RETENTION AND RESTRICTED STOCK UNIT AWARD AGREEMENT
Exhibit
10(c)3
THIS RETENTION AND RESTRICTED STOCK
UNIT AWARD AGREEMENT (the "Agreement"), made and entered into by and
between SOUTHERN NUCLEAR
OPERATING COMPANY, INC. (the "Company") and XXXXXX X. XXXXXX ("Employee"),
shall be effective as of December 1, 2009 (the "Effective Date").
W I T N E S S E T H:
WHEREAS, the Company wishes to
encourage Employee to continue employment with the Company for a three year term
and to provide Employee with a retention award for service he will provide to
the Company; and
WHEREAS, this Agreement should be
treated as an Award made by the Compensation and Management Succession Committee
of the Southern Company Board of Directors under the Southern Company 2006
Omnibus Incentive Compensation Plan (the "Omnibus Plan").
NOW, THEREFORE, in consideration of the
premises, and the agreement of the parties set forth in this Agreement, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:
1. Retention Payment
Amount. Employee shall become
vested in the following amount provided Employee is actively employed with the
Company or an affiliate of the Company on the designated Vesting Date set forth
below:
Amount
Vesting
Date
13,136 Restricted Stock
Units 12/31/2012
The award
under this Paragraph 1 shall be treated as an award of Restricted Stock Units
under the terms of the Omnibus Plan, and therefore, governed by the terms of
that Plan. The number of units is based on the Employee’s base salary
plus target Performance Pay Program Award value under the Omnibus Plan at the
Fair Market Value on the Effective Date The deemed dividends associated with the
Restricted Stock Units shall be credited and treated as reinvested in additional
Restricted Stock Units until the award is paid in accordance with Paragraph
2.
2. Timing and Form of Payment
of Retention Amount.
(a) Generally. Unless
modified by the provisions set forth in Paragraphs 2(b)-2(f), the
vested amount shall be paid in shares of Common Stock to Employee in a lump sum
within 30 days following the Vesting Date (the "Scheduled Payment
Date").
(b) Death. If
Employee dies while in active service prior to the Vesting Date,
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notwithstanding
anything to the contrary in this Agreement, Employee shall be treated as fully
vested in the retention award set forth in Paragraph 1. The amount
vested under this Paragraph 2(b) shall be paid on the earlier of (i) the
Scheduled Payment Date, or (ii) within 30 days following the Employee's date of
death. Employee shall designate his beneficiary(ies) in the
beneficiary designation form set forth in Exhibit 1 to this
Agreement.
(c) Disability. If
Employee separates from service on account of becoming totally disabled as
defined under the Company's long term disability plan prior to the Vesting Date,
notwithstanding anything to the contrary in this Agreement, Employee shall be
treated as fully vested in the retention award set forth in Paragraph
1. The amount vested under this Paragraph 2(c) shall be paid on the
earlier of (i) the Scheduled Payment Date or (ii) within 30 days following the
date Employee separates from service on account of disability.
(d) Involuntary
Termination. If Employee separates from service on account of
being involuntarily terminated for reasons other than Cause prior to the Vesting
Date, notwithstanding anything to the contrary in this Agreement, Employee shall
be treated as fully vested in the retention award set forth in Paragraph
1. The amount vested under this Paragraph 2(d) shall be paid on the
earlier of (i) the Scheduled Payment Date or (ii) within 30 days following the
date the Employee separates from service.
(e) Voluntary Termination or
Termination for Cause. If Employee voluntarily terminates
employment prior to the Vesting Date or is terminated for
cause solely as determined by the Company prior to the Scheduled Payment Date,
Employee forfeits all amounts under this Agreement and all amounts which could
have been paid under this Agreement. For purposes of this Agreement,
"Cause" or "Termination for Cause" shall include the following
conditions:
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(1) Failure to Discharge
Duties. Employee willfully neglects or refuses to
discharge his duties hereunder or refuses to comply with any lawful or
reasonable instructions given to his by the Company without reasonable
excuse;
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(2)
Breach. Employee
commits any material breach or repeats or continues (after written
warning) any breach of his obligations
hereunder;
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(3) Gross
Misconduct. The Employee is guilty of gross
misconduct. For the purposes of this Agreement, the following
acts shall constitute gross misconduct as solely determined by the
Company:
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(i) Any act involving fraud or
dishonesty or breach of appropriate regulations of competent authorities
in relation to trading or dealing with stocks, securities, investments and
the like;
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(ii) The carrying out of
any activity or the making of any statement which would prejudice and/or
reduce the good name and standing of the Company, Southern Company or any
of its affiliates or would bring any one of these into contempt, ridicule
or would reasonably shock or offend any community in which these companies
are located;
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(iii) Attendance at a Company worksite in a
state of intoxication or otherwise being found in possession on Company or
any of its affiliates' property of any prohibited drug or substance,
possession of which would amount to a criminal
offense;
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(iv) Assault or other act of violence against any
employee of the Company or other person during the course of his
employment; or
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(v) Conviction of any felony or misdemeanor
involving moral turpitude.
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(f) Transfer of Employment to a
Southern Company Subsidiary or Affiliate. In the event that
Employee's employment by the Company is terminated and Employee shall become
immediately re-employed by a subsidiary or an affiliate of Southern Company, the
Company may assign this Agreement to such subsidiary or affiliate if agreed to
by such entity, and such assignee shall become the "Company" for all purposes
hereunder. If such subsidiary or affiliate does not agree to accept
such assignment for purposes of this Section 2, Employee shall be treated as if
he remained employed by Southern Nuclear Operating Company, Inc. for any period
of time he was employed by an affiliate of the Company.
(g) Delaying Payment.
Notwithstanding the foregoing, if Employee is a “specified employee” within the
meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”) as of the date of his separation from service, then payment of any
amounts under the Agreement shall be deferred for six (6) months after the date
of his separation from service to the extent required by Section 409A of the
Code.
3. Amendment and/or Termination
of this Agreement. This Agreement terminates when all amounts have been
paid or forfeited pursuant to Paragraph 2. Notwithstanding the
preceding sentence, the Employee and the Company may mutually agree to amend or
terminate this Agreement prior to the end of the three year term only by written
agreement signed by each party.
4. Confidentiality.
Employee represents and agrees that he will keep all terms and provisions of
this Agreement completely confidential, except for possible disclosures to his
legal and financial advisors and his spouse or to the extent required by law,
and Employee further agrees that he will not disclose the terms, provisions or
information contained in or concerning this Agreement to anyone other than those
persons named above, including, but not limited to, any past, present or
prospective employee or applicant for employment with the Company or any
affiliate of the Company. This Agreement is not intended in any way
to proscribe Employee's right and ability to provide information to any federal,
state or local government in the lawful exercise of such governments'
governmental functions.
5. Assignability. Neither
Employee, his estate, his beneficiaries nor his legal
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representatives
shall have any rights to commute, sell, assign, transfer or otherwise convey the
right to receive any payments hereunder, which payments and the rights thereto
are expressly declared to be nonassignable and nontransferable. Any
attempt to assign or transfer the right to payments under this Agreement shall
be void and have no effect.
6. Unsecured General
Creditor. The Company shall neither reserve nor specifically
set aside funds for the payment of its obligations under this Agreement, and
such obligations shall be paid solely from the general assets of the
Company. Notwithstanding that Employee may be entitled to receive
payments under the terms and conditions of this Agreement, the assets from which
such amounts may be paid shall at all times be subject to the claims of the
Company's creditors.
7. No Effect on Other
Arrangements. It is expressly understood and agreed that any
payments made in accordance with this Agreement are in addition to any other
benefits or compensation to which Employee may be entitled or for which he may
be eligible, whether funded or unfunded, by reason of his employment with the
Company.
8. Tax Withholding and
Implications. To the extent permitted under Section 409A of
the Code, there shall be deducted from the vested retention amount the number of
shares of Common Stock necessary to cover the amount of any tax required by any
governmental authority to be withheld from the Employee and paid over by the
Company to such governmental authority for the account of the
Employee. The Company makes no representations or guarantees
regarding the tax implications of this Agreement and advises Employee to consult
with his attorney and/or tax advisor regarding the tax implications of this
Agreement. In addition, Employee agrees to hold harmless the Company
with respect to any tax liability for any and all federal, state or local taxes
or assessments, interest or penalties of any kind arising from this
Agreement.
9. Compensation. Any
compensation paid to Employee pursuant to this Agreement shall not be considered
"compensation" as the term is defined in The Southern Company Employee Savings
Plan, or "earnings" as such term is defined in The Southern Company Pension
Plan. Payments to Employee shall not be considered wages, salaries or
compensation under any other Company-sponsored employee benefit or compensation
plan or program, unless the explicit terms of such plan or program provides
otherwise.
10. No Guarantee of
Employment. No provision of this Agreement shall be construed
to affect in any manner the existing rights of the Company to suspend,
terminate, alter or modify, whether or not for cause, the Employee’s employment
relationship with the Company.
11. Governing
Law. This Agreement, and all rights under it, shall be
governed by and construed in accordance with the laws of the State of Alabama,
without giving effect to principles of conflicts of laws.
12. 409A. The parties
agree that the terms and provisions of this Agreement will be
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construed
and interpreted to the maximum extent permitted in order to comply with Section
409A of the Code, and the regulations promulgated thereunder. Neither
the Employee nor the Company may accelerate any deferred payment under this
Agreement, except in compliance with Section 409A of the Code.
IN WITNESS WHEREOF, this Agreement has
been executed by the parties first listed above, this 29th day of January
2010.
“COMPANY”
SOUTHERN NUCLEAR OPERATING COMPANY,
INC.
By: /s/Xxxxx X. Xxxxxx
III
Its: President
and CEO
“EMPLOYEE”
/s/X. X. Xxxxxx
XXXXXX
X. XXXXXX
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EXHIBIT
1
BENEFICIARY
DESIGNATION
Beneficiary
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____________________
Name
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____________________
Relationship
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____________________
Percentage
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| ____________________
Name
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____________________
Relationship
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____________________
Percentage
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In the
event that all or some beneficiaries designated above are not living at the time
payment
should be
made, I designate the following contingent beneficiaries to be paid such
amounts:
Contingent
Beneficiary
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____________________
Name
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____________________
Relationship
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____________________
Percentage
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| ____________________
Name
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____________________
Relationship
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____________________
Percentage
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Any
amounts not paid to the contingent beneficiary(ies) shall be paid to the
Employee's estate.
