Exhibit (10)-3
Commonwealth Edison Company
Form 10-K File No. 1-1839
COMMONWEALTH EDISON COMPANY
1994 LONG-TERM PERFORMANCE UNIT AWARD
FOR EXECUTIVE AND GROUP LEVEL EMPLOYES
PAYABLE IN 1995
UNDER THE
1993 LONG-TERM INCENTIVE PLAN
Commonwealth Edison Company, an Illinois corporation (the "Company"),
hereby grants to each employe described in Section 1 hereof (each, an "Employe")
as of January 25, 1994 (the "Grant Date"), in accordance with the provisions of
the Commonwealth Edison Company 1993 Long-Term Incentive Plan (the "Plan"), a
performance unit award (each, an "Award") expressed as a number (the "Base
Unit") 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. Recipients of Awards. Recipients of Awards hereunder shall consist of
the following employes of the Company and of Commonwealth Edison Company of
Indiana, Inc.: (i) each Group Level employe, (ii) each Executive and (iii) each
Officer, including, without limitation, the Chairman of the Company, the
President of the Company and each Senior Vice President of the Company.
2. Base Unit. The Base Unit for each Award shall be a number (rounded to
the nearest whole number) equal to (a) the product of multiplying (i) the Salary
(as defined herein) of the Employe receiving such Award by (ii) the applicable
percentage set forth below, divided by (b) $27:
Chairman: 25%
President: 25%
Senior Vice Presidents: 20%
Officers, other than as listed above: 15%
Executives, other than as listed above: 10%
Group Level employes, other than as listed above: 10%
For the purposes of calculating the Base Unit, an Employe's Salary shall be such
Employe's monthly scheduled rate of pay as of the Grant Date multiplied by 12
together with the income from such Employe's Deferred Compensation Units.
3. Performance Period. The Performance Period shall commence on January
25, 1994 and end on December 31, 1994.
4. Payment Amount/Stockholder Protection. The amount payable in
connection with an Award (a "Payment Amount") shall be a dollar amount based on
the Base Unit and on the Company's percentile rank, with the percentile rank
corresponding to the highest performance in the performance group being 100 and
the
percentile rank corresponding to the lowest performance in the performance group
being 1 (the "Company Rank"), in the Ranking (as hereinafter defined) for the
Performance Period, and calculated as follows:
Below Threshold Level. If the Company Rank is lower than the 25th
percentile in the Ranking, then the Payment Amount shall be zero.
Between Threshold Level and Target Level. If the Company Rank is no
lower than the 25th percentile in the Ranking and no higher than the 49th
percentile in the Ranking, then the Payment Amount shall be the Base Value
multiplied by a fraction the numerator of which is the Company Rank
multiplied by 2 and the denominator of which is 100.
Between Target Level and Maximum Level. If the Company Rank is no
lower than the 50th percentile in the Ranking and no higher than the 90th
percentile in the Ranking, then the Payment Amount shall be the Base Value
multiplied by a fraction the numerator of which is the Company Rank
multiplied by 2.5 minus 25 and the denominator of which is 100.
Above Maximum Level. If the Company Rank is above the 90th percentile
in the Ranking, then the Payment Amount shall be the Base Value multiplied
by 2.
Notwithstanding the foregoing, if the Company (or, if the Company becomes a
majority owned subsidiary of another corporation, then such parent corporation)
fails to maintain regular quarterly cash dividends of at least $.40 per share of
Common Stock during the Performance Period (adjusted for any stock-split, stock
dividend or other similar event) then the Payment Amount shall be zero.
For purposes of the foregoing, the term "Ranking" shall mean a ranking
determined based upon the Cumulative Total Shareholder Return (as hereinafter
defined) for such Performance Period on the Company's (or, if the Company
becomes a majority owned subsidiary of another corporation, then such parent
corporation's) Common Stock as compared to the Cumulative Total Shareholder
Return for such Performance Period on the common stock of each corporation
comprising the Dow Jones Utility Index (or any successor index); the term
"Cumulative Total Shareholder Return" for a period shall mean the result
obtained by dividing (i) the sum of (a) the cumulative amount of dividends on
the common stock in question for such period, assuming reinvestment of said
dividends in said common stock, and (b) the difference between the price per
share of said common stock at the end and the beginning of such period, by (ii)
the price per share of said common stock at the beginning of such period; and
the term "Base Value" shall mean the result obtained by multiplying the Base
Unit by the value of a share of Common Stock (as determined under Section 5
hereof).
-2-
5. Settlement of Awards. The Payment Amount shall become payable upon the
completion of the Performance Period and shall be paid by the Company within 90
days after the completion of the Performance Period. The Payment Amount shall
be paid 50% in cash and 50% in shares of Common Stock. Fractional shares of
Common Stock that may become payable hereunder shall be paid in cash. For the
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. Termination of Employment. If an Employe voluntarily terminates
employment with the Company prior to the completion of the Performance Period or
Employe's employment with the Company is terminated by the Company for cause
(including, without limitation, a termination due to Employe's gross
misconduct), then no amount shall be payable hereunder. Except as set forth in
the immediately preceding sentence, if an Employe's employment with the Company
is terminated prior to the completion of the Performance Period and at least six
months after the commencement of the Performance Period, then the Employe shall
be entitled to a Payment Amount calculated in accordance with Section 5 hereof,
except that the calculation of the Payment Amount shall be made as of the date
of such termination, 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 and the date of such termination and the
denominator of which is the number of days in the Performance Period. The
Payment Amount calculated in accordance with the immediately preceding sentence
shall be paid within 90 days after the date of such termination; provided,
however, that if the Ranking under Section 5 cannot be calculated as though the
Performance Period ended on the date of such termination, then such Ranking
shall be calculated as though the Performance Period ended on the most recent
date prior to the date of such termination for which such Ranking can be
calculated. As used in this Section 6, employment by the Company shall include
employment by a corporation which is a "subsidiary corporation" of the Company,
as such term is defined in section 424 (and any successor section) of the
Internal Revenue Code of 1986, as amended, or any successor internal revenue
law.
7. Rights as a Stockholder. No Employe shall have any rights as a
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
Employe or otherwise credited to an account for the benefit of such Employe.
-3-
8. Additional Terms and Conditions of Award.
8.1. Nontransferability of Award. In accordance with Section 13.5 of the
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 Employe 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
Employe 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 to the Employe, or may request
the Employe to pay to the Company in cash, such amount as the Company 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
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 the Plan, and shall be interpreted in accordance therewith.
-4-