This Agreement, made this 1st day of August, 1995 between Potomac
Electric Power Company, hereinafter referred to as the "Company" and H.
Xxxxxx Xxxxx, hereinafter referred to as "Xxxxx",
WITNESSETH:
WHEREAS, Xxxxx has served as Vice Chairman and Chief Financial
Officer of the Company since September, 1983; and has served as Chief
Executive Officer of the Company's subsidiary, Potomac Capital Investment
Corporation since its inception in 1983.
WHEREAS, the Company wishes to make provision for continuity and
orderly transition through the continued employment of Xxxxx for the period
specified herein; and
WHEREAS, Xxxxx is willing to continue employment upon the terms and
conditions hereinafter set forth;
NOW THEREFORE, the parties agree as follows:
1. For the period beginning on the date of execution of this
Agreement and ending May 1, 1997 (or such alternate date as may be mutually
agreed to in writing between the Company and Xxxxx) Xxxxx will continue to
serve as Vice Chairman of the Company, unless his services are sooner
terminated in accordance with the provisions of clause number 3 hereafter.
During the continuance of his employment, Xxxxx will devote his full time,
energies and best efforts to the business of the Company through April 30,
1996. For the year commencing May 1, 1996 through April 30, 1997, Xxxxx
will remain available to perform requested services and will continue to
serve as a director of the Company. Unless otherwise mutually agreed to in
writing between the Company and Xxxxx, Xxxxx will retire on May 1, 1997.
2. Xxxxx' salary as an officer of the Company during the period of
this Agreement shall be payable monthly at an annual rate to be established
by the Company's Board of Directors from time to time, which rate shall be
no less than the base salary in effect at the date on which this Agreement
is executed.
3. Xxxxx' services may be terminated at a time prior to May 1,
1997 (or such alternate date as may be mutually agreed to in writing
between the Company and Xxxxx) in the following circumstances:
(a) The Board of Directors of the Company may terminate
Xxxxx' services and effectuate his retirement upon a showing by clear and
convincing evidence of just cause and with six (6) months' notice to Xxxxx.
(b) Xxxxx' services shall be terminated upon a determination
by the Company that he has become totally and permanently disabled and
therefore unable to work for the Company due to physical or mental
disability.
4. Upon termination of Xxxxx' services with the Company, whether
on or before May 1, 1997 (or such alternate date as may be mutually agreed
to in writing between the Company and Xxxxx) and for whatever reason, the
Company will determine the retirement amounts to be paid to Xxxxx, pursuant
to the terms of the Company's General Retirement Plan, the Supplemental
Benefit Plan, the Executive Performance Supplemental Retirement Plan, and
the Supplemental Executive Retirement Plan (the "Retirement Plans"), based
upon the amounts paid or payable to Xxxxx, in all cases computed without
reduction for deferrals under any deferred compensation plan or arrangement
made available to Xxxxx by the Company. For purposes of computing Xxxxx'
compensation attributable to incentive compensation for purposes of the
Retirement Plans, such amounts shall be determined based upon the greater
of (i) actual incentive award amounts payable to Xxxxx or (ii) the
incentive award amounts which would be payable to Xxxxx resulting from
application of the target annual award level specified in the Company's
Executive Incentive Compensation Plan guidelines for the position of Vice
Chairman.
5. For purposes of the Director and Executive Deferred
Compensation Plan, contractual payments to Xxxxx pursuant to Section 5.03
of this plan shall commence the first day of the month following Xxxxx'
65th birthday, notwithstanding his termination for any reason or retirement
prior to age 65.
6. For purposes of the Executive Split Dollar Insurance Plan,
"Rollout", as provided pursuant to Section 9 of this plan will occur upon
Xxxxx' attainment of age 65, (the regular "Rollout Qualification Date"
specified in the plan), notwithstanding his termination for any reason or
retirement prior to age 65.
7. Should there be unvested restricted stock awards outstanding at
the date of Xxxxx' termination for any reason or retirement, remaining
restrictions shall be waived and such stock would vest upon his termination
for any reason or at retirement.
8. This Agreement shall inure to the benefit of and be binding
upon the Company, its successors and assigns (including without limitation
any corporation which might acquire all or substantially all of the
Company's assets and business or with which the Company may be consolidated
or merged).
9. This Agreement is effective on the date of execution hereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officers, under its corporate seal, by the
order of its Board of Directors, and Xxxxx has hereunto set his hand and
seal both as of the day and year first above written.
POTOMAC ELECTRIC POWER COMPANY
/s/ X. X. XXXXXXXX
By
_________________________
Chairman of the Board
Attest:
/s/ XXXXXXX X. XXXXXXXXX /s/ X. X. XXXXX
___________________________ _________________________(Seal)
Secretary H. Xxxxxx Xxxxx
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