AMENDMENT TO EMPLOYMENT AGREEMENT (Robert P. Powers)
AMENDMENT
TO EMPLOYMENT AGREEMENT
(Xxxxxx
X. Xxxxxx)
This
Amendment is made by and between American Electric Power Service Corporation, on
behalf of itself, American Electric Power Company, Inc., and the other
subsidiary companies, divisions, organizations or affiliated entities
(collectively referred to as “AEP”) and Xxxxxx X. Xxxxxx (the “Employee”) to the
Employment Agreement between AEP and the Employee dated July 29, 1998, as
amended (the “Employment Agreement”).
WHEREAS,
AEP and the Employee intend that any deferral of compensation by or for the
benefit of the Employee that is subject to the requirements of section 409A of
the Internal Revenue Code comply with such requirements; and
WHEREAS,
AEP and the Employee have identified certain provisions of the Employment
Agreement that should be amended to better ensure such compliance;
NOW,
THEREFORE, AEP and the Employee agree as follows:
1. Section
IV of the Employment Agreement (Supplemental Retirement Benefit) is amended to
read as follows:
“Section
IV: Benefit from the Excess Benefit Plan
4.01 The
Employee’s benefit under the American Electric Power Excess Benefit Plan shall
be calculated as follows:
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(a)
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The
Employee shall be credited with seventeen year of service in addition to
the number of years the Employee actually works for
AEP;
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(b)
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The
benefit shall take into account the eligible compensation received by the
Employee during the term of this Employment Agreement, including earned
MICP awards and excluding earned PSIP and NPIP awards;
and
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(c)
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The
calculated benefit to which the Employee is entitled shall be reduced by
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 AEP with a list of such
other plans within a reasonable time prior to the date the Employee’s
benefits from the American Electric Power Excess Benefit Plan are
scheduled to commence.
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4.02 The
Employee’s benefit under the American Electric Power Excess Benefit Plan,
calculated in accordance with Section 4.01 of the Employment Agreement, shall be
paid in accordance with the payment option applicable to the Employee under the
terms of the American Electric Power Excess Benefit Plan.
4.03 In
the event the Agreement is terminated due to the death of the Employee, the
Employee’s beneficiary shall be entitled to the payment of a pre-retirement
death benefit, calculated under the term of the American Electric Power Excess
Benefit Plan, subject to the adjustments set forth in Section 4.01 except that
in lieu of the offset determined under Section 4.01(c), the death benefit
payable to such beneficiary shall be offset by any death benefit that any
beneficiary of the Employee is entitled to receive from any qualified or
non-qualified plans sponsored by any prior employer of the
Employee.
4.04 The
benefits provided by this Section IV shall be paid out of the general assets of
AEP (except to the extent covered by the American Electric Power Service
Corporation Umbrella Trust for Executives) and are in lieu of any similar
benefit provided by the American Electric Power System Excess Benefit Plan as
may be determined without regard to this Agreement.”
2. In
the event that any amount becomes payable by AEP to the Employee pursuant to
Section 5.03(b) of the Employment Agreement, the following terms and conditions
shall apply:
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(A)
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If
AEP reasonably believes that its providing continued benefits at a reduced
rate (that is, for an employee contribution that is less than the full
cost of such benefits) would cause the Employee to incur excise tax under
Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), the Employee shall pay the full cost of such benefits and not
receive any reduced rate for the first six (6) months after the date of
the Employee’s separation by reason of the elimination of the Employee’s
position as described in Section 5.03 (the “Separation
Date”). As soon as practicable after the date that is 6 months
after the Separation Date, AEP will pay to the Employee an amount equal to
the difference between the actual amount the Employee paid for the
affected benefits and the amount the Employee would have paid for such
benefits had the reduced rate been effective (the “Benefit Contribution
Payment”). [AEP will also pay additional amounts such that the
Benefit Contribution Payment is the amount payable to the employee after
payment of any federal, state, local, or other
taxes.]
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(B)
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Notwithstanding
any provision of Section 5.03(b) to the contrary, the continuation of the
Employee’s pay will end once the total of the payments becomes equal to
two times the lesser of (a) the Employee’s annual rate of pay for services
provided to AEP in the year before the year of the Separation Date
(adjusted for any increase during that year that was expected to continue
indefinitely if there had been no Separation Date, or (b) the limit
prescribed in Section 401(a)(17) of the Code effective in the year of the
Employee’s Separation Date. As of the date the continuation
payments ended pursuant to the preceding sentence, but no earlier than six
months after the date the Employee separated from service, as defined in
Section 409A of the Code, the Employee will receive a second stream of
payments equal to any pay continuation payments as may then be otherwise
due and owing, with the first such payment also including an amount equal
to the excess, if any, of (i) the total amount of continuation pay the
Employee was entitled to receive during the period between the Separation
Date and the date the payments pursuant to the preceding sentence ended,
over (ii) the amount paid in accordance with the preceding
sentence.
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IN
WITNESS WHEREOF, this Amendment is executed by AEP and the Employee as of the
date set forth below their respective signatures.
AMERICAN
ELECTRIC POWER SERVICE CORPORATION
By: /s/ Xxxxxx X.
Xxxxxx
Name: Xxxxxx
X. Xxxxxx
Date: December
9, 2008
EMPLOYEE:
Name: /s/ Xxxxxx X.
Xxxxxx
Xxxxxx X.
Xxxxxx
Date: December
4, 2008
