EXHIBIT 10(m)(4)
EMPLOYMENT AGREEMENT
In consideration of the mutual promises and covenants contained herein,
this Employment Agreement (the "Agreement") is entered into by and between
American Electric Power Service Corporation, including any of its parent and/or
subsidiary companies, divisions, organizations, or affiliated entities
(collectively referred to as "AEP"), and Xxxxxx X. Xxxxxx (the "Employee" and
with AEP sometimes collectively referred to as the "Parties"), this 29th day of
July, 1998.
Section I: Term of Employment
1.01 AEP agrees to employ Employee as Senior Vice President-Nuclear
beginning on July 31, 1998 (hereafter referred to as the "Date of Hire").
Section II: Duties of Employee
2.01 Employee shall report to E. Xxxx Xxxxxx, Xx. or such other individual
as he may designate. Employee's duties and responsibilities shall include, but
are not limited to, the following: operating AEP's Xxxx Nuclear Plant and such
other nuclear generation facilities that AEP may periodically acquire, in a safe
and efficient manner, ensuring that operations are in full compliance with all
applicable local, state and federal laws, regulations and/or ordinances; and
perform other related duties that may be assigned from time to time.
2.02 During Employee's employment with AEP, Employee shall devote
Employee's best efforts, loyalty, and entire working time with AEP to the
performance of Employee's duties, and shall not render services to, or enter
into an employment, independent contractor, consultancy, or agency relationship
with, any person, firm, corporation, other business entity and/or governmental
body or agency other than AEP without AEP's express, prior and written consent.
Section III: Compensation and Benefits
3.01 As compensation for services and duties rendered under the Agreement,
Employee shall receive from AEP an annual salary of $240,000.00 payable in
accordance with AEP's standard payroll practices and subject to withholdings for
FICA and applicable federal, state and local income taxes.
3.02 Subject to AEP's right to change, modify, amend and/or eliminate any
of the following, Employee shall be entitled to participate in AEP's Exempt
Salary Administration Program, The Management Incentive Program ("MICP"), The
Performance Share Incentive Program ("PSIP"), The Nuclear Performance Incentive
Program ("NPIP"), The AEP System Survivor Benefit Plan (Split Dollar), the
American Electric Power Excess Benefit Plan, and AEP's savings, retirement and
employee welfare/benefit programs. Upon such terms and conditions established by
AEP, and subject to AEP's right to change, modify, amend and/or eliminate the
following, the Employee shall also be entitled to additional executive-level
benefits such as a company car and a country club membership.
3.03 Employee shall be entitled to ten days of paid vacation and three paid
personal days to be used during 1998, and twenty days of paid vacation and three
paid personal days to be used during each year thereafter.
3.04 Employee shall receive a $300,000.00 bonus payment, subject to
withholding for FICA and applicable federal, state and local income tax, as
follows: $150,000.00 paid at or around the Date of Hire; $100,000.00 paid on
January 1, 1999; and $50,000.00 on January 1, 2000. The Employee can, at
Employee's option, defer some or all of the $300,000.00 bonus payment until
Employee retires, in the form of a financial instrument that is agreeable to
both AEP and the Employee. AEP shall not be obligated to pay the bonus payments
that are due and owing to Employee on January 1, 1999 and January 1, 2000 if,
prior to those dates, AEP terminates Employee's employment for
performance-related reasons or Employee resigns.
Section IV: Supplemental Retirement Benefit
4.01 The Employee shall be entitled to a Supplemental Retirement Benefit.
For pension calculation purposes, employee shall be credited with seventeen
years of service in addition to the number of years that the Employee actually
works for AEP. The Employee shall be entitled to a retirement benefit calculated
as follows:
(a) The retirement benefit the Employee would be entitled to receive as of
the date of the Employee's termination of employment, under the terms
of the American Electric Power Excess Benefit Plan, as amended from
time to time or any successor thereto, based upon the compensation the
Employee received during the term of this Employment Agreement,
including earned MICP awards and excluding earned PSIP and NPIP
awards, based upon the actual number of years of service to AEP plus
seventeen years of credited service;
(b) Less the retirement benefit the Employee would be entitled to receive
as of the date of the Employee's termination of employment, under the
terms of the American Electric Power System Retirement Plan, as
amended from time to time or any successor thereto, based upon the
compensation the Employee received during the term of this Employment
Agreement, excluding earned MICP, PSIP and NPIP awards, for the actual
years of service to AEP;
(c) Less any retirement benefit the Employee is entitled to receive from
all qualified and non-qualified plans sponsored by any prior employer
of the Employee. The Employee shall provide the Company with a list of
such other plans within a reasonable time after Employee's employment
terminates.
4.02 The Employee's election under the terms of the American Electric Power
System Retirement Plan of a 50% Joint and Survivor Annuity or any other optional
form of payment, with the valid consent of the Employee's Spouse where required,
shall be deemed to be the payment election the Employee makes for purposes of
the Supplemental Retirement Benefit.
4.03 In the event the Agreement is terminated due to the death of the
Employee, the Employee's spouse shall be entitled to a Supplemental
Pre-Retirement Surviving Spouse Annuity provided that the Employee and the
Employee's spouse were married for at least one year prior to the employee's
death. The amount of the Supplemental Pre-Retirement Surviving Spouse Annuity
shall be equal to the following:
(a) The pre-retirement surviving spouse annuity the Employee's spouse
would be entitled to receive under the terms of the American Electric
Power System Excess Benefit Plan, based upon the compensation the
Employee received from the Company prior to his death, including
earned MICP awards and excluding earned PSIP and NPIP awards;
(b) Less any surviving spouse annuity the Employee's surviving spouse is
entitled to receive from any qualified or non-qualified plan sponsored
by any prior employer of the Employee;
(c) Less any surviving spouse annuity the Employee's surviving spouse is
entitled to receive from the American Electric Power System Retirement
Plan.
4.04 The Supplemental Retirement Benefit or the Supplemental Pre-Retirement
Surviving Spouse Annuity shall be paid out of the general assets of AEP and
shall be covered by the American Electric Power Service Corporation Umbrella
Trust for Executives. The supplemental benefits provided by this Agreement are
in lieu of any similar benefit provided by the American Electric Power System
Excess Benefit Plan.
Section V: Termination
5.01 Employee's employment with AEP is, and will be at all times, "at
will". Thus, AEP or Employee may terminate Employee's employment and this
Agreement for any or no reason upon written notice to the other. In the case of
the Employee, the notice shall be furnished not less than fourteen calendar days
prior to the designated date of termination. In the latter instance, AEP
reserves the right to accelerate Employee's date of termination by paying
Employee two weeks' salary calculated on the basis of the annualized amount
indicated in Section 3.01.
5.02 In the event that Employee's employment is terminated under this
Agreement by either the Employee or AEP, AEP shall no longer be obligated to
provide Employee with any compensation under Section 3.01, but Employee shall,
in accordance with the terms and conditions set forth in each plan then in
effect as applicable, be entitled to any amounts to which the Employee may be
eligible to receive pursuant to Sections 3.02, Section 3.03, Section 4, and
Section 5.01 and in accordance with the terms and conditions of each plan then
in effect.
5.03 In the event that the Employee's position is eliminated due to a
change in AEP's business strategy or organization not related to Employee's
performance as the Senior Vice President-Nuclear prior to Employee reaching age
55, AEP will offer Employee either:
(a) a comparable position with comparable pay, benefits, and
responsibilities within AEP; or
(b) if no such position is available, AEP will continue Employee's pay and
benefits for a period not to exceed eighteen months (hereinafter
referred to as the "Transition Period") to provide Employee with an
opportunity to find employment outside of AEP. Payments during the
first twelve months of the Transition Period shall include Employee's
normal salary, benefits, and Employee's target MICP, PSIP and NPIP
incentive payments at target, prorated for partial portions of a year.
Payment during the last six months of the Transition Period shall
include Employee's base salary and benefits only. In the event that no
comparable position is available within AEP, the Employee covenants
and agrees in good faith to diligently search for a position outside
of AEP. AEP's obligations to compensate Employee any amount of pay
and/or benefits pursuant to this provision shall cease as of the
Employee's effective date of hire with a new employer or at the end of
the Transition Period, whichever occurs first.
(c) For purposes of Section 5.03(a) of this Agreement, a position shall be
deemed to be comparable if Employee's total compensation, including
incentives at target, equal at least 90% of the compensation that the
Employee received with AEP including incentives at target.
(d) If, prior to the expiration of the Transition Period, the Employee
accepts employment with another company that is not comparable (as
defined in Section 5.03(b) of this Agreement), AEP will, during the
Transition Period, pay the difference between Employee's new total
compensation, including incentives at target, and the payments the
Employee would have received had the Employee not accepted the
employment with another company.
Section VI: Confidential Business Information and Trade Secrets
6.01 Employee recognizes that during Employee's employment with AEP, the
Employee will have access to and become familiar with confidential, proprietary
and/or trade secret information which is owned by AEP and regularly used in its
operation. Employee understands and agrees that AEP's confidential, proprietary
and/or trade secret information derives independent economic value for AEP,
actual or potential, from not being generally known or readily ascertainable by
other persons and entities who can obtain economic value from such information,
and that AEP takes reasonable efforts to maintain the secrecy of this
information. Employee agrees that during Employee's employment with AEP, except
as required in the performance of Employee's employment with AEP, or at any time
thereafter, Employee shall not directly or indirectly possess, use, convert,
misappropriate, copy or duplicate any confidential, proprietary and/or trade
secret information, or communicate, disclose, sell, transmit or transfer any
confidential, proprietary and/or trade secret information to any person, firm,
partnership, corporation, proprietorship, or business organization or entity of
any kind or description.
6.02 Employee acknowledges that confidential, proprietary and/or trade
secret information is defined to include, but is not limited to, the whole or
any part of paper copies or paper documents of any kind, computer data bases,
computer e-mail, computer programs and/or computer memory or storage devices of
any kind that contain, reflect, or relate to: (a) the design, process,
procedure, method, technique, formula, or improvement of any current or future
products or services developed, manufactured, owned, produced, sold, leased,
distributed or provided by AEP; (b) marketing plans and any associated
information such as customer names and/or contacts, addresses, telephone or fax
numbers, mailing lists, and customer, vendor and supplier account data; (c)
consulting reports; (d) site assessments; (e) business plans, financial
information, billing information, sales figures, price lists, discounts, or any
financial information; (f) computer passwords or codes; (g) information or data
relating to the energy commodity market and related financial instruments,
and/or statistical and analytical data, including analytical models, used to
forecast changes in the pricing of energy commodities or the value of related
financial instruments.
6.03 Employee understands and agrees that prior to or immediately upon the
termination of Employee's employment with AEP, whether voluntarily or
involuntarily and regardless of the circumstances relating to the termination,
Employee shall deliver and leave with AEP in good order all such confidential,
proprietary and/or trade secret information, in addition to any other AEP
property, including computer diskettes, laptops and any related equipment, which
is in Employee's possession and/or control.
Section VII: Miscellaneous
7.01 The Agreement shall be binding upon and inure to the benefit of AEP
and its successors and assigns, and Employee and Employee's assigns, legal
representatives and heirs. The Agreement shall be assignable by AEP to any
successor employer.
7.02 Nothing herein shall be construed as amending the terms and conditions
of the American Electric Power System Retirement Plan, the American Electric
Power System Employees Savings Plan, the MICP, PSIP or NPIP.
7.03 The provisions of the Agreement are severable. If any provision of the
Agreement is found by a court of competent jurisdiction to be unreasonable and
invalid, that determination shall not affect the enforceability of the other
provisions, which shall be enforced in all respects to the maximum benefit of
AEP.
7.04 The Agreement shall be governed by and construed in accordance with
the laws of the State of Ohio. Employee and AEP agree that AEP has the exclusive
right to decide the forum appropriate for any litigation that relates to the
validity, interpretation, performance, enforcement, breach or threatened breach
of the Agreement and/or Employee's job performance, conduct, and/or termination
from employment thereunder. In the event that AEP determines that it is
appropriate for any of the aforementioned issues relating to the Agreement to be
litigated in a state or federal court located in the State of Ohio, by entering
into this Agreement Employee expressly agrees to confer personal jurisdiction of
Employee upon the common pleas, municipal, and federal courts of the State of
Ohio. In the event that the Employee initiates any legal action relating to the
aforementioned issues, Employee expressly agrees to bring said legal action in
the Franklin County Court of Common Pleas, Franklin County, Ohio (subject to
AEP's right to remove the action to federal court if allowed by law) or the
United States District Court for the Southern District of Ohio, Eastern Division
in Columbus, Ohio.
7.05 AEP shall have the right to assign this Agreement to any of its parent
and/or subsidiary companies, divisions, organizations or affiliated entities
that presently exist or which may be established in the future.
7.06 The Agreement contains the entire understanding of the Parties
relating to the subject matter hereof, and AEP and Employee each acknowledge
that they have made no agreements, representations or warranties, express or
implied, relating to the subject matter of the Agreement which are not set forth
herein or attached hereto as an addendum. No provision of the Agreement may be
changed, modified or waived except by an agreement in writing and signed by
Employee and E. Xxxx Xxxxxx, Xx.
/s/ Xxxxxx X. Xxxxxx
/s/ E. Xxxx Xxxxxx, Xx.
Chairman of the Board, President and Chief Executive Officer,
American Electric Power Service Corporation
