ComEd 2006 Annual Report Download - page 368

• upon consummation of a reorganization, merger or consolidation, or sale or other disposition of
at least 50% of Exelon’s operating assets (excluding a transaction where Exelon shareholders
retain at least 60% of the voting power); or
• upon shareholder approval of a plan of complete liquidation or dissolution.
The term good reason, under the change in control employment agreements generally includes
any of the following occurring within two years after a change in control or disaggregation or within
18 months after a significant acquisition:
• a material reduction in salary, incentive compensation opportunity or aggregate benefits,
unless such reduction is part of a policy, program or arrangement applicable to peer
executives;
• failure of a successor to assume the agreement;
• a material breach of the agreement by Exelon; or
• any of the following, but only after a change in control or disaggregation: (1) a material adverse
reduction in the executive’s position, duties or responsibilities (other than a change in the
position or level of officer to whom the executive reports or a change that is part of a policy,
program or arrangement applicable to peer executives) or (2) a required relocation by more
than 50 miles.
The term cause under the change in control employment agreements generally includes any of the
following:
• refusal to perform or habitual neglect in the performance of duties or responsibilities or of
specific directives of the officer to whom the executive reports which are not materially
inconsistent with the scope and nature of the executive’s duties and responsibilities;
• willful or reckless commission of acts or omissions which have resulted in or are likely to result
in a material loss or material damage to the reputation of Exelon or any of its affiliates, or that
compromise the safety of any employee;
• commission of a felony or any crime involving dishonesty or moral turpitude;
• material violation of the code of business conduct which would constitute grounds for
immediate termination of employment, or of any statutory or common-law duty of loyalty; or
• any breach of the executive’s restrictive covenants.
Executives who have entered into change in control employment agreements will be eligible to
receive an additional payment to cover excise taxes imposed under Section 4999 of the Internal
Revenue Code on excess parachute payments or under similar state or local law if the after-tax
amount of payments and benefits subject to these taxes exceeds 110% of the safe harbor amount that
would not subject the employee to these excise taxes. If the after-tax amount, however, is less than
110% of the safe harbor amount, payments and benefits subject to these taxes would be reduced or
eliminated to equal the safe harbor amount.
If a named executive officer other than Mr. Rowe resigns for good reason or is terminated by
Exelon other than for cause or disability, in each case under circumstances not covered by an
individual change in control employment agreement, the named executive officer may be eligible for
the following non-change in control benefits under the Exelon Corporation Senior Management
Severance Plan:
• prorated payment of the executive’s target annual incentive for the year in which termination
occurs;
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