EXHIBIT 10-C
Conectiv Change-in-Control Severance Plan For Certain Executive Officers
FORM OF
CHANGE-IN-CONTROL
SEVERANCE AGREEMENT
This Agreement, dated as of _______, 19__, by and between Conectiv,
with its principal place of business at 000 Xxxx Xxxxxx, X.X. Xxx 000,
Xxxxxxxxxx, Xxxxxxxx, 00000 (the "Company"), and ________ (the "Executive").
WHEREAS, the Company considers it essential to the best interests of
its stockholders to xxxxxx the continuous employment of key management
personnel, and recognizes that, as is the case with many publicly held
corporations, the possibility of a change in control may exist and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the distraction or departure of management personnel
to the detriment of the Company and its stockholders; and
WHEREAS, the Board of Directors of the Company has determined that
appropriate steps should be taken to reinforce and encourage the Executive's
continued attention and dedication to the Executive's assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a change in control of the Company, although no such change is
presently known to be contemplated.
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1
DEFINITIONS
Except as may otherwise be specified or as the context may otherwise
require, the following terms shall have the respective meanings set forth below
whenever used herein:
"Base Salary" shall mean the annual base rate of regular compensation
of the Executive immediately before a Change in Control, or if greater, the
highest annual such rate at any time during the 12-month period immediately
preceding the Change in Control.
"Board" shall mean the Board of Directors of the Company.
"Cause" shall mean (i) the willful and continued failure by the
Executive substantially to perform [his] [her] duties with the Employer (other
than any such failure resulting from incapacity due to physical or mental
illness of the Executive, or any such actual or anticipated failure after the
issuance of a Notice of Termination for Good Reason) or (ii) the willful
engaging by the Executive in conduct which is demonstrably and materially
injurious to the Employer, monetarily or otherwise. For purposes hereof, no act,
or failure to act, on the Executive's part, shall be deemed "willful" unless
done, or omitted to be done, by the Executive not in good faith and without
reasonable belief that any act or omission was in the best interest of the
Employer.
"Change in Control" shall mean the first to occur, after the date
hereof, of any of the following:
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(i) if any Person is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Securities Exchange Act), directly or indirectly,
of securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly
from the Company or its Subsidiaries) representing 25% or more of
either the then outstanding shares of Stock of the Company or the
combined voting power of the Company's then outstanding securities;
(ii) if during any period of 24 consecutive months during the
existence of this Agreement commencing on or after the date hereof,
the individuals who, at the beginning of such period, constitute the
Board (the "Incumbent Directors") cease for any reason other than
death to constitute at least a majority thereof; provided that a
director who was not a director at the beginning of such 24-month
period shall be deemed to have satisfied such 24-month requirement
(and be an Incumbent Director) if such director was elected by, or on
the recommendation of or with the approval of, at least two-thirds of
the directors who then qualified as Incumbent Directors either
actually (because they were directors at the beginning of such
24-month period) or by prior operation of this clause (ii);
(iii) the consummation of a merger or consolidation of the Company
with any other corporation other than (A) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity or any parent thereof) at
least 60% of the combined voting power of the voting securities of the
Company or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (B) a merger or
consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no Person is or becomes the
beneficial owner, as defined in clause (i), directly or indirectly, of
securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly
from the Company or its Subsidiaries) representing 40% or more of
either the then outstanding shares of Stock of the Company or the
combined voting power of the Company's then outstanding securities; or
(iv) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company, or there is consummated an
agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets, other than a sale or
disposition by the Company of all or substantially all of the
Company's assets to an entity, at least 60% of the combined voting
power of the voting securities of which are owned by Persons in
substantially the same proportion as their ownership of the Company
immediately prior to such sale.
Upon the occurrence of a Change in Control as provided above, no subsequent
event or condition shall constitute a Change in Control for purposes of this
Agreement, with the result that there can be no more than one Change in Control
hereunder.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
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"Company" shall mean, subject to Section 4.1(a), Conectiv, a Delaware
corporation.
"Covered Termination" shall mean if, within the one-year period
immediately following a Change in Control, the Executive (i) is terminated by
the Employer without Cause (other than on account of death or Disability), or
(ii) terminates [his] [her] employment with the Employer for Good Reason. The
Executive shall not be deemed to have terminated for purposes of this Agreement
merely because he or she ceases to be employed by the Employer and becomes
employed by a new employer involved in the Change in Control; provided that such
new employer shall be bound by this Agreement as if it were the Employer
hereunder with respect to the Executive. It is expressly understood that no
Covered Termination shall be deemed to have occurred merely because, upon the
occurrence of a Change in Control, the Executive ceases to be employed by the
Employer and does not become employed by a successor to the Employer after the
Change in Control if the successor makes an offer to employ the Executive on
terms and conditions which, if imposed by the Employer, would not give the
Executive a basis on which to terminate employment for Good Reason.
"Date of Termination" shall mean the date on which a Covered
Termination occurs.
"Disability" shall mean the occurrence after a Change in Control of
the incapacity of the Executive due to physical or mental illness, whereby the
Executive shall have been absent from the full-time performance of [his] [her]
duties with the Employer for six consecutive months.
"Employer" shall mean the Company (if and for so long as the Executive
is employed thereby) and each Subsidiary which may now or hereafter employ the
Executive or, where the context so requires, the Company and such Subsidiaries
collectively. A subsidiary which ceases to be, directly or indirectly, through
one or more intermediaries, controlling, controlled by or under common control
with the Company prior to a Change in Control (other than in connection with and
as an integral part of a series of transactions resulting in a Change in
Control) shall, automatically and without any further action, cease to be (or be
part of) the Employer for purposes hereof.
"Good Reason" shall mean, without the express written consent of the
Executive, the occurrence after a Change in Control of any of the following
circumstances, unless such circumstances are fully corrected prior to the Date
of Termination specified in the Notice of Termination given in respect thereof:
(i) assignment to the Executive of any duties inconsistent in any
materially adverse respect with [his] [her] position, authority,
duties or responsibilities from those in effect immediately prior to
the Change in Control;
(ii) a reduction in the Executive's Base Salary as in effect
immediately before the Change in Control;
(iii) a material reduction in the Executive's aggregate compensation
opportunity, comprised only of (A) the Executive's Base Salary, (B)
bonus opportunity, if any, and (C) long-term or other incentive
compensation opportunity, if any (taking into account, in the case of
such bonus and incentive opportunities, without limitation,
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any target, minimum and maximum amounts payable and the attainability
and otherwise the reasonability of any performance hurdles, goals and
other measures);
(iv) the Company's requiring the Executive to be based at any office
or location more than 50 miles from that location at which the
Executive performed [his] [her] services immediately prior to the
occurrence of a Change in Control, except for travel reasonably
required in the performance of the Executive's responsibilities; or
(v) the failure of the Employer to obtain a reasonable agreement from
any successor to assume and agree to perform this Agreement, as
contemplated in Section 4.1(a).
"Notice of Termination" shall mean a notice given by the Employer or
Executive, as applicable, which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provisions so indicated.
"Person" shall have the meaning ascribed thereto by Section 3(a)(9) of
the Securities Exchange Act, as modified and used in Sections 13(d) and 14(d)
thereof (except that such term shall not include (i) the Company or any of its
Subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its Subsidiaries, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities, (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportion as their
ownership of stock of the Company, or (v) such Executive or any "group" (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act) which
includes the Executive).
"Potential Change in Control" shall mean the occurrence, before a
Change in Control, of any of the following:
(i) if the Company enters into an agreement, the consummation of which
would result in the occurrence of a Change in Control;
(ii) if the Company or any Person publicly announces an intention to
take or to consider taking actions which, if consummated, would
constitute a Change in Control;
(iii) if any Person becomes the "beneficial owner" (as defined in Rule
13d-3 under the Securities Exchange Act), directly or indirectly, of
securities of the Company (not including in the securities
beneficially owned by such Persons any securities acquired directly
from the Company or its Subsidiaries) representing 15% or more of
either the then outstanding shares of Stock of the Company or the
combined voting power of the Company's then outstanding securities; or
(iv) if the Board adopts a resolution to the effect that, for purposes
of this Agreement, a Potential Change in Control has occurred.
"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
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"Stock" shall mean the common stock, $.01 par value, of the Company.
"Subsidiary" shall mean any entity, directly or indirectly, through
one or more intermediaries, controlled by the Company.
"Target Annual Bonus" shall mean the Executive's annual bonus for the
Employer's fiscal year in which the Date of Termination occurs, which bonus
would be paid or payable if the Executive and the Employer were to satisfy all
conditions to the Executive's receiving the annual bonus at target (although not
necessarily the maximum annual bonus); provided that such amount shall be
annualized for any fiscal year consisting of less than 12 full months; and
provided, further, that, if at the time of a Change in Control it is
substantially certain that a bonus at a level beyond target will be paid or
payable for the fiscal year, then the bonus which is substantially certain to be
paid or payable, rather than the target bonus, shall be used for these purposes.
Section 2
BENEFITS
2.1 If a Covered Termination occurs, then the Executive shall be
entitled hereunder to the following:
(a) the product of (i) the Executive's Target Annual Bonus for the
year in which the Date of Termination occurs (or, if higher, as in effect at the
time of the Change in Control) and (ii) a fraction, the numerator of which is
the number of days in the current fiscal year through the Date of Termination,
and the denominator of which is 365;
(b) an amount equal to three times the sum of (i) the Executive's
annual Base Salary for the year in which the Date of Termination occurs (or, if
higher, as in effect at the time of the Change in Control) and (ii) the
Executive's Target Annual Bonus for the year in which the Date of Termination
occurs (or, if higher, as in effect at the time of the Change in Control);
(c) for a period of three years after such termination, the
Employer shall arrange to make available to the Executive medical, dental,
vision, group life and disability benefits that are at least at a level (and
cost to the Executive) that is substantially similar in the aggregate to the
level of such benefits which was available to the Executive immediately prior to
the Change in Control; provided that (i) the Employer shall be required to
provide group life and disability benefits only to the extent it is able to do
so on reasonable terms and at a reasonable cost, (ii) the Employer shall not be
required to provide benefits under this Section 2.1(c) upon and after the Change
in Control which are in excess of those provided to a significant number of
executives of similar status who are employed by the Employer from time to time
upon and after the Change in Control, and (iii) no type of benefit otherwise to
be made available to the Executive pursuant to this Section 2.1(c) shall be
required to be made available to the extent that such type of benefit is made
available to the Executive by any subsequent employer of the Executive; and
(d) in addition to the benefits to which the Executive is entitled
under the Company's tax-qualified defined benefit retirement plan (the
"Retirement Plan") and defined benefit supplemental executive retirement plan
(the "SERP"), including any successor plans thereto, the Employer shall pay to
the Executive in cash at the time and in the manner provided in Section 2.2:
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(i) the present value of the retirement benefits (or, if available,
the lump-sum retirement benefits) which would have accrued under the
terms of the Retirement Plan and the SERP (without regard to any
amendment to the Retirement Plan or the SERP made subsequent to a
Change in Control and prior to the Date of Termination, which
amendment adversely affects in any manner the computation of
retirement benefits thereunder), determined as if the Executive was 36
months older than their actual age at the Date of Termination and had
accumulated (after the Date of Termination) 36 additional months of
service credit for vesting, benefit accrual and eligibility purposes
thereunder at their highest annual rate of compensation during the 12
months immediately preceding the Date of Termination (or, if higher,
as in effect at the time of the Change in Control) and as if any
benefit indexing factors continued at the rate applicable at the Date
of Termination, minus
(ii) the present value of the vested retirement benefits (or, if
available, the lump-sum retirement benefits) which had then accrued
pursuant to the provisions of the Retirement Plan and the SERP;
provided, however, that any payment otherwise provided for under this
Section 2.1(d) shall be reduced by the present value of any retirement
(including early retirement) incentives offered for a limited time to,
and accepted by, the Executive (whether or not under a tax-qualified
plan).
2.2 (a) The payments provided for in Section 2.1 shall (except as
otherwise expressly provided therein or as provided in Section 2.2(b) or as
otherwise expressly provided hereunder) be made as soon as practicable, but in
no event later than 30 days, following the Date of Termination.
(b) Notwithstanding any other provision of this Agreement to the
contrary, no payment or benefit otherwise provided for under or by virtue of the
foregoing provisions of this Agreement shall be paid or otherwise made available
unless and until the Employer shall have first received from the Executive (no
later than 60 days after the Employer has provided to the Executive estimates
relating to the payments to be made under this Agreement) a valid, binding and
irrevocable general release, in form and substance acceptable to the Employer in
its discretion; provided that the Employer shall be permitted to defer any
payment or benefit otherwise provided for in this Agreement to the 15th day
after its receipt of such release and time at which it has become valid, binding
and irrevocable. The Employer may require that any such release contain an
agreement of the Executive to notify the Employer of any benefit made available
by a subsequent employer as contemplated by clause (iii) of the proviso to
Section 2.1(c).
2.3 Notwithstanding any other provision of this Agreement to the
contrary, to the extent permitted by the Worker Adjustment and Retraining
Notification Act ("WARN"), any benefit payable hereunder to the Executive as a
consequence of the Executive's Covered Termination shall be reduced by any
amounts required to be paid under Section 2104 of WARN to the Executive in
connection with such Covered Termination.
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Section 3
PARACHUTE TAX PROVISIONS
3.1 If all, or any portion, of the payments and benefits provided
under this Agreement, if any, either alone or together with other payments and
benefits which the Executive receives or is entitled to receive from the Company
or its affiliates, would constitute an excess "parachute payment" within the
meaning of Section 280G of the Code (whether or not under an existing plan,
arrangement or other agreement) (each such parachute payment, a "Parachute
Payment"), and would result in the imposition on the Executive of an excise tax
under Section 4999 of the Code, then, in addition to any other benefits to which
the Executive is entitled under this Agreement or otherwise, the Executive shall
be paid an amount in cash equal to the sum of the excise taxes payable by the
Executive by reason of receiving Parachute Payments plus the amount necessary to
place the Executive in the same after-tax position (taking into account any and
all applicable federal, state and local excise, income or other taxes at the
highest possible applicable rates on such Parachute Payments (including, without
limitation, any payments under this Section 3.1)) as if no excise taxes had been
imposed with respect to Parachute Payments (the "Parachute Gross-up"). Any
Parachute Gross-up otherwise required by this Section 3.1 shall not be made
later than the time of the corresponding payment or benefit hereunder giving
rise to the underlying Section 4999 excise tax, even if the payment of the
excise tax is not required under the Code until a later time. Any Parachute
Gross-up otherwise required under this Section 3.1 shall be made whether or not
there is a Change in Control, whether or not payments or benefits are payable
under this Agreement, whether or not the payments or benefits giving rise to the
Parachute Gross-up are made in respect of a Change in Control and whether or not
the Executive's employment with the Employer shall have been terminated.
3.2 Except as may otherwise be agreed to by the Company and the
Executive, the amount or amounts (if any) payable under this Section 3 shall be
as conclusively determined by the Company's independent auditors (who served in
such capacity immediately prior to the Change in Control), whose determination
or determinations shall be final and binding on all parties. The Executive
hereby agrees to utilize such determination or determinations, as applicable, in
filing all of the Executive's tax returns with respect to the excise tax imposed
by Section 4999 of the Code. If such independent auditors refuse to make the
required determinations, then such determinations shall be made by a comparable
independent accounting firm of national reputation reasonably selected by the
Company. Notwithstanding any other provision of this Agreement to the contrary,
as a condition to receiving any Parachute Gross-up payment, the Executive hereby
agrees to be bound by and comply with the provisions of this Section 3.2.
Section 4
MISCELLANEOUS
4.1 (a) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company expressly to assume
and agree to perform under the terms of this Agreement in the same manner and to
the same extent that the Company and its affiliates would be required to perform
it if no such succession had taken place (provided that such a requirement to
perform which arises by operation of law shall be deemed to satisfy the
requirements for such an express assumption and agreement), and in such event
the Company (as
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constituted prior to such succession) shall have no further obligation under or
with respect to this Agreement. Failure of the Company to obtain such assumption
and agreement with respect to the Executive prior to the effectiveness of any
such succession shall be a breach of the terms of this Agreement with respect to
the Executive and shall entitle the Executive to compensation from the Employer
(as constituted prior to such succession) in the same amount and on the same
terms as the Executive would be entitled to hereunder were the Executive's
employment terminated for Good Reason following a Change in Control, except that
for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of Termination. As used in
this Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor to its business or assets as aforesaid which assumes and agrees (or is
otherwise required) to perform this Agreement. Nothing in this Section 4.1(a)
shall be deemed to cause any event or condition which would otherwise constitute
a Change in Control not to constitute a Change in Control.
(b) Notwithstanding Section 4.1(a), the Company shall remain liable
to the Executive upon a Covered Termination after a Change in Control if (i) the
Executive is not offered continuing employment by a successor to the Employer or
(ii) the Executive declines such an offer and the Executive's resulting
termination of employment otherwise constitutes a Covered Termination hereunder.
(c) This Agreement, and the Executive's and the Company's rights
and obligations hereunder, may not be assigned by the Executive or, except as
provided in Section 4.1(a), the Company, respectively; any purported assignment
by the Executive or the Company in violation hereof shall be null and void.
(d) The terms of this Agreement shall inure to the benefit of and
be enforceable by the personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees of the
Executive. If the Executive shall die while an amount would still be payable to
the Executive hereunder if they had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the Executive's devisee, legatee or other designee or, if there is
no such designee, the Executive's estate.
4.2 Except as expressly provided in Section 2.1, the Executive
shall not be required to mitigate damages or the amount of any payment provided
for under this Agreement by seeking other employment or otherwise, nor will any
payments or benefits hereunder be subject to offset in the event the Executive
does mitigate.
4.3 The Employer shall pay all legal fees and expenses incurred in
a legal proceeding by the Executive in seeking to obtain or enforce any right or
benefit provided by this Agreement. Such payments are to be made within five
days after the Executive's request for payment accompanied with such evidence of
fees and expenses incurred as the Employer reasonably may require; provided that
if the Executive institutes a proceeding and the judge or other decision-maker
presiding over the proceeding affirmatively finds that the Executive has failed
to prevail substantially, the Executive shall pay [his] [her] own costs and
expenses (and, if applicable, return any amounts theretofore paid on the
Executive's behalf under this Section 4.3).
4.4 (a) The Executive may file a claim for benefits under this
Agreement by written communication to the Board. A claim is not considered filed
until such
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communication is actually received by the Board. Within 90 days (or, if special
circumstances require an extension of time for processing, 180 days, in which
case notice of such special circumstances shall be provided within the initial
90-day period) after the filing of the claim, the Board shall:
(i) approve the claim and take appropriate steps for satisfaction
of the claim; or
(ii) if the claim is wholly or partially denied, advise the
Executive of such denial by furnishing to him or her a written notice
of such denial setting forth (A) the specific reason or reasons for
the denial; (B) specific reference to pertinent provisions of this
Agreement on which the denial is based and, if the denial is based in
whole or in part on any rule of construction or interpretation adopted
by the Board, a reference to such rule, a copy of which shall be
provided to the Executive; (C) a description of any additional
material or information necessary for the Executive to perfect the
claim and an explanation of the reasons why such material or
information is necessary; and (D) a reference to this Section 4.4.
4.5 For the purposes of this Agreement, notice and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when hand delivered or mailed by United States
certified or registered express mail, return receipt requested, postage prepaid,
if to the Executive, addressed to the Executive at his or her respective address
on file with the Secretary of the Company; if to the Company, addressed to
Conectiv, 000 Xxxx Xxxxxx, X.X. Xxx 000, Xxxxxxxxxx, Xxxxxxxx 00000-0000, and
directed to the attention of its General Counsel; if to the Board, addressed to
the Board of Directors, c/o Conectiv, 000 Xxxx Xxxxxx, X.X. Xxx 000, Xxxxxxxxxx,
Xxxxxxxx, 00000-0000, and directed to the Company's General Counsel; or to such
other address as any party may have furnished to the others in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.
4.6 Unless otherwise determined by the Employer in an applicable
plan or arrangement, no amounts payable hereunder upon a Covered Termination
shall be deemed salary or compensation for the purpose of computing benefits
under any employee benefit plan or other arrangement of the Employer for the
benefit of its employees unless the Employer shall determine otherwise.
4.7 This Agreement is the exclusive arrangement with the Executive
applicable to payments and benefits in connection with a change in control of
the Company (whether or not a Change in Control), and supersedes any prior
arrangements involving the Company or its predecessors or affiliates (including,
without limitation, Delmarva Power & Light Company and Atlantic Energy, Inc.)
relating to changes in control (whether or not Changes in Control). This
Agreement shall not limit any right of the Executive to receive any payments or
benefits under an employee benefit or executive compensation plan of the
Employer, initially adopted as of or after the date hereof, or otherwise listed
in Exhibit A hereto, which are expressly contingent thereunder upon the
occurrence of a change in control (including, but not limited to, the
acceleration of any rights or benefits thereunder); provided that in no event
shall the Executive be entitled to any payment or benefit under this Agreement
which duplicates a
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payment or benefit received or receivable by the Executive under any severance
or similar plan or policy of the Employer.
4.8 Any payments hereunder shall be made out of the general assets
of the Employer. The Executive shall have the status of general unsecured
creditor of the Employer, and this Agreement constitutes a mere promise by the
Employer to make payments under this Agreement in the future as and to the
extent provided herein.
4.9 Nothing in this Agreement shall confer on the Executive any
right to continue in the employ of the Employer or interfere in any way (other
than by virtue of requiring payments or benefits as may expressly be provided
herein) with the right of the Employer to terminate the Executive's employment
at any time.
4.10 The Employer shall be entitled to withhold from any payments or
deemed payments any amount of tax withholding required by law.
4.11 Any controversy or claim arising out of or relating to this
Agreement or the breach of this Agreement that is not resolved by the Employer
and the Executive shall be submitted to arbitration in Wilmington, Delaware, in
accordance with Delaware law and the procedures of the American Arbitration
Association. The determination of the arbitrator(s) shall be conclusive and
binding on the Employer and Executive and judgment may be entered on the
arbitrator(s)' award in any court having jurisdiction.
4.12 (a) This Agreement may be amended, superseded, canceled,
renewed or extended, and the terms hereof may be waived, only by a written
instrument signed by the parties or, in the case of a waiver, by the party
waiving compliance. No delay on the part of any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any such right, power or privilege nor any
single or partial exercise of any such right, power or privilege, preclude any
other or further exercise thereof or the exercise of any other such right, power
or privilege.
(b) Without limiting the generality of Section 4.12(a), the Board,
on written notice to the Executive, may unilaterally terminate this Agreement
with respect to Changes in Control occurring after the later of (i) December 31,
2000 or (ii) the first anniversary of the date of such notice. Notwithstanding
the foregoing, in the event of a Potential Change of Control, until such time as
the transaction or transactions contemplated in connection with such Potential
Change in Control, and all related negotiations, are abandoned in their entirety
[as determined in good faith and reflected in writing (before a Change in
Control) by the Board], this Agreement may not be terminated under this Section
4.12(b) with respect to any Change of Control which ultimately results directly
from facts and circumstances constituting such Potential Change in Control if
such Potential Change in Control occurs on or before the later of (i) December
31, 2000 or (ii) one year after the first anniversary of the date of the notice
referred to in the foregoing sentence.
(c) Without limiting the generality of Section 4.12(a), if material
negotiations involving the Board or the Chief Executive Officer of the Company
have commenced regarding a transaction which, if consummated, would constitute a
Change in Control, and this Agreement is terminated while such negotiations are
continuing and actively being pursued by the Board or the Chief Executive
Officer, then such termination of this Agreement shall be null and void as
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applied with respect to the Change in Control (if any) which ultimately results
directly from such negotiations; it being expressly understood that this Section
4.12(c) shall not apply with respect to any negotiations which at any time prior
to a Change in Control have ceased [as determined in good faith and reflected in
writing (prior to a Change in Control) by the Board or Chief Executive Officer
(or which otherwise have ceased at a time prior to a Change in Control)].
4.13 The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement which shall remain in full force and effect.
4.14 The use of captions in this Agreement is for convenience. The
captions are not intended to and do not provide substantive rights.
4.15 THIS AGREEMENT SHALL BE CONSTRUED, ADMINISTERED AND ENFORCED
ACCORDING TO THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW, EXCEPT TO THE EXTENT PREEMPTED BY FEDERAL LAW.
IN WITNESS WHEREOF, the parties hereto have signed their names,
effective as of the date first above written.
CONECTIV
By:
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Name:
------------
Title:
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[Executive's Name]
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