Document:

Exhibit 4.4

Exhibit 4.4

THE NATIONAL GRID GROUP PLC and NATIONAL GRID

COMPANY
PLC 

And 

Steven Holliday

Dated 6th March 2001

 

SERVICE
AGREEMENT

  

INDEX TO CLAUSES

	CLAUSE NO	TITLE	PAGE NO
	1.	Appointment
    and Term	3
	2.	Duties	3
	3.	Salary	4
	4.	Pension	5
	5.	Insurance Benefits	5
	6.	Professional Fees	5
	7.	Car	5
	8.	Expenses	6
	9.	Holidays	6
	10.	Sickness and Injury	6
	11.	Code of Corporate Governance	7
	12.	Interests in other Businesses	7
	13.	Confidentiality	8
	14.	Protection of Interests of Company	9
	15.	Termination	10
	16.	Waiver of Rights	12
	17.	Discipline and Grievances	12
	18.	Inventions	12
	19.	Interpretation	13
	20.	Entire Contract Continuity and Conditionality	14
	21.	Notices	14
	22.	Jurisdiction	14

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THIS SERVICE AGREEMENT DATED 6th March
       2001 IS BETWEEN:–

 THE NATIONAL GRID GROUP plc (the "Company")
  and THE NATIONAL GRID COMPANY plc whose registered offices are at 15
  Marylebone Road, London NW1 5JD and National Grid House, Kirby Corner Road,
  Coventry, CV4 8JY respectively (the "Companies") and Steven
  Holliday.
  

	1.	APPOINTMENT AND
      TERM
	 	 	 
	1.1	You will be employed by the
      Company as a Director and will perform such duties as may be assigned to
      you from time to time in accordance with Clause 2. Your current job title
      is Group Director, Europe, National Grid Group and you will report to the
      Group Chief Executive. 
	 	 	 
	1.2	Your appointment to this post
      will be effective from 30th March 2001 and will continue, subject to and
      in accordance with the provisions of this contract, until terminated:–
    
	 	 	 
	 	(a)	by the Companies in accordance with Clause
      15;
	 	 	 
	 	(b)	by the Companies giving you not less than
      twelve months' notice (24 months for the first year, declining on a straight
      line basis in the second year to 12 months);
	 	 	 
	 	(c)	by you giving the Companies not less than
      twelve months' notice. 
	 	 	 
	1.3	In accordance
      with the Company's Articles of Association, your appointment is subject
      to ratification by shareholders in General Meeting. 
	 	 
	2.	DUTIES
	 	 
	2.1	During the continuance
      of your employment, you will:–
	 	 	 
	 	(a)	perform such duties as may
      from time to time be reasonably assigned to you whether those duties relate
      to the business of the Company or to the business of any of its Subsidiaries
      or Associates (including the holding of offices therein);
	 	 	 
	 	(b)	in all respects comply with
      all lawful directions given by or under the authority of the Company; 
	 	 	 
	 	(c)	use your best endeavours to
      promote, develop and extend the business and the interests of the Company
      and any of its subsidiaries;
	 	 	 
	 	(d)	 unless prevented by sickness
      or injury and except during holidays, devote the whole of your time, attention
      and ability during your hours of work to the performance of your duties
      under this Contract;  

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	 	(e)	 act only in accordance with the Memorandum
      and Articles of Association of the Company or of the relevant Associate
      or Subsidiary In the Company; and
	 	 	 
	 	(f)	 keep the board of directors of the Company
      (and, where applicable of the relevant Group company) promptly and fully
      informed (in writing if so requested) of your conduct of the business or
      affairs of the Company and provide such explanations as they may require.
	 	 	 
	2.2	Your normal hours of work total
      37 hours per week. However, you will be expected to work such other hours
      as may reasonably be required for the proper performance of your duties
      and you will not be entitled to receive additional remuneration for work
      over and above normal hours. In line with the Working Time Regulations,
      you will not be required to work more than an average of 48 hours per week.
       
	 	 
	2.3	 You will be based at National
      Grid House, Kirby Corner Road, Coventry CV4 8JY, but you will also be provided
      with an office in the Group Headquarters at 15 Marylebone Road, London NW1
      5JD.
	 	 
	2.4	 The Company reserves the right
      (as far as it is reasonable to do so and after giving you reasonable notice
      of the change) to relocate your main place of work to (or to require you
      to perform some of your duties from or to post you temporarily to) any of
      its UK offices.  
	 	 
	3.	SALARY
	 	 
	3.1	 During the continuance of
      your employment (subject to Clause 10.2), you will be entitled to a salary
      at the rate of £270,000 per annum (or such higher rate as may from
      time to time be agreed between the parties).  
	 	 
	3.2	 Your salary will accrue from
      day to day, be payable by equal monthly instalments on or before the last
      day of each month, and be inclusive of any remuneration to which you may
      be, or become entitled as a holder of any office in the Company or any other
      company for the time being in the Company.
	 	 
	3.3	 The salary referred to in
      Clause 3.1 above shall be reviewed annually. The current review date is
      1 April and your salary will be reviewed for the first time in April 2002.
	 	 
	3.4	 The remuneration of senior
      staff is linked to the Company's and their own performance and you will
      be covered by these arrangements. This includes performance management principles
      and clear and agreed performance targets and objectives for each year which
      will be discussed and agreed with you by the Group Chief Executive. Following
      assessment of performance against these targets an annual bonus, currently
      of up to 60%, may be payable in June following the relevant year end. The
      performance year is 1 April to 31 March and your first participation in
      this bonus will commence 1 April 2001.

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	4.	PENSION 
    
	 	 	 
	4.1	 In this Clause the "ESPS"
      means the Electricity Supply Pension Scheme and words used in this Clause
      have the same meaning as they have under the provisions of the ESPS.
	 	 	 
	4.2 	Subject to the terms and conditions
      (both statutory and non-statutory) in force from time to time in respect
      of the ESPS Group in which the Companies participate or of which it is Principal
      Employer, you will be eligible (but not obliged) to be a Member of the ESPS.
      You will also be entitled to enhanced pension arrangements as set out in
      Schedule 1 to this contract.
	 	 
	4.3 	As a member of the ESPS a Contracting-out
      certificate is in force in respect of your employment
	 	 
	5. 	INSURANCE BENEFITS
	 	 
	5.1 	The Company will, during your
      employment, provide you and, if appropriate, your partner and dependent
      children with cover under a private medical expenses insurance scheme. This
      scheme is maintained from time to time by the Company for its employees,
      and cover is subject to and in accordance with the rules of such scheme
      which may be reviewed from time to time.
	 	 
	5.2	 The Company will, during your
      employment, provide you with personal accident insurance cover, subject
      to and in accordance with the rules from time to time of the relevant scheme,
      current details of which are available from Group Human Resources.
	 	 
	5.3 	The Company will provide Permanent
      Health Insurance to you whilst you are employed under this Contract until
      30th March 2006, subject to underwriting by our insurers. At that time you
      will be eligible for ill health provisions of ESPS.
	 	 
	6.	PROFESSIONAL FEES
      
	 	 
	6.1	 The Company will reimburse
      you in full for subscriptions for any professional memberships which, in
      its opinion, are relevant to your employment.
	 	 
	7. 	CAR 
    
	 	 
	7.1	 You will be provided you with
      a car of suitable age, make, model and specification during the continuance
      of your employment in accordance with the policy laid down by the Company
      from time to time and the Company shall pay all standing and running costs
      relating to it (including the cost of fuel for private mileage) but not
      any taxable benefit arising. You shall comply with all rules laid down by
      the Company in relation to Company vehicles, notify the Company immediately
      of any accident involving your car and of any charge brought against you
      for a motoring offence and, unless otherwise agreed, shall return the car
      to your place of work forthwith on termination of your employment.

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	8.	EXPENSES
	 	 	 
	8.1	You will be reimbursed
    with all reasonable travelling, hotel and other expenses properly incurred
       by you in the performance of your duties under this Contract, subject
       to you providing the Company with receipts or other evidence as shall
       be required, of payment of the said expenses. The Company will also, during
       your employment, reimburse line rental and cost of business calls in respect
    of your home telephone.
	 	 	 
	9.	HOLIDAYS
	 	 	 
	9.1	You will be entitled, on
      a pro-rata monthly basis, to 31 working days' holiday without loss of pay
      in each Holiday Year to be taken at such times as may be approved in advance
      by the Group Chief Executive. Holidays may not be carried forward, from
      one Holiday Year to the next. No payment will be made by the Company during
      the continuance of this Contract in lieu of
holidays not taken.
	 	 	 
	9.2	Upon termination of this
      Contract, if (in the opinion of the Company) its business needs have prevented
      you from taking your holiday entitlement, you shall be entitled to payment
      (at the rate of 1/260th of your annual salary for each day) in lieu on
      a pro rata basis for any holidays not taken which have accrued in the Holiday
      Year up to the Date of Termination. However, if appropriate, the Company
      shall be entitled to deduct from your final salary instalment an amount
      equal to 1/260th of your salary for each day's holiday taken prior to the
    Date of Termination in excess of your proportionate entitlement.
	 	 	 
	10.	SICKNESS AND INJURY
	 	 	 
	10.1	If you are absent
      from work as a result of
sickness or injury you will:–
	 	 	 
	 	(a)	notify the Company by telephone
      on the first day of your absence or in the event of being unable to do
    so, as soon as practicable thereafter;
	 	 	 
	 	(b)	if the period of absence
      is less than 8 consecutive calendar days, submit to the Company on your
    return a certificate of sickness completed by yourself;
	 	 	 
	 	(c)	if it is 8 consecutive
      calendar days or more, submit to the Company without delay a medical certificate
      signed by a practising medical practitioner in respect of each week of
    absence after the first;
	 	 	 
	 	(d)	you will, on request by
      the Company, allow yourself to be examined by the Company doctor who shall
    report to the Group Chief Executive as appropriate.

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	10.2	You will, subject to compliance
    with sub-clause 10.1 above and to Clause 15 below, be entitled to:–
	 	 	 
	 	(a)	payment of salary at the full basic
        rate and maintenance of other contributions and benefits contractually
        provided by the Company (less any social security or other benefits payable
        to you) during any period of absence from work as a result of sickness
        or injury up to a maximum of a continuous period of 180 days or for an
    aggregate of 130 working days in any 12 consecutive months;
	 	 	 
	 	(b)	payment of salary at half the full
        basic rate in addition to other contributions and benefits (less any
        social security or other benefits payable to you) during any such periods
        of absence in excess of a continuous period of 180 days or for an aggregate
    of 130 working days in any 12 consecutive months;
	 	 	 
	 	but you will not be entitled to any payment
        of salary or maintenance of benefits during any absence in excess of
    12 months.
	 	 	 
	10.3	The Company will pay statutory sick
        pay, where appropriate, in accordance with the legislation in force at
        the time of absence, and any payment of salary in accordance with Clause
        10.2 will go towards discharging its liability to pay statutory sick
    pay.
	 	 	 
	11.	CODE OF CORPORATE
    GOVERNANCE
	 	 	 
	11.1	The National Grid Group plc's Code
        of Corporate Governance provides for you, in furtherance of your duties
        as a Director of the Company, to take independent professional advice,
        if necessary, at the Company's expense. The Chairman or the Group Company
        Secretary should be notified if this step is taken, which should only
    be taken in the best interests of the Company.
	 	 	 
	11.2	As a Director of the Company you
        are, of course, bound by the provisions of the Companies Act and the
        Stock Exchange Listing Requirements, the details of which are available
        from the Group General Counsel and Company Secretary. If at any point
        you are uncertain as to the interpretation of such provisions you must
    seek the advice of the Group Chief Executive.
	 	 	 
	12.	INTERESTS IN OTHER
    BUSINESSES
	 	 	 
	12.1	You shall disclose promptly
        in writing to the Company all your interests and those of your spouse
        and dependent
        children, in any business other than the business of the Company and
        its Subsidiaries and Associates and, save with the written consent of
        the Company (such consent not to be unreasonably withheld), you will
        not during the continuance of your employment accept any public office
        nor will you hold any directorship nor will you be engaged or interested
        (except as the holder for passive investment purposes of any shares or
        other securities quoted or dealt in on a recognised stock exchange not
        exceeding,
in any case, 3 per cent of the class of
        securities of the company concerned) either directly or indirectly in
        any business
        or commercial occupation other than the business of the Company and its
    Subsidiaries and Associates.

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	12.2	You shall comply where relevant
        with every rule of law, every regulation of The Stock Exchange and every
        regulation
        of the Company from time to time in force including compliance with the
        spirit as well as the letter of the rules for the time being applicable
        to the relevant stock exchanges on which shares of the Company are for
        the time being listed or traded. In relation to overseas dealings, you
        will also comply with all laws of the state and all regulations of the
        stock exchange, market or dealing system in which such dealings take
        place; and you will not (and will procure so far as you are able that
        your spouse and children do not) deal or become or cease to be interested
        (within the meaning of Part 1 of Schedule XIII to the Companies Act 1985)
        in any securities of the Company except in accordance with any rules
        or guidelines from time to time relating to securities transactions by
        senior executives of
the Company.
	 	 	 
	13.	CONFIDENTIALITY
	 	 	 
	13.1	You will not during the continuance
        of your employment or afterwards (unless authorised to do so by the Company
    or by a court of competent jurisdiction) directly or indirectly:–
	 	 	 
	 	(a)	use for your own benefit or the benefit
    of any other person; or
	 	 	 
	 	(b)	disclose to any person,
	 	 	 
	 	any trade secrets or other
        confidential information relating to the business, affairs, finances,
        products or
        processes of the Company and/or of any of its Subsidiaries or Associates
    ("Confidential Information").
	 	 	 
	13.2	The restriction in this Clause will
        not prevent you after the Date of Termination, from using for your own
    or another's benefit, any Confidential Information which:-
	 	 	 
	 	(a)	by virtue of your employment, becomes
    part of your own skill and knowledge; and
	 	 	 
	 	(b)	apart from the provisions of this
        Contract, could lawfully be used by you for that purpose, and in this
        respect you acknowledge without limitation the restrictions in Section
    57 of the Electricity Act 1989.
	 	 	 
	13.3	During your employment, you
    will not:–
	 	 	 
	 	(a)	directly or indirectly solicit, receive
        or obtain any discount, rebate, commission or other inducement (whether
        in cash or in kind) which is not authorised by regulations or guidelines
        from time to time governing dealings by executives on behalf of the Company,
    or, if you do, you will account immediately to the Company for
    the amount so received;  

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	 	(b)	except in the proper course of your duties
        under this Agreement remove from Company premises or copy or allow others
        to copy (or transmit by fax, e-mail or other means) the contents of any
        document, computer disk, tape or other tangible item which contains any
        Confidential Information
or which belongs to the Company; or
	 	 	 
	 	(c)	at any time make any untrue or misleading
        statement
relating to the Company, or any of its Subsidiaries or Associates.  
	 	 	 
	14.	PROTECTION OF
    INTERESTS OF COMPANY  
	 	 	 
	14.1	During the period
        of 12 months after the Date of Termination, you will not directly or
        indirectly offer employment to or solicit or entice away or endeavour
        to entice away from the Company, or any of its Subsidiaries or Associates,
        any person who is and was, at any time during the period of two years
        prior to the Date of Termination, employed or engaged by the Company
        or any of its Subsidiaries or Associates in a senior management, senior
        technical or senior sales position and who, by reason of such position,
        possesses any Confidential Information or is likely to be able to solicit
        the custom of any customer of the Company, or its Subsidiaries
or Associates. 
	 	 	 
	14.2	After the Date
        of Termination you will not represent yourself or permit yourself to
        be held out as being in any way connected with or interested in the business
        of the Company; and after such date you will not represent yourself or
        permit yourself to be held out as being in any way connected with the
        business of any of the Subsidiaries or Associates of the Company, except
    if and for so long as you remain an employee of that Subsidiary or Associate. 
	 	 	 
	14.3	It is your obligation
        to ensure you take no action and make no statement (or omit to take any
        action or make any statement) which constitutes unlawful discrimination
        whether under the Equal Pay Act 1970, the Sex Discrimination Act 1975,
        the Race Relations Act 1976, the Trade Union and Labour Relations (Consolidation)
        Act 1992, the Disability Discrimination Act
1995 or otherwise. 
	 	 	 
	14.4	You are required
        to comply with the provisions of the legislation on health and safety
        and working conditions. You are further required to do your utmost to
        ensure that the Company, and any of its Subsidiaries or Associates, comply
        with such health and safety legislation, all legislation concerning their
        areas of activity and generally with all legal obligations affecting
    the Company, or any of its Subsidiaries or Associates.
	 	 	 
	14.5	In this Clause
        references to acting directly or indirectly include (without prejudice
        to the generality of that expression) references to acting alone or jointly
        with or by means of any other person, firm
or company. 
	 	 	 

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	15.	TERMINATION
	 	 	 
	15.1	At any time after notice to
        terminate your employment has been served or received by the Company,
    the Company may:–
	 	 	 
	 	(a)	require you to return to the Company any
        documents, computer disks and tapes and other tangible items in your
        possession or under your control which belong to the Company or which
        contain or refer to any Confidential
Information; and/or 
	 	 	 
	 	(b)	require you to delete all Confidential
        Information from any computer disks, tapes or other re-usable material
        in your possession or under your control and destroy all other documents
        and tangible items in your possession or under your control which contain
        or refer to any Confidential Information;
and/or  
	 	 	 
	 	(c)	for such period as it considers reasonable
        ending no later than the expiry of such notice suspend you from the performance
    of all or any of your duties under this Agreement; and/or   
	 	 	 
	 	(d)	appoint a replacement to hold the same
        or similar job title as you and/or to carry out all or any of your duties
    instead of you; and/or
	 	 	 
	 	(e)	for such period as it considers reasonable
        ending not later than the expiry of such notice exclude you from all
        or any premises
of the Company or its Subsidiaries or Associates; and/or
	 	 	 
	 	(f)	for such period as it considers reasonable
        ending no later than the expiry of such notice require you not, without
        its prior consent, to engage in any contact (whether or not at your own
        instance) with any customer, supplier, employee, director, officer or
        agent of any company in the Company which touches and concerns any of
    the business affairs of the Company.
	 	 	 
	15.2	Without prejudice
        to the Company's right to summarily dismiss you for gross misconduct,
        the Company will be entitled to terminate your employment without notice
    if you:–
	 	 	 
	 	(a)	commit a serious or persistent breach
        of any
term of this Contract;
	 	 	 
	 	(b)	commit any act of dishonesty or engage
        in any conduct (in either case whether or not in the course of your employment)
        which, in the opinion of the Company, causes or is likely to cause your
        continued employment to be detrimental to the interests or reputation
        of the Company, or any of its
Subsidiaries or Associates;
	 	 	 
	 	(c)	become bankrupt or compound with your
    creditors; or
	 	 	 
	 	(d)	are convicted of any arrestable criminal
    offence (other than an offence under road traffic legislation
        in the United Kingdom or elsewhere for which a fine or non-custodial
    penalty is imposed).  

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	15.3	If you are incapacitated by
        sickness (including mental disorder) or injury from carrying out your
        duties under this Contract for a continuous period of 180 days or for
        an aggregate of 130 working days in any 12 consecutive months, the Company
        will be entitled, notwithstanding Clause 10.2 or your entitlement at
        that time to sick pay or benefits under the Company's permanent health
        insurance scheme, to terminate this Contract by not less than 6 months'
        written notice given within 6 months after the end of the 180 or (as
    the case may be) 130 working days.
	 	 	 
	15.4	When requested to do so during
        the currency of any notice to terminate your employment given or received
        by you and, in any
event, on the Date of Termination you will promptly:– 
	 	 	 
	 	(a)	resign (if you have not already done so)
        from all offices held by you in the Company and its Subsidiaries and
    Associates;
	 	 	 
	 	(b)	deliver up (if you have not already done
        so) to the Company all lists of customers, correspondence, documents,
        discs, tapes, data listing, codes, designs, drawings and all other materials
        and property belonging to the Company or any of its Subsidiaries or Associates
        which may be in your possession or under your control, including any
    copies;
	 	 	 
	 	(c)	confirm in writing that you no longer
        have in your possession, custody or power any property of or relating
        to the business of the Company and that you have not retained or made
        any unauthorised copy (whether in documentary or electronic form) of
        any data which contains or refers to any
Confidential information; and
	 	 	 
	 	(d)	deliver up to the Company forthwith any
        car provided under this Contract; and you hereby irrevocably authorise
        the Company to appoint someone as your attorney to act in your name and
        on your behalf to execute all documents and do all things necessary to
        effect the resignations referred to above, in the event of your failure
        to do so within 7 days of your being so requested or of the Termination
    Date (as the case may be).  
	 	 	 
	15.5	On serving or
        receiving notice to terminate this Contract or at any time thereafter
        during the currency of such notice the Company reserves the right in
        its absolute
        discretion to pay to you your salary (at the rate then payable under
    Clause 3.1 hereof) in lieu of your entitlement to notice.  
	 	 	 
	15.6	Any termination
        of your employment will be without prejudice to your continuing obligations
    under this Agreement.  

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	16.1	WAIVER OF RIGHTS
	 	 	 	 
	16.1	If:– 
	 	 	 	 
	 	(a)	  your employment is terminated:– 
	 	 	 	 
	 	 	i	by reason of the liquidation of the Company
    for the purpose of amalgamation or reconstruction; or  
	 	 	 	 
	 	 	ii	as part of any arrangement for the amalgamation
        of the undertaking of the Company not involving liquidation or for the
        transfer of the whole or part of the undertaking of the Company to any
        of its Subsidiaries
or Associates, and 
	 	 	 	 
	 	(b)	you are offered employment of a similar
        nature with the amalgamated or reconstructed or transferee company on
        terms not generally
less favourable to you than the terms of this Contract; 
	 	 	 	 
	 	 you will have no claim against the Company
    under this Contract in respect of that termination.  
	 	 	 	 
	17.	DISCIPLINE AND GRIEVANCES 
	 	 	 	 
	17.1	  As a Director of the Company, you are
        expected to conduct yourself in a thoroughly professional manner at all
        times. A copy of the Employee Rules of the Company for the time being
        in force, which apply to you by virtue of your employment hereunder but
        which do not form part of your terms and conditions of employment, can
    be obtained from Group Human Resources.  
	 	 	 	 
	18.	INVENTIONS 
	 	 	 	 
	18.1	If at any time during the continuance
        of your employment you, whether alone or with any other person, make,
        discover or produce any invention, process, development or design which
        relates to, or affects, or in the opinion of the Company is capable of
        being used or adapted for use in or in connection with, the business
        or any product, process or intellectual property right of the Company
    or any of its Subsidiaries or Associates:–
	 	 	 	 
	 	(a)	the invention, process, development or
        design will be the absolute property of the Company (except to the extent,
        if any, provided
otherwise by Section 39 of the Patents Act 1977); and 
	 	 	 	 
	 	(b)	  you will immediately disclose it to
        the Company
in writing.  
	 	 	 	 
	18.2	  You will, if and when required to do
        so by the Company (whether during the continuance of your employment
        or afterwards), and
at its expense:– 
	 	 	 	 
	 	(a)	  apply, or join with the
        Company, or any of its
Subsidiaries or Associates in applying for letters
patent or other protection in any part of the world for any invention, process,
development or design to which Clause 18.1 above applies;  
	 	 	 	 

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	 	(b)	  execute or procure to be executed all
        instruments, and do or procure to be done all things, which are necessary
        for vesting such letters patent or other protection in the Company or
        any other company, or subsequently for renewing and maintaining the same
        in the name of the Company or its nominee;
and  
	 	 	 	 
	 	(c)	  assist in defending any proceedings
        relating to, or to any application for, such letters patent or other
    protection.  
	 	 	 	 
	18.3	  In relation to each and every copyright
        work or design which relates either directly or indirectly to the business
        of the
Company, or any of its Subsidiaries or Associates (a “Group Work”) which you
(jointly or alone) originate, conceive, write or make at any time during the
period of your employment:– 
	 	 	 	 
	 	(a)	  you will promptly disclose such Group
        Work to the Company. Group Works made wholly outside your normal working
        hours which are wholly unconnected with your employment are not Group
    Works;  
	 	 	 	 
	 	(b)	  you hereby assign to the Company by
        way of future assignment all copyright, design right and other proprietary
        rights (if any)
throughout the world in such Group Work;  
	 	 	 	 
	 	(c)	you hereby irrevocably and
        unconditionally waive in favour of the Company any and all moral rights
        conferred on
        you by Part 1 of the Copyright Designs and Patents Act 1988 in relation
    to any such Group Works;
	 	 	 	 
	 	(c)	  you acknowledge that, for the purposes
        of the proviso to Section 2(1) of the Registered Designs Act 1949 (as
        amended by the Copyright Designs and Patents Act 1988), the covenants
        on the part of you and the Company will be treated as good consideration
        and, for the purposes of that Act, the Company will be the proprietor
    of any design which forms part of the Group Works. 
	 	 
	19.	INTERPRETATION
	 	 	 	 
	 	  In this Contract:– 
	 	 	 	 
	19.1 	 “Associate” means a
        body corporate which for the time being has not less than 20 per cent
        of its equity share
    capital beneficially owned by the Company; 

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	19.2	“Date of Termination” means the date upon
        which your employment under this Agreement terminates or, where so notified
        by the Company, the date with effect from which the Company exercises
    its right to suspend you under Clause 15.1(c); 
	 	 	 	 
	19.3	 “Holiday Year” means each 12 month period
    commencing 1st February and ending 31st January;  
	 	 	 	 
	19.4	 “Subsidiary” has the meaning attributed
        to it by Section 736 of the Companies Act 1985 and “equity share capital" has
    the meaning attributed to it by Section 744 of the Companies Act 1985;  
	 	 	 	 
	19.5	  unless otherwise stated and except in
        Clause
20 below, a reference to “your employment” is to your employment by the Companies
under this Contract;  
	 	 	 	 
	19.6	  unless the context otherwise requires,
        words in the singular include the plural and vice versa, and a reference
        to a person includes a reference to a body corporate and to an unincorporated
    body of persons;  
	 	 	 	 
	19.7	  a reference to a statute or statutory
        provisions includes a reference to that statute or provision as from
        time to time modified
or re-enacted.  
	 	 	 	 
	20.	 ENTIRE CONTRACT CONTINUITY AND CONDITIONALITY 
	 	 	 	 
	20.1	  Except as otherwise expressly provided
        by its terms and for any detailed rules (not being inconsistent with
        the express terms hereof) from time to time laid down by the Company,
        this Contract represents the entire understanding, and supersedes any
        previous agreement, between the parties in relation to your employment
    by the Company, its Subsidiaries or Associates.  
	 	 	 	 
	21.	NOTICES 
	 	 	 	 
	21.1	  Any notice to be given under this Contract
        will be in writing and will be deemed to be sufficiently served by one
        party on the other if it is either delivered personally or is sent by
        prepaid first class post and addressed to the party to whom it is to
        be given, in the case of yourself, at your last known residence and in
        the case of the Company, at its registered office, and any such notice
        if so posted will be deemed to have been served on the day (excluding
        Sundays and public holidays) following that on which it was
posted.  
	 	 	 	 
	22.	JURISDICTION 
	 	 	 	 
	22.1	  This Contract shall be governed by and
        interpreted in accordance with the laws of England and Wales and each
        of the parties submits to the jurisdiction of the English and Welsh courts
        as regards any claim or matter arising under this Contract or as a direct
    result of your employment by the Company.  

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Signed for and on behalf of 

The National Grid Group plc and The National Grid Company plc

	 	 	
	Signed	 
	 	 	

	Date	 	6.3.01
	 	 	

	 	 	 
	 	 	 

I accept employment with the National Grid
    Group plc and The National Grid Company plc on the terms and conditions contained
in this Service Agreement.

	 	 	
	Signed	 
	 	 	

	Date	 	13.3.01
	 	 	

     

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SCHEDULE 1

THE NATIONAL GRID GROUP plc and THE NATIONAL GRID
COMPANY plc

SUMMARY OF ENHANCED PENSION AND LIFE ASSURANCE

ARRANGEMENTS 

Steven Holliday 

This summary, which should be read in conjunction with the National Grid Company plc ("the Company") section of the ESPS booklet, notifies you of your entitlement to additional benefits to those provided by the ESPS. The additions are as follows: 

	1.	Your Normal Pension Age is age 60.
	 	 	 
	2.	Your pension will accrue at
       a rate of 1/30th of your Pensionable Salary for
       each year of Pensionable Service from 30th March 2001 (complete days will
       count) or such higher amount as may be advised by the Actuary to the Scheme,
       subject to pension payable, including any retained benefits, not exceeding
       Inland Revenue limits (but see 12 below). You will be able to exchange
       part of your pension for a tax free lump sum up to the maximum permitted
    by the Inland Revenue.  
	 	 	 
	3.	 You may retire early and opt
      for payment of an immediate pension, subject to the consent of the Companies,
      at any time after age 55 in which case you will be entitled to an immediate
      pension calculated on your Pensionable Service and your Pensionable Salary
    at the date of termination.  
	 	 	 
	4.	  Should your employment be
      terminated as a result of redundancy, and the termination is with the consent
      of the Companies, you
will be entitled to the greater of:  
	 	 	 
	 	(a)	  the severance terms of The
      National Grid Group, as amended from time to time, which currently include
      payment of a pension under standard ESPS terms only, (ie not a pension
      based on the enhanced accrual rate set out in this summary) at age 50,
    or immediately if aged over 50, or; 

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	 	(b)	  a deferred pension (and lump sum) payable
        at your request from age 50, or such later date as you may choose but
        no later than 60. The pension (and lump sum) will be calculated on your
        Pensionable Service and your Pensionable Salary at the date of termination.
        Should such a termination. occur after your 50th birthday you will be
        entitled to an immediate pension (and lump sum) calculated on your Pensionable
        Service and your Pensionable Salary
at the date of termination.  
	 	 	 
	5.	  In the event that it is
        agreed with the Companies that you should continue in service beyond
        age 60, there will be an appropriate adjustment to your benefits. The
        exact terms of the adjustment will be determined by the Companies and
        notified to you, upon advice received from the Actuary, when you reach
    age 60.  
	 	 
	6.	  On death in service before
        the Normal Pension Age a lump sum is available for your beneficiaries
        equal to four times your annual rate of basic salary at death, plus the
        total amount of contributions with interest paid by you into the National
    Grid Company plc Section of the ESPS.  
	 	 
	7.	  The pension payable to a
        spouse on death in service before Normal Pension Age is calculated as
        2/3 of the pension you would have received at Normal Pension Age based
    on your Pensionable Salary at death.  
	 	 
	8.	  The pension payable to a
        spouse on death after retirement is calculated as 2/3 of your pension.
        The calculation will assume you chose to exchange no pension for cash
        at retirement and will be increased at the same rate as your pension
    has increased between retirement and death.  
	 	 
	9.	  In the event of a transfer
        in of accrued pension benefits from another pension provider, any Back
        Service Credit will be calculated
on standard ESPS benefits.  
	 	 
	10.	  Your contributions will
        be normally be 6% of your Salary. However, this may be reduced from time
        to time based on actuarial advice. In this respect, you will benefit
        from a reduction in your contribution to 3% of your salary until March
    2002 or such later time as notified.  
	 	 
	11.	  In this schedule "Salary" means
        the annual amount of salary payable by the Companies as stipulated in
        your Agreement as increased from time to time but excluding any bonus,
        allowance or emoluments in kind appertaining to your employment, unless
    otherwise determined by the Companies.  
	 	 
	 	 "Pensionable Salary" means
    the greater of  
	 	 
	 	(a)	  the Salary paid or payable in the highest
        paid year in the, last five years of Pensionable Service, or if Pensionable
        Service is for a shorter period than five years in respect of such shorter
    period, or;

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	 	(b)	the average annual Salary paid in the
        three highest paid consecutive years in the last ten of Pensionable Service,
        or if your Pensionable Service is for a shorter period, in respect of
    such shorter period.  
	 	 	 
	 	 Where a year other than the
    last one is used, such Salary to be increased in line with RPI.  
	 	 	 
	 	 "Pensionable Service" means
        service whilst a contributing member of the ESPS. It is calculated in
        complete years but with each day completed in excess of a complete year
        calculated as 1/365 of a year and may include a Back Service Credit or
    Added year.  
	 	 	 
	11.	  You should note that the
        Inland Revenue have
placed a restriction (the "earnings cap") on the amount of pay on which benefits
may be calculated in an approved arrangement (£91,800 for the 2000/2001
Tax Year). Your pension at Normal Pension Age will be augmented under the National
Grid Company plc Section of the ESPS, if necessary, up to the maximum allowable.
If your full pension promise cannot be met from the National Grid Company plc
Section of the ESPS, you will be provided with additional benefits of appropriate
value under a separate agreement. With the exception of the earnings cap restriction,
all other limits imposed by the Inland Revenue on approved arrangements will
apply to the benefits referred to in this summary.  
	 	 	 
	13.	  In all other respects the
        provisions of ESPS
will apply to you.

 

3Exhibit 4.5

 Exhibit 4.5  

  NATIONAL GRID GROUP PLC and 

  NATIONAL GRID COMPANY PLC 

And 

STEVE LUCAS 

Dated
      13/6/2002

 

	 	
	 
	 	SERVICE
    AGREEMENT 	 
	 	
	 

 

  THIS SERVICE AGREEMENT DATED
  13/6/2002 IS
  BETWEEN:–

NATIONAL GRID
GROUP
plc (to become National Grid Transco plc) (the “Company”)
and THE
NATIONAL
GRID COMPANY plc whose registered offices are at 15
Marylebone Road, London NW1 5JD and National Grid House, Kirby Comer Road, Coventry,
CV4
8JY respectively (the “Companies”) and STEVE LUCAS (“you”). 

	1.	CONDITION
    PRECEDENT
	 	 	 
	 	This agreement
        shall be conditional upon the scheme of arrangement for the merger of
        the Company and Lattice Group plc becoming unconditional and becoming
        effective by not later than 31 March 2003 or such later date (if any)
        as the Company and Lattice Group plc may agree and the High Court may
    allow. 
	 	 	 
	2.	APPOINTMENT
    AND TERM
	 	 	 
	2.1	You
        will be
        employed by the Company as an Executive Director and will perform such
        duties as may be assigned to you from time to time in accordance with
    Clause 3. Your current job title is Group Finance Director and you will report
    to the Group Chief Executive. 
	 	 	 
	2.2	Your
        appointment to this post will continue, subject to and in accordance
    with the provisions of this contract, until terminated:–
	 	 
	 	(a) 	by the
    Companies in accordance with Clause 16; 
	 	 	 
	 	 (b) 	by the
    Companies giving you not less than twelve months’ notice; 
	 	 	 
	 	(c) 	by you
    giving the Companies not less than twelve months’ notice. 
	 	 	 
	2.3	In
        accordance with the Company’s Articles of Association, your appointment
    is subject to ratification by shareholders in General Meeting.
	 	 
	2.4	Your
        previous employment with Lattice Group plc does count as part of your
        period of continuous employment with the Companies. Your period of continuous
        employment commenced on 25
    July 1994. 
	 	 
	3.	DUTIES
	 	 
	3.1	During
    the continuance of your employment, you will:–
	 	 
	 	(b) 	perform
        such duties as may from time to time be reasonably assigned to you whether
        those duties relate to the business of the Company or to the business
        of any of its Subsidiaries or Associates (including the holding of offices
    therein);
	 	 	 
	 	(b) 	 in all
        respects comply with all lawful directions given by or under the authority
    of the Company;
	 	 	 
	 	(c) 	use your
    best endeavours to promote, develop and extend the business and the interests
    of the Company and any of its subsidiaries;

2 

	 	 	 
	 	 	 
	 	(d)	unless
        prevented by sickness or injury and except during holidays, devote the
        whole of your time, attention and ability during your hours of work to
    the performance of your duties under this Contract; 
	 	 	 
	 	(e)	act
        only in accordance with the Memorandum and Articles of Association of
        the Company or of the relevant Associate or Subsidiary In the Company;
    and
	 	 	 
	 	(f)	keep
        the board of directors of the Company (and, where applicable of the relevant
        Group company) promptly and fully informed (in writing if so requested)
        of your conduct of the business or affairs of the Company and provide
    such explanations as they may require.
	 	 	 
	3.2	Your
        normal hours of work total 37 hours per week However, you will be expected
        to work such other hours as may reasonably be required for the proper
        performance of your duties and you will not be entitled to receive additional
        remuneration for work over and above normal hours. In line with the Working
        Time Regulations, you will not be required to work more than an average
    of 48 hours per week.
	 	 	 
	3.3	You
        will be based
in London. 
	 	 	 
	3.4	The
        Company reserves the right (as far as it is reasonable to do so and after
        giving you reasonable notice of the change) to relocate your main place
        of work to (or to require you to perform some of your duties from or
        to post you
temporarily to) any of its UK offices.
	 	 	 
	4.	SALARY
	 	 	 
	4.1	During
        the continuance of your employment (subject to Clause 10.2),
        you will be entitled to a salary at the rate of £315,000 per annum
    (or such higher rate as may from time to time be agreed between the parties).
	 	 	 
	4.2	Your
        salary will accrue from day to day, be payable by equal monthly instalments
        on or before the last day of each month, and be inclusive of any remuneration
        to which you may be, or become entitled as a holder of any office in
        the Company or any other
company for the time being in the Company. 
	 	 	 
	4.3	The
        salary referred
        to in Clause 4.1 above shall be reviewed annually. The
        current review date is 1 April and your salary will be reviewed for the
    first time in April 2003.
	 	 	 
	4.4	The
        remuneration of senior staff is linked to the Company's and their own
        performance and you will be covered by these arrangements. This includes
        performance management principles and clear and agreed performance targets
        and objectives for each year which will be discussed and agreed with
        you by the Group Chief Executive. Following assessment of performance
        against these targets an annual bonus, currently of up to 60%, may be
        payable in June following the relevant year end. The performance year
    is 1 April to 31 March.
	 	 	 

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	5.	PENSION
    AND BENEFITS  
	 	 
	5.1	You
        will be entitled to remain a member of the Lattice Group Pension Scheme.
        The scheme's benefits and contributions are subject to a statutory earnings
        cap. If your pensionable earnings exceed this cap you will automatically
        participate in the Lattice Group Supplementary Benefits Scheme. This
        provides for pension benefits to be payable in respect of those earnings
        above the cap that would otherwise have been pensionable had the limit
        not applied. Membership of such schemes is subject to and in accordance
        with the rules of the relevant scheme. The
        Companies agree to become participating employers if necessary to maintain
    your membership of the pension scheme(s).
	 	 
	5.2	There
        will be no further awards under the Lattice Long and Short Term Incentive
        Schemes and any other incentive schemes that Lattice Group plc has established
        which will close but without prejudice to existing awards. Subject to
        meeting the Company's eligibility criteria you will be eligible to participate
        in other share schemes in the Company. At the Company's discretion you
        will have the opportunity of participating in the Lattice personal accident,
        private medical insurance and financial counselling schemes. The Company
        may amend, suspend or terminate these schemes or any parts thereof, at
        any time in its absolute discretion and you shall have no contractual
        right to any continued participation in the same. Membership of such
        schemes is subject to and in accordance with the rules of the relevant
    schemes as amended from time to time.
	 	 
	6.	PROFESSIONAL
    FEES
	 	 
	6.1	The
        Company will reimburse you in full for subscriptions for any professional
        memberships which,
in its opinion, are relevant to your employment.  
	 	 
	7.	CAR
	 	 
	7.1	You
        will be provided you with a car of suitable age, make, model and specification
        during the continuance of your employment in accordance with the policy
        laid down by the Company from time to time and the Company shall pay
        all standing and running costs
        relating to it (including the cost of fuel for private mileage) but not any
        taxable benefit arising. You shall comply with all rules laid down by
        the Company in relation to Company vehicles, notify the Company immediately
        of any accident involving your car and of any charge brought against
        you for a motoring offence and, unless otherwise agreed, shall return
    the car to your place of work forthwith on termination of your employment.
	 	 
	8.	EXPENSES
	 	 
	8.1	You
        will be reimbursed with all reasonable and properly incurred travelling,
        hotel and other expenses properly incurred by you in the performance
        of your duties under this Contract, subject to you providing the Company
        with receipts or other evidence as shall be required, of payment of the
        said expenses. The Company will also, during your employment, reimburse
        line rental and cost of business calls in respect of your
home telephone.  
	 	 
	9.	HOLIDAYS
	 	 
	9.1	You
        will be entitled, on a pro-rata monthly basis, to 28 working days' holiday
        without loss of pay in each year to be taken at such times as may be
    approved in advance by the Group Chief
        Executive. Holidays may not be carried forward from one year to the next.
        No payment will be made by the Company during the continuance of this
    Contract in lieu of holidays not taken.

4

	 	 
	 	 	 
	9.2	Upon
        termination of this Contract, you shall be entitled to payment (at the
        rate of 1/260th of your annual salary for each day) in lieu on a pro
        rata basis for any holidays not taken which have accrued in the year
        up to the Date of Termination. However, if appropriate, the Company shall
        be entitled to deduct from your final salary instalment an amount equal
        to 1/260th of your salary for each day's holiday taken prior to the Date
    of Termination in excess of your proportionate entitlement. 
	 	 	 
	10.	SICKNESS
    AND INJURY 
	 	 	 
	10.1	If
        you are
    absent from work as a result of sickness or injury you will:–
	 	 	 
	 	(a)	notify
        the Company by telephone on the first day of your absence or in the event
    of being unable to do so, as soon as practicable thereafter;
	 	 	 
	 	(b)	if
        the period of absence is less than 8 consecutive calendar days, submit
        to the Company on your return a certificate of sickness completed by
    yourself;
	 	 	 
	 	(c)	if
        it is 8 consecutive calendar days or more, submit to the Company without
        delay a medical certificate signed by a practising medical practitioner
    in respect of each week of absence after the first;
	 	 	 
	 	(d)	you
        will, on request by the Company, allow yourself to be examined by
        the Company doctor who shall report to the Group Chief Executive as appropriate.
	 	 	 
	10.2	You
        will, subject to compliance with sub-clause 10.1 above and to Clause
        16 below, be entitled
to:–
	 	 	 
	 	(a)	payment
        of salary at
        the full basic rate and maintenance of other contributions and benefits
        contractually provided by the Company (less any social security or other
        benefits payable to you) during any period of absence from work as a
        result of sickness or injury up to a maximum of a continuous period of
        180 days or for an aggregate of 130 working days in any 12 consecutive
    months;
	 	 	 
	 	(b)	payment
        of salary at half the full basic rate in addition to other contributions
        and benefits (less any social security or other benefits payable to you)
        during any such periods of absence in excess of a continuous period of
        180 days or for an aggregate of 130 working days in any 12 consecutive
    months;
	 	 	 
	 	but
        you will not be entitled to any payment of salary or maintenance of benefits during
    any absence in excess of 12 months.  
	 	 	 
	10.3	The
        Company will pay statutory sick pay, where appropriate, in accordance
        with the legislation in force at the time of absence, and any payment
        of salary in accordance with Clause 10.2 will go towards discharging
    its liability to pay statutory sick pay.

5

	11.	CODE
    OF CORPORATE GOVERNANCE
	 	 
	11.1	The National
        Grid Group plc's Code of Corporate Governance provides for you, in furtherance
        of your duties as a Director of the Company, to take independent professional
        advice, if necessary, at the Company's expense. The Chairman or the Group
        Company Secretary should be notified if this step is taken, which should
        only be taken in the best
interests of the Company. 
	 	 
	11.2	As a Director
        of the Company you are, of course, bound by the provisions of the Companies
        Act and the Listing Rules of the United Kingdom Listing Authority, the
        provisions of the Financial Services and Markets Act 2000 and
        the Code of Market Conduct, the details of which are available from the
        Group General Counsel and Company Secretary. If at any point you are
        uncertain as to the interpretation of such provisions you must seek the
    advice of the Group Chief Executive.  
	 	 
	12.	INTERESTS
    IN OTHER BUSINESSES 
	 	 
	12.1	  You shall disclose
        promptly in writing to the Company all your interests and those of your
        spouse and dependent children, in any business other than the business
        of the Company and its Subsidiaries and Associates and, save with the
        written consent of the Company (such consent not to be unreasonably withheld),
        you will not during the continuance of your employment accept any public
        office nor will you hold any directorship nor will you be engaged or
        interested (except as the holder for passive investment purposes of any
        shares or other securities quoted or dealt in on the London Stock Exchange,
        any other recognised stock exchange or NASDAQ not exceeding, in any case,
        3 per cent of the class of securities of the company concerned) either
        directly or indirectly in any business or commercial occupation other
    than the business of the Company and its Subsidiaries and Associates.  
	 	 
	12.2	In relation
        to dealing in shares, debentures or other securities of the Companies,
        its Subsidiaries or Associates and unpublished price sensitive information
        affecting the shares, debentures or other securities of any other company,
        you shall comply where relevant with every rule of law, every regulation
        of the UKLA, The London Stock Exchange and every regulation of the Company
        from time to time in force including compliance with the spirit as well
        as the letter of the rules for the time being applicable to the relevant
        stock exchanges on which shares of the Companies, its Subsidiaries or
        Associates are for the time being listed or traded. In relation to overseas
        dealings, you will also comply with all laws of the state and all regulations
        of the stock exchange, market or dealing system in which such dealings
        take place; and you will not (and will procure so far as you are able
        that your spouse and children do not) deal or become or cease to be interested
        (within the meaning of Part 1 of Schedule XIII to the Companies Act 1985)
        in any securities of the Company except in accordance with any rules
        or guidelines from time to time relating to securities transactions by
    senior executives of the Company.  
	 	 
	13.	 CONFIDENTIALITY  
	 	 
	13.1	  You will
        not during the continuance of your employment or afterwards (unless authorised
        to do so by the Company or by a court of competent jurisdiction) directly
    or indirectly:–

6 

	 	(a)	use for
    your own benefit or the benefit of any other person; or 
	 	 	 
	 	(b)	disclose
        to any
person,
	 	 
	 	 any
        trade secrets or other confidential information relating to the business,
        affairs,
        finances, products or processes of the Company and/or of any of its Subsidiaries
    or Associates ("Confidential Information").  
	 	 
	13.2	  The
        restriction in this Clause will not prevent you after the Date of Termination,
        from
        using for your own or another's benefit, any Confidential Information
    which:–
	 	 	 
	 	(a)	by virtue
    of your employment, becomes part of your own skill and knowledge; and
	 	 	 
	 	(b)	apart from
    the provisions of this Contract, could lawfully be used by you for that purpose. 
	 	 	 
	13.3	During
        your employment,
you will not:–
	 	 	 
	 	(a)	directly
        or indirectly solicit, receive or obtain any discount, rebate, commission
        or other inducement (whether in cash or in kind) which is not authorised
        by regulations or guidelines from time to time governing dealings by
        executives on behalf of the Company, or, if you do, you will account
    immediately to the Company for the amount so received;
	 	 	 
	 	(b)	except
        in the proper course of your duties under this Agreement
        remove from Company premises or copy or allow others to copy (or transmit
        by fax, e-mail or other means) the contents of any document, computer
        disk, tape or other tangible item which contains any Confidential Information
    or which belongs to the Company; or
	 	 	 
	 	(c)	at any
        time make any untrue or misleading statement relating to the Company,
    or any of its Subsidiaries or Associates.
	 	 	 
	14.	PROTECTION
    OF INTERESTS OF COMPANY 
	 	 	 
	14.1	  During
        the period of 12 months after the Date of Termination, you will not directly
        or indirectly offer employment to or solicit or entice away or endeavour
        to entice away from the Company, or any of its Subsidiaries or Associates,
        any person who is and was, at any time during the period of two years
        prior to the Date of Termination, employed or engaged by the Company
        or any of its Subsidiaries or Associates in a senior management, senior
        technical or senior sales position and who, by reason of such position,
        possesses any Confidential Information or is likely to be able to solicit
        the custom of any customer of the Company, or its Subsidiaries or
Associates.  
	 	 	 
	14.2	  After
        the Date of Termination, you will not represent yourself or permit yourself
        to be held out as being in any way connected with or interested in the
        business of the Company, and after such date you will not represent yourself
        or permit yourself to be held out as being in any way connected with
        the business of any of the Subsidiaries or Associates of the Company,
        except if and for so long as you remain an employee of that Subsidiary
    or Associate. 

  7 

	 	 
	 	 	 
	14.3	  It is
        your obligation to ensure you take no action and make no statement (or
        omit to take any action or make any statement) which constitutes unlawful
        discrimination whether under the Equal Pay Act 1970, the Sex Discrimination
        Act 1975, the Race Relations Act 1976, the Trade Union and Labour Relations
        (Consolidation) Act 1992, the Disability
Discrimination Act 1995 or otherwise.  
	 	 	 
	14.4	  You are
        required to comply with the provisions of the legislation on health and
        safety and working conditions. You are further required to do your utmost
        to ensure that the Company, and any of its Subsidiaries or Associates,
        comply with such health and safety legislation, all legislation concerning
        their areas of activity and generally with all legal obligations affecting
        the Company, or any of
    its Subsidiaries or Associates.  
	 	 	 
	14.5	  In this
        Clause references to acting directly or indirectly include (without prejudice
        to the generality of that expression) references to acting alone or jointly
        with or
by means of any other person, firm or company.  
	 	 
	15.	DATA
          PROTECTION ACT 1998 
	 	 	 
	15.1	  For the
        purpose of the Data Protection Act 1998 you give your consent to the
        holding and processing of personal data provided by you to the Company
        for all purposes relating to the performance of this Contract including,
    but not limited to:  
	 	 	 
	 	(a)	administering
    and maintaining personnel records;
	 	 	 
	 	(b)	paying
    and reviewing salary and other remuneration and benefits;
	 	 	 
	 	(c)	providing
        and administering benefits (including, if relevant, pension, life assurance,
    permanent health insurance and medical and accident insurance);
	 	 	 
	 	(d)	undertaking
    performance appraisals and reviews; 
	 	 	 
	 	(e)	maintaining
    sickness and other absence records;
	 	 	 
	 	(f)	taking
    decisions as to your fitness for work;  

	 	 	 
	 	(g)	providing
        references and information to future employers, and if necessary, governmental
        and quasi-governmental bodies, the Inland Revenue and Contributions Agency,
    for social security and other purposes;
	 	 	 
	 	(h)	providing
        information to future purchasers of the Company or of the business in
        which you work; and transferring information concerning you to a country
    or territory outside the European Economic Area.
	 	 	 
	16.	TERMINATION
	 	 
	16.1	At
        any time after
notice to terminate your employment
has been served or received by the Company, the Company may:–

   8

	 	(a)

   	require you to return to the Company any documents, computer disks and tapes and other tangible items in your possession or under your control which belong to the Company or which contain or refer to any Confidential Information; and/or
	 	 	 
	 	(b)

   	require you to delete all
       Confidential Information from any computer disks, tapes or other reu-sable
       material in your possession or under your control and destroy all other
       documents and tangible items in your possession or under your control
       which contain or refer to any Confidential Information; and/or
	 	 	 
	 	(c)

   	for such period as it considers reasonable ending no later than the expiry of such notice suspend you from the performance of all or any of your duties under this Agreement; and/or
	 	 	 
	 	(d)	appoint a replacement to hold the same or similar job title as you and/or to carry out all or any of your duties instead of you; and/or
	 	 	 
	 	(e)	for such period as it considers reasonable ending not later than the expiry of such notice exclude you from all or any premises of the Company or its Subsidiaries or Associates; and/or
	 	 	 
	 	(f)

   	for such period as it considers reasonable ending no later than the expiry of such notice require you not, without its prior consent, to engage in any contact (whether or not at your own instance) with any customer, supplier, employee, director, officer or agent of any company in the Company which touches and concerns any of the business affairs of the Company.    
	 	 	 
	16.2	Without
      prejudice to the Company's right to summarily dismiss you for gross misconduct,
      the
      Company will be entitled to terminate your employment without notice if
    you:–  
	 	 	 
	 	(a)	commit a serious or persistent
    breach of any term of this Contract;
	 	 	 
	 	(b) 	commit any act of dishonesty
      or engage in any conduct (in either case whether or not in the course of
      your employment) which, in the opinion of the Company, causes or is likely
      to cause your continued employment to be detrimental to the interests or
    reputation of the Company, or any of its Subsidiaries or Associates;
	 	 	 
	 	(c)	become bankrupt or compound
      with your creditors;
or 
	 	 	 
	 	(d)	are convicted of any arrestable
      criminal offence (other than an offence under road traffic legislation
      in the United Kingdom or elsewhere for which a fine or non-custodial penalty
    is imposed). 
	 	 	 
	16.3	If you are incapacitated
      by sickness (including mental disorder) or injury from carrying out your
      duties under this Contract for a continuous period of 180 days or for an
      aggregate of 130 working days in any 12 consecutive months, the Company
      will be entitled, notwithstanding Clause 10.2 or your entitlement at that
      time to sick pay or benefits under the Company's permanent health insurance
      scheme, to terminate this Contract by not less than 6 months' written notice
    given within 6 months after the end of the 180 or (as the case may be) 130
    working days.

9 

	 	 
	 	 	 
	16.4	When
        requested to do so during the currency of any notice to terminate your
        employment
        given or received by you and, in any event, on the Date of Termination
    you will promptly:–
	 	 	 
	 	(a)	resign (if you have not already done
        so) from all offices held by you in the Company and its Subsidiaries
    and Associates;
	 	 	 
	 	(b)	deliver up (if you have not already done
        so) to the Company all lists of customers, correspondence, documents,
        discs, tapes, data listing, codes, designs, drawings and all other materials
        and property belonging to the Company or any of its Subsidiaries or Associates
    which may be in your possession or under your control, including any copies; 
	 	 	 
	 	(c) 	confirm in writing that you no longer
        have in your possession, custody or power any property of or relating
        to the business of the Company and that you have not retained or made
        any unauthorised copy (whether in documentary or electronic form) of
    any data which contains or refers to any Confidential information; and 
	 	 	 
	 	(d) 	deliver up to the Company forthwith any
    car provided under this Contract;  
	 	 	 
	 	and you hereby
        irrevocably authorise the Company to appoint someone as your attorney
        to act in your name and on your behalf to execute all documents and do
        all things necessary to effect the resignations referred to above, in
        the event of your failure to do so within 7 days of your being so requested
    or of the Termination Date (as the case may be).
	 	 	 
	16.5	On serving
        or receiving notice to terminate this Contract or at anytime thereafter
        during the currency of such notice the Company reserves the right in
        its absolute discretion to pay to you your salary (at the rate then payable
    under Clause 4.1 hereof) in lieu of your entitlement to notice.
	 	 	 
	16.6	Any termination
        of your employment will be without prejudice to your continuing obligations
    under this Agreement.
	 	 	 
	17.	TERMINATION
    BY REORGANISATION OR RECONSTRUCTION
	 	 	 
	17.1	If
        there is a "change of control" (as hereinafter defined) and this Contract is terminated
        by the Company within twelve months of the change of control taking place
        (including a termination which amounts to constructive dismissal but
        excluding a termination in accordance with Clause 16.2 of this Contract
        or by reason of gross misconduct) the Company shall (i) be under no obligation
        to give you any period of notice and (ii) as liquidated damages, pay
        to you within one month of the termination, an amount equal to one year's
        salary at the rate current on the Date of Termination and credit you
        with one year's additional pensionable service (together "the Damages").
        For this purpose this contract is "terminated" on the date the Contract
        ends. For the avoidance of doubt, the merger of the Company and Lattice
    Group plc shall not be a "change of control" for these purposes. 

10 

	17.2	Any payments made under Clause
        17.1 above shall be less any deductions which the Company may be required
        by law to make including, without limitation, in respect of tax and other
        statutory deductions, and are conditional on you agreeing to be bound
        by the restrictive covenants in the Confidentiality and Business Protection
        Agreement and your signing a compromise agreement which complies with
        the requirements of Section 203 of the Employment Rights Act 1996 whereby
        you accept such payments in full and final settlement of all claims which
        you have or may have against the Company or any subsidiary or associated
        company arising out of the termination of this Contract and your employment,
        save for any personal injury claim, any accrued rights that you have
        in the Lattice Group Pension Scheme. It is agreed that the Damages are
        a genuine pre-estimate of your loss and shall not be reduced by reason
    of the doctrines of mitigation and accelerated receipt.  
	 	 	 	 
	17.3	For the
        purposes of this Contract, a "change of control" shall
occur if:  
	 	 	 	 
	 	(a)	the Company becomes
        a subsidiary of another company, unless this is part of a process on
        reconstruction under which
        the company becomes a subsidiary of another company which is owned by
    substantially the same shareholders as the shareholders of the Company;
	 	 	 	 
	 	(b)	50% or more of the voting rights for the
        time being of the Company become vested in any individual or body or
        group of individuals acting in concert (as defined in the City Code on
    Take-Overs and Mergers);
	 	 	 	 
	 	(c)	the right
        to appoint or remove the majority of the Board becomes vested in any
        individual or body or group of individuals
        or bodies acting in concert (as defined in the City Code on Take-Overs and
    Mergers);
	 	 	 	 
	 	(d)	all or substantially all of the business,
        assets and undertakings of the Company becomes owned by any person, firm
    or company (other than a subsidiary or associated company).
	 	 	 	 
	18.	WAIVER OF RIGHTS
	 	 	 	 
	18.1	If:–	 	 
	 	 	 	 
	 	(a)	your employment
    is terminated:–
	 	 	 	 
	 	 	i	by reason of the liquidation of the Company for the purpose of amalgamation
    or reconstruction; or
	 	 	 	 
	 	 	ii	as part of
        any arrangement for the amalgamation of the undertaking of the Company
        not involving liquidation or for the transfer of the whole or part of
        the undertaking of the Company to any of its Subsidiaries or Associates,
    and
	 	 	 	 
	 	(b)	you are offered employment
        of a similar nature with the amalgamated or reconstructed or transferee
        company on terms not generally less favourable to you than the terms
    of this Contract;  
	 	 	 
	 	 	you will have no claim against
    the Company under this Contract in respect of that termination.

11

	 	 
	 	 	 
	19.	DISCIPLINE
    AND GRIEVANCES   
	 	 	 
	19.1	  As a
        Director of the Company, you are expected to conduct yourself in a thoroughly
        professional manner at all times. A copy of the Employee Rules of the
        Company for the time being in force, which apply to you by virtue of
        your employment hereunder but which do not form part of your terms and
        conditions of employment, can be obtained
from Group Human Resources.  
	 	 	 
	20.	INVENTIONS   
	 	 	 
	20.1	 If
        at any time during the continuance of your employment you, whether alone
        or with any other person, make, discover or produce any invention, process,
        development or design which relates to, or affects, or in the opinion
        of the Company is capable of being used or adapted for use in or in connection
        with, the business or any product, process or intellectual property right
        of the Company
or any of its Subsidiaries or Associates:–
	 	 	 
	 	(a)	the invention,
        process, development or design will be the absolute property of the Company
        (except to the extent, if any, provided otherwise by Section 39 of the
    Patents Act 1977); and
	 	 	 
	 	(b)	you will
    immediately disclose it to the Company in writing.
	 	 	 
	20.2	  You
        will, if and when required to do so by the Company (whether during the
        continuance
        of your
employment or afterwards), and at its expense:– 
	 	 	 
	 	(a)	apply,
        or join with the Company, or any of its Subsidiaries or Associates in
        applying for letters patent or other protection in any part of the world
        for any invention, process, development or design to which Clause 20.1
    above applies;
	 	 	 
	 	(b)	execute
        or procure to be executed all instruments, and do or procure to be done
        all things, which are necessary for vesting such letters patent or other
        protection in the Company or any other company, or subsequently for renewing
    and maintaining the same in the name of the Company or its nominee; and
	 	 	 
	 	(c)	 assist
        in defending any proceedings relating to, or to any application for,
    such letters patent or other protection.  
	 	 	 
	20.3	 In
        relation to each and every copyright work or design which relates either
        directly
        or indirectly to the business of the Company, or any of its Subsidiaries
        or Associates (a "Group Work") which you (jointly or alone) originate,
    conceive, write or make at any time during the period of your employment:–
	 	 	 
	 	(a)	you will
        promptly disclose such Group Work to the Company. Group Works made wholly
        outside your normal working hours which are wholly unconnected with your
    employment are not Group Works;
	 	 	 

12

	 	(b)	you hereby
        assign to the Company by way of future assignment all copyright, design
        right and other proprietary rights (if any) throughout the world in such
    Group Work;
	 	 	 
	 	(c)	you hereby
        irrevocably and unconditionally waive in favour of the Company any and
        all moral rights conferred on you by Part 1 of the Copyright Designs
        and Patents Act 1988 in
    relation to any such Group Works;
	 	 	 
	 	(c)	you acknowledge
        that, for the purposes of the proviso to Section 2(1) of
        the Registered Designs Act 1949 (as
        amended by the Copyright Designs and Patents Act 1988), the
        covenants on the part of you and the Company will be treated as good
        consideration and, for the purposes of that Act, the Company will be
    the proprietor of any design which forms part of the Group Works.
	 	 	 
	21.	 INTERPRETATION
	 	 	 
	 	In
        this Contract:–
	 	 	 
	21.1	"Associate" means
        a body corporate which for the time being has not less than 20 per cent
    of its equity share capital beneficially owned by the Company;  
	 	 	 
	21.2	"Date
        of Termination" means the date upon which your employment under this
        Agreement terminates or, where so notified by the Company, the date with
        effect from which the Company exercises its right to suspend you under
    Clause 16.1(c);  
	 	 	 
	21.3	"Subsidiary" has
        the meaning attributed to it by Section 736 of
        the Companies Act 1985 and "equity
        share capital" has the meaning attributed to it by Section 744 of
    the Companies Act 1985;  
	 	 	 
	21.4	unless
        otherwise stated and except in Clause 22 below, a reference
        to "your employment" is to your employment by the Companies under this
    Contract;  
	 	 	 
	21.5	unless
        the context otherwise requires, words in the singular include the plural
        and vice versa, and a reference to a person includes a reference to a
    body corporate and to an unincorporated body of persons; 
	 	 	 
	21.6	a
        reference to a statute or statutory provisions includes a reference to
    that statute or provision as from time to time modified or re-enacted.  
	 	 	 
	22.	ENTIRE
    CONTRACT CONTINUITY AND CONDITIONALITY   
	 	 	 
	22.1	Except
        as otherwise expressly provided by its terms and for any detailed rules
        (not being inconsistent with the express terms hereof) from time to time
        laid down by the Company, this Contract represents the entire understanding,
        and supersedes any previous agreement including between yourself and
        Lattice Group plc, between the parties in relation to your employment
    by the Company, its Subsidiaries or Associates.  
	 	 	 
	 	 	 
	 	 	 

13

	23.	NOTICES 
	 	 	 
	23.1	  Any
        notice to be given under this Contract will be in writing and will be
        deemed to be sufficiently served by one party on the other if it is either
        delivered personally or is sent by prepaid first class post and addressed
        to the party to whom it is to be given, in the case of yourself, at your
        last known residence and in the case of the Company, at its registered
        office, and any such notice if so posted will be deemed to have been
        served on the day (excluding Sundays and public holidays) following that
    on which it was posted.  
	 	 	 
	24.	JURISDICTION 
	 	 	 
	24.1	  This
        Contract shall be governed by and interpreted in accordance with the
        laws of England and Wales and each of the parties submits to the jurisdiction
        of the English and Welsh courts as regards any claim or matter arising
        under this Contract or as
a direct result of your employment by the Company.  

 

	IN
        WITNESS WHEREOF THE PARTIES HAVE EXECUTED AND DELIVERED THIS DOCUMENT
        AS A DEED ON THE DATE FIRST BEFORE WRITTEN:–
	 	 	 	 
	

  Executed
        by JAMES
    ROSS (Director)

    and FIONA
        SMITH (Secretary)

    for and
    on behalf of the Companies		 	
	 	 	 	 
	Executed
        by STEVE LUCAS

    in the
    presence of:		 	
	 	 	 	 

  	Witness
    Signature:	
	Address:	4
        OLD DENE COTTS, RANMORE COMMON RD, WEST HUMBLE, SURREY RH5 6AZ
	Occupation: 	EXEC P.A.

14

 THIS DOCUMENT IS IMPORTANT AND REQUIRES
      YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you
      should take, you are recommended to seek your own financial advice immediately
      from your stockbroker, bank manager, solicitor, accountant or other independent
      financial adviser authorised under the Financial Services and Markets Act
      2000, or from another appropriately authorised independent financial adviser. 

	Lattice
      Group plc	National
      Grid Group plc
	130 Jermyn Street	15
      Marylebone Road
	London SW1 Y4UR	London
      NW1 5JD
	Registered in England
      and Wales No: 3900804	 
	 	 Registered in England and Wales No: 4031152  
	 	 
	Mr S Lucas,	 
	50, The Rise,	 10th June
      2002 
	Sevenoaks,	 
	Kent, 	 
	TN13 1RL	 

Dear Steve,  

 The Lattice Group
  Long Term Incentive Scheme (the "Scheme")  

	1	Introduction 
      
	 	 
	 	 As you are aware,
        the merger of Lattice Group plc ("Lattice") and National Grid
        Group plc ("National
        Grid") by means of a scheme of arrangement (the "Merger")
        is due to take place later this year. This letter explains the impact
        the Merger will have on your Allocations under the Scheme and seeks your
        agreement to the proposal set out in 3 below. Terms used in this letter
      are those used in the Rules of the Scheme, unless otherwise defined.  
	 	 
	2	 Impact of
      the Merger  
	 	 
	 	The following table
      sets out your current Allocations under the Scheme:
	 	 

	 	Allocation Date	No. of Shares	End of	First Transfer
	 	 	comprised in Allocation	Measurement	Date
	 	 	 	Period	 
	 	
	
	
	

	 	1st October 1999	 83,300
	30th
      September 2002 	1st
      October 2003
	 	
	
	 
	 

	 	3rd November 2000	213,073
	2nd
      November 2003	3rd
      November 2004
	 	
	
	 
	 

	 	2nd November 2001	257,572
	1st
      November 2004	2nd
      November 2005
	 	 	 	 	 
	 	 Under
         the rules of the Scheme, on the sanction of the Merger by the Court,
        the
      trustee of the Lattice Group Employees Share Trust (the "Trustee")
      would decide how much of your Allocations
      should be transferred to you after taking into account the extent to which
      the Performance Targets had been achieved.     

-1-

	 	 
	 	 
	 	 Based on the current timescales
        for the Merger, the Court sanction of the Merger may occur after the
        end of the Measurement Period for the 1999 Allocation. If this is the
        case, then the amount of that Allocation which is due to you will already
      be known.  
	 	 
	3 	The
      Proposal  
	 	 
	 	 Although
        you would be entitled to receive your Allocations on the Merger, the
        Remuneration Committees
        of both Lattice and National Grid believe that as an executive director
        of the newly merged National Grid Transco, you should have an immediate
        stake in its performance. Therefore both Lattice and National Grid are
        seeking your agreement to the following proposal (the "Proposal"). 
    
	 	 
	3.1	Your
      1999 Allocation  
	 	 
	 	On completion
        of the Merger, your 1999 Allocation will vest and the vested shares will
        be "banked" until the end of the original retention period of the 1999 Allocation,
      being 1st October 2003 (the "First Transfer Date"). The number of shares
      which will be banked will be calculated by applying the Performance Targets
      to your 1999 Allocation at the time of the Merger in accordance with the
      rules of the Scheme.  
	 	 
	 	The shares
      which will be banked will be National Grid Transco shares rather than Lattice
      shares and the number of those shares will be calculated under the Merger
      share exchange ratio by reference to the number of Lattice shares which
      will have vested under the procedure described above.  
	 	 
	 	 On the assumption that
        the Merger takes place in October 2002, and the Performance Target which
        applies to your 1999 Allocation is met in full, 83,300 Lattice shares
        will vest and therefore 31,237 National Grid Transco shares will be banked
      (rounded down to the nearest whole share). 
	 	 
	 	 The
      banked shares will be subject to an option granted by the trustee of the
        Lattice Group Employees Share Trust (the "Trustee"). You will be
      able to exercise your option on payment of £1 during a period of
      three months from the First Transfer Date. The option will be granted to
      you on
      the same principle terms as your 1999 Allocation, including dividend reinvestment,
      but will only be subject to forfeiture if you cease employment by reason
      of gross misconduct. There will be a number of minor differences between
      the terms of your 1999 Allocation and the option to reflect that the fact
      that you will have an option rather than a conditional awards of shares. 
	 	 
	3.2	Your
      2000 and 2001 Allocations  
	 	 
	 	 Following the Merger, your
        2000 and 2001 Allocations will continue on their original terms save
      that:  
	 	 
	 	(i)	your Allocations
      will continue over National Grid Transco shares which will have been substituted
      for Lattice shares on the basis of the Merger share exchange ratio; and
      
	 	 	 
	 	(ii)	the Performance
        Targets will be a measure of the TSR of National Grid Transco measured
        against the
      current Comparator Group of companies but the Measurement Period will continue
        so that the Performance Targets will include both the TSR performance
      of Lattice before the Merger and the TSR performance of National Grid Transco
      after the Merger; and   

-2-

	 	  	 
	 	 
	 	(iii)
      	if you leave the
      employment of the National Grid Transco group for any reason you will, unless
      the Remuneration Committee of National Grid Transco decides otherwise, be
      entitled to receive the shares comprised in your 2000 and 2001 Allocations
      subject to the extent to which the Performance Targets have been achieved
      at the last Measurement Date prior to the date you leave. 
	 	 
	 	 The Proposal is conditional
        upon the completion of the Merger but your acceptance of the Proposal
      will be irrevocable.  
	 	 
	 	On receipt
      of your acceptance of the Proposal, Lattice will notify the Trustee accordingly
      and it will grant you an option over National Grid Transco shares in relation
      to your 1999 Allocation nearer to the time of the Merger, conditional upon
      the Merger taking place. You will also be required to enter into an agreement
      to reflect the revised terms of your 2000 and 2001 Allocations. 
    
	 	 
	4	 Acceptance
      of the Proposal  
	 	 
	 	 To confirm your acceptance
        of the terms set out in this letter, please sign and date the enclosed
        copy of this letter, which will need to be signed by you as a deed, and
      return it to Pat Fulker, Group HR Director, as soon as possible.  

 

	 	 	 
		

      for and on behalf
        of  

        National Grid Group
        plc 

    
	  	 Lattice Group plc
    	 

-3-

 

	 	 	 	 
	 	 
	 	SIGNED
      AS A DEED and DELIVERED	
	 
	 	by
      Steve Lucas
	 	in
      the presence of:
	 	 	 	  	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 		 	 	 
	 	[Signature
      of Witness]	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	Name	Ms. J. A. HUTCHCROFT	 	 	 
	 	 	 	 	 	 
	 	Address	4 OLD DENE COTTAGES,	 	 	 
	 	 	RANMORE COMMON
      ROAD 	 	 	 
	 	 	WEST HUMBLE, DORKING,
      SURREY RH5 6AZ	 	 	 
	 	 	 	 	 	 
	 	Occupation	EXEC P.A.	 	 	 
	 	 	 	 	 	 

 This document
      has been approved by J.P. Morgan plc of 125 London wall, London EC2Y 5AJ
      and Cazenove & Co.
      Ltd of 12 Tokenhouse Yard, London EC2R 7AN solely and specifically for
      the purposes of Section 21 of the Financial Services and Markets Act 2000.
      JPMorgan and Cazenove are acting for the Lattice Group plc and no one else
      in connection with the Merger and will not be responsible to anyone other
      than Lattice Group plc for providing the protections afforded to customers
      of JPMorgan and Cazenove or for giving advice in relation to the Merger. 

 -4-

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