Document:

EXHIBIT 10.2

KEY EXECUTIVE SEVERANCE PLAN OF

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Amended effective September 22, 2008

TABLE OF CONTENTS

	
 

	
 

	
 

	
 

	
 

	
 

	 	
Page

	
 

	
 

	 	

	
 

	
ARTICLE I

 PURPOSE OF THE PLAN

	 	
 

	
 

	
1.1

	
Purpose

	 	
1

	
 

	
ARTICLE II

 DEFINITIONS

	 	
 

	
 

	
 

	 	
 

	
2.1

	
“Accrued Obligation”

	 	
1

	
 

	
 

	 	
 

	
2.2

	
“Affiliate”

	 	
1

	
 

	
 

	 	
 

	
2.3

	
“Annual Base Salary”

	 	
1

	
 

	
 

	 	
 

	
2.4

	
“Board”

	 	
1

	
 

	
 

	 	
 

	
2.5

	
“Cause”

	 	
1

	
 

	
 

	 	
 

	
2.6

	
“Change in Control”

	 	
2

	
 

	
 

	 	
 

	
2.7

	
“Code”

	 	
3

	
 

	
 

	 	
 

	
2.8

	
“Committee”

	 	
3

	
 

	
 

	 	
 

	
2.9

	
“Company”

	 	
3

	
 

	
 

	 	
 

	
2.10

	
“Confidential Information”

	 	
3

	
 

	
 

	 	
 

	
2.11

	
“Date of Termination”

	 	
4

	
 

	
 

	 	
 

	
2.12

	
“Disability”

	 	
4

	
 

	
 

	 	
 

	
2.13

	
“Disability
 Effective Date”

	 	
4

	
 

	
 

	 	
 

	
2.14

	
“Eligible Employee”

	 	
4

	
 

	
 

	 	
 

	
2.15

	
“Effective Date”

	 	
4

	
 

	
 

	 	
 

	
2.16

	
“Employer”

	 	
4

	
 

	
 

	 	
 

	
2.17

	
“Good Reason”

	 	
4

	
 

	
 

	 	
 

	
2.18

	
“Other Benefits”

	 	
5

	
 

	
 

	 	
 

	
2.19

	
“Participant”

	 	
5

	
 

	
 

	 	
 

	
2.20

	
“Plan”

	 	
5

	
 

	
 

	 	
 

	
2.21

	
“Prior Equity Awards”

	 	
5

	
 

	
 

	 	
 

	
2.22

	
“Retirement”

	 	
5

	
 

	
 

	 	
 

	
2.23

	
“Schedule A Participant”

	 	
5

	
 

	
 

	 	
 

	
2.24

	
“Schedule B Participant”

	 	
5

i

	
 

	
 

	
 

	
 

	
2.25

	
“Target Bonus”

	 	
5

	
 

	
 

	 	
 

	
2.26

	
“Target Long-Term Incentive”

	 	
6

	
 

	
 

	 	
 

	
 

	
ARTICLE III

 ELIGIBILITY AND PARTICIPATION

	 	
 

	
 

	
 

	 	
 

	
3.1

	
Eligible Employees

	 	
6

	
 

	
 

	 	
 

	
3.2

	
Participation

	 	
6

	
 

	
 

	 	
 

	
3.3

	
Release of Claims

	 	
6

	
 

	
 

	 	
 

	
 

	
ARTICLE IV

 SEVERANCE BENEFITS IN GENERAL

	 	
 

	
 

	
 

	 	
 

	
4.1

	
Termination by Employer Other than for
 Cause

	 	
6

	
 

	
 

	 	
 

	
 

	
ARTICLE V

 SEVERANCE BENEFITS AFTER A CHANGE IN CONTROL

	 	
 

	
 

	
 

	 	
 

	
5.1

	
Termination By Employer Other Than For
 Cause or By Participant For Good Reason (other than Good Reason as described
 in Subsection 2.17(d)) Within Two Years After a Change in Control

	 	
9

	
 

	
 

	 	
 

	
5.2

	
Termination By Participant For Good Reason
 as described in Subsection 2.17(d) Within Two Years After a Change in
 Control

	 	
11

	
 

	
 

	 	
 

	
5.3

	
Termination By Employer For Cause or By
 Participant Other Than For Good Reason

	 	
13

	
 

	
 

	 	
 

	
5.4

	
Death

	 	
13

	
 

	
 

	 	
 

	
5.5

	
Disability

	 	
14

	
 

	
 

	 	
 

	
5.6

	
Retirement

	 	
14

	
 

	
 

	 	
 

	
 

	
ARTICLE VI

 TIMING OF, LIMITATIONS ON AND ADJUSTMENTS TO PLAN PAYMENTS

	 	
 

	
 

	
 

	 	
 

	
6.1

	
Time of Payments

	 	
14

	
 

	
 

	 	
 

	
6.2

	
Payment Offsets

	 	
14

	
 

	
 

	 	
 

	
6.3

	
Cap on Excess Parachute Payments; Gross-Up
 Payments

	 	
14

	
 

	
 

	 	
 

	
6.4

	
Code Section 409A Compliance

	 	
17

	
 

	
 

	 	
 

	
6.5

	
Tax Withholding

	 	
17

	
 

	
 

	 	
 

	
 

	
ARTICLE VII

 RESTRICTIVE COVENANTS

	 	
 

	
 

	
 

	 	
 

	
7.1

	
Confidentiality

	 	
18

	
 

	
 

	 	
 

	
7.2

	
Non-Compete

	 	
18

	
 

	
 

	 	
 

	
7.3

	
Non-Solicitation

	 	
18

	
 

	
 

	 	
 

	
7.4

	
Enforcement

	 	
19

ii

	
 

	
 

	
 

	
 

	
 

	
ARTICLE VIII

 AMENDMENT AND TERMINATION

	 	
 

	
 

	
 

	 	
 

	
8.1

	
Amendment

	 	
19

	
 

	
 

	 	
 

	
8.2

	
Termination

	 	
19

	
 

	
 

	 	
 

	
 

	
ARTICLE IX

 ADMINISTRATION

	 	
 

	
 

	
 

	 	
 

	
9.1

	
Plan Administrator

	 	
19

	
 

	
 

	 	
 

	
9.2

	
Responsibilities of Committee

	 	
19

	
 

	
 

	 	
 

	
9.3

	
Allocation or Delegation of Duties and
 Responsibilities

	 	
20

	
 

	
 

	 	
 

	
9.4

	
Expenses

	 	
20

	
 

	
 

	 	
 

	
9.5

	
Indemnification of Plan Administrator

	 	
20

	
 

	
 

	 	
 

	
9.6

	
Reliance Upon Others

	 	
20

	
 

	
 

	 	
 

	
9.7

	
Notification

	 	
21

	
 

	
 

	 	
 

	
9.8

	
Multiple Capacities

	 	
21

	
 

	
 

	 	
 

	
 

	
ARTICLE X

 CLAIMS PROCEDURE

	 	
 

	
 

	
 

	 	
 

	
10.1

	
Submission of Claims

	 	
21

	
 

	
 

	 	
 

	
10.2

	
Computation and Review of Claims

	 	
21

	
 

	
 

	 	
 

	
 

	
ARTICLE XI

 GENERAL PROVISIONS

	 	
 

	
 

	
 

	 	
 

	
11.1

	
Construction

	 	
22

	
 

	
 

	 	
 

	
11.2

	
Unfunded Plan

	 	
22

	
 

	
 

	 	
 

	
11.3

	
No Right to Continued Employment

	 	
22

	
 

	
 

	 	
 

	
11.4

	
Partial Invalidity

	 	
23

	
 

	
 

	 	
 

	
11.5

	
Successors and Assigns

	 	
23

	
 

	
 

	 	
 

	
11.6

	
Waivers

	 	
23

	
 

	
 

	 	
 

	
11.7

	
Gender and Number

	 	
23

	
 

	
 

	 	
 

	
11.8

	
Headings

	 	
23

	
 

	
 

	
 

	
Schedule A

	
Participants

	
24

	
 

	
 

	
 

	
Schedule B

	
Participants

	
25

	
 

	
 

	
 

	
Exhibit I

	
Form of
 Restrictive Covenant Agreement

	
26

iii

	
 

	
 

	
 

	
Exhibit II

	
Form of
 Separation Agreement and General Release

	
27

ii

ARTICLE I

PURPOSE OF THE PLAN

               1.1
Purpose This Key Executive Severance Plan was established by the Company to
provide severance benefits to certain key executive-level employees of the
Company and its affiliates whose employment is terminated under the
circumstances described herein. 

               The
American Jobs Creation Act of 2004 (the “AJCA”), which became law on October
22, 2004, added new section 409A to the Code and imposes new restrictions on
deferred compensation, including certain severance arrangements. It further
provides that payments upon a separation from service will meet the
requirements of Code Section 409A only to the extent provided by guidance
issued by the Department of Treasury where such payments are made due to a
change in the ownership or effective control of the Company. The AJCA and any
Treasury guidance issued to implement the AJCA may result in additional
restrictions on a Participant’s rights relating to compensation considered to
be deferred under this Plan. This Plan automatically incorporates all
applicable restrictions of the AJCA and such regulations, and the Company will
amend the Plan from time to time to the extent necessary to comply with those
requirements. The timing under which a Participant will have a right to receive
any payment under this Plan will be deemed to be automatically modified, and a
Participant’s rights under the Plan limited to conform to any requirements
under the AJCA and such regulations.

ARTICLE II

DEFINITIONS

               2.1
“Accrued Obligation” shall have the meaning set forth in Section
4.1(i)(A) or Section 5.1(i)(A), as applicable.

               2.2
“Affiliate” means any corporation, trade or business if it or the Company are
members of a controlled group of corporations, are under common control or are
members of an affiliated service group, within the meanings of Sections 414(b),
414(c) and 414(m), respectively, of the Code. The term “Affiliate” shall also
include any other entity required to be aggregated with the Company pursuant to
regulations under Section 414(o) of the Code.

               2.3
“Annual
Base Salary” means the annual rate of base salary payable to a Participant for
services performed for an Employer, as in effect immediately prior to the
Participant’s Date of Termination.

               2.4
“Board” means the
board of directors of the Company.

               2.5
“Cause” means (a) the willful and continued failure
by a Participant to substantially perform his employment duties, (b) the
willful engaging by the Participant in gross misconduct that is materially and
demonstrably injurious to the Employer, (c) the willful violation of the
Company’s Standards of Integrity or other applicable corporate code of conduct,
or (d) the conviction of the Participant of a felony. No act or failure to act
on the part of the Participant shall be considered “willful” unless it is done,
or omitted to be done, by the Participant in bad faith or without reasonable
belief that the Participant’s action or omission was 

in the best
interests of the Employer. Any act or failure to act that is based upon
authority given pursuant to a resolution duly adopted by the Board, or the
advice of counsel for the Employer, shall be conclusively presumed to be done,
or omitted to be done, by the Participant in good faith and in the best
interests of the Employer.

               Notwithstanding
the forgoing, for purposes of the Plan, the termination of a Participant’s
employment with an Employer shall not be deemed to be for Cause unless such
termination is effected in accordance with the following procedures. The
Employer shall give the Participant written notice (“Notice of Termination for
Cause”) of its intention to terminate the Participant’s employment for Cause,
setting forth in reasonable detail the specific conduct of the Participant that
it considers to constitute Cause. Such notice shall be given no later than 60
days after the act or failure (or the last in a series of acts or failures)
that the Employer alleges to constitute Cause. The Participant shall have 30
days after receiving the Notice of Termination for Cause in which to cure such
act or failure, to the extent such cure is possible. In the case of a
termination under clause (a), (b) or (c) above, if the Participant fails to
cure such act or failure to the reasonable satisfaction of the Employer, the
Employer shall give the Participant a second written notice stating that in the
good faith opinion of the Employer, the Participant is guilty of the conduct
described in the Notice of Termination for Cause and that such conduct
constitutes Cause under the Plan.

               2.6
“Change in Control” means the occurrence of any of the following
events:

          (a)
any “person” (within the meaning of Section 13(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) is or becomes the beneficial owner
within the meaning of Rule 13d-3 under the Exchange Act (a “Beneficial Owner”),
directly or indirectly, of securities of the Company (not including in the
securities beneficially owned by such person any securities acquired directly
from the Company or its Affiliates) representing 25% or more of the combined
voting power of the Company’s then outstanding securities, excluding any person
who becomes such a Beneficial Owner in connection with a transaction described
in clause (i) of paragraph (c) below; or

          (b)
the following individuals cease for any reason to constitute a majority of the
number of directors of the Company then serving: individuals who, on the
Effective Date, constitute the Board and any new director (other than a
director whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election by the
Company’s stockholders was approved or recommended by a vote of at least
two-thirds of the directors then still in office who either were directors on
the Effective Date or whose appointment, election or nomination for election
was previously so approved or recommended; or

          (c)
there is consummated a merger or consolidation of the Company or any direct or
indirect wholly-owned subsidiary 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 to such merger or
consolidation continuing to represent (either by remaining outstanding or by
being converted into voting securities of

2

the surviving
entity or any parent thereof), in combination with the ownership of any trustee
or other fiduciary holding securities under an employee benefit plan of the
Company or of its Affiliates, at least 75% of the combined voting power of the
securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no person is or becomes the Beneficial Owner, directly
or indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company’s then outstanding securities; or

          (d)
the shareholders 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, at least 75% of the combined voting power of
the voting securities of which are owned by stockholders of the Company in
substantially the same proportions as their ownership of the Company
immediately prior to such sale.

          Notwithstanding
the foregoing, a “Change in Control” shall not be deemed to have occurred by
virtue of the consummation of any transaction or series of integrated
transactions immediately following which the record holders of the common stock
of the Company immediately prior to such transaction or series of transactions
continue to have substantially the same proportionate ownership in an entity
which owns all or substantially all of the assets of the Company immediately
following such transaction or series of transactions.

               2.7 “Code”
means the
Internal Revenue Code of 1986, as amended, and the regulations promulgated
thereunder.

               2.8
“Committee” means the
Organization and Compensation Committee of the Board or any successor of such
Committee.

               2.9
 “Company” means Public
Service Enterprise Group Incorporated and any successors thereto.

               2.10
“Confidential
Information” means all trade secrets, proprietary and
confidential business information belonging to, used by, or in the possession
of the Company or any of its Affiliates, including but not limited to
information, knowledge or data related to business strategies, plans and
financial information, mergers, acquisitions or consolidations, purchase or
sale of property, leasing, pricing, sales programs or tactics, actual or past
sellers, purchasers, lessees, lessors or customers, those with whom the Company
or its Affiliates has begun negotiations for new business, costs, employee
compensation, marketing and development plans, inventions and technology,
whether such confidential information, knowledge or data is oral, written or
electronically recorded or stored, except information in the public domain,
information known by the Participant prior to employment with an Employer, and
information received by the Participant from sources other than the Company or
its Affiliates, without obligation of confidentiality.

3

               2.11
 “Date of Termination” means the
date of a Participant’s death, Disability Effective Date, or the date on which
the termination of the Participant’s employment by an Employer for Cause or
without Cause or by the Participant for Good Reason or without Good Reason,
including Retirement, is effective, as the case may be.

               2.12
“Disability” means that
the Participant (a) is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, or (b) is, by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than 12 months,
receiving income replacement benefits for a period of not less than three
months under an accident or health plan covering employees of an Employer.

               2.13
“Disability Effective Date” means the
30th day after the Participant’s receipt of written notice of the Employer’s intention
to terminate the Participant’s employment on account of Disability, provided
that, within the 30 days after the Participant’s receipt of such notice, the
Participant shall not have returned to full-time performance of his employment
duties.

               2.14
“Eligible
Employee” means an individual who is designated as such in accordance with
Section 3.1.

               2.15
“Effective
Date”
means the effective date of the Plan, December 20, 2004.

               2.16
“Employer” means the
Company and each Affiliate, and any successors thereto.

               2.17
 “Good Reason” means, 

	
 

	
 

	
 

	
            (a)
 any reduction in the Participant’s Annual Base Salary, Target Bonus or Target Long-Term Incentive,
 other than reductions pursuant to a broad-based compensation reduction
 program or policy affecting the Participant and all similarly situated
 employees of the Employer;

          (b)
any adverse change in the Participant’s title, authority, duties, or
responsibilities or the assignment to the Participant of any duties or
responsibilities inconsistent in any respect with those customarily associated
with the position of the Participant immediately prior to the Change in
Control;

          (c)
the failure of any successor to the Company to assume this Plan in accordance
with Section 11.5(b); 

          (d)
where the only comparable position offered to the Participant within the
Employer following a change in control would not otherwise meet the
requirements of subsections (a) and (b) of this section 2.17, but require the
Participant to increase his or her one-way commuting distance from his or her
principal residence by more than 50 miles; or

4

          (e)
any other material breach of the terms of the Plan by the Company that either
is not taken in good faith or, even if taken in good faith, is not remedied by
the Company promptly after receipt of notice thereof from the Participant.

          Notwithstanding
the forgoing, for purposes of the Plan, the termination of a Participant’s
employment with an Employer shall not be deemed to be for Good Reason unless
such termination is effected in accordance with the following procedures. The
Participant shall give his Employer a written notice (“Notice of Termination
for Good Reason”) of the termination, setting forth in reasonable detail the
specific acts or omissions of the Employer that constitute Good Reason and the
specific provision(s) of the Plan on which the Participant relies. Unless the
Committee determines otherwise, a Notice of Termination for Good Reason by the
Participant must be made within 60 days after the Participant first has actual
knowledge of the act or omission (or the last in a series of acts or omissions)
that the Participant alleges to constitute Good Reason, and the Employer shall
have 30 days from the receipt of such Notice of Termination for Good Reason to
cure the conduct cited therein. A termination of employment by the Participant
for Good Reason shall be effective on the final day of such 30-day cure period
unless prior to such time the Employer has cured the specific conduct asserted
by the Participant to constitute Good Reason to the reasonable satisfaction of
the Participant.

          For
purposes of the Plan, a Participant’s determination that an act or failure to
act constitutes Good Reason shall be presumed to be valid unless such
determination is decided to be unreasonable by the Committee or its delegate
pursuant to Article IX.

               2.18
“Other Benefits” shall have the meaning set forth in Section
5.1, as applicable.

               2.19
“Participant” means an Eligible Employee who has satisfied the conditions for
participation in the Plan, as set out in Section 3.2, and is listed on either
Schedule A or Schedule B hereto, as the same may be amended from time to time.

               2.20
“Plan” means this Key Executive Severance Plan of Public Service Enterprise
Group Incorporated, as set forth herein and as may be amended, modified or
supplemented from time to time.

               2.21
“Prior Equity Awards” shall have the meaning set forth in Section
5.1(ii).

               2.22
“Retirement” means retirement under the terms of the Retirement Plan, as defined in
Section 5.1(vi)(A).

               2.23
“Schedule A Participant” shall mean a Participant listed on Schedule A
hereto.

               2.24
“Schedule B Participant” shall mean a Participant listed on Schedule B
hereto.

               2.25
“Target Bonus” means the Participant’s target annual bonus, if any, under the
applicable annual incentive compensation plan of the
Company for the fiscal year in which the Date of Termination occurs.

5

          2.26
“Target Long-Term Incentive” means the Participant’s target long-term
incentive award, if any, under the applicable long-term incentive compensation
plan of the Company. 

ARTICLE III 

ELIGIBILITY AND PARTICIPATION

          3.1
Eligible Employees. eligibility to participate in the Plan shall be
limited to certain key executives of an Employer who (a) are not parties to
individual employment or change in control agreements that provide for
severance benefits, and (b) are designated, by duly adopted resolution of the
Committee, as Eligible Employees. 

          3.2
Participation. As a condition to becoming a Participant and being
entitled to the benefits and protections provided under the Plan, each Eligible
Employee must execute and deliver to the Company, within 30 days after the
later of the Effective Date and the date such individual is designated by the
Committee as an Eligible Employee, a written agreement in the form attached
hereto as Exhibit I (or in such other form as may be satisfactory to the
Company) to be bound by the restrictive covenants set forth in Sections 7.1,
7.2 and 7.3. Schedules A and B hereto list the Eligible Employees who have
satisfied the conditions for Plan participation and the date as of which each
such Eligible Employee became a Participant. The Committee shall cause
Schedules A and B to be updated from time to time to reflect the Participants
who are currently participating in the Plan. 

          3.3
Release of Claims. Notwithstanding anything in the Plan to the contrary,
payment of any benefits under the Plan is expressly contingent upon the
Participant’s execution and delivery to the Company, within 45 days after the
Participant’s Date of Termination, of a written agreement, in the form attached
hereto as Exhibit II (or in such other form as may be satisfactory to the
Company) wherein the Participant releases and discharges the Company and each
of its Affiliates of any and all claims against the Company and its Affiliates
related in any way to the Participant’s employment with an Employer and the
termination of such employment. 

ARTICLE IV 

SEVERANCE BENEFITS IN GENERAL

          4.1
Termination by Employer Other than for Cause. Subject to Section 3.3 and
Article VI, if an Employer shall terminate a Participant’s employment other
than for Cause, death or Disability: 

          (a)
the Company shall pay to the Participant, in a lump sum in cash, the aggregate
of the amounts set forth in clauses (i) and (ii) below: 

	
 

	
 

	
 

	
 

	
 

	
(i) The sum of: 

	
 

	
 

	
 

	
 

	
 

	
(1)

	
the
 Participant’s base salary through the Date of Termination; 

6

	
 

	
 

	
 

	
 

	
 

	
 

	
(2)

	
the product
 of (x) the Participant’s Target Bonus and (y) a fraction, the numerator of
 which is the number of days in the current calendar year through the Date of
 Termination, and the denominator of which is 365; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
(3)

	
any accrued
 vacation pay; 

	
 

	
 

	
 

	
 

	
 

	
 

	
in each case
 to the extent not theretofore paid (the sum of the amounts described in
 clauses (1), (2) and (3) shall be hereinafter referred to as the “Accrued
 Obligations”); and 

	
 

	
 

	
 

	
 

	
          (ii)
 An amount equal to the product of 1.0 times (0.5 times if the Participant
 were employed less than one year) the sum of the Participant’s Annual Base
 Salary and Target Bonus.

          (b)
Long-Term Incentive Awards Any stock awards, stock options, stock
appreciation rights or other equity-based awards that were outstanding
immediately prior to the Date of Termination (“Prior Equity Awards”) shall vest
and/or become exercisable in accordance with the underlying plan for such Prior
Equity Award; 

          (c)
Annual Incentive Awards. As provided in subparagraph (a)(i)(2),
Participant shall receive a prorated annual incentive award pursuant to the
performance incentive program, if applicable, for the calendar year in which
the Participant’s Termination of Employment occurs. The award shall be
calculated based solely on 100 percent of the target incentive award and
prorated based on the number of days of employment in the calendar year in
which the participant’s Termination of Employment occurs through the employee’s
Termination Date. Annual incentive awards with respect to the calendar year in
which a Participant’s Termination Date occurs will be paid at the same time as
awards for such calendar year are paid to active employees of the Employer. 

          (d)
Outplacement Services. Outplacement services approved by the Committee,
which may include individual or group counseling and administrative assistance
or workshops, shall be available beginning on the participant’s Termination
Date or such earlier date designated by the participant’s business unit
leadership. Outplacement services shall continue to be available for the period
up to 12 months. 

          (e)
Educational Assistance. The Employer shall reimburse 90 percent of the
costs (up to a total of $3,000) of tuition, required books and mandatory fees
incurred for classes approved by the Committee that are successfully completed
within two years after a Participant’s Termination Date. “Successful
completion” shall mean the attainment of a final course grade of “C” or better.
Reimbursement will be made only upon the submission of bills or receipts in
such form as the Committee may require. 

          (f)
Health Care Benefits. 

          Retiree
Health Care Coverage. A Participant who has not otherwise satisfied the
eligibility criteria for participation prior to his or her Termination Date,
shall be entitled to 

7

elect retiree coverage under
the Employer’s applicable retiree group health care plans as though he or she
otherwise satisfied such plans’ eligibility requirements if: 

	
 

	
 

	
 

	
 

	
(A)

	
the
 Participant has attained age 50 and completed ten or more Years of Service as
 of his or her Termination Date but the sum of the Participant’s age and Years
 of Service is less than 80; or 

	
 

	
 

	
 

	
 

	
(B)

	
the Participant
 has attained age 49 and completed 20 or more Years of Service as of his or
 her Termination Date but the sum of the Participant’s age and Years of
 Service is less than 80. 

	
 

	
 

	
 

	
 

	
Such
 coverage shall commence no earlier than the Participant’s Termination Date.
 The Participant shall be charged the full cost of retiree coverage under
 these plans. 

          COBRA
Continuation Coverage. Each Participant who is not eligible for, or does
not elect, the retiree health care coverage described in this subsection (f)
shall be entitled, pursuant to any continuation coverage rights under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”),
to continue individual and dependent coverage under the Company’s group health
care plans following the Participant’s Termination Date. If continuation
coverage is elected, the Employer shall pay the same portion of the cost of
medical coverage that it paid immediately prior to the Participant’s
Termination Date for active employees during the one-year period following the
participant’s termination date that the Participant is receiving severance pay
under Section 4.1, and the Participant shall pay the balance. The Participant
shall be charged the full expense of medical coverage (102 percent of the cost
of coverage) during the remainder of the statutory coverage period, if any, and
the full expense of dental and (if applicable) vision and hearing coverage (102
percent of the cost of coverage) during the entire statutory coverage period. 

          (g)
Life Insurance. A Participant who is not eligible for coverage under the
Employer’s retiree life insurance plan shall be entitled, for the one-year
period following the Participant’s termination date to life insurance coverage
at the Employer’s expense in an amount equal to the group term life insurance
coverage in effect for such Participant under the Employer’s group term life
insurance plan for active employees as of his or her Termination Date. 

          (h)
Other Benefits. A Participant shall not be entitled to any severance,
separation or early retirement incentive pay or benefits other than as provided
hereunder or under any qualified or nonqualified retirement plan or deferred
compensation arrangement maintained by the Employer. Except as provided in the
foregoing sentence, a Participant’s rights under any other employee benefit
plans maintained by the Company or an Affiliate shall be determined in
accordance with the provisions of such plans, including the Company’s right to
amend or terminate such plans at any time. The amounts and benefits payable to
the Participant pursuant to sub paragraphs (a) (iii), (b) (c), (d), (e), (f),
and (g) shall be hereinafter referred to as the “Other Benefits”). 

8

ARTICLE V 

SEVERANCE BENEFITS AFTER A CHANGE IN CONTROL

          5.1
Termination By Employer Other Than For Cause or By Participant For Good
Reason (other than Good Reason as described in Subsection 2.17(d)) Within Two
Years After a Change in Control. Subject to Section 3.3 and Article VI, if,
within two years following the occurrence of a Change in Control, either (a) an
Employer shall terminate a Participant’s employment other than for Cause, death
or Disability or (b) a Participant shall voluntarily terminate his employment
for Good Reason pursuant to Subsections 2.17 (a), (b), (c) or (e): 

	
 

	
 

	
 

	
 

	
 

	
 

	
          (i) the Company
 shall pay to the Participant, in a lump sum in cash, the aggregate of the
 amounts set forth in clauses A and B below: 

	
 

	
 

	
 

	
 

	
 

	
 

	
A.

	
 

	
The sum of:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(1)

	
the
 Participant’s base salary through the Date of Termination; 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(2)

	
the product
 of (x) the Participant’s Target Bonus and (y) a fraction, the numerator of
 which is the number of days in the current calendar year through the Date of
 Termination, and the denominator of which is 365; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(3)

	
any accrued
 vacation pay; 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
in each case
 to the extent not theretofore paid (the sum of the amounts described in
 clauses (1), (2) and (3) shall be hereinafter referred to as the “Accrued
 Obligations”); and

	
 

	
 

	
 

	
 

	
 

	
 

	
B.

	
(1)

	
in the case
 of a Schedule A Participant, the amount equal to the product of two times the
 sum of the Schedule A Participant’s Annual Base Salary and Target Bonus; or 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(2)

	
in the case
 of a Schedule B Participant, the amount equal to the product of three times
 the sum of the Schedule B Participant’s Annual Base Salary and Target Bonus. 

	
 

	
 

	
 

	
 

	
 

	
 

	
          (ii)
 any stock awards, stock options, stock appreciation rights or other
 equity-based awards that were outstanding immediately prior to the Date of Termination
 (“Prior Equity Awards”) shall vest and/or become exercisable in accordance
 with the underlying plan for such Prior Equity Award; 

	
 

	
 

	
 

	
          (iii)
 the Company shall pay the cost of the continued coverage of the Participant
 and/or the Participant’s family under the Company’s medical and dental
 employee benefit plans for 18 months after the Date of Termination provided
 that the Participant makes an election to continue such coverage in the
 Company’s medical and dental employee benefit plans under COBRA, subject to
 the requirements and limitations 

9

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
thereof, and
 thereafter for an additional period of six months, in the case of a Schedule
 A Participant, or 18 months, in the case of a Schedule B Participant;
 provided however, that if the Participant becomes re-employed with another
 employer and is eligible to receive medical or dental benefits under another
 employer provided plan, the medical and dental benefits provided by the
 Company under this Plan shall be secondary to those provided under such other
 plan during the applicable period of eligibility; 

	
 

	
 

	
 

	
 

	
 

	
          (iv)
 for two years after the Date of Termination in the case of a Schedule A
 Participant or three years after the Date of Termination in the case of a
 Schedule B Participant (or such longer period as may be provided by the terms
 of the appropriate plan, program, practice or policy), the Company shall
 continue benefits (other than medical and dental benefits, but including
 financial planning assistance) to the Participant and/or the Participant’s
 family at least equal to those which would have been provided to them in
 accordance with the welfare plans, programs, practices and policies
 maintained by the Company if the Participant’s employment had not been
 terminated or, if more favorable to the Participant, as in effect generally
 at any time thereafter with respect to other peer executives of the Employer
 and their families;

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
          (v)
 the Participant’s eligibility (but not the time of commencement of such
 benefits) for retiree benefits pursuant to the welfare plans, programs,
 practices and policies maintained by the Company shall be determined as if
 the Participant had (A) remained employed until two years (in the case of a
 Schedule A Participant) or three years (in the case of a Schedule B
 Participant) after the Date of Termination and (B) retired on the last day of
 such period;

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
          (vi)
 the Participant shall be paid, in a lump sum payment in cash, an amount equal
 to the excess of:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
          (A)
 the actuarial equivalent of the benefit under the Company’s applicable
 qualified defined benefit retirement plan in which the Participant is
 participating immediately prior to his Date of Termination (the “Retirement
 Plan”) (utilizing the rate used to determine lump sums and, to the extent
 applicable, other actuarial assumptions no less favorable to the Participant
 than those in effect under the Retirement Plan immediately prior to the
 Effective Date), any supplemental executive retirement plans (“SERPs”) in
 which the Participant participates and, to the extent applicable, any other
 defined benefit retirement arrangement between the Participant and the
 Company (“Other Pension Benefits”) which the Participant would receive if the
 Participant’s employment continued for two or three additional years (for
 Schedule A Participants and Schedule B Participants, respectively) beyond the
 Date of Termination and, assuming that the Participant’s compensation for
 such deemed additional period was the Participant’s Annual Base Salary as in
 effect immediately prior to the Date of Termination and assuming a bonus in
 each year during such deemed additional period equal to the Target Bonus,
 over

10

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
          (B)
 the actuarial equivalent of the Participant’s actual benefit (paid or
 payable), if any, under the Retirement Plan, the SERPs and Other Pension
 Benefits as of the Date of Termination (utilizing the rate used to determine
 lump sums and, to the extent applicable, other actuarial assumptions no less
 favorable to the Participant than those in effect under the Retirement Plan
 immediately prior to the effective date of the Change in Control);

	
 

	
 

	
 

	
 

	
 

	
 

	
          (vii)
 any compensation previously deferred (other than pursuant to a tax-qualified
 plan) by or on behalf of the Participant (together with any accrued interest
 or earnings thereon), whether or not then vested, shall become vested on the
 Date of Termination and shall be paid in accordance with the terms of the
 plan, policy or practice under which it was deferred to the extent permitted
 by guidance issued by the U.S. Department of Treasury under Section 409A of
 the Code;

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
          (viii)
 the Company shall, at its sole expense as incurred, provide the Participant
 with outplacement services suitable to the Participant’s position for a
 period not to exceed one year following the Date of Termination with a
 nationally recognized outplacement firm; and,

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
          (ix)
 to the extent not theretofore paid or provided, the Company shall pay or
 provide to the Participant any other amounts or benefits required to be paid
 or provided or which the Participant is entitled to receive under any plan,
 program, policy, practice, contract or agreement of the Company (or other
 Employer), including earned but unpaid stock and similar compensation, but
 excluding medical or dental benefits if the Participant is eligible for such
 benefits to be provided by a subsequent employer, and benefits payable under
 any severance plan or policy (such other amounts and benefits that are
 payable to the Participant shall be hereinafter referred to as the “Other
 Benefits”).

	
 

	
 

	
 

	
 

	
 

	
          5.2
 Termination By Participant For Good Reason as described in Subsection
 2.17(d) Within Two Years After a Change in Control. Subject to Section 3.3
 and Article V, if, within two years following the occurrence of a Change in
 Control, a Participant shall voluntarily terminate his or her employment for
 Good Reason as described in Subsection 2.17(d):

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
          (i)
 Severance Pay. The Participant shall receive, in bi-weekly payments
 concurrent with his or her Employer’s normal payroll cycle, an amount of
 severance pay from his or her Employer calculated based upon the amount of
 the Participant’s base salary, the number of Years of Service completed as of
 the Participant’s Termination Date, as indicated below:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(A) Less than Thirteen Years of Service: If,
 as of the Participant’s Termination Date he or she has completed fewer than
 thirteen Years of Service, the amount of severance pay shall equal 26 weeks
 of base salary.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(B) Thirteen or More Years of Service: If, as
 of the Participant’s Termination Date, he or she has completed thirteen or
 more Years of 

11

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Service, the
 amount of severance pay shall equal two weeks of base salary for each Year of
 Service, up to a maximum of 52 weeks of base salary.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
          (ii)
 Annual Incentive Awards. A Participant shall receive a prorated annual
 incentive award pursuant to the performance incentive program, if applicable,
 for the calendar year in which the Participant’s Termination of Employment
 occurs. The award shall be calculated based solely on 100 percent of the
 target incentive award and prorated based on the number of days of employment
 in the calendar year in which the participant’s Termination of Employment
 occurs through the employee’s Termination Date. Annual incentive awards with
 respect to the calendar year in which a Participant’s Termination Date occurs
 will be paid at the same time as awards for such calendar year are paid to
 active employees of the Employer.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
          (iii)
 Outplacement Services. Outplacement services approved by the Committee, which
 may include individual or group counseling and administrative assistance or
 workshops, shall be available beginning on the participant’s Termination Date
 or such earlier date designated by the participant’s business unit
 leadership. Outplacement services shall continue to be available for the
 period up to 12 months.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
          (iv)
 Educational Assistance. The Employer shall reimburse 90 percent of the costs
 (up to a total of $3,000) of tuition, required books and mandatory fees
 incurred for classes approved by the Committee that are successfully
 completed within two years after a Participant’s Termination Date.
 “Successful completion” shall mean the attainment of a final course grade of
 “C” or better. Reimbursement will be made only upon the submission of bills
 or receipts in such form as the Committee may require.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(v) Health
 Care Benefits.

	
 

	
 

	
 

	
 

	
 

	
 

	
          Retiree
 Health Care Coverage. An Eligible Employee who has not otherwise
 satisfied the eligibility criteria for participation prior to his or her
 Termination Date, shall be entitled to elect retiree coverage under the
 Employer’s applicable retiree group health care plans as though he or she
 otherwise satisfied such plans’ eligibility requirements if:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
          (A)
 the Participant has attained age 50 and completed ten or more Years of
 Service as of his or her Termination Date but the sum of the Participant’s
 age and Years of Service is less than 80; or

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
          (B)
 the Participant has attained age 49 and completed 20 or more Years of Service
 as of his or her Termination Date but the sum of the Participant’s age and
 Years of Service is less than 80.

12

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Such
 coverage shall commence no earlier than the Participant’s Termination Date.
 The Participant shall be charged the full cost of retiree coverage under
 these plans.

	
 

	
 

	
 

	
 

	
 

	
 

	
          COBRA
 Continuation Coverage. Each Participant who is not eligible for, or does
 not elect, the retiree health care coverage described in this subsection (v)
 shall be entitled, pursuant to any continuation coverage rights under COBRA
 to continue individual and dependent coverage under the Company’s group
 health care plans following the Participant’s Termination Date. If
 continuation coverage is elected, the Employer shall pay the same portion of
 the cost of medical coverage that it paid immediately prior to the
 Participant’s Termination Date for active employees during the period that
 the Participant is receiving severance pay under Section 5.2, and the
 Participant shall pay the balance. The Participant shall be charged the full
 expense of medical coverage (102 percent of the cost of coverage) during the
 remainder of the statutory coverage period, if any, and the full expense of
 dental and (if applicable) vision and hearing coverage (102 percent of the
 cost of coverage) during the entire statutory coverage period.

	
 

	
 

	
 

	
          (vi)
 Life Insurance. A Participant who is not eligible for coverage under
 the Employer’s retiree life insurance plan shall be entitled, during the
 period that the Participant is receiving severance pay under this Section
 5.2, to life insurance coverage at the Employer’s expense in an amount equal
 to the group term life insurance coverage in effect for such Participant
 under the Employer’s group term life insurance plan for active employees as
 of his or her Termination Date.

	
 

	
 

	
 

	
          (vii)
 Other Benefits. A Participant shall not be entitled to any severance,
 separation or early retirement incentive pay or benefits other than as
 provided under the Plan or under any qualified or nonqualified retirement
 plan or deferred compensation arrangement maintained by the Employer. Except
 as provided in the foregoing sentence, a Participant’s rights under any other
 employee benefit plans maintained by the Company or an Affiliate shall be
 determined in accordance with the provisions of such plans, including the
 Company’s right to amend or terminate such plans at any time.

	
 

	
 

	
 

	
 

	
 

	
          5.3
 Termination By Employer For Cause or By Participant Other Than For Good
 Reason If, at any time after a Change in Control, either (a) an Employer
 shall terminate a Participant’s employment for Cause or (b) the Participant
 shall voluntarily terminate his employment other than for Good Reason, the
 Employer shall have no further payment obligations to the Participant other
 than for amounts described in Sections 5.1(i) (A) and 5.1(iii) and the timely
 payment or provision of Other Benefits. In such case, all such amounts shall
 be paid to the Participant in a lump sum.

	
 

	
          5.4
 Death. If a Participant’s employment terminates by reason of the
 Participant’s death after a Change in Control, all Accrued Obligations as of
 the time of death shall be paid to the Participant’s estate or beneficiary,
 as applicable, in a lump sum in cash and the Participant’s estate or
 beneficiary shall be entitled to any Other Benefits in accordance with their
 terms. Any 

13

	
 

	
Prior Equity
 Awards shall vest and/or become exercisable, as the case may be, as of the
 Date of Termination and the Participant’s estate or beneficiary, as the case
 may be, shall have the right to exercise any such Prior Equity Award until
 the earlier of (a) one year from the Date of Termination (or such longer
 period as may be provided under the terms of any such Prior Equity Award) and
 (b) the normal expiration date of such Prior Equity Award.

	
 

	
          5.5
 Disability. If a Participant’s employment is terminated by reason of
 Disability after a Change in Control, all Accrued Obligations shall be paid
 to the Participant in a lump sum in cash. Any Prior Equity Awards shall vest
 immediately and/or become exercisable, as the case may be, and the Participant
 shall have the right to exercise any such Prior Equity Award until the
 earlier of (a) one year from the Date of Termination (or such longer period
 as may be provided under the terms of any such Prior Equity Award) and (b)
 the normal expiration date of such Prior Equity Award.

	
 

	
          5.6
 Retirement. If a Participant’s employment terminates as a result of
 Retirement after a Change in Control, the Participant shall be paid the
 Accrued Obligations in a lump sum in cash and the Participant shall be
 entitled to any Other Benefits in accordance with their terms.

ARTICLE VI 

TIMING OF, LIMITATIONS ON AND ADJUSTMENTS TO PLAN PAYMENTS

          6.1
Time of Payments. Payments under the Plan shall be made as soon as
practicable after the Participant’s Date of Termination, except, however, that
any payment that is subject to the requirements of Section 409A of the Code
shall be made as soon as practicable after the earlier of (i) the six-month
anniversary of the Participant’s Date of Termination (other than by reason of
death) and (ii) the date of the Participant’s death. 

          6.2
Payment Offsets. Notwithstanding anything in the Plan to the contrary,
in the event a Participant is entitled to receive severance payments both under
this Plan and under the terms of either (i) an individual change of control or
employment agreement, (ii) another severance pay plan or policy of an Employer
or (iii) any existing or future law or regulation, the benefits payable under
this Plan shall be reduced by the amount of any severance benefits such
Participant is entitled to receive under such individual agreement, plan,
policy, law or regulation. 

          6.3
Cap on Excess Parachute Payments; Gross-Up Payments. Notwithstanding
anything in the Plan to the contrary, if (i) a Participant is a “disqualified
individual” (as defined in Section 280G(c) of the Code) and (ii) the severance
benefits provided under Articles IV or V, as applicable, together with any
other payments the Participant has the right to receive from an Employer, would
constitute a “parachute payment” (as defined in Section 280G(b) of the Code)
(“Parachute Payments”), the following provisions shall apply: 

	
 

	
 

	
 

	
 

	
(a)

	
Schedule A
 Participants 

	
 

	
 

	
 

	
          (i)
 In the case of a Schedule A Participant, the severance benefits under
 Articles IV or V shall not exceed an amount which, together with any other
 Parachute Payments the Participant has a right to receive from the Employer,
 would 

14

	
 

	
 

	
 

	
be 2.99
 times the Participant’s “base amount” (as defined in Section 280G of the
 Code) so that no portion of the amounts received by the Participant shall be
 subject to the excise tax imposed under Section 4999 of the Code.

	
 

	
 

	
 

	
          (ii)
 The determination of whether any limitation on the severance benefits payable
 under Articles IV or V is necessary shall be made by the Company’s
 independent auditor or such other certified public accounting firm as may be
 jointly designated by the Participant and the Company (the “Accounting
 Firm”), which shall provide detailed supporting calculations to the
 Participant and the Company. The determinations of the Accounting Firm shall
 be conclusive and binding on the Company and the Participant. All fees and
 expenses of the Accounting Firm shall be borne solely by the Company. 

	
 

	
 

	
 

	
          (iii)
 If through error or otherwise, a Schedule A Participant shall receive
 payments under the Plan, together with other Parachute Payments the
 Participant has the right to receive from an Employer, in excess of 2.99
 times his base amount, the Participant shall immediately repay the excess to
 the Employer upon notification from the Employer that an overpayment has been
 made. If the Participant fails to repay the excess to the Employer within 10
 business days of the date of the Employer’s notification, the Participant
 will become liable to the Employer for an amount equal to two (2) times the
 excess amount. 

	
 

	
 

	
 

	
(b)      Schedule
 B Participants

	
 

	
 

	
 

	
          (i)
 In the event it shall be determined that any severance benefits payable to a
 Schedule B Participant under Articles IV or V (together with any other
 Parachute Payments the Participant has a right to receive from the Employer)
 would be subject to the excise tax imposed by Section 4999 of the Code or any
 interest or penalties are incurred by the Participant 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
 Participant shall be entitled to receive an additional payment (a “Gross-Up
 Payment”) in an amount such that after payment by the Participant of all
 taxes (including any interest or penalties imposed with respect to such
 taxes), including, without limitation, any income and employment taxes (and
 any interest and penalties imposed with respect thereto) and Excise Tax
 imposed upon the Gross-Up Payment, the Participant retains an amount of the
 Gross-Up Payment equal to the Excise Tax imposed upon the Parachute Payments.

	
 

	
 

	
 

	
          (ii)
 Subject to the provisions of Section 6.3(b)(iii), all determinations required
 to be made under this Section 6.3(b), 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 the Accounting Firm, which shall provide detailed supporting calculations
 to the Participant and 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 6.3(b), shall be paid by the Company to
 the Participant as soon as practicable after the receipt of the Accounting
 Firm’s 

15

	
 

	
 

	
 

	
determination.
 Any determination by the Accounting Firm shall be binding upon the
 Participant and the Company. 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 Section 6.3(b)(iii) and
 the Participant 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 Participant.

	
 

	
 

	
 

	
          (iii)
 A Schedule B Participant 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 Participant
 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 Participant shall not pay such claim prior to the expiration of the
 30-day period following the date on which he 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 Participant in
 writing prior to the expiration of such period that it desires to contest
 such claim, the Participant shall:

	
 

	
 

	
 

	
 

	
                    (A)
 give the Company any information reasonably requested by the Company relating
 to such claim,

	
 

	
 

	
 

	
 

	
 

	
           (B)
 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,

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
                    (D)
 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 Participant 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 Section 6.3(b)(iii), the Company shall control all
 proceedings taken in connection with such contest and, at its sole option,
 may pursue or forgo 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 Participant to pay the tax claimed and
 sue for a refund or contest the claim in any permissible 

16

	
 

	
 

	
 

	
manner, and
 the Participant 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 Participant to pay such claim and sue for a
 refund, the Company shall advance the amount of such payment to the
 Participant, on an interest-free basis and shall indemnify and hold the
 Participant 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 further provided that any extension of the statute of
 limitations relating to payment of taxes for the taxable year of the
 Participant 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 Participant 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.

	
 

	
 

	
 

	
          (iv)
 If, after the receipt by a Schedule B Participant of an amount advanced by
 the Company pursuant to Section 6.3(b)(iii), the Participant becomes entitled
 to receive any refund with respect to such claim, the Participant shall
 (subject to the Company’s complying with the requirements of Section
 6.3(b)(iii)) 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 Participant of an amount advanced by the Company
 pursuant to Section 6.3(b)(iii), a determination is made that the Participant
 shall not be entitled to any refund with respect to such claim and the
 Company does not notify the Participant 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.

	
 

	
 

	
          6.4
 Code Section 409A Compliance. Notwithstanding anything in the Plan to
 the contrary, all Plan benefit obligations and payments are subject to
 guidance issued by the U.S. Department of Treasury under Section 409A of the
 Code. To the extent required, the Company may modify the severance benefits
 payable hereunder to comply with such guidance; provided, however, that the
 present value of the aggregate Plan benefits payable to a Participant after
 such modification shall not be less than the present value of the Plan
 benefits payable to the Participant prior to the modification.

	
 

	
 

	
          6.5
 Tax Withholding. Notwithstanding any other provision of this Plan, the
 Company may withhold from any amounts payable under this Plan such Federal,
 state, local or foreign taxes as shall be required to be withheld pursuant to
 any applicable law or regulation.

17

ARTICLE VII

RESTRICTIVE COVENANTS

          7.1
Confidentiality. As a condition to participation in the Plan, each
Participant agrees to hold in a fiduciary capacity for the benefit of the
Company and its Affiliates all Confidential Information which shall have been
obtained by the Participant during the Participant’s employment by the
Employer; except, however, that this Section 7.1 shall not apply to
Confidential Information that is or becomes public knowledge, unless such
Confidential Information became or becomes public knowledge due to acts of the
Participant or representatives of the Participant in violation of this Section
7.1. Upon termination of the Participant’s employment, he shall return to the
Company all Confidential Information in his possession. After termination of
the Participant’s employment with the Employer, the Participant shall not,
without the prior written consent of the Company or as may otherwise be
required by law or legal process, communicate or divulge any such Confidential
Information to anyone other than the Company and those designated by it, except
(x) otherwise publicly available information, (y) as may be necessary to
enforce his rights under the Plan or as necessary to defend himself against a
claim asserted directly or indirectly by the Company or its Affiliates; or (z)
as may be compelled by service of a valid subpoena or other legal process. If
the Participant is served with a valid subpoena or other legal process, he must
so notify the Company within three business days. Unless and until a
determination has been made in accordance with Section 7.4 that the Participant
has violated this Section 7.1, an asserted violation of the provisions of this
Section 7.1 shall not constitute a basis for deferring or withholding any amounts
otherwise payable to the Participant under the Plan. 

          7.2
Non-Compete. As a condition to participation in the Plan, each
Participant agrees, that, in the event the Participant voluntarily terminates
his employment other than for Good Reason, for the period of one year from Date
of Termination he will not, without the written consent of the Company,
directly or indirectly own, manage, operate, join, control, become employed by,
consult to or participate in the ownership, management, or control of any
business which is in direct competition with the Company or its Affiliates. 

          7.3
Non-Solicitation. As a condition to participation in the Plan, each
Participant agrees that, in the event the Participant voluntarily terminates
his employment other than for Good Reason, for the period of one year following
the Date of Termination, he will not, directly or indirectly, solicit or hire,
or encourage the solicitation or hiring by any employer other than the Company
or its Affiliates, for any position as an employee, independent contractor,
consultant or otherwise, any person who was a managerial or higher level
employee of an Employer at any time during the term of the Participant’s
employment by the Employer; provided, however, that this provision shall not
apply with respect to the solicitation of any person after six months from the
date on which such person’s employment by an Employer has terminated. 

18

          7.4
Enforcement. In the event of a breach by the Participant of any of the
covenants set forth in this Article VII, it is agreed that the Company shall
suffer irreparable harm for which money damages are not an adequate remedy, and
that, in the event of such breach, the Company shall be entitled to obtain an
order of a court of competent jurisdiction for equitable relief from such
breach, including, but not limited to, temporary restraining orders and
preliminary and/or permanent injunctions against the breach of such covenants
by the Participant. In the event that the Company should initiate any legal
action for the breach or enforcement of any of the provisions contained in this
Article VII and the Company does not prevail in such action, the Company shall
promptly reimburse the Participant the full amount of any court costs, filing
fees, attorney’s fees which the Participant incurs in defending such action,
and any loss of income during the period of such litigation.

ARTICLE VIII

AMENDMENT AND TERMINATION 

          8.1
Amendment. The Company may amend this Plan at any time, and from time to time,
by action of the Committee; provided, however, that no amendment adopted after
the effective date of a Change in Control shall have the effect of either (i)
removing an individual from the list of Participants, (ii) adding conditions
for participation or the entitlement to receive benefits hereunder, (iii)
reducing the amount of benefits payable to a Participant or (iv) otherwise
restricting a Participant’s right to receive benefits under the Plan, except as
may otherwise be required to conform such payments to the requirements of
Section 409A of the Code, as provided in Section 1.1. 

          8.2
Termination. The Committee may terminate the Plan at any time prior to a
Change in Control. The Plan may not be terminated after the effective date of a
Change in Control. 

ARTICLE IX

ADMINISTRATION

          9.1
Plan Administrator. The Plan shall be administered by the Committee,
which shall have the duties and responsibilities for administering the Plan as
are specifically set forth in this Article IX. 

          9.2
Responsibilities of Committee. 

          (a)
The Committee shall have responsibility for the day to day administration of
the Plan. In addition, the Committee shall have the specific powers, duties,
responsibilities and obligations specifically provided for herein. 

          (b)
Subject to the express provisions of the Plan, the Committee shall have full
and exclusive authority to interpret the Plan and to make all other factual
determinations deemed necessary or advisable in the implementation and
administration of the Plan, including but not limited to determinations with
respect to the eligibility of Participants to

19

receive
benefits under the Plan and the status and rights of such Participants and all
other persons affected hereunder. The Committee’s interpretation and
construction of the Plan shall be conclusive and binding on all persons. 

          (c)
The Committee shall have sole authority to adopt rules and regulations, which
shall be administered by the Committee. In addition, the Committee shall have
the discretionary authority to issue rulings and interpretations concerning the
Plan and all matters arising thereunder, on a uniform and nondiscriminatory
basis, provided the same shall not be contrary to or inconsistent with any
provision of the Plan. 

          (d)
As a condition of distributing any benefit under the Plan, the Committee may
prescribe the use of such forms and require the furnishing of such information
as the Plan Committee may deem appropriate for administering the Plan. 

          9.3
Allocation or Delegation of Duties and Responsibilities. In furtherance
of its duties and responsibilities under the Plan, the Committee may: 

	
 

	
 

	
 

	
               (a)
 Employ agents to carry out non-fiduciary responsibilities;

	
 

	
 

	
 

	
               (b)
 Employ agents to carry out fiduciary responsibilities;

	
 

	
 

	
 

	
               (c)
 Consult with counsel, who may be counsel to the Company; and 

	
 

	
 

	
 

	
               (d)
 Delegate any of its duties and responsibilities hereunder to such officer or
 officers of the Company as the Committee shall designate; except, however,
 that the Committee may not delegate to any other person the designation of
 Eligible Employees under Section 3.1. 

          9.4
Expenses. Unless otherwise agreed to by the Company, no person acting as
a fiduciary hereunder (who is an employee of an Employer) shall receive any
compensation for services as such. Expenses incurred by fiduciaries in
connection with the administration of the Plan shall be paid by the Company. 

          9.5
Indemnification of Plan Administrator. The Company shall indemnify, to
the fullest extent permitted by law, each person made or threatened to be made
a party to any civil or criminal action or proceeding by reason of the fact
that he, or his testator or intestate, was a member of the Committee, or a
delegate of the Committee, acting in the capacity of Plan administrator. 

          9.6
Reliance Upon Others. The Committee, any person to whom it may delegate
such of its duties and powers as provided herein, and the officers and
directors of the Company shall be entitled to rely conclusively upon and shall
be fully protected in any action taken by them in good faith in reliance upon
any tables, valuations, certificates, opinions, reports or other advice
furnished to them by any duly appointed actuary, accountant, legal counsel (who
may be counsel for the Company) or other specialist. 

20

          9.7
Notification. All notices, reports and statements in connection with the
Plan that are given, made, delivered or transmitted to a Participant shall be
deemed duly given, made, delivered, or transmitted when mailed, by such class
as the sender may deem appropriate, with postage prepaid and addressed to the
Participant at the address last appearing on the records of the Employer with
respect to this Plan. All notices, direct actions or other communications
given, made, delivered or transmitted by a Participant to an Employer or
Committee shall not be deemed to have been duly given, made, delivered, transmitted
or received unless and until actually received by the Employer or Committee. 

          9.8
Multiple Capacities. A person may serve in more than one fiduciary
capacity with respect to the Plan. 

ARTICLE X

CLAIMS PROCEDURE

          10.1
Submission of Claims. The initial claim by any Participant for benefits
under this Plan shall be submitted in writing to the Committee within 60 days
after the occurrence of the termination of employment that the Participant
claims to have triggered entitlement to Plan benefits. 

          10.2
Computation and Review of Claims. All benefits shall be computed by the
Committee or its delegate. All claims shall be approved or denied by the
Committee (or its delegate) as soon as practicable, but in no event later than
90 days after application by the claimant. 

               (a)
Initial Denial of Claim—Any
denial of a claim shall include: 

	
 

	
 

	
 

	
               (i) Reason
 or reasons for the denial;

	
 

	
 

	
 

	
               (ii) Reference
 to pertinent Plan provisions on which the denial is based;

	
 

	
 

	
 

	
               (iii) Description
 of any additional material or information necessary for the claimant to
 perfect the claim together with an explanation of why the material or
 information is necessary; and

	
 

	
 

	
 

	
               (iv) Explanation
 of the Plan’s claim review procedure, described below.

               (b) Review of a Denied
Claim—A claimant shall
have a reasonable opportunity to appeal a denied claim to the Committee (or its
delegate) for a full and fair review. The claimant or a duly authorized
representative: 

	
 

	
 

	
 

	
               (i) Shall
 have 60 days, after receipt of written notification of the denial of claim in
 which to request a review. 

21

	
 

	
 

	
 

	
               (ii) May
 request a review upon written application to the Committee. 

	
 

	
 

	
 

	
               (iii) Shall
 submit written comments, documents, records and other information relating to
 the claim. 

	
 

	
 

	
 

	
               (iv) May
 review, free of charge, pertinent Plan documents, records and other
 information relevant to the claim. 

               (c)
Committee Review—The Committee’s
(or its delegate’s) review shall take into account all comments, documents,
records and other information submitted by the claimant relating to the claim,
without regard to whether such information was submitted or considered in the
initial benefit determination.. 

               (d)
Written Decision—The Committee
(or its delegate) shall issue a decision on the reviewed claim promptly but no
later than 60 days after receipt of the review. The Committee’s decision shall
be in writing and shall include: 

	
 

	
 

	
 

	
               (i) Reasons
 for the decision, 

	
 

	
 

	
 

	
               (ii) References
 to the Plan provisions on which the decision is based, and 

	
 

	
 

	
 

	
               (iii) Statement
 that the claimant is entitled to receive, upon request, reasonable access to,
 and copies of, all documents, records and other information relevant to the
 claim 

               (e)
Binding Effect—The Committee’s
(or its delegate’s) decision shall be final and binding on the claimant and the
Employer. 

ARTICLE XI

GENERAL PROVISIONS

          11.1
Construction. This Plan shall be construed and enforced in accordance
with and governed by the internal substantive laws (and not the laws relating
to conflict of laws or choice of laws) of the State of New Jersey, except to
the extent that such laws are preempted by Federal law. 

          11.2
Unfunded Plan. The obligations of the Company under this Plan are not
required to be funded in advance. Nothing contained in this Plan shall give an
Eligible Employee or Participant any right, title or interest in any property
of the Company or any of its Affiliates. 

          11.3
No Right to Continued Employment. Nothing contained herein shall be
deemed to give any Eligible Employee or Participant the right to be retained in
the employment of an Employer or to limit the rights of any Employer to
discharge any Eligible Employee or Participant at any time, with or without
notice and with or without Cause. 

22

          11.4
Partial Invalidity. The invalidity or unenforceability of any term or
provision, or any clause, or portion thereof, of this Plan shall in no way
impair or affect the validity or enforceability of any other provision of this
Plan, which shall remain in full force and effect. 

          11.5
Successors and Assigns. 

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

          (b)
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 to assume expressly and agree to
perform the Company’s obligations under the Plan in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. 

          (c)
In no event shall a Participant assign his interests under the Plan to any other
person without the prior written consent of the Committee. 

          11.6
Waivers. Failure to strictly comply with any term, condition or
requirement set forth in the Plan shall not be deemed a waiver of such term,
condition or requirement, nor shall any waiver of any such term, condition or
requirement at any one time or times be deemed to result in a waiver of such
term, condition or requirement at any other time or times. 

          11.7
Gender and Number. Masculine pronouns include the feminine as well as
the neuter genders, and the singular shall include the plural, unless indicated
otherwise by the context. 

          11.8
Headings. The headings of the Plan are for purposes of reference only
and shall not limit or otherwise affect the meaning hereof. 

23

SCHEDULE A 

As Amended October 18, 2005

PARTICIPANTS

(New Schedule A to be approved by the
Committee on 9/22/08)

24

SCHEDULE B

(New Schedule B to be approved by the
Committee on 9/22/08

25

EXHIBIT I

Form of Restrictive Covenant Agreement

          AGREEMENT,
by and between Public Service Enterprise Group Incorporated, a New Jersey
Corporation (the “Company”) and [_________________] (“Executive”), dated as of
[______________  ]. 

          WHEREAS,
the Company maintains the Key Executive Severance Plan of Public Service
Enterprise Group Incorporated (the “Plan”), effective December 20, 2004, and as
thereafter amended, modified or supplemented; 

          WHEREAS,
Executive was designated as an Eligible Employee under the Plan by the
Organization and Compensation Committee of the Company’s board of directors on
___________; 

          WHEREAS,
pursuant to Section 3.2 of the Plan, in order to be a Participant in and be
entitled to benefits and protections under the Plan, Executive must execute and
delivery to the Company within 30 days after Executive was designated as an
Eligible Employee a written agreement to be bound by the terms and conditions
of certain covenants set out in Article VII of the Plan, which is hereby
incorporated herein; 

          NOW
THEREFORE, the parties agree as follows: 

          1.
Executive has received a copy of the Plan and has read and understands the
terms of conditions of Section 7.1, Confidentiality, Section 7.2,
Non-Compete, and Section 7.3, Non-Solicitation, therein, as applied to
Executive (the “Covenants”).  

          2.
Executive agrees to be bound by and comply with the terms of the Covenants in
consideration for becoming a Participant in the Plan. 

          3.
Executive acknowledges that the Covenants are reasonable in the scope of the
activities restricted, the geographic area covered by the restrictions, the
duration of the restrictions, and that such Covenants are reasonably necessary
to protect the Company’s legitimate interests in its Confidential Information
and its relationships with its employees, customers and suppliers. 

          4.
Executive acknowledges that the Covenants will not deprive Executive of the
ability to earn a livelihood or to support Executive’s dependents. 

          5.
Executive shall be a Participant in the Plan and be entitled to all of the
rights and benefits provided thereunder as of the date of this Agreement. 

26

          6.
This Agreement shall be construed and enforced in accordance with and governed
by the internal substantive laws (and not the laws relating to conflict of laws
or choice of laws) of the State of New Jersey, except to the extent that such
laws are preempted by Federal law. 

          IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first above written. 

[This Agreement may be executed in
counterparts.]

	
 

	
 

	
 

	
 

	
 

	
EXECUTIVE

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
PUBLIC
 SERVICE ENTERPRISE

	
 

	
GROUP
 INCORPORATED

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
 

	

	
 

	
Title:

	
 

	
 

	
 

	

27

EXHIBIT II

Form of Separation Agreement and General Release

          SEPARATION
AGREEMENT AND GENERAL RELEASE, by and between Public Service Enterprise Group
Incorporated, a New Jersey Corporation, (the “Company”) and [_________________   ] (“Executive”), dated as of
[______________], (“this Agreement”). 

          WHEREAS,
the Company maintains the Key Executive Severance Plan of Public Service
Enterprise Group Incorporated (the “Plan”), effective December 20, 2004, and as
thereafter amended, modified or supplemented; 

          WHEREAS,
Executive was designated as an Eligible Employee under the Plan by the
Organization and Compensation Committee of the Company’s board of directors on
___________ and became a Participant in the Plan as of [date]; 

          WHEREAS,
the Company or one of its Affiliates terminated Executive’s employment
effective [date] (the “Termination Date”); 

          WHEREAS,
pursuant to Section 3.3 of the Plan, in order to be a Participant in and be
entitled to benefits and protections under the Plan, Executive must execute and
delivery this Agreement to the Company within forty-five days after Executive
receives this Agreement; and 

          WHEREAS,
Executive and the Company desire to settle fully and finally any differences,
rights and duties arising between them, including, but in no way limited to,
any differences, rights and duties that have arisen or might arise out of or
are in any way related to Executive’s employment with the Company, and the
conclusion of that employment; 

          NOW
THEREFORE, Executive and the Company agree as follows: 

          1.
Terms. All capitalized terms in this Agreement shall have the same
meanings and definitions as assigned to such terms in the Plan. 

          2.
Separation Payment. The Company acknowledges that the Executive is
entitled to and that the Company will provide the payments and benefits
described in Article IV or Article V of the Plan, all such payments and
benefits to be paid to Executive less all applicable withholdings. 

          3.
Release of Claims. Executive, for himself and for his children, heirs,
administrators, representatives, executors, successors and assigns, releases
and gives up any and all claims and rights which he has, may have or hereafter
may have against the Company, its Affiliates and their respective subsidiaries,
affiliates, predecessors, successors, assigns, officers, directors,
shareholders, employees and agents and all of their predecessors, successors
and assigns (the “Releasees”) from the beginning of the world until the date of
the execution of this Agreement, including, but not limited to, any and all
charges, complaints, claims, liabilities, obligations, promises, agreements,
controversies, damages, remedies, actions, causes of action, suits, rights,
demands, costs, losses, debts and expenses (including attorneys’ fees and
costs) of

28

any nature
whatsoever, whether known or unknown, whether in law or equity (collectively,
“Claims”), including, but not limited to, any Claims related to Executive’s
employment with the Company and the conclusion thereof, any Claims based on
wrongful termination, any Claims based on contract whether express or implied,
written or oral, and any Claims arising under the United States and/or State
Constitutions, federal and/or common law, and/or rights arising out of alleged
violations of any federal, state or other government statutes, regulations or
ordinances including, without limitation, the National Labor Relations Act,
Title VII of the 1964 Civil Rights Act, the Age Discrimination in Employment
Act, the Older Workers’ Benefit Protection Act, the Sarbanes-Oxley Act, the New
Jersey Law Against Discrimination, the New Jersey Conscientious Employee
Protection Act, the Americans with Disabilities Act, the Civil Rights Act of
1866 (42 U.S.C. § 1981), the Civil Rights Act of 1991, the Equal Pay Act, the
Family and Medical Leave Act, the Fair Labor Standards Act and the Employees
Retirement Income Security Act of 1974, all as amended. This release
specifically includes, but is not limited to, the right to the payment of
wages, vacation, pension benefits or any other employee benefits, and any other
rights arising under federal, state or local laws prohibiting discrimination
and/or harassment on the basis of age, race, color, religion, creed, sex,
national origin, ancestry, mental or physical disability, alienage or
citizenship status, marital status, or any other basis prohibited by law. 

          4.
Covenant Not To Sue. Executive has not filed against the Company or any
of the Releasees, any complaints, charges or lawsuits with any government
agency, arbitral tribunal, self-regulatory body, or any court arising out of
Executive’s employment by the Company or any other matter arising on or prior
to the date hereof. Executive will not, directly or indirectly, commence or
prosecute, or assist in the filing, commencement or prosecution in any court,
arbitral tribunal, self-regulatory body or local or state government agency,
any claim or charge against the Company or any of the Releasees arising out of
any of the matters set forth in this Agreement or based upon any common law or
statutory claim against the Company or any of the Releasees that can be brought
under federal, state or local law. Notwithstanding the foregoing, Executive
shall not be limited from commencing a proceeding for the sole purpose of
enforcing his rights under this Agreement or under the Plan, provided Executive
first complies with the Claims Review procedures described in Article X of the
Plan. 

          5.
No Admission of Liability. This Agreement does not constitute or imply
an admission of liability or wrongdoing by Executive, the Company or any of the
Releasees. 

          6.
No Disparagement. Executive and the officers and directors of the
Company and its Affiliates agree that they will not make, or cause to be made,
any statements, observations or opinions, or communicate any information
(whether oral or written) that disparages or is likely in any way to harm the
reputation in the case of the officers and directors of the Company and its
Affiliates, Executive, and in the case of Executive, the Company, its
Affiliates or any of the Releasees. 

          7.
Confidentiality. The terms of this Agreement are CONFIDENTIAL. Executive agrees not to tell
anyone about this Agreement and not to disclose any information contained in
this Agreement to anyone, other than to his lawyer, financial advisor or
immediate family members, to enforce this Agreement, or to respond to a valid
subpoena or other legal process. If

29

Executive does
tell his lawyer, financial advisor or immediate family members about this
Agreement or its contents, he must immediately tell them that they must keep it
confidential as well. The Company agrees that it will keep the terms of this
Agreement confidential, except as is necessary to administer this Agreement, as
required by law or to respond to a valid subpoena or other legal process. 

          8.
No Reliance. Executive represents that in executing this Agreement he
does not rely and has not relied upon any representation or statement not set
forth in this Agreement that the Company or any of its agents, representatives
or attorneys may have made with regard to the subject matter, basis or effect
of this Agreement. 

          9.
Governing Law. This Agreement shall be construed in accordance with the
laws of the State of New Jersey without regard to any state’s conflict of law
provisions. 

          10.
Remedy for Breach. In the event of any breach of this Agreement, the
parties may only institute an action for specific enforcement of the terms of
this Agreement and the Plan and seek damages resulting from such breach.
Executive may not institute any proceeding based on any Claims related to his
employment with the Company or the conclusion of his employment because of a
breach of this Agreement or the Plan by the Company. The prevailing party in
any such action shall be entitled to an award of attorneys’ fees and costs in
addition to any other legal or equitable relief, except that the Company will
not be entitled to its attorneys’ fees or other damages if Executive challenges
the validity or enforceability of this Agreement. 

          11.
Severability. If at any time, after the date of the execution of this
Agreement, any provision of this Agreement shall be held in any court or agency
of competent jurisdiction to be illegal, void or unenforceable, such provision
shall be of no force and effect. In the event that a court or agency of
competent jurisdiction concludes that the release contained in paragraph 3 or
the covenant not to sue contained in paragraph 4 are illegal, void or
unenforceable, Executive agrees to execute a release and covenant not to sue
that are legal, valid and enforceable. 

          12.
Entire Agreement. This Agreement, the Plan and the Restrictive Covenant
Agreement required by Section 3.2 of the Plan set forth the entire agreement
between the parties with respect to the termination of Executive’s employment
and supersede any and all prior understandings and agreements between the
parties. Neither party shall have any obligation toward the other except as set
forth herein and therein. 

          13.
Modifications. This Agreement may not be modified except in writing
signed by all parties. 

          14.
Enforceability. The parties are bound by this Agreement. Anyone who
succeeds to the parties’ rights and responsibilities, such as their heirs,
executors, successors or assigns, is also bound. 

          15.
Headings. The headings contained in this Agreement are for the
convenience of reference only and are not intended to define, limit, expand or
describe the scope or intent of any provision of this Agreement. 

30

          16.
Acknowledgements. Executive acknowledges that: 

	
 

	
 

	
 

	
 

	
a.

	
Executive
 has carefully read and understands this Agreement; 

	
 

	
 

	
 

	
 

	
b.

	
Executive has been
 given forty-five (45) days to consider his rights and obligations under this
 Agreement and to consult with an attorney; 

	
 

	
 

	
 

	
 

	
c.

	
The Company
 advised Executive to consult with an attorney and/or any other advisors of
 his choice before signing this Agreement; 

	
 

	
 

	
 

	
 

	
d.

	
Executive
 understands that this Agreement is LEGALLY BINDING and
 by signing it he gives up certain rights; 

	
 

	
 

	
 

	
 

	
e.

	
Executive
 has voluntarily chosen to enter into this Agreement and has not been forced
 or pressured in any way to sign it; 

	
 

	
 

	
 

	
 

	
f.

	
Executive KNOWINGLY AND VOLUNTARILY
 RELEASES the Company and the Releasees from any and all claims
 Executive may have, known or unknown, in exchange for the benefits Executive
 has obtained by signing, and that these benefits are in addition to any
 benefit Executive would have otherwise received if he did not sign this
 Agreement; 

	
 

	
 

	
 

	
 

	
g.

	
The General
 Release in this Agreement includes a WAIVER OF ALL RIGHTS AND
 CLAIMS Executive may have under the Age Discrimination In
 Employment Act of 1967 (29 U.S.C. §621 et seq.); and 

	
 

	
 

	
 

	
 

	
h.

	
Executive
 has seven (7) days after he signs this Agreement to revoke it by notifying
 the Company in writing. Executive must deliver the written revocation to the
 Company’s General Counsel so that it is actually received by the Company
 within seven (7) days of the date Executive signs this Agreement. This
 Agreement will not become effective or enforceable until the Company receives
 a copy of this Agreement signed by Executive and the seven (7) day revocation
 period has expired without Executive revoking this Agreement. 

          IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.

	
 

	
 

	
 

	
 

	
          EXECUTIVE

	
 

	
 

	
PUBLIC
 SERVICE ENTERPRISE GROUP

	
 

	
 

	
 

	
INCORPORATED

	
 

	
 

	
By:

	
 

	

	
 

	
 

	

	
 

	
 

	
Name:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Title

	
 

31exv10w107

Exhibit 10.107

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made as of
                                     , 200      (the
“Effective Date”) by and between Gen-Probe Incorporated, a Delaware corporation with offices at
10210 Genetic Center Drive, San Diego, California 92121 (“Gen-Probe”), and
                                      (the
“Executive”).

     The parties hereto agree as follows:

	1.	 	Term of Employment. This Agreement shall be immediately effective. This Agreement,
and Executive’s employment hereunder, shall be for an indefinite term. At any time during the
term of this Agreement, either party may terminate this Agreement, and Executive’s employment,
in accordance with the provision of Sections 6 and 7 of this Agreement.

	 
	2.	 	Position and Duties. The Executive shall serve as [Title] of Gen-Probe, and shall
have commensurate responsibilities and authority. The Board of Directors may from time to
time particularly specify the Executive’s duties and authority. The Executive shall not
engage in or perform duties for any other persons or entities that interfere with the
performance of his or her duties hereunder. Any outside board of director positions held by
the Executive will be subject to approval by the Board of Directors of Gen-Probe.

	 
	3.	 	Salary, Bonus and Benefits. 

	 	(a)	 	Salary. During the period of the Executive’s employment, Gen-Probe
shall pay Executive an annual base salary of $                    . This base salary may be
adjusted annually by the Board, subject to the terms of this Agreement and consistent
with the Executive’s performance and Gen-Probe’s policy regarding adjustments in
officer compensation established from time to time by the Board.

	 
	 	(b)	 	Bonus. In addition, commencing with the 200      fiscal year, the
Executive may be awarded incentive compensation at the Board’s discretion, in the form
of a cash bonus for each fiscal year during the Executive’s employment, based upon
performance.

	 
	 	(c)	 	Benefits. The Executive shall be entitled to participate in the
employee benefit programs (including but not limited to medical, dental, life and
disability insurance, 401K retirement plan, and vacation program), which may be
adopted and maintained by Gen-Probe. The Executive may receive such other and
additional benefits as the Board may determine from time to time in its sole
discretion.

1

 

	4.	 	Expense Reimbursement. The Executive shall be entitled to receive prompt
reimbursement for all reasonable and customary expenses incurred by the Executive in
performing services hereunder, including all expenses of travel and living expenses while away
from home on business or at the request of, and in the service of Gen-Probe; provided, that
such expenses are incurred and accounted for in accordance with the policies and procedures
established by Gen-Probe. To the extent that reimbursements made pursuant to this Agreement
are subject to the provisions of Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), (a) the reimbursement shall be made in the no later than December 31 of the
calendar year following the year in which the expense was incurred, (b) the amount of expenses
reimbursed in one year shall not affect the amount eligible for reimbursement in any
subsequent year, and (c) the Executive’s right to reimbursement under this Section 4 will not
be subject to liquidation or exchange for another benefit.

	 
	5.	 	Indemnification. Gen-Probe shall indemnify the Executive to the maximum extent
permitted by law and by the by-laws of Gen-Probe if the Executive is made a party, or
threatened to be made a party, to any threatened or pending legal action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact that the
Executive is or was an officer, director or employee of Gen-Probe or any subsidiary or
affiliate thereof, in which capacity the Executive is or was serving at Gen-Probe’s request,
against reasonable expenses (including reasonable attorneys’ fees), judgments, fines and
settlement payments incurred by Executive in connection with such action, suit or proceeding.

	 
	6.	 	Termination. The Executive may terminate his or her employment hereunder at any
time, with or without Good Reason (as defined below) upon written notice to Gen-Probe. If
Executive contends that Good Reason exists for his or her termination, such notice shall
specifically and expressly state the grounds that Executive contends constitute Good Reason.
Gen-Probe may terminate the Executive’s employment hereunder at any time, subject to the terms
of this Agreement, with or without Cause (as defined below) upon written notice to the
Executive. If this Agreement is terminated, all compensation and benefits other than
severance benefits described in Section 7 below, to the extent applicable, shall immediately
cease, except that the Executive will be entitled, through the date of termination, to payment
of Executive’s salary and benefits under Gen-Probe benefit programs and plans in accordance
with their terms.

	 
	 	 	As used in this Agreement, “Good Reason” shall mean any of the following events that are
not consented to by the Executive: (i) a substantial and material diminution in the
Executive’s duties and responsibilities hereunder; (ii) the location of the Executive’s
assignment on behalf of Gen-Probe is moved to a location more than 30 miles from its
present location; (iii) a reduction of more than ten percent (10%) in the Executive’s base
salary; (iv) the failure of Gen-Probe to obtain a satisfactory agreement from any other
successor to Gen-Probe to assume and agree to perform this Agreement; or (iv) a material
breach by Gen-

2

 

	 	 	Probe of its obligations under this Agreement after notice in writing from the Executive
and a reasonable opportunity for Gen-Probe to cure or substantially mitigate any material
adverse effect of such breach. The Executive’s consent to any event which would otherwise
constitute Good Reason shall be conclusively presumed if the Executive does not exercise
his or her rights to terminate this Agreement for Good Reason under this section within
ninety (90) days of notice of the event.

	 	 	As used in this Agreement, “Cause” shall mean any of the following events: (i) any act of
gross or willful misconduct, fraud, misappropriation, dishonesty, embezzlement or similar
conduct on the part of Executive; (ii) the Executive’s conviction of a felony or any crime
involving moral turpitude (which conviction, due to the passage of time or otherwise, is
not subject to further appeal); (iii) the Executive’s misuse or abuse of alcohol, drugs or
controlled substances and failure to seek and comply with appropriate treatment; (iv)
willful and continued failure by the Executive to substantially perform his or her duties
under this Agreement (other than any failure resulting from disability or from termination
by the Executive for Good Reason) as determined by a majority of the Board after written
demand from the Board of Directors for substantial performance is delivered to the
Executive, and the Executive fails to resume substantial performance of his or her duties
on a continuous basis within 30 days of such notice; (vi) the death of the Executive; or
(vii) the Executive becoming disabled such that Executive is not able to perform his or her
usual duties for Gen-Probe for a period in excess of six (6) consecutive calendar months.

	 
	7.	 	Severance Benefits in Certain Events. If Gen-Probe terminates the Executive’s
employment for reasons other than for Cause, or if the Executive terminates his employment for
Good Reason (provided that (i) Executive notified Gen-Probe of his or her intent to resign for
Good Reason within 90 days of the initial existence of the condition giving rise to Good
Reason (a “Good Reason Condition”) and provides Gen-Probe with a period of 30 days during
which it may remedy the Good Reason Condition, (ii) Gen-Probe did not remedy the Good Reason
Condition during such period, and (iii) Executive terminated for Good Reason based on the
condition specified in the notice, and such resignation occurs within one year after the
initial existence of such Good Reason Condition), and such termination constitutes a
“separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h) (a
“Separation from Service”), the Executive shall be entitled to receive as liquidated damages,
the following severance benefits:

	 	(a)	 	Salary.

(i) Unless the Executive’s termination under this Section 7 occurs within eighteen
(18) months after a Change in Control, the Executive shall continue to receive his
base salary, at the rate in effect at the time of his termination of employment, in
monthly installments following termination

3

 

and continuing for an aggregate period of twelve (12) months (the “Salary
Continuation Period”), except that any payments that would otherwise have been made
before the sixtieth (60th) day after the date of termination of the Executive’s
employment (the “First Payment Date”) shall be made on the First Payment Date.

(ii) If the termination under this Section 7 occurs in connection with a Change
in Control, then the Executive shall receive a lump sum payment as described in
this Section 7(a)(ii). For purposes of this Agreement, “Change in Control” shall
have the meaning set forth on Attachment “1” to this Agreement (hereby
incorporated by reference). A termination shall be “in connection with” a Change
in Control if the termination occurs within the period six (6) months prior to or
eighteen (18) months after a Change in Control (and in the event that the
termination occurs during the six (6) months prior to a Change in Control,
subject to the consummation of the Change in Control and the transaction
constituting a change in the ownership or effective control of Gen-Probe or a
change in the ownership of a substantial portion of the assets of Gen-Probe, as
described in Treasury Regulation Section 1.409A-3(i)(5)). The lump sum payment
will be payable on the later of (A) five (5) days after the Change in Control, or
(B) sixty (60) days after the date of the termination of employment. If the
termination occurred within the six (6) months prior to a Change in Control, the
amount of the lump sum payment pursuant to this Section 7(a)(ii) shall be equal
to six (6) months’ base salary (and shall be in addition to the installment
payments described in Section 7(a)(i)); if the termination occurs within eighteen
(18) months after a Change in Control, the amount of the lump sum payment
pursuant to this Section 7(a)(ii) shall be equal to eighteen (18) months’ base
salary.

	 	(b)	 	Bonus. If the termination under this Section 7 occurs in connection
with a Change in Control, then the Executive shall be entitled to receive, in lieu of
the bonus provided in Section 3(b) and in addition to the salary payment described in
Section 7(a) above, an amount equal to 1.5 times the greater of (i) the Executive’s
targeted level bonus in the year of the termination, or (ii) the Executive’s highest
discretionary bonus in the preceding three years. The amount payable shall be paid in
a lump sum at the same time as the salary compensation paid under subsection (a)(ii)
above. No bonus compensation shall be payable under this Section 7 unless the
termination occurs in connection with a Change in Control.

	 
	 	(c)	 	Health Care and Life Insurance Coverage. Continued health care
coverage under Gen-Probe’s medical plan will be provided, without charge, to the
Executive and his or her eligible dependents until the earlier of (i) one (1) year
following the termination date or (ii) the first date that the Executive is covered
under another employer’s health benefit program providing substantially the same or
better benefit options to the Executive without

4

 

	 	 	 	exclusion for any pre-existing medical condition. The period of time medical coverage
continues under this agreement will be counted as coverage time under COBRA.
Gen-Probe will pay the premium for continued life insurance coverage, if any, that the
Executive may have elected under Gen-Probe’s Life Insurance and Supplemental Life
Insurance plan, subject to payment by the Executive of the portion of such premium not
contributed by Gen-Probe under such plan, during the Salary Continuation Period.

	 	(d)	 	Outplacement Services. Gen-Probe agrees to provide Executive with
outplacement services during the first six months of the Salary Continuation Period.

	 
	 	(e)	 	Tax Matters. All compensation described in this Section 7 will be
subject to Gen-Probe’s collection of all applicable federal, state and local income
and employment withholding taxes. If any excise tax is imposed under Section 4999 in
connection with the compensation described in this Section 7 and/or in connection with
the acceleration upon severance of any stock options granted by Gen-Probe to the
Executive, Executive shall be solely responsible for any such excise tax.

	 
	 	(f)	 	Release of Claims. Gen-Probe’s obligation to make the payments and
provide the benefits under this Section 7 shall be conditioned upon (i) Executive’s
execution of a release of all claims, in standard form and content, within fifty (50)
days following the Executive’s termination of employment and (ii) such release shall
not have been revoked by the Executive within any period permitted under applicable
law. The release shall be mutual and shall also be signed on behalf of Gen-Probe.

	 
	 	(g)	 	Section 409A of the Internal Revenue Code and Specified Employees.
Notwithstanding any provision to the contrary in this Agreement, if Executive is
deemed by Gen-Probe at the time of his Separation from Service to be a “specified
employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed
commencement of any portion of the benefits to which Executive is entitled under this
Agreement is required in order to avoid a prohibited distribution under Section
409A(a)(2)(B)(i) of the Code, such portion of Executive’s benefits shall not be
provided to Executive prior to the earlier of (i) the expiration of the six-month
period measured from the date of the Executive’s Separation from Service or (ii) the
date of Executive’s death. Upon the first business day following the expiration of
the applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to
this Section 7(g) shall be paid in a lump sum to Executive (or the Executive’s estate
or beneficiaries), and any remaining payments due under the Agreement shall be paid as
otherwise provided herein. For purposes of Section 409A of the Code, Executive’s
right to receive the payments of compensation pursuant to the Agreement shall be
treated as a right to receive a series of separate

5

 

	 	 	 	payments and accordingly, each payment shall at all times be considered a separate and
distinct payment.

	8.	 	Miscellaneous. 

	 	(a)	 	Arbitration. Executive and Gen-Probe agree that any and all claims or
disputes that in any way relate to or arise out of Executive’s employment with
Gen-Probe or the termination of such employment (including but not limited to claims
under this Agreement or any other contract, tort claims, and statutory claims of
employment discrimination, retaliation or harassment) shall be resolved exclusively
through final and binding arbitration in San Diego, California. Executive and
Gen-Probe waive any rights to a jury trial in connection with such claims or disputes.
The costs of the arbitration, including the fees of the arbitrator, shall be borne
exclusively by Gen-Probe. Any such arbitration shall take place in San Diego,
California and shall be conducted by a single neutral arbitrator who shall be a
retired federal or state judge, to be appointed by the American Arbitration
Association (“AAA”) in accordance with AAA rules. The applicable procedural rules of
AAA shall govern the arbitration. The arbitrator’s decision shall be delivered in
writing and shall disclose the essential findings and conclusion on which the
arbitrator’s decision is based. The parties shall be permitted to conduct adequate
discovery to allow for a full and fair exploration of the issues in dispute in the
arbitration proceeding. The arbitrator may grant any relief which otherwise would have
been available to the parties in a court proceeding. The decision and award of the
arbitrator shall be final and binding, and judgment upon the arbitrator’s award may be
entered by any court of competent jurisdiction.

	 
	 	(b)	 	Governing Law. This Agreement shall be construed and enforced in
accordance with and be governed by the laws of the State of California.

	 
	 	(c)	 	Entire Agreement. Executive and Company have separately entered into
a letter agreement (“the Letter Agreement”) that covers certain other matters related
to Executive’s initial hiring by Company, including sign-on bonus and initial equity
incentive awards to be made to Executive, as well as matters covered by this
Agreement. The Letter Agreement and this Agreement constitute the complete and entire
agreement between the parties on the subject of the matters addressed therein and
supersede any other negotiations, agreements, understandings, oral agreements,
representations and past or future practices whether written or oral. In the event of
any conflict between this Agreement and the Letter Agreement, the terms of this
Agreement shall control. No provision of this Agreement or the Letter Agreement may
be amended, supplemented, modified, cancelled, or discharged unless such amendment,
supplement, modification, cancellation or discharge is agreed to, in writing, signed
by the Executive and a duly authorized officer of the Company (other than the
Executive); and no

6

 

	 	 	 	provision of this Agreement or the Letter Agreement may be waived, except in writing,
so signed by or on behalf of the party granting such waiver.

	 	(d)	 	Validity. The invalidity or unenforceability of any provision or
provisions 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.

	 
	 	(e)	 	Notices.  For the purposes of this Agreement, notices, demands and
all other communications provided for in this Agreement shall be in writing and shall
be deemed to have duly given when personally delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid, addressed as
follows:

If to the Executive:

                                        

                                        

                                        

If to Gen-Probe:

President and Chief Executive Officer

Gen-Probe Incorporated

10210 Genetic Center Drive

San Diego, California 92121

With a copy to:

General Counsel

Gen-Probe Incorporated

10210 Genetic Center Drive

San Diego, California 92121

	 	(f)	 	Successors. Gen-Probe will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or substantially all
the business and/or assets of Gen-Probe, by agreement in form and substance
satisfactory to the Executive, expressly to assume and agree to perform this Agreement
in the same manner and to the same extent that Gen-Probe would be required to perform
it if no such succession had taken place. This Agreement and all rights under the
Agreement shall be binding upon and shall inure to the benefit of and be enforceable
by the party’s personal or legal representatives, executors, administrators, heirs,
and successors.

	 
	 	(g)	 	No Right to Continued Employment. Nothing herein shall be construed
as giving the Executive any rights to continued employment with Gen-Probe, and
Gen-Probe shall continue to have the right to terminate the Executive’s

7

 

	 	 	 	employment at any time, with or without cause, subject to the provisions of this
Agreement.

     In witness whereof, the parties have executed this Agreement.

	 	 	 	 	 
	Executive:

	 	Gen-Probe Incorporated:

	 

	 	By	 	 
	 

	 	 	 	 
	[Name]

	 	 	 	Diana De Walt

Senior Vice President, Human Resources

8

 

ATTACHMENT “1”

DEFINITION OF “CHANGE IN CONTROL”

          Change in Control. “Change in Control” shall mean a change in ownership or control of the
Company effected through any of the following transactions:

          (a) any person or related group of persons (other than the Company or a person that,
prior to such transaction, directly or indirectly controls, is controlled by, or is under
common control with, the Company) directly or indirectly acquires beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act) of securities possessing more
than fifty percent (50%) of the total combined voting power of the Company’s outstanding
securities by means of any transaction or series of transactions; or

          (b) there is a change in the composition of the Board over a period of thirty-six
(36) consecutive months (or less) such that a majority of the Board members (rounded up to
the nearest whole number) ceases, by reason of one or more proxy contests for the election
of Board members, to be comprised of individuals who either (i) have been Board members
continuously since the beginning of such period or (ii) have been elected or nominated for
election as Board members during such period by at least a majority of the Board members
described in clause (i) who were still in office at the time such election or nomination
was approved by the Board; or

          (c) the stockholders of the Company approve a merger or consolidation of the Company
with any other corporation (or other entity), other than 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 or another entity) more than 66-2/3% of the combined
voting power of the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; provided, however, that a
merger or consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no person acquires more than 25% of the combined voting
power of the Company’s then outstanding voting securities shall not constitute a Change in
Control; or

          (d) the stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or substantially
all of the Company’s assets.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}]]