Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
An employment agreement entered into in October 2003 with Ralph Izzo as President and Chief Operating Officer of our subsidiary, Public Service Electric and Gas Company, expired on October 18, 2008. On December 16, 2008 we entered into a new severance agreement with Mr. Izzo, now our Chairman, President and Chief Executive Officer, which replicates the material severance provisions of the expired agreement that apply in the event that Mr. Izzo’s employment is terminated without cause in other than a change-in-control situation. Under the new agreement, if Mr. Izzo’s employment is terminated in such an event, he would be entitled to a payment equal to A) salary through the date of termination, plus B) a prorated portion of his target bonus under our senior management incentive compensation plan, plus C) accrued vacation pay, plus D) an amount equal to two times the sum of his annual base salary plus target bonus. If we were to reduce Mr. Izzo’s annual base salary, he would be entitled to elect to terminate his employment and receive the same severance payment. In any qualified termination without cause, Mr. Izzo would be entitled to continue to participate for two years in our medical/dental and other welfare benefit plans at the same levels as prior to the termination and he would be entitled to be reimbursed for up to two years of outplacement services. The agreement also provides that Mr. Izzo will maintain information about us in confidence and comply with certain non-compete and non-solicitation provisions for a period of one year following any such termination of employment.
Also on December 16, 2008 our board of directors designated Mr. Izzo as a participant in our Key Executive Severance Plan, the terms of which will govern Mr. Izzo’s severance benefits if his employment is terminated without cause following a change of control. These benefits are substantially the same as those that applied in Mr. Izzo’s expired agreement upon termination of employment following a change of control.
A copy of Mr. Izzo’s new agreement is furnished as Exhibit 99 to this Form 8-K.
Item 9.01 Financial Statements and Exhibits
Exhibit 99 Ralph Izzo Severance Agreement dated December 16, 2008
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof.
|
PUBLIC SERVICE ENTERPRISE GROUP
INCORPORATED
|
|
|
(Registrant)
|
|
| By: |
/s/ Derek M. DiRisio
|
| Derek M. DiRisio | |
| Vice President and Controller | |
| (Principal Accounting Officer) | |
Date: December 22, 2008
3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof.
|
|
PSEG POWER LLC
|
|
|
(Registrant)
|
| By: |
/s/
Derek M. DiRisio
|
| Derek M. DiRisio | |
| Vice President and Controller | |
| (Principal Accounting Officer) | |
Date: December 22, 2008
4
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof.
|
|
PUBLIC SERVICE ELECTRIC
AND GAS COMPANY
|
|
|
(Registrant)
|
| By: |
/s/
Derek M. DiRisio
|
| Derek M. DiRisio | |
| Vice President and Controller | |
| (Principal Accounting Officer) | |
Date: December 22, 2008
5
December 16, 2008
Dr. Ralph Izzo
Chairman of the Board, President and
Chief Executive Officer
Public Service Enterprise Group Incorporated
80 Park Plaza
Newark, NJ 07102
Dear Dr. Izzo:
In conjunction with your employment as Chairman of the Board, President and Chief Executive Officer of Public Service Enterprise Group Incorporated (PSEG or the Company), PSEG is providing to you compensation and benefits in accordance with its normal practices for executive officers, which are intended to reflect the median of benefit practices for peer companies. In that respect, PSEG has in place a Key Executive Severance Plan which provides severance benefits in certain cases.
The benefits provided under the Key Executive Severance Plan in the case of any termination without cause of your employment by PSEG not involving a change in control would be below those generally provided to Chief Executive Officers. Accordingly, PSEG wishes to provide you with such benefits, as more fully described in this letter.
The Company may terminate your employment at any time for Cause or without Cause. For purposes of this letter, “Cause” shall mean willful and continued failure by you to substantially perform your duties, willful gross misconduct which is materially and demonstrably injurious to the Company, conviction of a felony or violation of PSEG’s Standards of Integrity. No act or failure to act shall be considered “willful” unless it is done, or omitted to be done, in bad faith or without reasonable belief that the action or omission was in the best interests of the Company. Any act or failure to act that is based upon authority given pursuant to a resolution duly adopted by the Board of Directors of the Company, or the advice of counsel for the Company, shall be conclusively presumed to be done, or omitted to be done, in good faith and in the best interests of the Company. If the Company reduces your annual base salary, you may terminate your employment and shall be entitled to benefits under this letter.
-2-
If PSEG terminates your employment other than for Cause or you terminate your employment because PSEG reduces your annual base salary:
(i) the Company shall pay you in a lump sum in cash, within 30 days after the date of termination, the aggregate of the amounts set forth in clauses A and B below:
| A. | The sum of: | |||
| (1) | your annual base salary through the date of termination; | |||
| (2) | the product of (x) your “target” annual bonus under PSEG’s Senior Management Incentive Compensation Plan (the “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 therefore paid; and | ||||
| B. | The amount equal to the product of (1) two and (2) the sum of (x) your annual base salary and (y) the Target Bonus. | |||
(ii) any unvested stock options, performance shares, stock awards or other equity-based awards that were outstanding immediately prior to the date of termination shall be forfeited, unless PSEG’s Organization and Compensation Committee shall determine that such options, shares or awards shall vest and/or become exercisable;
(iii) for two years after your date of termination or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy, the Company shall continue benefits to you and/or your family at least equal to those which would have been provided in accordance with the welfare plans, programs, practices and policies if your employment had not been terminated or, if more favorable to you, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies and their families; provided however, that if you become reemployed with another employer and are eligible to receive medical or dental benefits under another employer provided plan, the medical and dental benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility;
-3-
(iv) the Company shall, at its sole expense as incurred, provide you with outplacement services suitable to your position for a period not to exceed two years with a nationally recognized outplacement firm; and
(v) to the extent not theretofore paid or provided, the Company shall pay or provide to you any other amounts or benefits required to be paid or provided or which you are entitled to receive under any plan, program, policy, practice, contract or agreement of the Company and its affiliated companies (other than medical or dental benefits if you are eligible for such benefits to be provided by a subsequent employer), but excluding any severance plan or policy (including the PSEG Key Executive Severance Plan).
You shall hold in a fiduciary capacity for the benefit of the Company all confidential information, knowledge or data (defined below) relating to the Company or any of its affiliates or subsidiaries, and their respective businesses, which shall have been obtained by you during your employment by the Company or any of its affiliated companies and which shall not be or become public knowledge (other than by acts by you in violation of this letter). Upon termination of your employment, you shall return to the Company all confidential information. After termination of your employment with the Company, you 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 information, knowledge or data to anyone other than the Company and those designated by it, except (x) otherwise publicly available information, or (y) as may be necessary to enforce your rights under this letter or necessary to defend yourself against a claim asserted directly or indirectly by the Company or its affiliates.
As used herein, the term “confidential information, knowledge or data” 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 and subsidiaries, 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 and subsidiaries 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 you prior to employment with the Company, and information received by you from sources other than the Company or its affiliates and subsidiaries, without obligation of confidentiality.
The confidential knowledge, information and data, as defined in the previous paragraph, gained in the performance of your duties may be valuable to those who are now, or might become, competitors of the Company or its affiliates and subsidiaries. Accordingly, you agree that, without the written consent of PSEG, you will not, for the period of one year from the date of termination of your employment, directly own, manage, operate, join, control, become employed by, consult to or participate in the
-4-
ownership, management, or control of any business which is in direct competition with the Company and/or its affiliates and subsidiaries. Further, you agree that, for one year following the date of termination, you will not, directly or indirectly, solicit or hire, or encourage the solicitation or hiring of any person who was a managerial or higher level employee of the Company at any time during the term of your employment by the Company by any employer other than the Company for any position as an employee, independent contractor, consultant or otherwise. The foregoing agreement shall not apply to any person after six months have elapsed subsequent to the date on which such person’s employment by the Company has terminated.
In the event of a breach by you of any of the agreements set forth above, 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 agreements by you. In the event that the Company should initiate any legal action for the breach or enforcement of any of these provisions and the Company does not prevail in such action, the Company shall promptly reimburse you the full amount of any court costs, filing fees, attorney’s fees which you incur in defending such action, and any loss of income during the period of such litigation.
The provisions in this letter relating to confidential information, non-compete and non-solicitation are in addition to any other such provisions contained in Company plans or practices, including the Long-Term Incentive Plan. The Company may withhold from any amounts payable under this letter such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.
Except with respect to equitable relief provided for above, any dispute about the validity, interpretation, effect or alleged violation of this letter shall be resolved by confidential binding arbitration before one arbitrator to be held in Newark, New Jersey in accordance with the Employment Dispute Resolution Rules of the American Arbitration Association and the United States Arbitration Act. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereover. All costs and expenses incurred by the Company or you or your beneficiaries in connection with any such controversy or dispute, including without limitation reasonable attorney’s fees, shall be borne by the Company as incurred, except that you shall be responsible for any such costs and expenses incurred in connection with any claim determined by the arbitrator to have been without reasonable basis or to have been brought in bad faith.
This letter shall be governed by and construed in accordance with the laws of the State of New Jersey applicable to agreements executed and performed entirely therein. This letter may not be amended or modified otherwise than in writing.
-5-
If the foregoing is acceptable to you, please indicate by signing the enclosed copy of this letter.
/s/ Albert R. Gamper, Jr.
Albert
R. Gamper, Jr.
Chairman of the Organization
and Compensation Committee
Accepted and Agreed, this 16 th day of December 2008.
/s/ Ralph Izzo
Ralph Izzo