Exhibit (10)-1
Commonwealth Edison Company
Form 10-Q File No. 1-1839
COMMONWEALTH EDISON COMPANY
EXCESS BENEFIT SAVINGS PLAN
COMMONWEALTH EDISON COMPANY
EXCESS BENEFIT SAVINGS PLAN
ARTICLE I
Amendment and Restatement; Purpose
Amendment and Restatement; Purpose. The Commonwealth Edison Company Excess
Benefit Savings Plan, as established, effective August 1, 1994 and as amended by
the First Amendment, effective January 1, 1995 and the Second Amendment,
effective September 1, 1997 (the "Excess Savings Plan"), is hereby amended and
restated, effective October 1, 1998, except as specifically otherwise provided
herein. The rights and benefits of any Participant whose employment terminates
prior to October 1, 1998 shall be determined under the terms of the Excess
Savings Plan as in effect on the date of such termination of employment.
Commonwealth Edison Company (the "Company") sponsors the Commonwealth
Edison Employee Savings and Investment Plan (the "ESIP") for the benefit of its
employees and those of certain affiliated entities which have adopted the ESIP
(collectively, the "Employers"). The Excess Savings Plan is intended to provide
benefits equal to the benefits that would be paid under the ESIP but for the
application of any of Sections 401(a)(17), 402(g), 401(k), 401(m) or 415 of the
Internal Revenue Code of 1986, as amended (the "Code") and any other similar
provisions set forth in the Code that limit or reduce such benefits (hereinafter
collectively referred to as the "Limitations").
Unicom Corporation has sponsored the Management Deferred Compensation Plan
(MDCP) to provide for payment of deferred compensation to a select group of
management or highly compensated employees within the meaning of sections
201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act
of 1974, as amended (ERISA) and Department of Labor Regulation 29 CFR Section
2520.104-23. Effective January 1, 1999, the Company hereby assumes the
liabilities and obligations of Unicom Corporation with respect to the MDCP.
ARTICLE II
Definitions
All capitalized terms used herein shall have the respective meanings
assigned to such terms under the ESIP, except as otherwise set forth in Section
1.1 or below:
(a) "Compensation" means: (i) with respect to any Participant who is an
active employee of the Company or an Employer, for purposes of an election
under Section 4.1 such individual's compensation taken into account under
the ESIP, and for purposes of an election under Section 4.2(a), the
Participant's annual base salary in effect for the period with respect to
which the election is made, and (ii) with
respect to any Participant making an election under Section 4.2(b), the
amount of such individual's severance benefit with respect to which
participation in the Excess Savings Plan is authorized.
(b) "Eligible Employee" means, for any Plan Year:
(i) any officer of the Company or any Employer;
(ii) any employee of an Employer who is included on the Executive
payroll (or an equivalent payroll) of such Employer;
(iii) any employee of an Employer who is on the management payroll of
the Company classified at salary level 12 or above (or at an
equivalent level on the Company's payroll should such classifications
be revised), or at an equivalent level on the payroll of another
Employer; or
(iv) any employee of an Employer who is entitled to benefits under a
severance pay plan that provides for participation hereunder.
(c) "Participant" means, for any Plan Year, an Eligible Employee who elects
to participate in the Excess Savings Plan in accordance with the provisions
of Article IV.
ARTICLE III
Eligibility and Participation
3.1 Eligibility. Each individual who was a Participant under the Excess
Savings Plan on the day before the effective date of this amendment and
restatement shall continue to be a Participant hereunder. Each other Eligible
Employee may elect to participate in the Excess Savings Plan by filing a
deferral election in accordance with the provisions of Article IV.
3.2 Participation. An Eligible Employee who elects to participate in
accordance with the provisions of Article IV shall become a Participant in the
Excess Savings Plan on the effective date of such election.
3.3 Termination of Participation. Each Participant shall remain a
Participant until such individual is no longer entitled to benefits hereunder.
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ARTICLE IV
Elections
4.1 Excess ESIP Contribution Election.
(a) Election. Each Eligible Employee who, for any Plan Year, has in
effect an election to reduce his or her Compensation and have the amount of
the reduction contributed to the ESIP may also elect to participate in the
Excess Savings Plan for such Plan Year by filing an election with the
Committee in such form as the Committee shall specify. For periods ending
on or before December 31, 1998, an election made under this Section 4.1
shall authorize the Participant's Employer to reduce the Participant's
Compensation by a whole percentage not in excess of ten. Effective with
respect to Plan Years beginning on or after January 1, 1999, an election
made under this Section 4.1 shall authorize the Participant's Employer to
reduce the Participant's Compensation by the same percentage of
Compensation elected by the Participant as Before Tax Contributions under
the ESIP. Each such election shall also be deemed to authorize the
reduction of the Participant's Compensation by an amount equal to the
amount that would have been credited to the Participant's Before Tax
Contributions Account pursuant to the deemed election contained in Section
3.2 of the ESIP but for the application of the Limitations.
(b) Election Due Dates. An election to participate under this Section 4.1
shall be made (i) for the Plan Year in which an Eligible Employee first
becomes eligible to participate, within 30 days after such individual
becomes so eligible, and (ii) for any other Plan Year, at such time as the
Plan Administrator shall designate; but no later than December 31 of the
preceding calendar year; provided, however, that any Eligible Employee may
elect, no later than September 30, 1998, to become a Participant for the
fourth calendar quarter of 1998. Any election made under this Section 4.1
shall apply only with respect to Compensation payable after the effective
date of the election, as indicated thereon, and after the date on which the
Participant's Compensation is no longer reduced by reason of contributions
to his or her Before Tax Contributions Account under the ESIP due to the
application of ESIP provisions which reduce or disallow contributions
thereto on account of one or more of the Limitations.
4.2 Additional Deferral Elections.
(a) Salary Deferral Elections. Effective with respect to Plan Years
beginning on or after January 1, 1999, each Eligible Employee may elect to
participate in the Excess Savings Plan for a Plan Year by filing a salary
deferral election with the Committee in such form as the Committee shall
specify. An election under this Section 4.2(a) shall authorize the
Participant's Employer to reduce the amount of such individual's
Compensation for the Plan Year with respect to which the election is made
by such whole percentage as he or she shall specify not in excess of 50.
(b) Severance Benefit Elections. Effective beginning June 1, 1998, each
Eligible Employee who is entitled to benefits under a severance plan of an
Employer
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which provides for participation in the Excess Savings Plan may,
for any Plan Year, elect to participate in the Excess Savings Plan by
filing a deferral election with the Committee in such form as the Committee
shall specify. An election made under this Section 4.2(b) shall authorize
the Employer to reduce the amount of the Participant's Compensation for the
Plan Year with respect to which the election is made by such percentage as
he or she shall specify.
(c) Election Due Dates. An election to participate under this Section 4.2
shall be made (i) for the calendar year in which an Eligible Employee first
becomes entitled to benefits under a severance plan or otherwise eligible
to participate in the Excess Savings Plan, within 30 days after such
individual becomes so entitled or eligible, as applicable, and (ii) for any
other Plan Year, at such time as the Plan Administrator shall designate;
but no later than December 31 of the preceding calendar year. Any election
made under this Section 4.2 shall apply only with respect to Compensation
payable after the effective date of the election, as indicated thereon.
4.3 Irrevocability of Elections. An election made under this Article IV
with respect to any Plan Year shall become irrevocable on December 31 of the
preceding Plan Year, and shall continue in effect for the entire Plan Year with
respect to which it is made.
ARTICLE V
Accounts
5.1 Employee Accounts. There shall be established on the books of the
Company and of each Employer an Employee Account in the name and on behalf of
each Participant who is an employee of the Company or such Employer, as
applicable. Each Employee Account shall be credited with the amounts by which a
Participant's Compensation is reduced under Section 4.1, and the amounts, if
any, by which a Participant's Compensation is reduced under Section 4.2(a) or
Section 4.2(b), as applicable, as of the date such amounts would have been paid
to the Participant but for the election.
5.2 Employer Accounts. There shall be established on the books of the
Company and of each Employer an Employer Account in the name and on behalf of
each Participant who has made an election under Section 4.1 or Section 4.2(b)
and who is an employee of the Company or such Employer, as applicable. Each
Employer Account shall be credited with an amount equal to the Employer Matching
Contributions that would have been allocated to the Participant's Employer
Contribution Account under Section 4.3 of the ESIP in respect of amounts
credited to the Participant's Employee Account under Section 5.1 had such
amounts been allocated to such Participant's Before Tax Contribution Account
under the ESIP, but after taking into account any such matching contributions
made under Section 4.3 of the ESIP in respect of contributions by the
Participant to his or her After Tax Contributions Account, as of the date on
which the related amount is credited to his or her Employee Account.
Notwithstanding the preceding, effective for matching contributions made (i)
with respect to any Participant who is an officer or on the executive payroll of
an Employer, on or after October 1, 1998, and (ii) with respect to any other
Participant, on or
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after January 1, 1999, the amount credited to the Participant's Employer Account
as matching contributions shall be credited as units of Unicom Corporation
common stock valued as of the date on which such contributions are credited. For
purposes of the preceding sentence, a Participant who is entitled to benefits
under the severance plan of an Employer shall be deemed to have the payroll
classification in effect on the date such individual became entitled to benefits
under such severance pay plan.
5.3 Vesting. Amounts credited to a Participant's Employee Account or
Employer Account pursuant to the terms of this Excess Savings Plan shall be
fully vested and not subject to forfeiture for any reason.
5.4 Earnings Elections. Each Account shall be divided into a separate
subaccount with respect to each earnings election made by a Participant pursuant
to this Section 5.4.
(a) Investment Benchmarks. The Committee shall from time to time
designate two or more investment benchmarks, the rates of return or loss of
which, based upon a Participant' earnings election, shall be used to
determine the rate of return or loss to be credited to the subaccounts
established within the Participant's Accounts pursuant to this Section 5.4.
A Participant's earnings election shall specify the percentages of the
Participant's Accounts allocated to the subaccounts with respect to each
investment benchmark selected by the Participant, for periods ending on or
before December 31, 1998, in increments of 5% (or multiples thereof), and
for periods beginning on or after January 1, 1999, in whole percentages.
If, for any period, no earnings election is in effect pursuant to this
Section 5.4, the Participant's Accounts shall be credited with interest on
the balance thereof as of the end of each calendar month at an annual rate
equal to the imbedded rate of interest then being accrued by the Company on
its long-term debt, as determined from time to time by the Controller of
the Company.
(b) Changes in Earnings Elections. For periods ending on or before
December 31, 1998, a Participant may change his or her earnings election as
of the first business day of any calendar month by delivering to the
Participant's Employer, at such time as may be specified by the Committee,
a revised earnings election. For periods beginning on or after January 1,
1999, a Participant may change his or her earnings election at any time. A
revised earnings election may apply to the then balance of a Participant's
Account, to the future amounts to be credited thereto on account of the
Participant's election(s) under this Plan or both. Notwithstanding the
preceding to the contrary, a Participant shall not be entitled to make an
earnings election with respect to amounts credited to the Participant's
Employer Account on or after (i) with respect to a Participant who is an
officer or on the executive payroll of an Employer, October 1, 1998, and
(ii) with respect to any other Participant, January 1, 1999.
ARTICLE VI
Distributions
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6.1 Distributions Commencing On or After January 1, 1999.
(a) Automatic Form. Distribution of a Participant's Accounts shall be
made in a single lump sum as soon as practicable following the
Participant's termination of employment for any reason, including
retirement, but no later than 30 days after the date of such termination of
employment. The termination of employment of any Participant who is
receiving severance benefits under a plan of an Employer shall be deemed to
occur on the last day of the period for which severance benefits are paid.
(b) Election to Receive Installment Payments. Any Participant the value
of whose Accounts is anticipated to be at least $5,000 as of the date of
his or her termination of employment may elect to receive distribution of
his or her Accounts in up to 15 annual installments in lieu of receiving
payment in a lump sum by filing an election with the Committee in such form
as the Committee may permit; provided that such election must be made at
least one year prior to the date the Participant's employment terminates
and provided further, that in the case of a Participant whose termination
of employment occurs prior to December 31, 1999, such election may be made
within 30 days after such Participant's termination of employment but shall
not become effective until the first day of the calendar year which begins
after the date which is 12 months after the date of such election.
Notwithstanding the preceding, any Participant who, as of the date his
employment terminates, has not filed an election to receive distribution of
his Accounts in installments may elect installment payments commencing in
the year of termination; provided that such Participant has also elected to
begin receiving a distribution of his accrued benefit under the ESIP in
installment payments. In such case, distribution of his Excess Savings
Plan Accounts shall be made at the same time and over the same period as
the distribution of his ESIP accounts.
(c) Timing and Amount of Installment Payments. Installment payments shall
be made annually as soon as practicable after such annual payment date as
the Participant shall specify in his or her election. The amount of each
installment payment shall be determined:
(i) for the year in which installment payments are to commence, by
dividing the balance of the Participant's Accounts as of the last day
of the of calendar year in which the Participant's employment
terminates by the total number of installment payments to be made over
the payment period elected (the "Installment Period");
(ii) except as provided in clause (iii) below, for each subsequent calendar
year, by dividing the balance of the Participant's Accounts as of
December 31 (but subtracting from such balance the amount of the
installment payment to be made on the next following January 1) by the
total number of payments remaining to be made in the Installment
Period (excluding the installment payment to be made on the next
following January 1); and
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(iii) for the final calendar year in which installment payments are to be
made, by dividing the balance of the Participant's Accounts as of the
payment date by the number of payments remaining to be made in the
Installment Period (including the installment payment which is then
being made);
provided, however, (I) if an installment payment calculated under
subparagraph (i) above is to commence on January 1, such installments shall
continue until the second succeeding January 1, (II) no installment shall
exceed the balance of the Participant's Accounts immediately before the
date of payment, and (III) the final installment shall be equal to the then
remaining balance of the Participant's Accounts.
6.2 Distributions Commencing Before December 31, 1998. Distribution
of the balance of a Participant's Accounts commencing prior to December 31, 1998
shall be calculated in the manner specified in paragraph 6 of the Plan as in
effect prior to this amendment and restatement, and shall be made at the time
and in the manner specified below:
(a) Retirement or Disability. If a Participant's employment terminates
under circumstances entitling the Participant to a normal or early
retirement pension under the Commonwealth Edison Company Service Annuity
System or on account of the Participant's "disability" as defined therein,
and as of the date of such termination the balance of the Participant's
Accounts is at least $25,000, the balance of the Participant's Accounts
shall be distributed to the Participant in installments, payable on or
about the first day of each calendar quarter commencing with the first
calendar quarter beginning after the date on which the Participant's
employment terminates and continuing for fifteen years (the "Installment
Period"). Notwithstanding the foregoing, a Participant may elect to have
such installments payable over ten years or five years, computed in the
same manner as installments payable over 15 years, or to have the balance
of his or her Account distributed in a single lump sum as of the first day
of the calendar quarter next following the date the Participant's
employment terminates.
(b) Other Distributions. If a Participant's employment shall terminate for
any reason other than those described in Section 6.2(a) or on account of
death, or if, as of the date of a Participant's termination of employment,
the balance of the Participant's Accounts is less then $25,000, the balance
of the Participant's Accounts shall be distributed to the Participant in a
lump sum as soon as is practicable after the last day of the calendar
quarter coinciding with or next following such termination of employment.
6.3 Distributions in the Event of Death. If a Participant's employment is
terminated on account of the Participant's death, the balance of the
Participant's Accounts shall be distributed to the Participant's beneficiary
determined pursuant to Section 6.4 in a single lump sum as soon as practicable
following the end of the first calendar quarter coinciding with or next
following the Participant's death. If a Participant dies after installment
distributions have begun to be made, such installment distributions shall
continue to the Participant's beneficiary determined pursuant to Section 6.4.
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6.4 Beneficiaries. If a Participant shall die while any amount remains
credited to the Accounts established on his behalf pursuant to Article V of this
Excess Savings Plan, such amounts shall be paid as provided in Section 6.3
hereof to the beneficiary or beneficiaries designated by the Participant in
writing delivered to the Committee. Any Participant may revoke or change his or
her beneficiary designation at any time in writing delivered to the Committee.
If a Participant does not designate a beneficiary under this Excess Savings
Plan, or if no designated beneficiary survives the Participant, the balance of
his or her Accounts shall be paid to the person or persons entitled to his or
her accrued benefit under the terms of the ESIP (or who would be so entitled if
there were then an amount remaining unpaid under the ESIP).
6.5 Withholding. Notwithstanding any provision of this Excess Savings Plan
to the contrary, amounts payable hereunder shall be reduced by any amounts
required to be deducted or withheld by the Company under federal or state law,
including income tax withholding.
6.6 Facility of Payment. Whenever and as often as any Participant entitled
to payments under the Excess Savings Plan shall be incompetent or, in the
opinion of the Committee would fail to derive benefit from distribution of funds
under the Excess Savings Plan, the Committee, in its sole and exclusive
discretion, may direct that any or all payments hereunder be made (a) directly
to or for the benefit of such Participant, (b) to the Participant's legal
guardian or conservator; or (c) to relatives of the Participant. The decision of
the Committee in such matters shall be final, binding and conclusive upon each
Employer and Participant and every other person or party interested or
concerned. An Employer and the Committee shall not be under any duty to see to
the proper application of such payments made to a Participant, conservator,
guardian or relatives of a Participant.
ARTICLE VII
Application of ERISA, Funding
7.1 Application of ERISA. Amounts deferred pursuant to an election made
under Section 4.1 of the Excess Savings Plan are intended to be an excess
benefit plan within the meaning of Section 3(36) of the Employee Retirement
Income Security Act of 1974, as amended (ERISA). Amounts deferred pursuant to an
election made under Section 4.2 are intended to constitute an unfunded plan
maintained primarily for the purpose of providing deferred compensation to a
select group of management or highly compensated employees within the meaning of
sections 201(2), 301(a) (3) and 401 (a) (1) of ERISA and Department of Labor
Regulation Section 2520.104-23.
7.2 Funding. The Excess Savings Plan shall not be a funded plan, and
neither the Company nor any of the Employers shall be under any obligation to
set aside any funds for the purpose of making payments under this Excess Savings
Plan. Any payments hereunder shall be made out of the general assets of the
Company and the Employers.
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7.3 Trust. The Company shall establish a trust for the purpose of
administering assets of the Company and the Employers to be used for the purpose
of satisfying their obligations under the Excess Savings Plan and those
obligations formerly under the MDCP which have been herein assumed by the
Company. Any such trust shall be established in such manner so as to be a
"grantor trust" of which the Company is the grantor, within the meaning of
section 671 et. seq. of the Code. The existence of any such trust shall not
relieve the Company or any Employer of their liabilities under the Excess
Savings Plan, but the obligation of the Company and the Employers under the
Excess Savings Plan shall be deemed satisfied to the extent paid from the trust.
ARTICLE VIII
Administration
8.1 Committee. The Excess Savings Plan shall be administered by the
administrative committee created under the ESIP (the "Committee"). The Committee
shall have the same duties and powers and shall be subject to the same
limitations as those applicable to the Committee under Article 11 of the ESIP.
The Committee shall have no power to add to, subtract from or modify any of the
terms of the Excess Savings Plan, or to change or add to any benefits provided
under the Excess Savings Plan, or to waive or fail to apply any requirements of
eligibility for a benefit under the Excess Savings Plan. The Committee's
decisions in any matter involving the Excess Savings Plan shall be final,
binding and conclusive.
8.2 Administration. The provisions of Article 11 of the ESIP (other than
Sections 11.3 and 11.7) are hereby incorporated by reference, and shall be
applicable as if such provisions were set forth herein.
8.3 Expenses. All costs and expenses incurred in administering the Excess
Savings Plan, including the expenses of the Committee, the fees of counsel and
any agents of the Committee and other administrative expenses shall be paid by
the Company and the Employers. The Committee, in its sole discretion, having
regard to the nature of a particular expense, shall determine the portion of
such expense which is to be borne by the Company or a particular Employer.
ARTICLE IX
Amendment and Termination
Amendment and Termination. The Company intends to maintain the Excess
Savings Plan indefinitely. However, the Excess Savings Plan shall be subject to
the same reserved powers of amendment and termination by the Company or such
senior officer to whom it has delegated its amendment authority as the ESIP
(without regard to any limitations imposed on such powers by the Code or ERISA),
except that no such amendment or termination shall reduce or otherwise adversely
affect the rights of
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Participants in respect of amounts accrued hereunder as of the date of such
amendment or termination without their written consent.
ARTICLE X
Miscellaneous
10.1 FICA Taxes. For each calendar year in which a Participant's
Compensation is reduced pursuant to this Excess Savings Plan, his or her
Employer shall withhold from the Participant's compensation which is not
deferred pursuant to an election made hereunder the taxes imposed under Section
3121 of the Code in respect of amounts credited to the Participant's Accounts
for such year.
10.2 Nonassignment of Benefits. Notwithstanding anything contained in the
ESIP to the contrary, it shall be a condition of the payment of benefits under
this Excess Savings Plan that neither such benefits nor any portion thereof
shall be assigned, alienated or transferred to any person voluntarily or by
operation of any law, including any assignment, division or awarding of property
under state domestic relations law (including community property law). If any
person shall endeavor or purport to make any such assignment, alienation or
transfer, amounts otherwise provided hereunder shall cease to be payable to any
person.
10.3 No Guarantee of Employment. Nothing contained in this Excess Savings
Plan shall be construed as a contract of employment between any Employer and any
employee or as conferring a right on any employee to be continued in the
employment of any Employer, or as a limitation of the right of an Employer to
discharge any of its Employees, with or without cause.
10.4. Adoption by Employers. Any business entity which is or becomes an
"Employer" under the ESIP may, with the consent of the Company, become an
Employer under this Excess Savings Plan by delivery to the Company of a
resolution of its board of directors or duly authorized committee to such
effect, which resolution shall specify the date for which this Excess Savings
Plan shall be effective with respect to the employees of such business entity.
10.5 Gender and Number. Except when the context indicates to the contrary,
when used herein, masculine terms shall be deemed to include the feminine and
singular the plural.
10.6 Headings. The headings of Articles and Sections are included solely
for convenience of reference, and if there is any conflict between such headings
and the text of the Excess Savings Plan, the text shall control.
10.7 Invalidity. If any provision of this Excess Savings Plan shall be held
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provisions hereof, and the Excess Savings Plan shall be enforced and
construed as if such provisions, to the extent invalid or unenforceable, had not
been included.
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10.8 Successors and Assigns. The provisions of the Excess Savings Plan
shall bind and inure to the benefit of the Company and each Employer and their
successors and assigns, as well as each Participant and his successors.
10.9 Law Governing. Except as provided by any federal law, the provisions
of the Excess Savings Plan shall be construed in accordance with and governed by
the laws of the state of Illinois.
EXECUTED this 30th day of September, 1998.
COMMONWEALTH EDISON COMPANY
By: ___________________________________
S. Gary Snodgrass
Senior Vice President
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