11/12/99
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
among
UNICOM CORPORATION,
COMMONWEALTH EDISON COMPANY
and
XXXX X. XXXX
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement"), dated
as of December 15, 1999 (the "Agreement Date"), by and among Unicom Corporation,
an Illinois corporation ("Unicom"), Commonwealth Edison Company, an Illinois
corporation ("ComEd"), and Xxxx X. Xxxx ("Executive"), amends and restates, to
be effective immediately prior to the Merger Effective Time (as defined below),
that certain Employment Agreement dated as of March 10, 1998, as heretofore and
as hereafter otherwise amended prior to the Merger Effective Time (the "Prior
Agreement"), by and among Unicom, ComEd and Executive.
WHEREAS, Executive is currently serving as Chairman of the Unicom Board
and the ComEd Board, President and Chief Executive Officer of both Unicom and
ComEd and a member of the Unicom Board and the ComEd Board;
WHEREAS, Peco Energy Company, a Pennsylvania corporation ("Parent"),
Newholdco Corporation, a Pennsylvania corporation (the "Company") and Unicom
have executed an Agreement and Plan of Exchange and Merger, dated as of
September 22, 1999 (the "Merger Agreement"), which contemplates that Parent
shall become a wholly owned subsidiary of the Company and immediately thereafter
Unicom will be merged with and into the Company (the "Merger"), which Merger
will become effective at the Merger Effective Time (as defined in the Merger
Agreement);
WHEREAS, as contemplated by the Merger Agreement, the Company will be
the surviving corporation in the Merger and, as such, will by operation of law
succeed to the rights and obligations of Unicom hereunder;
WHEREAS, in order to induce Executive to serve, on and after the Merger
Effective Time, as President and Co-Chief Executive Officer of the Company (as
the surviving entity in the Merger and as successor to Unicom at the Merger
Effective Time), and Chairman of the Executive Committee of the Company Board
and other positions as provided in this Agreement, Unicom desires from and after
the Merger Effective Time to provide Executive with compensation and other
benefits on the terms and conditions set forth in this Agreement; and
WHEREAS, Executive is willing to accept such employment and perform
such services on the terms and conditions hereunder set forth;
NOW, THEREFORE, in consideration of the mutual undertakings of the
parties hereto, Unicom, ComEd and Executive agree as follows:
ARTICLE I.
DEFINITIONS
The terms set forth below have the following meanings (such meanings to
be applicable to both the singular and plural forms):
I.1 "Accrued Base Salary" means that portion of Executive's Base Salary
which is accrued but unpaid as of the Termination Date.
I.2 "Accrued Annual Incentive" means either:
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(1) the amount of any Annual Incentive earned with
respect to the calendar year ended prior to the Termination
Date, but which is unpaid as of the Termination Date, if both
(x) the amount of such Annual Incentive has been objectively
determined solely by the application of a formula that does
not provide the Company, Unicom or any Company Affiliate any
discretion to increase the amount of the Annual Incentive and
(y) neither the Company, Unicom nor any Company Affiliate has
applied any discretion it may have pursuant to the Annual
Incentive Award Program in which Executive participates or
otherwise to reduce the amount of such Annual Incentive or,
(2) if the conditions specified in clause (i) of this
sentence have not been satisfied, the average of the Annual
Incentives that were actually paid to Executive with respect
to Executive's last three full calendar years of employment by
the Company, Unicom or any Company Affiliate.
For purposes of clause (ii) of the preceding sentence, if Annual
Incentives have been paid to Executive in respect of fewer than three years,
such average shall be computed by reference to the Annual Incentives that were
actually paid to Executive.
I.3 "Affiliate" means, when used with reference to any Person, any
other Person directly or indirectly controlling, controlled by, or under direct
or indirect common control with, the referent Person or such other Person, as
the case may be. For the purposes of this definition, the term "control" when
used with respect to any Person means the power to direct or cause the direction
of management or policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise.
I.4 "Agreement Date" -- see the recitals to this Agreement.
I.5 "Anniversary Date" means any annual anniversary of March 16, 1998.
I.6 "Annual Incentive" -- see Section 4.2.
I.7 "Base Salary" -- see Section 4.1.
I.8 "Beneficiary" -- see Section 10.4.
I.9 "Cause" means any of the following:
(1) Executive's conviction of a felony or of a misdemeanor
involving moral turpitude, fraud or dishonesty,
(2) wilful misconduct by Executive in the performance of his
duties under this Agreement that was intended to personally benefit
Executive, or
(3) material breach of this Agreement by Executive (other than
as a result of incapacity due to physical or mental illness);
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provided that, if a material breach of this Agreement involved an act, or a
failure to act, which was done, or omitted to be done, by Executive in good
faith and with a reasonable belief that Executive's act, or failure to act, was
in the best interest of the Company or was required by applicable law or
administrative regulation, such breach shall not constitute Cause if, within 30
days (10 days in the event of a breach of covenants contained in Article IX)
after Executive is given written notice of such breach that specifically refers
to this Section, Executive cures such breach to the fullest extent that it is
curable.
I.10 "Change in Control" means any one or more of the following to
occur after the Merger Effective Time:
(1) the acquisition by any Person (including for purposes of
this definition any "person" within the meaning of Section 13(d) (3) or
14(d) (2) of the Exchange Act) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
more of either (i) the then outstanding shares of Common Stock (the
"Outstanding Common Stock") or (ii) the combined voting power of the
then-outstanding Voting Securities of the Company (the "Outstanding
Voting Securities"), but excluding (A) any acquisition directly from
the Company (excluding any acquisition resulting from the exercise of
an exercise, conversion or exchange privilege unless the security being
so exercised, converted or exchanged was acquired directly from the
Company), (B) any acquisition by the Company, (C) any acquisition by an
employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company (a "Company Plan")
or (D) any acquisition by any corporation pursuant to a transaction
which complies with clauses (i), (ii) and (iii) of subsection (c) of
this definition; provided further, that for purposes of clause (B), if
any Person (other than the Company or any Company Plan) shall become
the beneficial owner of 20% or more of the Outstanding Common Stock or
20% or more of the Outstanding Voting Securities by reason of an
acquisition by the Company, and such Person shall, after such
acquisition by the Company, become the beneficial owner of any
additional shares of the Outstanding Common Stock or any additional
Outstanding Voting Securities (other than pursuant to any dividend
reinvestment plan or arrangement maintained by the Company) and such
beneficial ownership is publicly announced, such additional beneficial
ownership shall constitute a Change in Control;
(2) individuals who, as of the Merger Effective Time,
constitute the Company Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Incumbent Board;
provided that any individual who becomes a director of the Company
subsequent to the Merger Effective Time whose election, or nomination
for election by the Company's stockholders, was approved by the vote of
at least a majority of the directors then comprising the Incumbent
Board shall be deemed a member of the Incumbent Board; and provided
further, that any individual who was initially elected as a director of
the Company as a result of an actual or threatened election contest (as
such terms are used in Rule 14a-11 promulgated under the Exchange Act)
or any other actual or threatened solicitation of proxies or consents
by or on behalf of any Person other than the Company Board shall not be
deemed a member of the Incumbent Board;
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(3) approval by the stockholders of the Company of a
reorganization, merger or consolidation or sale or other disposition of
more than 50% of the operating assets of the Company (determined on a
consolidated basis) other than in connection with a sale-leaseback or
other arrangement resulting in the continued utilization of such assets
(or the operating products of such assets) by the Company (such
reorganization, merger, consolidation, sale or other disposition, a
"Corporate Transaction"); excluding, however, a Corporate Transaction
pursuant to which:
(1) all or substantially all of the individuals or
entities who are the beneficial owners, respectively, of the
Outstanding Common Stock and the Outstanding Voting Securities
immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 60% of,
respectively, the outstanding shares of common stock, and the
combined voting power of the outstanding Voting Securities of
such corporation, as the case may be, of the corporation
resulting from such Corporate Transaction (including a
corporation which as a result of such transaction owns the
Company or all or substantially all of its assets either
directly or indirectly) in substantially the same proportions
relative to each other as their ownership, immediately prior
to such Corporate Transaction, of the Outstanding Common Stock
and the Outstanding Voting Securities, as the case may be;
(2) no Person (other than the Company; any Company
Plan; the corporation resulting from such Corporate
Transaction; and any Person which beneficially owned,
immediately prior to such Corporate Transaction, directly or
indirectly, 20% or more of the Outstanding Common Stock or the
Outstanding Voting Securities, as the case may be) will
beneficially own, directly or indirectly, 20% or more of,
respectively, the outstanding shares of common stock of the
corporation resulting from such Corporate Transaction or the
combined voting power of the outstanding Voting Securities of
such corporation;
(3) individuals who were members of the Incumbent
Board will constitute at least a majority of the members of
the board of directors of the corporation resulting from such
Corporate Transaction; and
(4) Executive shall be appointed or elected to
positions in respect of the corporation resulting from such
Corporate Transaction that are comparable to the positions
held by Executive pursuant to Section 2.1 immediately prior to
the Corporate Transaction; or
(4) approval by the stockholders of the Company of a plan of
complete liquidation or dissolution of the Company, other than a plan
of liquidation or dissolution which results in the acquisition of all
or substantially all the assets of the Company by its Affiliates.
I.11 "ComEd" -- see the recitals to this Agreement.
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I.12 "Common Stock" means common stock, without par value, of the
Company.
I.13 "Commencement Date" -- see Section 3.1.
I.14 "Company" -- see the recitals to this Agreement.
I.15 "Company Board" means the Board of Directors of the Company.
I.16 "Compensation Committee" means the Compensation Committee of the
Company Board, or any successor committee thereto.
I.17 "Confidential Information" means any information not generally
known in the relevant trade or industry, which was obtained from the Company,
Unicom or any Company Affiliate, or which was learned, discovered, developed,
conceived, originated or prepared during or as a result of the performance of
any services by Executive on behalf of the Company, Unicom or any Company
Affiliate and which:
(1) relates to one or more of the following:
(1) trade secrets of the Company or an Affiliate thereof
or any customer or supplier of the Company or an Affiliate
thereof;
(2) existing or contemplated products, services,
technology, designs, processes, formulae, algorithms, research
or product developments of the Company or an Affiliate thereof
or any customer or supplier of the Company or an Affiliate
thereof;
(3) business plans, sales or marketing methods, methods
of doing business, customer lists, customer usages and/or
requirements, supplier information of the Company or an
Affiliate thereof or any customer or supplier of the Company
or an Affiliate thereof; or
(2) the Company or an Affiliate thereof or any customer or
supplier of the Company or an Affiliate thereof may reasonably have the
right to protect by patent, copyright or by keeping it secret and
confidential.
Confidential Information does not include any information that is or may become
publicly known other than through the improper actions of Executive.
I.18 "Contract Term" -- see Section 3.1.
I.19 "Disability" means a mental or physical condition which, in the
opinion of the Company Board, renders Executive unable or incompetent to carry
out the job responsibilities which such Executive held or the duties to which
Executive was assigned at the time the disability was incurred, which has
existed for at least three months and which in the opinion of a physician
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mutually agreed upon by the Company and Executive (provided that neither party
shall unreasonably withhold or delay such agreement) is expected to be permanent
or to last for an indefinite duration or a duration in excess of six months.
I.20 "Early Retirement" means a Termination of Employment by Executive
on or after March 16, 2003, other than a Normal Retirement or a Termination for
Good Reason prior to Normal Retirement.
I.21 "Exchange Act" means the Securities Exchange Act of 1934.
I.22 "Executive" -- see the recitals to this Agreement.
I.23 "Formula Annual Incentive" means the greater of (i) the Annual
Incentive for the latest calendar year ended on or before the Termination Date,
or (ii) the average of the Annual Incentives that were actually paid (or would
have been paid in respect of the year preceding the Termination Date but for a
termination of Executive's employment after the end of such preceding year) to
Executive with respect to Executive's last three full calendar years of
employment by the Company, Unicom or any Affiliate of the Company. For purposes
of clause (ii) of the preceding sentence, if Annual Incentives have been paid to
Executive in respect of fewer than three years, such average shall be computed
by reference to the Annual Incentives that were actually paid to Executive.
I.24 "Good Reason" means any material breach of this Agreement by the
Company, including:
(1) a failure to provide the compensation and benefits
required by this Agreement, including a reduction in the Base Salary of
Executive below the Base Salary in effect during the immediately
preceding year under this Agreement or, where applicable, the Prior
Agreement, unless such reduction is commensurate with and part of a
general salary reduction program applicable to all senior executives of
the Company;
(2) failure to appoint or elect Executive (i) for the period
beginning at the Merger Effective Time and continuing until the last
day of the first half of the Transition Period, the President and
Co-Chief Executive Officer of the Company, the Chairman of the
Executive Committee of the Company Board and as a member of the Company
Board, (ii) for the period beginning at the commencement of the last
half of the Transition Period and continuing until the last day of the
Transition Period, the Co-Chief Executive Officer of the Company, the
Chairman of the Company Board and a member of the Company Board, and
(iii) for the period commencing immediately prior to the end of the
Transition Period and continuing after the Transition Period, the sole
Chief Executive Officer of the Company, Chairman of the Company Board
and a member of the Company Board; except that, in the event that prior
to the end of the Transition Period Xxxxxx X. XxXxxxx, Xx. should cease
to serve as Co-Chief Executive Officer of the Company, or prior to the
end of the first half of the Transition Period as Chairman of the
Company Board, "Good Reason" under this subsection (b) shall also
include failure to immediately appoint or elect Executive as sole Chief
Executive Officer and/or Chairman of the Company Board, as applicable;
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(3) causing or requiring Executive to report to any Person or
group other than the Company Board;
(4) any material adverse change in the status,
responsibilities or perquisites of Executive; or
(5) any public announcement by the Company Board that it is
seeking a replacement for Executive, which announcement is made prior
to Executive's attaining age 60, unless Executive has consented to such
announcement;
provided, however, that an act or omission shall not constitute a material
breach of this Agreement by the Company:
(1) unless Executive gives the Company 30 days' prior
notice of such act or omission and the Company fails to cure
such act or omission within the 30-day period;
(2) if Executive first acquired actual knowledge of
such act or omission more than 12 months before Executive
gives the Company such notice; or
(3) if Executive has consented in writing to such act
or omission in a document that makes specific reference to
this Section.
I.25 "Initial Term" shall mean the period, if any, beginning at the
Merger Effective Time and ending on March 15, 2001.
I.26 "including" means including without limitation.
I.27 "Key Employee" means any employee of the Company who is Group
Xxxxx 00 or above ("Group Level") or any employee of any Affiliate of the
Company who is at a level which is the equivalent of Group Level.
I.28 "LTIP" means the Company's Long-Term Incentive Plan.
I.29 "Merger" -- see the recitals to this Agreement.
I.30 "Merger Effective Time" -- see the recitals to this Agreement.
I.31 "Normal Retirement" means a Termination of Employment by Executive
either (i) on or after March 16, 2006 or (ii) on or after March 16, 2003 if the
Company Board shall have determined with the written consent of the Executive
that such Termination shall constitute Normal Retirement for purposes of this
Agreement.
I.32 "Option" means an option to purchase shares of Common Stock
pursuant to the terms and conditions of either this Agreement and the LTIP (or
any successor plan) or the Prior Agreement and the Unicom Long-Term Incentive
Plan.
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I.33 "Option Expiration Date" means, with respect to a specific Option,
the expiration date of such Option as specified in the grant agreement or the
plan (as applicable) relating thereto.
I.34 "Parent" -- see the recitals to this Agreement.
I.35 "Performance Unit Program" means Unicom's Long Term Performance
Unit Award Program, or any successor program maintained by the Company.
I.36 "Person" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, entity or government (whether federal,
state, county, municipal or otherwise).
I.37 "Post-Retirement Health Care Coverage" means the medical, dental
and vision care coverage provided by the Company or Unicom from time to time to
its retired senior executives who retired at or after March 10, 1998.
I.38 "Practices" means practices, policies and programs.
I.39 "Prior Agreement" -- see the recitals to this Agreement.
I.40 "Prorated Annual Incentive" means, in respect of the calendar year
during which the Termination Date occurs, an amount equal to the product of the
Formula Annual Incentive multiplied by a fraction, the numerator of which equals
the number of days between January 1 of such calendar year and the Termination
Date and the denominator of which equals 365.
I.41 "SERP Benefit" -- see Section 6.2(a).
I.42 "Service Annuity System" means the Commonwealth Edison Company
Service Annuity System.
I.43 "Severance Period" means the period that commences on the
Termination Date and ends two years after the Termination Date; provided,
however, that if (i) the Termination Date occurs at any time prior to December
31, 2004, (ii) the Termination Date occurs within the first 24 months after a
Change in Control, or (iii) the Termination Date occurs at any time because of a
Termination for Good Reason within the meaning of Section 1.24(b), the Severance
Period shall end three years after the Termination Date.
I.44 "Supplemental Retirement Plan" means the Commonwealth Edison
Company Supplemental Management Retirement Plan.
I.45 "Taxes" means federal, state, local or other income, employment or
other taxes.
I.46 "Termination Date" means the date as of which Executive's
employment with the Company and all Affiliates thereof is terminated by the
Company or by Executive for any reason.
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I.47 "Termination for Good Reason" means a Termination of Employment by
Executive for Good Reason.
I.48 "Termination of Employment" occurs on the first day on which
Executive is for any reason no longer employed by the Company or any Affiliate
thereof.
I.49 "Termination Without Cause" means a termination of Executive's
employment by the Company and all Affiliates thereof for any reason other than
Cause or Disability.
I.50 "Transition Period" means the period beginning at the Merger
Effective Time and ending on December 31, 2003.
I.51 "Unicom" -- see the recitals to this Agreement.
I.52 "Voting Securities" means, with respect to a corporation, the
securities of such corporation entitled to vote generally in the election of the
directors of such corporation.
ARTICLE II.
DUTIES
II.1 Duties. During the Contract Term, (a) for the period beginning at
the Merger Effective Time and continuing until the last day of the first half of
the Transition Period, Executive shall be the President and Co-Chief Executive
Officer of the Company, the Chairman of the Executive Committee of the Company
Board, and a member of the Company Board, (b) for the period beginning at the
commencement of the last half of the Transition Period and continuing until the
last day of the Transition Period, Executive shall be the Co-Chief Executive
Officer of the Company, the Chairman of the Company Board and a member of the
Company Board, and (c) for the period commencing immediately prior to the end of
the Transition Period and continuing after the Transition Period, Executive
shall be sole Chief Executive Officer of the Company, Chairman of the Company
Board and a member of the Company Board. In the event, however, that prior to
the end of the Transition Period Xxxxxx X. XxXxxxx, Xx. should cease during the
Contract Term to serve as Co-Chief Executive Officer of the Company, Executive
shall immediately be sole Chief Executive Officer of the Company, and if Xxxxxx
X. XxXxxxx, Xx. should cease to serve during the Contract Term as Chairman of
the Company Board prior to the end of the first half of the Transition Period,
Executive shall immediately become Chairman of the Company Board. It is
contemplated that, in connection with each annual meeting of shareholders (or
action by written consent in lieu thereof) of the Company during the Contract
Term, the shareholders of the Company will elect Executive to the Company Board.
During the Contract Term (excluding any periods of vacation, sick leave or
disability to which Executive is entitled), Executive (subject to Section 2.2)
shall devote his full attention and time to the business and affairs of the
Company and use his best efforts to perform his duties and responsibilities
described herein.
II.2 Other Activities. Executive may (a) serve on corporate, civic or
charitable boards or committees, (b) fulfill speaking engagements or teach at
educational institutions or (c) manage
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personal investments, in each case to the extent that such activities do not
materially interfere with the performance of his duties under this Agreement.
ARTICLE III.
TERM OF AGREEMENT
III.1 Term. The term of this Agreement (the "Contract Term") shall
begin at the Merger Effective Time (the "Commencement Date") and shall continue
in effect until the Termination Date.
ARTICLE IV.
COMPENSATION
IV.1 Base Salary. During any portion of the Contract Term consisting of
the Initial Term, the Company shall pay Executive in accordance with its normal
payroll practices an annual salary (the "Base Salary") of at least $900,000 but
not less than either Executive's annual salary under the Prior Agreement
immediately prior to the Merger Effective Time or the annual salary of the other
Co-Chief Executive Officer, if any, of the Company. After the expiration of the
Initial Term, the Base Salary shall be reviewed at least annually and may be
adjusted at any time and from time to time as shall be determined by the
Compensation Committee, except that during the Transition Period Executive's
Base Salary shall not be less than the annual salary of the other Co-Chief
Executive Officer, if any, of the Company. Any increase in Base Salary shall not
limit or reduce any other obligation to Executive under this Agreement.
IV.2 Annual Incentive. During the Contract Term, Executive shall
participate in the Company's Annual Incentive Award Program and shall be
eligible to receive an annual incentive award in accordance with the terms and
conditions thereof and on the same basis as other senior executives of the
Company, except that during the Transition Period such award shall not be less
than that of the other Co-Chief Executive Officer, if any, of the Company.
Executive shall continue to participate in the Unicom Annual Incentive Award
Program in accordance with the terms and conditions thereof with respect to
annual incentive awards (collectively with annual incentive awards granted under
the Company's Annual Incentive Award Program, "Annual Incentive") granted prior
to the Merger Effective Time.
IV.3 Long-Term Incentives. Effective as of the Commencement Date,
Executive shall participate in the Company's LTIP and in any Performance Unit
Program in accordance with the terms and conditions thereof and on the same
basis as other senior executives of the Company, except that during the
Transition Period such participation shall be on a basis that is not less than
that of the other Co-Chief Executive Officer, if any, of the Company. Executive
shall continue to participate in the Performance Unit Program in accordance with
the terms and conditions thereof with respect to performance cycles in effect as
of the Merger Effective Time. In addition, any award payable to Executive under
the Performance Unit Program with respect to the three-year performance period
ending on December 31, 2000 will be made as though Executive had participated in
such Program throughout such performance period (except in the event of a
Termination of Employment, in which case the provisions of the Performance Unit
Program shall apply).
IV.4 Deferred Stock and Additional Option.
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(1) Deferred Stock. Pursuant to the Prior Agreement, effective
on the date in 1999 on which Executive's Annual Incentive with respect
to 1998 first became payable pursuant to Section 4.3 of the Prior
Agreement (the "Grant Date"), Unicom granted to Executive a right to
receive, on the Payment Date (as defined in the last sentence of
Section 4.4(b)), a number of shares of Common Stock of Unicom (the
"Deferred Shares") equal to the sum of:
(1) a number of shares (the "Initial Deferred
Shares") equal to $600,000 divided by 100% of the fair market
value (determined in accordance with the Unicom Long-Term
Incentive Plan or any applicable successor plan (the "Fair
Market Value")) of a share of the Common Stock of Unicom on
the Grant Date (such price, the "Xxxxx Xxxxx"), and
(2) the aggregate number of shares of such Common
Stock that would be issued from time to time if all dividends
(other than dividends payable in such Common Stock) payable in
respect of the Initial Deferred Shares were reinvested in
additional shares of such Common Stock (assuming for this
purposes that the Initial Deferred Shares were outstanding
throughout the period beginning on the Grant Date and ending
on the Payment Date) based on the Fair Market Value of such
Common Stock as of the applicable dividend payment date.
Such Deferred Shares shall be payable as provided in this Section 4.4;
provided, however, that the aggregate number and kind of Deferred
Shares shall from time to time be equitably adjusted to prevent any
material dilution or enlargement of the aggregate value of the Deferred
Shares that may otherwise occur by reason of a change in the number or
kind of outstanding shares of Unicom Common Stock or of Common Stock
resulting from any recapitalization, reorganization, merger,
consolidation, stock split, stock dividend or any similar change
affecting such Common Stock (other than a dividend which is deemed to
have been reinvested pursuant to clause (ii) of this Section 4.4(a)),
including the Merger.
(2) Vesting. The Deferred Shares shall vest as follows: as to
50% of the Deferred Shares specified in clause (i) of Section 4.4(a),
on the Grant Date, and as to all remaining Deferred Shares (the
"Unvested Deferred Shares") on the date in 2000 on which Executive's
Annual Incentive with respect to 1999 first becomes payable pursuant to
Section 4.3 of the Prior Agreement (the "Year 2000 Bonus Date") . On or
before the fifth business day following Executive's Termination Date
(such day, the "Payment Date"), the Company shall deliver to Executive
a number of shares of Common Stock equal to the number of Deferred
Shares that have become vested on or before the Termination Date.
(3) Effect on SERP Benefit. Solely for purposes of determining
the amount of Executive's SERP Benefit pursuant to Section 6.2,
Executive's Annual Incentive with respect to each of 1998 and 1999
under the Prior Agreement shall be deemed to have been $300,000 greater
than the Annual Incentive actually paid to Executive in respect of such
year.
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(4) Additional Option. Effective as of the Grant Date, Unicom
granted to Executive an Option (the "Additional Option") with an
exercise price equal to the Xxxxx Xxxxx and subject to such other terms
and conditions as are applicable to other stock options granted to
senior executives of Unicom under the Unicom Long-Term Incentive Plan.
The Additional Option shall be exercisable during its term as follows:
(i) as to 50% of the shares subject thereto, at any time on or after
the Grant Date, and (ii) as to all of the other shares subject thereto
(the "Unvested Option Shares"), at any time on or after the Year 2000
Bonus Date.
ARTICLE V.
OPTION GRANTS
V.1 Initial Grant. On March 16, 1998, Unicom granted to Executive an
Option to purchase 250,000 shares of Unicom Common Stock. Subject to the
provisions of Article VII and Article VIII, such Option shall become exercisable
in equal installments on each of the three first Anniversary Dates and shall
thereafter remain exercisable until the 10th Anniversary Date. The option price
of such Option equaled 100% of the fair market value of Unicom's Common Stock as
of March 16, 1998 as determined by the Compensation Committee of the Unicom
Board.
V.2 Future Grants. As of the Merger Effective Time, the Compensation
Committee shall in its discretion consider Executive for a grant of Options
under the LTIP, but such grant shall be in an amount which is not less than the
Options granted as of the Merger Effective Time to the other Co-Chief Executive
Officer, if any, of the Company. In addition, during the Contract Term, the
Compensation Committee shall in its discretion consider Executive for possible
future annual or other grants of Options under the LTIP on the same date or
dates and on the same basis as other senior executives of the Company, except
that during the Transition Period such grants shall be in amounts which are not
less than those granted to the other Co-Chief Executive Officer, if any, of the
Company. Subject to the provisions of Article VII and Article VIII, Options
granted to Executive under the Unicom Long-Term Incentive Plan prior to the
Merger Effective Time shall become exercisable in accordance with their terms
and the terms of the Unicom Long-Term Incentive Plan.
ARTICLE VI.
OTHER BENEFITS
VI.1 Savings and Other Plans. During the Contract Term, Executive shall
be entitled to participate in all savings, deferred compensation and retirement
plans which are or may hereafter become generally available to senior executives
of the Company (subject to the eligibility requirements of such plans, except as
such eligibility requirements are modified by the provisions of Article IV and
this Article VI), except that during the Transition Period such participation
shall be on terms no less favorable than those available to the other Co-Chief
Executive Officer, if any, of the Company.
VI.2 Retirement Benefits.
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(1) Upon the first to occur of Executive's Early Retirement or
Normal Retirement, a Termination Without Cause, a Termination for Good
Reason, a Termination of Employment by reason of death or Disability or
a Termination of Employment by the Executive for any other reason on or
after the first anniversary of the Commencement Date (any of the
foregoing, a "SERP Payment Event"), Executive (or, in the event of his
death, his surviving spouse) shall thereafter receive a retirement
benefit (the "SERP Benefit") determined pursuant to Section 6.2(b).
(2) The SERP Benefit to be provided to Executive during any
year shall equal an amount which, when added to all other retirement
benefits provided to Executive by the Company and its Affiliates during
such year (including payments under the Service Annuity System, the
Supplemental Retirement Plan, any Social Security supplement paid by
ComEd until Executive attains age 65, any retirement benefit paid
pursuant to Section 8.4, and any other sources) results an aggregate
annual retirement benefit equal to the annual retirement benefit that
would have been payable under the Service Annuity System (including
under the Supplemental Retirement Plan) as in effect on the March 10,
1998, calculated as though Executive had:
(1) retired at age 60 (or, if greater, his attained
age upon the first SERP Payment Event), and
(2) accrued 20 years of service on March 16, 1998
and one additional year of service on each Anniversary Date
occurring on or before the Termination Date;
provided, however, that in no event shall any SERP Benefit be payable:
(A) during the Severance Period if either Section
7.3 or 8.3 is applicable,
(B) in the event that, before the first SERP Payment
Event, Executive shall have received a Notice of Consideration
(as defined in Section 7.1(b)(i)) and his employment is
subsequently terminated by the Company for Cause, or
(C) in the event of any Termination of Employment
other than in connection with a SERP Payment Event.
In addition, Executive's right to receive the SERP Benefit shall be
subject to Section 7.7.
(3) Executive shall have the option to receive the SERP
Benefit (i) as a lump-sum amount, payable within 30 days after
Termination of Employment notwithstanding the provisions of Section
6.2(b)(A), (ii) as a regular life annuity, or (iii) as a joint and
survivor marital annuity (to be appropriately adjusted in accordance
with the provisions of the Service Annuity System). In the event of
Executive's death during his employment by the Company, his spouse will
immediately become entitled to a surviving spouse benefit.
VI.3 Welfare Benefits. During the Contract Term, Executive (and his
family) shall be eligible to participate in and shall receive benefits under all
welfare benefit plans and Practices provided by the Company (including medical,
prescription, dental, vision care, disability, salary
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continuance, employee life, group life, dependent life, accidental death and
travel accident insurance plans and programs) generally available to senior
executives of the Company; provided, however, that the Company shall provide at
no cost to Executive an amount of term life insurance coverage that, when added
to the coverage available at no cost to Executive under the Company's group or
employee life plans or programs, equals three times his Base Salary. During the
Transition Period participation in such welfare benefit plans and Practices
shall be on terms no less favorable than those available to the other Co-Chief
Executive Officer, if any, of the Company.
VI.4 Employee Benefits. During the Contract Term, Executive shall be
entitled to employee benefits generally available to other senior executives of
the Company, including financial planning and tax planning services, except that
during the Transition Period such employee benefits available to Executive shall
be no less favorable than those available to the other Co-Chief Executive
Officer, if any, of the Company.
VI.5 Time Off. During each year of the Contract Term, Executive shall
be entitled to 30 "paid time off" days in accordance with the PTO policy
applicable to senior executives of the Company, except that during the
Transition Period such amount shall not be less than the days applicable to the
other Co-Chief Executive Officer, if any, of the Company.
VI.6 Expenses. During the Contract Term, Executive shall be entitled to
receive prompt reimbursement for all of his reasonable employment-related
expenses upon the Company's receipt of accounting in accordance with Practices
applicable to senior executives of the Company, except that during the
Transition Period such Practices shall not be less favorable than those
applicable to the other Co-Chief Executive Officer, if any, of the Company.
VI.7 Office; Support Staff. During the Contract Term, Executive shall
be entitled to an office of a size and with furnishings and other appointments,
and to personal secretarial and other assistance, as is appropriate to the
positions being assumed by Executive, but in no event less than those provided
to other senior executives of the Company or to the other Co-Chief Executive
Officer, if any, of the Company.
ARTICLE VII.
TERMINATION BENEFITS
VII.1 Termination for Cause or Other Than for Good Reason, Retirement,
Death or Disability.
(1) If, whether before or after the end of the Initial Term,
Executive's employment is terminated by the Company for Cause or by
Executive for any reason other than Good Reason, death, Disability,
Early Retirement or Normal Retirement, then:
(1) the Company shall within 10 days after the Termination
Date pay Executive his Accrued Base Salary and Accrued Annual
Incentive;
(2) all of Executive's Options (whether or not then
exercisable) shall expire on the Termination Date; and
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(3) any Performance Unit Program award that has not yet
become payable in accordance with the terms and conditions
thereof shall be forfeited.
(2) The Company may not terminate Executive's employment for
Cause unless:
(1) no fewer than 30 days prior to the Termination
Date, the Company provides Executive with written notice of
its intent to consider a termination of employment for Cause
that states the proposed Termination Date and includes a
detailed description of the specific reasons which form the
basis for such consideration (the "Notice of Consideration");
(2) during a period of not fewer than 15 days after
the date Notice of Consideration is provided, Executive shall
have the opportunity to appear before the Company Board, with
legal representation if he so elects, to present arguments on
his own behalf; and
(3) following the presentation to the Company Board
as provided in clause (ii) above, Executive shall be
terminated for Cause only if (x) not less than 60% of the
members of the Company Board (other than Executive if
Executive is a member of the Company Board, or any other
member of the Company Board alleged to be involved in the
events that form the basis of the proposed termination for
Cause) determines that the actions of Executive constituted
Cause and that his employment should accordingly be terminated
for Cause; and (y) the Company Board provides Executive with a
written determination setting forth the basis of such
termination of employment which shall be consistent with the
reasons set forth in the Notice of Consideration.
(3) After providing Notice of Consideration to Executive, the
Company Board may suspend Executive with pay pending a final
determination pursuant to this Section.
VII.2 Termination for Death or Disability. If Executive's employment
terminates due to death or Disability:
(1) the Company shall pay to Executive, his Beneficiaries or
his estate, as the case may be, immediately after the Termination Date
an amount which is equal to the sum of his Accrued Base Salary, Accrued
Annual Incentive and Prorated Annual Incentive; and
(2) each of Executive's Options (including any Options not
then exercisable) shall be fully exercisable and shall remain
exercisable until the applicable Option Expiration Date.
VII.3 Termination Without Cause or for Good Reason. Except as otherwise
provided in Section 8.3, in the event of a Termination Without Cause or a
Termination for Good Reason:
(1) Executive shall receive a lump sum equal to his Accrued
Base Salary, Accrued Annual Incentive, and Prorated Annual Incentive;
(2) Executive shall receive for the duration of the Severance
Period,
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(1) periodic payments in accordance with the
Company's normal payroll practices and in amounts equal to his
Base Salary in effect under this Agreement or, where
applicable, the Prior Agreement during the calendar year
preceding the Termination Date and, for each year during the
Severance Period, the Formula Annual Incentive, and
(2) a continuation of the benefits described in
Section 6.3 to which Executive and his family are entitled as
of the Termination Date (or, if such benefits are not
available, the economic equivalent thereof);
(3) each of Executive's Options that is exercisable on the
Termination Date shall remain exercisable until the applicable Option
Expiration Date;
(4) each of Executive's Options that has not yet become
exercisable as of the Termination Date shall become exercisable during
the Severance Period at such times and in such amounts (if any) as if
Executive had remained employed by the Company throughout the Severance
Period and, after becoming so exercisable, shall remain exercisable
until the applicable Option Expiration Date; and
(5) any of Executive's Options that remain unexercisable at
the end of the Severance Period shall be forfeited.
VII.4 Termination Upon Normal Retirement. If Executive's employment
terminates due to Normal Retirement:
(1) Executive shall receive a lump sum equal to his Accrued
Base Salary, Accrued Annual Incentive, and Prorated Annual Incentive;
(2) each of Executive's Options that is exercisable on the
Termination Date shall remain exercisable until the applicable Option
Expiration Date; and
(3) each of Executive's Options that has not yet become
exercisable as of the Termination Date shall become exercisable after
Executive's retirement at such times and in such amounts as if
Executive had remained employed by the Company following his retirement
and, after becoming so exercisable, shall remain exercisable until the
applicable Option Expiration Date.
VII.5 Termination Upon Early Retirement. If Executive's employment
terminates due to Early Retirement:
(1) Executive shall receive a lump sum equal to his Accrued
Base Salary, Accrued Annual Incentive, and Prorated Annual Incentive;
(2) each of Executive's Options that is exercisable on the
Termination Date shall remain exercisable until the later to occur of
(i) the end of the period that is applicable under such circumstances
pursuant to the form of grant agreement in general use for grants to
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senior executives at the time such Option was granted or (ii) 90 days
after the Termination Date, but in no event after the applicable Option
Expiration Date; and
(3) each of Executive's Options that has not yet become
exercisable as of the Termination Date shall expire on the Termination
Date.
VII.6 Post-Retirement Health Care Coverage. In the event of any
Termination of Employment on account of death, Disability, Early Retirement,
Normal Retirement, by Executive for Good Reason or by the Company without Cause,
Executive and his spouse shall each be entitled to Post-Retirement Health Care
Coverage for the remainder of their respective lives. Such coverage shall not
duplicate any benefits that may then be available to Executive and his spouse
under Section 6.3 and shall be secondary to any coverage provided by any other
employer or Medicare.
VII.7 Breach of Covenants; Exculpation. In the event of (a) a wilful
and material breach by Executive of any of the covenants contained in Article
IX, or (b) a failure by Executive to cure (to the fullest extent curable) a
non-wilful breach of any of such covenants within 10 days after his receipt of a
written notice thereof from the Company, the Company shall be entitled, after
obtaining a final judicial determination (or, if the Company reasonably
determines, based upon the advice of counsel, that it is more likely than not
that each of the Circuit Court of Xxxx County, Illinois and the United States
District Court for the Northern District of Illinois will decline to adjudicate
the issue, a final decree in an arbitration proceeding conducted in accordance
with the rules of the American Arbitration Association, with such arbitration
proceeding to be conducted in Chicago, Illinois before a panel of three
arbitrators) to the effect that such action by the Company is appropriate and
consistent with the requirements and procedures set forth in this Agreement, to
take any or all of the following actions:
(1) discontinue the SERP Benefit and any or all payments
and benefits provided to Executive pursuant to Article VII and
any other provision of this Agreement,
(2) terminate any Options then held by Executive,
whether or not then exercisable, and
(3) require Executive to:
(w) repay to the Company all amounts
previously received by Executive pursuant to any
provision of Article VII on or after the first date
on which the Executive breached any of the covenants
contained in Article IX (the "Breach Date"),
(x) repay to the Company all amounts
previously received by Executive pursuant the SERP
Benefit at any time on or after the Termination Date,
(y) pay to the Company an amount equal to
the aggregate "spread" on all Options exercised on or
after the Breach Date, and
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(z) repay to the Company any other amount
that it paid to Executive on or after the Breach Date
which Executive would not have been entitled to
receive if the Company had terminated the employment
of Executive for Cause as of the Breach Date;
provided, however, that (I) no benefits shall be discontinued or terminated nor
shall Executive have any monetary liability to the Company for any breach of the
covenants contained in Article IX for any act or failure to act, including
without limitation simple negligence or an error in judgment, if such act or
failure to act was done in good faith, with a reasonable belief that the act, or
failure to act, was in the best interest of the Company or was required by
applicable law or administrative regulations, and was not done primarily to
benefit Executive and (II) no action may be brought under this Section 7.7 more
than three years after the Termination Date. For purposes of clause (iii) (y) of
the preceding sentence, "spread" in respect of any Option shall mean the product
of the number of shares as to which such Option has been exercised on or after
the Breach Date multiplied by the difference between the closing price of the
Common Stock on the exercise date (or if the Common Stock did not trade on the
New York Stock Exchange on the exercise date, the most recent date on which the
Common Stock did so trade) and the exercise price of the Option.
VII.8 Other Employment; Other Plans. Executive shall not be obligated
to seek other employment or take any other action by way of mitigation of the
amounts payable to Executive under any provision of this Agreement. The amounts
payable hereunder shall not be reduced by any payments received by Executive
from any other employer; provided, however, that any continued welfare benefits
provided for by Section 6.3 shall not duplicate any benefits that are provided
to Executive and his family by such other employer and shall be secondary to any
coverage provided by such other employer. The provisions of this Article VII or
Article VIII will not limit the entitlement of Executive to any other benefits
available to Executive under any benefit plan or Practice that is maintained by
the Company, Unicom or any Company Affiliate in which Executive participates.
ARTICLE VIII.
EFFECTS OF CERTAIN CONTROL CHANGES
VIII.1 Effect on Certain Defined Terms. In the event of (i) a
Termination Without Cause or a Termination for Good Reason (including a
Termination for Good Reason within the meaning of Section 1.24(b)) for which the
Termination Date occurs at any time during the period beginning on the date on
which a Change in Control first occurs and ending 24 months after such date
(such period, the "Post-Change Period"), (ii) a Termination Without Cause or a
Termination for Good Reason (including a Termination for Good Reason within the
meaning of Section 1.24(b)) for which the Termination Date occurs at any other
time on or after the Commencement Date and prior to the earlier of Normal
Retirement or December 31, 2004, or (iii) a Termination for Good Reason within
the meaning of Section 1.24(b) for which the Termination Date occurs at any
other time on or after the Commencement Date and prior to Normal Retirement:
(1) the term "Formula Annual Incentive" shall mean the greater
of (i) that amount determined pursuant to Section 1.23 or (ii)
Executive's target Annual Incentive determined as of the Termination
Date; and
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(2) for purposes of a Termination for Good Reason for which
the Termination Date occurs during the Post-Change Period, the term
"Good Reason" shall have the meaning specified in Section 1.24, except
that, subject to the proviso at the end of Section 1.24, any one or
more of the following acts or omissions shall also constitute Good
Reason:
(1) a determination by Executive, made in good faith
at any time during the Post-Change Period, that, as a result
of a Change in Control, he is substantially unable to perform,
or that there has been a material reduction in, any of his
duties, functions, responsibilities or authority;
(ii) the failure for any reason of any successor to
the Company to assume this Agreement in writing as required by
Section 8.2;
(iii) a relocation of the principal offices of the
Company at any time during the Post-Change Period by more than
50 miles from the location of such offices immediately before
the date on which the Post-Change Period begins; or
(iv) during any 12-month period commencing after the
Change in Control, any increase of at least 20% in the amount
of time that Executive is required to devote to
business-related travel outside of the metropolitan Chicago,
Illinois area relative to the amount of time that Executive
devoted to such business travel during the 12-month period
immediately prior to the Change in Control, but only to the
extent that such increase is attributable to requirements
imposed upon Executive by the Company Board.
VIII.2 Successor(s). Before the consummation of any Change in Control,
the Company shall obtain from each Person that becomes a successor of the
Company by reason of the Change in Control, the unconditional written agreement
of such Person to assume this Agreement and to perform all of the obligations of
the Company hereunder.
VIII.3 Termination Without Cause or for Good Reason During Post-Change
Period or Termination in Certain Other Situations. In the event of (i) a
Termination Without Cause or a Termination for Good Reason (including a
Termination for Good Reason within the meaning of Section 1.24(b)) for which the
Termination Date occurs during the Post-Change Period, (ii) a Termination
Without Cause or a Termination for Good Reason (including a Termination for Good
Reason within the meaning of Section 1.24(b)) for which the Termination Date
occurs at any other time on or after the Commencement Date and prior to the
earlier of Normal Retirement or December 31, 2004, or (iii) a Termination for
Good Reason within the meaning of Section 1.24(b) for which the Termination Date
occurs at any other time on or after the Commencement Date and prior to Normal
Retirement, the provisions of Section 7.3 shall be inapplicable and, in lieu
thereof:
(a) Executive shall receive a lump sum equal to his Accrued
Base Salary, Accrued Annual Incentive, and Prorated Annual Incentive
(determined by reference to the Formula Annual Incentive computed in
accordance with Section 8.1(a));
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(b) Executive shall receive a lump sum equal to three (3.0)
times the sum of (x) his Base Salary in effect under this Agreement or,
where applicable, the Prior Agreement during the calendar year
preceding the Termination Date and (y) his Formula Annual Incentive
(computed in accordance with Section 8.1(a)) determined as of the
Termination Date;
(c) Executive and his family shall receive for the duration of
the Severance Period, a continuation of the benefits described in
Section 6.3 to which Executive and his family are entitled as of the
Termination Date (or, if such benefits are not available, the economic
equivalent thereof) and, upon the expiration of the Severance Period,
Executive and his spouse shall be entitled to Post-Retirement Health
Care Coverage in accordance with the provisions of Section 7.6;
(d) Company shall, at its expense, engage a professional
outplacement organization which shall provide individual outplacement
services to Executive for a period of six months commencing on the
Termination Date, subject to extension for an additional period of six
months in the sole discretion of Company;
(e) each of Executive's Options that is exercisable on the
Termination Date shall remain exercisable until the applicable Option
Expiration Date;
(f) each of Executive's Options that is not fully exercisable
as of the Termination Date shall immediately become fully exercisable
and shall thereafter remain exercisable until the applicable Option
Expiration Date;
(g) all forfeiture conditions which as of the Termination Date
are applicable to any deferred stock unit, restricted stock or
restricted share units awarded to Executive by the Company pursuant to
the LTIP, a successor plan, or otherwise at any time during the
Contract Term or by Unicom pursuant to the Unicom Long-Term Incentive
Plan or otherwise at any time during the contract term under the Prior
Agreement, shall lapse immediately; and
(h) If all or any portion of any of Executive's awards under
any other bonus or incentive arrangement under the LTIP or the Unicom
Long-Term Incentive Plan shall for any reason be unvested as of the
Termination Date, the Company shall pay Executive a benefit equal to
the increase in the benefit that Executive would have received if the
unvested portion of such benefit had become fully vested as of the
Termination Date.
VIII.4 Enhanced Retirement Benefit.
(a) In the event of (i) a Termination Without Cause or a
Termination for Good Reason (including a Termination for Good Reason
within the meaning of Section 1.24(b)) for which the Termination Date
occurs during the Post-Change Period, (ii) a Termination Without Cause
or a Termination for Good Reason (including a Termination for Good
Reason within the meaning of Section 1.24(b)) for which the Termination
Date occurs at any other time on or after the Commencement
20
Date and prior to the earlier of Normal Retirement or December 31,
2004, or (iii) a Termination for Good Reason within the meaning of
Section 1.24(b) for which the Termination Date occurs at any other time
on or after the Commencement Date and prior to Normal Retirement, the
aggregate amount of Executive's annual retirement benefit pursuant to
Section 6.2(a) shall be computed on the basis of the assumptions set
forth in such Section 6.2(b), together with the additional assumptions
that Executive had:
(x) attained as of the Termination Date an age that
is three greater than the age determined pursuant to clause
(i) of Section 6.2(b),
(y) accrued a number of years of service that is
three years greater than the number of years of service
determined pursuant to clause (ii) of Section 6.2(b), and
(z) received the lump-sum severance benefit specified
in Section 8.3(b) in equal monthly installments during the
Severance Period.
(b) For purposes of applying the adjustments necessary to give
effect to the form in which Executive may from time to time elect to
receive his SERP Benefit pursuant to Section 6.2(c), the term "Service
Annuity System" shall refer to Service Annuity System as in effect on
the last date preceding the Post-Change Period, if any, if the amount
of the SERP Benefit (in the form in which Executive elects to receive
it) would otherwise be reduced by application of the adjustments
provided for under the Service Annuity System as in effect as of the
Termination Date.
VIII.5 Gross-Up for Certain Taxes.
(a) If it is determined by the Company's independent auditors
that any monetary or other benefit received or deemed received by
Executive from the Company or any Affiliate thereof pursuant to this
Agreement or otherwise, whether or not in connection with a Change in
Control (such monetary or other benefits collectively, the "Potential
Parachute Payments"), is or will become subject to any excise tax under
Section 4999 of the Code or any similar tax under any United States
federal, state, local or other law (such excise tax and all such
similar taxes collectively, "Excise Taxes"), then the Company shall,
subject to Sections 8.10 and 8.11, within five business days after such
determination, pay Executive an amount (the "Gross-Up Payment") equal
to the product of:
(i) the amount of such Excise Taxes multiplied by
(ii) the Gross-Up Multiple (as defined in Section 8.8).
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The Gross-Up Payment is intended to compensate Executive for all Excise
Taxes payable by Executive with respect to Potential Parachute Payments
and all Taxes or Excise Taxes payable by Executive with respect to the
Gross-Up Payment.
(b) The determination of the Company's independent auditors
described in Section 8.5(a), including the detailed calculations of the
amounts of the Potential Parachute Payments, Excise Taxes and Gross-Up
Payment and the assumptions relating thereto, shall be set forth in a
written certificate of such auditors (the "Company Certificate")
delivered to Executive. Executive or the Company may at any time
request the preparation and delivery to Executive of a Company
Certificate. The Company shall cause the Company Certificate to be
delivered to Executive as soon as reasonably possible after such
request.
VIII.6 Determination by Executive.
(a) If (i) the Company shall fail to deliver a Company
Certificate to Executive within 30 days after its receipt of his
written request therefor, or (ii) at any time after Executive's receipt
of a Company Certificate, Executive disputes either (x) the amount of
the Gross-Up Payment set forth therein or (y) the determination set
forth therein to the effect that no Gross-Up Payment is due (whether by
reason of Section 8.11 or otherwise), then Executive may elect to
require the Company to pay a Gross-Up Payment in the amount determined
by Executive as set forth in an Executive Counsel Opinion (as defined
in Section 8.9). Any such demand by Executive shall be made by delivery
to the Company of a written notice which specifies the Gross-Up Payment
determined by Executive (together with the detailed calculations of the
amounts of Potential Parachute Payments, Excise Taxes and Gross-Up
Payment and the assumptions relating thereto) and an Executive Counsel
Opinion regarding such Gross-Up Payment (such written notice and
opinion collectively, the "Executive's Determination") . Within 30 days
after delivery of an Executive's Determination to the Company, the
Company shall either (i) pay Executive the Gross-Up Payment set forth
in the Executive's Determination (less the portion thereof, if any,
previously paid to Executive by the Company) or (ii) deliver to
Executive a Company Certificate and a Company Counsel Opinion (as
defined in Section 8.9), and pay Executive the Gross-Up Payment
specified in such Company Certificate. If for any reason the Company
fails to comply with the preceding sentence, the Gross-Up Payment
specified in the Executive's Determination shall be controlling for all
purposes.
(b) If Executive does not request a Company Certificate, and
the Company does not deliver a Company Certificate to Executive, then
(i) the Company shall, for purposes of Section 8.11, be deemed to have
determined that no Gross-Up Payment is due and (ii) Executive shall not
pay any Excise Taxes in respect of Potential Parachute Payments except
in accordance with Sections 8.10(a) or (d).
VIII.7 Additional Gross-Up Amounts. If for any reason (whether pursuant
to subsequently enacted provisions of the Code, final regulations or published
rulings of the IRS, a final judgment of a court of competent jurisdiction, a
determination of the Company's independent auditors set forth in
22
a Company Certificate or, subject to the last two sentences of Section 8.6(a),
an Executive's Determination) it is later determined that the amount of Excise
Taxes payable by Executive is greater than the amount determined by the Company
or Executive pursuant to Section 8.5 or 8.6, as applicable, then the Company
shall, subject to Sections 8.10 and 8.11, pay Executive an amount (which shall
also be deemed a Gross-Up Payment) equal to the product of:
(a) the sum of (1) such additional Excise Taxes and (2) any
interest, penalties, expenses or other costs incurred by Executive as a
result of having taken a position in accordance with a determination
made pursuant to Section 8.5 or 8.6, as applicable, multiplied by
(b) the Gross-Up Multiple.
VIII.8 Gross-Up Multiple. The Gross-Up Multiple shall equal a fraction,
the numerator of which is one (l.0), and the denominator of which is one (1.0)
minus the lesser of (i) the sum, expressed as a decimal fraction, of the
effective after-tax marginal rates of all Taxes and any Excise Taxes applicable
to the Gross-Up Payment or (ii) 0.80, it being intended that the Gross-Up
Multiple shall in no event exceed five (5.0) . (If different rates of tax are
applicable to various portions of a Gross-Up Payment, the weighted average of
such rates shall be used.)
VIII.9 Opinion of Counsel. "Executive Counsel Opinion" means an opinion
of nationally-recognized executive compensation counsel to the effect (i) that
the amount of the Gross-Up Payment determined by Executive pursuant to Section
8.6 is the amount that a court of competent jurisdiction, based on a final
judgment not subject to further appeal, is most likely to decide to have been
calculated in accordance with this Article and applicable law and (ii) if the
Company has previously delivered a Company Certificate to Executive, that there
is no reasonable basis or no substantial authority for the calculation of the
Gross-Up Payment set forth in the Company Certificate. "Company Counsel Opinion"
means an opinion of nationally-recognized executive compensation counsel to the
effect that (i) the amount of the Gross-Up Payment set forth in the Company
Certificate is the amount that a court of competent jurisdiction, based on a
final judgment not subject to further appeal, is most likely to decide to have
been calculated in accordance with this Article and applicable law and (ii) for
purposes of Section 6662 of the Code, Executive has substantial authority to
report on his federal income tax return the amount of Excise Taxes set forth in
the Company Certificate.
VIII.10 Amount Increased or Contested.
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(a) Executive shall notify the Company in writing (an
"Executive's Notice") of any claim by the IRS or other taxing authority
(an "IRS Claim") that, if successful, would require the payment by
Executive of Excise Taxes in respect of Potential Parachute Payments in
an amount in excess of the amount of such Excise Taxes determined in
accordance with Section 8.5 or 8.6, as applicable. Such Executive's
Notice shall include the nature and amount of such IRS Claim, the date
on which such IRS Claim is due to be paid (the "IRS Claim Deadline"),
and a copy of all notices and other documents or correspondence
received by Executive in respect of such IRS Claim. Executive shall
give his Executive's Notice as soon as practicable, but no later than
the earlier of (i) 10 business days after Executive first obtains
actual knowledge of such IRS Claim or (ii) five business days before
the IRS Claim Deadline; provided, however, that Executive's failure to
give such notice shall affect the Company's obligations under this
Article only to the extent that the Company is actually prejudiced by
such failure. If at least one business day before the IRS Claim
Deadline the Company shall:
(1) deliver to Executive a Company Certificate to the
effect that the IRS Claim has been reviewed by the Company's
independent auditors and, notwithstanding the IRS Claim, the
amount of Excise Taxes, interest and penalties payable by
Executive is either zero or an amount less than the amount
specified in the IRS Claim,
(2) pay to Executive an amount (which shall also be
deemed a Gross-Up Payment) equal to the positive difference
between (x) the product of the amount of Excise Taxes,
interest and penalties specified in the Company Certificate,
if any, multiplied by the Gross-Up Multiple, and (y) the
portion of such product, if any, previously paid to Executive
by the Company, and
(3) direct Executive pursuant to Section 8.10(d) to
contest the balance of the IRS Claim,
then Executive shall pay only the amount, if any, of Excise Taxes,
interest and penalties specified in the Company Certificate. In no
event shall Executive pay an IRS Claim earlier than 30 days after
having given an Executive's Notice to the Company (or, if sooner, the
IRS Claim Deadline).
(b) At any time after the payment by Executive of any amount
of Excise Taxes or related interest or penalties in respect of
Potential Parachute Payments (whether or not such amount was based upon
a Company Certificate, an Executive's Determination or an IRS Claim),
the Company may in its discretion require Executive to pursue a claim
for a refund (a "Refund Claim") of all or any portion of such Excise
Taxes, interest or penalties as the Company may specify by written
notice to Executive.
(c) If the Company notifies Executive in writing that the
Company desires Executive to contest an IRS Claim or to pursue a Refund
Claim, Executive shall:
24
(i) give the Company all information that it
reasonably requests in writing from time to time relating to
such IRS Claim or Refund Claim, as applicable,
(ii) take such action in connection with such IRS
Claim or Refund Claim (as applicable) as the Company
reasonably requests in writing from time to time, including
accepting legal representation with respect thereto by an
attorney selected by the Company, subject to the approval of
Executive (which approval shall not be unreasonably withheld
or delayed),
(iii) cooperate with the Company in good faith to
contest such IRS Claim or pursue such Refund Claim, as
applicable,
(iv) permit the Company to participate in any
proceedings relating to such IRS Claim or Refund Claim, as
applicable, and
(iv) contest such IRS Claim or prosecute such Refund
Claim (as applicable) to a determination before any
administrative tribunal, in a court of initial jurisdiction
and in one or more appellate courts, as the Company may from
time to time determine in its discretion.
The Company shall control all proceedings in connection with such IRS
Claim or Refund Claim (as applicable) and in its discretion may cause
Executive to pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the IRS or other taxing
authority in respect of such IRS Claim or Refund Claim (as applicable);
provided that (i) any extension of the statute of limitations relating
to payment of taxes for the taxable year of Executive relating to the
IRS Claim is limited solely to such IRS Claim, (ii) the Company's
control of the IRS Claim or Refund Claim (as applicable) shall be
limited to issues with respect to which a Gross-Up Payment would be
payable, and (iii) Executive shall be entitled to settle or contest, as
the case may be, any other issue raised by the IRS or other taxing
authority.
(d) The Company may at any time in its discretion direct
Executive to (i) contest the IRS Claim in any lawful manner or (ii) pay
the amount specified in an IRS Claim and pursue a Refund Claim;
provided, however, that if the Company directs Executive to pay an IRS
Claim and pursue a Refund Claim, the Company shall advance the amount
of such payment to Executive on an interest-free basis and shall
indemnify Executive, on an after-tax basis, for any Taxes, Excise
Taxes, and any related interest or penalties imposed with respect to
such advance.
(e) The Company shall pay directly all legal, accounting and
other costs and expenses (including additional interest and penalties)
incurred by the Company or Executive in connection with any IRS Claim
or Refund Claim, as applicable, and shall indemnify Executive, on an
after-tax basis, for any Taxes, Excise Taxes and related interest and
penalties imposed on Executive as a result of such payment of costs and
expenses.
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VIII.11 Limitation on Gross-Up Payments.
(a) Notwithstanding any other provision of this Article VIII,
if the aggregate After-Tax Amount (as defined below) of the Potential
Parachute Payments and Gross-up Payment that, but for this Section
8.11, would be payable to Executive, does not exceed 110% of the
After-Tax Floor Amount (as defined below), then no Gross-Up Payment
shall be made to Executive and the aggregate amount of Potential
Parachute Payments payable to Executive shall be reduced (but not below
the Floor Amount) to the largest amount which would both (i) not cause
any Excise Taxes to be payable by Executive and (ii) not cause any
Potential Parachute Payments to become nondeductible by the Company by
reason of Section 280G of the Code (or any successor provision) . For
purposes of the preceding sentence, Executive shall be deemed to be
subject to the highest effective after-tax marginal rate of Taxes.
(b) For purposes of this Section:
(i) "After-Tax Amount" means the portion of a
specified amount that would remain after payment of all Taxes
and Excise Taxes paid or payable by Executive in respect of
such specified amount;
(ii) "Floor Amount" means the greatest pre-tax amount
of Potential Parachute Payments that could be paid to
Executive without causing him to become liable for any Excise
Taxes in connection therewith; and
(iii) "After-Tax Floor Amount" means the After-Tax
Amount of the Floor Amount.
VIII.12 Refunds. If, after the receipt by Executive of any payment or
advance of Excise Taxes by the Company pursuant to this Article, Executive
receives any refund with respect to such Excise Taxes, Executive shall (subject
to the Company's complying with any applicable requirements of Section 8.10)
promptly pay the Company the amount of such refund (together with any interest
paid or credited thereon after Taxes applicable thereto). If, after the receipt
by Executive of an amount advanced by the Company pursuant to Section 8.10, a
determination is made that Executive shall not be entitled to any refund with
respect to such claim and the Company does not notify Executive in writing of
its intent to contest such determination within 30 days after the Company
receives written notice of such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid. Any contest of a denial of refund shall be controlled by Section 8.10.
VIII.13 No Adverse Effect on Pooling of Interests. Any benefits
provided to Executive under this Article VIII may be reduced or eliminated to
the extent necessary, in the reasonable judgment of the Company Board, to enable
the Company to account for a merger, consolidation or similar transaction as a
pooling of interests; provided that (i) the Company Board shall have exercised
such
26
judgment and given Executive written notice thereof prior to the Effective Date,
(ii) the determination of the Company Board shall be supported by a written
certificate of the Company's independent auditors, a copy of which shall be
provided to the Executive before the Effective Date, and (iii) if for any reason
the Company shall, notwithstanding such exercise of judgment by the Company
Board, fail to account for such merger, consolidation or other transaction as a
pooling of interests for any fiscal period that includes the Termination Date,
the Company shall, as soon as practicable after the end of such fiscal period
and, in any event, within 10 business days after the its audited financial
statements for such fiscal period first become publicly available, provide to
Executive the excess, if any, of (x) each severance or other benefit determined
pursuant to Article VIII (without giving effect to this Section 8.13) over (y)
each corresponding severance or other benefit previously provided to Executive
pursuant to Article VII or Article VIII.
ARTICLE IX.
RESTRICTIVE COVENANTS
IX.1 Confidential Information.
(1) Executive acknowledges that it is the policy of the
Company and its Affiliates to maintain as secret and confidential all
Confidential Information, and that Confidential Information has been
and will be developed at substantial cost and effort to the Company and
its Affiliates. Executive acknowledges that he will have access to
Confidential Information with respect to the Company and its Affiliates
which information is a valuable and unique asset of the Company and its
Affiliates and that disclosure of such Confidential Information would
cause irreparable damage to the business and operations of the Company
and its Affiliates.
(2) Executive acknowledges that the Confidential Information
is, as between the Company and its Affiliates and Executive, the
exclusive property of the Company and its Affiliates.
(3) Both during Executive's employment by the Company (whether
during or after the Initial Term) and at any time after the Termination
Date, Executive:
(1) shall not, directly or indirectly, divulge,
furnish or make accessible to any Person any Confidential
Information (except (x) to the extent Executive reasonably and
in good faith believes that such actions are related to, and
required by, Executive's performance of his duties under this
Agreement, or (y) as may be compelled by applicable law or
administrative regulation; provided that Executive, to the
extent not prohibited from doing so by applicable law or
administrative regulation, shall give the Company written
notice of the information to be so disclosed pursuant to
clause (y) of this sentence as far in advance of its
disclosure as is practicable, shall cooperate with the Company
in its efforts to protect the information from disclosure, and
shall limit its disclosure of such information to the minimum
disclosure required by law or administrative regulation unless
the Company agrees in writing to a greater level of
disclosure);
27
(2) shall not use for his own benefit in any manner,
any Confidential Information;
(3) shall not cause any such Confidential Information
to become publicly known; and
(4) shall take all reasonable steps to safeguard such
Confidential Information and to protect it against disclosure,
misuse, loss and theft.
(4) For purposes of this Agreement, Confidential Information
represents trade secrets subject to protection under the Uniform Trade
Secrets Act, as adopted by the State of Illinois, or to any comparable
protection afforded by applicable laws.
IX.2 Non-Competition.
(1) During the period beginning on the Agreement Date and
ending two years after the Termination Date, Executive shall not,
directly or indirectly, in any capacity, engage or participate in,
become employed by, serve as a director of, or render advisory or
consulting or other services in connection with, any Competitive
Business (as defined in Section 9.2(c)).
(2) During the period beginning on the Agreement Date and
ending two years after the Termination Date, Executive shall not at any
time make any financial investment, whether in the form of equity or
debt, or own any interest, directly or indirectly, in any Competitive
Business. Nothing in this subsection shall, however, restrict Executive
from making an investment in any Competitive Business if such
investment does not (i) represent more than 1% of market value of the
outstanding capital stock or debt (as applicable) of such Competitive
Business, (ii) give Executive any right or ability, directly or
indirectly, to control or influence the policy decisions of any
Competitive Business, and (iii) create a conflict of interest between
Executive's duties under this Agreement and his interest in such
investment. In addition, nothing in this subsection shall restrict
Executive's ability to retain any interest (including any interest in
common stock held on March 10, 1998 or subsequently acquired upon
exercise of options or similar rights held on March 10, 1998 or upon
the conversion of convertible securities held on March 10, 1998) in New
England Electric System or any of its successors received by Executive
as a result of his former employment relationship with such entity.
(3) "Competitive Business" means as of any date (including
during the two-year period commencing on the Termination Date) any
Person (and any branch, office or operation thereof) which 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
Termination Date which represents for any calendar year during the
Contract Term, or is projected by the Company (as reflected in a
business plan adopted by the Company or any Affiliate thereof before
the Termination Date) to yield during any year during the first
three-fiscal year period commencing on or after the Termination Date,
more than 5% of the gross revenue of the Company, and which is located
(i) anywhere in the United States, or (ii) anywhere outside of the
United States where the
28
Company or any Affiliate thereof is then engaged in, or proposes to
engage in, any of such activities.
IX.3 Non-Solicitation. During the period beginning on the Agreement
Date and ending two years after the Termination Date, Executive shall not,
directly or indirectly:
(1) other than in connection with the performance of his
duties as an officer of the Company, encourage any Key Employee to
terminate his or her employment;
(2) employ, engage as a consultant or adviser, or solicit the
employment or engagement as a consultant or adviser of, any Key
Employee (other than by the Company or its Affiliates), or cause any
Person to do any of the foregoing;
(3) establish a business with, or encourage others to
establish a business with, any Key Employee; or
(4) interfere with the relationship of the Company or any of
its Affiliates with, or endeavor to entice away from, the Company or
any of its Affiliates any Person who or which at any time during the
period commencing one year prior to March 16, 1998 was a material
customer or material supplier of, or maintained a material business
relationship with, the Company, Unicom or any of their Affiliates.
IX.4 Reasonableness of Restrictive Covenants.
(1) Executive acknowledges that the covenants contained in
Sections 9.1, 9.2 and 9.3 are reasonable in the scope of the activities
restricted, the geographic area covered by the restrictions, and the
duration of the restrictions, and that such covenants are reasonably
necessary to protect the Company's legitimate interests in its
Confidential Information and in its relationships with employees,
customers and suppliers. Executive further acknowledges such covenants
are essential elements of this Agreement and that, but for such
covenants, Unicom and ComEd would not have entered into this Agreement.
(2) Unicom and ComEd and Executive have each consulted with
their respective legal counsel and have been advised concerning the
reasonableness and propriety of such covenants. Executive acknowledges
that his observance of the covenants contained in Sections 9.1, 9.2 and
9.3 will not deprive him of the ability to earn a livelihood or to
support his dependents.
29
IX.5 Right to Injunction; Survival of Undertakings.
(1) In recognition of the confidential nature of the
Confidential Information, and in recognition of the necessity of the
limited restrictions imposed by Sections 9.1, 9.2 and 9.3, the parties
agree that it would be impossible to measure solely in money the
damages which the Company would suffer if Executive were to breach any
of his obligations under such Sections. Executive acknowledges that any
breach of any provision of this such Sections would irreparably injure
the Company. Accordingly, Executive agrees that if he breaches any of
the provisions of such Sections, the Company shall be entitled, in
addition to any other remedies to which the Company may be entitled
under this Agreement or otherwise, to an injunction to be issued by a
court of competent jurisdiction, to restrain any breach, or threatened
breach, of such provisions, and Executive hereby waives any right to
assert any claim or defense that the Company has an adequate remedy at
law for any such breach.
(2) If a court determines that any of the covenants included
in this Article IX is unenforceable in whole or in part because of such
covenant's duration or geographical or other scope, such court shall
have the power to reduce the duration or scope of such provision, as
the case may be, so as to cause such covenant to be thereafter
enforceable.
(3) All of the provisions of this Article IX shall survive any
Termination of Employment without regard to (i) the reasons for such
termination or (ii) the expiration of the Contract Term.
IX.6 Non-Disparagement. During the two-year period commencing on the
Termination Date, Executive shall not (a) make any written or oral statement
that brings the Company or any of its Affiliates or the employees, officers or
agents of the Company or any of its Affiliates into disrepute, or tarnishes any
of their images or reputations or (b) publish, comment upon or disseminate any
statements suggesting or accusing Company or any of its Affiliates or any of
agents, employees or officers of the Company or any of its Affiliates of any
misconduct or unlawful behavior. This Section shall not be deemed to be breached
by testimony of Executive given in any judicial or governmental proceeding which
Executive reasonably believes to be truthful at the time given or by any other
action of Executive which he reasonably believes is taken in accordance with the
requirements of applicable law or administrative regulation.
ARTICLE X.
MISCELLANEOUS
X.1 Required Withholding. The Company may deduct or withhold from
payments or other benefits otherwise payable to Executive pursuant to the
provisions of this Agreement any amounts that are required by applicable law.
X.2 Remedies. In the event of any Termination of Employment or any
breach of this Agreement by the Company, Executive's exclusive remedies shall be
as specified in Article VII or to enforce any other undertaking of the Company
expressly provided in this Agreement; provided that nothing herein shall deny
Executive the right to seek a final judicial determination (or, if Executive
reasonably determines, based upon the advice of counsel, that it is more likely
than not that each of
30
the Circuit Court of Xxxx County, Illinois and the United States District Court
for the Northern District of Illinois will decline to adjudicate the issue, a
final decree in an arbitration proceeding conducted in accordance with the rules
of the American Arbitration Association, with such arbitration proceeding to be
conducted in Chicago, Illinois before a panel of three arbitrators) that any
Termination of Employment purportedly made for Cause was, in fact, made not in
good faith or was made without adherence to the requirements or procedures set
forth in this Agreement. If Executive obtains such a final judicial or arbitral
determination, as applicable, the Termination of Employment shall be treated as
a Termination Without Cause for all purposes of this Agreement.
X.3 Assignment; Successors. This Agreement shall be binding upon and
inure to the benefit of Executive and his Beneficiaries and estate and the
Company (as the surviving entity in the Merger and as successor to Unicom at the
Merger Effective Time) and its successors.
X.4 Beneficiary. If Executive dies prior to receiving all of the
amounts payable hereunder pursuant to Article IV, VI (except as may otherwise
expressly be provided in such Article or in the plans referenced therein), VII
or VIII, such amounts shall be paid in a lump-sum payment to the beneficiary
("Beneficiary") designated by Executive in writing to the Company during his
lifetime, which Executive may change from time to time by new designation filed
in like manner without the consent of any Beneficiary; or if no such Beneficiary
is designated, to his estate.
X.5 Nonalienation of Benefits. Benefits payable under this Agreement
shall not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution or levy of any
kind, either voluntary or involuntary, prior to actually being received by
Executive, and any such attempt to dispose of any right to benefits payable
hereunder shall be void.
X.6 Severability. If all or any part of this Agreement is declared by
any court or governmental authority to be unlawful or invalid, such unlawfulness
or invalidity shall not serve to invalidate any portion of this Agreement not
declared to be unlawful or invalid. Any paragraph or part of a paragraph so
declared to be unlawful or invalid shall, if possible, be construed in a manner
which will give effect to the terms of such paragraph or part of a paragraph to
the fullest extent possible while remaining lawful and valid.
X.7 Amendment; Waiver. This Agreement shall not be amended or modified
except by a written agreement between (a) prior to the Merger Effective Time,
Unicom, ComEd and Executive and (b) on or after the Merger Effective Time, the
Company and Executive. A waiver of any term, covenant or condition contained in
this Agreement shall not result in a waiver of any other term, covenant or
condition, and any waiver of any default shall not result in a waiver of any
later default.
X.8 Notices. All notices hereunder shall be in writing, delivered by
hand, nationally-recognized courier service that guarantees overnight delivery
or by certified mail, return receipt requested, postage prepaid, and addressed
as follows:
31
If to the Company: Newco
Attn: Xxxxxx X. Xxxxxxx
Executive Vice President and General Counsel
00xx Xxxxx
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
If to Executive: Xxxx X. Xxxx
Unit 3306
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
With copy to: Xxxxxx X. Xxxxxxxx, Esq.
Xxxx & Xxxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Either party may from time to time designate a new address by accordance with
this Section. Notices shall be effective when received by the addressee.
X.9 Publicity. Until this Agreement has been filed as an exhibit to a
filing by the Company or Unicom with the Securities and Exchange Commission,
neither Executive nor the Company shall issue or cause the publication of any
press release or other public announcement with respect to 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 or
delayed where such release, announcement or disclosure shall be required by
applicable law or administrative regulation.
X.10 Communications. Nothing in this Agreement, including Sections 9.1,
9.6 or 10.9, shall be construed to prohibit Executive from 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.
X.11 Legal Expenses. The Company shall pay to Executive all reasonable
legal fees and expenses incurred by Executive in disputing in good faith any
termination of his employment hereunder or in seeking in good faith to obtain or
enforce any benefit or right under this Agreement, provided that Executive shall
have a reasonable basis for his position.
X.12 Articles and Sections. Except where otherwise indicated by the
context, any reference to an "Article" or "Section" shall be to an Article or
Section of this Agreement.
X.13 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
32
X.14 Effectiveness; Prior Agreement; Entire Agreement. This Agreement
shall be binding immediately upon its execution and shall become effective
immediately prior to the Merger Effective Time without further action of Unicom,
the Company, ComEd or Executive. The Prior Agreement shall remain in effect
until as provided in the following sentence. At the Merger Effective Time this
Agreement forms the entire agreement between the parties hereto with respect to
its subject matter, and shall supersede all prior agreements, promises and
representations of the parties regarding employment or severance, whether in
writing or otherwise, including but not limited to the Prior Agreement which
will be without further effect immediately prior to the Merger Effective Time
(and upon the effectiveness of this Agreement) without further action of Unicom,
the Company, ComEd or the Executive or liability to Unicom, the Company, ComEd
or Executive thereunder.
X.15 Applicable Law. This Agreement shall be interpreted and construed
in accordance with the laws of the State of Illinois, without regard to its
choice of law principles.
X.16 Survival. All of Executive's rights hereunder, including his
rights to compensation and benefits prior to the Termination Date, his right to
severance and other benefits subject to the terms and conditions of Article VII
and VIII after the Termination Date, and his obligations under Article IX
hereof, shall survive a Termination of Employment and the termination of this
Agreement.
33
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
UNICOM CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------------------
Xxxxxx X. Xxxxxxx,
Chairman of the Compensation Committee
of the Board of Directors
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------------------
Xxxxxx X. Xxxxxx,
Lead Non-employee Director
COMMONWEALTH EDISON COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------------------
Xxxxxx X. Xxxxxxx,
Chairman of the Compensation Committee of
the Board of Directors
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------------------
Xxxxxx X. Xxxxxx,
Lead Non-employee Director
EXECUTIVE:
/s/ Xxxx X. Xxxx
-------------------------------------------------
Xxxx X. Xxxx
34
