EXHIBIT 10-30
SECOND AMENDED AND RESTATED
EXELON CORPORATION
KEY MANAGEMENT
SEVERANCE PLAN
SECOND AMENDED AND RESTATED
EXELON CORPORATION
KEY MANAGEMENT SEVERANCE PLAN
1. AMENDMENT AND RESTATEMENT; PURPOSE OF THE PLAN
The Unicom Corporation Key Management Severance Plan (as amended and
restated, the "Plan") was established, effective June 15, 1998, by Unicom
Corporation ("Unicom") to provide certain key employees of Commonwealth Edison
Company ("ComEd") and other subsidiaries of Unicom (jointly and severally
referred to herein as the "Company" prior to October 20, 2000) certain severance
benefits in the event the employment of such employees terminates under the
circumstances described herein. The Plan was amended and restated, effective
March 8, 1999, to reflect a policy approved by the Board of Directors of the
Company which provides benefits in the event a key employee's employment is
terminated by the Company other than for Cause or the employee resigns for Good
Reason within 24 months following a Change in Control of the Company.
The Plan was further amended, effective October 20, 2000 (the "Merger
Effective Date"), to reflect the merger of Unicom Corporation with PECO Energy
Company. From and after the Merger Effective Date, Exelon Corporation ("Exelon")
and any subsidiary thereof of which Exelon owns at least 50% of all of the
outstanding voting power are jointly and severally referred to herein as the
"Company".
The Plan was further amended and restated effective June 1, 2001
("Restatement Date"), to reflect a policy approved by the Board of Directors of
Exelon which provides additional protection in the event of a new Change in
Control of Exelon or an Imminent Control Change of Exelon. The Plan, as so
amended and restated, shall apply solely to persons who satisfy the applicable
eligibility criteria in Section 2 and all the criteria for participation in
Section 3.
This document serves as both the Plan document and the summary plan
description which is required to be provided to participants under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
2. ELIGIBILITY
1.1 Eligibility in General. In order to be eligible to become a
Participant, each individual whose position is in Salary Band VII or
above (an "Executive") must execute non-competition, non-solicitation,
confidential information and intellectual property covenants
("Restrictive Covenants") which are substantially in the form attached
hereto and made a part hereof as Exhibit I.
1.2 Benefits Provided Under Section 4. Each Executive shall be eligible
for the benefits provided under Section 4 hereof in the event such
Executive has a Termination of Employment; provided, however, that any
Executive whose Termination of Employment is covered under Section 5
hereof or who is entitled to benefits under a change in control
agreement entered into after October 20, 2000 between such Executive
and the Company ("Individual Change in Control Agreement") shall not be
entitled to benefits under
Section 4, except as expressly provided in Section 5 or such Individual
Change in Control Agreement (which expressly refers to the benefits
under Section 4 of this Plan), until such Executive is no longer
eligible for benefits under Section 5 or under such Individual Change
in Control Agreement, as applicable.
1.3 Benefits Provided Under Section 5. Eligibility for the benefits
provided under Section 5 hereof due to a Termination of Employment
during the Current Post-Merger Period shall be limited to Executives
who, (i) on the day prior to the Merger Effective Date, were on the
payroll of a Unicom subsidiary or PECO Energy Company, and (ii) execute
an acceptance of substitution of the benefits under the Plan as it
existed on the day prior to the Restatement Date or of the benefits
under an individual Change in Control Agreement between the Executive
and PECO Energy Company entered into prior to the Merger Effective Date
(a "PECO Agreement"), as applicable, for the benefits under the Plan as
it exists on and after the Restatement Date (the "Acceptance of
Substitution") in a form satisfactory to the Company. Any otherwise
eligible Executive who is required, but declines, to execute an
Acceptance of Substitution under Section 3 shall be covered with
respect to a Termination of Employment occurring during the Current
Post-Merger Period solely under the terms of Section 5 of the Plan as
in effect immediately prior to the Restatement Date or under the terms
of such Executive's PECO Agreement, as applicable, and shall not
thereafter be eligible for benefits under Section 5 of the Plan in the
event of a Change in Control or Imminent Control Change. In all events,
benefits provided under Section 5 hereof shall be subject to the
provisions of any agreement between an Executive and the Company that
provided that such Executive would be ineligible for the benefits under
Section 5 or "change in control benefits" in the event of a termination
of employment, or under which the Executive had agreed, prior to the
Merger Effective Date or Restatement Date, to terminate his or her
employment.
3. PARTICIPATION
Each eligible Executive shall become a participant in the Plan
("Participant") upon his or her execution of an agreement with the Company in
such form as the Company, in its sole discretion, shall require or permit (the
"Severance Agreement"). Each Executive shall also be required to execute, no
later than the date of the Participant's Termination of Employment or, if later,
such date indicated by the Plan Administrator which shall be no less than 45
days after the date the Executive is provided with a copy of a Severance
Agreement, a waiver and release of claims against the Company ("Waiver and
Release") which is substantially in the form attached hereto and made a part
hereof as Exhibit II. The Company shall have no obligation to Executive under
this Plan unless and until Executive executes the Restrictive Covenants, a
Severance Agreement, Acceptance of Substitution (if applicable) and a Waiver and
Release. If a court determines that Executive has breached any Restrictive
Covenant, the Company shall not be obligated to pay or provide any severance pay
or other benefits under Section 4 or 5 of this Plan, all unexercised Stock
Options shall terminate as of the date of such breach, and all Restricted Stock
shall be forfeited as of the date of such breach.
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4. BENEFITS
If a Participant is entitled to benefits under Section 5, then such
Participant shall not be eligible for benefits under this Section 4 unless so
expressly provided in Section 5. Subject to the preceding sentence, benefits
under the Plan shall be those described in this Section 4; provided, however,
that if, under the terms of an offer of employment or employment agreement with
the Company, a Participant would be entitled to additional benefits (e.g., years
of credited service and/or age under a SERP, or other special termination
provisions), the terms of such offer of employment or other agreement shall be
incorporated into any Severance Agreement hereunder, provided further, however,
that if, under the terms of any such offer of employment or employment agreement
with the Company, a Participant would be entitled to benefits which, in
aggregate, exceed the value of benefits under the Plan, the terms of such offer
of employment or other agreement shall control and no payments or benefits shall
be provided under this Plan.
1.4 Severance Pay. Each Participant shall receive severance pay at a
monthly rate equal to 1/12 of the sum of (a) the Participant's annual
base salary in effect as of the date of Termination of Employment ,
plus (b) the Severance Incentive. Payment shall be made biweekly for
the duration of the applicable Salary Continuation Period, as indicated
below, commencing no later than the second paydate which occurs after
the date of the Participant's Termination of Employment, but in no
event earlier than the date which is eight days after the date the
Participant returns an executed Waiver and Release to the Plan
Administrator. Payment will be made in accordance with the Company's
normal payroll practices, net of applicable taxes and other deductions.
Participant Title Salary Continuation Period
Senior Vice President and above 24 months
Other Officers and Executives 15 months
1.5 Annual Incentive Awards. Each Participant shall receive a Target
Incentive which shall be prorated by multiplying the amount of such
Target Incentive by a fraction the numerator of which is the number of
days elapsed during such calendar year as of the date of such
Termination of Employment and the denominator of which is 365. Payment
of Target Incentives under this Section 4.2 shall be made in a lump sum
net of applicable taxes and other deductions no earlier than the date
which is eight days after the date the Participant returns an executed
Waiver and Release to the Plan Administrator.
1.6 Stock Options. No Participant shall be entitled to participate in
any grants of Stock Options (as defined in Section 5.1(b)) made after
such Participant's Termination of Employment. Except as provided below,
any Stock Options granted to a Participant prior to such Participant's
Termination of Employment shall be exercisable only to the extent such
Stock Options are exercisable as of the date of such Termination of
Employment and shall thereafter be exercised in accordance with the
provisions of the LTIP. Stock Options which remain unexercisable as of
the date of a Participant's Termination of Employment shall be
forfeited. Notwithstanding the preceding, if, as of the date of a
Participant's Termination of Employment (or, if later, the last day of
such Participant's
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Salary Continuation Period), such Participant has attained at least age
50 (but not age 55) and completed at least 10 years of service as
defined under any defined benefit plan maintained by an Employer (a
"Pension Plan") (or who, pursuant to the terms of an offer of
employment or employment agreement or under any provision of a Pension
Plan or SERP, is credited with a number of additional years of age
and/or service that would enable such Participant to satisfy the above
eligibility requirements), then any Stock Options granted to such
Participant which have not become exercisable prior to the date of the
Termination of Employment shall (i) become fully vested, and (ii)
remain exercisable until (1) the option expiration date for any such
Stock Options granted prior to January 1, 2002 or (2) the fifth
anniversary of the Termination Date or, if earlier, the option
expiration date for any such Stock Options granted on or after January
1, 2002.
1.7 Other LTIP Awards. Awards of Performance Shares and/or Restricted
Stock (as defined in Sections 5.1(c) and 5.1(d), respectively) shall be
payable to a Participant to the extent provided under the terms of such
Awards.
1.8 Health Care Coverage. During the Salary Continuation Period, a
Participant shall continue to participate in the health care plans
under which he or she was covered immediately prior to his or her
Termination of Employment. The Participant's out of pocket costs
(including premiums, deductibles and co-payments) for such coverage
shall be the same as that in effect from time to time for active peer
employees during such period. Coverage under this Paragraph 4.4 shall
be provided for the duration of the Salary Continuation Period in lieu
of continuation coverage under Section 4980B of the Code and Section
601 to 609 of ERISA ("COBRA") for the same period. At the end of the
Salary Continuation Period, COBRA continuation coverage may be elected
for the remaining balance of the statutory coverage period, if any;
provided, however that a Participant who, as of the last day of the
Salary Continuation Period has attained at least age 50 (but not age
55) and completed at least 10 years of service under the terms of any
Pension Plan (or who, pursuant to the terms of an offer of employment
or employment agreement or under any provision of a Pension Plan or
SERP, is credited with a number of additional years of age and/or
service that would enable such Participant to satisfy the above
eligibility requirements) shall be entitled to elect retiree health
coverage under the Company's health care plans on the same terms and
subject to the same conditions as active peer employees who have
attained age 55 and are eligible to begin receiving early retirement
benefits under the Pension Plan.
1.9 Retirement Plans. During the Salary Continuation Period, a
Participant shall accrue credited service under the SERP. The amount of
any payment made under Section 4.1 to the Participant during such
period shall be taken into account as compensation for purposes of the
SERP, and each Participant may also elect to participate in the Exelon
Corporation Deferred Compensation Plan during the Salary Continuation
Period with respect to the portion of any such payment which is
attributable to base salary. A Participant in the Plan shall not accrue
service or otherwise actively participate in any tax-qualified
retirement or savings plan sponsored by the Company during the Salary
Continuation Period, and shall not be entitled to commence to receive
benefits under any such plan until after the expiration of the Salary
Continuation Period.
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1.10 Life Insurance and Disability Coverage. Continued coverage under
the life insurance and long term disability plans sponsored by the
Company shall be extended to each Participant through the last day of
the Salary Continuation Period applicable to such Participant on the
same terms and subject to the same conditions as are applicable to
active peer employees.
1.11 Deferred Compensation Plans. The elections, if any, made by an
Executive under any non-qualified deferred compensation plan sponsored
by the Company shall remain in effect through the last day of such
participant's Salary Continuation Period, but such individual shall not
be entitled to make any deferral additional elections with respect to
such plans after December 31 of the year in which occurs the
Participant's Termination of Employment.
1.12 Executive Perquisites. Executive perquisites shall terminate
effective as of the date of a Participant's Termination of Employment,
and any Company-owned property shall be required to be returned to the
Company no later than such date; provided, however, that each
Participant who is an officer of the Company and who is retiring at the
end of the Salary Continuation Period shall be entitled to financial
counseling services for a period of 24 months following the date of
such Participant's Termination of Employment.
(a) Outplacement Services. Each Participant shall be entitled
to outplacement services at the expense of the Company for
such period (which shall not be less than six months) and
subject to such terms and conditions as the Plan
Administrator, in its sole discretion, determines are
appropriate. No cash shall be paid in lieu of such fees and
costs.
5. CHANGE IN CONTROL BENEFITS
A Participant described in Section 2.2 who is not subject to an
Individual Change in Control Agreement shall be entitled to benefits pursuant to
this Section 5 if such a Participant has a Termination of Employment during the
Current Post-Merger Period (subject to Section 2.3), Post-Change Period or
Imminent Control Change Period, and such Participant shall not be eligible for
benefits under Section 4 unless so expressly provided in this Section 5;
provided, however, that if, under the terms of an offer of employment or
employment agreement with the Company, a Participant would be entitled to
benefits which exceed the level of benefits under the Plan, the terms of such
offer of employment or other agreement shall control and no payments or benefits
shall be provided under this Plan to the extent that such payment or benefits
would reasonably be considered, by the Plan Administrator, duplicative.
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1.13 Termination During the Current Post-Merger Period or Post-Change
Period. If, during the Current Post-Merger Period or Post-Change
Period, an eligible Executive has a Termination of Employment and
becomes a Participant, the Company's sole obligations under Section 4
and Sections 5.1 and 5.2 shall be as set forth in this Section 5.1
(subject to Section 5.3, 5.5, 5.6, 5.7 and 5.8).
(a) Severance Payments. The Company shall pay or provide (or
cause to be provided) such Participant, according to the
payment terms set forth in Section 5.3 below, the following:
(i) Accrued Obligations. All Accrued Obligations;
(ii) Annual Incentive for Year of Termination. An
amount equal to the Target Incentive applicable to
such Participant under the Incentive Plan for the
performance period in which the Termination Date
occurs;
(iii) Deferred Compensation and Non-Qualified Defined
Contribution Plans. All amounts previously deferred
by, or accrued to the benefit of, such Participant
under the Exelon Corporation Deferred Compensation
Plan, the Exelon Corporation Deferred Stock Plan, any
successor of either of them, or under any other
non-qualified defined contribution or deferred
compensation plan of the Company (unless such
Participant has made an irrevocable election in
writing, filed with the Company no more than 60 days
after the Applicable Trigger Date (or such earlier
date as counsel to the Company may deem to be
required to avoid constructive receipt of such
amounts), and in any event at least 90 days prior to
the Termination Date to have such amounts paid under
the terms of the Exelon Corporation Deferred
Compensation Plan or the Exelon Corporation Deferred
Stock Plan, as applicable, any successor of either or
under any other non-qualified defined contribution or
deferred compensation plan of the Company (including
any elections in effect thereunder)) whether vested
or unvested, together with any accrued earnings
thereon, to the extent that such amounts and earnings
have not been previously paid by the Company and are
not provided under the terms of any such
non-qualified plan;
(iv) Pension Enhancements. An amount equal to the
positive difference, if any, between
(1) the lump sum value of such Participant's
benefit under the SERP, calculated as if
such Participant had
(a) become fully vested in all
benefits,
(b) attained as of the Termination
Date an age that is two years
greater than such Participant's
actual age and that includes the
number of years of age credited to
such Participant pursuant to any
other agreement between the Company
and such Participant,
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(c) accrued a number of years of
service (for purposes of
determining the amount of such
benefits, entitlement to - but not
commencement of - early retirement
benefits, and all other purposes of
such defined benefit plans) that is
two years greater than the number
of years of service actually
accrued by such Participant as of
the Termination Date and that
includes the number of years of
service credited to such
Participant pursuant to any other
agreement between the Company and
such Participant, and
(d) received the severance benefits
specified in Sections 5.1(a)(ii)
and 5.1(a)(vi) as covered
compensation in equal monthly
installments during the Severance
Period, minus
(2) the aggregate amounts paid or payable to
such Participant under the SERP;
(v) Unvested Benefits Under Defined Benefit Plan. To
the extent not paid pursuant to clause (iii) or (iv)
of this Section 5.1(a), an amount equal to the
actuarial equivalent present value of the unvested
portion of such Participant's accounts or accrued
benefits under any tax-qualified (under Section
401(a) of the Code) defined benefit retirement plan
maintained by the Company as of the Termination Date
and forfeited by such Participant by reason of the
Termination of Employment; and
(vi) Multiple of Salary and Severance Incentive. An
amount equal to two (2) times the sum of (x) Base
Salary plus (y) the Severance Incentive.
(b) Stock Options. Each of such Participant's stock options,
stock appreciation rights or similar incentive awards granted
under the LTIP ("Stock Options") shall (i) become fully
vested, and (ii) remain exercisable until (1) the option
expiration date for any such Stock Options granted prior to
January 1, 2002 or (2) the fifth anniversary of the
Termination Date or, if earlier, the option expiration date
for any such Stock Options granted on or after January 1,
2002.
(c) LTIP Vesting. On the Termination Date, all of the
performance shares, performance units or similar stock
incentive awards granted to such Participant under the Exelon
Performance Share Program under the LTIP ("Performance
Shares") to the extent earned by and awarded to such
Participant (i.e. as to which the first year of the
performance cycle has elapsed) as of the Termination Date,
shall become fully vested at the actual level earned and
awarded, and, to the extent not yet earned by and awarded to
such Participant (i.e. as to which the first year of the
performance cycle has not elapsed) as of the Termination Date,
shall become fully vested at the LTIP Target Level.
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(d) Other Restricted Stock. All forfeiture conditions that as
of the Termination Date are applicable to any deferred stock
unit, restricted stock or restricted share units awarded to
such Participant by Exelon other than under the Exelon
Performance Share Program under the LTIP ("Restricted Stock")
shall lapse immediately and all such awards will become fully
vested, and within ten business days after the Termination
Date, Exelon shall deliver or cause to be delivered to such
Participant all of such shares theretofore held by or on
behalf of Exelon.
(e) Continuation of Welfare Benefits. During the Severance
Period and continuing through such later date as may be
specified in any welfare plan of the Company (including
medical, prescription, dental, disability, employee life,
group life, accidental death, and travel accident insurance
benefits but excluding any severance pay) ("Welfare Plan")
that covered the Participant or such Participant's family
prior to such Participant's Termination of Employment, the
Company shall continue to provide (or shall cause the
continued provision) to such Participant and such
Participant's family welfare benefits under the Welfare Plans
to the same extent as if such Participant had remained
employed during the Severance Period. Such provision of
welfare benefits shall be subject to the following:
(i) In determining benefits applicable under such
Welfare Plans, such Participant's annual compensation
attributable to base salary and incentives for any
plan year or calendar year, as applicable, shall be
deemed to be not less than such Participant's Base
Salary and annual incentive.
(ii) The cost of such welfare benefits to such
Participant and family under this Section 5.1(e)
shall not exceed the cost of such benefits to peer
executives who are actively employed after the
Termination Date.
(iii) Such Participant's rights under this Section
5.1(e) shall be in addition to and not in lieu of any
post-termination continuation coverage or conversion
rights such Participant may have pursuant to
applicable law, including, without limitation,
continuation coverage required by COBRA.
(iv) If such Participant has, as of the last day of
the Severance Period, attained age 50 and completed
at least 10 years of service with the Company (five
years with respect to any Termination of Employment
occurring during the Current Post-Merger Period),
such Participant shall be entitled to the retiree
benefits provided under any Welfare Plan of the
Company; provided, however, that for purposes hereof,
any years of age and/or credited service granted to
such Participant in any other plan or agreement
between such Participant and the Company shall be
taken into account. For purposes of determining
eligibility for (but not the time of commencement of)
such retiree benefits, such Participant shall also be
considered (1) to have remained employed until the
last day of the Severance Period and to have retired
on the last day of such period, and
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(2) to have attained at least the age such
Participant would have attained on the last day of
the Severance Period.
Notwithstanding the foregoing, if such Participant obtains a
specific type of coverage under welfare plan(s) sponsored by
another employer of such Participant (e.g. medical,
prescription, vision, dental, disability, individual life
insurance benefits, group life insurance benefits, but
excluding for the purposes of this sentence retiree benefits
if such Participant is so eligible), then the Company shall
not be obligated to provide any such specific type of
coverage.
(f) Outplacement. To the extent actually incurred by such
Participant, the Company shall pay or cause to be paid on
behalf of such Participant, as incurred, all reasonable fees
and costs charged by a nationally recognized outplacement firm
selected by such Participant for outplacement services
provided for up to 12 months after the Termination Date. No
cash shall be paid in lieu of such fees and costs.
(g) Indemnification. Such Participant shall be indemnified and
held harmless by the Company to the greatest extent permitted
under applicable law as the same now exists or may hereafter
be amended (but, in the case of any such amendment, only to
the extent that such amendment permits the Company to provide
broader indemnification than was permitted prior to such
amendment) and the Company's by-laws as such exist on the
Restatement Date if such Participant was, is, or is threatened
to be, made a party to any pending, completed or threatened
action, suit, arbitration, alternate dispute resolution
mechanism, investigation, administrative hearing or any other
proceeding whether civil, criminal, administrative or
investigative, and whether formal or informal, by reason of
the fact that such Participant is or was, or had agreed to
become, a director, officer, employee, agent, or fiduciary of
the Company any other entity which such Participant is or was
serving at the request of the Company ("Proceeding"), against
all expenses (including all reasonable attorneys' fees) and
all claims, damages, liabilities and losses incurred or
suffered by such Participant or to which such Participant may
become subject for any reason. Upon receipt from such
Participant of (i) a written request for an advancement of
expenses, which such Participant reasonably believes will be
subject to indemnification hereunder and (ii) a written
undertaking by such Participant to repay any such amounts if
it shall ultimately be determined that such Participant is not
entitled to indemnification under this Plan or otherwise, the
Company shall advance such expenses to such Participant or pay
such expenses for such Participant, all in advance of the
final disposition of any such matter.
(h) Directors' and Officers' Liability Insurance. For a period
of six years after the Termination Date (or for any known
longer applicable statute of limitations period), the Company
shall provide such Participant with coverage under a
directors' and officers' liability insurance policy in an
amount no less than, and on terms no less favorable than,
those provided to senior executive officers and directors of
the Company on the Applicable Trigger Date.
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1.14 Termination During an Imminent Control Change Period. If, during
an Imminent Control Change Period, a Participant has a Termination of
Employment, then, unless such Termination of Employment occurred during
the Current Post-Merger Period, such Participant shall receive benefits
as provided in Section 4 and the Company's sole obligations to such
Participant under Sections 5.1 and 5.2 shall be as set forth in this
Section 5.2 (and subject to Sections 5.3, 5.5, 5.6, 5.7 and 5.8). The
Company's obligations to such Participant under this Section 5.2 shall
be reduced by any amounts or benefits paid or provided pursuant to
Section 4. If such Participant's Termination of Employment occurred
during any portion of an Imminent Control Change Period that is also
the Current Post-Merger Period, the Company's obligations to such
Participant, if any, shall be determined under Section 5.1.
(a) Cash Severance Payments. If the Imminent Control Change
Period culminates in a Change Date, the Company shall pay (or
cause to be paid) to such Participant, a lump-sum cash amount,
within thirty business days after the later of the Termination
Date or the Change Date, equal to the sum of all amounts
described in Section 5.1(a)(i) through (v). The amount
described in Section 5.1(a)(vi) shall be paid to such
Participant as described in Section 5.3, provided that amounts
that would have been paid prior to the Change Date shall be
paid in a lump sum (without interest) within 30 business days
after the Change Date.
(b) Vested Stock Options. Such Participant's Stock Options, to
the extent vested on the Termination Date,
(i) will not expire (unless such Stock Options would
have expired had such Participant remained an
employee of the Company) during the Imminent Control
Change Period; and
(ii) will continue to be exercisable after the
Termination Date to the extent provided in the
applicable grant agreement or the LTIP, and
thereafter, such Stock Options shall not be
exercisable during the Imminent Control Change
Period.
If the Imminent Control Change Period lapses without a Change
Date, then such Participant's Stock Options, to the extent
vested on the Termination Date, may be exercised, in whole or
in part, during the 30-day period following the lapse of the
Imminent Control Change, or, if larger, the period during
which such Participant's vested Stock Options could otherwise
be exercised under the terms of the applicable grant agreement
or the LTIP (but in no case shall any Stock Options remain
exercisable after the date on which such Stock Options would
have expired if such Participant had remained an employee of
the Company).
If the Imminent Control Change Period culminates in a Change
Date, then effective upon the Change Date, such Participant's
Stock Options, to the extent vested on the Termination Date,
may be exercised in whole or in part by such Participant at
any time until (1) the option expiration date for such Stock
Options granted prior to January 1, 2002 or (2) the earlier of
the fifth anniversary of the
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Change Date or the option expiration date for such Stock
Options granted on or after January 1, 2002.
(c) Unvested Stock Options. Such Participant's Stock Options
that are not vested on the Termination Date
(i) will not expire (unless such Stock Options would
have expired had such Participant remained an
employee of the Company) during the Imminent Control
Change Period; and
(ii) will not continue to vest and will not be
exercisable during the Imminent Control Change Period
after the expiration of the period for
post-termination exercise under the terms of the
applicable Stock Option agreement.
If the Imminent Control Change lapses without a Change Date,
such unvested Stock Options will thereupon expire.
If the Imminent Control Change culminates in a Change Date,
then immediately prior to the Change Date, such unvested Stock
Options shall become fully vested, and may thereupon be
exercised in whole or in part by such Participant at any time
until (1) the option expiration date for such Stock Options
granted prior to January 1, 2002 or (2) the earlier of the
fifth anniversary of the Change Date, or the option expiration
date for such Stock Options granted on or after January 1,
2002.
(d) Performance Shares. Such Participant's Performance Shares
granted under the Exelon Performance Share Program under the
LTIP will not be forfeited during the Imminent Control Change
Period, and will not continue to vest during the Imminent
Control Change Period. If the Imminent Control Change lapses
without a Change Date, such Performance Shares shall be
governed according to the terms of Section 4. If the Imminent
Control Change Period culminates in a Change Date:
(1) All Performance Shares granted to such
Participant under the Exelon Performance
Share Program under the LTIP, which, as of
the Termination Date, have been earned by
and awarded to such Participant, shall
become fully vested at the actual earned
level on the Change Date, and
(2) All of the Performance Shares granted to
such Participant under the Exelon
Performance Share Program under the LTIP
which, as of the Termination Date, have not
been earned by and awarded to such
Participant shall become fully vested on the
Change Date at the LTIP Target Level.
(e) Restricted Stock. Such Participant's unvested Restricted
Stock will:
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(i) not be forfeited during the Imminent Control
Change Period; and
(ii) not continue to vest during the Imminent Control
Change Period.
If the Imminent Control Change Period lapses without a Change
Date, such unvested Restricted Stock shall thereupon be
forfeited.
If the Imminent Control Change Period culminates in a Change
Date, then immediately prior to the Change Date, such
Participant's Restricted Stock shall become fully vested, and
within ten business days after the Change Date, the Company
shall deliver to such Participant all of such shares
theretofore held by or on behalf of the Company, which will be
subject to the same terms which other stockholders of the
Company receive in the transaction.
(f) Continuation of Welfare Benefits. The Company shall
continue to provide (or cause to be provided) to such
Participant and such Participant's family welfare benefits
(other than any severance pay that may be considered a welfare
benefit) that covered the Participant or such Participant's
family prior to such Participant's Termination of Employment,
during the Imminent Change Period which are at least as
favorable as welfare benefits under the most favorable Welfare
Plans of the Company applicable with respect to peer
executives who are actively employed by the Company after the
Termination Date and their families; subject to the following:
(i) in determining benefits applicable under such
Welfare Plans, such Participant's annual compensation
attributable to base salary and incentives for any
plan year or calendar year, as applicable, shall be
deemed to be not less than such Participant's Base
Salary and annual incentive;
(ii) the cost of such welfare benefits to such
Participant and family under this Section 5.2(f)
shall not exceed the cost of such benefits to peer
executives who are actively employed by the Company
after the Termination Date; and
(iii) such Participant's rights under this Section
5.2(f) shall be in addition to and not in lieu of any
post-termination continuation coverage or conversion
rights such Participant may have pursuant to
applicable law, including, without limitation,
continuation coverage required by COBRA.
If the Imminent Control Change Period lapses without a Change
Date, welfare benefit plan coverage under this Section 5.2(f)
shall thereupon cease, subject to such Participant's rights,
if any, to continued coverage under a Welfare Plan, Section 4,
or applicable law. If the Imminent Control Change Period
culminates in a Change Date, then for the remainder of the
Severance Period (and continuing through such later date as
any Welfare Plan may specify), the Company shall continue to
provide such Participant and such Participant's family welfare
benefits as described in, and subject to the limitations of
Section 5.1(e).
- 12 -
Notwithstanding the foregoing, if such Participant obtains a
specific type of coverage under welfare plan(s) sponsored by
another employer of such Participant (e.g. medical,
prescription, vision, dental, disability, individual life
insurance benefits, group life insurance benefits, but
excluding for the purposes of this sentence retiree benefits
if such Participant is so eligible), then the Company shall
not be obligated to provide such any specific type of
coverage.
(g) Outplacement. To the extent actually incurred by such
Participant, the Company shall pay or cause to be paid on
behalf of such Participant, as incurred, all reasonable fees
and costs charged by a nationally recognized outplacement firm
selected by such Participant for outplacement services
provided for up to 12 months after the Termination Date. No
cash shall be paid in lieu of such fees and costs.
(h) Indemnification. Such Participant shall be indemnified and
held harmless by the Company to the same extent as provided in
Section 5.1(g), but only during the Imminent Control Change
Period (or greater period provided under the Company's
by-laws) if the Imminent Control Change Period lapses without
a Change Date.
(i) Termination During an Imminent Control Change Period:
Directors' and Officers' Liability Insurance. The Company
shall provide the same level of directors' and officers'
liability insurance for such Participant as provided in
Section 5.1(h), but only during the Imminent Control Change
Period (or greater period provided under the Company's
by-laws) if the Imminent Control Change Period lapses without
a Change Date.
5.3 Timing of Severance Payments. Unless otherwise specified herein,
the amounts described in Sections 5.1(a)(i), (ii), (iii), (iv) and (v)
shall be paid within 30 business days of the Termination Date. The
severance payments described in Section 5.1(a)(vi) shall be paid
beginning no later than the second paydate which occurs after the
Termination Date, in periodic payments to a Participant according to
the Company's normal payroll practices at a monthly rate equal to 1/12
of the sum of (i) such Participant's Base Salary in effect as of the
Termination Date plus (ii) the Severance Incentive.
5.4 Other Terminations of Employment by the Company or a Participant.
(a) Obligations. If, during the Current Post-Merger Period,
the Post-Change Period, or the Imminent Control Change Period,
(i) the Company terminates an eligible Executive's employment
for Cause (or causes a Participant to be terminated for Cause)
("Cause Termination") or disability (as determined by the Plan
Administrator in good faith), (ii) an Executive elects to
retire or otherwise terminate employment other than for Good
Reason, disability or death, or (iii) an eligible Executive's
employment terminates on account of death or disability, the
Company shall have no obligations to such Executive under
Section 5 (subject to Section 5.7). The remaining applicable
provisions of this Plan (including the Restrictive Covenants)
shall continue to apply.
- 13 -
(b) Procedural Requirements. The Company shall strictly
observe or cause to be strictly observed each of the following
procedures in connection with any Cause Termination during the
Current Post-Merger Period, the Post-Change Period or the
Imminent Control Change Period: an eligible Executive's
termination of employment shall not be deemed to be for Cause
under this Section 5.4 unless and until there shall have been
delivered to such Executive a written notice of the
determination of the Chief Executive Officer of the
Executive's employer ("CEO") (after reasonable written notice
of such consideration by the CEO of acts or omissions alleged
to constitute Cause is provided to such Executive and such
Executive is given an opportunity to present a written
response to the CEO regarding such allegations), finding that,
in his or her good faith opinion, such Executive's acts, or
failure to act, constitutes Cause and specifying the
particulars thereof in detail.
5.5 Sole and Exclusive Obligations. The obligations of the Company
under this Plan with respect to any Termination of Employment occurring
during the Current Post-Merger Period, Post-Change Period, or Imminent
Control Change Period shall supersede any severance obligations of the
Company in any other plan of the Company or agreement between such
Participant and the Company, including, without limitations, Section 4,
any Individual Change in Control Agreement affecting such Participant
or any other plan or agreement (including an offer of employment or
employment contract) of the Company which provides for severance
benefits, except as explicitly provided in Section 5.2 or an Individual
Change in Control Agreement. In the event of any inconsistency,
ambiguity or conflict between the terms of such other plan of the
Company or agreement between a Participant and the Company, and this
Plan with respect to any severance obligations of the Company (other
than obligations with respect to age and/or credited service under the
SERP in any agreement other than a prior Individual Change in Control
Agreement), this Plan shall govern.
5.6 Payment Capped. If at any time or from time to time, it shall be
determined by the Company's independent auditors that any payment or
other benefit to a Participant pursuant to Section 5 of this Plan or
otherwise ("Potential Parachute Payment") is or will become subject to
the excise tax imposed by Section 4999 of the Code or any similar tax
payable under any United States federal, state, local, foreign or other
law ("Excise Taxes"), then the Potential Parachute Payments payable to
such Participant shall be reduced to the largest amount which would
both (a) not cause any Excise Tax to be payable by such Participant and
(b) not cause any Potential Parachute Payments to become nondeductible
by the Company by reason of Section 280G of the Code (or any successor
provision).
5.7 Arbitration. Any dispute, controversy or claim between the parties
hereto arising out of or in connection with or relating to this Section
5 (other than disputes related to an alleged breach of the Restrictive
Covenants) or any breach or alleged breach thereof, or any benefit or
alleged benefit hereunder, shall be settled by arbitration in Chicago,
Illinois, before an impartial arbitrator pursuant to the rules and
regulations of the American Arbitration Association ("AAA") pertaining
to the arbitration of labor disputes. Any party may invoke the right to
arbitration. The arbitrator shall be selected by means
- 14 -
of the parties striking alternatively from a panel of seven arbitrators
supplied by the Chicago office of AAA. The arbitrator shall have the
authority to interpret and apply the provisions of this Section,
consistent with Section 12.7 below. The decision of the arbitrator
shall be final and binding upon the parties and a judgment thereon may
be entered in the highest court of a forum, state or federal, having
jurisdiction. No arbitration shall be commenced after the date when
institution of legal or equitable proceedings based upon such subject
matter would be barred by the applicable statutes of limitations.
Notwithstanding anything to the contrary contained in this Section 5.7
or elsewhere in this Plan, any party may bring an action in the
District Court of Cook County, or the United States District Court for
the Northern District of Illinois, if jurisdiction there lies, in order
to maintain the status quo ante of the parties. The "status quo ante"
is defined as the last peaceable, uncontested status between the
parties. However, neither the party bringing the action nor the party
defending the action thereby waives its right to arbitration of any
dispute, controversy or claim arising out of or in connection or
relating to this Plan. Notwithstanding anything to the contrary
contained in this Section 5.7 or elsewhere in this Plan, any party may
seek relief in the form of specific performance, injunctive or other
equitable relief in order to enforce the decision of the arbitrator.
The parties agree that in any arbitration commenced pursuant to this
Plan, the parties shall be entitled to such discovery (including
depositions, requests for the production of documents and
interrogatories) as would be available in a federal district court
pursuant to Rules 26 through 37 of the Federal Rules of Civil
Procedure. In the event that either party fails to comply with its
discovery obligations hereunder, the arbitrator shall have full power
and authority to compel disclosure or impose sanctions to the full
extent of Rule 37 of the Federal Rules of Civil Procedure.
5.8 No Adverse Effect on Pooling of Interests. Any benefits provided to
a Participant under this Plan may be reduced or eliminated to the
extent necessary, in the reasonable judgment of the Board, to enable
Exelon to account for a merger, consolidation or similar transaction as
a pooling of interests; provided that (i) the Board shall have
exercised such judgment and given such Participant written notice
thereof prior to the Change Date and (ii) the determination of the
Board shall be supported by a written certificate of Exelon's
independent auditors, a copy of which shall be provided to such
Participant before the Change Date.
6. TERMINATION OF PARTICIPATION; CESSATION OF BENEFITS
A Participant's benefits under Section 4 of the Plan shall terminate on
the last day of the Participant's Salary Continuation Period; provided that a
Participant's right to benefits shall terminate immediately on such date as the
Company discovers that the Participant has breached any of the Restrictive
Covenants, in which case the Company may require the repayment of amounts paid
prior to such breach in accordance with Paragraph 4.1, and shall discontinue the
payment of any additional amounts under Section 4 of the Plan.
A Participant's benefits under Section 5 of the Plan shall terminate on
the later of the last day of the Participant's Severance Period or the date all
benefits to which the Participant is entitled to have been paid from the Plan;
provided that a Participant's right to benefits shall terminate immediately on
the date the Company discovers that the Participant has breached any
- 15 -
of the Restrictive Covenants, in which case the Company may require the
repayment of amounts paid prior to such breach in accordance with Section 5, and
shall discontinue the payment of any additional amounts under Section 5 of the
Plan.
7. DEFINITIONS
In addition to terms previously defined, when used in the Plan, the
following capitalized terms shall have the following meanings unless the context
clearly indicates otherwise:
1.15 "Accrued Annual Incentive" means the amount of any annual
incentive earned but not yet paid with respect to the Company's latest
fiscal year ended prior to the Termination Date.
1.16 "Accrued Base Salary" means the amount of a Participant's Base
Salary that is accrued but not yet paid as of the Termination Date.
1.17 "Accrued LTIP Award" means the amount of any LTIP award earned and
vested, but either deferred or not yet paid as of the Termination Date.
1.18 "Accrued Obligations" means, as of any date, the sum of a
Participant's Accrued Base Salary, Accrued Annual Incentive, Accrued
LTIP Award, any accrued but unpaid paid time off, and any other amounts
and benefits which are then due to be paid or provided to such
Participant by the Company, but have not yet been paid or provided (as
applicable).
1.19 "Applicable Trigger Date" means
(a) the Restatement Date, with respect to the Current
Post-Merger Period;
(b) the Change Date, with respect to the Post-Change Period;
or
(c) the date of an Imminent Control Change, with respect to
the Imminent Control Change Period.
1.20 "Base Salary" for purposes of Section 5, means not less than 12
times the highest monthly base salary paid or payable to a Participant
by the Company in respect of the 12-month period immediately before the
Applicable Trigger Date.
1.21 "Beneficial Owner" means such term as defined in Rule 13d-3 of the
SEC under the Exchange Act.
1.22 "Board" means the Board of Directors of Exelon or, from and after
the effective date of a Corporate Transaction (as defined in the
definition of Change in Control), the Board of Directors of the
corporation resulting from a Corporate Transaction or, if securities
representing at least 50% of the aggregate voting power of such
resulting corporation are directly or indirectly owned by another
corporation, such other corporation.
- 16 -
1.23 "Cause" means, with respect to any Executive:
(a) an Executive's willful commission of act(s) or omission(s)
which have, have had, or are likely to have a material adverse
effect on the business, operations, financial condition or
reputation of the Exelon or any of its affiliates;
(b) an Executive's conviction (including a plea of guilty or
nolo contendere) of a felony or any crime of fraud, theft,
dishonesty or moral turpitude;
(c) an Executive's material violation of any statutory or
common law duty of loyalty to the Company or any of its
affiliates; or
(d) solely with respect to a termination of employment during
an Imminent Control Change Period, an Executive's failure to
meet objective performance criteria of the position, provided
that, this subsection (d) shall be inapplicable if the
Imminent Control Change culminates in a Change Date.
1.24 "Change Date" means each date on which a Change in Control occurs
after the Restatement Date.
1.25 "Change in Control" means:
(a) any SEC Person becomes the Beneficial Owner of 20% or more
of the then outstanding common stock of Exelon or of Voting
Securities representing 20% or more of the combined voting
power of all the then outstanding Voting Securities of Exelon
(such an SEC Person, a "20% Owner"); provided, however, that
for purposes of this subsection (a), the following
acquisitions shall not constitute a Change in Control: (1) any
acquisition directly from Exelon (excluding any acquisition
resulting from the exercise of an exercise, conversion or
exchange privilege unless the security being so exercised,
converted or exchanged was acquired directly from Exelon), (2)
any acquisition by Exelon, (3) any acquisition by an employee
benefit plan (or related trust) sponsored or maintained by
Exelon or any corporation controlled by Exelon (a "Company
Plan"), or (4) any acquisition by any corporation pursuant to
a transaction which complies with clauses (i), (ii) and (iii)
of subsection (c) of this definition; provided further, that
for purposes of clause (2), if any 20% Owner of Exelon other
than Exelon or any Company Plan becomes a 20% Owner by reason
of an acquisition by Exelon, and such 20% Owner of Exelon
shall, after such acquisition by Exelon, become the beneficial
owner of any additional outstanding common shares of Exelon or
any additional outstanding Voting Securities of Exelon (other
than pursuant to any dividend reinvestment plan or arrangement
maintained by Exelon) and such beneficial ownership is
publicly announced, such additional beneficial ownership shall
constitute a Change in Control; or
(b) Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Incumbent Board;
provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination
for election by Exelon's
- 17 -
shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a
result of an actual or threatened election contest (as such
terms are used in Rule 14a-11 promulgated under the Exchange
Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
(c) Consummation of a reorganization, merger or consolidation
("Merger"), or the sale or other disposition of more than 50%
of the operating assets of Exelon (determined on a
consolidated basis), other than in connection with a
sale-leaseback or other arrangement resulting in the continued
utilization of such assets (or the operating products of such
assets) by Exelon (such reorganization, merger, consolidation,
sale or other disposition, a "Corporate Transaction");
excluding, however, a Corporate Transaction pursuant to which:
(i) all or substantially all of the individuals and
entities who are the Beneficial Owners, respectively,
of the outstanding common stock of Exelon and
outstanding Voting Securities of Exelon immediately
prior to such Corporate Transaction beneficially own,
directly or indirectly, more than 60% of,
respectively, the then-outstanding shares of common
stock and the combined voting power of the
then-outstanding voting securities entitled to vote
generally in the election of directors, as the case
may be, of the corporation resulting from such
Corporate Transaction (including, without limitation,
a corporation which, as a result of such transaction,
owns Exelon or all or substantially all of the assets
of Exelon either directly or through one or more
subsidiaries) in substantially the same proportions
as their ownership immediately prior to such
Corporate Transaction of the outstanding common stock
of Company and outstanding Voting Securities of
Exelon, as the case may be;
(ii) no SEC Person (other than the corporation
resulting from such Corporate Transaction, and any
Person which beneficially owned, immediately prior to
such corporate Transaction, directly or indirectly,
20% or more of the outstanding common stock of Exelon
or the outstanding Voting Securities of Exelon, as
the case may be) becomes a 20% Owner, directly or
indirectly, of the then-outstanding common stock of
the corporation resulting from such Corporate
Transaction or the combined voting power of the
outstanding voting securities of such corporation;
and
(iii) individuals who were members of the Incumbent
Board will constitute at least a majority of the
members of the board of directors of the corporation
resulting from such Corporate Transaction; or
(d) Approval by Exelon's shareholders of a plan of complete
liquidation or dissolution of Exelon, other than a plan of
liquidation or dissolution which results
- 18 -
in the acquisition of all or substantially all of the assets
of Exelon by an affiliated company.
Notwithstanding the occurrence of any of the foregoing events, a Change
in Control shall not occur with respect to a Participant if, in advance
of such event, such Participant agrees in writing that such event shall
not constitute a Change in Control.
1.26 "Code" means the Internal Revenue Code of 1986, as amended.
1.27 "Current Post-Merger Period" means, applicable only with respect
to a Participant who was on the payroll of PECO Company or a Unicom
subsidiary on the day prior to the Merger Effective Date, the period
commencing on the Restatement Date and ending on the earlier of the
Termination Date or October 20, 2002. To the extent that, prior to
October 21, 2002, the Current Post-Merger Period includes any portion
of an Imminent Control Change Period, the terms of this Plan applicable
to the Current Post-Merger Period shall govern.
1.28 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
1.29 "Good Reason" means a material reduction of a Participant's
salary, incentive compensation or benefits, unless such reduction is
part of a policy, program or arrangement applicable to peer executives
of the Company and of any successor entity; or a material reduction or
material adverse alteration in the nature of a Participant's position,
duties, function, responsibilities or authority; provided, however,
that for purposes of Section 5:
(a) a Termination of Employment for "Good Reason" shall
instead mean a termination initiated by an eligible Executive
upon notice to the Company as described below in subsection
(d)(i) of this Section, based on the occurrence of any one or
more of the following actions or omissions that, unless
otherwise specified, occurs during the Current Post-Merger
Period, the Post-Change Period, or the Imminent Control Change
Period:
(i) a material adverse reduction in the nature or
scope of an eligible Executive's office, position,
duties, functions, responsibilities or authority;
(ii) a material reduction of an eligible Executive's
salary, incentive compensation or aggregate benefits
unless such reduction is part of a policy, program or
arrangement applicable to peer executives of the
Executive's employer and of any successor entity;
(iii) the failure of any successor to Exelon to
assume this Plan;
(iv) a relocation, of more than 50 miles of (i) an
eligible Executive's workplace, or (ii) the principal
offices of Exelon or its successor (if such offices
are such Executive's workplace), in each case without
the consent of such Executive; provided, however, in
both cases of (i) and (ii) of this
- 19 -
Section 3.4(a), such new location is farther from
such Executive's residence that the prior location;
(v) a requirement of the greater of (i) more than 24
days of travel per year, or (ii) at least 20% more
business travel than was required of such Executive
prior to the Applicable Trigger Date; or
(vi) a material breach of this Plan by the Company or
its successor.
(b) Additional Basis for Good Reason During the Current
Post-Merger Period. With respect to the Current Post-Merger
Period, "Good Reason" shall have the meaning set forth in
above in subsection (a) and shall also include any of the
following which occurred prior to the Restatement Date:
(i) a material adverse alteration in the nature or
scope of an eligible Executive's position, duties,
functions, responsibilities or authority;
(ii) a determination by a Participant, made in good
faith during the Executive's participation in this
Plan and prior to the Restatement Date, that, as a
result of the change in control resulting in the
merger of Unicom Corporation and PECO Energy
Corporation, such Participant is substantially unable
to perform, or that there has been a material
reduction in, any of such Executive's duties,
functions, responsibilities or authority; provided
that the notice described below in subsection (d)(i)
of this Section shall be given prior to June 15,
2001;
(iii) a relocation of more than 50 miles of (i) such
Executive's workplace, or (ii) the principal offices
of Exelon if such offices are the Participant's
workplace), in each case without the consent of the
Executive; or
(iv) a requirement of at least 20% more business
travel than was required of such Executive prior to
the change in control resulting in the merger of
Unicom Corporation and PECO Energy Corporation.
(c) Application of "Good Reason" Definition During the
Imminent Control Change Period. During the Imminent Control
Change Period, "Good Reason" shall not include the events or
conditions described in subsection (a)(i), (a)(iv) or (a)(v)
above unless the Imminent Control Change Period culminates in
a Change Date.
(d) Limitations on Good Reason. Notwithstanding the foregoing
provisions of this Section, no act or omission shall
constitute a material breach of this Plan by the Company, nor
grounds for "Good Reason":
(i) unless the Executive gives the Company 30 days'
prior notice of such act or omission, and the Company
fails to cure such act or omission within the 30-day
period;
- 20 -
(ii) if the Executive first acquired knowledge of
such act or omission more than 12 months before such
Participant gives the Company such notice; or
(iii) if the Executive has consented in writing to
such act or omission in a document that makes
specific reference to this Section.
(e) Notice by a Participant. In the event of any Termination
of Employment by an eligible Executive for Good Reason, such
Executive shall as soon as practicable thereafter notify the
Company of the events constituting such Good Reason by a
Notice of Termination. Subject to the limitations in
subsection (d) above, a delay in the delivery of such Notice
of Termination shall not waive any right of an Executive under
this Plan.
1.30 "Imminent Control Change" means, as of any date on or after the
Restatement Date and prior to the Change Date, the occurrence of any
one or more of the following:
(a) Exelon enters into an agreement the consummation of which
would constitute a Change in Control;
(b) Any SEC Person commences a "tender offer" (as such term is
used in Section 14(d) of the Exchange Act) or exchange offer,
which, if consummated, would result in a Change in Control; or
(c) Any SEC Person files with the SEC a preliminary or
definitive proxy solicitation or election contest to elect or
remove one or more members of the Board, which, if consummated
or effected, would result in a Change in Control;
provided, however, that an Imminent Control Change will lapse and cease
to qualify as an Imminent Control Change:
(i) With respect to an Imminent Control Change
described in clause (a) of this definition, the date
such agreement is terminated, cancelled or expires
without a Change Date occurring;
(ii) With respect to an Imminent Control Change
described in clause (b) of this definition, the date
such tender offer or exchange offer is withdrawn or
terminates without a Change Date occurring;
(iii) With respect to an Imminent Control Change
described in clause (c) of this definition, (1) the
date the validity of such proxy solicitation or
election contest expires under relevant state
corporate law, or (2) the date such proxy
solicitation or election contest culminates in a
shareholder vote, in either case without a Change
Date occurring; or
(iv) The date a majority of the members of the
Incumbent Board make a good faith determination that
any event or condition described in clause (a), (b),
or (c) of this definition no longer constitutes an
Imminent Control
- 21 -
Change, provided that such determination may not be
made prior to the twelve (12) month anniversary of
the occurrence of such event.
1.31 "Imminent Control Change Period" means the period (excluding any
portion of such period in effect during the Current Post-Merger Period)
commencing on the date of an Imminent Control Change, and ending on the first to
occur thereafter of
(a) a Change Date, provided
(i) such date occurs after October 20, 2002 and no
later than the one-year anniversary of the
Termination Date, and
(ii) either the Imminent Control Change has not
lapsed, or the Imminent Control Change in effect upon
such Change Date is the last Imminent Control Change
in a series of Imminent Control Changes unbroken by
any period of time between the lapse of an Imminent
Control Change and the occurrence of a new Imminent
Control Change;
(b) the date an Imminent Control Changes lapses without the
prior or concurrent occurrence of a new Imminent Control
Change; or
(c) the twelve-month anniversary of the Termination Date.
1.32 "Incentive Plan" means any annual incentive award arrangement of
the Company.
1.33 "including" means including without limitation.
1.34 "Incumbent Board" - see definition of Change in Control.
1.35 "LTIP" means the Exelon Corporation Long-Term Incentive Plan, as
amended from time to time, or any successor thereto, and including any
Stock Options or Restricted Stock granted thereunder to replace stock
options or restricted stock initially granted under the Unicom
Corporation Long-Term Incentive Plan.
1.36 "LTIP Performance Period" means the performance period applicable
to an LTIP award, as designated in accordance with the LTIP.
1.37 "LTIP Target Level" means, in respect of any grant of Performance
Shares under the Exelon Performance Share Program under the LTIP, the
number of Performance Shares which a Participant would have been
awarded (prior to the Termination Date) for the LTIP Performance Period
corresponding to such grant if the business and personal performance
goals related to such grant were achieved at the 100% (target) level as
of the end of the first year of the LTIP Performance Period.
1.38 "Merger" - see definition of Change in Control.
1.39 "Notice of Termination" means a written notice given in accordance
with Section 11.8 which sets forth (i) the specific termination
provision in this Plan relied
- 22 -
upon by the party giving such notice, (ii) in reasonable detail the
specific facts and circumstances claimed to provide a basis for such
Termination of Employment or Cause Termination, and (iii) if the
Termination Date is other than the date of receipt of such Notice of
Termination, the Termination Date.
1.40 "Performance Shares" - see Section 5.1(c).
1.41 "Person" means any individual, sole proprietorship, partnership,
joint venture, limited liability company, trust, unincorporated
organization, association, corporation, institution, public benefit
corporation, entity or government instrumentality, division, agency,
body or department.
1.42 "Post-Change Period" means the period commencing on a Change Date
and ending on the earlier of (a) the Termination Date or (b) the second
anniversary of such Change Date; provided that no duplicate benefits
shall be paid with respect to simultaneous or overlapping Post-Change
Periods.
1.43 "Restricted Stock" -- see Section 5.1(d).
1.44 "Salary Continuation Period" means the period indicated in Section
4.1 during which benefits are payable under the Plan.
1.45 "SEC" means the United States Securities and Exchange Commission.
1.46 "SEC Person" means any person (as such term is used in Rule 13d-5
of the SEC under the Exchange Act) or group (as such term is defined in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act), other than (a)
Exelon or any Person that directly or indirectly controls, is
controlled by, or is under common control with, Exelon (an
"Affiliate"). For purposes of this definition the term "control" with
respect to any Person means the power to direct or cause the direction
of management or policies of such Person, directly or indirectly,
whether through the ownership of Voting Securities, by contract or
otherwise., or (b) any employee benefit plan (or any related trust) of
Exelon or any of its Affiliates.
1.47 "Section" means, unless the context otherwise requires, a section
of this Plan.
1.48 "SERP" means the PECO Energy Company Supplemental Retirement Plan
or the Commonwealth Edison Supplemental Management Retirement Plan,
whichever is applicable to a Participant, or any successor to either or
both.
1.49 "Severance Incentive" means the average of the annual incentive
awards paid to a Participant under the LTIP (or such other Incentive
Plan under which the Participant is entitled to such awards), a
successor plan or otherwise with respect to each of the two calendar
years preceding the year in which occurs the Participant's Termination
of Employment; provided, however, that for purposes of Section 5,
"Severance Incentive" shall mean the greater of (a) the Target
Incentive for the performance period in which the Termination Date
occurs, or (b) the average (mean) of the actual annual incentives paid
(or payable, to the extent not previously paid) to a Participant under
the Incentive Plan for
- 23 -
each of the two calendar years preceding the calendar year in which the
Termination Date occurs.
1.50 "Severance Period" means the period beginning on a Participant's
Termination Date, provided such Participant's Termination of Employment
entitles such Participant to benefits under Section 5.1, or 5.2, and
ending on the second anniversary thereof. There shall be no Severance
Period if a Participant's Termination of Employment is on account of
retirement, death or disability (as determined by the Plan
Administrator in good faith) or if a Participant's employment is
terminated by the Company for Cause or by a Participant other than for
Good Reason.
1.51 "Stock Options" -- see Section 5.1(b).
1.52 "Target Incentive" as of a certain date means an amount equal to
the product of Base Salary determined as of such date multiplied by the
percentage of such Base Salary to which a Participant would have been
entitled immediately prior to such date under the LTIP or any other
Incentive Plan for the applicable performance period if the performance
goals established pursuant to the LTIP or such Incentive Plan were
achieved at the 100% (target) level as of the end of the applicable
performance period; provided, however, that any reduction in a
Participant's Base Salary or annual incentive that would qualify as
Good Reason shall be disregarded for purposes of this definition.
1.53 "Taxes" means the incremental federal, state, local and foreign
income, employment, excise and other taxes payable by a Participant
with respect to any applicable item of income.
1.54 "Termination Date" means the effective date of an eligible
Executive's termination of employment with the Company for any or no
reason, which shall be the last day on which such Executive is employed
by the Company; provided, however, that (a) if the Company terminates
such Executive's employment other than for Cause or disability or if
such Participant terminates such Executive's employment for Good
Reason, then the Termination Date shall be the date of receipt of the
Notice of Termination by such Executive (if such Notice is given by the
Company) or by the Company (if such Notice is given by such Executive),
or such later date, not more than 15 days after the giving of such
Notice, specified in such Notice as of which such Executive's
employment shall be terminated; and (b) if such Executive's employment
is terminated by reason of death or disability, the Termination Date
shall be the date of such Executive's death or the disability.
1.55 "Termination of Employment" means:
(a) a termination of an eligible Executive's employment by the
Company for reasons other than for Cause; or
(b) a resignation by an eligible Executive for Good Reason.
The following shall not constitute a Termination of Employment for purposes of
the Plan: (i) a termination of employment for Cause, (ii) an Executive's
resignation other than for Good
- 24 -
Reason, (iii) the cessation of an Executive's employment with the Company or any
Affiliate due to death, retirement, or disability (as determined by the Plan
Administrator in good faith), or (iv) the cessation of an Executive's employment
with the Company or any subsidiary thereof as the result of the sale, spin-off
or other divestiture of a plant, division, business unit or subsidiary or a
merger or other business combination followed by employment (or reemployment)
with the purchaser or successor in interest to the Participant's employer with
regard to such plant, division, business unit or subsidiary. Any dispute
regarding whether an Executive's Termination of Employment for purposes of
Section 5 is based on Good Reason shall be submitted to binding arbitration
pursuant to Section 5.7.
1.56 "20% Owner" -- see paragraph (a) of the definition of "Change in
Control."
1.57 "Voting Securities" means with respect to a corporation,
securities of such corporation that are entitled to vote generally in
the election of directors of such corporation.
8. FUNDING
Nothing in the Plan shall be interpreted as requiring the Company to
set aside any of its assets for the purpose of funding its obligations under the
Plan. No person entitled to benefits under the Plan shall have any right, title
or claim in or to any specific assets of the Company, but shall have the right
only as a general creditor to receive benefits from the Company on the terms and
conditions provided in the Plan.
9. ADMINISTRATION OF THE PLAN
Exelon Corporation is the "administrator" and a "named fiduciary" of
the Plan for purposes of the Employee Retirement Income Security Act of 1974, as
amended (ERISA). The Plan shall be administered on a day-to-day basis by the
Compensation Vice President of Exelon (the "Plan Administrator"). The Plan
Administrator has the sole and absolute power and authority to interpret and
apply the provisions of this Plan to a particular circumstance, make all factual
and legal determinations, construe uncertain or disputed terms and make
eligibility and benefit determinations in such manner and to such extent as the
Plan Administrator, in his or her sole discretion may determine. Benefits under
the Plan will be paid only if the Plan Administrator, in his or her discretion,
determines that an individual is entitled to them.
The Plan Administrator shall promulgate any rules and regulations
necessary to carry out the purposes of the Plan or to interpret the terms and
conditions of the Plan; provided, however, that no rule, regulation or
interpretation shall be contrary to the provisions of the Plan. The rules,
regulations and interpretations made by the Plan Administrator shall be applied
on a uniform basis and shall be final and binding on any Executive or former
Executive and any successor in interest.
The Plan Administrator may delegate any administrative duties,
including, without limitation, duties with respect to the processing, review,
investigation, approval and payment of severance pay and provision of severance
benefits, to designated individuals or committees.
- 25 -
10. CLAIMS PROCEDURE
The Plan Administrator shall determine the status of an individual as
an Executive and the eligibility and rights of any Executive or former Executive
as a Participant to any severance pay or benefits hereunder. Any Executive or
former Executive who believes that he or she is entitled to receive severance
pay or benefits under the Plan, including severance pay or benefits other than
those initially determined by the Plan Administrator, may file a claim in
writing with the Plan Administrator. No later than 90 days after the receipt of
the claim the Plan Administrator shall either allow or deny the claim in
writing.
A denial of a claim, in whole or in part, shall be written in a manner
calculated to be understood by the claimant and shall include the specific
reason or reasons for the denial; specific reference to pertinent Plan
provisions on which the denial is based; a description of any additional
material or information necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary; and an explanation
of the claims review procedure.
A claimant whose claim is denied (or his or her duly authorized
representative) may, within 60 days after receipt of the denial of his or her
claim, request a review upon written application to an officer designated by
Exelon and specified in the claim denial; review pertinent documents; and submit
issues and comments in writing.
The designated officer shall notify the claimant of his or her decision
on review within 60 days after receipt of a request for review unless special
circumstances require an extension of time for processing, in which case a
decision shall be rendered as soon as possible, but not later than 120 days
after receipt of a request for review. Notice of the decision on review shall be
in writing. The officer's decision on review shall be final and binding on any
claimant or any successor in interest.
11. AMENDMENT OR TERMINATION OF PLAN
Exelon's Chief Human Resources Officer or another designated officer of
the Company may amend, modify or terminate the Plan at any time by written
instrument; provided, however, that no amendment, modification or termination
shall deprive any Participant of any payment or benefit that the Plan
Administrator previously has determined is payable under the Plan.
Notwithstanding the foregoing, no amendment or termination that materially
adversely affects any Participant's benefits under Section 5 shall become
effective as to such Participant during: (a) the Current Post-Merger Period, (b)
the 24-month period following the Change Date or (c) during the Imminent Control
Change Period (unless such Participant consents to such termination or
amendment). Any purported Plan termination or amendment in violation of this
Section 11 shall be void and of no effect.
12. MISCELLANEOUS
1.58 Limitation on Rights. Participation in the Plan is limited to the
individuals described in Sections 2 and 3, and the Plan shall not apply
to any voluntary or involuntary termination of employment that is not a
Termination of Employment occurring on or after the Restatement Date of
the Plan.
- 26 -
1.59 No Set-off by Company. A Participant's right to receive when due
the payments and other benefits provided for under this Plan is
absolute, unconditional and subject to no setoff, counterclaim or legal
or equitable defense. Time is of the essence in the performance by the
Company of its obligations under this Plan. Any claim which the Company
may have against a Participant, whether for a breach of this Plan, the
Severance Agreement, or otherwise, shall be brought in a separate
action or proceeding and not as part of any action or proceeding
brought by such Participant to enforce any rights against the Company
under this Plan.
1.60 No Mitigation. A Participant shall not have any duty to mitigate
the amounts payable by the Company under this Plan by seeking new
employment following termination. Except as specifically otherwise
provided in this Plan, all amounts payable pursuant to this Plan shall
be paid without reduction regardless of any amounts of salary,
compensation or other amounts which may be paid or payable to the
Executive as the result of the Executive's employment by another
employer.
1.61 Affiliates. To the extent that immediately prior to the Applicable
Trigger Date, a Participant has been on the payroll of, and
participated in the incentive or employee benefit plans of, an
Affiliate of Exelon (as defined in Section 7.32), the references to the
Company or Exelon contained in applicable Sections of this Plan
referring to benefits to which a Participant may be entitled shall be
read to refer to such Affiliate.
1.62 Headings. Headings of sections in this document are for
convenience only, and do not constitute any part of the Plan.
1.63 Severability. If any one or more Sections, subsections or other
portions of this Plan are declared by any court or governmental
authority to be unlawful or invalid, such unlawfulness or invalidity
shall not serve to invalidate any Section, subsection or other portion
not so declared to be unlawful or invalid. Any Section, subsection or
other portion so declared to be unlawful or invalid shall be construed
so as to effectuate the terms of such Section, subsection or other
portion to the fullest extent possible while remaining lawful and
valid.
1.64 Governing Law. The Plan shall be construed and enforced in
accordance with ERISA and the laws of the Commonwealth of Pennsylvania
to the extent such laws are not preempted by ERISA.
1.65 No Right to Continued Employment. Nothing in this Plan shall
guarantee the right of a Participant to continue in employment, and the
Company retains the right to terminate a Participant's employment at
any time for any reason or for no reason.
1.66 Successors and Assigns. This Plan shall be binding upon and inure
to the benefit of Exelon Corporation and its successors and assigns and
shall be binding upon and inure to the benefit of a Participant and his
or her legal representatives, heirs and assigns. Before or upon the
consummation of any Change in Control, Exelon shall obtain from each
individual, entity or group that becomes a successor of Exelon by
reason of the Change in Control, the unconditional written agreement of
such individual, entity or
- 27 -
group to assume this Plan and to perform all of the obligations of the
Company under the Plan. Any successor to the business or assets of
Exelon which assumes or agrees to perform this Plan by operation of
law, contract, or otherwise shall be jointly and severally liable with
Exelon under this Plan as if such successor were Exelon.
No rights, obligations or liabilities of a Participant hereunder shall
be assignable without the prior written consent of Exelon Corporation. In the
event of the death of a Participant prior to receipt of severance pay or
benefits to which he or she is entitled hereunder (and, with respect to benefits
under Section 4 or Section 5, after he or she has signed the Waiver and
Release), the severance pay described in Sections 4.1, 5.1, or 5.2, as
applicable, shall be paid to his or her estate, and the Participant's dependents
who are covered under any health care plans maintained by the Company shall be
entitled to continued rights under Section 4.4 or Section 5.1(e) or Section
5.2(f), as applicable; provided that the estate or other successor of the
Participant has not revoked such Waiver and Release.
1.67 Notices. All notices and other communications under this Plan
shall be in writing and delivered by hand, by nationally-recognized
delivery service that promises overnight delivery, or by first-class
registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to a Participant, to such Participant at his most
recent home address on file with the Company.
If to the Company: to the Plan Administrator.
or to such other address as either party shall have furnished to the other in
writing. Notice and communications shall be effective when actually received by
the addressee.
1.68 Number and Gender. Wherever appropriate, the singular shall
include the plural, the plural shall include the singular, and the
masculine shall include the feminine.
1.69 Tax Withholding. The Company may withhold from any amounts payable
under this Plan or otherwise payable to a Participant any Taxes the
Company determines to be appropriate under applicable law and may
report all such amounts payable to such authority as is required by any
applicable law or regulation.
13. ADMINISTRATIVE INFORMATION
Plan Sponsor: Exelon Corporation
Address: P.O. Box 805379
Chicago, Illinois 60680-5379
Employer Identification
Number: 23-2990190
Plan Administrator: Vice President Compensation
Address and Telephone: Exelon Corporation
- 28 -
P.O. Box 805379
Chicago, Illinois 60680-5379
(312) 394-4015
Agent for Service of
Legal Process: Vice President Compensation
Exelon Corporation
P.O. Box 805379
Chicago, Illinois 60680-5379
Plan Number: 501
Type of Plan: Severance benefit plan (welfare)
Plan Year: Calendar year
14. ERISA RIGHTS
As a Participant in the Plan, you are entitled to certain rights and
protections under ERISA. ERISA provides that all plan participants shall be
entitled to:
Examine, without charge, at the Plan Administrator's office at 10 S.
Dearborn Street, Chicago, Illinois all Plan documents and copies of all
documents filed by the Plan with the U.S. Department of Labor; and
Obtain copies of all Plan documents and other Plan information upon
written request to the Plan Administrator. The Plan Administrator may
make a reasonable charge for the copies.
In addition to creating rights for Participants, ERISA imposes duties
upon the people who are responsible for the operation of the Plan. The people
who operate the Plan, called "fiduciaries" of the Plan, have a duty to act
prudently and in the interest of you and other Participant and beneficiaries. No
one, including your employer, your union, or any other person, may fire you or
otherwise discriminate against you in any way to prevent you from obtaining your
interest in the Plan or from exercising your rights under ERISA. If your claim
for a benefit from the Plan is denied in whole or in part, you must receive a
written explanation of the reason for the denial. You have the right to have
your claim reviewed and reconsidered. Under ERISA, there are steps you can take
to enforce the above rights. For instance, if you request materials from the
Plan and do not receive them within 30 days, you may file suit in a federal
court. In such a case, the court may require the Plan Administrator to provide
the materials and pay you up to $110 a day until you receive the materials,
unless the materials were not sent because of reasons beyond the control of the
Plan Administrator. If you have a claim for benefits which is denied or ignored,
in whole or in part, you may file suit in a state or federal court. If it should
happen that Plan fiduciaries misuse the Plan's money, or if you are
discriminated against for asserting your rights, you may seek assistance from
the U.S. Department of Labor, or you may file suit in a federal court. The court
will decide who should pay court costs and legal fees. If you are successful,
the court may order the person you have sued to pay these costs and fees. If
- 29 -
you lose and the court finds your claim to be frivolous, the court may order you
to pay these costs and fees. If you have any questions about the Plan, you
should contact the Plan Administrator. If you have any questions about this
statement or about your rights under ERISA, you should contact the nearest Area
Office of the U.S. Labor-Management Services Administration, Department of
Labor.
14152671v4
- 30 -
EXHIBIT I
EXELON CORPORATION
RESTRICTIVE COVENANTS
This agreement and covenant (the "Agreement"), made as of the _____ day
of _________, ______, is made by and among Exelon Corporation, incorporated
under the laws of the Commonwealth of Pennsylvania (together with successors
thereto, "Exelon"), ______________, a _________________ corporation (together
with successors thereto, the "Employer"), and ______________________ ("you").
WHEREAS, Exelon amended and restated the Exelon Corporation Key
Management Severance Plan (the "Severance Plan") effective as of June 1, 2001,
and as amended, modified and supplemented;
WHEREAS, you may be eligible to become a Participant (as defined in the
Severance Plan) in the Severance Plan as an employee of the Employer;
WHEREAS, in order to be a Participant in and be eligible for benefits
under the Severance Plan, you must execute this covenant;
NOW THEREFORE, in consideration for becoming eligible to participate in
the Severance Plan and your commencement of employment with the Employer, you
covenant the following:
CONFIDENTIAL INFORMATION.
(a) Obligation to Keep Confidential Information Confidential.
You acknowledge that in the course of performing services for
Exelon and its affiliates (together, the "Company"), you may
create (alone or with others), learn of, have access to and
receive Confidential Information. Confidential Information (as
defined below) shall not include: (i) information that is or
becomes generally known through no fault of yours; (ii)
information received from a third party outside of the Company
that was disclosed without a breach of any confidentiality
obligation; or (iii) information approved for release by
written authorization of the Company. You recognize that all
such Confidential Information is the sole and exclusive
property of the Company or of third parties which the Company
is obligated to keep confidential, that it is the Company's
policy to keep all such Confidential Information confidential,
and that disclosure of Confidential Information would cause
damage to the Company. You agree that, except as required by
your duties of employment with the Company or any of its
affiliates, and except in connection with enforcing your
rights under the Severance Plan or if compelled by a court or
governmental agency, in each case provided that prior written
notice is given to Exelon, you will not, without the written
consent of Exelon, willfully disseminate or otherwise
disclose, directly or indirectly, any Confidential Information
obtained during your employment with the Company, and will
take all necessary precautions to prevent disclosure, to any
unauthorized individual or entity inside or outside the
Company, and will not use the Confidential Information or
permit
1
its use for your personal benefit or any other person or
entity other than the Company. These obligations shall
continue during and after the termination of your employment
(whether or not after a Change in Control or Imminent Control
Change, as such terms are defined in the Severance Plan).
(b) Definition of Confidential Information. "Confidential
Information" shall mean any information, ideas, processes,
methods, designs, devices, inventions, data, techniques,
models and other information developed or used by the Company
and not generally known in the relevant trade or industry
relating to the Company's products, services, businesses,
operations, employees, customers or suppliers, whether in
tangible or intangible form, which gives the Company a
competitive advantage in the harnessing, production,
transmission, distribution, marketing or sale of energy or the
transmission or distribution thereof through wire or cable or
similar medium or in the energy services industry and other
businesses in which the Company is engaged, or of third
parties which the Company is obligated to keep confidential,
or which was learned, discovered, developed, conceived,
originated or prepared during or as a result of your
performance of any services on behalf of the Company and which
falls within any of the following general categories:
(i) information relating to trade secrets of the
Company or any customer or supplier of the Company;
(ii) information relating to existing or contemplated
products, services, technology, designs, processes,
formulae, algorithms, research or product
developments of the Company or any customer or
supplier of the Company;
(iii) information relating to business plans or
strategies, sales or marketing methods, methods of
doing business, customer lists, customer usages
and/or requirements, supplier information of the
Company or any customer or supplier of the Company;
(iv) information subject to protection under the
Uniform Trade Secrets Act, as adopted by the
Commonwealth of Pennsylvania, or to any comparable
protection afforded by applicable law; or
(v) any other confidential information which either
the Company or any customer or supplier of the
Company may reasonably have the right to protect by
patent, copyright or by keeping it secret and
confidential.
15. NON-COMPETITION. DURING THE PERIOD BEGINNING ON THE DATE OF EXECUTION
OF THIS AGREEMENT AND ENDING ON THE SECOND ANNIVERSARY OF THE
TERMINATION DATE (AS SUCH TERM IS DEFINED IN THE SEVERANCE PLAN),
WHETHER OR NOT AFTER A CHANGE IN CONTROL OR IMMINENT CONTROL CHANGE,
YOU HEREBY AGREE THAT WITHOUT THE WRITTEN CONSENT OF EXELON YOU SHALL
NOT AT ANY TIME, DIRECTLY OR INDIRECTLY, IN ANY CAPACITY:
(c) engage or participate in, become employed by, serve as a
director of, or render advisory or consulting or other
services in connection with, any Competitive
- 2 -
Business (as defined below); provided, however, that after the
Termination Date this Section 2 shall not preclude you from
being an employee of, or consultant to, any business unit of a
Competitive Business if (i) such business unit does not
qualify as a Competitive Business in its own right and (ii)
you do not have any direct or indirect involvement in, or
responsibility for, any operations of such Competitive
Business that cause it to qualify as a Competitive Business.
(d) make or retain any financial investment, whether in the
form of equity or debt, or own any interest, in any
Competitive Business. Nothing in this subsection shall,
however, restrict you from making an investment in any
Competitive Business if such investment does not (i) represent
more than 1% of the aggregate market value of the outstanding
capital stock or debt (as applicable) of such Competitive
Business, (ii) give you any right or ability, directly or
indirectly, to control or influence the policy decisions or
management of such Competitive Business, and (iii) create a
conflict of interest between your employment duties and your
interest in such investment.
(e) Definition of Competitive Business. "Competitive Business"
means, as of any date, any utility business and any individual
or entity (and any branch, office, or operation thereof) which
engages in, or proposes to engage in (with your assistance)
(i) the harnessing, production, transmission, distribution,
marketing or sale of energy or the transmission or
distribution thereof through wire or cable or similar medium,
(ii) any other business engaged in by the Company prior to
your Termination Date which represents for any calendar year
or is projected by the Company (as reflected in a business
plan adopted by any Company before your Termination Date) to
yield during any year during the first three-fiscal year
period commencing on or after your Termination Date, more than
5% of the gross revenue of any individual Company, and, in
either case, which is located (x) anywhere in the United
States, or (y) anywhere outside of the United States where
Company is then engaged in, or proposes as of the Termination
Date to engage in, to your knowledge, any of such activities.
16. NON-SOLICITATION. DURING THE PERIOD BEGINNING ON THE DATE OF EXECUTION
OF THIS AGREEMENT AND ENDING ON THE SECOND ANNIVERSARY OF ANY
TERMINATION DATE, WHETHER OR NOT AFTER A CHANGE IN CONTROL OR IMMINENT
CONTROL CHANGE, YOU SHALL NOT, DIRECTLY OR INDIRECTLY:
(f) other than in connection with the good-faith performance
of your duties as an officer of the Company cause or attempt
to cause any employee or agent of the Company to terminate his
or her relationship with the Company;
(g) employ, engage as a consultant or adviser, or solicit the
employment or engagement as a consultant or adviser, of any
employee or agent of the Company (other than by the Company),
or cause or attempt to cause any Person to do any of the
foregoing;
(h) establish (or take preliminary steps to establish) a
business with, or cause or attempt to cause others to
establish (or take preliminary steps to establish) a
- 3 -
business with, any employee or agent of the Company, if such
business is or will be a Competitive Business; or
(i) interfere with the relationship of the Company with, or
endeavor to entice away from the Company, any Person who or
which at any time during the period commencing one year prior
to the Termination Date was or is, to your knowledge, a
material customer or material supplier of, or maintained a
material business relationship with, the Company.
17. INTELLECTUAL PROPERTY. DURING THE PERIOD OF YOUR EMPLOYMENT WITH THE
COMPANY, AND THEREAFTER UPON THE COMPANY'S REQUEST, WHETHER OR NOT
AFTER A CHANGE IN CONTROL OR IMMINENT CONTROL CHANGE, YOU SHALL
DISCLOSE IMMEDIATELY TO THE COMPANY ALL IDEAS, INVENTIONS AND BUSINESS
PLANS THAT HE MAKES, CONCEIVES, DISCOVERS OR DEVELOPS ALONE OR WITH
OTHERS DURING THE COURSE OF YOUR EMPLOYMENT WITH THE COMPANY OR DURING
THE ONE YEAR PERIOD FOLLOWING YOUR TERMINATION DATE, INCLUDING ANY
INVENTIONS, MODIFICATIONS, DISCOVERIES, DEVELOPMENTS, IMPROVEMENTS,
COMPUTER PROGRAMS, PROCESSES, PRODUCTS OR PROCEDURES (WHETHER OR NOT
PROTECTABLE UPON APPLICATION BY COPYRIGHT, PATENT, TRADEMARK, TRADE
SECRET OR OTHER PROPRIETARY RIGHTS) ("WORK PRODUCT") THAT: (I) RELATE
TO THE BUSINESS OF THE COMPANY OR ANY CUSTOMER OR SUPPLIER TO THE
COMPANY OR ANY OF THE PRODUCTS OR SERVICES BEING DEVELOPED,
MANUFACTURED, SOLD OR OTHERWISE PROVIDED BY THE COMPANY OR THAT MAY BE
USED IN RELATION THEREWITH; OR (II) RESULT FROM TASKS ASSIGNED TO YOU
BY THE COMPANY; OR (III) RESULT FROM THE USE OF THE PREMISES OR
PERSONAL PROPERTY (WHETHER TANGIBLE OR INTANGIBLE) OWNED, LEASED OR
CONTRACTED FOR BY THE COMPANY. YOU AGREE THAT ANY WORK PRODUCT SHALL BE
THE PROPERTY OF THE COMPANY AND, IF SUBJECT TO COPYRIGHT, SHALL BE
CONSIDERED A "WORK MADE FOR HIRE" WITHIN THE MEANING OF THE COPYRIGHT
ACT OF 1976, AS AMENDED (THE "ACT"). IF AND TO THE EXTENT THAT ANY SUCH
WORK PRODUCT IS NOT A "WORK MADE FOR HIRE" WITHIN THE MEANING OF THE
ACT, YOU HEREBY ASSIGN TO THE COMPANY ALL RIGHT, TITLE AND INTEREST IN
AND TO THE WORK PRODUCT, AND ALL COPIES THEREOF, AND THE COPYRIGHT,
PATENT, TRADEMARK, TRADE SECRET AND ALL PROPRIETARY RIGHTS IN THE WORK
PRODUCT, WITHOUT FURTHER CONSIDERATION, FREE FROM ANY CLAIM, LIEN FOR
BALANCE DUE OR RIGHTS OF RETENTION THERETO ON YOUR PART.
(j) The Company hereby notifies you that the preceding
paragraph does not apply to any inventions for which no
equipment, supplies, facility, or trade secret information of
the Company was used and which was developed entirely on your
own time, unless: (i) the invention relates (a) to the
Company's business, or (b) to the Company's actual or
demonstrably anticipated research or development, or (ii) the
invention results from any work performed by you for the
Company.
(k) You agree that upon disclosure of Work Product to the
Company, you will, during your employment and at any time
thereafter, at the request and cost of the Company, execute
all such documents and perform all such acts as the Company or
its duly authorized agents may reasonably require: (i) to
apply for, obtain and vest in the name of the Company alone
(unless the Company otherwise directs) letters patent,
copyrights or other analogous protection in any country
throughout the world, and when so obtained or vested to renew
and restore the same; and (ii) to prosecute or defend any
opposition proceedings in respect of such applications and any
opposition proceedings or petitions or applications for
- 4 -
revocation of such letters patent, copyright or other
analogous protection, or otherwise in respect of the Work
Product.
(l) In the event that the Company is unable, after reasonable
effort, to secure your execution as provided in subsection (b)
above, whether because of your physical or mental incapacity
or for any other reason whatsoever, you hereby irrevocably
designate and appoint the Company and its duly authorized
officers and agents as your agent and attorney-in-fact, to act
for and on your behalf to execute and file any such
application or applications and to do all other lawfully
permitted acts to further the prosecution, issuance and
protection of letters patent, copyright and other intellectual
property protection with the same legal force and effect as if
personally executed by you.
18. REASONABLENESS OF RESTRICTIVE COVENANTS.
(m) You acknowledge that the covenants contained in Sections
2, 3, and 4 are reasonable in the scope of the activities
restricted, the geographic area covered by the restrictions,
and the duration of the restrictions, and that such covenants
are reasonably necessary to protect the Company's legitimate
interests in its Confidential Information and in its
relationships with its employees, customers and suppliers.
(n) The Company and you have all consulted with their
respective legal counsel and have been advised concerning the
reasonableness and propriety of such covenants. You
acknowledge that your observance of the covenants contained in
Sections 2, 3, and 4 will not deprive you of the ability to
earn a livelihood or to support your dependents.
(o) All of the provisions of this Restrictive Covenant shall
survive any termination of employment without regard to (i)
the reasons for such termination or (ii) the expiration of any
participation in the Severance Plan.
(p) The Company shall have no further obligation to pay or
provide severance or benefits under the Plan if a court
determines that you have breached any covenant in this
Restrictive Covenant.
19. COUNTERPARTS. THIS AGREEMENT MAY BE EXECUTED IN SEVERAL COUNTERPARTS,
EACH OF WHICH SHALL BE DEEMED TO BE AN ORIGINAL, BUT ALL OF WHICH
TOGETHER WILL CONSTITUTE ONE AND THE SAME INSTRUMENT.
20. HEADINGS. THE HEADINGS OF THIS AGREEMENT ARE NOT PART OF THE PROVISIONS
HEREOF AND SHALL NOT HAVE ANY FORCE OR EFFECT.
21. APPLICABLE LAW. THE PROVISIONS OF THIS AGREEMENT SHALL BE INTERPRETED
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF
PENNSYLVANIA WITHOUT REGARD TO ITS CHOICE OF LAW PRINCIPLES.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
dates specified below.
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EXECUTIVE
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EXELON CORPORATION
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By:
---------------------------------
Title:
------------------------------
(Employer, if different from Exelon)
------------------------------------
------------------------------------
By:
---------------------------------
Title:
------------------------------
14152671v4
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