Exhibit 10a(23)
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into effective the
1st day of October, 1994, among ATLANTIC CITY ELECTRIC COMPANY ("Company"), a
corporation of the State of New Jersey, ATLANTIC ENERGY, INC. ("Energy"), and
James E. Franklin, II, Esq. ("Executive") .
AS consideration for the mutual promises, covenants and agreements
expressed in this Agreement, the parties hereto, intending to be legally bound
agree as follows:
1. Term of Employment.
The Executive's term of employment shall commence October 1, 1994
(the "Commencement Date"), and shall terminate at the close of
business on the date of the Annual Meeting of the Shareholders of
Energy in 1997, (the "Term of Employment") subject only to such
earlier termination as specifically provided in Article 5 hereof
(the "Termination Date"). No extension of the term of employment
shall occur without the written agreement of Executive, Company
and Energy.
2. Place of Employment.
The Executive's services during the term of this Agreement shall
be performed primarily at the principal offices of the Company.
The Executive shall be furnished with a suitable office and such
other facilities and services as he may reasonably require in
performing his obligations under this Agreement.
3. Employment Options.
A. Executive Position: The Company hereby agrees to employ the
Executive as its General Counsel for the Term of Employment. It is
understood and agreed that the position of General Counsel is a
Senior Vice Presidential level position and shall be considered as
such for all purposes.
B. Executive Responsibility: Executive hereby accepts
employment with the Company as its General Counsel and agrees that
during the Term of Employment the Executive shall exercise his
reasonable best efforts in furtherance of, and shall devote
substantially all of his working time and attention to the affairs
of the Company, Energy or any subsidiary or affiliate thereof, and
shall perform such duties and services as may reasonably be
assigned to him by, and shall report directly to the President and
Chief Executive Officer of the Company; provided, however, that
the Executive may serve as a director of other corporations or
organizations upon approval by the Board of Directors of the
Company and by the Board of Directors of Energy (the "Boards")
which, in the judgment of the Boards, will not present any
conflict of interest with the Company, Energy or any subsidiary or
affiliate thereof, and which would not affect the performance of
Executive's duties pursuant to this Agreement, which approval
shall not be unreasonably withheld; and provided further that the
Executive shall neither (a) become an officer or director of (i)
another entity which has or will have the status of a public
utility under the Federal Power Act, or any successor Act, (ii)
any bank, trust company, banking association, or firm that is
authorized by law to underwrite or participate in the marketing of
securities of a public utility, or (iii) any company supplying
electrical equipment to the Company, nor (b) accept any such
position and commence the performance of any duties or services in
such capacity (herein called an "Interlock"), unless the Executive
shall have first (x) furnished the Boards with at least thirty
(30) days prior written notice of his intention to create such
Interlock and (y) secured, if the Boards shall request that such
action be taken, any necessary authorization for such Interlock,
in form and substance satisfactory to the Boards, from the Federal
Energy Regulatory Commission, or successor regulatory agency,
pursuant to Section 305(b) of the Federal Power Act, or any
supplement or amendment thereto.
4. Compensation.
A. Base Salary and Supplements: During the Term of Employment,
the Company shall pay to the Executive a base salary of one
hundred seventy-five thousand dollars ($175,000.00) per annum
(which shall be prorated in any partial calendar year), (the "Base
Salary"). Such Base Salary shall be payable by the Company in
installments to conform with regular payroll payment dates for
officers of the Company. The Base Salary shall be reviewed
annually by the Board. There shall be no downward adjustment in
the Base Salary unless as part of a plan affecting all officers;
and there shall be no proportionately greater reduction in the
Base Salary of the Executive as compared to any other officer.
The Executive shall be paid from time to time during the Term of
Employment, in addition to his Base Salary, such incentive
compensation as the Board shall in its discretion, elect to pay to
the Executive.
B. Other Expenses and Other Benefits: During the Term of
Employment the Executive shall be entitled to such employee
benefits and perquisites as shall be available, from time to time,
to officers of the Company. Neither the Company nor Energy shall
make any voluntary changes in such employee benefit plans or
perquisites which would adversely affect Executive's rights or
benefits thereunder, unless such change is applicable to all
officers of the Company; and no such change shall result in a
proportionately greater reduction in the rights or benefits of the
Executive as compared with any other officer of the Company. The
Company and Energy further agree that no such benefit or
perquisite shall be changed in such a manner as to reduce any
benefit or award earned or accrued by Executive prior to the date
of any such modification, except as may be required by statute or
regulation or to maintain the qualified status of an employee
benefit plan.
Executive shall receive reimbursement for all reasonable travel
and other authorized expenses incurred by Executive in performing
his obligations under this Agreement, or such expenses may be paid
directly by the Company, all in accordance with the normal
policies and practices of the Company.
5. Early Termination Provisions.
A. Early Termination: The Executive's employment hereunder may
be terminated prior to the Termination Date without breach of this
Agreement only upon the following circumstances:
(a) Death: The Executive's employment hereunder shall
terminate on the date of the Executive's death. The Company
shall thereupon pay to the Executive's designated
beneficiary, in addition to any other benefits payable by or
on behalf of the Company, Energy or any subsidiary or
affiliate thereof, Executive's then current Base Salary
through the date of death.
(b) Disability: If, as a result of the Executive's
incapacity due to physical or mental illness or accident,
the Executive shall have been incapable or unable to
substantially perform the Executive's duties hereunder on a
full-time basis for a period of six (6) consecutive months,
the Company, at any time thereafter and while such absence
continues, may give written notice of early termination to
the Executive if, in the good faith opinion of a majority of
the Board of the Company the Executive is incapable or
unable to substantially perform his duties on a full-time
basis. Early termination shall be effective as of the date
set forth in said notice.
The Company shall pay to the Executive his Base Salary
through such early termination date, together with any other
earned and accrued benefits then in effect to which the
Executive would otherwise be entitled. Following such early
termination, the Executive shall be entitled to all benefits
available through the Disability Benefit Plan covering
officers of the Company.
(c) Cause by the Company: The Company may terminate the
Executive's employment hereunder for cause. For purposes of
this Agreement, the Company shall have cause to terminate
the Executive's employment hereunder only upon either
willful and continuous failure by the Executive to
substantially perform his duties hereunder (other than
failure resulting from incapacity due to physical or mental
illness), or willful engagement in misconduct which results
in economic damage to the Company. In either such event the
Board shall provide Executive with a notice of termination,
stating that in the good faith opinion of a majority of the
members of the Board of Energy who are not employees of the
Company, the Executive is being terminated and setting forth
the reasons for the Company's exercise of its right to
terminate for cause. In such notice, an early termination
date shall be stated, which shall be not less than twenty
(20) days from the date of said notice (the "Early
Termination Date").
In the event of the early termination of this Agreement for
cause, the Company shall pay to the Executive his Base
Salary through the Early Termination Date. In addition, the
Executive shall be entitled to all other earned and accrued
benefits to which the Executive would otherwise be entitled
through the Early Termination Date. Neither the Company nor
Energy shall have any further financial obligation to the
Executive; provided, however, that in the event of a
determination through arbitration that termination for Cause
was without basis, the Executive shall then be entitled, if
so determined by the arbitrator(s), to receive an award of
up to his Base Salary through the Termination Date, together
with an amount determined by the Company's actuary to be
equal to the value of the employee benefits the Executive
was deprived of by reason of the wrongful termination of
employment, and together with interest thereon calculated at
the prime rate(s) in effect for the period as established by
The Bank of New York, or its successor. Payment of such
arbitrators award by the Company shall constitute full and
final discharge of any and all financial obligations of the
Company and of Energy or any subsidiary or affiliate thereof
to the Executive.
(d) Termination by the Executive: The Executive may
exercise early termination without constituting a breach of
this Agreement upon not less than thirty (30) days advance
written notice to the Company and to Energy only in the
event of:
(i) assignment to the Executive, without the
Executive's express written approval of duties
materially inconsistent with the Executive's position,
duties, responsibilities, or status with the Company
immediately prior to any change in control of the
Company or of Energy, as hereinafter defined; or
(ii) relocation, without the prior written consent of
the Executive, of the principal offices of the Company
or relocation of the Executive's personal office to a
location more than sixty-five (65) miles from said
location prior to any change in control; or
(iii) Executive's position is eliminated or the duties
and responsibilities of the Executive are materially
and adversely changed as a result of a reorganization
or restructuring of the Company or of Energy without
the participation of and approval by Executive,
regardless of whether there has been a change in
control.
For purposes of this Agreement, a change in control of the Company
or of Energy shall be deemed to have occurred if (i) the persons
who constituted a majority of the members of the Board of Energy
at the commencement of this Agreement shall cease to constitute a
majority of the Board of Energy, unless the election or the
nomination for election by the shareholders of each such new
director was approved by two-thirds of the members of the Board of
Energy who were in office at the commencement of this Agreement,
or by those Directors of Energy who shall have been added after
the date of commencement of this Agreement and who shall have been
elected without written objection of the Executive; (ii) as a
result of a tender offer, merger, consolidation, sale of assets or
contested election, or any combination of the foregoing
transactions, the Company and/or Energy shall become a subsidiary
of another corporation or either of them shall be merged or
consolidated into another corporation, or if substantially all of
the assets of the Company and/or Energy shall be sold to another
corporation.
The exercise by the Executive of early termination as a result of
any of the events, or combination thereof, described within
subparagraphs (i) through (iii) of this subsection, shall be
communicated to the Company and to Energy by a written notice of
termination. The notice of termination shall set forth in
reasonable detail the facts and circumstances claimed to provide a
basis for early termination of the Executive's employment and the
provisions of this Agreement upon which the decision shall have
been based. Such written notice shall be communicated and
delivered not less than thirty (30) days in advance of the date of
early termination.
If such a notice of termination shall have been properly given and
supported by the events giving rise to such election, the Company
shall thereupon pay to the Executive, in addition to any other
benefits payable by or on behalf of the Company, Energy or their
affiliates; (a) the Executive's Base Salary in effect at the time
of termination, through the Termination Date which, at the
discretion of the Company, may be payable either in up to three
(3) equal installments with the first such installment payable not
later than sixty (60) days following the date of early
termination, and the last such installment payable not later than
the Termination Date, or in equal installments to conform with the
regular payroll payment dates for officers of the Company (Federal
and State Income Taxes and other payroll deductions shall be
deducted from such payments); (b) all salary supplements, bonuses
and perquisites which shall have been earned through the date of
early termination, which shall be prorated; (c) all rights and
benefits under any plan in which the Executive was then
participating related to the award of securities of Energy, which
shall be accelerated and shall become exercisable immediately in
full to the extent same shall have become vested and capable of
determination. Any securities previously granted to the Executive
which remain subject to any restrictions at the time of early
termination shall have all such restrictions removed immediately
following such early termination; (d) continuation of the
Executive's medical plan benefits until the earlier of the
Termination Date or the effective date of Executive's coverage
under a subsequent employers plan or policy; and (e) an amount
determined by the Company's actuary to be equal to the value of
Executive's rights, benefits and awards for purposes of all
retirement, deferred compensation and supplemental executive
retirement plans through the Termination Date as if the Executive
had continued through such date, and Termination Date shall be
deemed to be the Executive's retirement date for purposes of said
plans. In making such calculations, and in determining the
benefits to be awarded, the Executive's age and years of service
shall be based upon the age and years of service which would have
been achieved as of the Termination Date.
Notwithstanding the obligations undertaken by the Company in
Subsection (e) above, it is understood and agreed that the
Executive shall be entitled to all retirement benefits of the
Company as of the date of early termination. However, the benefits
under all such plans shall be calculated and determined in
accordance with Subsection (e).
Other than medical plan benefits, no other benefits to be paid to
Executive pursuant to this section shall be offset or subject to
mitigation as a result of Executive's subsequent employment
following the date of early termination.
B. Termination by Company: Any termination of the Executive by
the Company or by Energy for any reason other than as specifically
provided in Article 5 shall constitute a termination by the
Company in breach of this Agreement. The Company shall thereupon
be obligated to pay to the Executive the same amounts and in the
same manner as if the Executive had terminated this Agreement in
accordance with Article 5A(d); and upon satisfaction of those
obligations, there shall be no further payments due or owing by
the Company or by Energy to the Executive.
6. Successors; Binding Agreement.
(a) The Company and Energy shall require any successor (whether
direct or indirect, by purchase, merger, consolidation,
condemnation or otherwise) to all or substantially all of the
business and/or assets of the Company or of Energy, by agreement
in form and substance satisfactory to the Executive, to expressly
assume and to agree to perform this Agreement in same manner and
to the same extent that the Company and Energy would be required
to perform if no such succession had taken place.
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors,
assigns, heirs, administrators, executors and legal
representatives.
(c) This Agreement shall not be assignable except as
specifically provided herein and may not be assigned, pledged or
sold by the Executive for the benefit of the Executive or for the
benefit of the Executive's creditors.
(d) The Executive shall not have any vested right in any payment
to be made hereunder prior to the time when such payment is to be
made by the terms hereof.
Nothing contained within this Article 6 is intended to limit or
restrict the ability of Executive to exercise the early
termination provisions of Article 5.
7. Arbitration and Payment of Fees and Expenses.
Any dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three (3) neutral arbitrators in
accordance with the commercial rules of the American Arbitration
Association then in effect. The arbitrators shall sit within
Atlantic County, New Jersey. Judgment may be entered upon the
arbitrators' award in any court having jurisdiction.
8. Governing Law.
The execution, validity, interpretation, performance and
enforcement of this Agreement shall be governed and determined in
accordance with the laws of the State of New Jersey
9. Entire Agreement.
This Agreement contains the entire agreement of the parties. This
Agreement may not be changed orally, but only by an agreement in
writing signed by the party against whom enforcement is sought.
10. Separability.
If any provision of this Agreement shall be rendered or declared
illegal, invalid or unenforceable by reason of any existing or
subsequently enacted legislation or by decree of a court of
competent jurisdiction, such determination shall not affect the
validity or enforceability of any other provision of this
Agreement. In the event of such determination, the parties hereto
shall promptly meet to negotiate and agree upon substitute
language to give effect to the intent of the parties and, if
replacement language cannot be agreed upon, either party may seek
recourse through arbitration in accordance with Article 7.
11. Article Headings.
Article headings are included for convenience only and are not
intended to affect the meaning or interpretation of this
Agreement.
12. Counterparts.
This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original, but all of which
together will constitute one and the same instrument.
13. Waiver.
The waiver by either party of a breach of any provision of this
Agreement by the other shall not be construed as a waiver of any
subsequent breach.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date and year first above written.
ATTEST: ATLANTIC ENERGY, INC.
/s/ J. G. Salomone BY: /s/ J. M. Galvin, Jr.
J. G. Salomone J. M. Galvin, Jr., Chairman
of the Personnel Committee
of Atlantic Energy, Inc.
and designated by the Board
of Directors of Atlantic
Energy, Inc. as the
individual authorized to
execute and deliver this
Agreement on behalf of
Atlantic Energy, Inc.
ATTEST: ATLANTIC CITY ELECTRIC COMPANY
/s/ L. M. Walters BY: /s/ J. L. Jacbos
L. M. Walters J. L. Jacobs, Chairman,
President and Chief
Executive Officer
WITNESS: EXECUTIVE:
/s/ Lois F. Jennings /s/ James E. Franklin, II
James E. Franklin, II
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