FORM OF SEPARATION AGREEMENT
Exhibit 10.63
FORM OF SEPARATION AGREEMENT
THIS SEPARATION AGREEMENT (this “Agreement”) is entered into as of , 200_ between Exelon Corporation (“Exelon”), (“Subsidiary”, and, collectively with Exelon, the “Company”) and (the “Executive”).
W I T N E S S E T H:
WHEREAS, the Executive is resigning and separating from all positions with Exelon, SUBSIDIARY and their affiliates; and
WHEREAS, the Executive is eligible for benefits under Section 4 of the Exelon Corporation Senior Management Severance Plan, as amended and restated (the “Severance Plan”);
NOW, THEREFORE, in consideration of the mutual promises and agreements contained herein, the adequacy and sufficiency of which are hereby acknowledged, the Company and the Executive agree as follows:
1. Resignation; Termination of Employment. The Executive’s employment will terminate and Executive hereby resigns, effective as of (the “Termination Date”), as and from all other positions as an employee, officer or director of the Company and its subsidiaries and affiliates.
2. Payment of Accrued Amounts. The Company shall pay to the Executive not later than the second payroll date after the Termination Date the following amounts:
(a) the portion of his or her annual salary that has accrued but is unpaid as of the Termination Date; and
(b) an additional amount representing the Executive’s accrued but unused vacation days as of the Termination Date.
3. Severance Payments. Subject to the Executive’s execution, not earlier than the Termination Date and not later than forty-five days after the Termination Date, of the waiver and release attached hereto as Exhibit I and made a part hereof (the “Waiver and Release”), the Company shall pay to the Executive:
(a) Cash severance payments in an aggregate amount equal to $ , representing the product of [one and one quarter/two times] the sum of (i) the Executive’s current annual base salary and (ii) $ (representing the Executive’s target annual incentive for calendar year 200_. Payment shall commence no later than the second payroll date following the Termination Date (or, if later, the first paydate which occurs at least eight days after the date on which the Executive returns the signed Waiver and Release) and shall be made in substantially equal regular payroll installments over a period of [fifteen/twenty-four] months (the “Severance Period”).
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(b) An additional cash payment in the amount of $ , representing a pro-rated, target annual incentive award for 200_. Payment shall be made in a lump sum within 30 business days following the Termination Date (or, if later, the date which is eight days after the date on which the Executive returns the signed Waiver and Release).
4. Tax Withholding. The Company shall deduct from the amounts payable to the Executive pursuant to this Agreement the amount of all required federal, state and local withholding taxes in accordance with the Executive’s Form W-4 on file with the Company and all applicable social security and Medicare taxes. The Company shall be entitled to withhold from the shares of common stock of the Company to be delivered to the Executive pursuant to Sections 6(a) and 6(b) a number of shares of common stock of the Company having a value (based upon the closing price of a share of the Company’s common stock as reported on the New York Stock Exchange on the Termination Date) equal to the minimum amount of all required federal, state and local withholding taxes and all applicable social security and Medicare taxes with respect to the lapse of forfeiture conditions applicable to the vesting of performance shares.
5. Outplacement Assistance. During the twelve-month period following the Termination Date, the Company shall reimburse the Executive for reasonable fees incurred for services rendered to the Executive by a professional outplacement organization selected by the Executive and acceptable to the Company to provide individual outplacement services.
6. Stock Awards.
(a) Each of the Executive’s options to purchase common stock of Exelon Corporation granted pursuant to Exelon’s long term incentive plan which are vested and exercisable as of the Termination Date shall remain so exercisable for ninety days following the Termination Date. Each of Executive’s stock options that are not vested and exercisable as of the Termination Date shall be forfeited.
(b) As of the Termination Date, the Executive shall become fully vested in shares of common stock of Exelon Corporation, representing outstanding non-vested performance share awards (and reinvested dividends thereunder), and a pro-rated performance share target award equal to shares for 200_, each pursuant to Exelon’s long term incentive plan. The Executive’s deferral elections, if any, in effect under Exelon’s stock deferral or deferred compensation plans with respect to such respective performance share awards shall be applied, and any deferred portion of such awards shall subsequently be paid from the plans as provided in Section 8(b).
7. Supplemental Executive Retirement Benefits. The Executive shall be not eligible for a retirement benefit under the Exelon Corporation Supplemental Management Retirement Plan (the “SERP”), and the Executive’s non-vested benefit shall be forfeited.
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8. Employee and Other Benefits.
(a) Subject to the Executive’s timely execution of the Waiver and Release:
(i) During the Severance Period and in lieu of COBRA continuation coverage during such period with respect to healthcare benefits, (A) the Executive (and his or her eligible dependents) shall be eligible to participate in, and shall receive benefits under Exelon’s welfare benefit plans (including medical, dental, vision and hearing) in which the Executive (and his or her eligible dependents) were participating immediately prior to the Termination Date, and (B) the Executive shall be eligible to participate in the life insurance programs in which he or she was a participant immediately prior to the Termination Date, in each case on the same basis as if the Executive had remained actively employed during the Severance Period.
(ii) Following the Severance Period, the Executive (and his or her eligible dependents) shall be eligible for continued health care coverage at Executive’s sole expense for any remaining period required by COBRA.
(b) The Company shall pay to the Executive, in the time and manner specified in the terms and conditions of such plans and any distribution elections by the Executive in effect thereunder, his or her account balances (if any) under Exelon’s deferred compensation and stock deferral plans, as adjusted by all applicable earnings and losses on such account balances.
(c) The Executive shall be entitled to purchase from the leasing company any automobile leased by the Company for his or her use, subject to the terms and conditions of such lease, and shall be entitled to purchase the computer furnished by the Company for his or her use. The Executive shall be responsible for payment of expenses incurred after the Termination Date with respect to the Company-owned cellular phone furnished for his or her use.
(d) If the Executive is entitled to any benefit under any employee benefit plan of the Company that is accrued and vested on the Termination Date and that is not expressly referred to in this Agreement, such benefit shall be provided to the Executive in accordance with the terms of such employee benefit plan. Executive’s non-vested qualified pension benefit shall be forfeited in its entirety.
(e) Notwithstanding Section 8(d) or anything else contained in this Agreement to the contrary, the Executive acknowledges and agrees that he or she is not and shall not be entitled to benefits under any other severance or change in control plan, program, agreement or arrangement, and that the benefits provided under this Agreement shall be the sole and exclusive benefits to which the Executive may become entitled upon his or her termination of employment. In the event the Executive dies prior to executing the Waiver and Release attached hereto, neither he or she, his or her estate, nor any other person shall be entitled to any further compensation or benefits under the Severance Plan, unless and until the executor of the Executive’s estate (and/or such other heirs or representatives as may be requested by the Company) executes upon Company request and does not revoke such a Waiver and Release.
9. Restrictive Covenants. The Executive acknowledges and agrees that he or she is bound by, and subject to, the Restrictive Covenants and the Waiver and Release. The Executive shall comply with, and observe, the Restrictive Covenants including, without limitation, the confidential information, non-competition, non-solicitation and intellectual property provisions and related covenants contained therein, all of which are hereby incorporated
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by reference. In the event the Company determines that Executive has breached any of the Restrictive Covenants or the Waiver and Release or has engaged in conduct during his or her employment with the Company that would constitute ground for termination for Cause, benefits under the Severance Plan shall terminate immediately, and Executive shall reimburse Exelon for any benefits received under the Severance Plan.
10. Certain Tax Matters.
(a) If it is determined by Exelon’s independent auditors that any severance payment, benefit or enhancement that is provided to the Executive pursuant to the terms of the Severance Plan is or will become subject to any excise tax under section 4999 of the Internal Revenue Code of 1986, as amended, or any similar tax payable under any United States federal, state, local, foreign or other law (“Excise Taxes”), then such payment, benefit or enhancement shall be reduced to the largest amount which would not cause any such Excise Tax to by payable by the Executive and not cause a loss of the related income tax deduction by the Company.
(b) The parties intend this Agreement to comply with section 409A of the Code. In the event the timing of any payment or benefit under this Agreement would result in any tax or penalty under section 409A of the Code, the Company may reasonably adjust the timing of such payment or benefit if doing so will eliminate or materially reduce such tax or penalty and amend this Agreement accordingly.
11. Non-disparagement. The Executive shall not (a) make any written or oral statement that brings the Company or any of its affiliates or the employees, officers, directors 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 the Company or any of its affiliates, employees, officers, directors or agents of any misconduct or unlawful behavior. The provisions of this Section 11 shall not apply to testimony as a witness, compliance with other legal obligations, assertion of or defense against any claim of breach of this Agreement, or any activity that otherwise may be required by the lawful order of a court or agency of competent jurisdiction, and shall not require the Executive to make false statements or disclosures.
12. Publicity. Neither the Executive nor Exelon shall issue or cause the publication of any press release or other announcement with respect to the terms or provisions of this Agreement, nor disclose the contents hereof to any third party (other than, in the case of the Executive, to members of his or her immediate family or in the case of both Exelon and Executive, to tax, financial and legal advisors), without obtaining in each case the consent of the other party hereto, except where such release, announcement or disclosure shall be required by applicable law or administrative regulation or agency or other legal process.
13. Other Employment; Other Plans. The Executive shall not be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any provision of this Agreement. The amounts payable hereunder shall not be reduced by any payments received by the Executive from any other employer; provided, however, that any continued welfare benefits provided for by Section 8(a) shall not duplicate any benefits that are provided to the Executive and his or her family by such other employer and shall be secondary to any coverage provided by Medicare.
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14. Cooperation by the Executive. During the Severance Period, the Executive shall (a) be reasonably available to the Company to respond to reasonable requests by them for information pertaining to or relating to matters which may be within the knowledge of the Executive and (b) reasonably cooperate with the Company in connection with any existing or future litigation or other proceedings brought by or against the Company, its subsidiaries or affiliates, to the extent Exelon reasonably deems the Executive’s cooperation necessary.
15. Successors; Binding Agreement. This Agreement shall inure to the benefit of and binding upon the Company and its successors, and by the Executive, his or her spouse, personal or legal representatives, executors, administrators and heirs. This Agreement, being personal, may not be assigned by Executive.
16. Governing Law; Validity. The interpretation, construction, performance and enforcement of this Agreement shall be governed by and construed and enforced in accordance with the applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, and section 409A of the Code.
17. Entire Agreement. This Agreement, the Waiver and Release and the Severance Plan constitute the entire agreement and understanding between the parties with respect to the subject matter hereof and supersede and preempt any other understandings, agreements or representations by or between the parties, written or oral, which may have related in any manner to the subject matter hereof.
18. Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed to be an original and both of which together shall constitute one and the same instrument.
19. Miscellaneous. No provision of this Agreement may be modified or waived (except as provided in Section 10(b)) unless such modification or waiver is agreed to in writing and executed by the Executive and by a duly authorized officer of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. Failure by the Executive or the Company to insist upon strict compliance with any provision of this Agreement or to assert any right which the Executive or the Company may have hereunder shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.
20. Beneficiary. If the Executive dies prior to receiving all of the amounts payable hereunder (other than amounts payable under any plan referenced in Section 8(d), which shall be governed by any beneficiary designation in effect thereunder) but after executing the Waiver and Release, such amounts shall be paid, except as may be otherwise expressly provided herein or in the applicable plans, to the beneficiary (“Beneficiary”) designated with respect to this Agreement by the Executive in writing to the Vice President, Corporate Compensation of the
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Company during his or her lifetime, which the 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 or her surviving spouse, and if there be none, to his or her estate.
21. 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 the Executive, and any such attempt to dispose of any right to benefits payable hereunder shall be void.
22. 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, except that in the event a determination is made that the Restrictive Covenants as applied to the Executive are invalid or unenforceable in whole or in part, then this Agreement shall be void and the Company shall have no obligation to provide benefits under the Severance Plan. 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.
23. Communications. Nothing in this Agreement, including Sections 9 and 11, shall be construed to prohibit the Executive from communicating with, including testifying in any administrative proceeding before, the Nuclear Regulatory Commission, the United States Department of Labor, the Securities Exchange Commission 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 and no such communication or action shall constitute a breach of Section 11 or any other provision of this Agreement; provided, however, that if the Executive is entitled under section 211 of the Energy Reorganization Act, employment law or securities law to pursue a claim, complaint or charge seeking damages, costs or fees, the Executive agrees that the consideration provided to the Executive pursuant to this Agreement shall be fully inclusive of all such damages, costs and fees that could have been awarded to the Executive, that such consideration is being paid in full and that the Executive under no circumstances shall be entitled to compensation of any kind from the Company or any of the other party released by the Waiver and Release not expressly provided for pursuant to this Agreement.
24. Sections. Except where otherwise indicated by the context, any reference to a “Section” shall be to a Section of this Agreement.
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IN WITNESS WHEREOF, Exelon and SUBSIDIARY have caused this Agreement to be executed by their duly authorized officers and the Executive has executed this Agreement as of the day and year first above written.
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EXHIBIT 1
WAIVER AND RELEASE
UNDER
In consideration for the Executive’s receiving severance benefits under the Exelon Corporation Senior Management Severance Plan (the “Severance Plan”), (the “Executive”) hereby agrees as follows:
1. Release. Except with respect to the Company’s obligations under the Severance Plan and the Separation Agreement by and between Exelon Corporation, Subsidiary (collectively, the “Company”) and the Executive dated as of , 200 (the “Separation Agreement”), the Executive, on behalf of Executive and his or her heirs, executors, assigns, agents, legal representatives and personal representatives, hereby releases, acquits and forever discharges the Company, its agents, subsidiaries, affiliates, and their respective officers, directors, agents, servants, employees, attorneys, shareholders, successors, assigns and affiliates, of and from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys fees, damages, indemnities and obligations of every kind and nature, in law, equity, or otherwise, known and unknown, foreseen or unforeseen, disclosed and undisclosed, suspected and unsuspected, arising out of or in any way related to agreements, events, acts or conduct at any time prior to the day of execution of this Waiver and Release, including but not limited to any and all such claims and demands directly or indirectly arising out of or in any way connected with the Executive’s employment or other service with the Company, or any of its Subsidiaries or affiliates; the Executive’s termination of employment and other service with the Company or any of its subsidiaries or affiliates; claims or demands related to salary, bonuses, commissions, stock, stock options, restricted stock or any other ownership interests in the Company or any of its subsidiaries and affiliates, vacation pay, fringe benefits, expense reimbursements, sabbatical benefits, severance, change in control or other separation benefits, or any other form of compensation or equity; and claims pursuant to any federal, state, local law, statute, ordinance, common law or other cause of action including but not limited to, the federal Civil Rights Act of 1964, as amended; the federal Age Discrimination in Employment Act of 1967, as amended; the federal Americans with Disabilities Act of 1990; tort law; contract law; wrongful discharge; discrimination; fraud; defamation; harassment; emotional distress; or breach of the covenant of good faith and fair dealing. This Waiver and Release does not apply to the payment of any benefits to which the Executive may be entitled under a Company-sponsored tax qualified retirement or savings plan.
2. No Inducement. The Executive agrees that no promise or inducement to enter into this Waiver or Release has been offered or made except as set forth in this Waiver and Release and the Separation Agreement, that the Executive is entering into this Waiver and Release without any threat or coercion and without reliance on any statement or representation made on behalf of the Company or any of its subsidiaries or affiliates, or by any person employed by or representing the Company or any of its subsidiaries or affiliates, except for the written provisions and promises contained in this Waiver and Release and the Separation Agreement.
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3. Advice of Counsel; Time to Consider; Revocation. The Executive acknowledges the following:
(a) The Executive has read this Waiver and Release, and understands its legal and binding effect, including that by signing and not revoking this Waiver and Release the Executive waives and releases any and all claims under the Age Discrimination in Employment Act of 1967, as amended, including but not limited to the Older Workers Benefits Protection Act. The Executive is acting voluntarily and of the Executive’s own free will in executing this Waiver and Release.
(b) The Executive has been advised to seek and has had the opportunity to seek legal counsel in connection with this Waiver and Release.
(c) The Executive was given at least twenty-one (21) days to consider the terms of this Waiver and Release before signing it.
The Executive understands that, if the Executive signs the Waiver and Release, the Executive may revoke it within seven (7) days after signing it, provided that Executive will not receive any severance benefits under the Severance Plan or the Separation Agreement. The Executive understands that this Waiver and Release will not be effective until after the seven-day period has expired and no consideration will be due the Executive.
4. Severability. If all or any part of this Waiver and Release is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any other portion of this Waiver and Release. Any Section or a part of a Section declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of the Section to the fullest extent possible while remaining lawful and valid.
5. Amendment. This Waiver and Release shall not be altered, amended, or modified except by written instrument executed by the Company and the Executive. A waiver of any portion of this Waiver and Release shall not be deemed a waiver of any other portion of this Waiver and Release.
6. Applicable Law. The provisions of this Waiver and Release shall be interpreted and construed in accordance with the laws of the State of Illinois without regard to its choice of law principles. IN WITNESS WHEREOF, the Executive has executed this Waiver and Release as of the date specified below.
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