Common use of Severance Benefit Clause in Contracts

Severance Benefit. a. If, during the period commencing on the date of a Change in Control and ending on the last day of the Term, the Executive's employment hereunder is terminated by the Company for any reason, other than Cause, death, or disability, or is terminated by the Executive in the event of a Constructive Discharge, then, within five (5) business days after such termination, PEC shall pay to the Executive (if the Executive has died before receiving all payments to which he has become entitled hereunder to the beneficiary or estate of the Executive as described in paragraph 14) the sum of (i) accrued but unpaid salary and accrued but unused paid time off under the Company's "Paid Time Off Bank" policy for all nonunion employees, effective January 1, 1997, or any successor plan, (ii) severance pay in a lump sum cash amount equal to three (3) years of the Executive's Compensation, and (iii) the amount determined pursuant to paragraph 3.e. The Executive (if the Executive has died before receiving all payment to which he becomes entitled hereunder, the beneficiary or the estate of the Executive as described in paragraph 14) will be paid in cash within ten (10) business days after termination as described in paragraph 3.a., the Present Value Amount of the benefits accrued by the Executive under the PEC SRB, Part A and Part B on the date of termination of employment as described in this paragraph 3.a., determined as if the Executive had received credit for an additional three (3) years of Benefit Service. For purposes of determining the Executive's accrued benefits under the preceding sentence, such benefits shall be determined as full benefits, without actuarial reduction, as if the Executive qualified for the Rule of Eighty-Five under the PEC Retirement Plan and PEC SRB (regardless of whether the Executive so qualifies). All non-vested Options and SARs awarded to the Executive under the PEC LTIC shall be deemed vested as of the earlier of the date of a Change in Control as defined in this Agreement or Change in Control as defined in the PEC LTIC. The Company shall treat the Executive as employed by the Company for purposes of exercising Stock Options and SARs during the Coverage Period. All non-vested restricted stock awarded to the Executive under the PEC LTIC shall be deemed vested and owned by the Executive as of the earlier of the date of a Change in Control as defined in this Agreement or a Change in Control as defined in the PEC LTIC and such stock shall be delivered to the Executive within five (5) business days after the date of such Change in Control. The Executive's termination of employment with the Company to become an employee of a corporation which directly or indirectly owns one hundred percent (100%) of or which is owned one hundred percent (100%) by the Company shall not be considered a termination of employment for purposes of this Agreement. The subsequent termination of the Executive's employment from such corporation, without employment at a company that is wholly-owned by such corporation, shall be considered a termination of employment for purposes of this Agreement. b. During the longer of: (i) the Coverage Period or (ii) the period commencing with the date of the Executive's termination of employment as described in paragraph 3a and ending on the last day of the first month in which the Executive may retire under the PEC Retirement Plan and be eligible to receive a retirement annuity thereunder without actuarial reduction, the Executive shall be entitled to all benefits under the Company's welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended), as if the Executive were still employed during such period, at the same level of benefits and at the same dollar cost to the Executive as is available to all of the Company's executives generally and if and to the extent that equivalent benefits shall not be payable or provided under any such plans, the Company shall pay or provide equivalent benefits on an individual basis; provided, however, that PEC's obligations under this paragraph 3.b. shall cease upon the date following the termination of the Executive's employment as described in paragraph 3.a. that the Executive is eligible to receive benefits under welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) provided by an employer of the Executive other than the Company. c. (i) If Independent Tax Counsel shall determine that the aggregate payments made to the Executive pursuant to this Agreement and any other payments to the Executive from the Company which constitute "parachute payments" as defined in Section 280G of the Code (or any successor provision thereto) ("Parachute Payments") would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount calculated at the highest marginal tax rate applicable to the Executive for the tax year in which such payments were paid to the Executive (determined by Independent Tax Counsel) such that after payment by the Executive of all federal, state and other taxes (including any Excise Tax) imposed upon the Gross-Up Payment and any interest or penalties imposed with respect to such taxes, the Executive retains from the Gross-Up Payment an amount equal to the Excise Tax imposed upon the payments. For purposes of this paragraph 3.c., "Independent Tax Counsel" shall mean a lawyer, a certified public accountant with a nationally recognized accounting firm, or a compensation consultant with a nationally recognized actuarial and benefits consulting firm, with expertise in the area of executive compensation tax law, who shall be selected by the Executive and shall be reasonably acceptable to PEC, and whose fees and disbursements shall be paid by PEC. (ii) If Independent Tax Counsel shall determine that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that the Executive has substantial authority not to report any Excise Tax on the Executive's Federal income tax return. If the Executive is subsequently required to make a payment of any Excise Tax, then the Independent Tax Counsel shall determine in the same manner as a Gross-up Payment the amount (the amount of such additional payments are referred herein as "Gross-Up Underpayment") of such payment and any such Gross-Up Underpayment shall be promptly paid by PEC to or for the benefit of the Executive. The fees and disbursements of the Independent Tax Counsel shall be paid by PEC. (iii) The Executive shall notify PEC in writing within 15 days of any claim by the Internal Revenue Service that, if successful, would require the payment by PEC of a Gross-Up Payment. If PEC notifies the Executive in writing that it desires to contest such claim and that it will bear the costs and provide the indemnification as required by this subparagraph (iii) of paragraph 3.c., the Executive shall: (A) give the Company any information reasonably requested by the Company relating to such claim, (B) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company, (C) cooperate with the Company in good faith in order to effectively contest such claim, and (D) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, for any Excise Tax or federal and state income tax or other taxes, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. The Company shall control all proceedings taken in connection with such contest; provided, however, that if the Company directs the Executive to pay such claim and xxx for a refund, PEC shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, from any Excise Tax or federal and state income tax or other taxes, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance. (iv) If, after the receipt by the Executive of an amount advanced by PEC pursuant to subparagraph (iii) of paragraph 3.c., the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall within 10 days pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). d. In the event of any termination of the Executive's employment as described in paragraph 3.a., the Executive shall be under no obligation to seek other employment, and there shall be no offset against amounts due the Executive under this Agreement on account of any remuneration attributable to any subsequent employment. e. The Executive shall be paid the following described amounts pursuant to subparagraph (iii) of paragraph 3.a. If the Executive has not received an award under the STIC for the Plan Year in which his employment is terminated the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount equal to a prorated award for the portion of the Plan Year that the Executive was employed by the Company. If the Executive has not yet received payment of his award amount under the STIC for the Plan Year preceding the Executive's termination, the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount under the STIC for such Plan Year. 4.

Severance Benefit. a. If, during the period commencing on the date of a Change in Control and ending on the last day of the Term, the Executive's employment hereunder is terminated by the Company for any reason, other than Cause, death, or disability, or is terminated by the Executive in the event of a Constructive Discharge, then, within five (5) business days after such termination, PEC shall pay to the Executive (if the Executive has died before receiving all payments to which he has become entitled hereunder to the beneficiary or estate of the Executive as described in paragraph 14) the sum of (i) accrued but unpaid salary and accrued but unused paid time off under the Company's "Paid Time Off Bank" policy for all nonunion employees, effective January 1, 1997, or any successor plan, (ii) severance pay in a lump sum cash amount equal to three (3) years of the Executive's Compensation, and (iii) the amount determined pursuant to paragraph 3.e. The Executive (if the Executive has died before receiving all payment to which he becomes entitled hereunder, the beneficiary or the estate of the Executive as described in paragraph 14) will be paid in cash within ten (10) business days after termination as described in paragraph 3.a., the Present Value Amount of the benefits accrued by the Executive under the PEC SRB, Part A and Part B on the date of termination of employment as described in this paragraph 3.a., determined as if the Executive had received credit for an additional three (3) years of Benefit Service. For purposes of determining the Executive's accrued benefits under the preceding sentence, such benefits shall be determined as full benefits, without actuarial reduction, as if the Executive qualified for the Rule of Eighty-Five under the PEC Retirement Plan and PEC SRB (regardless of whether the Executive so qualifies). All non-vested Options and SARs awarded to the Executive under the PEC LTIC shall be deemed vested as of the earlier of the date of a Change in Control as defined in this Agreement or Change in Control as defined in the PEC LTIC. The Company shall treat the Executive as employed by the Company for purposes of exercising Stock Options and SARs during the Coverage Period. All non-vested restricted stock awarded to the Executive under the PEC LTIC shall be deemed vested and owned by the Executive as of the earlier of the date of a Change in Control as defined in this Agreement or a Change in Control as defined in the PEC LTIC and such stock shall be delivered to the Executive within five (5) business days after the date of such Change in Control. The Executive's termination of employment with the Company to become an employee of a corporation which directly or indirectly owns one hundred percent (100%) of or which is owned one hundred percent (100%) by the Company shall not be considered a termination of employment for purposes of this Agreement. The subsequent termination of the Executive's employment from such corporation, without employment at a company that is wholly-owned by such corporation, shall be considered a termination of employment for purposes of this Agreement. b. During the longer of: (i) the Coverage Period or (ii) the period commencing with the date of the Executive's termination of employment as described in paragraph 3a and ending on the last day of the first month in which the Executive may retire under the PEC Retirement Plan and be eligible to receive a retirement annuity thereunder without actuarial reduction, the Executive shall be entitled to all benefits under the Company's welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended), as if the Executive were still employed during such period, at the same level of benefits and at the same dollar cost to the Executive as is available to all of the Company's executives generally and if and to the extent that equivalent benefits shall not be payable or provided under any such plans, the Company shall pay or provide equivalent benefits on an individual basis; provided, however, that PEC's obligations under this paragraph 3.b. shall cease upon the date following the termination of the Executive's employment as described in paragraph 3.a. that the Executive is eligible to receive benefits under welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) provided by an employer of the Executive other than the Company. c. (i) If Independent Tax Counsel shall determine that the aggregate payments made to the Executive pursuant to this Agreement and any other payments to the Executive from the Company which constitute "parachute payments" as defined in Section 280G of the Code (or any successor provision thereto) ("Parachute Payments") would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount calculated at the highest marginal tax rate applicable to the Executive for the tax year in which such payments were paid to the Executive (determined by Independent Tax Counsel) such that after payment by the Executive of all federal, state and other taxes (including any Excise Tax) imposed upon the Gross-Up Payment and any interest or penalties imposed with respect to such taxes, the Executive retains from the Gross-Up Payment an amount equal to the Excise Tax imposed upon the payments. For purposes of this paragraph 3.c., "Independent Tax Counsel" shall mean a lawyer, a certified public accountant with a nationally recognized accounting firm, or a compensation consultant with a nationally recognized actuarial and benefits consulting firm, with expertise in the area of executive compensation tax law, who shall be selected by the Executive and shall be reasonably acceptable to PEC, and whose fees and disbursements shall be paid by PEC. (ii) If Independent Tax Counsel shall determine that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that the Executive has substantial authority not to report any Excise Tax on the Executive's Federal income tax return. If the Executive is subsequently required to make a payment of any Excise Tax, then the Independent Tax Counsel shall determine in the same manner as a Gross-up Payment the amount (the amount of such additional payments are referred herein as "Gross-Up Underpayment") of such payment and any such Gross-Up Underpayment shall be promptly paid by PEC to or for the benefit of the Executive. The fees and disbursements of the Independent Tax Counsel shall be paid by PEC. (iii) The Executive shall notify PEC in writing within 15 days of any claim by the Internal Revenue Service that, if successful, would require the payment by PEC of a Gross-Up Payment. If PEC notifies the Executive in writing that it desires to contest such claim and that it will bear the costs and provide the indemnification as required by this subparagraph (iii) of paragraph 3.c., the Executive shall: (A) give the Company any information reasonably requested by the Company relating to such claim, (B) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company, (C) cooperate with the Company in good faith in order to effectively contest such claim, and (D) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, for any Excise Tax or federal and state income tax or other taxes, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. The Company shall control all proceedings taken in connection with such contest; provided, however, that if the Company directs the Executive to pay such claim and xxx for a refund, PEC shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, from any Excise Tax or federal and state income tax or other taxes, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance. (iv) If, after the receipt by the Executive of an amount advanced by PEC pursuant to subparagraph (iii) of paragraph 3.c., the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall within 10 days pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). d. In the event of any termination of the Executive's employment as described in paragraph 3.a., the Executive shall be under no obligation to seek other employment, and there shall be no offset against amounts due the Executive under this Agreement on account of any remuneration attributable to any subsequent employment. e. The Executive shall be paid the following described amounts pursuant to subparagraph (iii) of paragraph 3.a. If the Executive has not received an award under the STIC for the Plan Year in which his employment is terminated the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount equal to a prorated award for the portion of the Plan Year that the Executive was employed by the Company. If the Executive has not yet received payment of his award amount under the STIC for the Plan Year preceding the Executive's termination, the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount under the STIC for such Plan Year. 4.

Severance Benefit. a. If, during the period commencing on the date of a Change An officer who elects to be made redundant in Control and ending on the last day of the Term, the Executive's employment hereunder is terminated by the Company for any reason, other than Cause, death, or disability, or is terminated by the Executive in the event of a Constructive Discharge, then, within five (5) business days after such termination, PEC shall pay to the Executive (if the Executive has died before receiving all payments to which he has become entitled hereunder to the beneficiary or estate of the Executive as described in paragraph 14) the sum of (i) accrued but unpaid salary and accrued but unused paid time off under the Company's "Paid Time Off Bank" policy for all nonunion employees, effective January 1, 1997, or any successor plan, (ii) severance pay in a lump sum cash amount equal to three (3) years of the Executive's Compensation, and (iii) the amount determined pursuant to paragraph 3.e. The Executive (if the Executive has died before receiving all payment to which he becomes entitled hereunder, the beneficiary or the estate of the Executive as described in paragraph 14) accordance with this clause will be paid in cash within ten (10) business days after termination as described in paragraph 3.a., the Present Value Amount of the benefits accrued by the Executive under the PEC SRB, Part A and Part B on the date of termination of employment as described in this paragraph 3.a., determined as if the Executive had received credit for an additional three (3) years of Benefit Service. For purposes of determining the Executive's accrued benefits under the preceding sentence, such benefits shall be determined as full benefits, without actuarial reduction, as if the Executive qualified for the Rule of Eighty-Five under the PEC Retirement Plan and PEC SRB (regardless of whether the Executive so qualifies). All non-vested Options and SARs awarded to the Executive under the PEC LTIC shall be deemed vested as of the earlier of the date of a Change in Control as defined in this Agreement or Change in Control as defined in the PEC LTIC. The Company shall treat the Executive as employed by the Company for purposes of exercising Stock Options and SARs during the Coverage Period. All non-vested restricted stock awarded to the Executive under the PEC LTIC shall be deemed vested and owned by the Executive as of the earlier of the date of a Change in Control as defined in this Agreement or a Change in Control as defined in the PEC LTIC and such stock shall be delivered to the Executive within five (5) business days after the date of such Change in Control. The Executive's termination of employment with the Company to become an employee of a corporation which directly or indirectly owns one hundred percent (100%) of or which is owned one hundred percent (100%) by the Company shall not be considered a termination of employment for purposes of this Agreement. The subsequent termination of the Executive's employment from such corporation, without employment at a company that is wholly-owned by such corporation, shall be considered a termination of employment for purposes of this Agreement. b. During the longer of: (i) the Coverage Period or (ii) the period commencing with the date of the Executive's termination of employment as described in paragraph 3a and ending on the last day of the first month in which the Executive may retire under the PEC Retirement Plan and be eligible to receive a retirement annuity thereunder without actuarial reduction, the Executive shall be entitled to all benefits under the Company's welfare benefit plans (within the meaning of Section 3(1) be paid either of the Employee Retirement Income Security Act of 1974following, as amended), as if whichever is the Executive were still employed during such period, at the same level of benefits and at the same dollar cost greater: a sum equal to the Executive as is available to all two weeks of the Company's executives generally and if and to officer’s pay for each completed year of continuous service, plus a pro rata payment for completed months of continuous service since the extent that equivalent benefits shall not be last year of continuous service. The maximum sum payable or provided under any such plans, the Company shall pay or provide equivalent benefits on an individual basis; provided, however, that PEC's obligations under this paragraph 3.bwill be 48 weeks pay; or twenty-six weeks pay. shall cease upon For the purpose of calculating any payment instead of notice or part payment, the pay an officer would have received had he or she been on annual leave during the notice period, or the unexpired portion of the notice period as appropriate, will be used. For the purpose of calculating payment under subclause K6.1: where an officer has been acting in a higher position for a continuous period of at least twelve months immediately preceding the date following on which he or she receives notice of retirement, the termination pay level will be the officer’s pay in such higher position at that date; where an officer has, during 50% or more of pay periods in the Executive's employment twelve months immediately preceding the date on which he or she receives notice of retirement, been paid a loading for shiftwork or are paid a composite pay, the weekly average amount of shift loading received during that twelve month period will be counted as described part of "weeks pay"; the inclusion of other allowances, being allowances in paragraph 3.a. that the Executive is eligible to receive benefits under welfare benefit plans (within the meaning nature of Section 3(1) of the Employee Retirement Income Security Act of 1974pay, as amended) provided by an employer of the Executive other than the Company. c. (i) If Independent Tax Counsel shall determine that the aggregate payments made to the Executive pursuant to this Agreement and any other payments to the Executive from the Company which constitute "parachute payments" as defined in Section 280G of the Code (or any successor provision thereto) ("Parachute Payments") would will be subject to the excise tax imposed by Section 4999 approval of the Code (Chief Executive. Where a redundancy situation affects a number of officers engaged in the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount calculated same work at the highest marginal tax rate applicable same level, elections to be made redundant may be invited. Nothing in this Agreement will prevent the Chief Executive inviting officers who are not in a redundancy situation to express interest in voluntary redundancy, where such redundancies would permit the redeployment of potentially excess and excess officers who do not wish to accept voluntary redundancy. Redeployment Redeployment of potentially excess and excess officers will be in accordance with the officer’s experience, ability and, as far as possible, the officer’s career aspirations and wishes. The Chief Executive will consider potentially excess and excess officers from other ACTPS agencies in isolation for vacancies at the officer’s substantive level. Excess officers (potential or actual) have absolute preference for transfer to positions at the officer’s substantive level and must be considered in isolation from other applicants for any vacancy within CIT and the ACTPS. An excess officer need only be found suitable, or suitable within a reasonable time (generally three to six months) to be transferred to the Executive for the tax year in which such payments were paid to the Executive (determined by Independent Tax Counsel) such that after payment by the Executive of all federal, state and other taxes (including any Excise Tax) imposed upon the Gross-Up Payment and any interest or penalties imposed with respect to such taxes, the Executive retains from the Gross-Up Payment an amount equal to the Excise Tax imposed upon the paymentsposition. For the purposes of this paragraph 3.c., "Independent Tax Counsel" shall mean a lawyer, a certified public accountant with a nationally recognized accounting firm, clause substantive level means the same classification or a compensation consultant classification where the maximum pay does not exceed the top increment of the officer’s current classification by more than 10%. The Chief Executive will make every effort to facilitate the placement of an excess officer, within the service. The Chief Executive will arrange reasonable training that would assist the excess officer’s prospects for redeployment. The Chief Executive will provide appropriate internal assistance and career counselling and assist as necessary with the preparation of job applications. An excess officer who does not accept voluntary redundancy is entitled to a nationally recognized actuarial and benefits consulting firm, with expertise seven month retention period. The retention period will commence: on the day the officer is advised in writing by the Chief Executive that he or she is an actually excess officer; or in the area case of executive compensation tax law, an officer who shall be selected is invited by the Chief Executive and shall to submit an election to be reasonably acceptable to PEC, and whose fees and disbursements shall be paid by PEC. (ii) If Independent Tax Counsel shall determine that no Excise Tax retired - one month after the day on which the election is payable by invited; whichever is the Executive, it shall furnish the Executive with a written opinion that the Executive has substantial authority not to report any Excise Tax on the Executive's Federal income tax return. If the Executive is subsequently required to make a payment of any Excise Tax, then the Independent Tax Counsel shall determine in the same manner as a Gross-up Payment the amount (the amount of such additional payments are referred herein as "Gross-Up Underpayment") of such payment and any such Gross-Up Underpayment shall be promptly paid by PEC to or for the benefit of the Executiveearlier. The fees Chief Executive may reduce the officer in classification and disbursements of place the Independent Tax Counsel shall be paid by PEC. (iii) The Executive shall notify PEC officer in writing a specific position within 15 days of any claim by CIT, where the Internal Revenue Service that, if successful, would require the payment by PEC of a Gross-Up Payment. If PEC notifies the Executive in writing that it desires to contest such claim and that it will bear the costs and provide the indemnification as required by this subparagraph (iii) of paragraph 3.c., the Executive shall: (A) give the Company any information reasonably requested by the Company relating to such claim, (B) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company, (C) cooperate with the Company in good faith in order to effectively contest such claim, and (D) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, for any Excise Tax or federal and state income tax or other taxes, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. The Company shall control all proceedings taken in connection with such contest; provided, however, that if the Company directs the Executive to pay such claim and xxx for a refund, PEC shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, from any Excise Tax or federal and state income tax or other taxes, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance. (iv) If, after the receipt by the Executive of an amount advanced by PEC pursuant to subparagraph (iii) of paragraph 3.c., the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall within 10 days pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). d. In the event of any termination of the Executive's employment as described in paragraph 3.a., the Executive shall be under no obligation to seek other employment, and there shall be no offset against amounts due the Executive under this Agreement on account of any remuneration attributable to any subsequent employment. e. The Executive shall be paid the following described amounts pursuant to subparagraph (iii) of paragraph 3.a. If the Executive has not received an award under the STIC for the Plan Year in which his employment is terminated the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount equal to a prorated award for the portion of the Plan Year that the Executive was employed by the Company. If the Executive has not yet received payment of his award amount under the STIC for the Plan Year preceding the Executive's termination, the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount under the STIC for such Plan Year. 4.officer:

Severance Benefit. a. If, during the period commencing on the date of a Change in Control and ending on the last day of the Term, the Executive's employment hereunder is terminated by the Company for any reason, other than Cause, death, or disability, or is terminated by the Executive in the event of a Constructive Discharge, then, within five (5) business days after such termination, PEC shall pay to the Executive (or, if the Executive has died before receiving all payments to which he she has become entitled hereunder hereunder, to the beneficiary or estate of the Executive as described in paragraph 1413) the sum of of: (i) accrued but unpaid salary and accrued but unused paid time off for nonunion employees under the Company's "Paid Time Off Bank" policy for all nonunion employees, effective January 1as in effect on the Effective Date, 1997, as amended from time to time or any successor plan, and (ii) severance pay in a lump sum cash amount equal to three (3) years of the Executive's Compensation. Provided that the Executive is vested under the PEC Retirement Plan, and (iii) the amount determined pursuant to paragraph 3.e. The Executive (or, if the Executive has died before receiving all payment payments to which he she becomes entitled hereunder, the beneficiary or the estate of the Executive as described in paragraph 1413) will be paid in cash within ten (10) business days after termination as described in this paragraph 3.a., the Present Value Amount amount of the vested benefits accrued by the Executive under the PEC SRB, Part A and Part B SRB on the date of termination of employment as described in this paragraph 3.a., determined as if the Executive had received credit for an additional three (3) years of Benefit Service ("Additional Three Years Benefit Service. For purposes ") (or the Present Value Amount of determining such vested benefits if the Executive's accrued benefits under the preceding sentence, such benefits shall be determined as full benefits, without actuarial reduction, as if the Executive qualified for the Rule of Eighty-Five benefit under the PEC Retirement Plan and PEC SRB is expressed as an annuity). If, at the date of termination of employment as described in this paragraph 3a (regardless of whether a) the Executive so qualifies). All non-vested Options and SARs awarded to is at least age 37 but less than age 40, or (b) the Executive is at least age 47 but less than age 50 that part of Executive's severance benefit resulting from the Additional Three Years Benefit Service shall be calculated at the percentage Executive would be entitled to if Executive had reached the age of (a) 40 in the event Executive is at least age 37 but less than age 40, or (b) 50 in the event Executive is at least age 47 but less than age 50. Any payment of the Executive's vested accrued benefit under the PEC LTIC SRB pursuant to this paragraph 3.a. shall be deemed vested as in lieu of any payment under the earlier of PEC SRB itself and once paid pursuant to this Agreement, the date Executive shall have no further claim to payment under the PEC SRB. In the event of a Change change in Control control as defined in this Agreement or Change in Control as defined in under the PEC LTIC. The Company shall treat the Executive as employed by the Company for purposes of exercising Stock Options and SARs during the Coverage Period. All , any non-vested restricted stock awarded to the Executive under the PEC LTIC shall be deemed vested and owned by the Executive as in accordance with the provisions of the earlier of PEC LTIC. In the date event of a Change change in Control as defined in this Agreement or a Change in Control control, as defined in the PEC LTIC 2004 Plan, any award under the Long-Term Plan and such stock any Award Opportunity under the Short-Term Plan shall be delivered to distributed or paid in accordance with the Executive within five (5) business days after the date respective provisions of such Change in Controlplans. The Executive's termination of employment with the Company to become an employee of a corporation which directly or indirectly owns one hundred percent (100%) of or which is owned one hundred percent (100%) by the Company shall not be considered a termination of employment for purposes of this Agreement, provided that such termination and subsequent employment is not a Constructive Discharge. The subsequent termination of the Executive's employment from such corporation, without employment at a company that is wholly-owned by such corporation, shall be considered a termination of employment for purposes of this Agreement. b. During the longer of: (i) the Coverage Period or (ii) the period commencing with the date of the Executive's termination of employment as described in paragraph 3a and ending on the last day of the first month in which the Executive may retire under the PEC Retirement Plan and be eligible to receive a retirement annuity thereunder without actuarial reduction, the Executive shall be entitled to all benefits under the Company's welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended), as if the Executive were still employed during such period, at the same level of benefits and at the same dollar cost to the Executive as is available to all of the Company's executives generally and if and to the extent that equivalent benefits shall not be payable or provided under any such plans, the Company shall pay or provide equivalent benefits on an individual basis; provided, however, that PEC's obligations under this paragraph 3.b. shall cease upon the date following the termination of the Executive's employment as described in paragraph 3.a. that the Executive is eligible to receive benefits under welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) provided by an employer of the Executive other than the Company. c. (i) If Independent Tax Counsel shall determine that the aggregate payments made to the Executive pursuant to this Agreement and any other payments to the Executive from the Company which constitute "parachute payments" as defined in Section 280G of the Code (or any successor provision thereto) ("Parachute Payments") would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount calculated at the highest marginal tax rate applicable to the Executive for the tax year in which such payments were paid to the Executive (determined by Independent Tax Counsel) such that after payment by the Executive of all federal, state and other taxes (including any Excise Tax) imposed upon the Gross-Up Payment and any interest or penalties imposed with respect to such taxes, the Executive retains from the Gross-Up Payment an amount equal to the Excise Tax imposed upon the payments. For purposes of this paragraph 3.c., "Independent Tax Counsel" shall mean a lawyer, a certified public accountant with a nationally recognized accounting firm, or a compensation consultant with a nationally recognized actuarial and benefits consulting firm, with expertise in the area of executive compensation tax law, who shall be selected by the Executive and shall be reasonably acceptable to PEC, and whose fees and disbursements shall be paid by PEC. (ii) If Independent Tax Counsel shall determine that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that the Executive has substantial authority not to report any Excise Tax on the Executive's Federal income tax return. If the Executive is subsequently required to make a payment of any Excise Tax, then the Independent Tax Counsel shall determine in the same manner as a Gross-up Payment the amount (the amount of such additional payments are referred herein as "Gross-Up Underpayment") of such payment and any such Gross-Up Underpayment shall be promptly paid by PEC to or for the benefit of the Executive. The fees and disbursements of the Independent Tax Counsel shall be paid by PEC. (iii) The Executive shall notify PEC in writing within 15 days of any claim by the Internal Revenue Service that, if successful, would require the payment by PEC of a Gross-Up Payment. If PEC notifies the Executive in writing that it desires to contest such claim and that it will bear the costs and provide the indemnification as required by this subparagraph (iii) of paragraph 3.c., the Executive shall: (A) give the Company any information reasonably requested by the Company relating to such claim, (B) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company, (C) cooperate with the Company in good faith in order to effectively contest such claim, and (D) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, for any Excise Tax or federal and state income tax or other taxes, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. The Company shall control all proceedings taken in connection with such contest; provided, however, that if the Company directs the Executive to pay such claim and xxx for a refund, PEC shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, from any Excise Tax or federal and state income tax or other taxes, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance. (iv) If, after the receipt by the Executive of an amount advanced by PEC pursuant to subparagraph (iii) of paragraph 3.c., the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall within 10 days pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). d. In the event of any termination of the Executive's employment as described in paragraph 3.a., the Executive shall be under no obligation to seek other employment, and there shall be no offset against amounts due the Executive under this Agreement on account of any remuneration attributable to any subsequent employment. e. The Executive shall be paid the following described amounts pursuant to subparagraph (iii) of paragraph 3.a. If the Executive has not received an award under the STIC for the Plan Year in which his employment is terminated the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount equal to a prorated award for the portion of the Plan Year that the Executive was employed by the Company. If the Executive has not yet received payment of his award amount under the STIC for the Plan Year preceding the Executive's termination, the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount under the STIC for such Plan Year. 4.

Severance Benefit. a. If, during the period commencing on the date of a Change in Control and ending on the last day of the Term, the Executive's employment hereunder is terminated by the Company for any reason, other than Cause, death, or disability, or is terminated by the Executive in the event of a Constructive Discharge, then, within five (5) business days after such termination, PEC shall pay to the Executive (if the Executive has died before receiving all payments to which he has become entitled hereunder to the beneficiary or estate of the Executive as described in paragraph 1413) the sum of (i) accrued but unpaid salary and accrued but unused paid time off under the Company's "Paid Time Off Bank" policy for all nonunion employees, effective January 1, 1997, as in effect on the Effective Date, as amended from time to time or any successor plan, (ii) the amount determined pursuant to paragraph 3(e), and (iii) severance pay in a lump sum cash amount equal to three (3) years of the Executive's Compensation. If the Executive has been employed by PEC or an Affiliate for at least five (5) years prior to termination of employment, and (iii) as described in paragraph 3.a., the amount determined pursuant to paragraph 3.e. The Executive (if the Executive has died before receiving all payment to which he becomes entitled hereunder, the beneficiary or the estate of the Executive as described in paragraph 1413) will be paid in cash within ten (10) business days after termination of employment as described in paragraph 3.a., an amount equal to the remainder of (x) the Present Value Amount of the benefits that would have been accrued by the Executive under the PEC Retirement Plan and the PEC SRB, Part A and Part B on the date of termination of employment as described in this paragraph 3.a., determined as if the Executive (i) had received credit for an additional three twenty-one (321) years of Benefit Service, and (ii) had commenced participation in the PEC Retirement Plan and PEC SRB as of first date of Executive's actual employment with PESCO, less (y) the Present Value Amount of the benefits accrued by the Executive under the PEC Retirement Plan and the PEC SRB, Part A and Part B on the date of termination of employment as described in this Paragraph 3a. If the Executive has been employed by PEC or an Affiliate for at least one (1) but less than five (5) years at the date of termination of employment as described in paragraph 3.a., then the Executive (if the Executive has died before receiving all payments to which he becomes entitled hereunder, the beneficiary or the estate of the Executive as described in paragraph 13) will be paid cash within ten (10) business days after termination of employment as described in paragraph 3.a., an amount equal to the Present Value Amount of the benefits that would have been accrued by the Executive under the PEC Retirement Plan and PEC SRB, Part A and Part B on the date of termination of employment as described in this paragraph 3.a., determined as if the Executive (i) had commenced participation in the PEC Retirement Plan and PEC SRB as of first date of Executive's actual employment with PESCO, and (ii) had received credit for the number of years of Benefit Service equal to the sum of (x) the number of years that the Executive has been employed by the Company and (y) the product of 20 multiplied by a fraction, the numerator of which is equal to the number of whole months the Executive has been employed by PEC or an Affiliate at the date of termination of employment as described in this paragraph 3.a. and the denominator of which is equal to sixty (60). For purposes of determining the Executive's accrued benefits under the preceding sentenceprovisions of this paragraph 3.a., such benefits shall be determined as full benefits, without actuarial reduction, as if the Executive qualified for the Rule of Eighty-Five under the PEC Retirement Plan and PEC SRB (regardless of whether the Executive so qualifies). All non-vested Options and SARs awarded to the Executive under the PEC LTIC shall be deemed vested as of the earlier of the date of a Change in Control as defined in this Agreement or Change in Control as defined in the PEC LTIC. The Company shall treat the Executive as employed by the Company for purposes of exercising Stock Options and SARs during the Coverage Period. All non-vested restricted stock awarded to the Executive under the PEC LTIC shall be deemed vested and owned by the Executive as of the earlier of the date of a Change in Control as defined in this Agreement or a Change in Control as defined in the PEC LTIC and such stock shall be delivered to the Executive within five (5) business days after the date of such Change in Control. The Executive's termination of employment with the Company to become an employee of a corporation which directly or indirectly owns one hundred percent (100%) of or which is owned directly or indirectly one hundred percent (100%) by the Company shall not be considered a termination of employment for purposes of this Agreement. The subsequent termination of the Executive's employment from such corporation, without employment at a company that is wholly-owned by such corporation, shall be considered a termination of employment for purposes of this Agreement. b. During the longer of: (i) the Coverage Period or (ii) the period commencing with the date of the Executive's termination of employment as described in paragraph 3a and ending on the last day of the first month in which the Executive may retire under the PEC Retirement Plan and be eligible to receive a retirement annuity thereunder without actuarial reduction, the Executive shall be entitled to all benefits under the Company's welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended), as if the Executive were still employed during such period, at the same level of benefits and at the same dollar cost to the Executive as is available to all of the Company's executives generally and if and to the extent that equivalent benefits shall not be payable or provided under any such plans, the Company shall pay or provide equivalent benefits on an individual basis; provided, however, that PEC's obligations under this paragraph 3.b. shall cease upon the date following the termination of the Executive's employment as described in paragraph 3.a. that the Executive is eligible to receive benefits under welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) provided by an employer of the Executive other than the Company. c. (i) If Independent Tax Counsel shall determine that the aggregate payments made to the Executive pursuant to this Agreement and any other payments to the Executive from the Company which constitute "parachute payments" as defined in Section 280G of the Code (or any successor provision thereto) ("Parachute Payments") would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount calculated at the highest marginal tax rate applicable to the Executive for the tax year in which such payments were paid to the Executive (determined by Independent Tax Counsel) such that after payment by the Executive of all federal, state and other taxes (including any Excise Tax) imposed upon the Gross-Up Payment and any interest or penalties imposed with respect to such taxes, the Executive retains from the Gross-Up Payment an amount equal to the Excise Tax imposed upon the payments. For purposes of this paragraph 3.c., "Independent Tax Counsel" shall mean a lawyer, a certified public accountant with a nationally recognized accounting firm, or a compensation consultant with a nationally recognized actuarial and benefits consulting firm, with expertise in the area of executive compensation tax law, who shall be selected by the Executive and shall be reasonably acceptable to PEC, and whose fees and disbursements shall be paid by PEC. (ii) If Independent Tax Counsel shall determine that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that the Executive has substantial authority not to report any Excise Tax on the Executive's Federal income tax return. If the Executive is subsequently required to make a payment of any Excise Tax, then the Independent Tax Counsel shall determine in the same manner as a Gross-up Payment the amount (the amount of such additional payments are referred herein as "Gross-Up Underpayment") of such payment and any such Gross-Up Underpayment shall be promptly paid by PEC to or for the benefit of the Executive. The fees and disbursements of the Independent Tax Counsel shall be paid by PEC. (iii) The Executive shall notify PEC in writing within 15 days of any claim by the Internal Revenue Service that, if successful, would require the payment by PEC of a Gross-Up Payment. If PEC notifies the Executive in writing that it desires to contest such claim and that it will bear the costs and provide the indemnification as required by this subparagraph (iii) of paragraph 3.c., the Executive shall: (A) give the Company any information reasonably requested by the Company relating to such claim, (B) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company, (C) cooperate with the Company in good faith in order to effectively contest such claim, and (D) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, for any Excise Tax or federal and state income tax or other taxes, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. The Company shall control all proceedings taken in connection with such contest; provided, however, that if the Company directs the Executive to pay such claim and xxx for a refund, PEC shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, from any Excise Tax or federal and state income tax or other taxes, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance. (iv) If, after the receipt by the Executive of an amount advanced by PEC pursuant to subparagraph (iii) of paragraph 3.c., the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall within 10 days pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). d. In the event of any termination of the Executive's employment as described in paragraph 3.a., the Executive shall be under no obligation to seek other employment, and there shall be no offset against amounts due the Executive under this Agreement on account of any remuneration attributable to any subsequent employment. e. The Executive shall be paid the following described amounts pursuant to subparagraph (iii) of paragraph 3.a. If the Executive has not received an award under the STIC for the Plan Year in which his employment is terminated the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount equal to a prorated award for the portion of the Plan Year that the Executive was employed by the Company. If the Executive has not yet received payment of his award amount under the STIC for the Plan Year preceding the Executive's termination, the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount under the STIC for such Plan Year. 4.

Severance Benefit. a. If, during the period commencing on the date of a Change in Control and ending on the last day of the Term, If the Executive's employment hereunder is terminated by the Company for any reason, reason other than Causecause, death, death or disability, or is terminated by the Executive in the event of a Constructive Discharge, at any time during the Coverage Period, then, within five (5) business days after such termination, PEC the Company shall pay to the Executive (if the Executive has died before receiving all payments to which he has become entitled hereunder to the beneficiary or estate of the Executive as described in paragraph 14Executive) the sum of (i) accrued but unpaid salary and accrued but unused paid time off under the Company's "Paid Time Off Bank" policy for all nonunion employees, effective January 1, 1997, or any successor plan, vacation and (ii) severance pay in a lump sum cash amount equal to three (3) years of the Executive's Compensation, and (iii) . During the amount determined pursuant to paragraph 3.e. The Executive (if three year period which begins on the date of employment termination the Executive has died before receiving all payment to which he becomes entitled hereunder, the beneficiary or the estate of the Executive as described shall receive (i) full benefits coverage for welfare plans in paragraph 14) will be paid in cash within ten (10) business days after termination as described in paragraph 3.a., the Present Value Amount of the benefits accrued by the Executive under the PEC SRB, Part A place and Part B operational on the date of termination and (ii) full perquisites for all perquisites in place and operational on the date of employment as described termination. The Company shall pay to Executive the present value of the benefits that would have accrued under the qualified retirement plans in this paragraph 3.a., determined as place and operational on the date of termination if the Executive had received credit for an additional the three (3) years year period of Benefit Serviceseverance under this Agreement. For purposes of determining The Company shall treat the Executive's accrued benefits Executive as if he had continued participation and benefit accruals under the preceding sentence, such benefits shall be determined Company's Supplemental Retirement Income Plan or a successor plan (as full benefits, without actuarial reduction, as if in effect upon the Executive qualified for the Rule of Eighty-Five under the PEC Retirement Plan and PEC SRB (regardless of whether the Executive so qualifies). All non-vested Options and SARs awarded to the Executive under the PEC LTIC shall be deemed vested as of the earlier of the date of a Change in Control as defined in this Agreement or Change in Control as defined in Control) during the PEC LTICthree year period. The Company shall treat the Executive as employed by the Company for purposes of exercising Stock Options and SARs stock options during the three year period. The Coverage PeriodPeriod shall begin on the Starting Date and end on the Ending Date. All non-vested restricted stock awarded to the Executive under the PEC LTIC The Starting Date shall be deemed vested and owned by the Executive as of the earlier of (i) the date on which a public announcement is made by the Company of its intention to participate in a transaction which constitutes a Change in Control, or (ii) the date on which a Change in Control as defined in this Agreement or occurs. The Ending Date shall be the earlier of (i) the date on which a public announcement is made by the Company of its intention to abandon a Change in Control as defined in the PEC LTIC and such stock shall be delivered to the Executive within five transaction, or (5ii) business days after the date of such Change in Controlwhich is 36 full calendar months following the Transaction Completion Date. The Executive's termination of employment with the Company to become an employee of a corporation which directly or indirectly owns one hundred percent (100%) % of or which is owned one hundred percent (100%) by the Company shall not be considered a termination of employment for purposes of this Agreement. The subsequent termination of the Executive's employment from such corporation, without employment at a company that is wholly-owned by such corporation, corporation shall be considered a termination of employment for purposes of this Agreement. b. During the longer of: (i) the Coverage Period or (ii) the period commencing with the date of the Executive's termination of employment as described in paragraph 3a and ending on the last day of the first month in which the Executive may retire under the PEC Retirement Plan and be eligible to receive a retirement annuity thereunder without actuarial reduction, the Executive shall be entitled to all benefits under the Company's welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended), as if the Executive were still employed during such period, at the same level of benefits and at the same dollar cost to the Executive as is available to all of the Company's executives generally and if and to the extent that equivalent benefits shall not be payable or provided under any such plans, the Company shall pay or provide equivalent benefits on an individual basis; provided, however, that PEC's obligations under this paragraph 3.b. shall cease upon the date following the termination of the Executive's employment as described in paragraph 3.a. that the Executive is eligible to receive benefits under welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) provided by an employer of the Executive other than the Company. c. (i) If Independent Tax Counsel shall determine that the aggregate payments made to the Executive pursuant to this Agreement and any other payments to the Executive from the Company which constitute "parachute payments" as defined in Section 280G of the Code (or any successor provision thereto) ("Parachute Payments") would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount calculated at the highest marginal tax rate applicable to the Executive for the tax year in which such payments were paid to the Executive (determined by Independent Tax Counsel) such that after payment by the Executive of all federal, state and other taxes (including any Excise Tax) imposed upon the Gross-Up Payment and any interest or penalties imposed with respect to such taxes, the Executive retains from the Gross-Up Payment an amount equal to the Excise Tax imposed upon the payments. For purposes of this paragraph 3.c., "Independent Tax Counsel" shall mean a lawyer, a certified public accountant with a nationally recognized accounting firm, or a compensation consultant with a nationally recognized actuarial and benefits consulting firm, with expertise in the area of executive compensation tax law, who shall be selected by the Executive and shall be reasonably acceptable to PEC, and whose fees and disbursements shall be paid by PEC. (ii) If Independent Tax Counsel shall determine that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that the Executive has substantial authority not to report any Excise Tax on the Executive's Federal income tax return. If the Executive is subsequently required to make a payment of any Excise Tax, then the Independent Tax Counsel shall determine in the same manner as a Gross-up Payment the amount (the amount of such additional payments are referred herein as "Gross-Up Underpayment") of such payment and any such Gross-Up Underpayment shall be promptly paid by PEC to or for the benefit of the Executive. The fees and disbursements of the Independent Tax Counsel shall be paid by PEC. (iii) The Executive shall notify PEC in writing within 15 days of any claim by the Internal Revenue Service that, if successful, would require the payment by PEC of a Gross-Up Payment. If PEC notifies the Executive in writing that it desires to contest such claim and that it will bear the costs and provide the indemnification as required by this subparagraph (iii) of paragraph 3.c., the Executive shall: (A) give the Company any information reasonably requested by the Company relating to such claim, (B) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company, (C) cooperate with the Company in good faith in order to effectively contest such claim, and (D) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, for any Excise Tax or federal and state income tax or other taxes, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. The Company shall control all proceedings taken in connection with such contest; provided, however, that if the Company directs the Executive to pay such claim and xxx for a refund, PEC shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, from any Excise Tax or federal and state income tax or other taxes, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance. (iv) If, after the receipt by the Executive of an amount advanced by PEC pursuant to subparagraph (iii) of paragraph 3.c., the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall within 10 days pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). d. In the event of any termination of the Executive's employment as described in paragraph 3.a., the Executive shall be under no obligation to seek other employment, and there shall be no offset against amounts due the Executive under this Agreement on account of any remuneration attributable to any subsequent employment. e. The Executive shall be paid the following described amounts pursuant to subparagraph (iii) of paragraph 3.a. If the Executive has not received an award under the STIC for the Plan Year in which his employment is terminated the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount equal to a prorated award for the portion of the Plan Year that the Executive was employed by the Company. If the Executive has not yet received payment of his award amount under the STIC for the Plan Year preceding the Executive's termination, the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount under the STIC for such Plan Year. 4.

Severance Benefit. a. If, during the period commencing on the date of a Change in Control and ending on the last day of the Term, the Executive's employment hereunder is terminated by the Company for any reason, other than Cause, death, or disability, or is terminated by the Executive in the event of a Constructive Discharge, then, within five (5) business days after such termination, PEC shall pay to the Executive (or, if the Executive has died before receiving all payments to which he she has become entitled hereunder hereunder, to the beneficiary or estate of the Executive as described in paragraph 1413) the sum of of: (i) accrued but unpaid salary and accrued but unused paid time off for nonunion employees under the Company's "Paid Time Off Bank" policy for all nonunion employees, effective January 1as in effect on the Effective Date, 1997, as amended from time to time or any successor plan, and (ii) severance pay in a lump sum cash amount equal to three two (32) years of the Executive's Compensation. Provided that the Executive is vested under the PEC Retirement Plan, and (iii) the amount determined pursuant to paragraph 3.e. The Executive (or, if the Executive has died before receiving all payment payments to which he she becomes entitled hereunder, the beneficiary or the estate of the Executive as described in paragraph 1413) will be paid in cash within ten (10) business days after termination as described in this paragraph 3.a., the Present Value Amount amount of the vested benefits accrued by the Executive under the PEC SRB, Part A and Part B SRB on the date of termination of employment as described in this paragraph 3.a., determined as if the Executive had received credit for an additional three two (32) years of Benefit Service ("Additional Two Years Benefit Service. For purposes ") (or the Present Value Amount of determining such vested benefits if the Executive's accrued benefits under the preceding sentence, such benefits shall be determined as full benefits, without actuarial reduction, as if the Executive qualified for the Rule of Eighty-Five benefit under the PEC Retirement Plan and PEC SRB is expressed as an annuity). If, at the date of termination of employment as described in this paragraph 3a (regardless of whether a) the Executive so qualifies). All non-vested Options and SARs awarded to is at least age 38 but less than age 40, or (b) the Executive is at least age 48 but less than age 50 that part of Executive's severance benefit resulting from the Additional Two Years Benefit Service shall be calculated at the percentage Executive would be entitled to if Executive had reached the age of (a) 40 in the event Executive is at least age 38 but less than age 40, or (b) 50 in the event Executive is at least age 48 but less than age 50. Any payment of the Executive's vested accrued benefit under the PEC LTIC SRB pursuant to this paragraph 3.a. shall be deemed vested as in lieu of any payment under the earlier of PEC SRB itself and once paid pursuant to this Agreement, the date Executive shall have no further claim to payment under the PEC SRB. In the event of a Change change in Control control as defined in this Agreement or Change in Control as defined in under the PEC LTIC. The Company shall treat the Executive as employed by the Company for purposes of exercising Stock Options and SARs during the Coverage Period. All , any non-vested restricted stock awarded to the Executive under the PEC LTIC shall be deemed vested and owned by the Executive as in accordance with the provisions of the earlier of PEC LTIC. In the date event of a Change change in Control as defined in this Agreement or a Change in Control control, as defined in the PEC LTIC 2004 Plan, any award under the Long-Term Plan and such stock any Award Opportunity under the Short-Term Plan shall be delivered to distributed or paid in accordance with the Executive within five (5) business days after the date respective provisions of such Change in Controlplans. The Executive's termination of employment with the Company to become an employee of a corporation which directly or indirectly owns one hundred percent (100%) of or which is owned one hundred percent (100%) by the Company shall not be considered a termination of employment for purposes of this Agreement, provided that such termination and subsequent employment is not a Constructive Discharge. The subsequent termination of the Executive's employment from such corporation, without employment at a company that is wholly-owned by such corporation, shall be considered a termination of employment for purposes of this Agreement. b. During the longer of: (i) the Coverage Period or (ii) the period commencing with the date of the Executive's termination of employment as described in paragraph 3a and ending on the last day of the first month in which the Executive may retire under the PEC Retirement Plan and be eligible to receive a retirement annuity thereunder without actuarial reduction, the Executive shall be entitled to all benefits under the Company's welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended), as if the Executive were still employed during such period, at the same level of benefits and at the same dollar cost to the Executive as is available to all of the Company's executives generally and if and to the extent that equivalent benefits shall not be payable or provided under any such plans, the Company shall pay or provide equivalent benefits on an individual basis; provided, however, that PEC's obligations under this paragraph 3.b. shall cease upon the date following the termination of the Executive's employment as described in paragraph 3.a. that the Executive is eligible to receive benefits under welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) provided by an employer of the Executive other than the Company. c. (i) If Independent Tax Counsel shall determine that the aggregate payments made to the Executive pursuant to this Agreement and any other payments to the Executive from the Company which constitute "parachute payments" as defined in Section 280G of the Code (or any successor provision thereto) ("Parachute Payments") would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount calculated at the highest marginal tax rate applicable to the Executive for the tax year in which such payments were paid to the Executive (determined by Independent Tax Counsel) such that after payment by the Executive of all federal, state and other taxes (including any Excise Tax) imposed upon the Gross-Up Payment and any interest or penalties imposed with respect to such taxes, the Executive retains from the Gross-Up Payment an amount equal to the Excise Tax imposed upon the payments. For purposes of this paragraph 3.c., "Independent Tax Counsel" shall mean a lawyer, a certified public accountant with a nationally recognized accounting firm, or a compensation consultant with a nationally recognized actuarial and benefits consulting firm, with expertise in the area of executive compensation tax law, who shall be selected by the Executive and shall be reasonably acceptable to PEC, and whose fees and disbursements shall be paid by PEC. (ii) If Independent Tax Counsel shall determine that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that the Executive has substantial authority not to report any Excise Tax on the Executive's Federal income tax return. If the Executive is subsequently required to make a payment of any Excise Tax, then the Independent Tax Counsel shall determine in the same manner as a Gross-up Payment the amount (the amount of such additional payments are referred herein as "Gross-Up Underpayment") of such payment and any such Gross-Up Underpayment shall be promptly paid by PEC to or for the benefit of the Executive. The fees and disbursements of the Independent Tax Counsel shall be paid by PEC. (iii) The Executive shall notify PEC in writing within 15 days of any claim by the Internal Revenue Service that, if successful, would require the payment by PEC of a Gross-Up Payment. If PEC notifies the Executive in writing that it desires to contest such claim and that it will bear the costs and provide the indemnification as required by this subparagraph (iii) of paragraph 3.c., the Executive shall: (A) give the Company any information reasonably requested by the Company relating to such claim, (B) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company, (C) cooperate with the Company in good faith in order to effectively contest such claim, and (D) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, for any Excise Tax or federal and state income tax or other taxes, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. The Company shall control all proceedings taken in connection with such contest; provided, however, that if the Company directs the Executive to pay such claim and xxx for a refund, PEC shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, from any Excise Tax or federal and state income tax or other taxes, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance. (iv) If, after the receipt by the Executive of an amount advanced by PEC pursuant to subparagraph (iii) of paragraph 3.c., the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall within 10 days pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). d. In the event of any termination of the Executive's employment as described in paragraph 3.a., the Executive shall be under no obligation to seek other employment, and there shall be no offset against amounts due the Executive under this Agreement on account of any remuneration attributable to any subsequent employment. e. The Executive shall be paid the following described amounts pursuant to subparagraph (iii) of paragraph 3.a. If the Executive has not received an award under the STIC for the Plan Year in which his employment is terminated the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount equal to a prorated award for the portion of the Plan Year that the Executive was employed by the Company. If the Executive has not yet received payment of his award amount under the STIC for the Plan Year preceding the Executive's termination, the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount under the STIC for such Plan Year. 4.

Severance Benefit. a. If, during the period commencing on the date of a Change in Control and ending on the last day of the Term, the Executive's employment hereunder is terminated by the Company for any reason, other than Cause, death, or disability, or is terminated by the Executive in the event of a Constructive Discharge, then, within five (5) business days after such termination, PEC shall pay to the Executive (if the Executive has died before receiving all payments to which he has become entitled hereunder to the beneficiary or estate of the Executive as described in paragraph 14) the sum of (i) accrued but unpaid salary and accrued but unused paid time off under the Company's "Paid Time Off Bank" policy for all nonunion employees, effective January 1, 1997, or any successor plan, (ii) severance pay in a lump sum cash amount equal to three (3) years of the Executive's Compensation, and (iii) the amount determined pursuant to paragraph 3.e. The Executive (if the Executive has died before receiving all payment to which he becomes entitled hereunder, the beneficiary or the estate of the Executive as described in paragraph 14) will be paid in cash within ten (10) business days after termination as described in paragraph 3.a., the Present Value Amount of the benefits accrued by the Executive under the PEC SRB, Part A and Part B on the date of termination of employment as described in this paragraph 3.a., determined as if the Executive had received credit for an additional three (3) years of Benefit Service. For purposes of determining the Executive's accrued benefits under the preceding sentence, such benefits shall be determined as full benefits, without actuarial reduction, as if the Executive qualified for the Rule of Eighty-Five under the PEC Retirement Plan and PEC SRB (regardless of whether the Executive so qualifies). All non-vested Options and SARs awarded to the Executive under the PEC LTIC shall be deemed vested as of the earlier of the date of a Change in Control as defined in this Agreement or Change in Control as defined in the PEC LTIC. The Company shall treat the Executive as employed by the Company for purposes of exercising Stock Options and SARs during the Coverage Period. All non-vested restricted stock awarded to the Executive under the PEC LTIC shall be deemed vested and owned by the Executive as of the earlier of the date of a Change in Control as defined in this Agreement or a Change in Control as defined in the PEC LTIC and such stock shall be delivered to the Executive within five (5) business days after the date of such Change in Control. The Executive's termination of employment with the Company to become an employee of a corporation which directly or indirectly owns one hundred percent (100%) of or which is owned one hundred percent (100%) by the Company shall not be considered a termination of employment for purposes of this Agreement. The subsequent termination of the Executive's employment from such corporation, without employment at a company that is wholly-owned by such corporation, shall be considered a termination of employment for purposes of this Agreement. b. During the longer of: (i) the Coverage Period or (ii) the period commencing with the date of the Executive's termination of employment as described in paragraph 3a and ending on the last day of the first month in which the Executive may retire under the PEC Retirement Plan and be eligible to receive a retirement annuity thereunder without actuarial reduction, the Executive shall be entitled to all benefits under the Company's welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended), as if the Executive were still employed during such period, at the same level of benefits and at the same dollar cost to the Executive as is available to all of the Company's executives generally and if and to the extent that equivalent benefits shall not be payable or provided under any such plans, the Company shall pay or provide equivalent benefits on an individual basis; provided, however, that PEC's obligations under this paragraph 3.b. shall cease upon the date following the termination of the Executive's employment as described in paragraph 3.a. that the Executive is eligible to receive benefits under welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) provided by an employer of the Executive other than the Company. c. (i) If Independent Tax Counsel shall determine that the aggregate payments made to the Executive pursuant to this Agreement and any other payments to the Executive from the Company which constitute "parachute payments" as defined in Section 280G of the Code (or any successor provision thereto) ("Parachute Payments") would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount calculated at the highest marginal tax rate applicable to the Executive for the tax year in which such payments were paid to the Executive (determined by Independent Tax Counsel) such that after payment by the Executive of all federal, state and other taxes (including any Excise Tax) imposed upon the Gross-Up Payment and any interest or penalties imposed with respect to such taxes, the Executive retains from the Gross-Up Payment an amount equal to the Excise Tax imposed upon the payments. For purposes of this paragraph 3.c., "Independent Tax Counsel" shall mean a lawyer, a certified public accountant with a nationally recognized accounting firm, or a compensation consultant with a nationally recognized actuarial and benefits consulting firm, with expertise in the area of executive compensation tax law, who shall be selected by the Executive and shall be reasonably acceptable to PEC, and whose fees and disbursements shall be paid by PEC. (ii) If Independent Tax Counsel shall determine that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that the Executive has substantial authority not to report any Excise Tax on the Executive's Federal income tax return. If the Executive is subsequently required to make a payment of any Excise Tax, then the Independent Tax Counsel shall determine in the same manner as a Gross-up Payment the amount (the amount of such additional payments are referred herein as "Gross-Up Underpayment") of such payment and any such Gross-Up Underpayment shall be promptly paid by PEC to or for the benefit of the Executive. The fees and disbursements of the Independent Tax Counsel shall be paid by PEC. (iii) The Executive shall notify PEC in writing within 15 days of any claim by the Internal Revenue Service that, if successful, would require the payment by PEC of a Gross-Up Payment. If PEC notifies the Executive in writing that it desires to contest such claim and that it will bear the costs and provide the indemnification as required by this subparagraph (iii) of paragraph 3.c., the Executive shall: (A) give the Company any information reasonably requested by the Company relating to such claim, (B) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company, (C) cooperate with the Company in good faith in order to effectively contest such claim, and (D) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, for any Excise Tax or federal and state income tax or other taxes, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. The Company shall control all proceedings taken in connection with such contest; provided, however, that if the Company directs the Executive to pay such claim and xxx for a refund, PEC shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, from any Excise Tax or federal and state income tax or other taxes, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance. (iv) If, after the receipt by the Executive of an amount advanced by PEC pursuant to subparagraph (iii) of paragraph 3.c., the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall within 10 days pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). d. In the event of any termination of the Executive's employment as described in paragraph 3.a., the Executive shall be under no obligation to seek other employment, and there shall be no offset against amounts due the Executive under this Agreement on account of any remuneration attributable to any subsequent employment. e. The Executive shall be paid the following described amounts pursuant to subparagraph (iii) of paragraph 3.a. If the Executive has not received an award under the STIC for the Plan Year in which his employment is terminated the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount equal to a prorated award for the portion of the Plan Year that the Executive was employed by the Company. If the Executive has not yet received payment of his award amount under the STIC for the Plan Year preceding the Executive's termination, the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount under the STIC for such Plan Year. 4.

Severance Benefit. a. If, during the period commencing on the date of a Change in Control and ending on the last day of the Term, the Executive's employment hereunder is terminated by the Company for any reason, other than Cause, death, or disability, or is terminated by the Executive in the event of a Constructive Discharge, then, within five (5) business days after such termination, PEC shall pay to the Executive (if the Executive has died before receiving all payments to which he has become entitled hereunder to the beneficiary or estate of the Executive as described in paragraph 14) the sum of (i) accrued but unpaid salary and accrued but unused paid time off under the Company's "Paid Time Off Bank" policy for all nonunion employees, effective January 1, 1997, or any successor plan, (ii) severance pay in a lump sum cash amount equal to three (3) years of the Executive's Compensation, and (iii) the amount determined pursuant to paragraph 3.e. The Executive (if the Executive has died before receiving all payment to which he becomes entitled hereunder, the beneficiary or the estate of the Executive as described in paragraph 14) will be paid in cash within ten (10) business days after termination as described in paragraph 3.a., the Present Value Amount of the benefits accrued by the Executive under the PEC SRB, Part A and Part B on the date of termination of employment as described in this paragraph 3.a., determined as if the Executive had received credit for an additional three (3) years of Benefit Service. For purposes of determining the Executive's accrued benefits under the preceding sentence, such benefits shall be determined as full benefits, without actuarial reduction, as if the Executive qualified for the Rule of Eighty-Eighty- Five under the PEC Retirement Plan and PEC SRB (regardless of whether the Executive so qualifies). All non-vested Options and SARs awarded to the Executive under the PEC LTIC shall be deemed vested as of the earlier of the date of a Change in Control as defined in this Agreement or Change in Control as defined in the PEC LTIC. The Company shall treat the Executive as employed by the Company for purposes of exercising Stock Options and SARs during the Coverage Period. All non-vested restricted stock awarded to the Executive under the PEC LTIC shall be deemed vested and owned by the Executive as of the earlier of the date of a Change in Control as defined in this Agreement or a Change in Control as defined in the PEC LTIC and such stock shall be delivered to the Executive within five (5) business days after the date of such Change in Control. The Executive's termination of employment with the Company to become an employee of a corporation which directly or indirectly owns one hundred percent (100%) of or which is owned one hundred percent (100%) by the Company shall not be considered a termination of employment for purposes of this Agreement. The subsequent termination of the Executive's employment from such corporation, without employment at a company that is wholly-owned by such corporation, shall be considered a termination of employment for purposes of this Agreement. b. During the longer of: (i) the Coverage Period or (ii) the period commencing with the date of the Executive's termination of employment as described in paragraph 3a and ending on the last day of the first month in which the Executive may retire under the PEC Retirement Plan and be eligible to receive a retirement annuity thereunder without actuarial reduction, the Executive shall be entitled to all benefits under the Company's welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended), as if the Executive were still employed during such period, at the same level of benefits and at the same dollar cost to the Executive as is available to all of the Company's executives generally and if and to the extent that equivalent benefits shall not be payable or provided under any such plans, the Company shall pay or provide equivalent benefits on an individual basis; provided, however, that PEC's obligations under this paragraph 3.b. shall cease upon the date following the termination of the Executive's employment as described in paragraph 3.a. that the Executive is eligible to receive benefits under welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) provided by an employer of the Executive other than the Company. c. (i) If Independent Tax Counsel shall determine that the aggregate payments made to the Executive pursuant to this Agreement and any other payments to the Executive from the Company which constitute "parachute payments" as defined in Section 280G of the Code (or any successor provision thereto) ("Parachute Payments") would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount calculated at the highest marginal tax rate applicable to the Executive for the tax year in which such payments were paid to the Executive (determined by Independent Tax Counsel) such that after payment by the Executive of all federal, state and other taxes (including any Excise Tax) imposed upon the Gross-Up Payment and any interest or penalties imposed with respect to such taxes, the Executive retains from the Gross-Up Payment an amount equal to the Excise Tax imposed upon the payments. For purposes of this paragraph 3.c., "Independent Tax Counsel" shall mean a lawyer, a certified public accountant with a nationally recognized accounting firm, or a compensation consultant with a nationally recognized actuarial and benefits consulting firm, with expertise in the area of executive compensation tax law, who shall be selected by the Executive and shall be reasonably acceptable to PEC, and whose fees and disbursements shall be paid by PEC. (ii) If Independent Tax Counsel shall determine that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that the Executive has substantial authority not to report any Excise Tax on the Executive's Federal income tax return. If the Executive is subsequently required to make a payment of any Excise Tax, then the Independent Tax Counsel shall determine in the same manner as a Gross-up Payment the amount (the amount of such additional payments are referred herein as "Gross-Up Underpayment") of such payment and any such Gross-Up Underpayment shall be promptly paid by PEC to or for the benefit of the Executive. The fees and disbursements of the Independent Tax Counsel shall be paid by PEC. (iii) The Executive shall notify PEC in writing within 15 days of any claim by the Internal Revenue Service that, if successful, would require the payment by PEC of a Gross-Up Payment. If PEC notifies the Executive in writing that it desires to contest such claim and that it will bear the costs and provide the indemnification as required by this subparagraph (iii) of paragraph 3.c., the Executive shall: (A) give the Company any information reasonably requested by the Company relating to such claim, (B) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company, (C) cooperate with the Company in good faith in order to effectively contest such claim, and (D) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, for any Excise Tax or federal and state income tax or other taxes, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. The Company shall control all proceedings taken in connection with such contest; provided, however, that if the Company directs the Executive to pay such claim and xxx for a refund, PEC shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, from any Excise Tax or federal and state income tax or other taxes, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance. (iv) If, after the receipt by the Executive of an amount advanced by PEC pursuant to subparagraph (iii) of paragraph 3.c., the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall within 10 days pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). d. In the event of any termination of the Executive's employment as described in paragraph 3.a., the Executive shall be under no obligation to seek other employment, and there shall be no offset against amounts due the Executive under this Agreement on account of any remuneration attributable to any subsequent employment. e. The Executive shall be paid the following described amounts pursuant to subparagraph (iii) of paragraph 3.a. If the Executive has not received an award under the STIC for the Plan Year in which his employment is terminated the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount equal to a prorated award for the portion of the Plan Year that the Executive was employed by the Company. If the Executive has not yet received payment of his award amount under the STIC for the Plan Year preceding the Executive's termination, the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount under the STIC for such Plan Year. 4.

Severance Benefit. a. If, during the period commencing on the date of a Change in Control and ending on the last day of the Term, the Executive's employment hereunder is terminated by the Company for any reason, other than Cause, death, or disability, or is terminated by the Executive in the event of a Constructive Discharge, then, within five (5) business days after such termination, PEC shall pay to the Executive (or, if the Executive has died before receiving all payments to which he has become entitled hereunder hereunder, to the beneficiary or estate of the Executive as described in paragraph 1413) the sum of of: (i) accrued but unpaid salary and accrued but unused paid time off for nonunion employees under the Company's "Paid Time Off Bank" policy for all nonunion employeesBank as in effect on the Effective Date, effective January 1, 1997, as amended from time to time or any successor plan, and (ii) severance pay in a lump sum cash amount equal to three (3) years of the Executive's Compensation. If the Executive has been employed by PEC or an Affiliate for at least five (5) years prior to termination of employment, and (iii) as described in this paragraph 3.a., the amount determined pursuant to paragraph 3.e. The Executive (or, if the Executive has died before receiving all payment payments to which he becomes entitled hereunder, the beneficiary or the estate of the Executive as described in paragraph 1413) will be paid in cash within ten (10) business days after termination of employment as described in this paragraph 3.a., an amount equal to the Present Value Amount remainder of (x) the value of the benefits that would have been accrued by the Executive under the PEC SRB, Part A Retirement Plan and Part B the PEC SRB on the date of termination of employment as described in this paragraph 3.a., determined as if the Executive (i) had received credit for an additional three twenty-one (321) years of Benefit Service, and (ii) had commenced participation in the PEC Retirement Plan and PEC SRB as of first date of Executive's actual employment with PESCO, less (y) the value of the benefits accrued by the Executive under the PEC Retirement Plan on the date of termination of employment as described in this Paragraph 3a. If the Executive has been employed by PEC or an Affiliate for at least one (1) but less than five (5) years at the date of termination of employment as described in paragraph 3.a., then the Executive (or, if the Executive has died before receiving all payments to which he becomes entitled hereunder, the beneficiary or the estate of the Executive as described in paragraph 13) will be paid in cash within ten (10) business days after termination of employment as described in paragraph 3.a., an amount equal to the value of the benefits that would have been accrued by the Executive under the PEC Retirement Plan and PEC SRB on the date of termination of employment as described in this paragraph 3.a., determined as if the Executive (i) had commenced participation in the PEC Retirement Plan and PEC SRB as of first date of Executive's actual employment with PESCO, and (ii) had received credit for the number of years of Benefit Service equal to the sum of (x) the number of years that the Executive has been employed by the Company and (y) the product of 20 multiplied by a fraction, the numerator of which is equal to the number of whole months the Executive has been employed by PEC or an Affiliate at the date of termination of employment as described in this paragraph 3.a. and the denominator of which is equal to sixty (60). For purposes of determining the Executive's value of the benefits that would have been accrued benefits by the Executive under the preceding sentenceprovisions of this paragraph 3.a. (both in the event Executive has been employee for less than 5 years or more than 5 years), such benefits shall be determined based on the provisions of Article IV of the PEC Retirement Plan ("Article IV Accrued Benefit") or Article XI of the PEC Retirement Plan, whichever produces the higher amount of benefits. For the purpose of determining Executive's Article IV Accrued Benefit, such benefit shall be determined as full benefits, without actuarial reduction, as if the Executive qualified for the Rule of Eighty-Five under the PEC Retirement Plan and PEC SRB (regardless of whether the Executive so qualifies). All non-Any payment of the Executive's vested Options and SARs awarded to the Executive accrued benefit under the PEC LTIC SRB pursuant to this paragraph 3.a. shall be deemed vested as in lieu of any payment under the earlier of PEC SRB itself and once paid pursuant to this Agreement, the date Executive shall have no further claim to payment under the PEC SRB. In the event of a Change change in Control control as defined in this Agreement or Change in Control as defined in under the PEC LTIC. The Company shall treat the Executive as employed by the Company for purposes of exercising Stock Options and SARs during the Coverage Period. All , any non-vested restricted stock awarded to the Executive under the PEC LTIC shall be deemed vested and owned by the Executive as in accordance with the provisions of the earlier of PEC LTIC. In the date event of a Change change in Control as defined in this Agreement or a Change in Control control, as defined in the PEC LTIC 2004 Plan, any award under the Long-Term Plan and such stock any Award Opportunity under the Short-Term Plan shall be delivered to distributed or paid in accordance with the Executive within five (5) business days after the date respective provisions of such Change in Controlplans. The Executive's termination of employment with the Company to become an employee of a corporation which directly or indirectly owns one hundred percent (100%) of or which is owned directly or indirectly one hundred percent (100%) by the Company shall not be considered a termination of employment for purposes of this Agreement, provided that such termination and subsequent employment is not a Constructive Discharge. The subsequent termination of the Executive's employment from such corporation, without employment at a company that is wholly-owned by such corporation, shall be considered a termination of employment for purposes of this Agreement. b. During the longer of: (i) the Coverage Period or (ii) the period commencing with the date of the Executive's termination of employment as described in paragraph 3a and ending on the last day of the first month in which the Executive may retire under the PEC Retirement Plan and be eligible to receive a retirement annuity thereunder without actuarial reduction, the Executive shall be entitled to all benefits under the Company's welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended), as if the Executive were still employed during such period, at the same level of benefits and at the same dollar cost to the Executive as is available to all of the Company's executives generally and if and to the extent that equivalent benefits shall not be payable or provided under any such plans, the Company shall pay or provide equivalent benefits on an individual basis; provided, however, that PEC's obligations under this paragraph 3.b. shall cease upon the date following the termination of the Executive's employment as described in paragraph 3.a. that the Executive is eligible to receive benefits under welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) provided by an employer of the Executive other than the Company. c. (i) If Independent Tax Counsel shall determine that the aggregate payments made to the Executive pursuant to this Agreement and any other payments to the Executive from the Company which constitute "parachute payments" as defined in Section 280G of the Code (or any successor provision thereto) ("Parachute Payments") would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount calculated at the highest marginal tax rate applicable to the Executive for the tax year in which such payments were paid to the Executive (determined by Independent Tax Counsel) such that after payment by the Executive of all federal, state and other taxes (including any Excise Tax) imposed upon the Gross-Up Payment and any interest or penalties imposed with respect to such taxes, the Executive retains from the Gross-Up Payment an amount equal to the Excise Tax imposed upon the payments. For purposes of this paragraph 3.c., "Independent Tax Counsel" shall mean a lawyer, a certified public accountant with a nationally recognized accounting firm, or a compensation consultant with a nationally recognized actuarial and benefits consulting firm, with expertise in the area of executive compensation tax law, who shall be selected by the Executive and shall be reasonably acceptable to PEC, and whose fees and disbursements shall be paid by PEC. (ii) If Independent Tax Counsel shall determine that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that the Executive has substantial authority not to report any Excise Tax on the Executive's Federal income tax return. If the Executive is subsequently required to make a payment of any Excise Tax, then the Independent Tax Counsel shall determine in the same manner as a Gross-up Payment the amount (the amount of such additional payments are referred herein as "Gross-Up Underpayment") of such payment and any such Gross-Up Underpayment shall be promptly paid by PEC to or for the benefit of the Executive. The fees and disbursements of the Independent Tax Counsel shall be paid by PEC. (iii) The Executive shall notify PEC in writing within 15 days of any claim by the Internal Revenue Service that, if successful, would require the payment by PEC of a Gross-Up Payment. If PEC notifies the Executive in writing that it desires to contest such claim and that it will bear the costs and provide the indemnification as required by this subparagraph (iii) of paragraph 3.c., the Executive shall: (A) give the Company any information reasonably requested by the Company relating to such claim, (B) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company, (C) cooperate with the Company in good faith in order to effectively contest such claim, and (D) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, for any Excise Tax or federal and state income tax or other taxes, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. The Company shall control all proceedings taken in connection with such contest; provided, however, that if the Company directs the Executive to pay such claim and xxx for a refund, PEC shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, from any Excise Tax or federal and state income tax or other taxes, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance. (iv) If, after the receipt by the Executive of an amount advanced by PEC pursuant to subparagraph (iii) of paragraph 3.c., the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall within 10 days pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). d. In the event of any termination of the Executive's employment as described in paragraph 3.a., the Executive shall be under no obligation to seek other employment, and there shall be no offset against amounts due the Executive under this Agreement on account of any remuneration attributable to any subsequent employment. e. The Executive shall be paid the following described amounts pursuant to subparagraph (iii) of paragraph 3.a. If the Executive has not received an award under the STIC for the Plan Year in which his employment is terminated the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount equal to a prorated award for the portion of the Plan Year that the Executive was employed by the Company. If the Executive has not yet received payment of his award amount under the STIC for the Plan Year preceding the Executive's termination, the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount under the STIC for such Plan Year. 4.

Severance Benefit. a. If, during the period commencing on the date of a Change in Control and ending on the last day of the Term, the Executive's employment hereunder is terminated by the Company for any reason, other than Cause, death, or disability, or is terminated by the Executive in the event of a Constructive Discharge, then, within five (5) business days after such termination, PEC the Company shall pay to the Executive (if the Executive executive has died before receiving all payments to which he has become entitled hereunder to the beneficiary or estate of the Executive as described in paragraph 1412) the sum of (i) accrued but unpaid salary and accrued but unused paid time off under the Company's "Paid Time Off Bank" policy for all nonunion employees, effective January 1, 1997, or any successor plan, and (ii) severance pay in a lump sum cash amount equal to three two (32) years of the Executive's Compensation, and (iii) the amount determined pursuant to paragraph 3.e. The Executive (if the Executive has died before receiving all payment to which he becomes entitled hereunder, the beneficiary or the estate of the Executive as described in paragraph 1412) will be paid in cash within ten (10) business days after termination as described in paragraph 3.a., the Present Value Amount of the benefits accrued by the Executive under the PEC SRB, Part A and Part B on the date of termination of employment as described in this paragraph 3.a., determined as if the Executive had received credit for an additional three two (32) years of Benefit Service. For purposes of determining the Executive's accrued benefits under the preceding sentence, such benefits shall be determined as full benefits, without actuarial reduction, as if the Executive qualified for the Rule of Eighty-Five under the PEC Retirement Plan and PEC SRB (regardless of whether the Executive so qualifies). All non-vested Options and SARs awarded to the Executive under the PEC LTIC shall be deemed vested as of the earlier of the date of a Change in Control as defined in this Agreement or Change in Control as defined in the PEC LTIC. The Company shall treat the Executive as employed by the Company for purposes of exercising Stock Options and SARs during the Coverage Period. All non-vested restricted stock awarded to the Executive under the PEC LTIC shall be deemed vested and owned by the Executive as of the earlier of the date of a Change in Control as defined in this Agreement or a Change in Control as defined in the PEC LTIC and such stock shall be delivered to the Executive within five (5) business days after the date of such Change in Control. The Executive's termination of employment with the Company to become an employee of a corporation which directly or indirectly owns one hundred percent (100%) of or which is owned directly or indirectly one hundred percent (100%) by the Company PEC shall not be considered a termination of employment for purposes of this Agreement. The subsequent termination of the Executive's employment from such corporation, without employment at a company that is wholly-owned by such corporation, shall be considered a termination of employment for purposes of this Agreement. b. During the longer of: (i) the Coverage Period or (ii) the period commencing with the date of the Executive's termination of employment as described in paragraph 3a and ending on the last day of the first month in which the Executive may retire under the PEC Retirement Plan and be eligible to receive a retirement annuity thereunder without actuarial reduction, the Executive shall be entitled to all benefits under the Company's welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended), as if the Executive were still employed during such period, at the same level of benefits and at the same dollar cost to the Executive as is available to all of the Company's executives generally and if and to the extent that equivalent benefits shall not be payable or provided under any such plans, the Company shall pay or provide equivalent benefits on an individual basis; provided, however, that PEC's obligations under this paragraph 3.b. shall cease upon the date following the termination of the Executive's employment as described in paragraph 3.a. that the Executive is eligible to receive benefits under welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) provided by an employer of the Executive other than the Company. c. (i) If Independent Tax Counsel shall determine that the aggregate payments made to the Executive pursuant to this Agreement and any other payments to the Executive from the Company which constitute "parachute payments" as defined in Section 280G of the Code (or any successor provision thereto) ("Parachute Payments") would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount calculated at the highest marginal tax rate applicable to the Executive for the tax year in which such payments were paid to the Executive (determined by Independent Tax Counsel) such that after payment by the Executive of all federal, state and other taxes (including any Excise Tax) imposed upon the Gross-Up Payment and any interest or penalties imposed with respect to such taxes, the Executive retains from the Gross-Up Payment an amount equal to the Excise Tax imposed upon the payments. For purposes of this paragraph 3.c., "Independent Tax Counsel" shall mean a lawyer, a certified public accountant with a nationally recognized accounting firm, or a compensation consultant with a nationally recognized actuarial and benefits consulting firm, with expertise in the area of executive compensation tax law, who shall be selected by the Executive and shall be reasonably acceptable to PEC, and whose fees and disbursements shall be paid by PEC. (ii) If Independent Tax Counsel shall determine that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that the Executive has substantial authority not to report any Excise Tax on the Executive's Federal income tax return. If the Executive is subsequently required to make a payment of any Excise Tax, then the Independent Tax Counsel shall determine in the same manner as a Gross-up Payment the amount (the amount of such additional payments are referred herein as "Gross-Up Underpayment") of such payment and any such Gross-Up Underpayment shall be promptly paid by PEC to or for the benefit of the Executive. The fees and disbursements of the Independent Tax Counsel shall be paid by PEC. (iii) The Executive shall notify PEC in writing within 15 days of any claim by the Internal Revenue Service that, if successful, would require the payment by PEC of a Gross-Up Payment. If PEC notifies the Executive in writing that it desires to contest such claim and that it will bear the costs and provide the indemnification as required by this subparagraph (iii) of paragraph 3.c., the Executive shall: (A) give the Company any information reasonably requested by the Company relating to such claim, (B) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company, (C) cooperate with the Company in good faith in order to effectively contest such claim, and (D) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, for any Excise Tax or federal and state income tax or other taxes, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. The Company shall control all proceedings taken in connection with such contest; provided, however, that if the Company directs the Executive to pay such claim and xxx for a refund, PEC shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, from any Excise Tax or federal and state income tax or other taxes, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance. (iv) If, after the receipt by the Executive of an amount advanced by PEC pursuant to subparagraph (iii) of paragraph 3.c., the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall within 10 days pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). d. In the event of any termination of the Executive's employment as described in paragraph 3.a., the Executive shall be under no obligation to seek other employment, and there shall be no offset against amounts due the Executive under this Agreement on account of any remuneration attributable to any subsequent employment. e. The Executive shall be paid the following described amounts pursuant to subparagraph (iii) of paragraph 3.a. If the Executive has not received an award under the STIC for the Plan Year in which his employment is terminated the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount equal to a prorated award for the portion of the Plan Year that the Executive was employed by the Company. If the Executive has not yet received payment of his award amount under the STIC for the Plan Year preceding the Executive's termination, the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount under the STIC for such Plan Year. 4.

Severance Benefit. a. If, during the period commencing on the date of a Change in Control and ending on the last day of the Term, the Executive's employment hereunder is terminated by the Company for any reason, other than Cause, death, or disability, or is terminated by the Executive in the event of a Constructive Discharge, then, within five (5) business days after such termination, PEC shall pay to the Executive (if the Executive has died before receiving all payments to which he has become entitled hereunder to the beneficiary or estate of the Executive as described in paragraph 14) the sum of (i) accrued but unpaid salary and accrued but unused paid time off under the Company's "Paid Time Off Bank" policy for all nonunion employees, effective January 1, 1997, or any successor plan, (ii) severance pay in a lump sum cash amount equal to three (3) years of the Executive's Compensation, and (iii) the amount determined pursuant to paragraph 3.e. The Executive (if the Executive has died before receiving all payment to which he becomes entitled hereunder, the beneficiary or the estate of the Executive as described in paragraph 14) will be paid in cash within ten (10) business days after termination as described in paragraph 3.a., the Present Value Amount of the benefits accrued by the Executive under the PEC SRB, Part A and Part B on the date of termination of employment as described in this paragraph 3.a., determined as if the Executive had received credit for an additional three (3) years of Benefit Service. For purposes of determining the Executive's accrued benefits under the preceding sentence, such benefits shall be determined as full benefits, without actuarial reduction, as if the Executive qualified for the Rule of Eighty-Eighty- Five under the PEC Retirement Plan and PEC SRB (regardless of whether the Executive so qualifies). All non-vested Options and SARs awarded to the Executive under the PEC LTIC shall be deemed vested as of the earlier of the date of a Change in Control as defined in this Agreement or Change in Control as defined in the PEC LTIC. The Company shall treat the Executive as employed by the Company for purposes of exercising Stock Options and SARs during the Coverage Period. All non-vested restricted stock awarded to the Executive under the PEC LTIC shall be deemed vested and owned by the Executive as of the earlier of the date of a Change in Control as defined in this Agreement or a Change in Control as defined in the PEC LTIC and such stock shall be delivered to the Executive within five (5) business days after the date of such Change in Control. The Executive's termination of employment with the Company to become an employee of a corporation which directly or indirectly owns one hundred percent (100%) of or which is owned one hundred percent (100%) by the Company shall not be considered a termination of employment for purposes of this Agreement. The subsequent termination of the Executive's employment from such corporation, without employment at a company that is wholly-owned by such corporation, shall be considered a termination of employment for purposes of this Agreement. b. During the longer of: (i) the Coverage Period or (ii) the period commencing with the date of the Executive's termination of employment as described in paragraph 3a and ending on the last day of the first month in which the Executive may retire under the PEC Retirement Plan and be eligible to receive a retirement annuity thereunder without actuarial reduction, the Executive shall be entitled to all benefits under the Company's welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended), as if the Executive were still employed during such period, at the same level of benefits and at the same dollar cost to the Executive as is available to all of the Company's executives generally and if and to the extent that equivalent benefits shall not be payable or provided under any such plans, the Company shall pay or provide equivalent benefits on an individual basis; provided, however, that PEC's obligations under this paragraph 3.b. shall cease upon the date following the termination of the Executive's employment as described in paragraph 3.a. that the Executive is eligible to receive benefits under welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) provided by an employer of the Executive other than the Company. c. (i) If Independent Tax Counsel shall determine that the aggregate payments made to the Executive pursuant to this Agreement and any other payments to the Executive from the Company which constitute "parachute payments" as defined in Section 280G of the Code (or any successor provision thereto) ("Parachute Payments") would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount calculated at the highest marginal tax rate applicable to the Executive for the tax year in which such payments were paid to the Executive (determined by Independent Tax Counsel) such that after payment by the Executive of all federal, state and other taxes (including any Excise Tax) imposed upon the Gross-Up Payment and any interest or penalties imposed with respect to such taxes, the Executive retains from the Gross-Up Payment an amount equal to the Excise Tax imposed upon the payments. For purposes of this paragraph 3.c., "Independent Tax Counsel" shall mean a lawyer, a certified public accountant with a nationally recognized accounting firm, or a compensation consultant with a nationally recognized actuarial and benefits consulting firm, with expertise in the area of executive compensation tax law, who shall be selected by the Executive and shall be reasonably acceptable to PEC, and whose fees and disbursements shall be paid by PEC. (ii) If Independent Tax Counsel shall determine that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that the Executive has substantial authority not to report any Excise Tax on the Executive's Federal income tax return. If the Executive is subsequently required to make a payment of any Excise Tax, then the Independent Tax Counsel shall determine in the same manner as a Gross-up Payment the amount (the amount of such additional payments are referred herein as "Gross-Up Underpayment") of such payment and any such Gross-Up Underpayment shall be promptly paid by PEC to or for the benefit of the Executive. The fees and disbursements of the Independent Tax Counsel shall be paid by PEC. (iii) The Executive shall notify PEC in writing within 15 days of any claim by the Internal Revenue Service that, if successful, would require the payment by PEC of a Gross-Up Payment. If PEC notifies the Executive in writing that it desires to contest such claim and that it will bear the costs and provide the indemnification as required by this subparagraph (iii) of paragraph 3.c., the Executive shall: (A) give the Company any information reasonably requested by the Company relating to such claim, (B) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company, (C) cooperate with the Company in good faith in order to effectively contest such claim, and (D) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, for any Excise Tax or federal and state income tax or other taxes, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. The Company shall control all proceedings taken in connection with such contest; provided, however, that if the Company directs the Executive to pay such claim and xxx sue for a refund, PEC shall advance the amount of such payment to the ExecutiveExecutixx, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, from any Excise Tax or federal and state income tax or other taxes, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance. (iv) If, after the receipt by the Executive of an amount advanced by PEC pursuant to subparagraph (iii) of paragraph 3.c., the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall within 10 days pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). d. In the event of any termination of the Executive's employment as described in paragraph 3.a., the Executive shall be under no obligation to seek other employment, and there shall be no offset against amounts due the Executive under this Agreement on account of any remuneration attributable to any subsequent employment. e. The Executive shall be paid the following described amounts pursuant to subparagraph (iii) of paragraph 3.a. If the Executive has not received an award under the STIC for the Plan Year in which his employment is terminated the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount equal to a prorated award for the portion of the Plan Year that the Executive was employed by the Company. If the Executive has not yet received payment of his award amount under the STIC for the Plan Year preceding the Executive's termination, the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount under the STIC for such Plan Year. 4.

Severance Benefit. a. If, during the period commencing on the date of a Change in Control and ending on the last day of the Term, the Executive's employment hereunder is terminated by the Company for any reason, other than Cause, death, or disability, or is terminated by the Executive in the event of a Constructive Discharge, then, within five (5) business days after such termination, PEC shall pay to the Executive (or, if the Executive has died before receiving all payments to which he has become entitled hereunder hereunder, to the beneficiary or estate of the Executive as described in paragraph 1413) the sum sum: of (i) accrued but unpaid salary and accrued but unused paid time off for nonunion employees under the Company's "Paid Time Off Bank" policy for all nonunion employees, effective January 1as in effect on the Effective Date, 1997, as amended from time to time or any successor plan, and (ii) severance pay in a lump sum cash amount equal to three (3) years of the Executive's Compensation, and (iii) the amount determined pursuant to paragraph 3.e. The Executive (or, if the Executive has died before receiving all payment payments to which he becomes entitled hereunder, the beneficiary or the estate of the Executive as described in paragraph 1413) will be paid in cash within ten (10) business days after termination as described in this paragraph 3.a., the Present Value Amount of the vested benefits accrued by the Executive under the PEC SRB, Part A and Part B SRB on the date of termination of employment as described in this paragraph 3.a., determined as if the Executive had received credit for an additional three (3) years of Benefit Service. For purposes of determining the Executive's accrued benefits under the preceding sentence, such benefits shall be determined as full benefits, without actuarial reduction, as if the Executive qualified for the Rule of Eighty-Five under the PEC Retirement Plan and PEC SRB (regardless of whether the Executive so qualifies). All non-Any payment of the Executive's vested Options and SARs awarded to the Executive accrued benefit under the PEC LTIC SRB pursuant to this paragraph 3.a. shall be deemed vested as in lieu of any payment under the earlier of PEC SRB itself and once paid pursuant to this Agreement, the date Executive shall have no further claim to payment under the PEC SRB. In the event of a Change change in Control control as defined in this Agreement or Change in Control as defined in under the PEC LTIC. The Company shall treat the Executive as employed by the Company for purposes of exercising Stock Options and SARs during the Coverage Period. All , all non-vested restricted stock awarded to the Executive under the PEC LTIC shall be deemed vested and owned by the Executive as in accordance with the provisions of the earlier of PEC LTIC. In the date event of a Change change in Control as defined in this Agreement or a Change in Control control, as defined in the PEC LTIC 2004 Plan, any award under the Long-Term Plan and such stock any Award Opportunity under the Short-Term Plan shall be delivered to distributed or paid in accordance with the Executive within five (5) business days after the date respective provisions of such Change in Controlplans. The Executive's termination of employment with the Company to become an employee of a corporation which directly or indirectly owns one hundred percent (100%) of or which is owned one hundred percent (100%) by the Company shall not be considered a termination of employment for purposes of this Agreement, provided that such termination and subsequent employment is not a Constructive Discharge. The subsequent termination of the Executive's employment from such corporation, without employment at a company that is wholly-owned by such corporation, shall be considered a termination of employment for purposes of this Agreement. b. During the longer of: (i) the Coverage Period or (ii) the period commencing with the date of the Executive's termination of employment as described in paragraph 3a and ending on the last day of the first month in which the Executive may retire under the PEC Retirement Plan and be eligible to receive a retirement annuity thereunder without actuarial reduction, the Executive shall be entitled to all benefits under the Company's welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended), as if the Executive were still employed during such period, at the same level of benefits and at the same dollar cost to the Executive as is available to all of the Company's executives generally and if and to the extent that equivalent benefits shall not be payable or provided under any such plans, the Company shall pay or provide equivalent benefits on an individual basis; provided, however, that PEC's obligations under this paragraph 3.b. shall cease upon the date following the termination of the Executive's employment as described in paragraph 3.a. that the Executive is eligible to receive benefits under welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) provided by an employer of the Executive other than the Company. c. (i) If Independent Tax Counsel shall determine that the aggregate payments made to the Executive pursuant to this Agreement and any other payments to the Executive from the Company which constitute "parachute payments" as defined in Section 280G of the Code (or any successor provision thereto) ("Parachute Payments") would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount calculated at the highest marginal tax rate applicable to the Executive for the tax year in which such payments were paid to the Executive (determined by Independent Tax Counsel) such that after payment by the Executive of all federal, state and other taxes (including any Excise Tax) imposed upon the Gross-Up Payment and any interest or penalties imposed with respect to such taxes, the Executive retains from the Gross-Up Payment an amount equal to the Excise Tax imposed upon the payments. For purposes of this paragraph 3.c., "Independent Tax Counsel" shall mean a lawyer, a certified public accountant with a nationally recognized accounting firm, or a compensation consultant with a nationally recognized actuarial and benefits consulting firm, with expertise in the area of executive compensation tax law, who shall be selected by the Executive and shall be reasonably acceptable to PEC, and whose fees and disbursements shall be paid by PEC. (ii) If Independent Tax Counsel shall determine that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that the Executive has substantial authority not to report any Excise Tax on the Executive's Federal income tax return. If the Executive is subsequently required to make a payment of any Excise Tax, then the Independent Tax Counsel shall determine in the same manner as a Gross-up Payment the amount (the amount of such additional payments are referred herein as "Gross-Up Underpayment") of such payment and any such Gross-Up Underpayment shall be promptly paid by PEC to or for the benefit of the Executive. The fees and disbursements of the Independent Tax Counsel shall be paid by PEC. (iii) The Executive shall notify PEC in writing within 15 days of any claim by the Internal Revenue Service that, if successful, would require the payment by PEC of a Gross-Up Payment. If PEC notifies the Executive in writing that it desires to contest such claim and that it will bear the costs and provide the indemnification as required by this subparagraph (iii) of paragraph 3.c., the Executive shall: (A) give the Company any information reasonably requested by the Company relating to such claim, (B) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company, (C) cooperate with the Company in good faith in order to effectively contest such claim, and (D) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, for any Excise Tax or federal and state income tax or other taxes, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. The Company shall control all proceedings taken in connection with such contest; provided, however, that if the Company directs the Executive to pay such claim and xxx for a refund, PEC shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, from any Excise Tax or federal and state income tax or other taxes, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance. (iv) If, after the receipt by the Executive of an amount advanced by PEC pursuant to subparagraph (iii) of paragraph 3.c., the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall within 10 days pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). d. In the event of any termination of the Executive's employment as described in paragraph 3.a., the Executive shall be under no obligation to seek other employment, and there shall be no offset against amounts due the Executive under this Agreement on account of any remuneration attributable to any subsequent employment. e. The Executive shall be paid the following described amounts pursuant to subparagraph (iii) of paragraph 3.a. If the Executive has not received an award under the STIC for the Plan Year in which his employment is terminated the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount equal to a prorated award for the portion of the Plan Year that the Executive was employed by the Company. If the Executive has not yet received payment of his award amount under the STIC for the Plan Year preceding the Executive's termination, the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount under the STIC for such Plan Year. 4.

Severance Benefit. a. If, during the period commencing on the date of a Change in Control and ending on the last day of the Term, the Executive's employment hereunder is terminated by the Company for any reason, other than Cause, death, or disability, or is terminated by the Executive in the event of a Constructive Discharge, then, within five (5) business days after such termination, PEC shall pay to the Executive (if the Executive has died before receiving all payments to which he has become entitled hereunder to the beneficiary or estate of the Executive as described in paragraph 14) the sum of (i) accrued but unpaid salary and accrued but unused paid time off under the Company's "Paid Time Off Bank" policy for all nonunion employees, effective January 1, 1997, or any successor plan, (ii) severance pay in a lump sum cash amount equal to three (3) years of the Executive's Compensation, and (iii) the amount determined pursuant to paragraph 3.e. The Executive (if the Executive has died before receiving all payment to which he becomes entitled hereunder, the beneficiary or the estate of the Executive as described in paragraph 14) will be paid in cash within ten (10) business days after termination as described in paragraph 3.a., the Present Value Amount of the benefits accrued by the Executive under the PEC SRB, Part A and Part B on the date of termination of employment as described in this paragraph 3.a., determined as if the Executive had received credit for an additional three (3) years of Benefit Service. For purposes of determining the Executive's accrued benefits under the preceding sentence, such benefits shall be determined as full benefits, without actuarial reduction, as if the Executive qualified for the Rule of Eighty-Eighty- Five under the PEC Retirement Plan and PEC SRB (regardless of whether the Executive so qualifies). All non-vested Options and SARs awarded to the Executive under the PEC LTIC shall be deemed vested as of the earlier of the date of a Change in Control as defined in this Agreement or Change in Control as defined in the PEC LTIC. The Company shall treat the Executive as employed by the Company for purposes of exercising Stock Options and SARs during the Coverage Period. All non-vested restricted stock awarded to the Executive under the PEC LTIC shall be deemed vested and owned by the Executive as of the earlier of the date of a Change in Control as defined in this Agreement or a Change in Control as defined in the PEC LTIC and such stock shall be delivered to the Executive within five (5) business days after the date of such Change in Control. The Executive's termination of employment with the Company to become an employee of a corporation which directly or indirectly owns one hundred percent (100%) of or which is owned one hundred percent (100%) by the Company shall not be considered a termination of employment for purposes of this Agreement. The subsequent termination of the Executive's employment from such corporation, without employment at a company that is wholly-owned by such corporation, shall be considered a termination of employment for purposes of this Agreement. b. During the longer of: (i) the Coverage Period or (ii) the period commencing with the date of the Executive's termination of employment as described in paragraph 3a and ending on the last day of the first month in which the Executive may retire under the PEC Retirement Plan and be eligible to receive a retirement annuity thereunder without actuarial reduction, the Executive shall be entitled to all benefits under the Company's welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended), as if the Executive were still employed during such period, at the same level of benefits and at the same dollar cost to the Executive as is available to all of the Company's executives generally and if and to the extent that equivalent benefits shall not be payable or provided under any such plans, the Company shall pay or provide equivalent benefits on an individual basis; provided, however, that PEC's obligations under this paragraph 3.b. shall cease upon the date following the termination of the Executive's employment as described in paragraph 3.a. that the Executive is eligible to receive benefits under welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) provided by an employer of the Executive other than the Company. c. (i) If Independent Tax Counsel shall determine that the aggregate payments made to the Executive pursuant to this Agreement and any other payments to the Executive from the Company which constitute "parachute payments" as defined in Section 280G of the Code (or any successor provision thereto) ("Parachute Payments") would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount calculated at the highest marginal tax rate applicable to the Executive for the tax year in which such payments were paid to the Executive (determined by Independent Tax Counsel) such that after payment by the Executive of all federal, state and other taxes (including any Excise Tax) imposed upon the Gross-Up Payment and any interest or penalties imposed with respect to such taxes, the Executive retains from the Gross-Up Payment an amount equal to the Excise Tax imposed upon the payments. For purposes of this paragraph 3.c., "Independent Tax Counsel" shall mean a lawyer, a certified public accountant with a nationally recognized accounting firm, or a compensation consultant with a nationally recognized actuarial and benefits consulting firm, with expertise in the area of executive compensation tax law, who shall be selected by the Executive and shall be reasonably acceptable to PEC, and whose fees and disbursements shall be paid by PEC. (ii) If Independent Tax Counsel shall determine that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that the Executive has substantial authority not to report any Excise Tax on the Executive's Federal income tax return. If the Executive is subsequently required to make a payment of any Excise Tax, then the Independent Tax Counsel shall determine in the same manner as a Gross-up Payment the amount (the amount of such additional payments are referred herein as "Gross-Up Underpayment") of such payment and any such Gross-Up Underpayment shall be promptly paid by PEC to or for the benefit of the Executive. The fees and disbursements of the Independent Tax Counsel shall be paid by PEC. (iii) The Executive shall notify PEC in writing within 15 days of any claim by the Internal Revenue Service that, if successful, would require the payment by PEC of a Gross-Up Payment. If PEC notifies the Executive in writing that it desires to contest such claim and that it will bear the costs and provide the indemnification as required by this subparagraph (iii) of paragraph 3.c., the Executive shall: (A) give the Company any information reasonably requested by the Company relating to such claim, (B) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company, (C) cooperate with the Company in good faith in order to effectively contest such claim, and (D) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, for any Excise Tax or federal and state income tax or other taxes, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. The Company shall control all proceedings taken in connection with such contest; provided, however, that if the Company directs the Executive to pay such claim and xxx for a refund, PEC shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, from any Excise Tax or federal and state income tax or other taxes, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance. (iv) If, after the receipt by the Executive of an amount advanced by PEC pursuant to subparagraph (iii) of paragraph 3.c., the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall within 10 days pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). d. In the event of any termination of the Executive's employment as described in paragraph 3.a., the Executive shall be under no obligation to seek other employment, and there shall be no offset against amounts due the Executive under this Agreement on account of any remuneration attributable to any subsequent employment. e. The Executive shall be paid the following described amounts pursuant to subparagraph (iii) of paragraph 3.a. If the Executive has not received an award under the STIC for the Plan Year in which his employment is terminated the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount equal to a prorated award for the portion of the Plan Year that the Executive was employed by the Company. If the Executive has not yet received payment of his award amount under the STIC for the Plan Year preceding the Executive's termination, the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount under the STIC for such Plan Year. 4.

Severance Benefit. a. If, during the period commencing on the date of a Change in Control and ending on the last day of the Term, the Executive's employment hereunder is terminated by the Company for any reason, other than Cause, death, or disability, or is terminated by the Executive in the event of a Constructive Discharge, then, within five (5) business days after such termination, PEC shall pay to the Executive (or, if the Executive has died before receiving all payments to which he has become entitled hereunder hereunder, to the beneficiary or estate of the Executive as described in paragraph 1413) the sum of of: (i) accrued but unpaid salary and accrued but unused paid time off for nonunion employees under the Company's "Paid Time Off Bank" policy for all nonunion employees, effective January 1as in effect on the Effective Date, 1997, as amended from time to time or any successor plansuccessor, (ii) severance pay in a lump sum cash amount equal to three (3) years of the Executive's Compensation, and (iii) unless an accelerated pay-out of Executive's Performance Awards under the PEC LTIP has been made by the Compensation Committee in cash pursuant to Section 4.7(a) or 4.7(b) of the PEC LTIP or in the form of restricted stock or options to purchase common stock of Newco pursuant to Section 4.7(c) of the PEC LTIP, a cash amount equal to the amount determined pursuant payable with respect to any outstanding Performance Award under the PEC LTIP in accordance with the provisions of the PEC LTIP for payments upon the occurrence of a change in control (as defined therein). If, on the date of the Executive's termination as described in this paragraph 3.e. The 3.a, the Executive is vested with respect to his accrued benefit under the PEC Retirement Plan, the Executive (or, if the Executive has died before receiving all payment payments to which he becomes entitled hereunder, the beneficiary or the estate of the Executive as described in paragraph 1413) will be paid in cash within ten (10) business days after termination as described in this paragraph 3.a., (i) the Present Value Amount amount of the benefits benefit accrued by the Executive under the PEC SRB, Part A and Part B SRB on the date of such termination of employment, plus (ii) the Additional Three Years Accrued Benefit. If the Executive is not vested with respect to his accrued benefit under the PEC Retirement Plan on the date of his termination of employment as described in this paragraph 3.a., determined as the Executive (or, if the Executive has died before receiving all payments to which he becomes entitled hereunder, the beneficiary or the estate of the Executive as described in paragraph 13) will be paid in cash within ten (10) business days after termination as described in this paragraph 3.a., an amount equal to the sum of (x) plus (y) where "x" equals the value of the benefit accrued by the Executive under the PEC SRB on the date of such termination of employment, determined as if, (i) the Executive had commenced participation in the PEC Retirement Plan and the PEC SRB as of the first date of Executive's actual employment with PEPCO, (ii) he had received credit for an additional three (3) years a year of Benefit Service. For purposes of determining the Executive's accrued benefits under the preceding sentence, such benefits shall be determined as full benefits, without actuarial reduction, as if the Executive qualified for the Rule of Eighty-Five Service under the PEC Retirement Plan and the PEC SRB for each year or partial year during which he was employed by the Company, and (regardless of whether the Executive so qualifies). All non-iii) he was fully vested Options and SARs awarded to the Executive in his accrued benefit under the PEC LTIC SRB at all times, and "y" equals the Additional Three Years Accrued Benefit. Any payment of the Executive's deemed accrued benefit under the PEC SRB pursuant to this paragraph 3.a. shall be deemed vested as in lieu of any payment under the earlier of PEC SRB itself and once paid pursuant to this Agreement, the date Executive shall have no further claim to payment under the PEC SRB. In the event of a Change change in Control control as defined in this Agreement or Change in Control as defined in under the PEC LTIC. The Company shall treat the Executive as employed by the Company for purposes of exercising Stock Options and SARs during the Coverage Period. All , any non-vested restricted stock awarded to the Executive under the PEC LTIC shall be deemed vested and owned by the Executive as in accordance with the provisions of the earlier of PEC LTIC. In the date event of a Change change in Control as defined in this Agreement or a Change in Control control, as defined in the PEC LTIC 2004 Plan, any award under the Long-Term Plan and such stock any Award Opportunity under the Short-Term Plan shall be delivered to distributed or paid in accordance with the Executive within five (5) business days after the date respective provisions of such Change in Controlplans. The Executive's termination of employment with the Company to become an employee of a corporation which directly or indirectly owns one hundred percent (100%) of or which is owned one hundred percent (100%) by the Company shall not be considered a termination of employment for purposes of this Agreement, provided that such termination and subsequent employment is not a Constructive Discharge. The subsequent termination of the Executive's employment from such corporation, without employment at a company that is wholly-owned by such corporation, shall be considered a termination of employment for purposes of this Agreement. b. During the longer of: (i) the Coverage Period or (ii) the period commencing with the date of the Executive's termination of employment as described in paragraph 3a and ending on the last day of the first month in which the Executive may retire under the PEC Retirement Plan and be eligible to receive a retirement annuity thereunder without actuarial reduction, the Executive shall be entitled to all benefits under the Company's welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended), as if the Executive were still employed during such period, at the same level of benefits and at the same dollar cost to the Executive as is available to all of the Company's executives generally and if and to the extent that equivalent benefits shall not be payable or provided under any such plans, the Company shall pay or provide equivalent benefits on an individual basis; provided, however, that PEC's obligations under this paragraph 3.b. shall cease upon the date following the termination of the Executive's employment as described in paragraph 3.a. that the Executive is eligible to receive benefits under welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) provided by an employer of the Executive other than the Company. c. (i) If Independent Tax Counsel shall determine that the aggregate payments made to the Executive pursuant to this Agreement and any other payments to the Executive from the Company which constitute "parachute payments" as defined in Section 280G of the Code (or any successor provision thereto) ("Parachute Payments") would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount calculated at the highest marginal tax rate applicable to the Executive for the tax year in which such payments were paid to the Executive (determined by Independent Tax Counsel) such that after payment by the Executive of all federal, state and other taxes (including any Excise Tax) imposed upon the Gross-Up Payment and any interest or penalties imposed with respect to such taxes, the Executive retains from the Gross-Up Payment an amount equal to the Excise Tax imposed upon the payments. For purposes of this paragraph 3.c., "Independent Tax Counsel" shall mean a lawyer, a certified public accountant with a nationally recognized accounting firm, or a compensation consultant with a nationally recognized actuarial and benefits consulting firm, with expertise in the area of executive compensation tax law, who shall be selected by the Executive and shall be reasonably acceptable to PEC, and whose fees and disbursements shall be paid by PEC. (ii) If Independent Tax Counsel shall determine that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that the Executive has substantial authority not to report any Excise Tax on the Executive's Federal income tax return. If the Executive is subsequently required to make a payment of any Excise Tax, then the Independent Tax Counsel shall determine in the same manner as a Gross-up Payment the amount (the amount of such additional payments are referred herein as "Gross-Up Underpayment") of such payment and any such Gross-Up Underpayment shall be promptly paid by PEC to or for the benefit of the Executive. The fees and disbursements of the Independent Tax Counsel shall be paid by PEC. (iii) The Executive shall notify PEC in writing within 15 days of any claim by the Internal Revenue Service that, if successful, would require the payment by PEC of a Gross-Up Payment. If PEC notifies the Executive in writing that it desires to contest such claim and that it will bear the costs and provide the indemnification as required by this subparagraph (iii) of paragraph 3.c., the Executive shall: (A) give the Company any information reasonably requested by the Company relating to such claim, (B) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company, (C) cooperate with the Company in good faith in order to effectively contest such claim, and (D) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, for any Excise Tax or federal and state income tax or other taxes, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. The Company shall control all proceedings taken in connection with such contest; provided, however, that if the Company directs the Executive to pay such claim and xxx for a refund, PEC shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, from any Excise Tax or federal and state income tax or other taxes, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance. (iv) If, after the receipt by the Executive of an amount advanced by PEC pursuant to subparagraph (iii) of paragraph 3.c., the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall within 10 days pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). d. In the event of any termination of the Executive's employment as described in paragraph 3.a., the Executive shall be under no obligation to seek other employment, and there shall be no offset against amounts due the Executive under this Agreement on account of any remuneration attributable to any subsequent employment. e. The Executive shall be paid the following described amounts pursuant to subparagraph (iii) of paragraph 3.a. If the Executive has not received an award under the STIC for the Plan Year in which his employment is terminated the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount equal to a prorated award for the portion of the Plan Year that the Executive was employed by the Company. If the Executive has not yet received payment of his award amount under the STIC for the Plan Year preceding the Executive's termination, the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount under the STIC for such Plan Year. 4.

Severance Benefit. a. If, during the period commencing on the date of a Change in Control and ending on the last day of the Term, the Executive's employment hereunder is terminated by the Company for any reason, other than Cause, death, or disability, or is terminated by the Executive in the event of a Constructive Discharge, then, within five (5) business days after such termination, PEC shall pay to the Executive (or, if the Executive has died before receiving all payments to which he has become entitled hereunder hereunder, to the beneficiary or estate of the Executive as described in paragraph 1413) the sum of of: (i) accrued but unpaid salary and accrued but unused paid time off for nonunion employees under the Company's "Paid Time Off Bank" policy for all nonunion employees, effective January 1as in effect on the Effective Date, 1997, as amended from time to time or any successor plan, and (ii) severance pay in a lump sum cash amount equal to three (3) years of the Executive's Compensation. Provided that the Executive is vested under the PEC Retirement Plan, and (iii) the amount determined pursuant to paragraph 3.e. The Executive (or, if the Executive has died before receiving all payment payments to which he becomes entitled hereunder, the beneficiary or the estate of the Executive as described in paragraph 1413) will be paid in cash within ten (10) business days after termination as described in this paragraph 3.a., the Present Value Amount amount of the vested benefits accrued by the Executive under the PEC SRB, Part A and Part B SRB on the date of termination of employment as described in this paragraph 3.a., determined as if the Executive had received credit for an additional three (3) years of Benefit Service ("Additional Three Years Benefit Service. For purposes ") (or the Present Value Amount of determining such vested benefits if the Executive's accrued benefits under the preceding sentence, such benefits shall be determined as full benefits, without actuarial reduction, as if the Executive qualified for the Rule of Eighty-Five benefit under the PEC Retirement Plan and PEC SRB is expressed as an annuity). If, at the date of termination of employment as described in this paragraph 3a (regardless of whether a) the Executive so qualifies). All non-vested Options and SARs awarded to is at least age 37 but less than age 40, or (b) the Executive is at least age 47 but less than age 50 that part of Executive's severance benefit resulting from the Additional Three Years Benefit Service shall be calculated at the percentage Executive would be entitled to if Executive had reached the age of (a) 40 in the event Executive is at least age 37 but less than age 40, or (b) 50 in the event Executive is at least age 47 but less than age 50. Any payment of the Executive's vested accrued benefit under the PEC LTIC SRB pursuant to this paragraph 3.a. shall be deemed vested as in lieu of any payment under the earlier of PEC SRB itself and once paid pursuant to this Agreement, the date Executive shall have no further claim to payment under the PEC SRB. In the event of a Change change in Control control as defined in this Agreement or Change in Control as defined in under the PEC LTIC. The Company shall treat the Executive as employed by the Company for purposes of exercising Stock Options and SARs during the Coverage Period. All , any non-vested restricted stock awarded to the Executive under the PEC LTIC shall be deemed vested and owned by the Executive as in accordance with the provisions of the earlier of PEC LTIC. In the date event of a Change change in Control as defined in this Agreement or a Change in Control control, as defined in the PEC LTIC 2004 Plan, any award under the Long-Term Plan and such stock any Award Opportunity under the Short-Term Plan shall be delivered to distributed or paid in accordance with the Executive within five (5) business days after the date respective provisions of such Change in Controlplans. The Executive's termination of employment with the Company to become an employee of a corporation which directly or indirectly owns one hundred percent (100%) of or which is owned one hundred percent (100%) by the Company shall not be considered a termination of employment for purposes of this Agreement, provided that such termination and subsequent employment is not a Constructive Discharge. The subsequent termination of the Executive's employment from such corporation, without employment at a company that is wholly-owned by such corporation, shall be considered a termination of employment for purposes of this Agreement. b. During the longer of: (i) the Coverage Period or (ii) the period commencing with the date of the Executive's termination of employment as described in paragraph 3a and ending on the last day of the first month in which the Executive may retire under the PEC Retirement Plan and be eligible to receive a retirement annuity thereunder without actuarial reduction, the Executive shall be entitled to all benefits under the Company's welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended), as if the Executive were still employed during such period, at the same level of benefits and at the same dollar cost to the Executive as is available to all of the Company's executives generally and if and to the extent that equivalent benefits shall not be payable or provided under any such plans, the Company shall pay or provide equivalent benefits on an individual basis; provided, however, that PEC's obligations under this paragraph 3.b. shall cease upon the date following the termination of the Executive's employment as described in paragraph 3.a. that the Executive is eligible to receive benefits under welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) provided by an employer of the Executive other than the Company. c. (i) If Independent Tax Counsel shall determine that the aggregate payments made to the Executive pursuant to this Agreement and any other payments to the Executive from the Company which constitute "parachute payments" as defined in Section 280G of the Code (or any successor provision thereto) ("Parachute Payments") would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount calculated at the highest marginal tax rate applicable to the Executive for the tax year in which such payments were paid to the Executive (determined by Independent Tax Counsel) such that after payment by the Executive of all federal, state and other taxes (including any Excise Tax) imposed upon the Gross-Up Payment and any interest or penalties imposed with respect to such taxes, the Executive retains from the Gross-Up Payment an amount equal to the Excise Tax imposed upon the payments. For purposes of this paragraph 3.c., "Independent Tax Counsel" shall mean a lawyer, a certified public accountant with a nationally recognized accounting firm, or a compensation consultant with a nationally recognized actuarial and benefits consulting firm, with expertise in the area of executive compensation tax law, who shall be selected by the Executive and shall be reasonably acceptable to PEC, and whose fees and disbursements shall be paid by PEC. (ii) If Independent Tax Counsel shall determine that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that the Executive has substantial authority not to report any Excise Tax on the Executive's Federal income tax return. If the Executive is subsequently required to make a payment of any Excise Tax, then the Independent Tax Counsel shall determine in the same manner as a Gross-up Payment the amount (the amount of such additional payments are referred herein as "Gross-Up Underpayment") of such payment and any such Gross-Up Underpayment shall be promptly paid by PEC to or for the benefit of the Executive. The fees and disbursements of the Independent Tax Counsel shall be paid by PEC. (iii) The Executive shall notify PEC in writing within 15 days of any claim by the Internal Revenue Service that, if successful, would require the payment by PEC of a Gross-Up Payment. If PEC notifies the Executive in writing that it desires to contest such claim and that it will bear the costs and provide the indemnification as required by this subparagraph (iii) of paragraph 3.c., the Executive shall: (A) give the Company any information reasonably requested by the Company relating to such claim, (B) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company, (C) cooperate with the Company in good faith in order to effectively contest such claim, and (D) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, for any Excise Tax or federal and state income tax or other taxes, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. The Company shall control all proceedings taken in connection with such contest; provided, however, that if the Company directs the Executive to pay such claim and xxx for a refund, PEC shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, from any Excise Tax or federal and state income tax or other taxes, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance. (iv) If, after the receipt by the Executive of an amount advanced by PEC pursuant to subparagraph (iii) of paragraph 3.c., the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall within 10 days pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). d. In the event of any termination of the Executive's employment as described in paragraph 3.a., the Executive shall be under no obligation to seek other employment, and there shall be no offset against amounts due the Executive under this Agreement on account of any remuneration attributable to any subsequent employment. e. The Executive shall be paid the following described amounts pursuant to subparagraph (iii) of paragraph 3.a. If the Executive has not received an award under the STIC for the Plan Year in which his employment is terminated the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount equal to a prorated award for the portion of the Plan Year that the Executive was employed by the Company. If the Executive has not yet received payment of his award amount under the STIC for the Plan Year preceding the Executive's termination, the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount under the STIC for such Plan Year. 4.

Severance Benefit. a. IfIn the event of a termination of Executive’s employment by the Bank or the Company without Cause (as such term is defined in Section 3.5) at any time, during or in the period commencing event of termination of Executive’s employment by her for Good Reason, the Bank will pay to Executive within 30 days of the date of such termination or expiration, in lump sum, any base salary and bonus previously awarded on account of services performed prior to the Executive’s termination of employment which have not been previously paid plus a severance payment equal to 2.99 times the sum of (a) Executive’s annual base salary then in effect and (b) an amount equal to the average executive cash bonus earned by Executive with respect to the two (2) full fiscal years immediately preceding the year in which termination occurs (the “Severance Benefit”). In addition, the Bank shall continue to pay for all medical, dental and life insurance coverage provided on the date of a Change in Control and ending on termination for the last day of the Term, the Executive's employment hereunder is terminated by the Company for any reason, other than Cause, death, or disability, or is terminated by the Executive in the event of a Constructive Discharge, then, within five (5) business days after such termination, PEC shall pay to the Executive (if the Executive has died before receiving all payments to which he has become entitled hereunder to the beneficiary or estate of the Executive as described in paragraph 14) the sum of (i) accrued but unpaid salary and accrued but unused paid time off under the Company's "Paid Time Off Bank" policy for all nonunion employees, effective January 1, 1997, or any successor plan, (ii) severance pay in a lump sum cash amount equal to three (3) years of the Executive's Compensation, and (iii) the amount determined pursuant to paragraph 3.e. The Executive (if the Executive has died before receiving all payment to which he becomes entitled hereunder, the beneficiary or the estate of the Executive as described in paragraph 14) will be paid in cash within ten (10) business days after termination as described in paragraph 3.a., the Present Value Amount of the benefits accrued by the Executive under the PEC SRB, Part A and Part B thirty-six month period commencing on the date of termination of employment as described (the “Severance Period”); the Bank shall continue to provide Executive with the same automobile then being used by Executive in accordance with the provisions of Section 1.4(b) of this paragraph 3.a., determined as if the Executive had received credit for an additional three (3) years of Benefit Service. For purposes of determining the Executive's accrued benefits under the preceding sentence, such benefits shall be determined as full benefits, without actuarial reduction, as if the Executive qualified Agreement for the Rule Severance Period (all of Eighty-Five under the PEC Retirement Plan foregoing benefits to be provided at the expense of the Bank) and, at any time during or within thirty (30) days of the expiration of the Severance Period, Executive shall have the right and PEC SRB (regardless of whether the Executive so qualifies). All non-vested Options and SARs awarded option, on written notice to the Executive under the PEC LTIC shall be deemed vested as Bank, to purchase such automobile for a purchase price equal to 90% of the earlier wholesale value as established by the National Automobile Dealers Association Official Used Car Guide published in the year of such notice; and, notwithstanding any provision of any option agreement governing options to purchase common stock of the Company granted to Executive (“Options”), any such Options which are exercisable by Executive on the date of a Change in Control termination shall not terminate until the expiration of the Severance Period and such Options as defined in extended are herein referred to as “Extended Options”. Any Severance Benefit paid under this Agreement or Change in Control as defined in the PEC LTIC. The Company Section 2.1 shall treat the Executive as employed by the Company for purposes of exercising Stock Options and SARs during the Coverage Period. All non-vested restricted stock awarded to the be credited against any amounts due Executive under the PEC LTIC shall be deemed vested and owned by the Executive Section 3 as of the earlier of the date a result of a Change in Control as defined in this Agreement or a Change in Control as defined in the PEC LTIC and such stock shall be delivered to the Executive within five (5) business days after the date of such Change in Control. The Executive's termination of employment with the Company to become an employee of a corporation which directly or indirectly owns one hundred percent (100%) of or which is owned one hundred percent (100%) by the Company Bank shall not be considered a termination of employment for purposes of this Agreement. The subsequent termination of the Executive's employment from such corporation, without employment at a company that is wholly-owned by such corporation, shall be considered a termination of employment for purposes of this Agreement. b. During the longer of: (i) the Coverage Period or (ii) the period commencing with the date of the Executive's termination of employment as described in paragraph 3a and ending on the last day of the first month in which the Executive may retire under the PEC Retirement Plan and be eligible to receive a retirement annuity thereunder without actuarial reduction, the Executive shall be entitled to all benefits under the Company's welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended), as if the Executive were still employed during such period, at the same level of benefits and at the same dollar cost to the Executive as is available to all of the Company's executives generally and if and to the extent that equivalent benefits shall not be payable or provided under any such plans, the Company shall pay or provide equivalent benefits on an individual basis; provided, however, that PEC's obligations under this paragraph 3.b. shall cease upon the date following the termination of the Executive's employment as described in paragraph 3.a. that the Executive is eligible to receive benefits under welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) provided by an employer of the Executive other than the Company. c. (i) If Independent Tax Counsel shall determine that the aggregate payments made to the Executive pursuant to this Agreement and any other payments to the Executive from the Company which constitute "parachute payments" as defined in Section 280G of the Code (or any successor provision thereto) ("Parachute Payments") would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount calculated at the highest marginal tax rate applicable to the Executive for the tax year in which such payments were paid to the Executive (determined by Independent Tax Counsel) such that after payment by the Executive of all federal, state and other taxes (including any Excise Tax) imposed upon the Gross-Up Payment and any interest or penalties imposed with respect to such taxes, the Executive retains from the Gross-Up Payment an amount equal to the Excise Tax imposed upon the payments. For purposes of this paragraph 3.c., "Independent Tax Counsel" shall mean a lawyer, a certified public accountant with a nationally recognized accounting firm, or a compensation consultant with a nationally recognized actuarial and benefits consulting firm, with expertise in the area of executive compensation tax law, who shall be selected by the Executive and shall be reasonably acceptable to PEC, and whose fees and disbursements shall be paid by PEC. (ii) If Independent Tax Counsel shall determine that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that the Executive has substantial authority not to report any Excise Tax on the Executive's Federal income tax return. If the Executive is subsequently required to make a payment of any Excise Tax, then the Independent Tax Counsel shall determine in the same manner as a Gross-up Payment the amount (the amount of such additional payments are referred herein as "Gross-Up Underpayment") of such payment and any such Gross-Up Underpayment shall be promptly paid by PEC to or for the benefit of the Executive. The fees and disbursements of the Independent Tax Counsel shall be paid by PEC. (iii) The Executive shall notify PEC in writing within 15 days of any claim by the Internal Revenue Service that, if successful, would require the payment by PEC of a Gross-Up Payment. If PEC notifies the Executive in writing that it desires to contest such claim and that it will bear the costs and provide the indemnification as required by this subparagraph (iii) of paragraph 3.c., the Executive shall: (A) give the Company any information reasonably requested by the Company relating to such claim, (B) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company, (C) cooperate with the Company in good faith in order to effectively contest such claim, and (D) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, for any Excise Tax or federal and state income tax or other taxes, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. The Company shall control all proceedings taken in connection with such contest; provided, however, that if the Company directs the Executive to pay such claim and xxx for a refund, PEC shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis calculated at the highest marginal tax rate applicable to the Executive, from any Excise Tax or federal and state income tax or other taxes, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance. (iv) If, after the receipt by the Executive of an amount advanced by PEC pursuant to subparagraph (iii) of paragraph 3.c., the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall within 10 days pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). d. In the event of any termination of the Executive's employment as described in paragraph 3.a., the Executive shall be under have no obligation to seek other employment, and there shall be no offset against amounts due pay the Severance Benefit to Executive under this Agreement on account of any remuneration attributable to any subsequent employment. e. The Executive shall be paid in the following described amounts pursuant to subparagraph (iii) of paragraph 3.a. If the Executive has not received an award under the STIC for the Plan Year in which his event her employment is terminated with Cause by the PEC Directors' Compensation-Nominating Committee shall determine in good faith, specifically considering Bank or the Executive's Computed Award under the STIC for such Plan Year, an award amount equal Company or voluntarily by Executive without Good Reason prior to a prorated award for the portion of the Plan Year that the Executive was employed by the Company. If the Executive has not yet received payment of his award amount under the STIC for the Plan Year preceding the Executive's termination, the PEC Directors' Compensation-Nominating Committee shall determine Change in good faith, specifically considering the Executive's Computed Award under the STIC for such Plan Year, an award amount under the STIC for such Plan Year. 4Control.