Exhibit (10)-22
Unicom Corporation and
Commonwealth Edison Company
Form 10-K File Nos. 1-11375 and 1-1839
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT ("Agreement") dated November 1, 1997 is made and
entered into between Commonwealth Edison Company ("ComEd") and Oliver D.
Kingsley, Jr. ("Kingsley").
1. EMPLOYMENT
----------
ComEd hereby employs Kingsley and Kingsley hereby accepts such employment on
the terms and conditions as hereinafter set forth.
2. TERM OF EMPLOYMENT
------------------
Subject to the provisions of Section 12, ComEd shall employ Kingsley as
Executive Vice President of ComEd and President and Chief Nuclear Officer -
Nuclear Group from November 1, 1997 to and including October 31, 2001 ("Initial
Term"), provided that upon the expiration of the Initial Term, this Agreement
shall be renewed automatically for successive periods of one year each (the
"Term"), unless written notice of the intention not to renew this Agreement is
provided by either ComEd or Kingsley within 90 days prior to the expiration of
any Term.
3. DESCRIPTION OF DUTIES
---------------------
Kingsley shall have overall accountability for nuclear operations and shall
perform to the best of his ability and to the reasonable satisfaction of ComEd
all duties normally attendant to his position. Kingsley shall have such
authority and responsibility as described in the attached Guidelines.
4. EXCLUSIVITY OF EMPLOYMENT
-------------------------
Kingsley represents and warrants that there are no agreements or
arrangements, whether written or oral, in effect which would prevent him from
rendering exclusive services to ComEd during the Initial Term or any additional
Term, and that he has not made and will not make any commitment, agreement or
arrangement, or do any act in conflict with this Agreement. Kingsley shall
devote his full employment energies, interest, abilities and time to the
performance of his obligations hereunder.
5. COMPENSATION AND BONUS
----------------------
A. Salary
------
For services to be rendered by Kingsley pursuant to this Agreement, and
provided that Kingsley has kept and performed all of his obligations
hereunder, ComEd shall pay to Kingsley an annual salary ("Salary") for
calendar years 1997 and 1998 of $475,000, to be paid in accordance with
ComEd's normal payroll practices as such practices may be modified from
time to time. Kingsley shall receive the above-named Salary for all hours
worked by him in a week regardless of the number of hours he may work.
Effective beginning with calendar year 1999, ComEd may increase
Kingsley's Salary, provided that it shall not be reduced after any such
increase, and the term Salary as used in this Agreement shall refer to
the Salary as so increased.
B. Employment Sign-On Payment
--------------------------
ComEd shall pay to Kingsley, no later than December 1, 1997; an
employment sign-on payment of $375,000, provided however, that such
payment shall not be taken into account in determining Kingley's
compensation for purposes of any tax-qualified retirement plan sponsored
by ComEd or the Commonwealth Edison Supplemental Management Retirement
Plan . In the event that Kingsley resigns his employment with ComEd prior
to November 1, 1999, Kingsley agrees promptly to repay $250,000 to ComEd.
C. Incentive Compensation
----------------------
(i) Beginning in 1998, Kingsley shall participate in Unicom
Corporation's Annual Incentive Award Program in accordance with
the terms and conditions thereof; provided, however that for each
of 1998 and 1999, Kingsley shall be guaranteed the target award
under such Program for the applicable year or, if greater, the
actual award for such year.
(ii) Effective immediately, Kingsley shall participate in Unicom
Corporation's Long Term Performance Unit Award Program in
accordance with the terms and conditions thereof; provided,
however that any award payable to Kingsley under such Program
with respect to 1997, 1998 or 1999 will be made as though
Kingsley participated in the Program for the entire cycle with
respect to which such awards are payable.
ComEd may take such deductions, withholdings or payments from sums payable
to Kingsley pursuant to the provisions of this Agreement as are required by law
for taxes and similar charges.
2
6. STOCK AWARDS
------------
ComEd shall make the following stock awards to Kingsley on the date
determined by the Board of Directors of ComEd (the "Grant Date"):
A. A grant of 25,000 non-qualified stock options, one third of which shall
vest on each of the first, second and third anniversaries of the Grant
Date; and
B. A grant of 20,000 shares of restricted stock one-third of which shall
vest on each of the second, third and fourth anniversaries of the date
hereof.
7. LIVING COST ALLOWANCE
---------------------
ComEd shall pay to Kingsley an annual living cost allowance of $75,000
(increased by the amount necessary to reimburse Kingsley for any federal, state,
local or other income taxes payable by Kingsley with respect to (a) the living
cost allowance and (b) the amount paid as reimbursement of any such income
taxes) during the first three years of the Initial Term, which shall be payable
in annual installments commencing December 1, 1997. Any payment made under this
Section 7 shall not be taken into account in determining Kingley's compensation
for purposes of any tax-qualified retirement plan sponsored by ComEd or the
Commonwealth Edison Supplemental Management Retirement Plan.
8. EMPLOYEE BENEFITS
-----------------
During the Initial Term and any subsequent Term, Kingsley shall be eligible
to participate in such ComEd benefit plans as are generally made available to
ComEd peer executives, as those plans may be modified from time to time,
including, but not limited to, medical, dental and vision care benefits, life
insurance, retirement benefits and vacation benefits; provided, however that
Kingsley shall be entitled to paid time off of 30 days per year.
In addition, Kingsley shall be credited with years of service and entitled
to payment under the Commonwealth Edison Supplemental Management Retirement Plan
in accordance with the provisions of Attachment A.
9. NONDISCLOSURE OF EMPLOYER INFORMATION AND NONSOLICITATION
---------------------------------------------------------
Kingsley acknowledges that the successful operation of ComEd's Nuclear
Operations requires substantial time and expense and that such efforts generate
for ComEd valuable and proprietary information, which gives ComEd business
advantages over others who do not have such information. For purposes of this
Agreement, "confidential information" is information which: (a) is known or
reasonably should be known by Kingsley to be confidential; (b) is identified
orally to Kingsley as information that is confidential; or (c) is identified in
writing as information that is confidential. Confidential information includes
but is not limited to information relating to: contracts involved in ComEd's
business, information regarding acquisitions and sales of entities under
consideration by ComEd, and
3
specific contracts with customers of ComEd. Kingsley acknowledges that during
the course of his employment under this Agreement, he will obtain knowledge of
such confidential information, and Kingsley agrees to undertake the following
obligations which he acknowledges to be reasonably designed to protect ComEd's
legitimate business interests without unnecessarily or unreasonably restricting
Kingsley's business opportunities:
A. Upon termination of this Agreement for any reason, regardless of how
such termination may be effected, or whenever requested by ComEd,
Kingsley shall immediately turn over to ComEd all of ComEd's property,
including but not limited to originals and copies of computer
programs, files, notes, records, charts, or other documents or things
containing in whole or in part any of ComEd's confidential
information;
B. During the Initial Term and any subsequent Term, and after termination
of this Agreement for any reason (with or without cause), Kingsley
agrees to forever hold in confidence and not at any time, in any way,
directly or indirectly, to use for his own benefit or the benefit of
some other person, firm, corporation or other entity, or to divulge,
disclose or communicate to any person, firm, corporation or other
entity, any confidential information unless (1) at that time the
information has become, without any action by Kingsley in breach of
this Agreement, generally and lawfully known to the public or in
Kingsley's trade or industry; (2) the information has been disclosed
to a third party by ComEd without restrictions similar to those
contained herein; (3) the information is disclosed by Kingsley
pursuant to the order or requirement of a court or other governmental
body; (4) the information is known to Kingsley before disclosure by
ComEd; or (5) the information becomes lawfully known to Kingsley
independent of, and unrelated to, Kingsley's employment by ComEd; and
C. During the Initial Term and any subsequent Term and for a one year
period from the date of termination of this Agreement for any reason,
Kingsley shall not actively solicit or assist in the active
solicitation of any employee away from ComEd's employ or to in any way
impede the faithful discharge of such ComEd's agent's or employee's
contractual and fiduciary obligations to serve ComEd's interests with
undivided loyalty.
10. OWNERSHIP OF INVENTIONS AND BUSINESS IDEAS
------------------------------------------
Inventions, innovations, or ideas (hereinafter "inventions") that Kingsley
develops or conceives, alone or together with others, belong to ComEd if: they
were conceived or developed at the time Kingsley was employed under this
Agreement; they were financed by ComEd or Kingsley used or relied on ComEd's
resources, materials, facilities, funds, information, agents, or employees; or,
they related to ComEd's business activities and used information that Kingsley
acquired in the course of working for ComEd. Kingsley will assign to ComEd as
its exclusive property the entire right, title and interest in all inventions
that belong to ComEd under this Section 10. Kingsley will keep written records
of all inventions
4
belonging to ComEd under this Section 10 and shall promptly submit those records
to ComEd. Further, Kingsley will execute all papers and provide any other
assistance that ComEd may reasonably request, to enable ComEd or anyone it
designates to obtain, at its expense, patents, copyrights and legal protection
in any country for the inventions which belong to ComEd under this Section 10.
11. BREACH
------
In the event that Kingsley breaches any term of this Agreement including,
without limitation, the provisions set forth in Sections 9 and 10 hereof, the
parties agree that ComEd may seek, but is not obligated to seek, equitable
relief, including, but not limited to, specific performance, as a remedy.
12. TERMINATION
-----------
A. ComEd may immediately terminate this Agreement for "cause" by giving
notice of such termination to Kingsley. Immediately upon receipt of
notice of termination, Kingsley shall no longer be entitled to
participate in the management or other operations of ComEd. "Cause"
shall mean:
(i) Kingsley's material breach of any of the terms of this
Agreement;
(ii) Kingsley's willful commission of acts(s) or omissions(s) which
have, have had, or are likely to have a material adverse effect
on the business, operations, financial condition or reputation
of ComEd;
(iii) Kingsley's conviction (including a plea of guilty or nolo
contendere) of a felony or any crime of fraud, theft,
dishonesty or moral turpitude; or,
(iv) Kingsley's material violation of any statutory or common law
duty of loyalty to ComEd.
If ComEd terminates this Agreement for "cause" as defined above, or
if Kingsley dies, becomes disabled or resigns from his employment
with ComEd other than for "good reason" as defined below, during the
Initial Term or any subsequent Term, Kingsley shall be paid all
accrued compensation and benefits through the date of termination of
employment, death or disability, but shall not be entitled to any
continued Salary, bonuses, or benefits except as required under the
law or under the terms of the benefits plans as in effect on the date
of such termination of employment, death or disability.
B. ComEd may terminate this Agreement at any time for reasons other than
"cause" as defined in this Section 12(A) or Kingsley may resign his
employment with ComEd at any time for "good reason." "Good reason"
shall mean:
5
(i) ComEd's material breach of any of the terms of this Agreement;
(ii) A material reduction of Kingsley's Salary, incentive
compensation or benefits; or
(iii) A material reduction or adverse alteration in the nature of
Kingsley's position, responsibilities or authority, or
Kingsley's becoming the holder of a lesser office or title than
that provided under this Agreement.
If ComEd terminates this Agreement for reasons other than "cause" or
if Kingsley resigns for "good reason":
(i) ComEd shall pay to Kingsley all accrued compensation (Salary and
incentive pay) and benefits through the date of termination of
employment;
(ii) ComEd shall pay to Kingsley a lump sum amount equal to his then
current Salary;
(iii) Any unvested shares of restricted stock granted pursuant to this
Agreement shall immediately become fully vested and
nonforfeitable;
(iv) Kingsley shall receive executive outplacement assistance from a
firm of Kingsley's selection; and
(v) ComEd shall continue to provide, at its expense, the health care
and life insurance coverage Kingsley has elected under ComEd's
health care and group term life insurance plans for a period of
twelve months beginning on the date of termination of
employment; provided that continuation coverage under this
Section 12(B) shall be in lieu of any continuation coverage to
which Kingsley would be entitled under applicable law.
In the event of a termination of employment under this Section 12(B),
the compensation and benefits provided to Kingsley hereunder shall be
his sole remedy and Kingsley shall not be entitled to any additional
compensation or benefits except as required under applicable law or
under the terms of the ComEd benefit plans as in effect on the date of
termination.
13. ASSIGNMENT AND SURVIVAL OF OBLIGATIONS
--------------------------------------
A. Kingsley acknowledges that his services are unique and personal.
Accordingly, Kingsley may not assign his rights or delegate his duties
or obligations under this Agreement, and all of Kingsley's rights and
obligations shall terminate
6
upon Kingsley's death other than such compensation and benefits as
have accrued on or before his death.
B. ComEd's rights and obligations under this Agreement shall inure to the
benefit of and shall be binding upon ComEd's successors and assigns.
C. Kingsley agrees that all obligations under this Agreement that survive
by their terms shall survive the termination of his employment with
ComEd.
14. ENTIRE AGREEMENT
----------------
This Agreement contains the entire understanding of the parties, and
supersedes all prior written or oral agreements or understandings. This
Agreement may be modified only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification, extension, or
discharge is sought.
15. DISPUTE RESOLUTION
------------------
ComEd shall be entitled to seek injunctive relief for any violation of the
provisions of Sections 9 and 10 of this Agreement. All other disputes that
relate in any way to Kingsley's employment or to the provisions of this
Agreement shall be resolved by binding arbitration held in the State of Illinois
pursuant to the rules of the American Arbitration Association.
16. COUNTERPARTS
------------
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.
17. NO WAIVER
---------
Either party's failure to insist upon strict compliance with any of the
terms, conditions or covenants expressed in this Agreement shall not be deemed a
waiver of such term, condition or covenant, or any other term, condition or
covenant, nor shall any waiver or relinquishment of any right or power under
this Agreement at one time or times be deemed a waiver or relinquishment of such
right or power or any other right or power at any other time or times.
18. APPLICABLE LAW
--------------
This Agreement shall be governed by and construed in accordance with the
laws of the State of Illinois.
7
19. NOTICES
-------
All notices required or permitted under this Agreement shall be deemed to
have been duly given and made if in writing and if served either by personal
delivery to the party to whom intended or by being deposited, postage paid,
certified or registered mail, return receipt requested, in the United States
mail. Notices to Kingsley shall be addressed to the personal address that
Kingsley provides to ComEd. Notices to ComEd should be sent to Pamela B.
Strobel, Vice President and General Counsel, Commonwealth Edison Company, One
First National Plaza, 10 S. Dearborn, 37th Floor, Chicago, Illinois 60603.
20. SAVINGS CLAUSE
--------------
Whenever possible, each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law; but if any
provision of this Agreement is held to be prohibited by or invalid under
applicable law, such provision will be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
Kingsley has read, understands, and accepts all of the provisions in this
Agreement and in all documents incorporated herein.
IN WITNESS WHEREOF, the parties have executed this Agreement.
Employer: Employee:
COMMONWEALTH EDISON COMPANY
By:__________________________________ __________________________
James J. O'Connor Oliver D. Kingsley, Jr.
Chairman & Chief Executive Officer
Date: October ___________, 1997 Date: October ___________, 1997
8
ATTACHMENT A
For purposes of determining Kingsley's Credited Service under the
Commonwealth Edison Company Supplemental Management Retirement Plan (the
"Plan"), Kingsley shall be credited with years of service in accordance with the
following schedule:
Years of Employment Years of Credited Service
------------------- -------------------------
Less than 2 0
2 but less than 3 15
3 but less than 4 20
4 but less than 5 25
5 or more Additional service determined in
accordance with the terms of the Plan
If, prior to the date Kingsley would be eligible to receive an annuity
under the Commonwealth Edison Service Annuity System (the "Service Annuity
System"), Kingsley (a) becomes entitled to payment under the Plan, or (b) dies
while employed, then, as applicable, Kingsley shall be entitled to elect payment
in the form of a service annuity or a marital annuity, or his surviving spouse
shall be immediately entitled to a surviving spouse benefit , any of which shall
be determined as though he (or his surviving spouse) were entitled to such
annuities under the Service Annuity System, taking into account Kingsley's
service as credited above.