Exhibit (10)-2
Unicom Corporation and Commonwealth Edison Company
Form 10-Q File Nos. 1-11375 and 1-1839
RETIREMENT AND SEPARATION AGREEMENT
THIS RETIREMENT AND SEPARATION AGREEMENT ("Agreement") dated as of March
30, 1998, by and among Xxxxx X. X'Xxxxxx ("Executive"), Commonwealth Edison
Company ("ComEd") and Unicom Corporation ("Unicom") (both such corporations
hereinafter referred to collectively as the "Company").
RECITALS
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WHEREAS, the Executive has served as Chief Executive Officer of ComEd and
Unicom, and as Chairman of the Board of Directors of each of them; and
WHEREAS, the Executive has indicated his intention to retire from the
Company; effective as of September 1, 1998 (the "Separation Date");
NOW, THEREFORE, in consideration of the foregoing, the mutual promises,
covenants and conditions hereinafter set forth, and other good and valuable
consideration, the parties agree as follows:
1. Resignation of Executive. The Executive shall resign any and all positions
he currently holds as an officer or director of ComEd, Unicom or any
subsidiary thereof, effective as of March 16, 1998. The Executive shall
remain on the ComEd payroll as an active employee and shall continue to be
paid his current salary through August 31, 1998.
2. Severance Benefits. Subject to the Executive's execution of the Waiver and
Release attached hereto as Appendix A and made a part hereof, the Company
will provide the following benefits:
(a) The Company agrees to pay to the Executive a severance payment equal
to $3,056,000 (two times the sum of the Executive's current annual
base salary and target annual incentive). Payment shall be made in a
lump sum, net of applicable federal and state taxes which are required
to be withheld, on the date which is at least eight days after the
date on which the Executive returns the signed Waiver and Release, but
no earlier than the Separation Date.
(b) Long Term Performance Unit and Annual Incentive Awards to which the
Executive is entitled and which are made or payable with respect to
periods beginning on or after January 1, 1998 shall be prorated
through August 31, 1998 and paid in accordance with the terms of the
applicable programs.
(c) ComEd will pay to the Executive, in a cash lump sum in accordance with
its customary personnel practices, an amount equal to the value of 35
days of paid time off (PTO), or, if less, the number of PTO days
remaining to the Executive's credit as of August 31, 1998.
(d) Through August 31, 2008, the Executive will be entitled to a furnished
office located in such space as the Company and the Executive shall
agree, and to secretarial and office support services at the Company's
expense. Such arrangements may be extended by mutual agreement of the
parties for such additional period as the parties shall determine.
(e) ComEd shall purchase the car currently leased for the Executive's use
and shall transfer the title thereof to the Executive effective
September 1, 1998.
(f) ComEd shall transfer to the Executive, effective September 1, 1998
(1) the ComEd-owned home computer, and (2) any ComEd-owned cellular
phones currently provided for the Executive's use.
(g) ComEd will pay for the cost of financial counseling and tax
preparation services for five years following the date of this
Agreement. ComEd may, in its sole discretion, continue to pay for such
services for such additional period as the parties shall determine.
(h) ComEd shall pay to the Executive the amount necessary to reimburse the
Executive for any federal or state income taxes payable to him (I)
with respect to the benefits described in paragraphs 2(e) and 2(f)(1),
and (II) with respect to the amount paid hereunder as reimbursement
for such income taxes.
Notwithstanding the preceding, in the event of (1) a breach by the
Executive of any of the covenants contained in Sections, 4, 7 or 10 of this
Agreement and a failure by the Executive to cure such breach within 10 days
after his receipt of a written notice thereof from the Company, or (2) a
breach by the Executive of any of the covenants contained in Section 6 of
this Agreement, the Company shall be entitled to (I) require the Executive
to promptly repay to the Company the amount which was payable to the
Executive under Section 2(a), and (II) to discontinue any or all of the
other payments or benefits provided to the Executive under this Section 2
3. Other Benefits. Except as provided in Section 2, above, the Executive's
rights under any employee benefit or deferred compensation plans sponsored
or maintained by the Company shall be determined in accordance with the
provisions of such plans and shall not be affected in any way by this
Agreement.
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4. Publicity. Until filed as an exhibit to the Company's quarterly report of
the results of operations, neither the Executive nor the Company shall
issue or cause the publication of any press release or other announcement
with respect to the terms or provisions of this Agreement, nor disclose the
contents hereof to any third party, without obtaining in each case the
consent of the other parties hereto, which consent shall not be withheld
where such release, announcement or disclosure shall be required by
applicable law or administrative regulation or agency.
5. Confidential Information Defined. For the purposes hereof, the term
"Confidential Information" shall mean any information not generally known
in the relevant trade or industry, which was obtained from the Company, or
which was learned, discovered, developed, conceived, originated or prepared
during or as result of the performance of any services by the Executive on
behalf of the Company and which falls within the following general
categories:
(a) information relating to trade secrets of the Company or any customer
or supplier of the Company;
(b) information relating to existing or contemplated products, services,
technology, designs, processes, formulae, algorithms, research or
product developments of the Company or any customer or supplier of the
Company;
(c) information relating to business plans or strategies, sales or
marketing methods, methods of doing business, customer lists, customer
usages and/or requirements, supplier information of the Company or any
customer or supplier of the Company; and
(d) any other confidential information which either the Company or any
customer or supplier of the Company may reasonably have the right to
protect by patent, copyright or by keeping it secret and confidential.
The parties agree that Confidential Information, as defined herein, also
qualifies as "confidences or secrets" within the meaning of the Illinois
Rules of Professional Conduct.
6. Nondisclosure of Confidential Information. The Executive will not use for
his own benefit, either direct or indirect, or disclose any Confidential
Information obtained by the Executive during his employment with the
Company at any time, to any other person, firm or corporation (except to
the extent directly related to and required by the Executive's performance
of duties assigned to the Executive by the Company) without the Company's
prior written consent, except as may be required by the lawful order of a
court or agency of competent jurisdiction. The Executive shall take all
reasonable steps to safeguard such Confidential Information and to protect
such information against disclosure, misuse, loss and theft. The
Executive's obligations under this
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paragraph with respect to any specific Confidential Information shall cease
when that specific portion of Confidential Information becomes publicly
known.
7. Covenant Not to Compete; Non-Interference.
(a) Competition. The Executive agrees that, for a period of two (2) years
beginning on the Separation Date, without the prior written approval
of the Company, he will not participate in the management of, be
employed by . (whether as a common law employee or an independent
contractor) or consult with, other than as provided in paragraph (b),
below, or own any business enterprise that (1) engages in or proposes
to engage in (I) the production, transmission, distribution, marketing
or sale of electricity, or (II) any other business engaged in by the
Company or its affiliates prior to the date hereof which represents,
as of such date, or is projected by the Company and its affiliates as
reflected in a business plan adopted prior to the date hereof to yield
during any year within the first three-fiscal-year period commencing
on or after the date hereof, more than 5% of the gross revenues of the
Company and with respect to which the Executive had access to
Confidential Information, and (2) which is located (I) anywhere in the
United States, or (II) anywhere outside of the United States where the
Company is engaged in or proposed as of such date to engage in any of
such activities (a "Competing Business"); provided, however, that
nothing in this paragraph 8(a) shall prohibit the Executive from
owning stock or other securities of any such business amounting to
less than five percent of the outstanding capital stock of such
business where the Executive does not participate in the management,
control or operation of such business.
(b) Practice of Law. The Executive agrees that, for a period of two years
beginning on the date hereof, he will not undertake, without first
obtaining written consent from the General Counsel of the Company, the
representation, as legal counsel, of any Competing Business: (1) in a
litigation matter adverse to the Company or any of its affiliates; (2)
in a regulatory or legislative matter where the position of the
Competing Business is contrary to the position of the Company or any
of its affiliates; (3) in a position adverse to the Company or any of
its affiliates as part of a contract negotiation; or (4) in any other
matter that would risk the disclosure of or involve any Confidential
Information.
(c) Interference. The Executive hereby agrees that, for a period of two
years beginning on the date hereof, he will not (1) employ
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any Key Employee (as defined below) or encourage any Key Employee to
terminate his or her employment; (2) take any action which is intended
to adversely affect the Company's or any of its affiliates'
relationships with any person, firm, corporation, or other business
organization who or which at any time (whether before or after the
date hereof) was a Key Employee, or which, during the period
commencing one year prior to the date hereof, was a material supplier
of, or maintained a material supplier relationship with, any business
of the Company or its affiliates, or (3) endeavor to entice away from
the Company or any of its affiliates a Key Employee or a business
which, during the period commencing one year prior to the date hereof,
was a material customer (five or more megawatts) or material supplier
of, or maintained a material business relationship with (other than as
a customer or supplier), the Company or an affiliate. For purposes of
this Section 8(c), "Key Employee" means any employee of the Company
who is rated at Group Xxxxx 00 or above ("Group Level") or any
employee of an affiliate of the Company who is rated at a level which
is the equivalent of Group Level.
8. Reasonableness of Restrictive Covenants. The Executive acknowledges that
the covenants contained in Sections 6 and 7 of this Agreement are
reasonable in the scope of the activities restricted, the geographic area
covered by the restrictions, and the duration of the restrictions, and that
they are reasonably necessary to protect the Company's legitimate interests
in its Confidential Information and in its relationships with its
customers. The Company and the Executive further acknowledge that the
covenants contained in Sections 6 and 7 are essential elements of this
Agreement and that, but for the agreement of the Executive to comply with
such covenants, the Company would not have agreed to enter into this
Agreement.
If a court of competent jurisdiction shall, in a final nonappealable order,
limit or invalidate any provision of the covenants contained in Sections 6
or 7, then, in the event of a breach by the Executive of any of the
covenants contained in Sections 6 or 7 of this Agreement, at the Company's
sole discretion, (I) the Company shall require the Executive to promptly
repay to the Company the amount which was payable to the Executive under
Section 2(a), and shall be entitled to discontinue payment of any or all of
the other payments or benefits provided to the Executive under Section 2;
(II) the Executive agrees to enter into an agreement embodying the
essential elements of the covenants contained in Sections 6 or 7 or both of
them which is valid and enforceable; or (III) the parties shall agree to be
bound by provisions with respect to Sections 6 or 7 which are reformed by
the court pursuant to Section 11 hereof.
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The Executive and the Company further acknowledge that nothing in this
Agreement is intended to limit the application of the Illinois Rules of
Professional Conduct.
The Executive and the Company have independently consulted with their
respective counsel and have been advised concerning the reasonableness and
propriety of such covenants with specific regard to the nature of the
business conducted by the Company. The Executive acknowledges that his
observance of the covenants contained in Sections 6 and 7 of this Agreement
will not deprive him of the ability to earn a livelihood or to support his
dependents.
9. Remedies. In recognition of the confidential nature of the Confidential
Information, and in recognition of the necessity of the limited
restrictions imposed under Sections 6 and 7 of this Agreement, the parties
agree that it is impossible to measure solely in money the damages which
will accrue to the Company by reason of the Executive's failure to abide by
any of his obligations under this Agreement. The Executive hereby
specifically affirms the appropriateness of injunctive or other equitable
relief in any such action. Accordingly, the Executive agrees that if he
breaches any of the provisions of Sections 6 or 7, the Company shall have
the right, in addition to any other remedies it may have under this
Agreement or otherwise, to obtain in any court of competent jurisdiction
injunctive relief to restrain any breach or threatened breach hereof or
otherwise to specifically enforce any of the provisions hereof, and the
Executive hereby waives any and all rights to assert any claim or defense
that the Company has an adequate remedy at law for any breach. Disputes
regarding the rights of the Company and the Executive hereunder as to which
the Company has not sought equitable relief shall be resolved in a court of
competent jurisdiction.
10. Non-Disparagement. The Executive agrees that he will not make any
written or oral statement that brings Unicom or ComEd or any of its
employees, officers or agents into disrepute, or tarnishes any of their
images or reputations. The Executive further agrees not to publish, comment
upon or disseminate any statements suggesting or accusing Unicom or ComEd
or any of its agents, employees or officers of any misconduct or unlawful
behavior. The Company agrees that neither the directors nor the officers of
the Company nor any official spokesperson for the Company will make any
written or oral statements that bring the Executive into disrepute or
materially tarnishes his image or reputation. The Company further agrees
not to publish or disseminate any statements suggesting or accusing the
Executive of any misconduct or unlawful behavior, and to take all
reasonable steps to prevent statements prohibited hereunder. The provisions
of this Section 10 shall not apply to testimony as a witness, compliance
with other legal obligations, assertion of or defense against any claim of
breach of this Agreement, or any activity that otherwise may be required by
the lawful order of a court or agency
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of competent jurisdiction, and shall not require the Company or the
Executive to make false statements or disclosures.
11. Partial Invalidity/Severability. If any provision of this Agreement shall
be held invalid or unenforceable, the remainder nevertheless shall remain
in full force and effect. If any provision is held invalid or unenforceable
with respect to particular circumstances, it nevertheless shall remain in
full force and effect in all other circumstances. Further, the covenants
contained in Sections 6 and 7 of this Agreement shall be construed as
independent of any other provision of this Agreement, and the existence of
any claim or cause of action (whether predicated on this Agreement or
otherwise) shall not constitute a defense to the enforcement by the Company
of said covenants. In the event that any provision of this Agreement should
be found by a court of competent jurisdiction to be unreasonable, invalid,
or otherwise unenforceable, it is the desire of the parties hereto that (a)
such provision be considered severable, and (b) such provision be reformed
by such court so as to render it reasonable, valid, and enforceable, and
that it be so enforced.
12. Benefit of Agreement. This Agreement shall inure to the benefit of, and
shall be binding upon, the parties hereto and their respective successors,
assigns, heirs, and legal representatives, including any person with which
the Company may merge or consolidate. Insofar as the Executive is
concerned, this Agreement, being personal, cannot be assigned.
13. Entire Agreement. This Agreement contains the entire agreement between the
parties and constitutes the complete, final, and exclusive embodiment of
their agreement with respect to the subject matters covered by this
Agreement. This Agreement is executed without reliance upon any promise,
warranty or representation, written or oral, by any party or any
representative of any party other than those expressly contained herein and
supersedes any other such promises, warranties, representations, or
agreements.
14. Modifications and Waivers. No change, modification or waiver of any
provision of this Agreement shall be valid or binding unless it is in
writing, dated subsequent to the date hereof, and signed by the party
intended to be bound. No waiver of any breach, term, or condition of this
Agreement by either party shall constitute a subsequent waiver of the same
or any other breach, term, or condition.
15. Construction. This Agreement shall be governed by, construed and enforced
(both as to validity and performance) in accordance with the internal laws
of the State of Illinois applicable to agreements made and to be performed
wholly within such jurisdiction, without regard to principles of conflicts
of law.
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16. Post-Employment Communications. Nothing in this Agreement, including
Sections 4 or 10, shall be construed to prohibit the Executive from freely
communicating with, including testifying in any administrative proceeding
before, the Nuclear Regulatory Commission or the United States Department
of Labor, or from otherwise addressing issues related to nuclear safety
with any party or taking any other action protected under Section 211 of
the Energy Reorganization Act.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written as indicated below.
Executive
__________________________________
Xxxxx X. X'Xxxxxx
COMMONWEALTH EDISON COMPANY
By:_______________________________
UNICOM CORPORATION
By:_______________________________
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Xxxxx X. X'Xxxxxx
Appendix A
WAIVER AND RELEASE
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In exchange for the separation benefits described in that certain Retirement and
Separation Agreement dated March 30, 1998 (the "Agreement"), which I acknowledge
I am not otherwise entitled to receive, I freely and voluntarily agree to this
Waiver and Release.
1. In signing this Waiver and Release, I hereby waive and release any and all
claims that I may ever have had or that I now have against the following
persons and organizations:
a) Commonwealth Edison Company, Commonwealth Edison Company of Indiana,
Unicom Corporation and any of their affiliates, successors and
subsidiaries; and
b) Any and all officers, directors, employees, shareholders and agents of
Commonwealth Edison Company, Commonwealth Edison Company of Indiana,
Unicom Corporation and any of their affiliates, successors or
subsidiaries.
2. I understand and agree that, in signing this document, I am waiving and
releasing any and all claims of whatever nature that I may ever have had or
now have against the persons and organizations listed in paragraph 1. I
understand and agree that among the claims that I am waiving and releasing
are the following:
a) Claims of age discrimination in employment under the federal Age
Discrimination in Employment Act;
b) Claims of race, color, sex, national origin, and religious
discrimination in employment under Title VII of the Civil Rights Act
of 1964, as amended, and the Civil Rights Act of 1866, 42 U.S.C.
(S)1981, as amended;
c) Claims of disability discrimination under the Americans with
Disabilities Act;
d) Claims of discrimination in employment under any state or local
statute, ordinance, regulation, or constitution;
e) Claims of breach of contract or claims or vacation, bonuses, incentive
compensation or other benefits, except that nothing contained herein
shall constitute a waiver or release of any claim or cause of action
arising out of an alleged breach or other violation of any obligation
under the Agreement; and
f) Any common law or statutory claims of wrongful discharge and any other
common law tort or statutory claims.
I understand and agree that I am waiving and releasing any and all claims
that I may ever have had or that I now have, regardless of their nature of
origin, and that the fact that such claim is not listed in subparagraphs
(a) through (f), above, does not mean that such claim is not included in
this Waiver and Release.
3. The existence of, and the terms of, the separation benefits described in
the Agreement and in this Waiver and Release shall be confidential, and I
will not engage in any action which might reveal the contents of the
Agreement and this Waiver and Release to anyone, including but not limited
to, past,
Xxxxx X. X'Xxxxxx
Appendix A
present or future employees of the released parties, other than to members
of my immediate family or to tax, legal or financial advisers, except as
may be required by the lawful order of a court or agency of competent
jurisdiction. The Agreement and this Waiver and Release may, however, be
used as evidence in a judicial proceeding in which any of the parties
allege a breach or other violation of this agreement.
4. I agree that I have no present or future right to seek employment with
Commonwealth Edison Company or Unicom Corporation. Further, I will not
apply for, or seek consideration for, any employment, engagement, or
contract with Commonwealth Edison Company or Unicom Corporation.
5. In signing this agreement, I agree and understand that this Waiver and
Release will be binding not only on me but also on my heirs,
administrators, and assigns with respect to the claims covered by this
agreement. As of the date of my signing of this agreement, I have made no
assignment of any claims against any of the persons or organizations
described in paragraph 1.
6. The Agreement and this Waiver and Release may only be modified in writing,
and any party's failure to enforce this agreement in the event of one or
more events which violate this agreement shall not constitute a waiver of
any right to enforce this agreement against subsequent violations.
7. I hereby acknowledge that, at the time I was given this Waiver and Release,
I was informed in writing by Commonwealth Edison Company that I had at
least twenty-one (21) days in which to consider whether I would sign this
Waiver and Release. I also acknowledge that, at the time I was given this
Waiver and Release, I was informed in writing that I should consult with an
attorney before signing this agreement. I have had an opportunity to
consult with any attorney and have either had such consultations or have
decided of my own free will that I will sign this agreement without
consulting with legal counsel.
8. I acknowledge that I have been informed that I may revoke my acceptance of
this Waiver and Release by delivering a letter to S. Xxxx Xxxxxxxxx, Senior
Vice President, One First Xxxxxxxx Xxxxx, 00xx Xxxxx, Xxxxxxx, XX 00000
within seven days of the date I have signed this agreement. I understand
that this Waiver and Release will not become effective until the eighth day
following my signing of this agreement. I understand and intend that, in
the event I do not revoke my acceptance of this agreement within the seven-
day period described in this paragraph, this Waiver and Release will be
legally binding and enforceable.
9. This Waiver and Release shall, in all respects, be construed in accordance
with and governed by the laws of the State of Illinois.
I STATE THAT I HAVE READ THE FOREGOING, THAT IN UNDERSTAND EACH OF ITS TERMS AND
THAT I INTEND TO BE BOUND THERETO.
___________________________ _______________________________
Name (Print) Social Security Number
___________________________ _______________________________
Signature Date
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