Companies during the continuance of
          this Agreement in lieu of holidays not taken unless the Remuneration
          Committee at its absolute discretion decides otherwise.

-7-

 

Back to Index

	 	 
	
9.2	Upon termination of this Agreement for whatever reason you shall be entitled to payment in lieu on a pro-rata basis for any holidays not taken which have accrued in the Holiday Year including the Date of Termination or, if appropriate, you shall repay to the Companies any
 salary received in respect of holiday taken prior to the Date of Termination in excess of your proportionate entitlement.

	 	 
	
10.	SICKNESS AND INJURY

	 	 
	
10.1	If you are absent from work as a result of sickness or injury you will:

	 	 	 
	
 	
(a)	notify the Companies as soon as practicable of your absence;

	 	 	 
	
 	
(b)	if the period of absence is less than 8 consecutive calendar days, submit to the Companies on your return a certificate of sickness completed by yourself;

	 	 	 
	
 	
(c)	if it is 8 consecutive days or more, submit to the Companies a medical certificate signed by a practising medical practitioner in respect of each week of absence after the first;

	 	 	 
	
 	
(d)	you will on request by the Companies allow yourself to be examined by the Companies’ doctor who shall report to the Board.

	 	 
	
10.2	You will subject to compliance with sub-clause 10.1 above and to Clause 14 below, be entitled to:

	 	 	 
	
 	
(a)	payment of your salary
          at the full basic rate and maintain other contributions and benefits
          (less any social security or other benefits payable to you) during
          any period of absence from work as a result of sickness or injury up
          to a maximum of a continuous period of 180 days or 130 working days
          in aggregate in any 12 consecutive months;

-8-

 

Back to Index

	 	 	 
	
 	
(b)	payment of your salary at half the full basic rate in addition to other contributions and benefits (less any social security or other benefits payable to you) during any such periods of absence in excess of a continuous period of 180 days or 130 working days in
 aggregate in any 12 consecutive months;

	 	 
	
 	but you will not be entitled to any payment of salary during any absence in excess of 12 months.

	 	 
	
10.3	The Companies will pay statutory sick pay, where appropriate, in accordance with the legislation in force at the time of absence, and any payment of salary in accordance with this Clause will go towards discharging its liability to pay statutory sick pay.

	 	 
	
11.	CODE OF CORPORATE GOVERNANCE

	 	 
	
11.1	The National Grid Group plc’s Code of Corporate Governance provides for you, in furtherance of your duties as a Director of the Companies, to take independent professional advice, if necessary, at the Companies’ expense. The Chairman or the Group Company Secretary
 should be notified if this step is taken, which should only be taken in the best interests of the Companies.

	 	 
	
12.	INTERESTS IN OTHER BUSINESS

	 	 
	
12.1	You shall disclose promptly in writing to the Board all your interests in compliance with the requirements of Companies Act, any other legislation in force and in association with the Companies articles of association and any additional requirements agreed by the Companies
 own code of government in operation.

-9-

 

Back to Index

	
12.2	You shall disclose promptly in writing to the Board any and all non-executive Directorship offices held by you in any company save the Companies’ Subsidiaries or associates for the time being. The Board may, at its absolute discretion, request you to resign any position as
 non-executive Director in the event that they consider the holding of that office to give rise to a conflict of interest. You will be entitled to retain any fee payable to you in respect of two non-executive offices but will account to the Companies for any fees payable in respect of
 additional non-executive offices.

	 	 
	
12.3	You shall comply with any code or regulations issued by the Companies from time to time relating to securities transactions by Directors or senior executives.

	 	 
	
13.	CONFIDENTIALITY

	 	 
	
13.1	You will not during
          the continuance of your employment or afterwards (unless authorised
          to do so by the Board or by a court of competent jurisdiction):-

	 	 	 
	
 	
(a)	use for your own benefit or the benefit of any other person; or

	 	 	 
	
 	
(b)	disclose to any person;

	 	 
	
 	any trade secrets or other confidential information relating to the business affairs, finances, products or processes of the Companies and/or of any of their Subsidiaries or Associates.

	 	 
	
13.2	The restriction in this Clause will not prevent you, after the Date of Termination, from using for your own or another’s benefit, any information which:

	 	 	 
	
 	
(a)	by virtue of your employment, becomes part of your own skill and knowledge; and

-10-

 

Back to Index

	
 	
(b)	apart from the provisions of this Agreement, could lawfully be used by you for that purpose, and in this respect you acknowledge without limitation the restrictions in Section 57 of the Electricity Act.

	 	 
	
14.	PROTECTION OF INTERESTS OF COMPANIES

	 	 
	
14.1	As you are likely to obtain knowledge of not only the Companies’ confidential information but also that of other electricity generators and suppliers provided by those persons to the Companies, you agree that you will not until the expiration of 12 months from the Date of
 Termination directly or indirectly within England and Wales unless express permission is given by the Board and such permission will not be unreasonably withheld:

	 	 	 
	
 	
(a)	be employed or engaged by any person licenced to generate, transmit or supply electricity or any associate thereof in any executive, managerial, technical or advisory capacity; and/or

	 	 	 
	
 	
(b)	be a director or
          other officer of any person authorised to generate, transmit or
          supply electricity to any associate thereof;

	 	 
	
 	BUT this sub-clause shall not prevent you from holding for investment purposes only up to 3 per cent of any class of securities of a company which are quoted or dealt in on a Recognised Stock Exchange.

	 	 
	
14.2	Until the expiration of 12 months from the Date of Termination you will not directly or indirectly solicit or entice away or endeavour to entice away from the Companies or any of their Subsidiaries or Associates any director or senior employee.

	 	 
	
14.3	After the Date of Termination or, if later, the date of your ceasing to be a Director of the Companies you will not represent yourself or permit yourself to be held out as being in any way connected with or interested in the

-11-

 

Back to Index

	
 	business of the Companies; and after that termination you will not represent yourself to be held out as being in any way connected with the business of any of the Subsidiaries or Associates of the Companies, except if and for so long as you remain a director or an employee of
 the Subsidiary or Associate.

	 	 
	
14.4	In this Clause references to acting directly or indirectly include (without prejudice to the generality of that expression) references to acting alone or jointly with or by means of any other person.

	 	 
	
15.	TERMINATION

	 	 
	
15.1	If you have given notice to terminate this Agreement the Companies shall have the right during the notice period or in circumstances where no notice has been given by you the Companies shall have the same right for a period not exceeding twelve months to relieve you of all
 your duties and responsibilities under this Agreement, exclude you from your place of work and/or require you to resign forthwith all offices held in the Companies, their Subsidiaries or Associates or any other appointment held as nominee or representative or any of the
 foregoing.

	 	 
	
15.2	Without prejudice
          to the Companies’ right to summarily dismiss you for gross misconduct
          the Companies will be entitled to terminate your employment without
          notice if you:-

	 	 	 
	
 	
(a)	commit a serious or persistent breach of any term of this Agreement;

	 	 	 
	
 	
(b)	become bankrupt or compound with your creditors; or

	 	 	 
	
 	
(c)	become prohibited by law from being director of a company or of your own volition cease to be a Director of the Companies.

-12-

 

Back to Index

	
15.3	If you are incapacitated by sickness (including mental disorder) or injury from carrying out your duties under this Agreement for a continuous period of 180 days or for an aggregate of 130 working days in any 12 consecutive months, the Companies will be entitled to
 terminate this Agreement by not less than 3 months’ written notice given within 3 months after the end of the 180 or (as the case may be) 130 working days.

	 	 
	
15.4	On the Date of Termination you will promptly:-

	 	 	 
	
 	
(a)	resign (if you have not already done so) from all offices held by you in the Companies and their Subsidiaries and Associates;

	 	 	 
	
 	
(b)	deliver up to the Companies all lists of customers, correspondence, documents, discs, tapes, data listing, codes, designs, drawings and all other materials and property belonging to the Companies or any of their Subsidiaries or Associates which may be in your
 possession or under your control, including any copies; and

	 	 	 
	
 	
(c)	deliver up to the Companies forthwith any car provided under this Agreement;

	 	 
	
 	and you irrevocably authorise the Companies in your name and on your behalf to execute all documents and do all things necessary to effect the resignations referred to above, in the event of your failure to do so.

	 	 
	
15.5	Your employment as Managing Director, Transmission will terminate immediately if you resign as a Director of the Companies or any of their Subsidiaries or Associates (otherwise than at the request or with the prior agreement of the Board which shall not be unreasonably
 withheld) and no claim for damages for wrongful termination of employment shall arise.

-13-

 

Back to Index

	
15.6	Any termination of your employment as Managing Director, Transmission will be without prejudice to your continuing obligations under this Agreement.

	 	 
	
16.	WAIVER OF RIGHTS

	 	 
	
 	If:-

	 	 	 
	
 	
(a)	your employment is terminated:-

	 	 	 	 
	
 	
 	
(i)	by reason of the liquidation of the Companies or either of them for the purpose of amalgamation or reconstruction; or

	 	 	 	 
	
 	
 	
(ii)	as part of any arrangement for the amalgamation of the undertaking of the Companies not involving liquidation or for the transfer of the whole or part of the undertaking of the Companies to any of their Subsidiaries or Associates, and

	 	 	 
	
 	
(b)	you are offered employment of a similar nature with the amalgamated or reconstructed or transferee company on terms not generally less favourable to you than the terms of this Agreement;

	 	 
	
 	you will have no claim against the Companies under this Agreement in respect of that termination.

	 	 
	
17.	DISCIPLINE AND GRIEVANCES

	 	 
	
17.1	A copy of the Employee Rules of the Companies for the time being in force which apply to you by virtue of your employment hereunder can be obtained from the Director of Human Resources.

-14-

 

Back to Index

	
17.2	If you are dissatisfied with any disciplinary decision or have any grievance relating to your employment, you should raise the matter with the Chairman either orally or in writing and the reference will be dealt with by discussion.

	 	 
	
18.	INVENTIONS

	 	 
	
18.1	If at any time during
          your employment you, whether alone or with any other person, make,
          discover or produce any invention, process, development or design which
          relates to, or affects, or in the opinion of the Board is capable of
          being used or adapted for use in or in  connection with, the business
          or any product, process or intellectual property right of The National
          Grid Group plc or any of its Subsidiaries or Associates:-

	 	 	 
	
 	
(a)	the invention, process, development or design will be absolute property of The National Grid Group plc (except to the extent, if any, provided otherwise by Section 39 of the Patents Act 1977); and

	 	 	 
	
 	
(b)	you will immediately disclose it to the Companies in writing.

	 	 
	
18.2	You will, if and when
          required to do so by The National Grid Group plc (whether during your
          employment or afterwards), and at their expense:-

	 	 	 
	
 	
(a)	apply, or join with The National Grid Group plc in applying for letters patent or other protection in any part of the world for any invention, process, development or design to which Clause 18.1 above applies;

	 	 	 
	
 	
(b)	execute or procure
          to be executed all instruments, and do or procure to be done all things,
          which are necessary for vesting such letters patent or other such letters
          patent or other protection in The National Grid Group plc or any other
          Company, or subsequently for  renewing and maintaining the same in
          the name of The National Grid Group plc or its nominee; and

-15-

 

Back to Index

	 	 	 
	
 	
(c)	assist in defending any proceedings relating to, or to any application for, such letters patent or other protection.

	 	 
	
18.3	You agree to irrevocably appoint The National Grid Group plc as your attorney in your name and on your behalf to execute all documents, and do all things, required in order to give full effect to the provisions of this Clause.

	 	 
	
19.	ADDITIONAL PARTICULARS

	 	 
	
 	The following additional particulars are given for the purposes of the Employment Protection (Consolidation) Act 1978:-

	 	 
	
19.1	Subject to Clause 1.1 your employment under this Agreement began on 17th November 1995 and your period of continuous employment began on 30th September 1995.

	 	 
	
19.2	Under the terms of the Redundancy Payments Act Exemption Order (Part VI Employment Protection (Consolidation) Act 1978), your employment with any Existing Body or Public Electricity Supplier counts as continuous employment with the Companies (and for these
 purposes any appointment as chairman or deputy chairman of an Existing Body or Public Electricity Supplier shall be treated as an employment) and your period of continuous employment for these purposes began on 1st March 1971.

	 	 
	
19.3	Except as otherwise provided by this Agreement, there are no terms or conditions of employment relating to hours of work or to normal working hours or to entitlement to holidays (including public holidays) or holiday pay or to incapacity for work due to sickness or injury or
 to pensions or pension schemes.

-16-

 

Back to Index

	
20.	INTERPRETATION

	 	 
	
 	In this Agreement and the Schedule:-

	 	 
	
20.1	“Associate” means a body corporate which for the time being has not less than 20 per cent of its equity share capital beneficially owned by the Companies;

	 	 
	
20.2	“the Board” means the board of executive and non-executive directors of The National Grid Group plc unless expressly stated to mean the Executive Board;

	 	 
	
20.3	“the Date of Termination” means the date upon which your employment under this Agreement terminates whether such termination results from the Companies’ breach and whether such breach is repudiatory or otherwise;

	 	 
	
20.4	“an Existing Body” means the Electricity Council or any Electricity Board (as defined in the Electricity Act 1989);

	 	 
	
20.5	“Holiday Year” means each 12 month period commencing 1st April and ending 31st March;

	 	 
	
20.6	“Public Electricity Supplier” means the companies treated as such in the Electricity Act 1989;

	 	 
	
20.7	“Recognised Stock Exchange” has the meaning attributed to it by Section 841 of the Income and Corporation Taxes Act 1988;

	 	 
	
20.8	“Remuneration Committee” means the committee of the Board bearing that name or, if there is no committee with such name, such other committee as shall from time to time be delegated responsibility by the Board for determining the emoluments of directors of the
 Companies;

-17-

 

Back to Index

	
20.9	“Subsidiary“ has the meaning attributed to it by Section 736 of the Companies Act 1985 and “equity share capital” has the meaning attributed to it by Section 744 of the Companies Act 1985;

	 	 
	
20.10	Unless otherwise stated, and except in Clause 19.2 above, a reference to your employment is to your employment by the Companies under this Agreement;

	 	 
	
20.11	Unless the context otherwise requires, words in the singular include the plural and vice versa, and a reference to a person includes a reference to a body corporate and to an unincorporated body of persons;

	 	 
	
20.12	A reference to a statute or statutory provision includes a reference to that statute or provision as from time to time modified or re-enacted.

	 	 
	
21.	ENTIRE AGREEMENT CONTINUITY AND CONDITIONALITY

	 	 
	
21.1	Except as otherwise expressly provided by its terms and for any detailed rules (not being inconsistent with the express terms hereof) from time to time laid down by the Companies, this Agreement represents the entire understanding.

	 	 
	
21.2	Upon the satisfaction of the condition in Clause 1.1 above, any previous contract of service between you and the Companies or either of them shall be deemed to have been terminated by mutual consent as from 16th November 1995.

	 	 
	
22.	AMENDMENTS

	 	 
	
22.1	Any major changes to your terms and conditions will be subject to mutual agreement by both parties and any other changes will be notified to you, in writing, within four weeks of any such change.

-18-

 

Back to Index

	
23.	NOTICES

	 	 
	
23.1	Any notice to be given under this Agreement will be in writing and will be deemed to be sufficiently served by one party on the other if it is either delivered personally or is sent by prepaid first class post and addressed to the party to whom it is to be given, in your case at your
 last known residence and in the case of the Companies at their registered office, and any such notice if so posted will be deemed to have been served on the day (excluding Sundays and public holidays) following that on which it was posted.

	 	 
	
24.	JURISDICTION

	 	 
	
24.1	This Agreement shall be governed by and interpreted in accordance with the laws of England and each of the parties submits to the jurisdiction of the English courts as regards any claim or matter arising under this Agreement.

-19-

 

Back to Index

	IN WITNESS whereof this Agreement is executed under the seal on the date set out below.

	 	 
	THE COMMON SEAL of

        THE NATIONAL
    GRID GROUP plc

    was hereunto affixed

    in the presence of:-

    Dated
	

	 	 
	 	 

	 
	Member of Board Sealing Committee
	 

	 	

	 	 
	THE COMMON SEAL of

        THE NATIONAL
    GRID GROUP plc

    was hereunto affixed

    in the presence of:- 

    Dated 
	
	 	 
	 	 
	 	 
	 	 

-20-

 

Back to Index

	 	

              
	SIGNED
        SEALED AND DELIVERED by
	 	
	 
	in the presence of:-
	 
	 
	 	 
	Dated	17 November 1995	 
	 	 
	Name:	R. K. DREW	 
	 	 
	Occupation:	Company Secretary	 
	 	 
	Address:	11 Willes Terrace

      Leamington Spa

      CV31 1DL	 

 

-21-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00067-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00067-of-00352.parquet"}]]