Document:

ex10w2-110508.htm

    
      

      

    

    EXHIBIT
10.2

      FORM
OF CAPE TOWN ADDENDUM TO AIRCRAFT LEASE AGREEMENT

       

      FAA
Authorization Code:_______________

       

      International
Registry File Numbers:

       

      (Airframe):                      __________________

       

      (Engine
No.
1):              
__________________

       

      (Engine
No.
2):               __________________

       

      

      THIS ADDENDUM (this “Addendum”) dated as of
September 1, 2008 amends and supplements that certain Aircraft Lease
Agreement (as amended to the date hereof and as may be amended from time to time
and as more particularly described in Annex I attached hereto, the “Lease”) with respect to the
Aircraft as more particularly described in Annex I attached hereto (the “Aircraft”) between CFS Air, LLC, with an office
at 44 Old Ridgebury Road,
Danbury, CT 06810-5105 (together with its successors and assigns, if any
“Lessor”) and Air Logistics, L.L.C., a
limited liability company organized and existing under the laws of the State of
Louisiana with its mailing address and chief place of business at 4605 Industrial Drive, New Iberia, LA
70560 (“Lessee”).  Capitalized
terms not otherwise defined herein shall have the meanings set forth in the
Lease.

       

      1. Preconditions to the Addendum.
Lessor shall have received: (a) an AC Form 8050-135 FAA Entry Point
Filing Form International Registry for filing with the FAA and the international
registry (the “International
Registry”) established pursuant to the Cape Town Convention on
International Interests in Mobile Equipment (the “Convention”) and the Protocol
thereto On Matters Specific To Aircraft Equipment (the “Protocol”) concluded in Cape
Town in November 2001 (the Convention and the Protocol, each, in the official
English language text thereof, are collectively referred to herein as the “Cape Town Convention”) and
any other form proscribed by the International Registry or the FAA, (b) evidence
that Lessee is a registered “transacting user entity” with the International
Registry, has identified its “administrator” to Lessor, has appointed a
“professional user entity” satisfactory to Lessor, has filed all necessary
documentation and paid all required user fees to enable Lessor to register its
“international interests” (as such term is used in the Cape Town Convention)
created hereby with the International Registry, (c) a “priority search
certificate” (as such term is used in the procedures of the International
Registry) from the International Registry indicating that no international
interests with respect to the Aircraft are currently registered therein; (d)
evidence any or all filings required or advisable to protect or perfect Lessor’s
“international interests” created by the Lease, this Addendum, and the related
documents are filed with the International Registry; and (e) confirmation
satisfactory to Lessor that Lessee has consented to the registration of the
“international interests” created by this Amendment and any of the other
Documents in favor of Lessor.

       

      2. AMENDMENTS
TO THE LEASE:

       

      So long
as the preconditions have been fulfilled to the satisfaction of the Lessor, the
Lease is hereby amended by adding the following thereto:

       

      
        	
                (a)  

              	
                Section
      20(f) of the Lease is hereby amended by inserting the following at the end
      thereof:

              

      

       

      “LESSEE
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL
COURTS LOCATED IN THE STATE OF CONNECTICUT TO HEAR AND DETERMINE ANY SUIT,
ACTION OR PROCEEDING AND TO SETTLE ANY DISPUTES, WHICH MAY ARISE OUT OF OR IN
CONNECTION HEREWITH (COLLECTIVELY, THE “PROCEEDINGS”), AND LESSEE
FURTHER IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO REMOVE ANY SUCH PROCEEDINGS
FROM ANY SUCH COURT (EVEN IF REMOVAL IS SOUGHT TO ANOTHER OF THE ABOVE-NAMED
COURTS). Notwithstanding the foregoing, Lessor shall have the right to apply to
a court of competent jurisdiction in the United States or abroad for equitable
relief as is necessary to preserve, protect and enforce its rights under this
Lease, including but not limited to orders of attachment or injunction necessary
to maintain the status quo pending litigation or to enforce judgments against
Lessee, any Guarantor or the Aircraft or to gain possession of the
Aircraft.”

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      
        	
                (b)  

              	
                Section
      20(h) is hereby deleted in its entirety and replaced with the words
      “Intentionally Reserved”.

              

      

       

      
        	
                (c)  

              	
                The
      Amended and Restated Annexes B and F attached hereto amend and restate the
      original annexes B and F and replace and supercede them in their entirety.
      Annex A is hereby amended by changing Capitalized Lessor’s Cost to reflect
      the Capitalized Lessor’s Cost on Amended and Restated Annex
    B.

              

      

       

      3. MISCELLANEOUS
PROVISIONS.

       

      
        	
                (a)  

              	
                This
      Addendum may be executed in any number of counterparts and by the
      different parties hereto on separate counterparts, each of which
      counterparts when executed and delivered shall be an original, but all of
      which shall together constitute one and the same
    instrument.

              

      

       

      
        	
                (b)  

              	
                Except
      as expressly modified hereby, all terms and provisions of the Lease shall
      remain in full force and effect. This Addendum is not binding nor
      effective with respect to the Lease or the Aircraft until executed on
      behalf of Lessor and Lessee by authorized representatives of Lessor and
      Lessee.

              

      

       

      
        	
                (c)  

              	
                From
      and after the date hereof, all references in the Lease and any other
      documents related thereto shall be deemed to be a reference to the Lease
      as modified pursuant to the terms of this
  Addendum.

              

      

       

      IN WITNESS WHEREOF, Lessee and
Lessor have caused this Addendum to be executed by their duly authorized
representatives as of the date first above written.

       

      

      
        	
                LESSOR:

              	
                LESSEE:

              
	 
      	 
      
	
                CFS
      Air, LLC

              	
                Air
      Logistics, L.L.C.

              
	
                By
      Its Manager

              	 
      
	
                General
      Electric Capital Corporation

              	 
      
	 
      	 
      
	 
      	 
      
	
                By:_______________________________________________

              	
                By:________________________________________________________

              
	 
      	 
      
	
                Name:____________________________________________________

              	
                Name:______________________________________________________

              
	 	 
      
	
                Title:_____________________________________________________

              	
                Title:_______________________________________________________

              

      

      

      
        
          
             

          

           

        

        
          2

          
            

          

        

        
           

        

      

      Annex
I

       

      Aircraft
Lease Agreement (SN ________) dated as
of December 30, 2005 between CFS Air, LLC, as lessor, and Air Logistics, L.L.C.,
as lessee, which was recorded by the Federal Aviation Administration on January
25, 2006 and assigned Conveyance No. [Intentionally Deleted], as supplemented
and amended by the following described instruments:

       

      
        	
                Instrument

              	
                Date
      of

                Instrument

              	
                FAA

                Recording Date

              	
                FAA

                Conveyance No.

              
	
                Certificate
      of Acceptance

                (SN  [Intentionally
      Deleted])

              	
                [Intentionally
      Deleted]

              	
                [Intentionally
      Deleted]

              	
                [Intentionally
      Deleted]

              
	
                Amendment
      to Aircraft Lease Agreement (SN  [Intentionally
      Deleted])

              	
                [Intentionally
      Deleted]

              	
                [Intentionally
      Deleted]

              	
                [Intentionally
      Deleted]

              

      

      

      

      Description
of Aircraft:

       

      A.Airframe:  [Intentionally
Deleted].

       

      B.Engines:  [Intentionally
Deleted].

       

      C.Propellers:
None.

       

      

       

      
        
          
             

          

           

        

        
          3

          
            

          

        

        
           

        

      

      Annex B
(Aircraft/Fixed)

       

      AMENDED
AND RESTATED

       

      ANNEX
B

       

      DATED
THIS SEPTEMBER 1, 2008

       

      TO
AIRCRAFT LEASE AGREEMENT (SN [Intentionally Deleted])

       

      DATED
AS OF December 30, 2005, AS AMENDED

      

        
          	
                  Lessor
      & Mailing Address:

                	
                  Lessee
      & Mailing Address:

                
	
                  CFS
      Air, LLC

                	
                  Air
      Logistics, L.L.C.

                
	
                  44
      Old Ridgebury Road

                	
                  4605
      Industrial Place 

                
	
                  Danbury,
      CT 06810

                	
                  New
      Iberia, LA 70560

                

        

      

       

      Capitalized
terms not defined herein shall have the meanings assigned to them in the
Aircraft Lease Agreement, as amended, identified above.

       

      A. Aircraft.

       

      Pursuant
to the terms of the Lease, Lessor has acquired and leased to Lessee the Aircraft
described on Annex A to the Lease.

       

      B. Financial
Terms. (For the remaining of the term from the date hereof)

       

      
        
          
            	
                    1.

                  	
                    Advance
      Rent (if any):

                  	
                    [Intentionally
      Deleted]

                  
	
                    2.

                  	
                    Capitalized
      Lessor’s Cost:

                  	
                    [Intentionally
      Deleted]

                  
	
                    3.

                  	
                    Basic
      Term Commencement Date:

                  	
                    [Intentionally
      Deleted]

                  
	
                    4.

                  	
                    Basic
      Term:

                  	
                    [Intentionally
      Deleted]

                  
	
                    5.

                  	
                    First
      Basic Term Rent Date:

                  	
                    [Intentionally
      Deleted]

                  
	
                    6.

                  	
                    Basic
      Term Rent Dates:

                  	
                    [Intentionally
      Deleted]

                  
	
                    7.

                  	
                    First
      Termination Date:

                  	
                    [Intentionally
      Deleted]

                  
	
                    8.

                  	
                    Last
      Basic Term Rent Date:

                  	
                    [Intentionally
      Deleted]

                  
	
                    9.

                  	
                    Last
      Delivery Date:

                  	
                    [Intentionally
      Deleted]

                  
	
                    10.

                  	
                    Primary
      Hangar Location:

                  	
                    [Intentionally
      Deleted]

                  
	
                    11.

                  	
                    Supplier:

                  	
                    [Intentionally
      Deleted]

                  
	
                    12.

                  	
                    Lessee
      Federal Tax ID No.:

                  	
                    [Intentionally
      Deleted]

                  
	
                    13.

                  	
                    Early
      Purchase Option:

                  	
                    [Intentionally
      Deleted]

                  
	
                    14.

                  	
                    Expiration
      Date:

                  	
                    September
      1, 2023

                  
	
                    15.

                  	
                    Daily
      Lease Rate Factor:

                  	
                    [Intentionally
      Deleted]

                  
	
                    16.

                  	
                    Basic
      Term Lease Rate Factor:

                  	
                    [Intentionally
      Deleted]

                  

          

           

        

      

      C. Tax
Benefits.

       

      Depreciation
Deductions:  [Intentionally Deleted]

       

      D. Term
and Rent.

       

      1. Interim
Rent.  Not
Applicable.

       

      2. Basic
Term Rent.  Commencing on September 1, 2008 and on the
same day of each month thereafter (each, a “Rent Payment Date”) during
the Basic Term, Lessee shall pay as Rent (“Basic Term Rent”) the product
of the Basic Term Lease Rate Factor times the Capitalized Lessor’s Cost of the
Aircraft on this Amended and Restated Annex B (SN [Intentionally
Deleted]).  For the avoidance of doubt, payment to Lessor of the Basic
Term Rent due on September 2, 2008 hereunder shall satisfy any requirement
to pay Basic Term Rent on September 1, 2008 under the original Annex B
[Intentionally Deleted].

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      E. Insurance.

       

      1. Public
Liability:  [Intentionally Deleted].

       

      2. Casualty
and Property Damage:  [Intentionally Deleted].

       

      F. Additional
Maintenance Requirements.  None.

       

      Except as
expressly modified hereby, all terms and provisions of the Lease shall remain in
full force and effect. This Amended and Restated Annex B is not binding or
effective with respect to the Lease or the Aircraft until delivered on behalf of
Lessor and Lessee.

       

      IN WITNESS WHEREOF, Lessee and
Lessor have caused this Amended and Restated Annex B to be executed by their
duly authorized representatives as of the date first above written.

       

      

       

      
        	
                LESSOR:

              	
                LESSEE:

              
	 
      	 
      
	
                CFS
      Air, LLC

              	
                Air
      Logistics, L.L.C.

              
	
                By
      Its Manager

              	 
      
	
                General
      Electric Capital Corporation

              	 
      
	 
      	 
      
	 
      	 
      
	

                By:__________________________________________________

              	
                 

              	
                By:_________________________________________________________

              
	 	 
      
	

                Name:______________________________________________________

              	
                 

              	
                Name:_______________________________________________________

              
	 
      	 
      
	

                Title:_______________________________________________________

              	
                 

              	
                Title:________________________________________________________

              
	 
      	 
	 
      	 
      
	 
      	
                Attest

              
	 
      	 
      
	 
      	
                By:_________________________________________________________

              
	 
      	 
	 
      	
                Name:_______________________________________________________

              

      

      

       

      
        
          
             

          

           

        

        
          5

          
            

          

        

        
           

        

      

      Amended
& Restated

       

      Annex
F

       

      DATED
THIS SEPTEMBER 1, 2008

       

      TO
AIRCRAFT LEASE AGREEMENT ([Intentionally Deleted])

       

      DATED
AS OF December 30, 2005, AS AMENDED

       

      Stipulated
Loss and Termination Values

       

      From and
after the date hereof, the Stipulated Loss and Termination Value of the Aircraft
shall be the percentage of Capitalized Lessor’s Cost of the aircraft set forth
opposite the applicable rent payment.

       

      Capitalized
Lessor’s Cost     [Intentionally Deleted]

       

      

      

      
        	
                Rental
      Basic

              	
                Termination
      Value Percentage

              	
                Stipulated
      Loss Value Percentage

              	
                Rental

              	
                Termination
      Value Percentage

              	
                Stipulated
      Loss Value Percentage

              
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                [Intentionally
      Deleted]

              	 
      
	 
      	 
      	 
      	 
      	 
      	 
      

      

      

       

      

       

      
        	
                Initials:    Lessor:_______________________________________________

              	
                Lessee:__________________________________________________________

              
	
                CFS Air, LLC

              	
                Air Logistics,
      L.L.C.

              

      

      

       

      
        
          
             

          

           

        

        
          6

          
            

          

        

        
           

        

      

      FORM
OF ADDENDUM

       

      DATED
AS OF SEPTEMBER 1, 2008

       

      TO
AIRCRAFT LEASE AGREEMENT ([Intentionally Deleted])

       

      DATED
AS OF December 30, 2005, AS AMENDED

       

      

      THIS ADDENDUM(“Addendum”) amends and
supplements the above Aircraft Lease Agreement (“Lease”) between CFS Air, LLC (together with
its successors and assigns, if any, “Lessor”) and Air Logistics, L.L.C. (“Lessee”) and is hereby
incorporated into the Lease as though fully set forth
therein.  Capitalized terms not otherwise defined herein shall have
the meanings set forth in the Lease.

       

      Section
21 of the Lease is hereby re-numbered Section 22 and a new Section 21 is hereby
added to the Lease:

       

      “21.  LESSEE
STATEMENT

       

      Lessee
hereby states that it has read and understands all of the terms and conditions
contained herein, including, but not limited to (i) the disclaimer found in the
DISCLAIMER Section of this Lease by Lessor of, among other things, any warranty
obligations on the part of Lessor to the Lessee concerning the Aircraft leased
pursuant to this Lease or any component thereof, including, without limitation,
any warranty as to design, compliance with specifications, quality of materials
or workmanship, merchantability, fitness for any purpose, use or operation,
safety, patent, trademark or copyright infringement or title and Lessee hereby
agrees to waive and disclaim any rights it would otherwise have against Lessor
for such warranty obligations and (ii) the provisions of the NET LEASE Section
of this Lease which provide that the Lessee’s obligations under this Lease,
including, but not limited to, its obligations to pay Rent to Lessor, shall not
be affected by reason of any defect in or damage to, or loss of possession, use
or destruction of the Aircraft from whatsoever cause.

       

      Without
limiting the generality of the foregoing, Lessee understands and agrees as
follows:

       

      
        	
                 
      

              	
                (a)

              	
                Lessee
      has waived, and reaffirms its waiver in favor of Lessor, all legal rights
      of Lessee found in Louisiana Civil Code Articles 2693, 2694, 2695, 2697,
      2699, 2700 and 2728.

              

      

       

      
        	
                 
      

              	
                (b)

              	
                Lessee
      has selected the Aircraft leased pursuant to this Lease and requested
      Lessor to purchase such Aircraft.

              

      

       

      
        	
                 
      

              	
                (c)

              	
                Lessee
      has waived and reaffirms its waiver of any warranty granted Lessee under
      Louisiana law as to any vices or defects in the Aircraft which may prevent
      the Aircraft being used for its intended
  purposes.

              

      

       

      
        	
                 
      

              	
                (d)

              	
                Lessee
      has all obligations to maintain and repair the Aircraft, subject to the
      terms of the Lease.

              

      

       

      
        	
                 
      

              	
                (e)

              	
                Lessee
      shall still pay Rent to Lessor if the Aircraft is lost, stolen, destroyed,
      damaged or cannot be used for its intended purpose for any reason, subject
      to the terms of the Lease.

              

      

       

      
        	
                 
      

              	
                (f)

              	
                Lessee
      has accepted the Aircraft subject to this Lease and accepts full
      responsibility if the Aircraft was not properly installed, does not
      operate as represented by the Supplier of the Aircraft or is
      unsatisfactory for any reason, subject to the terms of the
      Lease.

              

      

       

      In
addition, Lessee understands that Lessor and the Supplier are separate
entities.  The Supplier is not the agent of Lessor and Lessor is not
the agent of the Supplier.  No claim or cause of action Lessee might
have against the Supplier or any other party shall terminate this Lease or the
obligations of  Lessee to Lessor pursuant to this
Lease.  Such claims or causes of action must be pursued directly
against the Supplier or such other party and  Lessee shall be entitled
to no abatement or reduction of, or set-off against any rental payments due
under this Lease based upon such claims or causes of action.”

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      Except as
expressly modified hereby, all terms and provisions of the Lease shall remain in
full force and effect.

       

      IN WITNESS WHEREOF, Lessee and
Lessor have caused this Addendum to be executed by their duly authorized
representatives as of the date first above written.

       

      

       

      
        	
                LESSOR:

              	
                LESSEE:

              
	 
      	 
      
	
                CFS
      Air, LLC

              	
                Air
      Logistics, L.L.C.

              
	
                By
      Its Manager

              	 
      
	
                General
      Electric Capital Corporation

              	 
      
	 
      	 
      
	 
      	 
      
	
                By:_______________________________________________________

              	
                By:_______________________________________________________________

              
	 
      	 
      
	
                Name:_____________________________________________________

              	
                Name:_____________________________________________________________

              
	 
      	 
      
	
                Title:_____________________________________________________

              	
                Title:______________________________________________________________

              
	 	 
      
	 
      	 
      
	 
      	
                Attest

              
	 
      	 
      
	 
      	
                By:_______________________________________________________________

              
	 
      	 
      
	 
      	
                Name:_____________________________________________________________

              

      

      

       

      
        
          
             

          

           

        

        
          8

          
            

          

        

        
           

        

      

      [Form
of Guaranty of Aircraft Lease Agreement]

       

      

       

      

       

      
        	 	  

                ______________________________,
      2008

              

      

       

      

      CFS Air,
LLC

       

      44 Old
Ridgebury Road

       

      Danbury,
Connecticut  06810

       

      RE:           Reaffirmation of
Guaranty

       

      Ladies
and Gentlemen:

       

      Reference
is made to that certain Guaranty (the “Guaranty”) dated as of
___________ executed by Bristow Group Inc. formerly known as Offshore Logistics,
Inc. (together with its successors and permitted assigns, “Guarantor”) in favor of CFS
Air, LLC (together with its successors and permitted assigns, “Lessor”), which Guaranty
guarantees the payment and performance by Air Logistics, L.L.C.
(together with its successors and permitted assigns, “Lessee”) of any and all of its
obligations to Lessor under any financial and leasing arrangements between
Lessee and Lessor, including, without limitation, that certain Aircraft Lease
Agreement, dated as of December 30, 2005 between Lessee and Lessor
(collectively, the “Guaranteed
Obligations”).

       

      In order
to induce Lessor to consent to that certain Cape Town Addendum to Aircraft Lease
Agreement together with the amended and restated annexes thereto (collectively,
the “Transaction”), Guarantor hereby acknowledges that it has received notice of
the Transaction, has re-evaluated the risks it has assumed under the Guaranty in
light of the consummation of the Transaction, and hereby ratifies and reaffirms
to Lessor all of its obligations under the Guaranty as the same are set forth
therein.  Such ratification and reaffirmation shall in all respects be
deemed the equivalent of a re-issuance of such Guaranty as of the date
hereof.

       

      Very
truly yours,

      

      Bristow
Group Inc.

      

      

      

      
         

        
          	 By:	 	________________________________________________________________________________ 
	 Name:	 	________________________________________________________________________________
	 Title:	 	 ________________________________________________________________________________

        

         

      

       

       

      
        
          
             

          

           

        

        
          9Exhibit 10(a)1

COMPENSATION AND RETENTION AGREEMENT

THIS COMPENSATION AND RETENTION AGREEMENT (the “Agreement”), made and entered into by and between SOUTHERN COMPANY SERVICES, INC. (the “Company”) and C. ALAN MARTIN (“Employee”), shall be effective as of February 1, 2008 (the “Effective Date”).

W I T N E S S E T H:

WHEREAS, Employee has been named the President of the Company effective February 1, 2008; 

WHEREAS, the Company wishes to encourage Employee to continue employment with the Company for a three year term and to provide Employee with compensation and retention awards 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 (the “Compensation Committee”) 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 Amounts.  
 

 (a)       Employee shall become vested in the following amounts provided Employee is actively employed and serving as President of the Company on the designated Employment Vesting Date set forth below:

 

 

	
            Amount
 	
            Employment Vesting Date
 
	
            $100,000
 	
            12/31/2008
 
	
            $100,000
 	
            12/31/2009
 
	
            $100,000
 	
            12/31/2010
 

An annual amount vested under this Paragraph 1(a) shall earn interest until paid to Employee in accordance with Paragraph 2 of this Agreement as if invested on each respective Employment Vesting Date in the prime interest rate investment described in Section 6.2 of the Southern Company Deferred Compensation Plan (the “DCP”).  No other provision of the DCP shall apply to any award under this Paragraph 1(a).  The award under this Paragraph 1(a) shall be treated as a cash-based award under the terms of the Omnibus Plan, and therefore, governed by the terms of that Plan.

(b)       Employee shall become vested in up to the following additional amounts provided Employee is actively employed and serving as President of the Company on the Performance Vesting Date and satisfies annual written performance criteria established by the Chief Executive Officer of the Southern Company (“CEO”):

	
            Maximum Restricted Stock
 Unit Base Value 
 	
            Performance
 Vesting Date
 
	
            $200,000
 	
            12/31/2008
 
	
            $200,000
 	
            12/31/2009
 
	
            $200,000
 	
            12/31/2010
 

The annual performance criteria to achieve a full payout under this Paragraph 1(b) shall be established in writing by the CEO as soon as practicable at the beginning of each annual performance period (typically within ninety (90) days) and such written annual performance criteria shall be a part hereof of this Agreement.  The performance criteria shall permit Employee to earn less than the maximum base value based on a scale also established in writing by the CEO.  If Employee fails to maintain an effective team of officers and senior managers at the Company during each annual performance period, the CEO, in its sole judgment, may exercise 

 

	
             
 	
            - 2 -
 

 

 

negative discretion to reduce by all or a percentage the payout earned by the Employee pursuant to this Paragraph 1(b) through his achievement of the written performance criteria.  The CEO shall notify Employee of the decision to exercise negative discretion and the amount of such exercise for any annual performance period before December 31st of each respective annual performance period.  The CEO and Employee shall meet by July 31st during each annual performance period to generally discuss the mid-term status of Employee’s achievement of the annual performance criteria.

An annual amount vested under this Paragraph 1(b) shall be treated until paid to Employee in accordance with Paragraph 2 of this Agreement as if invested on the Performance Vesting Date in a deemed investment in the common stock of the Southern Company.  As such, the award under this Paragraph 1(b) shall be treated as restricted stock units provided under the terms of the Omnibus Plan and, therefore, governed by the terms of that Plan.  Deemed dividends associated with the restricted stock units shall be treated as reinvested until the award earned under this Paragraph 1(b) is paid to Employee pursuant to 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), all amounts vested, plus earning thereon, shall be paid to Employee in a lump sum on February 1, 2011.  Amounts provided under Paragraph 1(a) shall be paid in cash.  Amounts provided in Paragraph 1(b) shall be paid in stock.

(b)       Death.  If Employee dies while in active service while serving as President of the Company prior to December 31, 2010, amounts vested under Paragraphs 1(a) and 1(b) shall be paid on the earlier of (i) February 1, 2011, or (ii) on March 15th of the year following the Employee’s date of death.  With respect to any amount which would have been vested under 

 

	
             
 	
            - 3 -
 

 

 

Paragraph 1(b) for an annual performance period based on Employee’s actual satisfaction of the written annual performance criteria except for Employee’s failure to be actively employed as President of the Company on the Performance Vesting Date because of his death, Employee’s beneficiary shall be entitled to be paid the amount attributable to this annual performance period based on actual performance plus amounts provided under Paragraphs 1(a) and 1(b) previously vested as provided in the preceding sentence.  (For example, if Employee had in fact achieved 100% of the written annual performance criteria at his death during the 2008 annual performance period, Employee’s beneficiary would be entitled to the maximum base value payout of restricted stock units measured against the 2008 performance period even though Employee was not employed as President of the Company on
December 31, 2008.)  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 from the Company on account of becoming totally disabled as defined under the Company’s long term disability plan, Employee shall be paid the amounts vested under Paragraphs 1(a) and 1(b) on the earlier of (i) February 1, 2011, or (ii) March 15th of the year following the year in which the Employee separates from service provided that in any event such payment must not occur until at least six (6) months following Employee’s separation from service.  With respect to any amount which would have been vested under Paragraph 1(b) for an annual performance period based on Employee’s actual satisfaction of the written annual performance criteria except for Employee’s failure to be actively employed
as President of the Company on the Performance Vesting Date because of his disability, Employee shall be entitled to be paid the amount attributable to this annual performance period based on actual performance plus amounts provided under Paragraphs 1(a) and 1(b) previously vested as provided in the preceding sentence.  (For example, if Employee 

 

	
             
 	
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had in fact achieved 100% of the written annual performance criteria at his separation from service date on account of disability measured against the 2008 annual performance period, Employee would be entitled to the maximum base value payout of restricted stock units for the 2008 performance period even though Employee was not employed as President of the Company on December 31, 2008.)

(d)       Retirement.  If Employee separates from service on account of retirement, Employee shall be paid the amounts vested under Paragraphs 1(a) and 1(b) as of such separation from service on the earlier of (1) February 1, 2011 or (ii) March 15th of the year following the year in which the Employee separates from service provided that in any event such payment must not occur until at least six (6) months following Employee’s separation from service.  With respect to any amount which would have been vested under Paragraph 1(b) for an annual performance period based on Employee’s actual satisfaction of the written annual performance criteria except for Employee’s failure to be actively employed as President of the Company on the Performance Vesting Date
because of his retirement, Employee shall be entitled to be paid the amount attributable to this annual performance period based on actual performance plus amounts provided under Paragraphs 1(a) and 1(b) previously vested as provided in the preceding sentence.  (For example, if Employee had in fact achieved 100% of the written annual performance criteria at his separation from service date on account of disability measured against the 2008 annual performance period, Employee would be entitled to the maximum base value payout of restricted stock units for the 2008 performance period even though Employee was not employed as President of the Company on December 31, 2008.)

	
             
 	
             
 

	
             
 	
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(e)       Involuntary Termination.  If Employee separates from service from the Company on account of being involuntarily terminated by the Company for reasons other than Cause, Employee shall be paid the amounts vested under Paragraphs 1(a) and 1(b) on the earlier of (i) February 1, 2011, or (ii) March 15th of the year following the year in which the Employee separates from service provided that in any event such payment must not occur until at least six (6) months following Employee’s separation from service.  For purposes of this Paragraph 2(e) only, Employee shall be deemed to be vested in the annual amount provided for in Paragraph 1(a) for purposes of payment under the preceding sentence which would have been earned in the calendar year in which the Employee is involuntarily te

minated from employment by the Company even though Employee
fails to be employed as President of the Company on the Employment Vesting Date for that calendar year.  In addition, with respect to any amount which would have been vested under Paragraph 1(b) for the annual performance period during which Employee is involuntarily terminated based on Employee’s actual satisfaction of the written annual performance criteria except for Employee’s failure to be actively employed as President of the Company on the Performance Vesting Date because of his involuntary termination from employment, Employee shall be vested and entitled to be paid the amount attributable to this annual performance period based on actual performance.  In addition, Employee is also entitled to be paid amounts provided under Paragraphs 1(a) and 1(b) previously vested at the time of his involuntary termination of service from the Company.  (For example, if Employee had in fact achieved 100% of the written annual performance criteria at his separation from service date
on account of involuntary termination measured against the 2008 annual performance period, Employee would be entitled to the maximum base value payout of restricted stock units for the 

 

	
             
 	
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2008 performance period and the amount of $100,000 even though Employee was not employed as President of the Company on December 31, 2008.)

(f)        Termination for Cause.  If Employee is terminated for cause solely determined by the Company prior to the payment of the amounts earned and vested under Paragraphs 1(a) and 1(b), Employee forfeits all such amounts under this Agreement and all amounts which could have been paid under this Agreement.  “Cause” or “Termination for Cause” shall include the following conditions:

(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;

(2)       Breach.  Employee has commits any material breach or repeats or continues (after written warning) any breach of his obligations hereunder;

(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:

(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;

(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 property of any prohibited drug or substance, possession of which would amount to a criminal offense;

(iv)      Assault or other act of violence against any employee of the Company or other person during the course of his employment; or

(v)       Conviction of any felony or misdemeanor involving moral turpitude.

3.         Amendment and/or Termination of this Agreement.  This Agreement terminates when all amounts have been paid pursuant to Paragraph 2 to Employee or his beneficiary.  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 representatives shall have any rights to commute, sell, assign, transfer or otherwise convey the 

 

	
             
 	
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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.  There shall be deducted from the amounts paid under Paragraph 2 the amount of any tax required by any governmental authority to be withheld and paid over by the Company to such governmental authority for the account of Employee.  

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 The Southern Company Pension Plan.  Payments to Employee shall not be considered wages, salaries or compensation under any other Company-sponsored employee benefit plan.

	
             
 	
             
 

	
             
 	
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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 employment relationship of Employee and the Company.

11.       Governing Law.  This Agreement, and all its rights under it, shall be governed by and construed in accordance with the laws of the State of Georgia, without giving effect to principles of conflicts of laws.

12.       409A.  The parties agree that the terms and provisions of this Agreement will be construed and interpreted to the maximum extent permitted in order to comply with Section 409A of the Internal Revenue 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 for such events that include but may not be limited to a termination of the Agreement.

13.       Accredited Investor.  Employee understands that the Company’s obligations under this Agreement have not been registered under the Securities Exchange Act of 1933, as amended (the "Securities Act"), or any state securities laws.  Employee is an “accredited investor” as defined in Regulation D under the Securities Act, and has such knowledge and experience in financial and business matters that he is able to evaluate the risks and benefits of this Agreement.  There has been direct communication and negotiation between the Company and Employee with respect to this Agreement.  The Company has made available to Employee information regarding the business of the Company and the risks inherent therein, and Employee has had the opportunity to ask questions of, and receive
responses from, the Company regarding such matters and the terms and conditions of this Agreement.

 

	
             
 	
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IN WITNESS WHEREOF, this Agreement has been executed by the parties first listed above, this 12th day of September, 2008.

	
             
 	
            “COMPANY”
 

	
             
 	
            SOUTHERN COMPANY SERVICES, INC.
 

 

By: /s/David M. Ratcliffe

Its: Chairman of the Board

 

“EMPLOYEE”

C. ALAN MARTIN

 

/s/C. Alan Martin

 

 

	
             
 	
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