EXHIBIT (10)-5
Unicom Corporation and Commonwealth Edison Company
Form 10-K File No. 1-11375 and 1-1839
Unicom Corporation
1999 Long-Term Performance Unit Award
Payable in 2002 under the
Unicom Corporation Long-Term Incentive Plan, as amended
Unicom Corporation, an Illinois corporation (the "Company"), hereby grants to
each individual described in Section 1 hereof as of January 1, 1999 (the "Grant
Date"), in accordance with the provisions of the Unicom Corporation Long-Term
Incentive Plan, as amended (the "Plan"), a performance unit award (each, an
"Award") expressed as a number of performance units, in the amount and upon and
subject to the restrictions, terms and conditions set forth below. Capitalized
terms not defined herein shall have the meanings specified in the Plan.
1. Participation:
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(a) The following individuals shall be participants eligible to receive an
Award hereunder ("Participants"): any regular non-temporary employee of the
Company or its affiliates (including, but not limited to Commonwealth Edison
Company ("ComEd") and collectively referred to herein as the "Employers")
who, on the Grant Date and for at least 180 days of the Performance Period,
is a member of one of the following groups of eligible employees: (i) an
officer; (ii) classified as an Executive Level or its equivalent, or (iii)
classified as a Key Management Level or its equivalent and who has been
designated by the Company as eligible to participate hereunder.
(b) An individual who becomes an officer, Executive Level, designated Key
Management Level or is hired after the Grant Date but prior to June 30, 2001
into one of the groups of eligible employees described above (each, a "New
Employee") shall also be a Participant; provided, however, that such
individual must be an eligible employee through either actual or deemed
employment for at least 180 days of the Performance Period in order to be
eligible to receive an Award.
For purposes of the above, eligible employees' pay classifications shall be
those used by the Company or ComEd or, if a Participant's Employer maintains
a system of pay classification different from those described above, a
classification mutually determined by such employer and the Company to be
comparable to the Company's eligible classifications.
Notwithstanding the preceding, an eligible employee described above who
participates in another long term performance award program ("Other
Program") sponsored by an Employer will not be eligible to participate in
this Award. If such individual is no longer eligible to participate in an
Other Program, then he or she may be deemed eligible to be a Participant and
any Award payable to such individual shall be prorated using the proration
formula provided in Section 6.2. Similarly, if a Participant becomes
eligible to participate in an Other Program, then such individual will cease
to be a Participant hereunder and any Award payable to such individual will
be prorated using the proration formula provided in Section 6.1.
2. Base Unit. The number of performance units (rounded to the nearest one
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hundredth) granted for each Participant's Award (the "Base Unit") shall
equal (a) the product of (i) the Participant's Salary (as defined below),
multiplied by (ii) the applicable Target Award Opportunity percentage (set
forth below), (b) divided by the average of the closing prices of a share of
Common Stock as reported in The Wall Street Journal as New York Stock
Exchange Composite Transactions during the calendar quarter
ending on December 31, 1998 (appropriately adjusted for any stock-split,
stock dividend, or other similar event):
Target Award Opportunities
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Target
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Chairman & CEO 50%
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Executive Vice President (Line) 45%
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Executive Vice President (Staff) 40%
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Senior Vice President 35%
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Vice President (Officers) 25%
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Other Executives 20%
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Designated Key Managementl 15%
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For purposes hereof, "Salary" shall mean, with respect to any Participant,
such Participant's annual scheduled rate of pay as of March 29, 1999,
together with the annual income from any deferred compensation units
previously granted to the Participant, if applicable; provided, however,
that with respect to a Participant who is a New Employee, Salary shall mean
such New Employee's annual scheduled rate of pay as of the date such
individual becomes a New Employee (the "Start Date").
3. Performance Period. The Performance Period shall commence on January 1,
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1999 and end on December 31, 2001.
4. Payment Amount. The amount payable in connection with any Award (a "Payment
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Amount") shall be a dollar amount equal to the product of (i) the Employee's
Base Value (as defined below), multiplied by (ii) the applicable Component
Weights (as indicated below) for each of the three year goals (the "Goals")
established specifically for this Program, multiplied by, (iii) the
composite of the achieved percentage of each applicable Goal, as determined
by the Committee, expressed as a percentage of target ranging from 50% to
200% ; provided the initial threshold is met.
(a) "Base Value" means the product of (i) each Participant's Base Unit
multiplied by, (ii) the average of the closing prices of a share of Common
Stock as reported in The Wall Street Journal as New York Stock Exchange
Composite Transactions during the calendar quarter ending on the last day of
the Performance Period (appropriately adjusted for any stock-split, stock
dividend or other similar event).
(b) "Component Weights" are those set forth below:
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Component Weight
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Participant Corporate Business Unit
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Line Business Units Business Unit Head 50% 50%
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All Others 25% 75%
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Corporate Staff
Business Units Officers 100% 0%
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Non-Officers 100% 0%
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(c) The "Goals" shall mean:
(1) Corporate Measures: Cumulative three-year Corporate Shareholder
Value Added (SVA) and Overall Customer Satisfaction Index (2001
Index).
(ii) Business Unit Measures: Three-year strategic/financial goals set
for each Business Unit, as approved by the Committee.
5. Settlement of Awards. The Payment Amount shall become payable upon the last
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day of the Performance Period and shall be paid by the Company within 90
days thereafter. The Payment Amount shall be paid 50% in cash and 50% in
shares of Common Stock; provided, however, that, if a Participant elects
under the Unicom Corporation Stock Bonus Deferral Plan to defer up to 100%
of the Payment Amount, the amount so deferred shall be paid in shares of
Common Stock; and provided further, that shares that may become payable to a
Participant hereunder shall not be issued if the aggregate number of shares
payable to such Participant does not exceed 25 (and, in such case, cash
shall be paid in an amount equal to the value of the shares that would have
been issued but for this proviso). Fractional shares of Common Stock that
may become payable to a Participant hereunder shall be issued if the shares
issuable to such Participant exceed 25 and are held in non-certificated,
book-entry or electronic form; otherwise, any such fractional shares shall
be paid in cash. For purposes of determining the number of shares of Common
Stock payable pursuant to this Section, a share of Common Stock shall be
valued at the average of the closing prices of a share of Common Stock as
reported in The Wall Street Journal as New York Stock Exchange Composite
Transactions during the calendar quarter ending on the last day of the
Performance Period (appropriately adjusted for any stock-split, stock
dividend or other similar event).
6. Employment for Less than Full Performance Period.
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6.1. Termination of Employment. Except as provided in the immediately
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following sentence, if a Participant's employment with an Employer is
terminated prior to the last day of the Performance Period for any reason,
the Participant shall forfeit his or her Award and no amount shall be
payable hereunder. If a Participant's employment with an Employer is
terminated prior to the last day of the Performance Period due to such
Participant's (i) termination as a result of the sale, permanent closure or
other disposition of any generation facility, the sale or other disposition
of any business unit or functional group (or portion thereof) that includes
such Participant or the Company's decision to have a third party provide the
services performed by the functional group that includes such Participant
(in any such case, a "Permitted Termination"), (ii) retirement under the
pension plan of any of the Employers, (iii) death, or (iv) acceptance of
severance pay under a voluntary separation plan or entitlement to payment
under any other severance plan or arrangement that provides for an Award,
and such individual was a Participant for at least 180 days of the
Performance Period, then the Payment Amount for such Participant shall be
amount equal to the Payment Amount calculated in accordance with Section 4
hereof multiplied by a fraction, the numerator of which is the number of
days in the Performance Period that have elapsed between the commencement of
the Performance Period (in the case of a Participant described in Section
1(a)), or the Start Date (in the case of a New Employee), and the date of
such Permitted Termination, retirement or death (as the case may be) and the
denominator of which is the total number of days in the Performance Period.
Any Payment Amount calculated in accordance with the immediately preceding
sentence shall be paid as provided in Section 5 hereof within 90 days after
the last day of the Performance Period.
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6.2. New Employees. The Payment Amount for any Participant who is a New
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Employee and whose Start Date was on or before June 30, 2001, who remains
employed through the last day of the Performance Period and who was a
Participant for at least 180 days of the Performance Period shall be an
amount equal to the Payment Amount calculated in accordance with Section 4
hereof multiplied by a fraction, the numerator of which is the number of
days in the Performance Period that have elapsed between the New Employee's
Start Date and the end of the Performance Period and the denominator of
which is the total number of days in the Performance Period. Any Payment
Amount calculated in accordance with the immediately preceding sentence
shall be paid as provided in Section 5 hereof within 90 days after the last
day of the Performance Period.
6.3. Promotions and Demotions.
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(a) If a Participant's pay classification changes during the
Performance Period to a pay classification that remains included
within the groups of eligible employees set forth in Section 1(a),
then such individual shall be entitled to an Award in an amount equal
to the Payment Amount calculated in accordance with Section 4 hereof,
but based upon the sum of the products of (i) the Base Unit applicable
to each pay classification held by such Participant during the
Performance Period, multiplied by (ii) a fraction the numerator of
which is the number of days during the Performance Period that each
such pay classification was held and the denominator of which is the
total number of days in the Performance Period.
(b) If a Participant is demoted during the Performance Period to a pay
classification below those included within the groups of eligible
employees set forth in Section 1(a) and such individual was a
Participant for at least 180 days of the Performance Period, then such
individual shall be entitled to an Award in an amount equal to the
Payment Amount calculated in accordance with Section 4 hereof
multiplied by a fraction the numerator of which is the number of days
in the Performance Period that such individual was an eligible
employee and the denominator of which is the total number of days in
the Performance Period.
(c) If an individual who was not, as of the Grant Date, eligible to
participate hereunder is promoted on or before June 2001 to a pay
classification that is included within the groups of eligible
employees set forth in Section 1(a) and such individual is a
Participant for at least 180 days of the Performance Period, then such
individual shall be entitled to an Award in an amount equal to the
Payment Amount calculated in accordance with Section 4 hereof
multiplied by a fraction the numerator of which is the number of days
in the Performance Period that such individual was an eligible
employee and the denominator of which is the total number of days in
the Performance Period.
6.4. Reduction of Payment Amount in Certain Circumstances. In the event
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that a Participant takes a voluntary leave of absence or a leave of absence
for long-term disability during all or any portion of the Performance Period
and such individual was a Participant for at least 180 days of the
Performance Period, the Payment Amount for such Participant's Award shall be
prorated by multiplying it by a fraction, the numerator of which is the
number of days during the Performance Period that the Participant was
actively at work for an Employer (or Employers) and the denominator of which
is the total number of days in the Performance Period.
6.5. Transfer from One Business Unit to Another Business Unit. If a
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Participant is transferred from one business unit to another business unit
and such individual was a Participant for at least 180 days of the
Performance Period, the Participant's Payment Amount will be the sum of
prorations with respect to
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each business unit. Each proration will equal (i) the Payment Amount,
multiplied by (ii) a fraction, the numerator of which is the number of days
the Participant was in the applicable business unit and the denominator of
which is the total number of days in the Performance Period.
7. Rights as a Stockholder. No Participant shall have any rights as a
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stockholder of the Company with respect to any shares of Common Stock that
may be payable hereunder unless and until such shares have been issued to
such Participant or otherwise credited to an account for the benefit of such
Participant.
8. Additional Terms and Conditions of Award.
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8.1. Nontransferability of Award. In accordance with Section 13.5 of the
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Plan, no Award or other related benefit may, except as otherwise
specifically provided by the Plan or by law, be transferable in any manner
other than by will or the laws of descent and distribution, and any attempt
to transfer any such Award or other benefit shall be void; provided,
however, that the foregoing shall not restrict the ability of any
Participant to transfer any cash or Common Stock received as part of the
Payment Amount. In accordance with Section 13.5 of the Plan, Awards or other
benefits payable under Awards shall not in any manner be subject to the
debts, contracts, liabilities, engagements or torts of any person who shall
be entitled to such Award or benefits, nor shall they be subject to
attachment or legal process for or against such person.
8.2. Withholding Taxes. As a condition precedent to the delivery to the
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Participant of cash or Common Stock hereunder and in accordance with Section
13.4 of the Plan, the Company may deduct from any amount (including any
Payment Amount) payable then or thereafter payable by the Company or any of
its subsidiaries to the Participant, or may request the Participant to pay
to the Company in cash, such amount as the Company or any of its
subsidiaries may be required, under all applicable federal, state, local or
other laws or regulations, to withhold and pay over with respect to the
Award.
8.3. Compliance with Applicable Law. Each Award is subject to the
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condition that if the listing, registration or qualification of the shares
of Common Stock subject to the Award upon any securities exchange or under
any law, or the consent or approval of any governmental body, or the taking
of any other action is necessary or desirable as a condition of, or in
connection with, the vesting or delivery of such shares hereunder, such
shares may not be delivered, in whole or in part, unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained.
8.4 Award Subject to the Plan. This Award is subject to the provisions of
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the Plan, and shall be interpreted in accordance therewith.
8.5. Administration. Senior management administers the Program and has the
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authority to interpret, administer, and implement it, and to approve goal
determinations and performance achievement. Senior management and the
Compensation Committee of the Board of Directors may, in its sole
discretion, make adjustments to Program performance measures in order to
take into account changes in accounting rules, principles or methods, or the
occurrence of extraordinary events. The Company reserves the right to revise
or terminate the Program at any time with no advance notice.
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