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Exhibit 10e(1)
May 25, 1993
Mr. Donald C. Shelton
Davis-Besse Nuclear Power Station
300 Madison Avenue
Toledo, Ohio 43652
Re: Employment Agreement
Dear Mr. Shelton:
This will confirm the agreement between you and Centerior Service
Company (the "Company"), effective June 4, 1993, with respect to the terms of
your employment by the Company, as follows:
1. The Company agrees to employ you, and you agree to serve, in a
full-time senior executive capacity, until June 30, 1995, at which time you
agree that your employment with the Company and its affiliates will
terminate. Effective as of June 7, 1993 and during this period your annual
base salary will be $225,000, payable bi-weekly.
2. Your duties will be those as Senior Vice President - Nuclear of
the Company effective as of June 7, 1993; however, these may be changed to
other duties of a senior executive nature as may be determined by the Chief
Executive Officer and/or the Board of Directors of the Company.
3. Your employment, pursuant to this Agreement, will terminate upon
June 30, 1995 or upon your earlier death or if, in the opinion of the Board
of Directors, you are disabled or have failed to perform your duties as a
senior executive of the Company. Upon your written request, the Board of
Directors may, but is not obligated to, consent to your termination of
employment at any time prior to June 30, 1995.
4. As an inducement to and in consideration of your employment
commitment pursuant to this Agreement, the Company agrees to provide you (or
if you are deceased, your spouse) with certain pension and other employee
benefits, namely:
(a) As a full-time employee of the Company and throughout your
employment under this Agreement, you will be entitled to
participate, in accordance with the terms thereof, in each
of the Company's employee benefit plans as are available to
other senior executive officers of the Company except for
incentive compensation benefits and pension benefits which
shall be payable as provided in paragraphs 4(b) and 4(c) below.
In addition, upon termination of this agreement in accordance
with the terms hereof, you will be entitled to normal retiree
welfare benefits.
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Mr. Donald C. Shelton
May 25, 1993
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(b) You shall be entitled to participate in the Company's
existing incentive compensation plan on the same terms
and conditions as other vice presidents of the Company.
In addition, you shall have the opportunity to receive,
pursuant to this agreement, an additional incentive
compensation award of up to 30% of your annual base
salary contingent upon achievement of certain nuclear
generation goals to be approved by the Company. The
additional incentive compensation award provided pursuant
to this paragraph 4(b) shall not be included in the
calculation of pension benefits as provided in
paragraph 4(c).
(c) If you continue in the employ of the Company and continue
the full performance of your duties hereunder through
June 30, 1995, or such earlier date as may be approved
by the Board of Directors, the Company will provide
through the Pension Plan of the Company and by direct
payments to you (or if you are deceased, your spouse) of
the full amount of benefits to which you or she would
otherwise be entitled to receive under the Pension Plan
of the Company and at the time or times provided in such
Plan, all as if the design features of the Company's 1993
Voluntary Transition Program were applied to your pension
benefit calculation effective as of June 30, 1995, or
such earlier date as may be approved by the Board of
Directors, and as if the commuted benefit payment option
were based on the interest rate under the Pension Plan
in effect on July 1, 1993 or July 1, 1995 (or the actual
date at retirement if earlier), whichever results in a
higher commuted benefit amount; provided, however, that
the Company's obligation to provide such benefits will be
reduced by the amounts payable to you or on your behalf
under such Pension Plan. In addition, you will be
credited with 1.75 additional years of service for purposes
of the foregoing normal pension benefit calculation.
If your employment under this Agreement is terminated
by the Board of Directors prior to June 30, 1995 by
reason of your failure to perform your obligations
and duties under this Agreement, the Company's only
obligation to you will be the payment of the pension
benefit described in this paragraph 4(c). If you
voluntarily terminate employment from the Company prior
to June 30, 1995 without Board of Directors' consent,
the Company will have no obligation to provide the
pension benefits described in this paragraph 4(c) or
any other payment or benefit described in this agreement.
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Mr. Donald C. Shelton
May 25, 1993
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5. Your rights under this Agreement will not be transferable or
subject to encumbrance of any nature except that upon your death, such rights
will inure to the benefit of your executors, administrators, personal
representatives or assigns.
6. You agree that during the term of this agreement you will provide
no similar services to any corporation, partnership, association, business or
activity which, in the Company's reasonable opinion, is then competitive with
any business or type of enterprise conducted or engaged in by the Company,
except with the written consent of the Company. Any violation of this
provision of the agreement will cause the agreement to be null and void and
any right you may have to future payments hereunder shall be cancelled.
Otherwise you will be free to engage in other professional and/or business
activities which do not impair your ability to perform this agreement.
7. All information disclosed by the Company to you which is not or
does not become available to the public shall be treated by you as
confidential information and shall not be disclosed to third parties. You
agree not to publish either as author or co-author, without prior written
approval by the Company, any information that may be developed by you in
performance of your services for the Company.
8. Unless otherwise instructed, in the performance of your services
under this agreement, approvals and requests on behalf of the Company shall
be given by Robert J. Farling, Chief Executive Officer of the Company, or his
designee or, in the event that Robert J. Farling shall cease to serve as
Chief Executive Officer of the Company, the then Chief Executive Officer of
the Company, or such person as the Board of Directors of Centerior may
designate for such purposes.
9. This Agreement will be governed by and construed according to the
laws of the State of Ohio.
If the foregoing correctly sets forth the agreement between you and the
Company, please sign and return to me the enclosed copy of this letter.
Very truly yours,
ROBERT J. FARLING
Robert J. Farling
Chairman and Chief Executive Officer
AGREED:
D. C. SHELTON
Donald C. Shelton