Document:

Ex 10(a)2 q1 2013 10-Q

Exhibit 10(a)2
	
			
	Thomas A. Fanning
Chairman, President, 
and Chief Executive Officer
	Bin SC1500
30 Ivan Allen Jr. Boulevard. NW
Atlanta, GA 30308

Tel  404.506.5000

	

	 
	 
	

June 4, 2011
 
Mr. Stephen E. Kuczynski
41W981 Oak Hill Drive
Saint Charles, IL 60175
 
Dear Stephen:
 
We are pleased to extend to you a conditional offer of employment for the position of Chairman, President and CEO of Southern Nuclear Operating Company, Inc. (Southern Nuclear).  You will report directly to me.  

The terms and conditions of your employment are as follows:
 
		
	•
	An annual base salary of $625,000 to be paid on a bi-weekly basis in accordance with the Company's normal payroll practices.  Subsequent annual base salary increases will be based upon an assessment of your individual performance under the Base Salary Program and as approved by the Compensation & Management Succession Committee of the Southern Company Board of Directors (Compensation Committee).

		
	•
	Participation in the Company's annual variable pay plan; the Performance Pay Program (PPP).  Your Target Award under this plan is 65% of annual base salary.  The actual amount of any award you may receive can range from 0-200% of target based upon company, business unit and individual performance.  Your award earned for the 2011 performance year, paid in March 2012 as a lump-sum, will be prorated based upon your date of hire.  

		
	•
	Participation in the Company's Long-Term Performance Compensation Program, that provides for an annual grant of stock options and/or performance share units.  Your Target Award under this plan is 160% of your annual base salary.  Long-term grants typically are made in February each year.

		
	•
	The number of stock options you receive is based on your target award and the accounting fair value of a stock option at the time of the grant.  The exercise price of stock options is the closing price on the date of the grant.  Stock options vest one-third per year and have a ten-year term.

		
	•
	The number of performance share units you receive is based on your target award and the accounting fair value of a performance share at the time of the grant.  At the end of a three year performance period, you will be awarded actual shares of Southern Company stock based on Southern Company's Total Shareholder Return as compared to that of a group of utility peers.  The number of shares you receive will range between 0-200% of the target units you received on the grant date.

		
	•
	A new hire grant of non-qualified stock options with a grant date value $1,000,000 ($625,000 annual base salary x 160% long-term performance target).  The number of options and the terms of the options will be as outlined in the previous bullet.  An award agreement will be provided that details all terms of the stock options.

		
	•
	A grant of Restricted Stock Units with an aggregate grant date value of $800,000 for foregone bonus and equity awards.  The units will vest 30% on the first anniversary of your hire date, another 30% will vest on the second anniversary of your hire date and the remaining 40% will vest on the fourth anniversary of your hire date.  The units will also vest immediately upon 

Mr. Stephen E. Kuczynski
Letter Dated June 4, 2011
Page 2 of 3

death or termination due to disability.  The units will be treated as if dividends are reinvested in Southern Company common stock.  Payment of vested units will be made in shares of Southern Company common stock.  An award agreement will be provided that details all terms of the restricted stock units.
		
	•
	Participation in the pension plan and capital accumulation plans sponsored by the Company for similarly situated executives including the Southern Company Pension Plan, the Southern Company Supplemental Executive Retirement Plan, the Southern Company Employee Savings Plan, the Southern Company Supplemental Benefit Plan and the Southern Company Deferred Compensation Plan pursuant to the terms and eligibility requirement of those plans.

		
	•
	Full benefits under the Company's relocation program including any loss on the sale of your current primary residence.  If payment is required to keep you whole, it will be made in a lump sum.  If you leave the Company within two years of relocating, repayment of the lump sum will be required.

		
	•
	Personal usage of the Company's aircraft for six months for once weekly commuting or the equivalent.  There will be no tax assistance provided.

		
	•
	Lump sum reimbursement of club initiation fees.  There will be no tax assistance provided.

		
	•
	Participation in the Company's Executive Financial Planning Program pursuant to the terms of the program.

		
	•
	Effective immediately with your employment you receive 10 paid holidays and twenty-five days of vacation.

		
	•
	In the event you are involuntarily terminated by the Company not for cause, you will be eligible for a lump sum cash payment of one times base salary plus target PPP, subject to the approval of the Compensation Committee at the time of the termination.  

  
Southern Nuclear strictly prohibits its employees from using or disseminating any confidential information of a prior employer and related materials while employed by Southern Nuclear.  We are hereby advising you that Southern Nuclear does not want such confidential information nor does Southern Nuclear want you to utilize such information while employed by Southern Nuclear.  By signing this letter, you agree that to the extent that you have any confidential information of Exelon Corporation or any of its affiliated companies (or any other prior employer), you will not use, disclose or disseminate that confidential information, directly or indirectly, while employed by Southern Nuclear. You further agree that all confidential records, documents, and similar items of your former employer shall not be utilized while employed with Southern Nuclear.

This offer is contingent upon you successfully meeting Southern Company's employment requirements which include but are not limited to verification of your application, a satisfactory background investigation and drug screen.  We will contact you to confirm your start date after these employment requirements have been completed.  

We will schedule an orientation with you and your Human Resources Director during the first week of employment.  At this orientation, you will need to complete several employment forms and will be required to provide documents to verify your identity and authorization to work in the United States.  
 
Your medical coverage begins on your first day of employment. You will receive a benefits package from our Employee Service Center within 10 days of your start date. In the interim, if you need medical attention, you will be covered under a basic benefit plan, which consists of medical, long-term disability and non-contributory life insurance.
  

Mr. Stephen E. Kuczynski
Letter Dated June 4, 2011
Page 3 of 3

We look forward to having you as part of our team.  If you have any questions, please don't hesitate to call me at 404-506-0506.
 
Sincerely,

/s/Thomas A. Fanning

Acknowledged on behalf of the Compensation Committee:

	
		
	/s/J. Neal Purcell
J. Neal Purcell
Chair, Compensation Committee of the 
Southern Company Board of Directors
	6/2/2011
Date

The terms and conditions of this conditional offer of employment are agreed to and accepted.

	
		
	/s/Stephen E. Kuczynski
Stephen E. Kuczynski
	6-5-2011
DateEx 10(a)3 q1 2013 10-Q

Exhibit 10(a)3
RETENTION AND RESTRICTED STOCK UNIT AWARD AGREEMENT

THIS RETENTION AND RESTRICTED STOCK UNIT AWARD AGREEMENT (Agreement) made and entered into by and between SOUTHERN NUCLEAR OPERATING COMPANY, INC. (Company) and STEPHEN E. KUCZYNSKI (Employee), shall be effective as of July 11, 2011 (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 four -year term and to provide Employee with a retention award for service he will provide to the Company; and 

WHEREAS, this Agreement will be treated as an Award under the Southern Company Omnibus Incentive Compensation Plan as it may be amended from time to time (Omnibus Plan). 

NOW, THEREFORE, in consideration of the premises, and the agreement of the parties set forth in this Agreement, the parties hereby agree as follows: 

1.    Award Amounts.      Employee shall become vested in the following, provided Employee is actively employed with the Company or an affiliate of the Company on the applicable Vesting Dates set forth below:

	
					
	 
	Amount
	 
	Vesting Date
	 

	 
	 
	 
	 
	 

	 
	5,979  Restricted Stock Units
	 
	July 11, 2012
	 

	 
	5,979  Restricted Stock Units
	 
	July 11, 2013
	 

	 
	7,972  Restricted Stock Units
	 
	July 11, 2015
	 

The amounts under this Paragraph 1 are awards of Restricted Stock Units under the terms of the Omnibus Plan.  The deemed dividends associated with the Restricted Stock Units shall be credited and treated as reinvested in additional Restricted Stock Units until each Award is paid in accordance with Paragraph 2. 

2.    Timing and Form of Payment of Award Amounts.
(a)    Generally.  Unless modified by the provisions set forth in Paragraphs 2(b) or 2(c),
the vested amount shall be paid in shares of Common Stock to Employee in a lump sum within 30 days following the applicable Vesting Date (Scheduled Payment Date). 
    
(b)    Death.  If Employee dies while in active service prior to the final Vesting Date, notwithstanding anything to the contrary in the Agreement, Employee shall be treated as fully vested in any unvested Awards set forth in Paragraph 1.  The amount(s) vested under this Paragraph 2(b) shall be paid on the earlier of (i) the Scheduled Payment Date or (ii) within thirty

 

(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 the 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 final Vesting Date, notwithstanding anything to the contrary in the Agreement, Employee shall be treated as fully vested in the unvested Awards set forth in Paragraph 1.  The amount(s) 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.  However if Employee is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code  (the “Code”) as of the date of his separation from service under this Section 2(c), then payment of any amounts vested under this Section  shall be deferred for six (6) months after the date of his separation from service to the extent required by the Code.
    
(d)     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, 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.

3.    Amendment and/or Termination of this Agreement. The Agreement terminates when all amounts have been paid or forfeited.  Notwithstanding the preceding sentence, the Employee, pursuant to Paragraph 2, and the Company may mutually agree to amend or terminate the Agreement prior to the end of the four-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 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 the 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.  The 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 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 the 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 the 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 the 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 the 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 award amounts 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 the Agreement and advises Employee to consult with his attorney and/or tax advisor regarding the tax implications of the 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 the Agreement.

9.    Compensation.  Any compensation paid to Employee pursuant to the Agreement shall not be considered "compensation" as the term is defined in The Southern Company Employee Savings Plan, or "earnings" that is defined in The Southern Company Pension Plan.  Payments to Employee shall not be considered wages, salary or compensation under any other Company-sponsored employee benefit or compensation plan or program, unless the explicit terms of such plan or program provide otherwise. 

10.    No Guarantee of Employment.  No provision of the 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.  The 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.        Section 409A.  Any Payment provided under this Agreement is intended to be a short-term deferral as provided by Section 409A of the Internal Revenue Code and the regulations promulgated thereunder, and the parties agree that the terms and provisions of the Agreement will be construed and interpreted to the maximum extent permitted in order to have this effect.

SIGNATURES ARE ON FOLLOWING PAGE

IN WITNESS WHEREOF, this Agreement has been executed by the parties first listed above, this 30th day of July, 2011.

	
		
	 
	“COMPANY”
SOUTHERN NUCLEAR OPERATING COMPANY, INC.

By:  /s/Stacy R. Kilcoyne
Its:  Vice President

	 
	 

	 
	“EMPLOYEE”
STEPHEN E. KUCZYNSKI

/s/Stephen E. Kuczynski

RETENTION AND RESTRICTED STOCK UNIT AWARD AGREEMENT
EXHIBIT 1
BENEFICIARY DESIGNATION

Beneficiary 

	
					
	 
	 
	 
	 
	 

	Name
	 
	Relationship
	 
	Percentage

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	Name
	 
	Relationship
	 
	Percentage

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

	
					
	 
	 
	 
	 
	 

	Name
	 
	Relationship
	 
	Percentage

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	Name
	 
	Relationship
	 
	Percentage

Any amounts not paid to the contingent beneficiary(ies) shall be paid to the Employee's estate.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00217-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00217-of-00352.parquet"}]]