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EXHIBIT 10(a)63 SOUTHERN COMPANY PERFORMANCE PAY PLAN AMENDED AND RESTATED Troutman Sanders LLP NationsBank Plaza, Suite 5200 600 Peachtree Street, N.E. Atlanta, Georgia 30308 Effective January 1, 1998
SOUTHERN COMPANY PERFORMANCE PAY PLAN Amended and Restated Purposes The purposes of the Amended and Restated Performance Pay Plan are to focus the attention and efforts of employees on goals which have a direct and significant influence on individual, organizational and corporate performance; to improve the correlation between pay and performance for the achievement of individual, organizational and corporate goals; and to provide the potential for levels of compensation that will enhance the ability of the Operating Companies to attract, retain, and motivate employees. In order to achieve these objectives, the Performance Pay Plan is intended to pay additional compensation to eligible employees based upon individual, organizational and corporate performance. Such compensation shall be paid out of the general assets of Southern Company. No benefits under the Performance Pay Plan shall be deferred under this Plan or held in trust for the benefit of eligible employees. The Performance Pay Plan is not intended to be an employee benefit plan or any other plan subject to regulation by the Employee Retirement Income Security Act of 1974. The Performance Pay Plan was established effective January 1, 1989. It has subsequently been amended and restated effective January 1, 1991, January 1, 1993 and January 1, 1996. The Board of Directors of Southern Company Services, Inc. now desires to amend and restate the Performance Pay Plan to expand eligibility and modify the basis for funding and allocating Incentive Pay Awards and to provide for certain plan distributions in the event of a change in control of Southern Company or of an Operating Company. The effective date of this amendment and restatement (the "Restatement Effective Date") of the Performance Pay Plan shall be January 1, 1998. ARTICLE I Definitions For purposes of the Performance Pay Plan, the following terms shall have the following meanings, unless a different meaning is plainly required by the context: 1.1 "Annual Salary" shall mean base salary or wages paid to an Employee before deductions for taxes, social security, etc., including all amounts contributed on an Employee's behalf by an Operating Company to the Southern Electric System Flexible Benefits Plan or the Southern Company Flexible Benefits Plan, any amounts contributed on an Employee's behalf by any Operating Company to the Southern Company Employee Savings Plan as Elective Employer Contributions, as said term is defined in Section 4.1 therein, pursuant to an Employee's exercise of any deferral option made in accordance with Section 401(k) of the Internal Revenue Code, and amounts contributed on an Employee's behalf to the Southern Company Deferred Compensation Plan, but excluding all awards under the Southern Company Performance Pay Plan, the Southern Company Executive
SOUTHERN COMPANY PERFORMANCE PAY PLAN Amended and Restated Purposes The purposes of the Amended and Restated Performance Pay Plan are to focus the attention and efforts of employees on goals which have a direct and significant influence on individual, organizational and corporate performance; to improve the correlation between pay and performance for the achievement of individual, organizational and corporate goals; and to provide the potential for levels of compensation that will enhance the ability of the Operating Companies to attract, retain, and motivate employees. In order to achieve these objectives, the Performance Pay Plan is intended to pay additional compensation to eligible employees based upon individual, organizational and corporate performance. Such compensation shall be paid out of the general assets of Southern Company. No benefits under the Performance Pay Plan shall be deferred under this Plan or held in trust for the benefit of eligible employees. The Performance Pay Plan is not intended to be an employee benefit plan or any other plan subject to regulation by the Employee Retirement Income Security Act of 1974. The Performance Pay Plan was established effective January 1, 1989. It has subsequently been amended and restated effective January 1, 1991, January 1, 1993 and January 1, 1996. The Board of Directors of Southern Company Services, Inc. now desires to amend and restate the Performance Pay Plan to expand eligibility and modify the basis for funding and allocating Incentive Pay Awards and to provide for certain plan distributions in the event of a change in control of Southern Company or of an Operating Company. The effective date of this amendment and restatement (the "Restatement Effective Date") of the Performance Pay Plan shall be January 1, 1998. ARTICLE I Definitions For purposes of the Performance Pay Plan, the following terms shall have the following meanings, unless a different meaning is plainly required by the context: 1.1 "Annual Salary" shall mean base salary or wages paid to an Employee before deductions for taxes, social security, etc., including all amounts contributed on an Employee's behalf by an Operating Company to the Southern Electric System Flexible Benefits Plan or the Southern Company Flexible Benefits Plan, any amounts contributed on an Employee's behalf by any Operating Company to the Southern Company Employee Savings Plan as Elective Employer Contributions, as said term is defined in Section 4.1 therein, pursuant to an Employee's exercise of any deferral option made in accordance with Section 401(k) of the Internal Revenue Code, and amounts contributed on an Employee's behalf to the Southern Company Deferred Compensation Plan, but excluding all awards under the Southern Company Performance Pay Plan, the Southern Company Executive Productivity Improvement Plan and the Southern Company Productivity Improvement Plan, overtime pay, shift differential and substitution pay. Annual Salaries of Employees who commence service during a Performance Period and Annual Salaries of Employees who terminate their employment for one of the reasons set forth in Section 2.1(b)(1)-(5) shall be prorated based upon their date of commencement or termination of service with their Operating Company in accordance with Schedule I or Schedule II hereof, as appropriate. With respect to Covered Employees, "Annual Salary" shall be defined in the Covered Employee Plan established by an Operating Company for the benefit of Covered Employees. 1.2 "Base Funding Opportunity" shall mean the funding percentage determined with reference to ROE earned by Southern Company and each Operating Company as provided in Schedule VII hereof. 1.3 "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. 1.4 "Board of Directors" shall mean the Board of Directors of Southern Company Services, Inc. 1.5 "Business Combination" shall mean a reorganization, merger or consolidation or sale of Southern Company or
a sale of all or substantially all of Southern Company's assets. 1.6 "Company Goals" shall mean the goals established annually by the Southern Company Leadership Council and set forth in Schedule III hereof. 1.7 "Consummation" shall mean the completion of the final act necessary to complete a transaction as a matter of law, including, but not limited to, any required approvals by the corporation's shareholders and board of directors, the transfer of legal and beneficial title to securities or assets and the final approval of the transaction by any applicable domestic or foreign governments or agencies. 1.8 "Control" shall mean, in the case of a corporation, Beneficial Ownership of more than 50% of the combined voting power of the corporation's Voting Securities, or in the case of any other entity, Beneficial Ownership of more than 50% of such entity's voting equity interests. 1.9 "Covered Employee" shall mean an employee of an Operating Company covered by a collective bargaining agreement between the Operating Company and a union or other employee representative who participates in a Covered Employee Plan. 1.10 "Covered Employee Plan" shall mean a performance based plan established for the benefit of Covered Employees by an Operating Company pursuant to a collective bargaining agreement which plan is maintained in conjunction with this Performance Pay Plan. 1.11 "Earnings Thresholds" shall mean the Southern Company Earnings Threshold and the Operating Company Earnings Threshold set forth at Section 3.1 of the Plan. 1.12 "Effective Date" shall mean January 1, 1989. The "Restatement Effective Date" shall mean January 1, 1998. 1.13 "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. 1.14 "Employee" shall mean each active full-time and regular part-time employee of an Operating Company, regardless of their classification as an exempt or non-exempt employee. The term "Employee" shall not include any person who is a temporary employee, cooperative employee, a contractor of an Operating Company or an employee covered by a collective bargaining agreement unless such employee is eligible to participate in the Plan as an Employee pursuant to an agreement between his Operating Company and his collective bargaining representative. In addition, the term "Employee" shall not include any employee who is eligible to participate in any incentive compensation program maintained by his Operating Company that specifically provides that an eligible employee under such program shall not be entitled to also receive Incentive Pay Awards under this Plan. 1.15 "Funding Unit" shall mean each organizational unit established by an Operating Company for which Company Goals are established and assessed for the purpose of paying Incentive Pay Awards. 1.16 "Group" shall have the meaning set forth in Section 14(d) of the Exchange Act. 1.17 "Incentive Pay Award" shall mean the amount awarded to a Participant in accordance with Article IV hereof. 1.18 "Incentive Pay Award Pool" shall mean the pool of funds established in accordance with Article III hereof either for the benefit of Employees or for the benefit of Covered Employees, respectively, and which funds are allocated to each Operating Company. 1.19 "Incumbent Board" shall mean those individuals who constitute the Southern Board as of the Restatement Effective Date plus any individual who shall become a director subsequent to such date whose election or nomination for election by Southern's shareholders was approved by a vote of at least 75% of the directors then comprising the Incumbent Board. Notwithstanding the foregoing, no individual who shall become a director of the Southern Board subsequent to the Restatement Effective Date whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Regulations promulgated under the Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Southern Board shall be a member of the Incumbent Board.
1.20 "Non-Adopting Company" shall mean any subsidiary or affiliate of Southern Company which is not an Operating Company. 1.21 "Operating Companies" shall mean Southern Company Services, Inc., or any affiliate or subsidiary (direct or indirect) of Southern Company, which the Board of Directors may from time to time determine to be eligible to participate under the Plan and which shall adopt the Plan, and any successor of any such affiliate or subsidiary. The Operating Companies as of the Restatement Effective Date are as follows: Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Company Services, Inc. and Southern Nuclear Operating Company, Inc. 1.22 "Participant" shall mean all Employees and Covered Employees who satisfy the criteria set forth in Article II. 1.23 "Performance Period" shall mean each 12-month period commencing on the first day of January and ending on the last day of December next following. 1.24 "Person" shall mean any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act. 1.25 "Plan" shall mean the Southern Company Performance Pay Plan, as described herein or as from time to time amended. 1.26 "Plan Administrator" shall mean Southern Company Compensation and Benefits Department. 1.27 "Plan Termination" shall mean the termination of the Plan by an Employing Company or Southern Company following a Southern Change in Control unless an equitable arrangement (embodied in an ongoing substitute or replacement plan) has been made with respect to the Plan in connection with the Southern Change in Control. For purposes of this Plan, an ongoing substitute or alternative plan shall be considered an "equitable arrangement" if a nationally recognized compensation consulting firm chosen by the Committee opines in writing that the postSouthern Change in Control plan is an equitable substitute or replacement of the Plan, and that such substitute or alternative plan provides substantially similar target opportunities and a substantially similar level of performance difficulty. 1.28 "ROE" shall mean return on equity. 1.29 "Southern Board" shall mean the Board of Directors of Southern Company. 1.30 "Southern Change in Control" shall mean any of the following: (a) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern Company's Voting Securities; provided, however, that for purposes of this subsection (a), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control: (i) any acquisition directly from Southern Company, (ii) any acquisition by Southern Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Southern Company or any corporation controlled by Southern Company, (iv) any acquisition by a qualified pension plan or publicly held mutual fund, (v) any acquisition by an Employee or Group composed exclusively of Employees, or (vi) any Business Combination which would not otherwise constitute a Change in Control because of the application of clauses (i), (ii) and (iii) of Section 1.30(c); (b) A change in the composition of the Southern Board whereby individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Southern Board; or
(c) Consummation of a Business Combination, unless, following such Business Combination, all of the following three conditions are met: (i) all or substantially all of the individuals and entities who held Beneficial Ownership, respectively, of Southern Company's Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, 65% or more of the combined voting power of the Voting Securities of the corporation surviving or resulting from such Business Combination, (including, without limitation, a corporation which as a result of such transaction holds Beneficial Ownership of all or substantially all of Southern Company's Voting Securities or all or substantially all of Southern Company's assets) (such surviving or resulting corporation to be referred to as "Surviving Company"), in substantially the same proportions as their ownership, immediately prior to such Business Combination, of Southern Company's Voting Securities, (ii) no Person (excluding any corporation resulting from such Business Combination, any qualified pension plan, publicly held mutual fund, Group composed exclusively of Employees or employee benefit plan (or related trust) of Southern Company, its subsidiaries or Surviving Company) holds Beneficial Ownership, directly or indirectly, of 20% or more of the combined voting power of the then outstanding Voting Securities of Surviving Company except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the members of the board of directors of Surviving Company were members of the Incumbent Board at the earlier of the date of execution of the initial agreement, or of the action of the Southern Board, providing for such Business Combination. 1.31 "Southern Company" shall mean The Southern Company. 1.32 "Southern Termination" shall mean the following: (a) The Consummation of a reorganization, merger or consolidation of Southern Company under circumstances where either (i) Southern Company is not the surviving corporation or (ii) Southern Company's Voting Securities are no longer publicly traded; (b) The Consummation of a sale or other disposition of all or substantially all of Southern Company's assets; or (c) The Consummation of an acquisition by any Person of Beneficial Ownership of all of Southern Company's Voting Securities such that Southern Company's Voting Securities are no longer publicly traded. 1.33 "Subsidiary Change in Control" shall mean the following: (a) The Consummation of an acquisition by any Person of Beneficial Ownership of 50% or more of the combined voting power of the then outstanding Voting Securities of an Operating Company; provided, however, that for purposes of this Section 1.33, any acquisition by an Employee, or Group composed entirely of Employees, any qualified pension plan, any publicly held mutual fund or any employee benefit plan (or related trust) sponsored or maintained by Southern Company or any corporation Controlled by Southern Company shall not constitute a Change in Control. (b) Consummation of a reorganization, merger or consolidation of an Operating Company (an "Operating Company Business Combination"), in each case, unless, following such Operating Company Business Combination, Southern Company Controls the corporation surviving or resulting from such Operating Company Business Combination, or (c) Consummation of the sale or other disposition of all or substantially all of the assets of an Operating Company to an entity which Southern Company does not Control. 1.34 "Southern Company Earnings Test" shall mean the test set forth at Section 3.2(b) of the Plan. 1.35 "Southern Company Earnings Threshold" shall mean the percentage ROE determined under Section 3.1(a). 1.36 "Subsidiary Employee" shall mean an Employee of an Operating Company which has undergone a Subsidiary Change in Control.
Where the context requires, words in the masculine gender include the feminine and neuter genders and words in the singular include the plural and words in the plural include the singular. ARTICLE II Participation 2.1 Employees. All Employees of an Operating Company shall be eligible to participate in the Plan and receive Incentive Pay Awards. (a) Employees who commence service with an Operating Company after January 1 and before December 15 of a Performance Period shall be eligible to receive Incentive Pay Awards in the same proportion as the ratio of the number of months employed during a Performance Period bears to the total number of months in a Performance Period. The following shall apply for purposes of calculating the number of months of employment with an Operating Company under this Section 2.1: (1) Employees whose effective date of employment is on or before the fourteenth (14th) day of a month shall be considered Employees as of the first day of such month; and (2) Employees whose effective date of employment is on or after the fifteenth (15th) day of a month shall not be considered Employees until the first day of the next succeeding month. (b) Employees whose effective date of employment is on or after December 15 of a Performance Period shall not be eligible to participate until the next succeeding Performance Period. (c) Employees whose employment with an Operating Company is terminated during a Performance Period for one of the following reasons shall be eligible to receive an Incentive Pay Award for such Performance Period on a pro-rata basis: (1) retirement, (2) total disability (as determined by the Social Security Administration), (3) death, (4) termination of employment, but only in the event the Participant shall transfer to or be reemployed by a NonAdopting Company, or any successor thereto, during such Performance Period, or (5) termination from participation in the Plan because the requirements of Section 1.21 of the Plan are not met. (d) The pro-rata amount of an Incentive Pay Award shall be determined for the Performance Period in which a termination described in Section 2.1(c) occurs by a fraction which is the number of months of employment with an Operating Company during the Performance Period, divided by the total number of months in the Performance Period. The following shall apply for purposes of calculating the number of months of employment with an Operating Company under this Section 2.(1)(d) for an Employee whose service is terminated for one of the reasons described in Section 2.1(c): (1) The month in which the Employee's service terminates shall not be considered if such terminating event occurs on or before the fourteenth (14th) day of the month; and (2) The month in which the Employee's service terminates shall be considered if such terminating event occurs on or after the fifteenth (15th) day of the month. (e) An Employee whose employment with an Operating Company is terminated during a Performance Period for any reason other the reasons described in Section 2.1(c) shall not be eligible to receive an Incentive Pay Award for such Performance Period. 2.2 Covered Employees. All Covered Employees of an Operating Company who are covered under a Covered Employee Plan shall not be eligible to participate in the Plan, but shall be eligible to participate in the Covered
Employee Plan and to receive Incentive Pay Awards in accordance with the terms of such Covered Employee Plan. 2.3 Notwithstanding any other provision of the Plan, all Participants covered by a collective bargaining agreement shall become ineligible for Incentive Pay Awards for and after any Performance Period in which such collective bargaining agreement expires or is terminated for any reason. ARTICLE III Funding of Incentive Pay Awards 3.1 Earnings Thresholds. Incentive Pay Award Pools shall be eligible for funding for the Performance Period in an amount determined in accordance with this Article III for each Operating Company, provided both of the Earnings Thresholds set forth in Sections 3.1(a) and (b) are achieved, provided however, notwithstanding anything to the contrary in this Section 3.1, no Earnings Threshold shall apply in the Plan Year of a Southern Change in Control. (a) Southern Company Earnings Threshold. The Southern Company Earnings Threshold shall be met if Southern Company achieves earnings during the Performance Period equal to or greater than a percentage return on equity, which percentage is designated by the Southern Company Leadership Council by no later than the end of each Performance Period and which percentage shall be set forth on Schedule IV hereof. (b) Operating Company Earnings Threshold. The Operating Company Earnings Threshold shall be met with respect to an Operating Company which achieves earnings during the Performance Period equal to or greater than a percentage return on equity, which percentage is designated for such Operating Company by the Southern Company Leadership Council no later than the end of each Performance Period and which percentage and its dollar equivalent shall be set forth on Schedule V hereof. (c) Funding Eligibility. If, during the Performance Period, the Southern Company Earnings Threshold is not satisfied, no Incentive Pay Award Pool for any Operating Company shall be eligible for funding. If, during the Performance Period, the Southern Company Earnings Threshold is satisfied, but an Operating Company fails to satisfy its Operating Company Earnings Threshold, such Operating Company's Incentive Pay Award Pool shall not be eligible for funding. If, during the Performance Period, the Southern Company Earnings Threshold is satisfied and the Operating Company satisfies its Operating Company Earnings Threshold, such Operating Company's Incentive Pay Award Pools shall be eligible for funding in accordance with this Article III. 3.2 Funding for Employee Participants. Subject to the provisions of Section 3.2(c) hereof, Plan funding for the Incentive Pay Award Pool benefiting Employees for each Operating Company shall equal for any given Performance Period the percentage provided under the Southern Company Earnings Test set forth in Section 3.2(a) hereof reduced or increased by the achievement of the Company Goals set forth in Section 3.2(b) hereof.
(a) Southern Company (Core Business only) Earnings Test. The Southern Company (Core Business only) Earnings Test set forth in Schedule VII hereof shall be applied at the end of each Performance Period to determine the Base Funding Opportunity. (b) Operating Company (Core Business only) Earnings Test. The Operating Company (Core Business only) Earnings Test set forth in Schedule VIII hereof shall be applied at the end of each Performance Period to determine the Base Funding Opportunity. (c) Company Goals. The Chief Executive Officer of Southern Company shall determine in his sole discretion whether to increase or decrease the Base Funding Opportunity established in Section 3.2(a) hereof based on achievement of the Company Goals set forth in Schedule III hereof. Such increase or decrease shall not cause a deviation of more than 10% in the Base Funding Opportunity. (d) Employee Transfers. If an Employee Participant transfers from one Funding Unit to another Funding Unit during a Performance Period, the transferee Funding Unit will fund such Participant's Incentive Pay Award for the
(a) Southern Company (Core Business only) Earnings Test. The Southern Company (Core Business only) Earnings Test set forth in Schedule VII hereof shall be applied at the end of each Performance Period to determine the Base Funding Opportunity. (b) Operating Company (Core Business only) Earnings Test. The Operating Company (Core Business only) Earnings Test set forth in Schedule VIII hereof shall be applied at the end of each Performance Period to determine the Base Funding Opportunity. (c) Company Goals. The Chief Executive Officer of Southern Company shall determine in his sole discretion whether to increase or decrease the Base Funding Opportunity established in Section 3.2(a) hereof based on achievement of the Company Goals set forth in Schedule III hereof. Such increase or decrease shall not cause a deviation of more than 10% in the Base Funding Opportunity. (d) Employee Transfers. If an Employee Participant transfers from one Funding Unit to another Funding Unit during a Performance Period, the transferee Funding Unit will fund such Participant's Incentive Pay Award for the entire Performance Period, and shall include such Participant's Annual Salary in the calculation of the Incentive Pay Award Pool for the transferee Funding Unit without prorating the Annual Salary of such Participant for the Performance Period. 3.3 Funding for Covered Employee Participants. With respect to a Covered Employee Plan sponsored by an Operating Company, such Plan shall be funded in accordance with this Section 3.3. (a) Funding Eligibility. A Covered Employee Plan shall be acceptable for funding provided the Earnings Thresholds set forth in Section 3.1 are satisfied. (b) Maximum Dollar Amount. Provided the Incentive Pay Award Pool for a Covered Employee Plan is acceptable for funding under Section 3.3(a) hereof, the Incentive Pay Award Pool for a Covered Employee Plan shall be funded in accordance with its terms, except that the maximum dollar amount of the Incentive Pay Award Pool for the Covered Employee Plan shall be subject to and may be limited by the Southern Company Earnings Test. 3.4 Extraordinary Item Exception. If requested by an Operating Company, at the sole discretion of the Chief Executive Officer of Southern Company, the Incentive Pay Award Pool for a Performance Period may be calculated without regard to any extraordinary item of income or expense ("Extraordinary Item") incurred by Southern Company or any Operating Company, provided such determination is made prior to the close of the Performance Period. If the Chief Executive Officer of Southern Company approves an Extraordinary Item, it shall be identified in Schedule VI hereof, and, in addition, an explanation as to how such Extraordinary Item shall impact the funding of the Plan and the Incentive Pay Award Pool of the Operating Company requesting approval of the Extraordinary Item shall be set forth therein. 3.5 Determination of Funding Amount. Funding in accordance with this Article III shall be fixed in all events by the end of each Performance Period. ARTICLE IV Incentive Pay Award Opportunities 4.1 Employee Participants. (a) The Incentive Pay Award Pool benefiting Employee Participants of an Operating Company shall be allocated to each Operating Company in accordance with Article III hereof. The amount allocated to each Operating Company shall then be distributed by the Plan Administrator among Participants in proportion to each such Participant's Annual Salary. (b) The Plan Administrator shall be solely responsible for calculating each Participant's Incentive Pay Award and distributing such Incentive Pay Award.
(c) The Plan Administrator shall endeavor to pay the Incentive Pay Awards for a Performance Period to the Participants not later than two and one-half (2 1/2) months following the close of the preceding Performance Period, or such shorter or longer period of time following the close of the preceding Performance Period as may be required under the Internal Revenue Code to preserve the timely accrual of the federal income tax deduction for Incentive Pay Awards paid with respect to such Performance Period. (d) The Incentive Pay Award payment shall be made in cash or its functional equivalent and the receipt of such payment may not be deferred under this Plan at the option of the Participant. In the event of a Participant's death prior to the payment of any Incentive Pay Award payable to the Participant, such amount shall be paid to the estate of the Participant. 4.2 Covered Employee Participants. (a) The Incentive Pay Award Pool benefiting Covered Employees of an Operating Company shall be allocated among Covered Employee Participants in the Covered Employee Plan in accordance with the terms of such Covered Employee Plan. (b) The Plan Administrator shall be solely responsible for calculating and distributing each Participant's Incentive Pay Award in accordance with the terms of the Covered Employee Plan in which the Covered Employee Participant participates. ARTICLE V Change in Control 5.1 Southern Change in Control. In the event of a Southern Change in Control, if there is no Plan Termination, payout of Incentive Pay Awards to Participants for the Performance Period in which the Southern Change in Control shall have occurred shall be the greater of actual or target performance under the Plan. 5.2 Plan Termination. Notwithstanding any other provision of this Plan to the contrary, in the event of a Plan Termination within two (2) years following a Southern Change in Control, each Participant who is an Employee on the date of such Plan Termination shall be entitled to receive within thirty (30) days of the Plan Termination, cash in an amount equal to a pro-rated payout of his Incentive Pay Award under the Plan for the Performance Period in which the Plan Termination shall have occurred, at the greater of target or actual performance under the Plan and prorated by the number of months which have passed since the beginning of the Performance Period until the date of the Plan Termination. 5.3 Subsidiary Change in Control. Notwithstanding any other provision of this Plan to the contrary, in the event of a Subsidiary Change in Control, each Subsidiary Employee on the date of such Change in Control whose employment is not transferred upon such Subsidiary Change in Control to another Operating Company shall be entitled to receive within thirty (30) days of the Subsidiary Change in Control, cash in an amount equal to a prorated payout of his Incentive Pay Award under the Plan for the Performance Period in which the Subsidiary Change in Control shall have occurred, at the greater of actual or target performance under the Plan and prorated by the number of months which have passed since the beginning of the Performance Period until the date of the Subsidiary Change in Control. 5.4 Southern Termination. Notwithstanding any other provision of this Plan to the contrary, in the event of a Southern Termination, each Participant on the date of such Southern Termination shall be entitled to receive within thirty (30) days of the Southern Termination, cash in an amount equal to a prorated payout of his Incentive Pay Award under the Plan for the Performance Period in which the Southern Termination shall have occurred, at the greater of actual or target performance under the Plan and prorated by the number of months which have passed since the beginning of the Performance Period until the date of the Southern Termination. This Plan shall terminate immediately following the payments provided for in this Section 5.5 Pro rata Calculation. For purposes of calculating any pro rata Incentive Pay Awards under this Article V, a month shall not be considered if the determining event occurs on or before the 14th day of the month, and a
month shall be considered if the determining event occurs on or after the 15th day of the month. ARTICLE VI Administration of Plan 6.1 Employment of Agents. The Plan Administrator shall be responsible for the daily administration of the Plan and may appoint other persons or entities to perform or assist in the performance of any of its fiduciary duties, subject to its review and approval. The Plan Administrator shall have the right to remove any such appointee from his position without cause or notice. Any person, group of persons, or entity may serve in more than one fiduciary capacity. 6.2 Record Keeping and Reporting. (a) The Plan Administrator shall maintain permanent records and accounts of Participants and shall be responsible for all receipts, disbursements, transfers and other transactions concerning the Plan. Such accounts, books, and records relating thereto shall be open to inspection and audit by the boards of directors of the Operating Companies and any persons designated thereby at all reasonable times. (b) The Plan Administrator shall undertake the preparation and filing of all documents and forms required by any governmental agency. The Plan Administrator shall keep all such books of account records, and other data as may be necessary for proper administration of the Plan. 6.3 Responsibilities in General. The Plan Administrator shall administer the Plan in accordance with its terms and shall have all powers necessary to carry out the provisions of the Plan as more particularly set forth herein. The Plan Administrator shall interpret the Plan and shall determine all questions concerning eligibility, administration, interpretation, and application of the Plan, and all such determinations shall be conclusive and binding on all Participants and interested persons. The Plan Administrator shall adopt such procedures and guidelines as it deems necessary or desirable in order to discharge its duties hereunder.
6.4 Indemnification. The Operating Companies shall indemnify the Plan Administrator against any and all claims, losses, damages, expenses, and liability arising from its actions or omissions, except when the same are finally adjudicated to be due to gross negligence or willful misconduct. The Operating Companies may purchase at their own expense sufficient liability insurance for the Plan Administrator to cover any and all claims, losses, damages, and expenses arising from any action or omission in connection with the execution of the duties as the Plan Administrator. 6.5 Service of Process. The Plan Administrator shall be the appointed agent for the service of process. ARTICLE VII Miscellaneous Provisions 7.1 No Right of Assignment or Alienation. Neither the Participant nor his personal representative 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 of this Plan shall be void and have no effect. 7.2 No Trust Requirement. Unless the Board of Directors shall in its discretion determine otherwise, the Operating Companies shall neither reserve nor otherwise set aside funds for the payments of Incentive Pay Awards under the Plan. 7.3 Amendment and Termination of Plan. Except for the provisions of Article V hereof, which may not be amended following a Southern Change in Control, Subsidiary Change in Control or a Southern Termination, the Board of Directors may terminate the Plan at any time or may from time to time amend the Plan; provided, however, that no amendment shall impair any rights to payments which have been earned under the Plan prior to the termination or amendment. Any amendment or termination of the Plan shall apply, in the Board of Directors'
6.4 Indemnification. The Operating Companies shall indemnify the Plan Administrator against any and all claims, losses, damages, expenses, and liability arising from its actions or omissions, except when the same are finally adjudicated to be due to gross negligence or willful misconduct. The Operating Companies may purchase at their own expense sufficient liability insurance for the Plan Administrator to cover any and all claims, losses, damages, and expenses arising from any action or omission in connection with the execution of the duties as the Plan Administrator. 6.5 Service of Process. The Plan Administrator shall be the appointed agent for the service of process. ARTICLE VII Miscellaneous Provisions 7.1 No Right of Assignment or Alienation. Neither the Participant nor his personal representative 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 of this Plan shall be void and have no effect. 7.2 No Trust Requirement. Unless the Board of Directors shall in its discretion determine otherwise, the Operating Companies shall neither reserve nor otherwise set aside funds for the payments of Incentive Pay Awards under the Plan. 7.3 Amendment and Termination of Plan. Except for the provisions of Article V hereof, which may not be amended following a Southern Change in Control, Subsidiary Change in Control or a Southern Termination, the Board of Directors may terminate the Plan at any time or may from time to time amend the Plan; provided, however, that no amendment shall impair any rights to payments which have been earned under the Plan prior to the termination or amendment. Any amendment or termination of the Plan shall apply, in the Board of Directors' sole discretion, with respect to all Employees participating in the Plan, irrespective of whether any such amendment or termination has been collectively bargained. Notwithstanding the foregoing, in the event that the Plan is terminated before funding is fixed at the end of a Performance Period, no Incentive Pay Award shall be funded, and accordingly, no Incentive Pay Awards shall be paid for such Performance Period.
7.4 Incentive Pay Award as Compensation. (a) Incentive Pay Awards made in accordance with the Plan are in addition to any other benefits or compensation to which a Participant may be entitled or for which he may be eligible, whether funded or unfunded, by reason of his employment with the Operating Company. (b) There shall be deducted from each Incentive Pay Award to a Participant the amount of any tax required to be withheld by any governmental authority and paid over by the Operating Company to such governmental authority. 7.5 Coordination with Benefit Plans. Any Incentive Pay Awards paid to a Participant while employed by an Operating Company shall not be considered in the calculation of the Participant's benefits under any employee welfare or pension benefit plan maintained by an Operating Company, unless otherwise specifically provided therein. 7.6 Plan Not a Contract. The Plan shall not be deemed to constitute a contract between an Operating Company and any Employee or Covered Employee, nor shall anything herein contained be deemed to give any Employee or Covered Employee any right to be retained in the employ of an Operating Company or interfere with the right of the Operating Company to discharge any Employee or Covered Employee at any time and to treat him without regard to the effect which such treatment might have upon him as a Participant. 7.7 Choice of Law. This Plan shall be governed by and construed in accordance with the laws of the State of Georgia except for the application of any law which would require the use of the laws of another state. 7.8 Pooling Accounting. Notwithstanding anything to the contrary herein, if, but for any provision of this Plan, a
7.4 Incentive Pay Award as Compensation. (a) Incentive Pay Awards made in accordance with the Plan are in addition to any other benefits or compensation to which a Participant may be entitled or for which he may be eligible, whether funded or unfunded, by reason of his employment with the Operating Company. (b) There shall be deducted from each Incentive Pay Award to a Participant the amount of any tax required to be withheld by any governmental authority and paid over by the Operating Company to such governmental authority. 7.5 Coordination with Benefit Plans. Any Incentive Pay Awards paid to a Participant while employed by an Operating Company shall not be considered in the calculation of the Participant's benefits under any employee welfare or pension benefit plan maintained by an Operating Company, unless otherwise specifically provided therein. 7.6 Plan Not a Contract. The Plan shall not be deemed to constitute a contract between an Operating Company and any Employee or Covered Employee, nor shall anything herein contained be deemed to give any Employee or Covered Employee any right to be retained in the employ of an Operating Company or interfere with the right of the Operating Company to discharge any Employee or Covered Employee at any time and to treat him without regard to the effect which such treatment might have upon him as a Participant. 7.7 Choice of Law. This Plan shall be governed by and construed in accordance with the laws of the State of Georgia except for the application of any law which would require the use of the laws of another state. 7.8 Pooling Accounting. Notwithstanding anything to the contrary herein, if, but for any provision of this Plan, a Change in Control transaction would otherwise be accounted for as a pooling of interests under APB No. 16 ("Pooling Accounting") (after giving effect to any and all other facts and circumstances affecting whether such Change in Control transaction would use Pooling Accounting), such provision or provisions of this Plan which would otherwise cause the Change in Control transaction to be ineligible for Pooling Accounting shall automatically be void and ineffective in such a manner and to the extent that be eliminating such provision or provisions of this Plan, Pooling Accounting would be required for such Change in Control transaction and Pooling Accounting is in fact used for such Change in Control transaction. IN WITNESS WHEREOF, Southern Company Services, Inc., through its officers duly authorized, hereby amends and restates Southern Company Performance Pay Plan this _____ day of , 1999, to be effective January 1, 1998. SOUTHERN COMPANY SERVICES, INC. By: _____________________________________________________ Christopher C. Womack Senior Vice President, Human Resources Attest: By: ____________________________________________ Tommy Chisholm Secretary [Corporate Seal]
SOUTHERN COMPANY PERFORMANCE PAY PLAN Amended and Restated Effective January 1, 1998 SCHEDULE I
SOUTHERN COMPANY PERFORMANCE PAY PLAN Amended and Restated Effective January 1, 1998 SCHEDULE I
Employment Date____________ January 1 - January 14_____ January 15 - February 14___ February 15 - March 14_____ March 15 - April 14________ April 15 - May 14__________ May 15 - June 14___________ June 15 - July 14__________ July 15 - August 14________ August 15 - September 14___ September 15 - October 14__ October 15 - November 14___ November 15 - December 14__ December 15 - December 31__ Accrual 12/12 11/12 10/12 9/12 8/12 7/12 6/12 5/12 4/12 3/12 2/12 1/12 0/12 = = = = = = = = = = = = = Factor 1.00 .92 .83 .75 .67 .58 .50 .42 .33 .25 .17 .08 .00
SOUTHERN COMPANY PERFORMANCE PAY PLAN Amended and Restated Effective January 1, 1998 SCHEDULE II
Termination Date___________ December 15 - December 31__ November 15 - December 14__ October 15 - November 14___ September 15 - October 14__ August 15 - September 14___ July 15 - August 14________ June 15 - July 14__________ May 15 - June 14___________ April 15 - May 14__________ March 15 - April 14________ Accrual 12/12 11/12 10/12 9/12 8/12 7/12 6/12 5/12 4/12 3/12 = = = = = = = = = = Factor 1.00 .92 .83 .75 .67 .58 .50 .42 .33 .25
SOUTHERN COMPANY PERFORMANCE PAY PLAN Amended and Restated Effective January 1, 1998 SCHEDULE II
Termination Date___________ December 15 - December 31__ November 15 - December 14__ October 15 - November 14___ September 15 - October 14__ August 15 - September 14___ July 15 - August 14________ June 15 - July 14__________ May 15 - June 14___________ April 15 - May 14__________ March 15 - April 14________ February 15 - March 14_____ January 15 - February 14___ January 1 - January 14_____ Accrual 12/12 11/12 10/12 9/12 8/12 7/12 6/12 5/12 4/12 3/12 2/12 1/12 0/12 = = = = = = = = = = = = = Factor 1.00 .92 .83 .75 .67 .58 .50 .42 .33 .25 .17 .08 .00
SOUTHERN COMPANY PERFORMANCE PAY PLAN Amended and Restated Effective January 1, 1998 SCHEDULE III 1998 COMPANY GOALS
----------BIG ----------------------I ---------------------------------------1998 Goals ----------------------------------------------------------------------------------------o Cost Goal(1)(2) -------------APC ----------------------------$1,144 $1,107 --------------GPC ------------------------------$1,350 $1,296 ------------GULF ---------------------------$231 $224 ------------------------$31.0 $30.0 ------------------------$55.1 $57.7 ------MPC --------------$229 $222 ------------$26.0 $25.0 ------------$47.0 $49.7
----------- ---------------------------------------- -------------- ------------------------- ---------------------------------------- -------------- --------------II o Overhead Cost Goal(1)(2)(3) $123.0 $219.0 $119.0 $210.0 ----------- ---------------------------------------- -------------- ------------------------- ---------------------------------------- -------------- --------------IV o Cashflow - above capital $355.0 $645.0 reinvestment and dividend $369.0 $665.0 requirements(1)(2)
----------- ---------------------------------------- -------------- --------------- ------------- ----------------- ---------------------------------------- -------------- --------------- ------------- -------
SOUTHERN COMPANY PERFORMANCE PAY PLAN Amended and Restated Effective January 1, 1998 SCHEDULE III 1998 COMPANY GOALS
----------BIG ----------------------I ---------------------------------------1998 Goals ----------------------------------------------------------------------------------------o Cost Goal(1)(2) -------------APC ----------------------------$1,144 $1,107 --------------GPC ------------------------------$1,350 $1,296 ------------GULF ---------------------------$231 $224 ------------------------$31.0 $30.0 ------------------------$55.1 $57.7 ------MPC --------------$229 $222 ------------$26.0 $25.0 ------------$47.0 $49.7
----------- ---------------------------------------- -------------- ------------------------- ---------------------------------------- -------------- --------------II o Overhead Cost Goal(1)(2)(3) $123.0 $219.0 $119.0 $210.0 ----------- ---------------------------------------- -------------- ------------------------- ---------------------------------------- -------------- --------------IV o Cashflow - above capital $355.0 $645.0 reinvestment and dividend $369.0 $665.0 requirements(1)(2)
----------- ---------------------------------------- -------------- --------------- ------------- ----------------- ---------------------------------------- -------------- --------------- ------------- ------IX o Each operating company will measure customer satisfaction relative to a peer group of 16 competitive utilities. Customer satisfaction scores will be equally weighted across residential and business customers (commercial, industrial and large energy users), and will be scored on a ranking scale where entry into the top quartile represents 100% achievement of this goal. ----------- ---------------------------------------- -------------- --------------- ------------- -------
(1)Dollars expressed in millions (2)Goal assumes 100% performance level. Second figure in column assumes 110% performance level. (3)Figures shown indicate levels of overhead cost, except for Southern Nuclear data which represents reductions in overheads. *Cash flow goal for Southern Nuclear represents level of capital spending.
SOUTHERN COMPANY PERFORMANCE PAY PLAN Amended and Restated Effective January 1, 1998 SCHEDULE IV THE SOUTHERN COMPANY EARNINGS THRESHOLD Year Percentage ROE 1998 10.75%
SOUTHERN COMPANY PERFORMANCE PAY PLAN Amended and Restated Effective January 1, 1998 SCHEDULE IV THE SOUTHERN COMPANY EARNINGS THRESHOLD Year Percentage ROE 1998 10.75%
SOUTHERN COMPANY PERFORMANCE PAY PLAN Amended and Restated Effective January 1, 1998 SCHEDULE V OPERATING COMPANY EARNINGS THRESHOLD
Percentage ROE Southern Nuclear ------12%
Year ---1998
Alabama ------12%
Georgia ------12%
Gulf ---12%
Mississippi ----------12%
Savannah -------12%
SCS --12%
SOCO ---12%
SOUTHERN COMPANY PERFORMANCE PAY PLAN Amended and Restated Effective January 1, 1998 SCHEDULE VI EXTRAORDINARY ITEMS
SOUTHERN COMPANY PERFORMANCE PAY PLAN Amended and Restated Effective January 1, 1998 SCHEDULE VII SOUTHERN COMPANY (CORE BUSINESS ONLY) EARNINGS TEST
Southern Nuclear -------
Year ----
Alabama -------
Georgia -------
Gulf ----
Mississippi -----------
Savannah --------
SCS ---
SOCO ----
SOUTHERN COMPANY PERFORMANCE PAY PLAN Amended and Restated Effective January 1, 1998 SCHEDULE V OPERATING COMPANY EARNINGS THRESHOLD
Percentage ROE Southern Nuclear ------12%
Year ---1998
Alabama ------12%
Georgia ------12%
Gulf ---12%
Mississippi ----------12%
Savannah -------12%
SCS --12%
SOCO ---12%
SOUTHERN COMPANY PERFORMANCE PAY PLAN Amended and Restated Effective January 1, 1998 SCHEDULE VI EXTRAORDINARY ITEMS
SOUTHERN COMPANY PERFORMANCE PAY PLAN Amended and Restated Effective January 1, 1998 SCHEDULE VII SOUTHERN COMPANY (CORE BUSINESS ONLY) EARNINGS TEST
Southern Nuclear ------13.5%
Year ---1998
Alabama ------13.5%
Georgia ------13.5%
Gulf ---13.5%
Mississippi ----------13.5%
Savannah -------13.5%
SCS --13.5%
SOCO ---13.5%
SOUTHERN COMPANY PERFORMANCE PAY PLAN Amended and Restated Effective January 1, 1998 SCHEDULE VIII OPERATING COMPANY (CORE BUSINESS ONLY) EARNINGS TEST Southern Year Alabama Georgia Gulf Mississippi Savannah Nuclear SCS SOCO
SOUTHERN COMPANY PERFORMANCE PAY PLAN Amended and Restated Effective January 1, 1998 SCHEDULE VI EXTRAORDINARY ITEMS
SOUTHERN COMPANY PERFORMANCE PAY PLAN Amended and Restated Effective January 1, 1998 SCHEDULE VII SOUTHERN COMPANY (CORE BUSINESS ONLY) EARNINGS TEST
Southern Nuclear ------13.5%
Year ---1998
Alabama ------13.5%
Georgia ------13.5%
Gulf ---13.5%
Mississippi ----------13.5%
Savannah -------13.5%
SCS --13.5%
SOCO ---13.5%
SOUTHERN COMPANY PERFORMANCE PAY PLAN Amended and Restated Effective January 1, 1998 SCHEDULE VIII OPERATING COMPANY (CORE BUSINESS ONLY) EARNINGS TEST Southern Year Alabama Georgia Gulf Mississippi Savannah Nuclear SCS SOCO 1998 13.5% 13.5% 13.5% 13.5% 13.5% 13.5% 13.5% 13.5%
EXHIBIT 10(a)66 SOUTHERN COMPANY DEFERRED COMPENSATION PLAN Troutman Sanders LLP 600 Peachtree Street, N.E. 5200 NationsBank Plaza Atlanta, Georgia 30308 (404) 885-3000 Amended and Restated as of January 1, 1998
SOUTHERN COMPANY PERFORMANCE PAY PLAN Amended and Restated Effective January 1, 1998 SCHEDULE VII SOUTHERN COMPANY (CORE BUSINESS ONLY) EARNINGS TEST
Southern Nuclear ------13.5%
Year ---1998
Alabama ------13.5%
Georgia ------13.5%
Gulf ---13.5%
Mississippi ----------13.5%
Savannah -------13.5%
SCS --13.5%
SOCO ---13.5%
SOUTHERN COMPANY PERFORMANCE PAY PLAN Amended and Restated Effective January 1, 1998 SCHEDULE VIII OPERATING COMPANY (CORE BUSINESS ONLY) EARNINGS TEST Southern Year Alabama Georgia Gulf Mississippi Savannah Nuclear SCS SOCO 1998 13.5% 13.5% 13.5% 13.5% 13.5% 13.5% 13.5% 13.5%
EXHIBIT 10(a)66 SOUTHERN COMPANY DEFERRED COMPENSATION PLAN Troutman Sanders LLP 600 Peachtree Street, N.E. 5200 NationsBank Plaza Atlanta, Georgia 30308 (404) 885-3000 Amended and Restated as of January 1, 1998
SOUTHERN COMPANY DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
ARTICLE I Purpose and Adoption of Plan................................1
ARTICLE II Definitions................................................1
SOUTHERN COMPANY PERFORMANCE PAY PLAN Amended and Restated Effective January 1, 1998 SCHEDULE VIII OPERATING COMPANY (CORE BUSINESS ONLY) EARNINGS TEST Southern Year Alabama Georgia Gulf Mississippi Savannah Nuclear SCS SOCO 1998 13.5% 13.5% 13.5% 13.5% 13.5% 13.5% 13.5% 13.5%
EXHIBIT 10(a)66 SOUTHERN COMPANY DEFERRED COMPENSATION PLAN Troutman Sanders LLP 600 Peachtree Street, N.E. 5200 NationsBank Plaza Atlanta, Georgia 30308 (404) 885-3000 Amended and Restated as of January 1, 1998
SOUTHERN COMPANY DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
ARTICLE I Purpose and Adoption of Plan................................1
ARTICLE II Definitions................................................1
ARTICLE III Administration of Plan....................................4
ARTICLE IV Eligibility................................................6
ARTICLE V Deferral Election...........................................7
ARTICLE VI Participants'Accounts......................................8
ARTICLE VII Account Distribution.....................................10
ARTICLE VIII Miscellaneous Provisions................................12
EXHIBIT 10(a)66 SOUTHERN COMPANY DEFERRED COMPENSATION PLAN Troutman Sanders LLP 600 Peachtree Street, N.E. 5200 NationsBank Plaza Atlanta, Georgia 30308 (404) 885-3000 Amended and Restated as of January 1, 1998
SOUTHERN COMPANY DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
ARTICLE I Purpose and Adoption of Plan................................1
ARTICLE II Definitions................................................1
ARTICLE III Administration of Plan....................................4
ARTICLE IV Eligibility................................................6
ARTICLE V Deferral Election...........................................7
ARTICLE VI Participants'Accounts......................................8
ARTICLE VII Account Distribution.....................................10
ARTICLE VIII Miscellaneous Provisions................................12
SOUTHERN COMPANY DEFERRED COMPENSATION PLAN ARTICLE I Purpose and Adoption of Plan 1.1 Adoption: Southern Company Services, Inc. and the other Employing Companies established the Deferred Compensation Plan for The Southern Electric System effective October 1, 1988. The Plan was amended effective October 1, 1988, March 1, 1993 and January 1, 1996, and except as otherwise provided herein, the terms of the Plan as in effect prior to January 1, 1998 shall continue to be applicable to deferrals made pursuant to the Plan prior to January 1, 1998. .........1.2 Purpose: This Southern Company Deferred Compensation Plan is designed to permit a select group of
SOUTHERN COMPANY DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
ARTICLE I Purpose and Adoption of Plan................................1
ARTICLE II Definitions................................................1
ARTICLE III Administration of Plan....................................4
ARTICLE IV Eligibility................................................6
ARTICLE V Deferral Election...........................................7
ARTICLE VI Participants'Accounts......................................8
ARTICLE VII Account Distribution.....................................10
ARTICLE VIII Miscellaneous Provisions................................12
SOUTHERN COMPANY DEFERRED COMPENSATION PLAN ARTICLE I Purpose and Adoption of Plan 1.1 Adoption: Southern Company Services, Inc. and the other Employing Companies established the Deferred Compensation Plan for The Southern Electric System effective October 1, 1988. The Plan was amended effective October 1, 1988, March 1, 1993 and January 1, 1996, and except as otherwise provided herein, the terms of the Plan as in effect prior to January 1, 1998 shall continue to be applicable to deferrals made pursuant to the Plan prior to January 1, 1998. .........1.2 Purpose: This Southern Company Deferred Compensation Plan is designed to permit a select group of management or highly compensated employees to elect to defer a portion of their regular compensation during each payroll period and to defer all or a portion of certain short-term and long-term incentive payments until their death, disability, retirement, or other termination of employment with an Employing Company. The Plan shall be an unfunded deferred compensation arrangement whose benefits shall be paid solely from the general assets of the Employing Companies. ARTICLE II Definitions .........For purposes of the Plan the following terms shall have the following meanings unless a different meaning is plainly required by the context: .........2.1 "Account" shall mean the account or accounts established and maintained by an Employing Company to reflect the interest of a Participant in the Plan resulting from a Participant's deferral of Compensation or Incentive Pay and adjustments thereto to reflect income, gains, losses, and other credits or charges. Charges to
SOUTHERN COMPANY DEFERRED COMPENSATION PLAN ARTICLE I Purpose and Adoption of Plan 1.1 Adoption: Southern Company Services, Inc. and the other Employing Companies established the Deferred Compensation Plan for The Southern Electric System effective October 1, 1988. The Plan was amended effective October 1, 1988, March 1, 1993 and January 1, 1996, and except as otherwise provided herein, the terms of the Plan as in effect prior to January 1, 1998 shall continue to be applicable to deferrals made pursuant to the Plan prior to January 1, 1998. .........1.2 Purpose: This Southern Company Deferred Compensation Plan is designed to permit a select group of management or highly compensated employees to elect to defer a portion of their regular compensation during each payroll period and to defer all or a portion of certain short-term and long-term incentive payments until their death, disability, retirement, or other termination of employment with an Employing Company. The Plan shall be an unfunded deferred compensation arrangement whose benefits shall be paid solely from the general assets of the Employing Companies. ARTICLE II Definitions .........For purposes of the Plan the following terms shall have the following meanings unless a different meaning is plainly required by the context: .........2.1 "Account" shall mean the account or accounts established and maintained by an Employing Company to reflect the interest of a Participant in the Plan resulting from a Participant's deferral of Compensation or Incentive Pay and adjustments thereto to reflect income, gains, losses, and other credits or charges. Charges to Participant's Accounts for distributions shall be posted as of the date the Committee (or its designee) notifies its paying agent to make such distribution. .........2.2 "Board of Directors" shall mean the Board of Directors of the Company. .........2.3 "Closing Price" shall mean the closing price on any trading day of a share of the Common Stock based on consolidated trading as defined by the Consolidated Tape Association and reported as part of the consolidated trading prices of New York Stock Exchange listed securities. .........2.4 "Committee" shall mean the committee referred to in Section 3.1 hereof. .........2.5 "Common Stock" shall mean the common stock of The Southern Company. .........2.6 "Company" shall mean Southern Company Services, Inc. .........2.7 "Compensation" shall mean the monthly rate of an Employee's base wages or salary paid by any Employing Company to an Employee, including amounts contributed by an Employing Company to the Employee Savings Plan as Elective Employer Contributions, as said term is defined in Section 4.1 therein, pursuant to the Employee's exercise of his or her deferral option made in accordance with Section 401(k) of the Internal Revenue Code and amounts contributed by an Employing Company to The Southern Company Flexible Benefits Plan on behalf of the Employee pursuant to his or her salary reduction election under such plan; but disregarding overtime and any reimbursements to an Employee paid by any Employing Company including, but not limited to, reimbursements for such items as moving expenses, automobile expenses, tax preparation expenses, travel and entertainment expenses, and health and life insurance premiums. .........2.8 "Deferral Election" shall mean the Participant's written election to defer a portion of his or her Compensation or Incentive Pay pursuant to Article V hereof. .........2.9 "Distribution Election" shall mean the election under Article VII hereof, pursuant to which a Participant
elects to receive the balance of his or her Account in either a lump sum or in annual installments following the Participant's death, disability, retirement or other termination of Employment with an Employing Company. .........2.10 "Effective Date" shall mean January 1, 1998. .........2.11 "Employee" shall mean any person who is currently employed by an Employing Company. .........2.12 "Employee Savings Plan" shall mean The Southern Company Employee Savings Plan, as amended from time to time. .........2.13 "Employee Stock Ownership Plan" shall mean The Southern Company Employee Stock Ownership Plan, as amended from time to time. .........2.14 "Employing Company" shall mean the Company, or any affiliate or subsidiary (direct or indirect) of The Southern Company, which the Board of Directors may from time to time determine to bring under the Plan and which shall adopt the Plan, and any successor of any of them. .........2.15 "Enrollment Date" shall mean the Effective Date, January 1 of each Plan Year, and such other dates as may be determined from time to time by the Committee. .........2.16 "Incentive Pay" shall mean such long-term or short-term incentive pay as the Committee shall permit to be deferred under this Plan for any Plan Year. .........2.17 "Investment Election" shall mean the Participant's written election to have his or her deferred Compensation or Incentive Pay invested pursuant to Section 6.2 or Section 6.3 hereof. .........2.18 "Non-adopting Company" shall mean any subsidiary or affiliate of The Southern Company which is not an Employing Company. .........2.19 "Participant" shall mean an Employee or former employee of an Employing Company who is eligible to receive benefits under the Plan or who was so eligible and had an unpaid Account balance upon his or her death, disability, retirement or other termination of employment with an Employing Company. .........2.20 "Pension Plan" shall The Southern Company Pension Plan, as amended from time to time. .........2.21 "Performance Sharing Plan" shall mean The Southern Company Performance Sharing Plan, as amended from time to time. .........2.22 "Plan" shall mean the Southern Company Deferred Compensation Plan, amended and restated as of January 1, 1998, as further amended from time to time. Prior to the January 1, 1996 amendment and restatement, the Plan was entitled the Deferred Compensation Plan for The Southern Electric System. .........2.23 "Plan Year" shall mean the calendar year. .........2.24 "Retirement Income" shall have the same meaning as set forth in the Pension Plan. .........2.25 "Supplemental Benefit Plan" shall mean The Southern Company Supplemental Benefit Plan and the Supplemental Executive Retirement Plan of Savannah Electric and Power Company, each as amended from time to time. .........2.26 "Valuation Date" shall mean each trading day of the New York Stock Exchange, or any successor national exchange on which the Common Stock is traded and with respect to which a Closing Price may be determined. .........Where the context requires, the definitions of all terms set forth in the Pension Plan, the Employee Savings Plan, the Employee Stock Ownership Plan, the Performance Sharing Plan and the Supplemental Benefit Plan shall apply with equal force and effect for purposes of interpretation and administration of the Plan, unless said terms are otherwise specifically defined in the Plan. Words in the masculine gender shall include the feminine and neuter genders, words in the singular shall include the plural and words in the plural shall include the singular.
ARTICLE III Administration of Plan .........3.1 The general administration of the Plan shall be placed in the Committee. The Committee shall consist of the Vice President, Human Resources of The Southern Company, the Director, System Compensation and Benefits of The Southern Company and the Comptroller of The Southern Company. Any member may resign or may be removed by the Board of Directors and new members may be appointed by the Board of Directors at such time or times as the Board of Directors in its discretion shall determine. The Committee shall be chaired by the Vice President, Human Resources of The Southern Company and may select a Secretary (who may, but need not, be a member of the Committee) to keep its records or to assist it in the discharge of its duties. A majority of the members of the Committee shall constitute a quorum for the transaction of business at any meeting. Any determination or action of the Committee may be made or taken by a majority of the members present at any meeting thereof, or without a meeting by resolution or written memorandum concurred in by a majority of the members. .........3.2 No member of the Committee shall receive any compensation from the Plan for his or her service. .........3.3 The Committee shall administer the Plan in accordance with its terms and shall have all powers necessary to carry out the provisions of the Plan as may be more particularly set forth herein. The Committee shall interpret the Plan and shall determine all questions arising in the administration, interpretation and application of the Plan. Any such determination by the Committee shall be conclusive and binding on all persons. The Committee may adopt such regulations as it deems desirable for the conduct of its affairs and may appoint such accountants, counsel, actuaries, specialists and other persons as it deems necessary or desirable in connection with the administration of this Plan. The Committee shall be the Plan's agent for service of process. .........3.4 The Committee shall be reimbursed by the Employing Companies for all reasonable expenses incurred by it in the fulfillment of its duties, including, but not limited to, fees of accountants, counsel, actuaries, and other specialists, and other costs of administering the Plan. 3.5 (a) The Committee is responsible for the daily administration of the Plan and may appoint other persons or entities to perform any of its fiduciary functions. The Committee and any such appointee may employ advisors and other persons necessary or convenient to help the Committee carry out its duties, including its fiduciary duties. The Committee shall review the work and performance of each such appointee, and shall have the right to remove any such appointee from his or her position. Any person, group of persons or entity may serve in more than one fiduciary capacity. (b) The Committee shall maintain accurate and detailed records and accounts of Participants and of their rights under the Plan and of all receipts, disbursements, transfers and other transactions concerning the Plan. Such accounts, books and records relating thereto shall be open at all reasonable times to inspection and audit by the Board of Directors and by any persons designated thereby. (c) The Committee shall take all steps necessary to ensure that the Plan complies with the law at all times. These steps shall include such items as the preparation and filing of all documents and forms required by any governmental agency; maintaining of adequate Participants' records; recording and transmission of all notices required to be given to Participants and their beneficiaries; the receipt and dissemination, if required, of all reports and information received from an Employing Company; securing of such fidelity bonds as may be required by law; and doing such other acts necessary for the proper administration of the Plan. The Committee shall keep a record of all of its proceedings and acts, and shall keep all such books of account, records and other data as may be necessary for proper administration of the Plan. The Committee shall notify the Employing Companies upon their request of any action taken by the Committee, and when required, shall notify any other interested person or persons. ARTICLE IV Eligibility .........4.1 Any Employee whose compensation equals or exceeds such minimum amount as may be established by the Committee from time to time may elect to participate in the Plan beginning on any Enrollment Date by electing to have his or her Compensation or Incentive Pay reduced and such amounts contributed to the Plan in accordance with Article V hereof, and directing the investment of such contributions in accordance with Article
VI hereof. The Committee shall be authorized to establish the minimum compensation required for eligibility to participate in the Plan, to be effective as of the first day of the next succeeding Plan Year. Notwithstanding the foregoing, any Employee eligible to participate in any similar deferred compensation plan maintained by an Employing Company or maintained by a Non-adopting Company shall be ineligible to defer Compensation or Incentive Pay under this Plan, unless the Committee in its sole discretion shall determine otherwise. .........4.2 Notwithstanding the above, the Committee shall be authorized to modify the minimum compensation amount and to rescind the eligibility of any Participant if necessary or advisable to insure that the Plan is maintained primarily for the purpose of providing deferred compensation to a select group of management or highly compensated employees, as such terms are defined by the Employee Retirement Income Security Act of 1974, as amended. .........4.3 The Committee shall have the authority to permit, if it deems appropriate, separate Deferral Elections under Article V hereof, Investment Elections under Article VI hereof, and Distribution Elections under Article VII hereof for Compensation and Incentive Pay, respectively. ARTICLE V Deferral Election .........5.1 A Participant may elect to defer payment of a portion of his or her Compensation otherwise payable to him by his or her Employing Company during each payroll period of the next succeeding Plan Year by any whole percentage not to exceed fifty percent (50%) of his or her Compensation, or such greater or lesser amount as shall be determined by the Committee from time to time. A Participant may also elect to defer payment of up to one hundred percent (100%), by whole percentages, of any Incentive Pay otherwise payable to him or her by his or her Employing Company. .........5.2 The Deferral Election shall be made in writing on a form prescribed by the Committee and shall state as follows: (a) That the Participant wishes to make an election to defer the receipt of a portion of his or her Compensation or all or a portion of his or her Incentive Pay; (b) The whole percentage of his or her Compensation or Incentive Pay which the Participant elects to defer; and (c) The Distribution Election under Article VII hereof. .........5.3 The initial Deferral Election of a new Participant shall be made by written notice signed by the Participant and delivered to the Participant's Employing Company by the date established by the Committee and shall be effective on the next occurring Enrollment Date. Any modification or revocation of the most recent Deferral Election shall be made by written notice signed by the Participant and delivered to the Participant's Employing Company by the date established by the Committee and shall be effective on the first day of the Plan Year immediately following the date of the Deferral Election. A Deferral Election with respect to the deferral of future Compensation or Incentive Pay shall be an annual election for each Plan Year unless otherwise modified or revoked as provided herein. The termination of a Participant's participation in the Plan shall not affect the Participant's Compensation or Incentive Pay previously deferred under the Plan, which shall be invested and distributed in accordance with the Participant's elections and the terms and conditions of the Plan. .........5.4 Notwithstanding the provisions of Section 5.4 of the Plan, the Committee, in its sole discretion upon written application by a Participant, may authorize the suspension of a Participant's Deferral Election in the event of an unforeseen emergency or hardship of the Participant. A Deferral Election suspension will be on account of hardship if it is necessary in light of immediate and heavy financial needs of the Participant which cannot reasonably be met from the Participant's other financial resources. For this purpose, any amounts held in the Participant's accounts in the Employee Savings Plan and the Employee Stock Ownership Plan shall not be deemed to be reasonably available. Any Deferral Election suspension authorized by the Committee shall become effective as of the first payroll period beginning thirty (30) days after receipt by the Participant's Employing Company of the Participant's suspension application, or as soon as practicable after the receipt of such application. Such Deferral Election suspension shall be effective for the remainder of the Plan Year of application and shall be deemed an annual election by the Participant for each succeeding Plan Year unless otherwise modified by the Participant under the provisions of Section 5.3 hereof.
ARTICLE VI Participants' Accounts .........6.1 Upon the Committee's receipt of a Participant's valid Deferral Election under Article V hereof, beginning as of the Enrollment Date, the designated portion of Compensation and Incentive Pay shall be credited to the Participant's Account as of the date of each such deferral in accordance with the provisions of this Article VI. .........6.2 On the last business day of each month the Account of each Participant electing to invest his or her deferred Compensation or Incentive Pay for a Plan Year in accordance with this Section 6.2 shall be credited by the Employing Company with an amount, in lieu of interest, equal to the monthly equivalent of the per annum prime rate of interest as published by the Wall Street Journal as the base rate on corporate loans posted as of the last business day of each month by at least seventy five (75%) percent of the United States' largest banks, compounded monthly on any Account balance until such balance is fully distributed. .........6.3 The Account of each Participant electing to invest his or her deferred Compensation or Incentive Pay for a Plan Year in accordance with this Section 6.3 shall be credited on the date of deferral with the deemed number of shares (including fractional shares) of Common Stock which could have been purchased on such date with the dollar amount of such deferral, based upon the Common Stock's Closing Price on the Valuation Date immediately preceding the date of deferral. As of the date on which occurs the payment of dividends on the Common Stock, there shall be credited with respect to the deemed number of shares of Common Stock in the Participant's Account on such date such additional deemed shares (including fractional shares) of Common Stock as follows: (a) In the case of cash dividends, such additional deemed shares as could be purchased at the Closing Price on the Valuation Date immediately preceding the dividend payment date with the dividends which would have been payable on the deemed number of shares previously credited to the Participant's Account; (b) In the case of dividends payable in property other than cash or Common Stock, such additional deemed shares as could be purchased at the Closing Price on the Valuation Date immediately preceding the dividend payment date with the fair market value of the property which would have been payable on the deemed number of shares previously credited to the Participant's Account; or (c) In the case of dividends payable in Common Stock, such additional deemed shares as would have been payable on the deemed number of shares previously credited to the Participant's Account. .........6.4 The Investment Election by a Participant with respect to his or her Account shall be made in writing on a form prescribed by the Committee. Investment Elections shall be delivered to the Participant's Employing Company prior to the first (1st) day of the month immediately prior to his or her Enrollment Date or the next succeeding Plan Year, as appropriate, and shall be effective on such Enrollment Date or the first day of such succeeding Plan Year. Investment Elections shall be irrevocable and shall continue from Plan Year to Plan Year unless the Participant changes the Investment Election regarding future deferred Compensation or Incentive Pay by submitting a written request to his or her Employing Company on a form prescribed by the Committee. Any such change shall become effective as of the first day of the Plan Year next following the Plan Year in which such request is submitted to the Employing Company. No transfer of amounts between investment options shall be permitted under the Plan. .........6.5 As of the last day of each Plan Year, the Committee shall issue a report to each Participant holding an Account, setting forth the dollar amount of deferrals invested under Section 6.2 hereof as of the last day of the Plan Year and, with respect to deferrals invested under Section 6.3 hereof, the aggregate Closing Price of the number of shares of Common Stock credited to each Participant's Account as of the Valuation Date on or immediately preceding the last day of the Plan Year. ARTICLE VII Account Distribution .........7.1 When a Participant retires or terminates his or her employment with an Employing Company, he or she shall be entitled to receive in cash an amount equal to the dollar amount of any deferrals and any amounts in lieu of interest thereon credited to his or her Account under the Investment Election of Section 6.2 hereof, and the
dollar value of the aggregate Closing Price of the number of deemed shares of Common Stock (and fractions thereof) credited to his or her Account in accordance with the Investment Election of Section 6.3 hereof, determined as of the date following such termination or retirement that the Company notifies its paying agent to make the distribution or the immediately preceding Valuation Date, and any replacement benefits provided under Sections 6.2, 6.3 and 6.4 hereof prior to January 1, 1996, such amounts to be paid in accordance with the Participant's most recent Distribution Election. The transfer by a Participant between subsidiaries or affiliates of The Southern Company shall not be deemed to be a termination of employment with an Employing Company for purposes of the Plan. No portion of a Participant's Account shall be distributed in Common Stock. .........7.2 In the event that a Participant's most recent Distribution Election is to receive a lump sum distribution of his or her Account, the dollar amount determined under Section 7.1 hereof shall be paid to the Participant not later than sixty (60) days following the date on which the Participant's termination of employment occurs, or as soon as reasonably practicable thereafter. .........7.3 In the event that a Participant's most recent Distribution Election is to receive the distribution of his or her Account in annual installments, the first payment shall be made not later than sixty (60) days following the date on which the Participant's termination of employment occurs, or as soon as reasonably practicable thereafter, and shall be in an amount equal to the dollar balance in the Participant's Account determined under Section 7.1 hereof, divided by the number of annual installments elected. Subsequent annual installments shall be in an amount equal to the dollar value of the Participant's Account determined under Section 7.1 hereof divided by the number of the remaining annual payments, and shall be paid as soon as practicable following each anniversary of the initial payment date until the balance of the Participant's Account is paid in full. .........7.4 The Participants' initial Distribution Elections may not be revoked and shall govern the distribution of the Participants' Accounts. Notwithstanding the foregoing, and except as otherwise provided herein, the Committee may, in its sole discretion, upon application by a Participant, accept an amended Distribution Election from a Participant provided the election is made not prior to the 395th day nor later than the 365th day prior to a distribution of such Participant's Account in accordance with the terms of the Plan; provided further, however, that any Participant who is required to file reports pursuant to Section 16(a) of the Securities and Exchange Act of 1934, as amended, with respect to equity securities of The Southern Company shall not be permitted to amend his or her Distribution Election during any time period for which such Participant is required to file any such reports with respect to the portion of his or her Account invested in accordance with the provisions of Section 6.3 of the Plan, unless the Committee in its sole discretion shall determine otherwise. .........7.5 Upon the death of a Participant prior to the complete distribution his or her Account, the unpaid Account balance shall be paid in the sole discretion of the Committee (a) in a lump sum to the Participant's designated beneficiary within sixty (60) days following the date on which the Committee is provided evidence of the Participant's death (or as soon as reasonably practicable thereafter) or (b) in accordance with the Distribution Election made by such Participant. In the event a beneficiary designation is not on file or the designated beneficiary is deceased or cannot be located, payment will be made to the Participant's estate. .........7.6 Beneficiary designations may be changed by the Participants at any time without the consent of any prior beneficiary. .........7.7 Upon the total disability of a Participant, as determined by the Social Security Administration, prior to the complete distribution of his or her Account, the unpaid balance of his or her Account shall be paid in the sole discretion of the Committee (a) in a lump sum to the Participant or his or her legal representative within sixty (60) days following the date on which the Committee receives notification of the determination of disability by the Social Security Administration (or as soon as reasonable practicable thereafter) or (b) in accordance with the Participant's Deferral Election. .........7.8 Upon application made by a Participant, his or her designated beneficiary, or an authorized legal representative, the Committee may in its sole discretion determine to accelerate payments or, in the event of death or total disability (as determined by Social Security Administration), may extend or otherwise make payments in a manner different from the manner in which such payment would otherwise be made under the Participant's Deferral Election in the absence of such determination. ARTICLE VIII Miscellaneous Provisions
.........8.1 Neither the Participant, his or her beneficiary, nor his or her legal representative 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 non-assignable and nontransferable. Any attempt to assign or transfer the right to payments of this Plan shall be void and have no effect. .........8.2 An Employing Company maintaining an Account for the benefit of a Participant shall neither reserve nor specifically set aside funds for the payment of its obligations under the Plan, and such obligations shall be paid solely from the general assets of the Employing Companies. Notwithstanding that a Participant shall be entitled to receive the balance of his or her Account under the Plan, the assets from which such amount may be paid shall at all times be subject to the claims of the creditors of the Participants' Employing Companies. .........8.3 The Plan may be amended, modified, or terminated by the Board of Directors in its sole discretion at any time and from time to time; provided, however, that no such amendment, modification, or termination shall impair any rights to any amounts which have been earned or deferred under the Plan prior to such amendment, modification, or termination. Payment in full in cash of the amount credited to a Participant's Account as of the date of any amendment, modification of termination of the Plan shall not be deemed to be an impairment of the Participant's rights under the Plan. The Plan may also be amended or modified by the Committee if such amendment or modification does not involve a substantial increase in cost to any Employing Company. .........8.4 It is expressly understood and agreed that the payments made in accordance with the Plan are in addition to any other benefits or compensation to which a Participant may be entitled or for which he or she may be eligible, whether funded or unfunded, by reason of his or her employment with any Employing Company. .........8.5 There shall be deducted from each payment under the Plan the amount of any tax required by any governmental authority to be withheld and paid over by an Employing Company to such governmental authority for the account of the person entitled to such distribution. .........8.6 Any Compensation or Incentive Pay deferred by a Participant while employed by an Employing Company shall not be considered "compensation," as the term is defined in the Employee Savings Plan, the Employee Stock Ownership Plan, or the Pension Plan. Distributions from a Participant's Account shall not be considered wages, salaries or compensation under any other employee benefit plan. .........8.7 No provision of this Plan shall be construed to affect in any manner the existing rights of an Employing Company to suspend, terminate, alter, modify, whether or not for cause, the employment relationship of the Participant and his or her Employing Company. .........8.8 This Plan, and all rights under it, shall be governed by and construed in accordance with the laws of the State of Georgia. .........IN WITNESS WHEREOF, this Amended and Restated Deferred Compensation Plan has been executed pursuant to resolutions of the Board of Directors of Southern Company Services, Inc., this ___ day of March, 1998, to be effective as provided herein. ......... SOUTHERN COMPANY SERVICES, INC. ......... By:______________________________ ......... C. Alan Martin ..... Vice President, Human Resources Attest: By: ______________________________ Tommy Chisholm Secretary
EXHIBIT 10(a)69 SOUTHERN COMPANY PERFORMANCE DIVIDEND PLAN
EXHIBIT 10(a)69 SOUTHERN COMPANY PERFORMANCE DIVIDEND PLAN AMENDED AND RESTATED TROUTMAN SANDERS LLP NationsBank Plaza 600 Peachtree Street, N.E., Suite 5200 Atlanta, Georgia 30308 (404) 885-3000 Effective January 1, 1998
SOUTHERN COMPANY PERFORMANCE DIVIDEND PLAN Purposes The purposes of the Southern Company Performance Dividend Plan are to provide a financial incentive which will focus the efforts of certain key employees on areas which will have a direct and significant influence on corporate performance and to provide the potential for levels of compensation which will enhance the Employing Companies' abilities to attract, retain and motivate such key employees. In order to achieve these objectives, the Plan will be based upon corporate performance as measured by total shareholder return or such other performance measure which the Committee may determine under the terms of the Plan. ARTICLE I Definitions For purposes of the Plan, the following terms shall have the following meanings unless a different meaning is plainly required by the context: 1.1 "Annual Dividend" shall mean the aggregate, annual dividend declared by Southern Company on Common Stock for the Plan Year in which an Award is made. 1.2 "Award" shall mean the awards granted pursuant to Article IV hereof. 1.3 "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. 1.4 "Board of Directors" shall mean the Board of Directors of Southern Company Services, Inc. 1.5 "Business Combination" shall mean a reorganization, merger or consolidation of Southern Company or sale or other disposition of all or substantially all of the assets of Southern Company. 1.6 "Committee" shall mean the Compensation Committee of the Board of Directors of Southern Company. 1.7 "Common Stock" shall mean the common stock of Southern Company. 1.8 "Computation Period" shall mean a four-year period commencing the first day of January of each year, provided, however, that the Computation Period for the first three years beginning in the year of the effective date of the Plan shall be one year, two years and three years, respectively, beginning January 1, 1997. 1.9 "Consummation" shall mean the completion of the final act necessary to complete a transaction as a matter of law, including, but not limited to, any required approvals by the corporation's shareholders and board of
SOUTHERN COMPANY PERFORMANCE DIVIDEND PLAN Purposes The purposes of the Southern Company Performance Dividend Plan are to provide a financial incentive which will focus the efforts of certain key employees on areas which will have a direct and significant influence on corporate performance and to provide the potential for levels of compensation which will enhance the Employing Companies' abilities to attract, retain and motivate such key employees. In order to achieve these objectives, the Plan will be based upon corporate performance as measured by total shareholder return or such other performance measure which the Committee may determine under the terms of the Plan. ARTICLE I Definitions For purposes of the Plan, the following terms shall have the following meanings unless a different meaning is plainly required by the context: 1.1 "Annual Dividend" shall mean the aggregate, annual dividend declared by Southern Company on Common Stock for the Plan Year in which an Award is made. 1.2 "Award" shall mean the awards granted pursuant to Article IV hereof. 1.3 "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. 1.4 "Board of Directors" shall mean the Board of Directors of Southern Company Services, Inc. 1.5 "Business Combination" shall mean a reorganization, merger or consolidation of Southern Company or sale or other disposition of all or substantially all of the assets of Southern Company. 1.6 "Committee" shall mean the Compensation Committee of the Board of Directors of Southern Company. 1.7 "Common Stock" shall mean the common stock of Southern Company. 1.8 "Computation Period" shall mean a four-year period commencing the first day of January of each year, provided, however, that the Computation Period for the first three years beginning in the year of the effective date of the Plan shall be one year, two years and three years, respectively, beginning January 1, 1997. 1.9 "Consummation" shall mean the completion of the final act necessary to complete a transaction as a matter of law, including, but not limited to, any required approvals by the corporation's shareholders and board of directors, the transfer of legal and beneficial title to securities or assets and the final approval of the transaction by any applicable domestic or foreign governments or agencies. 1.10 "Control" shall mean, in the case of a corporation, Beneficial Ownership of more than 50% of the combined voting power of the corporation's Voting Securities, or in the case of any other entity, Beneficial Ownership of more than 50% of such entity's voting equity interests. 1.11 "Employing Company" shall mean Southern Company Services, Inc., or any other affiliate or subsidiary (direct or indirect) of Southern Company, which the Board of Directors may from time to time determine to bring under the Plan and which shall adopt the Plan, and any successor of any of them. 1.12 "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. 1.13 "Group" shall mean group within the meaning of Section 14(d) of the Exchange Act. 1.14 "Incumbent Board" shall mean those individuals who constitute the Southern Board as of the Effective Date
plus any individual who shall become a director subsequent to such date whose election or nomination for election by Southern Company's shareholders was approved by a vote of at least 75% of the directors then comprising the Incumbent Board. Notwithstanding the foregoing, no individual who shall become a director of the Southern Board subsequent to the Effective Date whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Regulations promulgated under the Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Southern Board shall be a member of the Incumbent Board. 1.15 "Key Employee" shall mean any person who is or was employed by an Employing Company who has been granted Stock Options. 1.16 "Participant" shall mean a Key Employee who satisfies the criteria set forth in Article III. 1.17 "Payment Date" shall mean the date the check evidencing an Award is endorsed by an authorized person of an Employing Company. 1.18 "Peer Group Common Stock" shall mean the common stock of the Peer Group Companies. 1.19 "Peer Group Companies" shall mean those Companies designated by Goldman Sachs as the 80 Utility Peer Group Companies as published quarterly and as composed from time to time. In the event that Goldman Sachs no longer publishes the 80 Utility Peer Group Companies, the Committee shall choose such other and similar list of national peer group companies as published by a similarly nationally recognized firm. 1.20 "Performance Based" shall mean compensation which qualifies as "performance based" within the meaning of Code Section 162(m)(4)(c) and the regulations thereunder. 1.21 "Permanent Disability" shall mean such permanent disability as defined in The Southern Company Pension Plan. 1.22 "Person" shall mean any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of Exchange Act. 1.23 "Phantom Stock" shall mean phantom shares of Common Stock as defined by The Southern Company Deferred Compensation Plan. 1.24 "Plan" shall mean the Southern Company Performance Dividend Plan. 1.25 "Plan Termination" shall mean the termination of the Plan by Southern Company or an Employing Company following a Southern Change in Control unless an equitable arrangement (embodied in an ongoing substitute or replacement plan) has been made with respect to the Plan in connection with the Southern Change in Control. For purposes of this Plan, an ongoing substitute or alternative plan shall be considered an "equitable arrangement" if a nationally recognized compensation consulting firm chosen by the Committee opines in writing that the postSouthern Change in Control plan is an equitable substitute or replacement of the Plan, and that such substitute or alternative plan provides substantially similar target opportunities and a substantially similar level of performance difficulty. 1.26 "Plan Year" shall mean the calendar year. 1.27 "Retirement" shall mean the termination of employment with an Employing Company under the terms of The Southern Company Pension Plan or such other retirement or early retirement plan or arrangement which the Committee shall adopt and make available to a Participant. 1.28 "Southern Board" shall mean the Board of Directors of The Southern Company. 1.29 "Southern Change in Control" shall mean any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern Company's Voting Securities; provided, however, that for purposes of this subsection
(i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control: (A) any acquisition directly from Southern Company; (B) any acquisition by Southern Company; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Southern or any corporation controlled by Southern Company; (D) any acquisition by a qualified pension plan or publicly held mutual fund; (E) any acquisition by an Employee or Group composed exclusively of Employees; or (F) any Business Combination which would not otherwise constitute a change in control because of the application of clauses (A), (B) and (C) of Section 1.29(iii). (ii) A change in the composition of the Southern Board whereby individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Southern Board; or (iii) Consummation of a Business Combination, unless, following such Business Combination, all of the following three conditions are met: (A) all or substantially all of the individuals and entities who held Beneficial Ownership, respectively, of Southern Company's Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, 65% or more of the combined voting power of the Voting Securities of the corporation surviving or resulting from such Business Combination, (including, without limitation, a corporation which as a result of such transaction holds Beneficial Ownership of all or substantially all of Southern Company's Voting Securities or all or substantially all of Southern Company's assets) (such surviving or resulting corporation to be referred to as "Surviving Company"), in substantially the same proportions as their ownership, immediately prior to such Business Combination, of Southern Company's Voting Securities; (B) no Person (excluding any corporation resulting from such Business Combination, qualified pension plan, publicly held mutual fund, Group composed exclusively of Employees or employee benefit plan (or related trust) of Southern Company, its subsidiaries or Surviving Company) holds Beneficial Ownership, directly or indirectly, of 20% or more of the combined voting power of the then outstanding Voting Securities of Surviving Company except to the extent that such ownership existed prior to the Business Combination; and (C) at least a majority of the members of the board of directors of Surviving Company were members of the Incumbent Board at the earlier of the date of execution of the initial agreement, or of the action of the Southern Board, providing for such Business Combination. 1.30 "Southern Company" shall mean The Southern Company. 1.31 "Subsidiary Change in Control" shall mean the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 50% or more of the combined voting power of the then outstanding Voting Securities of an Employing Company; provided, however, that for purposes of this Subsection 1.31, any acquisition by an Employee, or Group composed entirely of Employees, any qualified pension plan, publicly held mutual fund or any employee benefit plan (or related trust) sponsored or maintained by Southern Company or any corporation Controlled by Southern Company shall not constitute a Change in Control; (ii) Consummation of a reorganization, merger or consolidation of an Employing Company (an "Employing Company Business Combination"), in each case, unless, following such Employing Company Business Combination, Southern Company Controls the corporation surviving or resulting from such Employing Company Business Combination; or (iii) Consummation of the sale or other disposition of all or substantially all of the assets of an Employing Company to an entity which Southern Company does not Control.
1.32 "Southern Termination" shall mean the following: (a) The Consummation of a reorganization, merger or consolidation of Southern Company under circumstances where either (i) Southern Company is not the surviving corporation or (ii) Southern Company's Voting Securities are no longer publicly traded; (b) The Consummation of a sale or other disposition of all or substantially all of Southern Company's assets; or (c) The Consummation of an acquisition by any Person of Beneficial Ownership of all of Southern Company's Voting Securities such that Southern Company's Voting Securities are no longer publicly traded. 1.33 "Subsidiary Employee" shall mean an Employee of an Employing Company which has undergone a Subsidiary Change in Control. 1.34 "Stock Option" shall mean those options to acquire Common Stock awarded to Participants pursuant to the Southern Company Performance Stock Plan. 1.35 "Termination for Cause" or "Cause" shall mean the termination of a Participant's employment by an Employing Company under any of the following circumstances: (a) The Participant willfully neglects or refuses to discharge his or her duties to the Employing Company as an employee or refuses to comply with any lawful or reasonable instructions given to him or her by the Employing Company without reasonable excuse; (b) The Participant is guilty of gross misconduct. For purposes of this Plan, the following acts shall constitute gross misconduct: (i) any act involving fraud or dishonesty or breach of appropriate regulations of competent authorities; (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 Southern Company or an Employing Company or would bring Southern Company or an Employing Company any into contempt, ridicule or would reasonably shock or offend any community in which Southern Company or an Employing Company is located; (iii) attendance at work in a state of intoxication or otherwise being found in possession at his or her workplace 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 or other person during the course of the Participant's employment; and (v) conviction of any felony or misdemeanor involving moral turpitude. 1.36 "Total Shareholder Return" or "TSR" shall mean the total amount an investor would receive by investing $100 per quarter in Common Stock or in Peer Group Common Stock, as the case may be, as determined by measuring the total dividends which would have been paid on such Common Stock or Peer Group Common Stock by reinvesting such dividends on a quarterly basis in additional shares of Common Stock or Peer Group Common Stock as the case may be and the total gain or loss on such Common Stock or Peer Group Common Stock as if such stock had been sold at the closing price on the last day of the respective Computation Period. 1.37 "Voting Securities" shall mean the outstanding voting securities of a corporation entitling the holder thereof to vote generally in the election of such corporation's directors. Where the context requires, words in the masculine gender shall include the feminine and neuter genders, words in the singular shall include the plural, and words in the plural shall include the singular.
ARTICLE II
ARTICLE II Plan Administration. 2.1 The Plan shall be administered by the Committee. The Committee is authorized to establish such rules and to appoint such agents as it deems appropriate for the proper administration of the Plan, and to make such determinations and to take such steps in connection with the Plan or the benefits provided hereunder as it deems necessary or advisable. 2.2 Plan Interpretation. The Committee shall have the exclusive authority to interpret the Plan. The decision of the Committee with respect to any question arising as to the grant of an Award to a Participant in the Plan, the amount, term, form, and time of payment of Awards under the Plan, or any other matter concerning the Plan shall be final, conclusive, and binding on both Southern Company and the Participants. ARTICLE III Participants 3.1 Participation in the Plan shall be limited to Key Employees of the Employing Companies, or in the case of death, their estates or beneficiaries, holding Stock Options as of the last day of any Computation Period. 3.2 Any Participant who terminates his or her employment with an Employing Company and who is not immediately re-employed with an affiliate of an Employing Company prior to the Payment Date of any Award due under this Plan for reasons other than death, Permanent Disability, or Retirement shall forfeit any Award due under this Plan. If a Participant terminates his or her employment by reason of death, Permanent Disability or Retirement, such Participant or his or her estate or representative shall continue to be eligible to receive Awards with respect to any Stock Options which remain outstanding in accordance with their terms. 3.3 Notwithstanding any other provision of this Plan, no Participant whose employment is terminated by an Employing Company for Cause shall be eligible to receive an Award under this Plan. 3.4 Notwithstanding any other provision of this Plan, the maximum Award for any Plan Year payable to any Participant with respect to Stock Options awarded during such Plan Year shall be six million dollars ($6,000,000). 3.5 In the case of an individual who becomes a Participant subsequent to January 1, 1997, such Participant shall participate in each Computation Period which ends not less than two (2) years after becoming a Participant. A new four-year measuring period shall begin each year in order to recognize the need to link objectives over longer periods of time, to recognize changes in the operating environment, and to encourage Participants to make long-term decisions. ARTICLE IV Performance Dividend Award 4.1 Each Participant shall receive an Award on the last day of each Computation Period which shall be based upon the number of vested and unvested, outstanding Stock Options held by the Participant on the last day of such Computation Period multiplied by the Annual Dividend multiplied by the Payout Percentage determined in accordance with the following schedule:
Percentile of Southern TSR Versus Peer Group TSR 90th and above 70th 50th 30th Below 30th Payout Percentage 100% 75% 50% 25% 0%
The Payout Percentage for performance levels falling between the percentiles listed above shall be interpolated on a straight line basis for any given Plan Year. The Committee may increase the Payout Percentage by up to a factor of two (2) with respect to such Participants and under such circumstances as the Committee in its discretion shall deem appropriate. 4.2 The Payout Percentage set forth herein shall be based on Southern Company's Total Shareholder Return during a Computation Period as compared to the Total Shareholder Return ranking of the Peer Group Companies for such Computation Period. The Total Shareholder Return of the Peer Group Companies shall be determined annually by an independent certified public accountant and shall be properly adjusted and annualized by such accountant so that the Peer Group Companies' Total Shareholder Return may be accurately compared to that of Southern Company. 4.3 Notwithstanding the above provisions, an Award shall not be granted for any Computation Period ending with the Plan Year in which the current earnings of Southern Company are less than the amount necessary to fund dividends on its Common Stock at the rate such dividends were paid for the immediately preceding Plan Year. 4.4 Awards shall be paid in cash on or before the 15th day of the third month following the last day of the Computation Period or, with respect to those Participants who are otherwise eligible to participate in the Southern Company Deferred Compensation Plan, may be deferred by exercising an option to do so no later than 12 months before any amount would otherwise be distributed pursuant to this Section 4.4. If an election is made to defer the receipt of the amount of any Award, such amount shall be deemed to be invested in Phantom Stock. Dividend equivalents earned on such Phantom Stock shall be automatically invested in additional shares of Phantom Stock. ARTICLE V Change in Control and Southern Termination 5.1 Southern Change in Control. Notwithstanding any other provision of this Plan to the contrary, in the event of a Plan Termination within two (2) years following a Southern Change in Control, each Participant who is an employee of his Employing Company on the date of such Plan Termination shall be entitled to receive within thirty (30) days of the Plan Termination, cash for each Award held as of such date, based on actual performance under Section 4.1 hereof determined as of the date of the Plan Termination, and the Annual Dividend declared prior to the date of the Plan Termination. 5.2 Subsidiary Change in Control. Notwithstanding any other provision of this Plan to the contrary, in the event of a Subsidiary Change in Control, each Subsidiary Employee on the date of such Change in Control whose employment is not transferred upon such Subsidiary Change in Control to another Employing Company shall be entitled to receive within thirty (30) days of the Subsidiary Change in Control, cash for each Award held as of such date, based on actual performance under Section 4.1 hereof determined as of the date on which the Subsidiary Change in Control shall have occurred, and the Annual Dividend declared prior to the date of the Subsidiary Change in Control. 5.3 Southern Termination. Notwithstanding any other provision of this Plan to the contrary, in the event of a Southern Termination, each Participant who is an employee of his Employing Company on the date of such Southern Termination shall be entitled to receive within thirty (30) days of the Southern Termination, cash for each Award held as of such date, based on actual performance under Section 4.1 hereof determined as of the date on which the Southern Termination shall have occurred, and the Annual Dividend declared prior to the date of the Southern Termination. ARTICLE VI Miscellaneous Provisions 6.1 Neither the Participant, his or her beneficiary, nor his or her personal representative 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 Plan shall be void and have no effect.
6.2 An Employing Company shall neither reserve nor otherwise set aside funds for the payments of any Awards under this Plan. 6.3 Except for the provisions of Article V, which may not be amended, modified or terminated following a Southern Change in Control, a Subsidiary Change in Control or a Southern Termination, the Plan may be amended, modified, or terminated by the Board of Directors in its sole discretion at any time and from time to time; provided, however, that no such amendment, modification, or termination shall impair any rights to payments which have accrued under the Plan prior to such amendment, modification, or termination. 6.4 It is expressly understood and agreed that Awards made in accordance with the Plan are in addition to any other benefits or compensation to which a Participant may be entitled or for which he or she may be eligible, whether funded or unfunded, by reason of his or her employment with an Employing Company. 6.5 There shall be deducted from the payment of each Award under the Plan the amount of any tax required by any governmental authority to be withheld and paid over by an Employing Company to such governmental authority for the account of the person entitled to such distribution. 6.6 Any Awards paid to a Participant while employed by an Employing Company shall not be considered in the calculation of the Participant's benefits under any other employee welfare or pension benefit plan maintained by an Employing Company, unless otherwise specifically provided therein. 6.7 This Plan, and all rights under it, shall be governed by and construed in accordance with the laws of the State of Georgia. 6.8 Pooling Accounting. Notwithstanding anything to the contrary herein, if, but for any provision of this Plan, a Change in Control transaction would otherwise be accounted for as a pooling-of-interests under APB No.16 ("Pooling Accounting") (after giving effect to any and all other facts and circumstances affecting whether such Change in Control transaction would use Pooling Accounting), such provision or provisions of this Plan which would otherwise cause the Change in Control transaction to be ineligible for Pooling Accounting shall automatically be void and ineffective in such a manner and to the extent that by eliminating such provision or provisions of this Plan, Pooling Accounting would be required for such Change in Control transaction and Pooling Accounting is in fact used for such Change in Control transaction.
IN WITNESS WHEREOF, Southern Company Services, Inc., through its duly authorized officers, hereby adopts the Southern Company Performance Dividend Plan this ____ day of _____________, 1999, to be effective ______________, 1998. SOUTHERN COMPANY SERVICES, INC. By: Christopher C. Womack Senior Vice President, Human Resources Attest: By: Tommy Chisholm Secretary [CORPORATE SEAL]
EXHIBIT 10(a)71 SECOND AMENDMENT TO THE SOUTHERN COMPANY PENSION PLAN
IN WITNESS WHEREOF, Southern Company Services, Inc., through its duly authorized officers, hereby adopts the Southern Company Performance Dividend Plan this ____ day of _____________, 1999, to be effective ______________, 1998. SOUTHERN COMPANY SERVICES, INC. By: Christopher C. Womack Senior Vice President, Human Resources Attest: By: Tommy Chisholm Secretary [CORPORATE SEAL]
EXHIBIT 10(a)71 SECOND AMENDMENT TO THE SOUTHERN COMPANY PENSION PLAN WHEREAS, the Board of Directors of Southern Company Services, Inc. (the "Company") heretofore adopted The Southern Company Pension Plan, as amended and restated (the "Plan"), effective January 1, 1997; and WHEREAS, the Company desires to amend the Plan to clarify the grant of prior service credit to certain employees formerly employed by Commonwealth Edison of Indiana; and WHEREAS, the Company also desires to amend the Plan to discontinue eligibility under the Plan for employees classified as temporary employees and to cease the accrual of benefits of any temporary employees who may be participating in the Plan effective as of August 31, 1998; and WHEREAS, the Company also desires to amend the Plan to reflect the corporate name change of certain Employing Companies; and WHEREAS, the Company also desires to amend the Plan to make certain other technical and miscellaneous corrections; and WHEREAS, the Company is authorized pursuant to Section 13.1 of the Plan to amend the Plan at any time. NOW, THEREFORE, the Company hereby amends the Plan as follows to be effective as provided herein: 1. Effective January 1, 1998, Section 1.16 of the Plan, as amended by the First Amendment to the Plan, is further amended by deleting the last sentence of such Section and substituting the following in lieu thereof: Notwithstanding the preceding, "Employee" shall not mean any person who is classified by an Employing Company as an independent contractor regardless of whether such classification is determined to be in error. 2. Effective September 1, 1998, Section 2.5 of the Plan is amended by adding the following sentence to the end of the first paragraph thereof:
EXHIBIT 10(a)71 SECOND AMENDMENT TO THE SOUTHERN COMPANY PENSION PLAN WHEREAS, the Board of Directors of Southern Company Services, Inc. (the "Company") heretofore adopted The Southern Company Pension Plan, as amended and restated (the "Plan"), effective January 1, 1997; and WHEREAS, the Company desires to amend the Plan to clarify the grant of prior service credit to certain employees formerly employed by Commonwealth Edison of Indiana; and WHEREAS, the Company also desires to amend the Plan to discontinue eligibility under the Plan for employees classified as temporary employees and to cease the accrual of benefits of any temporary employees who may be participating in the Plan effective as of August 31, 1998; and WHEREAS, the Company also desires to amend the Plan to reflect the corporate name change of certain Employing Companies; and WHEREAS, the Company also desires to amend the Plan to make certain other technical and miscellaneous corrections; and WHEREAS, the Company is authorized pursuant to Section 13.1 of the Plan to amend the Plan at any time. NOW, THEREFORE, the Company hereby amends the Plan as follows to be effective as provided herein: 1. Effective January 1, 1998, Section 1.16 of the Plan, as amended by the First Amendment to the Plan, is further amended by deleting the last sentence of such Section and substituting the following in lieu thereof: Notwithstanding the preceding, "Employee" shall not mean any person who is classified by an Employing Company as an independent contractor regardless of whether such classification is determined to be in error. 2. Effective September 1, 1998, Section 2.5 of the Plan is amended by adding the following sentence to the end of the first paragraph thereof: Notwithstanding the foregoing, the exclusion set forth in Section 2.6 shall apply with respect to any temporary employee effective as of September 1, 1998. 3. Effective September 1, 1998, Section 2.6 of the Plan is amended by deleting such subsection in its entirety and substituting the following in lieu thereof: 2.6 Exclusion of certain categories of employees. Notwithstanding any other provision of this Article II, leased employees and, effective September 1, 1998, any individuals classified by an Employing Company as temporary employees, regardless of whether either such classification is determined to be in error, shall not be eligible to participate in the Plan. Notwithstanding the preceding sentence, temporary employees, defined as Employees in Section 1.16 and participating in the Plan prior to July 1, 1991, are eligible to participate in the Plan up through and including August 31, 1998. 4. Effective January 1, 1998, Section 16.1(b) of the Plan as amended by the First Amendment to the Plan is further amended by deleting such subsection (b) in its entirety and substituting the following in lieu thereof:
(b) Former Commonwealth Edison of Indiana Employees. Effective January 1, 1998, notwithstanding any other provision of the Plan to the contrary, any former employee of Commonwealth Edison of Indiana ("ComEd") who was employed by Southern Energy Resources, Inc. on or before December 31, 1997 and is set forth on a schedule of employees acknowledged by the Retirement Board (hereafter "January 1 ComEd Employees") shall be eligible to participate in the Plan effective January 1, 1998. In addition, any former employee of ComEd who becomes employed by Southern Energy Resources, Inc. on or after January 1, 1998 but prior to April 1, 1998 (hereafter "Date of Employment") and is set forth on the schedule of employees acknowledged by the Retirement Board (hereafter "Pre-April 1 ComEd Employees") shall become a Participant as of the first day of the month coincident with or next following such employee's Date of Employment. The following provisions of this subparagraph (b) shall also apply with respect to all January 1 ComEd Employees and Pre-April 1 ComEd Employees (hereafter jointly referred to as "ComEd Scheduled Employees"): (1) Such ComEd Scheduled Employee, if and when he attains his Early Retirement Date, Normal Retirement Date, or Deferred Retirement Date, or terminates service for any reason subject to the requirements of Section 8.1 or 8.2, shall be entitled to receive Retirement Income based on both his Accredited Service with an Employing Company and the service accrued under the Commonwealth Edison Company of Indiana Service Annuity System Plan (the "ComEd Plan") which shall be treated as if Accredited Service under this Plan. To calculate such ComEd Scheduled Employee's Retirement Income, the ComEd Scheduled Employee's Accrued Retirement Income, as determined in accordance with Section 5.1, shall first be reduced by the Employee's accrued benefit in the ComEd Plan, determined as if he retired from ComEd at his normal retirement age, as that term is defined in the ComEd Plan on December 31, 1997. Thereafter, such Employee's Retirement Income shall be subject to applicable reductions, if any, in accordance with Article V, Section 8.1 and Section 8.2, as appropriate. (2) For purposes of calculating such ComEd Scheduled Employee's Social Security Offset under Section 5.4, the Social Security Offset shall be determined by using the actual salary history of the ComEd Scheduled Employee during his employment with any Affiliated Employer, and ComEd. If the actual salary history is not available from ComEd, such history shall be estimated in accordance with Section 5.4. (3) For vesting purposes, such ComEd Scheduled Employee shall be entitled to receive Vesting Years of Service as provided in Section 1.41 and, in addition, shall be entitled to vesting service equal to the sum of the years of service accrued under the ComEd Plan. 5. Effective September 1, 1998, Section 17.1 (d) is amended by adding the following sentence to the end thereof: Notwithstanding the preceding, in the event a SEPCO Employee is classified as a temporary employee and is eligible to participate in the Plan as such in accordance with this Article XVII, such SEPCO Employee shall be ineligible to participate in the Plan on and after September 1, 1998. 6. Effective January 1, 1998, Section 1.14 of the SEPCO Schedule which is incorporated in the Plan by the First Amendment thereto, is amended by deleting the last sentence of such section and substituting the following in lieu thereof: Notwithstanding the preceding, "Employee" shall not mean any person who is classified by the Company as an independent contractor regardless of whether such classification is determined to be an error. 7. Effective September 1, 1998, Section 3.07 of the SEPCO Schedule which is incorporated into the Plan by the First Amendment thereto, is amended by deleting such section in its entirety and substituting the following in lieu thereof: Section 3.07 Notwithstanding any other provision of this Article 3 of the SEPCO Schedule, Leased Employees and, effective September 1, 1998, any individuals classified by the Company as temporary employees, regardless of whether either such classification is determined to be an error, shall not be eligible to participate in the Plan.
of whether either such classification is determined to be an error, shall not be eligible to participate in the Plan. Notwithstanding the preceding sentence, temporary employees as defined in Section 1.14 of the SEPCO Schedule who were participating in the SEPCO Plan as temporary employees prior to October 13, 1994, shall be eligible to participate in the Plan up to and including August 31, 1998. 8. Effective July 1, 1998, Appendix A of the Plan is amended by deleting such Appendix in its entirety and substituting the following in lieu thereof: APPENDIX A THE SOUTHERN COMPANY PENSION PLAN EMPLOYING COMPANIES AS OF JULY 1, 1998 Alabama Power Company Georgia Power Company Gulf Power Company Mississippi Power Company Savannah Electric and Power Company Southern Communications Services, Inc. Southern Company Energy Solutions, Inc. Southern Company Services, Inc. Southern Energy Resources, Inc. Southern Nuclear Operating Company, Inc. 9. Except as amended herein by this Second Amendment, the Plan shall remain in full force and effect. IN WITNESS WHEREOF, Southern Company Services, Inc., through its duly authorized officer, has adopted this Second Amendment to The Southern Company Pension Plan pursuant to resolutions of the Board of Directors of Southern Company Services, Inc. this ____ day of __________, 1998, to be effective as stated herein. SOUTHERN COMPANY SERVICES, INC. By: Title: ATTEST By: ________________________ Its: ________________________
THIRD AMENDMENT TO THE SOUTHERN COMPANY PENSION PLAN WHEREAS, the Board of Directors of Southern Company Services, Inc. (the "Company") heretofore adopted The Southern Company Pension Plan, as amended and restated (the "Plan"), effective January 1, 1997; and WHEREAS, the Company desires to amend the Plan to modify the definition of Earnings for appliance salespersons to include certain nonproductive pay earnings types; and WHEREAS, the Company desires to amend the Plan to grant prior service credit to certain employees formerly employed by Commonwealth Energy Systems ("CES") and to provide for an offset of the CES retirement benefit; and
THIRD AMENDMENT TO THE SOUTHERN COMPANY PENSION PLAN WHEREAS, the Board of Directors of Southern Company Services, Inc. (the "Company") heretofore adopted The Southern Company Pension Plan, as amended and restated (the "Plan"), effective January 1, 1997; and WHEREAS, the Company desires to amend the Plan to modify the definition of Earnings for appliance salespersons to include certain nonproductive pay earnings types; and WHEREAS, the Company desires to amend the Plan to grant prior service credit to certain employees formerly employed by Commonwealth Energy Systems ("CES") and to provide for an offset of the CES retirement benefit; and WHEREAS, the Company desires to amend the Plan to grandfather certain employees of Southern Company Energy Marketing L.P. who are rehired by an Employing Company; and WHEREAS, the Company desires to clarify Plan language concerning the Retirement Board's responsibility for controlling and managing Plan assets and to clarify the calculation of the level income form of payment with respect to Alternate Payees; and WHEREAS, the Company is authorized pursuant to Section 13.1 of the Plan to amend the Plan at any time. NOW, THEREFORE, the Company hereby amends the Plan as follows to be effective as provided herein: 1. Effective July 1, 1998, Subsection 1.13(b) of the Plan shall be amended by adding the following new language to the end thereof: Effective as of July 1, 1998, "Earnings" shall also include, for appliance salespersons, certain nonproductive pay earnings types as determined from time to time by the Board of Directors and set forth on Appendix B to the Plan, which Appendix may be updated from time to time. 2. Effective January 1, 1998, Section 5.5 of the Plan shall be amended by deleting the last sentence thereof and by adding the following new language: The Federal primary Social Security benefit used in calculating an Employee's Retirement Income and adjustment described in the preceding sentence shall be determined by using the salary history of the Employee during his employment with any Affiliated Employer, as calculated in accordance with Section 5.4. Notwithstanding the preceding sentence with respect to an Alternate Payee, the adjustment described in this paragraph shall be determined by using the Alternate Payee's actual Social Security salary history and estimated age 65 Social Security benefit provided that the Alternate Payee secures this information for the Retirement Board. 3. Effective January 1, 1999, Article XVI of the Plan shall be amended by adding the following to the end thereof: (c) Former Commonwealth Energy System Employees. (1) Effective January 1, 1999, notwithstanding any other provision of the Plan to the contrary, any former employees of Commonwealth Energy System ("CES") who were employed by Southern Energy Resources, Inc. and are set forth on a schedule of employees acknowledged by the Retirement Board (hereinafter "CES Employees") shall be eligible to become a Participant as of the first day of the month coincident with or next following the later of the CES Employee's employment date or the date on which he first completes an Eligibility Year of Service as provided in Paragraph (5) below.
(2) CES Employees who (A) were actively employed by CES on January 1, 1997 and (B) attain their fortieth (40th) birthday on or before January 1, 2002 shall not be subject to provisions of Article XV of the Plan. (3) If and when a CES Employee attains his Early Retirement Date, Normal Retirement Date, or Deferred Retirement Date, or terminates service for any reason subject to the requirements of Section 8.1 or 8.2, he shall be entitled to receive Retirement Income based on both his Accredited Service with an Employing Company and the Credited Service as defined under The Pension Plan for Employees of Commonwealth Energy System and Subsidiary Companies (the "CES Plan") which shall be treated as if Accredited Service under this Plan. However, prior to adjustment for forms of payment, a CES Employee's Retirement Income will be reduced by the Actuarial Equivalent as defined in Appendix D of the applicable amounts set forth in Appendix C. Thereafter, such Employee's benefit shall be subject to applicable reductions, if any, in accordance with Article V, Section 8.1 and Section 8.2, as appropriate. (4) For purposes of calculating Retirement Income, such CES Employee's actual salary history with CES shall be included. With respect to determining the Social Security Offset, if the actual salary history is not available from CES, such history shall be estimated in accordance with Section 5.4. (5) For vesting and participation purposes, such CES Employee shall be entitled to receive Vesting and Eligibility Years of Service as provided under the Plan and, in addition, shall be entitled to vesting and eligibility service equal to the sum of the Years of Service as defined and accrued under the CES Plan. (6) Notwithstanding any provision in this Plan to the contrary, prior to the offset described in Paragraph 3 above, a CES Employee will be entitled to his Retirement Income or his Retirement Allowance or vested benefit determined under Appendix D as of the earlier of his retirement, termination of employment, or December 31, 2001 whichever has the greater Actuarial Equivalent value as defined in Appendix D. Such determination will be made prior to any adjustment for forms of payments. 4. Effective February 11, 1999, Section 10.9 of the Plan shall be amended by deleting such section in its entirety and replacing it with the following: Section 10.9 Areas in which the Retirement Board does not have responsibility. The Retirement Board shall not have responsibility with respect to control or management of the assets of the Plan insofar as such control or management is assigned under the Trust Agreement to a Person, including but not limited to an Asset Manager, as those terms are defined under the Trust Agreement. The responsibility for providing a procedure for establishing and carrying out a funding policy and method for the Plan consistent with the objectives of the Plan and the requirements of Title I of ERISA shall be that of The Southern Company Pension Fund Investment Review Committee. 5. Effective January 1, 1999, Section 15.1 of the Plan shall be amended by adding the following new language to the end thereof: (e) Notwithstanding paragraph (c) of this Section 15.1, employees that have been previously employed by an Employing Company, transferred to Southern Company Energy Marketing, L.P., subsequently transfer back to an Employing Company, and are not described in paragraph (a) of this Section 15.1, shall not be subject to this Article XV but shall be subject to eligibility to participate in the Plan in accordance with the provisions of Article II. 6. Except as amended herein by this Third Amendment, the Plan shall remain in full force and effect. IN WITNESS WHEREOF, Southern Company Services, Inc., through its duly authorized officer, has adopted this Third Amendment to The Southern Company Pension Plan pursuant to resolutions of the Board of Directors
this Third Amendment to The Southern Company Pension Plan pursuant to resolutions of the Board of Directors of Southern Company Services, Inc. this ____ day of __________, 1999, to be effective as stated herein. SOUTHERN COMPANY SERVICES, INC. By: Title: ATTEST By: ________________________ Its: ________________________
APPENDIX B
Nonproductive Pay Earnings Types Earnings Code 003 092 093 095 096 100 106 108 111 112 113 115 116 117 118 119 125 127 442 Earnings Description Salesperson - Hourly Holiday Taken Meetings Meetings - Safety Disability 100% Disability Extended Approval Leave - Death Occupational Injury Jury Duty Training Safety Training Vacation Vacation Special Circumstances Vacation FMLA Employee Vacation FMLA Family Care Time Off With Pay Holiday Banked - Taken Vacation In Lieu Of Disability DISABILITY FMLA EMPLOYEE
EXHIBIT 10(a)72 SOUTHERN COMPANY PERFORMANCE STOCK PLAN AMENDED AND RESTATED TROUTMAN SANDERS LLP NationsBank Plaza 600 Peachtree Street, N.E., Suite 5200 Atlanta, Georgia 30308 (404) 885-3000 Effective January 1, 1998
SOUTHERN COMPANY PERFORMANCE STOCK PLAN AMENDED AND RESTATED
APPENDIX B
Nonproductive Pay Earnings Types Earnings Code 003 092 093 095 096 100 106 108 111 112 113 115 116 117 118 119 125 127 442 Earnings Description Salesperson - Hourly Holiday Taken Meetings Meetings - Safety Disability 100% Disability Extended Approval Leave - Death Occupational Injury Jury Duty Training Safety Training Vacation Vacation Special Circumstances Vacation FMLA Employee Vacation FMLA Family Care Time Off With Pay Holiday Banked - Taken Vacation In Lieu Of Disability DISABILITY FMLA EMPLOYEE
EXHIBIT 10(a)72 SOUTHERN COMPANY PERFORMANCE STOCK PLAN AMENDED AND RESTATED TROUTMAN SANDERS LLP NationsBank Plaza 600 Peachtree Street, N.E., Suite 5200 Atlanta, Georgia 30308 (404) 885-3000 Effective January 1, 1998
SOUTHERN COMPANY PERFORMANCE STOCK PLAN AMENDED AND RESTATED Purposes This Southern Company Performance Stock Plan, as amended and restated, is intended to maximize the longterm success of Southern Company, ensure a balanced emphasis on both current and long-term performance, enhance Participants' identification with shareholders' interests, and facilitate the attraction and retention of key individuals with outstanding ability. ARTICLE I Definitions. Whenever used in the Plan, the following terms shall have the meaning set forth below: 1.1 "Award" shall mean, individually and collectively, any Option, Stock Appreciation Right or Restricted Stock granted under the Plan.
EXHIBIT 10(a)72 SOUTHERN COMPANY PERFORMANCE STOCK PLAN AMENDED AND RESTATED TROUTMAN SANDERS LLP NationsBank Plaza 600 Peachtree Street, N.E., Suite 5200 Atlanta, Georgia 30308 (404) 885-3000 Effective January 1, 1998
SOUTHERN COMPANY PERFORMANCE STOCK PLAN AMENDED AND RESTATED Purposes This Southern Company Performance Stock Plan, as amended and restated, is intended to maximize the longterm success of Southern Company, ensure a balanced emphasis on both current and long-term performance, enhance Participants' identification with shareholders' interests, and facilitate the attraction and retention of key individuals with outstanding ability. ARTICLE I Definitions. Whenever used in the Plan, the following terms shall have the meaning set forth below: 1.1 "Award" shall mean, individually and collectively, any Option, Stock Appreciation Right or Restricted Stock granted under the Plan. 1.2 "Award Document" shall mean the written document evidencing the grant of an Award and setting forth the terms and conditions thereof. 1.3 "Base Value" shall mean the Fair Market Value of a Stock Appreciation Right on the date of its grant. 1.4 "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. 1.5 "Board" or "Board of Directors" shall mean the Board of Directors of Southern Company. 1.6 "Code" shall mean the Internal Revenue Code of 1986, as amended. 1.7 "Committee" shall mean the Compensation Committee of the Board of Directors composed solely of not less than three (3) Nonemployee Directors and, to the extent necessary for any Award intended to qualify as Performance Based to so qualify, each member of the Committee shall be an Outside Director. 1.8 "Common Stock" shall mean the common stock of Southern Company. 1.9 "Consummation" shall mean the completion of the final act necessary to complete a transaction as a matter of law, including, but not limited to, any required approvals by the corporation's shareholders and board of directors, the transfer of legal and beneficial title to securities or assets and the final approval of the transaction by any applicable domestic or foreign governments or agencies. 1.10 "Control" shall mean, in the case of a corporation, Beneficial Ownership of more than 50% of the combined
SOUTHERN COMPANY PERFORMANCE STOCK PLAN AMENDED AND RESTATED Purposes This Southern Company Performance Stock Plan, as amended and restated, is intended to maximize the longterm success of Southern Company, ensure a balanced emphasis on both current and long-term performance, enhance Participants' identification with shareholders' interests, and facilitate the attraction and retention of key individuals with outstanding ability. ARTICLE I Definitions. Whenever used in the Plan, the following terms shall have the meaning set forth below: 1.1 "Award" shall mean, individually and collectively, any Option, Stock Appreciation Right or Restricted Stock granted under the Plan. 1.2 "Award Document" shall mean the written document evidencing the grant of an Award and setting forth the terms and conditions thereof. 1.3 "Base Value" shall mean the Fair Market Value of a Stock Appreciation Right on the date of its grant. 1.4 "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. 1.5 "Board" or "Board of Directors" shall mean the Board of Directors of Southern Company. 1.6 "Code" shall mean the Internal Revenue Code of 1986, as amended. 1.7 "Committee" shall mean the Compensation Committee of the Board of Directors composed solely of not less than three (3) Nonemployee Directors and, to the extent necessary for any Award intended to qualify as Performance Based to so qualify, each member of the Committee shall be an Outside Director. 1.8 "Common Stock" shall mean the common stock of Southern Company. 1.9 "Consummation" shall mean the completion of the final act necessary to complete a transaction as a matter of law, including, but not limited to, any required approvals by the corporation's shareholders and board of directors, the transfer of legal and beneficial title to securities or assets and the final approval of the transaction by any applicable domestic or foreign governments or agencies. 1.10 "Control" shall mean, in the case of a corporation, Beneficial Ownership of more than 50% of the combined voting power of the corporation's Voting Securities, or in the case of any other entity, Beneficial Ownership of more than 50% of such entity's voting equity interests. 1.11 "Covered Employee" shall mean a Participant who is, as of the last day of Southern Company's fiscal year in which the Participant shall be required to recognize taxable income with respect to an Award, a "covered employee" within the meaning of Code section 162(m)(3) and the regulations thereunder. 1.12 "Director" shall mean any person who is currently a member of the Board of Directors or of the board of directors of an Employing Company. 1.13 "Disability" shall mean total and permanent disability as determined by the Social Security Administration. 1.14 "Effective Date" shall mean January 1, 1998. 1.15 "Employee" shall mean any person who is currently employed by an Employing Company.
1.16 "Employing Company" shall mean any affiliate or subsidiary (direct or indirect) of Southern Company, which the Board of Directors may from time to time determine to bring under the Plan and which may adopt the Plan, and any successor of any of them. The Employing Companies as of January 1, 1998 are: Alabama Power Company Georgia Power Company Gulf Power Company Mississippi Power Company Savannah Electric and Power Company Southern Communications Services, Inc. Southern Company Services, Inc. Southern Energy Resources, Inc. Southern Nuclear Operating Company, Inc. Southern Company Energy Solutions, Inc. 1.17 "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. 1.18 "Fair Market Value" shall mean the average of the high and low prices at which a share of Common Stock shall have been traded on the respective measurement date, such as the date of grant or the exercise of an Award, or on the next preceding trading day if such date was not a trading date, as reported on the New York Stock Exchange-Composite Transactions Listing, or as otherwise determined by the Committee. In no event shall the Fair Market Value equal less than the par value of the Common Stock. 1.19 "Group" shall mean group within the meaning of Section 14(d) of the Exchange Act. 1.20 "Incentive Stock Option" shall mean a stock option satisfying the requirements of Section 422 of the Code granted pursuant to Section 4.1(b) and designated by the Committee as an Incentive Stock Option. 1.21 "Nonemployee Director" shall mean a Director of Southern Company who is a "nonemployee director" within the meaning of Rule 16b-3 promulgated under the Exchange Act. 1.22 "Nonqualified Stock Option" shall mean an Option, other than an Incentive Stock Option, granted pursuant to Section 4.1(c). 1.23 "Option" shall mean, individually and collectively, an Incentive Stock Option or a Nonqualified Stock Option to purchase Common Stock. 1.24 "Optionee" shall mean a person to whom an Option has been granted under the Plan. 1.25 "Option Price" shall mean the price per share of Common Stock set by the grant of an Option, but in no event less than the Fair Market Value of the Common Stock on the date of grant. 1.26 "Outside Director" shall mean a Director of Southern Company who is an "outside director" within the meaning of Section 162(m) of the Code and the regulations promulgated thereunder. 1.27 "Participant" shall mean any Director or Employee who satisfies the criteria set forth in Article III. 1.28 "Performance-Based" shall mean compensation which qualifies as "performance-based" within the meaning of Code section 162(m)(4)(c) and the regulations thereunder. 1.29 "Person" shall mean any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act. 1.30 "Plan" shall mean this Southern Company Performance Stock Plan, as amended and restated and as may be further amended from time to time. 1.31 "Restricted Stock" shall mean an Award granted pursuant to Section 4.1(e).
1.32 "Retirement" shall mean the termination of service or employment by a Participant on or after age 65 or as otherwise determined by the Committee in its sole discretion. 1.33 "Separation Date" shall mean, as determined by the Committee, the date on which a Participant's service or employment with Southern Company or an Employing Company terminates for reasons other than his transfer of service or employment to Southern Company or another Employing Company. Whether any leave of absence shall constitute a termination of service or employment for the purposes of the Plan shall be determined in each case by the Committee in its sole discretion. 1.34 "Stock Appreciation Right" or "SAR" shall mean a right to any appreciation in value of shares of Common Stock granted pursuant to Section 4.1(d). 1.35 "Southern Company" shall mean The Southern Company. 1.36 "Southern Termination" shall mean the following: (a) The Consummation of a reorganization, merger or consolidation of Southern Company under circumstances where either (i) Southern Company is not the surviving corporation or (ii) Southern Company's Voting Securities are no longer publicly traded; (b) The sale or other disposition of all or substantially all of Southern Company's assets; or (c) The Consummation of an acquisition by any Person of Beneficial Ownership of all of Southern Company's Voting Securities such that Southern Company's Voting Securities are no longer publicly traded. 1.37 "Subsidiary Change in Control" shall mean the following: (a) The Consummation of an acquisition by any Person of Beneficial Ownership of 50% or more of the combined voting power of the then outstanding Voting Securities of an Employing Company; provided, however, that for purposes of this Subsection 1.37, any acquisition by an Employee, or Group composed entirely of Employees, any qualified pension plan, publicly held mutual fund or any employee benefit plan (or related trust) sponsored or maintained by Southern Company or any corporation Controlled by Southern Company shall not constitute a Change in Control; (b) The Consummation of a reorganization, merger or consolidation of an Employing Company (an "Employing Company Business Combination"), in each case, unless, following such Employing Company Business Combination, Southern Company Controls the corporation surviving or resulting from such Employing Company Business Combination; or (c) The Consummation of the sale or other disposition of all or substantially all of the assets of an Employing Company to an entity which Southern Company does not Control. 1.38 "Subsidiary Employee" shall mean an Employee of an Employing Company which has undergone a Subsidiary Change in Control whose employment is not immediately transferred to another Employing Company upon such Subsidiary Change in Control. 1.39 "Voting Securities" shall mean the outstanding voting securities of a corporation entitling the holder thereof to vote generally in the election of such corporation's directors. Where the context requires, words in the masculine gender shall include the feminine and neuter genders, words in the singular shall include the plural, and words in the plural shall include the singular. ARTICLE II 2.1 Plan Administration. The Plan shall be administered by the Committee. The Committee is authorized to establish such rules, to appoint such agents and to delegate such authority as it deems appropriate for the proper administration of the Plan, including, but not limited to, the delegation of authority to such person or persons to exercise the discretion provided in Section 5.1 hereof to determine whether a Participant may exercise an Award subsequent to termination of
employment, and to make such determinations and to take such steps in connection with the Plan or the benefits provided hereunder as it deems necessary or advisable. 2.2 Plan Interpretation. The Committee shall have the exclusive authority to interpret the Plan. The decision of the Committee with respect to any question arising as to the grant of an Award to a Participant in the Plan, the amount, term, form, and time of payment of Awards under the Plan, or any other matter concerning the Plan shall be final, conclusive, and binding on both Southern Company and the Participants. ARTICLE III 3.1 Eligibility. The Participants in the Plan shall be limited to Directors and to those Employees, as determined by the Committee, who have a significant impact on the long-term performance and success of Southern Company. Subject to the terms of the Plan, the Committee shall identify individuals eligible to become Participants in the Plan, select from time to time the Participants to whom Awards shall be granted and shall determine the number of Awards to be granted. ARTICLE IV 4.1 Awards. (a) General. Beginning January 1, 1998 and thereafter not more frequently than once each calendar year, the Committee shall determine the forms and amounts of Awards for Participants. All Awards shall be subject to the terms and conditions of the Plan and to such other terms and conditions consistent with the Plan as the Committee deems appropriate. Awards under the Plan need not be uniform and Awards under two (2) or more paragraphs may be combined in one Award Document. Any combination of Awards may be granted at one time and on more than one occasion to the same Participant. Such Awards may take the following forms, in the Committee's sole discretion: (b) Incentive Stock Options. These shall be stock options within the meaning of Section 422 of the Code to purchase Common Stock. In addition to other restrictions contained in the Plan, an Incentive Stock Option (1) shall not be exercised more than ten (10) years after the date it is granted, (2) shall not have an Option Price less than the Fair Market Value of Common Stock on the date the Incentive Stock Option is granted, (3) shall otherwise comply with Section 422 of the Code, (4) shall be granted only to Employees and (5) shall be designated as an "Incentive Stock Option" by the Committee. The aggregate Fair Market Value of Common Stock, determined at the time of each grant, for which any Optionee may vest in Incentive Stock Options under this Plan for any calendar year shall not exceed $100,000. (c) Nonqualified Stock Options. These shall be stock options to purchase Common Stock which are not designated by the Committee as "Incentive Stock Options." At the time of the grant, the Committee shall determine the Option exercise period, the Option Price, and such other conditions or restrictions on the exercise of the Nonqualified Stock Option as the Committee deems appropriate. In addition to other restrictions contained in the Plan, a Nonqualified Stock Option (1) shall not be exercised more than ten (10) years after the date it is granted, and (2) shall not have an Option Price less than 100% of the Fair Market Value of Common Stock on the date the Nonqualified Stock Option is granted. (d) Stock Appreciation Rights. These shall be rights that on exercise entitle the holder to receive the excess of (1) the Fair Market Value of Common Stock on the date of exercise over (2) its Base Value multiplied by (3) the number of SARs exercised. Such rights shall be satisfied in cash, stock, or a combination thereof, as determined by the Committee. Stock Appreciation Rights granted under the Plan may be granted in the sole discretion of the Committee in conjunction with an Incentive Stock Option or Nonqualified Stock Option under the Plan. The Committee may impose such conditions or restrictions on the exercise of SARs as it deems appropriate and may terminate, amend, or suspend such SARs at any time. SARs granted under this Plan shall not be exercised more than ten (10) years after the date of grant. (e) Restricted Stock. Restricted Stock shall be shares of Common Stock held by Southern Company for the benefit of a Participant without payment of consideration, except as otherwise may be determined by the Committee in its discretion, with restrictions or conditions upon the Participant's right to retain, transfer or sell such shares. The following provisions shall be applicable to Restricted Stock Awards:
(1) Stock Power. Each certificate for Restricted Stock shall be registered in the name of the Participant and shall be deposited by him with Southern Company, together with a stock power endorsed in blank. (2) Restriction Period. At the time of making a Restricted Stock Award, the Committee shall establish the "Restriction Period" applicable thereto. Such Restriction Period may be up to ten (10) years as determined by the Committee. The Committee may provide for the annual lapse of restrictions with respect to a specified percentage of the Restricted Stock, provided the Participant satisfies all eligibility requirements at such time. (3) Dividends. The Participant shall be entitled to receive dividends during the Restriction Period and shall have the right to vote such Common Stock and all other shareholder's rights except the following: (i) the Participant shall not be entitled to delivery of the stock certificate during the Restriction Period, (ii) Southern Company shall retain custody of the Common Stock during the Restriction Period, and (iii) a breach of a restriction or a breach of the terms and conditions established by the Committee with respect to the Restricted Stock shall cause a forfeiture of the Restricted Stock. 4.2 Award Document. After the Committee determines the form and amount of a Participant's Award, it shall cause Southern Company to prepare an Award Document to be delivered to the Participant setting forth the form and amount of the Award and any conditions and restrictions on the Award imposed by the Plan and the Committee. 4.3 Exercise and Payment. The exercise of an Option shall be made only by a written notice delivered in person or by mail to the Secretary of Southern Company at Southern Company's principal executive office, specifying the number of shares of Common Stock to be purchased and accompanied by payment therefore and otherwise in accordance with the Award Document pursuant to which the Option was granted. The purchase price for any shares of Common Stock purchased pursuant to the exercise of an Option shall be paid, as determined by the Committee in its discretion and set forth in the Award Document at the time of grant, in either of the following forms (or any combination thereof): (i) cash or (ii) the transfer of shares of Common Stock with a Fair Market Value equal to the aggregate exercise price of the Option to Southern Company upon such terms and conditions as determined by the Committee. In addition, Options may be exercised through a registered broker-dealer pursuant to such cashless exercise procedures (other than the withholding of shares of Common Stock that would otherwise be acquired upon the exercise of such Option) which are, from time to time, deemed acceptable by the Committee, and the Committee may authorize that the purchase price payable upon exercise of an Option may be paid by having shares of Common Stock withheld that otherwise would be acquired upon such exercise. Any shares of Common Stock transferred to Southern Company (or withheld upon exercise) as payment of the purchase price under an Option shall be valued at their Fair Market Value on the day preceding the date of exercise of such Option. The Optionee shall deliver the Award Document evidencing the Option to the Secretary of Southern Company who shall endorse thereon a notation of such exercise and return such Award Document to the Optionee. No fractional shares of Common Stock (or cash in lieu thereof) shall be issued upon exercise of an Option and the number of shares of Common Stock that may be purchased upon exercise shall be rounded to the nearest number of whole shares of Common Stock. ARTICLE V 5.1 Termination of Service or Employment. A Participant whose service as a Director or whose employment terminates for reasons other than Retirement, Disability, or death shall, in the discretion of the Committee, have no right to receive any benefit or payment for existing Awards under the Plan. Any outstanding Award shall terminate on the Participant's Separation Date; provided, however, that the Committee or its designee, in its or his sole discretion, may permit the exercise of any outstanding Award after the Participant's Separation Date, at such time and in such manner as the Committee or such designee may determine, but in no event in the case of Incentive Stock Options shall such exercise be beyond the earlier of (a) three (3) months from the Participant's Separation Date or (b) the expiration date of the Award, to the extent exercisable on such Participant's Separation Date. 5.2 Death of a Participant. Unless otherwise provided in the Award Document, in the event of the death of a Participant prior to the exercise of all Incentive Stock Options, Nonqualified Stock Options, and Stock Appreciation Rights granted to such Participant, the administrator of the deceased Participant's estate, the
executor under his will, or the person or persons to whom the Options or SARs shall have been validly transferred by such executor or administrator pursuant to the will or laws of intestate succession shall have the right, within thirty-six (36) months from the date of such Participant's death, but not beyond the expiration date of the Options or SARs, to exercise such Options or SARs to the extent exercisable on such Participant's Separation Date. 5.3 Retirement. (a) Incentive Stock Options. In the event of the termination of a Participant's employment as result of his Retirement prior to the exercise of all Incentive Stock Options granted to the Participant, such Participant shall have the right, within three (3) months of his Separation Date, but not beyond the expiration date of such Options, to exercise such Incentive Stock Options to the extent exercisable on his Separation Date. (b) Nonqualified Stock Options and SARs. Unless otherwise provided in the Award Document, in the event of the termination of a Participant's employment as a result of his Retirement prior to the exercise of all Nonqualified Stock Options or Stock Appreciation Rights granted to the Participant, such Participant shall have the right, within thirty-six (36) months of his Separation Date, but not beyond the expiration date of such Nonqualified Stock Options or SARs, to exercise such Nonqualified Stock Options or SARs to the extent exercisable on his Separation Date. 5.4 Disability. (a) Incentive Stock Options. In the event of the termination of a Participant's employment due to Disability prior to the exercise of all Incentive Stock Options granted to the Participant, such Participant or his legal representative shall have the right, within twelve (12) months of his Separation Date, but not beyond the expiration date of such Incentive Stock Options, to exercise such Incentive Stock Options to the extent exercisable on his Separation Date. (b) Nonqualified Stock Options and SARs. Unless otherwise provided in the Award Document, in the event of the termination of a Participant's employment due to Disability prior to the exercise of all Nonqualified Stock Options or Stock Appreciation Rights granted to the Participant, such Participant or his legal representative shall have the right, within thirty-six (36) months of his Separation Date, but not beyond the expiration date of such Nonqualified Stock Options or SARs, to exercise such Nonqualified Stock Options or SARs to the extent exercisable on his Separation Date. 5.5 Change in Control. (a) Subsidiary Change in Control. Notwithstanding any other provision of the Plan to the contrary, in the event of a Subsidiary Change in Control: (i) Any Options and Stock Appreciation Rights held by a Subsidiary Employee which are outstanding as of the date such Subsidiary Change in Control is determined to have occurred, and which are not then exercisable and vested, shall become fully exercisable and vested to the full extent of the original grant; provided, that in the case of a Subsidiary Employee holding a Stock Appreciation Right who is actually subject to Section 16(b) of the Exchange Act, such Stock Appreciation Right shall not become fully vested and exercisable unless it shall have been outstanding for at least six months as of the date such Subsidiary Change in Control is determined to have occurred. (ii) The restrictions and deferral limitations applicable to any Restricted Stock held by a Subsidiary Employee shall lapse, and such Restricted Stock shall become free of all restrictions and limitations and become fully vested and transferable to the full extent of the original grant. (iii) The restrictions and deferral limitations and other conditions applicable to any other Awards held by Subsidiary Employees shall lapse, and such other Awards shall become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent of the original grant. (b) Southern Termination. Notwithstanding any other provision of the Plan to the contrary, in the event of a Southern Termination:
(i) Any Options and Stock Appreciation Rights which are outstanding as of the date such Southern Termination is determined to have occurred, and which are not then exercisable and vested, shall become fully exercisable and vested to the full extent of the original grant; provided, that in the case of a Participant holding a Stock Appreciation Right who is subject to Section 16(b) of the Exchange Act, such Stock Appreciation Right shall not become fully vested and exercisable at such time if such actions would result in liability to the Participant under Section 16(b), provided further, that any such actions not taken as a result of the rules under Section 16(b) shall be effected as of the first date that such activity would no longer result in liability under such section. (ii) The restrictions and deferral limitations applicable to any Restricted Stock shall lapse, and such Restricted Stock shall become free of all restrictions and limitations and become fully vested and transferable to the full extent of the original grant. (iii) The restrictions and deferral limitations and other conditions applicable to any other Awards under the Plan shall lapse, and such other Awards shall become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent of the original grant. (iv) Any Options, Stock Appreciation Rights or Restricted Stock which are outstanding as of the date such Southern Termination is determined to have occurred, shall be converted into or replaced by options, stock appreciation rights or restricted stock, as the case may be, in the Surviving Company, or the corporation which has acquired all of Southern Company's Common Stock or assets. In the event of such conversion or replacement, the terms of the replacement options or stock appreciation rights shall preserve with respect to each Option and each SAR the spread between the Fair Market Value of the shares subject to the Options or SARs and the Option Price or Base Value, as the case may be, as determined immediately prior to the Southern Termination. Similarly, the terms of replacement restricted stock shall preserve the Fair Market Value of each share of Restricted Stock as determined immediately prior to the Southern Termination. No replacement option, stock appreciation right or share of restricted stock received shall be subject to any terms which are less favorable than those which existed with respect to the original Option, SAR or share of Restricted Stock immediately prior to the Southern Termination. (v) In the event that it is not possible to effect the conversion set forth in Section 5.5(b)(iv) hereof, any and all outstanding Options, Stock Appreciation Rights and Restricted Stock as of the date of the Southern Termination which are not so converted shall be terminated and the affected Participants shall receive within thirty (30) days of the Southern Termination cash equal to the difference between the Option Price and Fair Market Value, in the case of Options, the Base Value and Fair Market Value, in the case of SARs and equal to the Fair Market Value, in the case of Restricted Stock. For purposes of this Section 5.5(b)(v), Fair Market Value shall be determined as of the day prior to the date of the Southern Termination.
ARTICLE VI 6.1 Limitation of Shares of Common Stock Available under the Plan. (a) Share Limit. The total number of shares of Common Stock available to be granted by the Committee as Awards to the Participants under the Plan shall not exceed 40,000,000 shares. Upon a change in capitalization, the maximum number of shares of Common Stock referred to in the preceding sentence shall be adjusted in number and kind pursuant to Section 7.1 hereof. (b) Share Reduction. The total number of shares available under Section 6.1(a) shall be reduced from time to time in the manner specified: (1) Incentive Stock Options and Nonqualified Stock Options. The grant of an Incentive Stock Option and Nonqualified Stock Option shall reduce the available shares by the number of shares subject to such Option. (2) Stock Appreciation Rights. The grant of Stock Appreciation Rights shall reduce the available shares by the number of SARs granted; provided, however, if SARs are granted in conjunction with an Option and the exercise of such Option would cancel the SARs and vice versa, then the grant of the SARs will only reduce the amount available by the excess, if any, of the number of SARs granted over the number of shares subject to the related Option.
ARTICLE VI 6.1 Limitation of Shares of Common Stock Available under the Plan. (a) Share Limit. The total number of shares of Common Stock available to be granted by the Committee as Awards to the Participants under the Plan shall not exceed 40,000,000 shares. Upon a change in capitalization, the maximum number of shares of Common Stock referred to in the preceding sentence shall be adjusted in number and kind pursuant to Section 7.1 hereof. (b) Share Reduction. The total number of shares available under Section 6.1(a) shall be reduced from time to time in the manner specified: (1) Incentive Stock Options and Nonqualified Stock Options. The grant of an Incentive Stock Option and Nonqualified Stock Option shall reduce the available shares by the number of shares subject to such Option. (2) Stock Appreciation Rights. The grant of Stock Appreciation Rights shall reduce the available shares by the number of SARs granted; provided, however, if SARs are granted in conjunction with an Option and the exercise of such Option would cancel the SARs and vice versa, then the grant of the SARs will only reduce the amount available by the excess, if any, of the number of SARs granted over the number of shares subject to the related Option. (3) Restricted Stock. The grant of Restricted Stock shall reduce the available shares by the number of shares of Restricted Stock granted. (c) Share Increase. The total number of shares available under Section 6.1(a) shall be increased from time to time in the manner specified: (1) Incentive Stock Options and Nonqualified Stock Options. The lapse or cancellation of an Incentive Stock Option or Nonqualified Stock Option shall increase the available shares by the number of shares released from such Option; provided, however, in the event the cancellation of an Option is due to the exercise of SARs related to such Option, the cancellation of such Option shall only increase the amount available by the excess, if any, of the number of shares released from such Option over the number of SARs exercised. (2) Stock Appreciation Rights. The lapse or cancellation of Stock Appreciation Rights shall increase the available shares by the number of SARs which lapse or are canceled; provided, however, in the event the cancellation of such SARs is due to the exercise of an Option related to such SARs, the cancellation of such SARs shall only increase the available shares by the excess, if any, of the number of SARs canceled over the number of shares delivered on the exercise of such Option. (3) Restricted Shares. The reversion of Restricted Stock to Southern Company due to the breach or occurrence of a restriction or failure to satisfy a condition on such shares shall increase the available shares by the number of shares of Restricted Stock reverted. 6.2 Maximum Shares to Participant. The maximum number of shares of Common Stock which may be the subject of Awards to a Participant during any calendar year during the term of the Plan shall be 1,000,000. ARTICLE VII 7.1 Adjustment Upon Changes in Capitalization. The total number of shares of Common Stock available for Awards under the Plan or allocable to any individual Participant, the number of shares of Common Stock subject to outstanding Options, the exercise price for such Options, the number of outstanding SARs, the Base Value of such SARs and the Award limit set forth in subsection 6.2 shall be appropriately adjusted by the Committee in the event of any increase or decrease in the number of outstanding shares of Common Stock resulting from any change in Southern Company's capital structure, including but not limited to any stock dividend, subdivision or combination of shares, or reclassification. 7.2 Merger, Consolidation or Tender Offer. In the event of a merger or consolidation of Southern Company or a tender offer for shares of Common Stock, or in anticipation of such merger, consolidation, or tender offer, the
Committee may make such adjustments with respect to Awards under the Plan and take such other action as it deems necessary or appropriate to reflect such merger, consolidation, or tender offer, including without limitation the substitution of new Awards, the termination or adjustment of outstanding Awards, the acceleration of Awards, or the removal of limitations or restrictions on outstanding Awards. ARTICLE VIII 8.1 Withholding Taxes. Southern Company or the Employing Company, as the case may be, of the Participant shall deduct from all payments and distributions in cash under the Plan any taxes required to be withheld for federal, state, or local governments. In the event distributions are made in shares of Common Stock, Southern Company shall retain the value of sufficient shares to equal the amount of the tax required to be withheld in respect of such distributions. 8.2 Service or Employment. The establishment of the Plan and Awards hereunder shall not be construed as conferring on any Participant any right to continued service or employment, and the service or employment of any Participant may be terminated without regard to the effect which such action might have upon him or her as a Participant. 8.3 Non-Alienation of Benefits. Except as otherwise provided in Section 8.5 hereof, or as may otherwise be provided in the Participant's Award Document with respect to Awards other than Incentive Stock Options, and other than as specifically provided with regard to the death of a Participant, no benefit under the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, excluding the use of Options under this Plan as collateral in exercising such Options. Any attempt to do so shall be null and void. No such benefits shall, prior to receipt thereof by the Participant, be in any manner liable for or subject to the debts, contracts, liabilities, engagement, or torts of the Participant. 8.4 Non-Alienation of Election or Exercise Rights. Except as otherwise provided in Section 8.5 hereof, or as may otherwise be provided in the Participant's Award Document with respect to Awards other than Incentive Stock Options, no election as to benefits or exercise of Options, Stock Appreciation Rights, or other rights may be made during a Participant's lifetime by anyone other than the Participant. 8.5 Transfer of Awards (Other Than ISOs) to Revocable Trust. Awards other than Incentive Stock Options may be transferred by a Participant to a revocable trust under circumstances where the grantor Participant is the trustee or co-trustee of such revocable trust and the trust beneficiaries are limited to the grantor Participant and, in the event of the Participant's death, the grantor's spouse, lineal descendants and lineal ancestors. Powers of the non-Participant co-trustee must be limited to the exercise of the Awards held by the trust in the event of the Participant's death or incapacity. Written notice of the Participant's intent to transfer Awards under this Section 8.5 must be delivered to the Vice President of Human Resources of Southern Company Services, Inc. prior to such transfer. 8.6 Amendment, Modification, and Termination of the Plan. Except for the provisions of Section 5.5 hereof, which cannot be amended, modified or terminated following a Subsidiary Change in Control or a Southern Termination, the Board of Directors, at any time, may terminate and in any respect amend or modify the Plan; provided, however, that no such action by the Board of Directors, without approval of Southern Company's shareholders, may increase the total number of shares of Common Stock available under the Plan; and further provided that, except as provided in Section 7.2, no amendment, modification, or termination of the Plan shall in any manner adversely affect the rights of any Participant under the Plan without the consent of such Participant. 8.7 Indemnification. Each person who is or shall have been a member of the Committee or of the Board of Directors shall be indemnified and held harmless by Southern Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him in connection with or resulting from any claim, action, suit, or proceeding to which he may be a party or in which he may be involved by reason of any action or failure to act under the Plan and against and from any and all amounts paid by him in satisfaction of judgment in any such action, suit, or proceeding against him. Such person shall give Southern Company an opportunity, at its own expense, to handle and defend the same before he undertakes to handle and defend it on his own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under Southern Company's Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that Southern Company may have to indemnify them or hold them harmless.
8.8 Reliance on Reports. Each member of the Committee and each member of the Board of Directors shall be fully justified in relying or acting in good faith upon any report made by the independent public accountants of Southern Company and any Employing Company and upon any other information furnished in connection with the Plan by any person or persons other than himself. In no event shall any person who is or shall have been a member of the Committee or the Board of Directors be liable for any determination made or other action taken or any omission to act in reliance upon any such report or information or for any action taken, including the furnishing of information, or failure to act, if in good faith. 8.9 Governing Law. To the extent that federal law shall not be held to have preempted local law, this Plan shall be governed by the laws of the State of Delaware. If any provision of the Plan shall be held invalid or unenforceable, the remaining provisions hereof shall continue in full force and effect. 8.10 Term. The Plan shall remain in effect for ten (10) years from the Effective Date or until terminated by the Board of Directors, whichever occurs first. 8.11 Pooling Accounting. Notwithstanding anything to the contrary herein, if, but for any provision of this Plan, a Southern Termination transaction would otherwise be accounted for as a pooling-of-interests under APB No.16 ("Pooling Accounting") (after giving effect to any and all other facts and circumstances affecting whether such Southern Termination transaction would use Pooling Accounting), such provision or provisions of this Plan which would otherwise cause the Southern Termination transaction to be ineligible for Pooling Accounting shall automatically be void and ineffective in such a manner and to the extent that by eliminating such provision or provisions of this Plan, Pooling Accounting would be required for such Southern Termination transaction and Pooling Accounting is in fact used for such Southern Termination transaction. IN WITNESS WHEREOF, Southern Company has caused the Southern Company Performance Stock Plan, as amended and restated, to be executed by its duly authorized officers pursuant to resolutions of the Board of Directors as of the ______day of ___________1999, to be effective January 1, 1998. SOUTHERN COMPANY By:___________________________________ A. W. Dahlberg President Attest: By:____________________________ Tommy Chisholm Secretary [CORPORATE SEAL]
EXHIBIT 10(a)74 FIRST AMENDMENT TO THE SOUTHERN COMPANY SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN WHEREAS, effective as of January 1, 1997, Southern Company Services, Inc. ("Company") established The Southern Company Supplemental Executive Retirement Plan ("Plan") to provide deferred compensation benefits primarily for a select group of management or highly compensated employees which are not otherwise payable under The Southern Company Pension Plan as a result of the exclusion of incentive pay from the definition of earnings set forth under such Plan; and WHEREAS, the Company, through its Board of Directors, has reserved unto itself the authority to amend the Plan at any time; and WHEREAS, the Company wishes to provide for the withholding of the Hospital Insurance portion of the tax due
EXHIBIT 10(a)74 FIRST AMENDMENT TO THE SOUTHERN COMPANY SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN WHEREAS, effective as of January 1, 1997, Southern Company Services, Inc. ("Company") established The Southern Company Supplemental Executive Retirement Plan ("Plan") to provide deferred compensation benefits primarily for a select group of management or highly compensated employees which are not otherwise payable under The Southern Company Pension Plan as a result of the exclusion of incentive pay from the definition of earnings set forth under such Plan; and WHEREAS, the Company, through its Board of Directors, has reserved unto itself the authority to amend the Plan at any time; and WHEREAS, the Company wishes to provide for the withholding of the Hospital Insurance portion of the tax due under the Federal Insurance Contributions Act from payments made under the Plan; and WHEREAS, the Company desires to make certain other clarifying technical and miscellaneous changes. Accordingly, The Southern Company Supplemental Executive Retirement Plan is hereby amended in the following particulars, to be effective as of even date herewith: 1. Amend Section 2.15 of the Plan by deleting said Section in its entirety and substituting the following in lieu thereof: 2.15 "Supplemental Pension Benefit" shall mean the pension benefit, if any, that is payable to a Participant under a group and/or individual supplemental benefit plan of an Affiliated Employer (as such term is defined therein). 2. Amend Section 5.1(a)(1) of the Plan by deleting said Section in its entirety and substituting the following in lieu thereof: (1) 1.70% (1.0% if subject to Article XV of the Pension Plan) of the Participant's Average Monthly Earnings multiplied by his years (and fraction of a year) of Accredited Service to his Retirement Date, death or other termination of service, including a Social Security Offset, as adjusted, if necessary, under the terms of the Pension Plan for commencement prior to the Participant's Normal Retirement Date; less 3. Amend Section 5.2 of the Plan by deleting said Section in its entirety and substituting the following in lieu thereof: 5.2 Distribution of Benefits. (a) The SERP Benefit, as determined in accordance with Section 5.1, shall be payable in monthly increments on the first day of the month concurrently with the Participant's Retirement Income under the Pension Plan. The form in which the SERP Benefit is paid will be the same as elected by the Participant under the Pension Plan except that the amount of the monthly benefit will be modified at the appropriate time based on the commencement of payments as follows. Payments shall be adjusted to include three components: (1) The amount necessary to pay the Hospital Insurance portion of the tax due under the Federal Insurance Contributions Act with respect to the accrued SERP Benefit determined upon retirement (or such other appropriate "resolution date" as defined under Treasury Regulation Section 31.3121(v)-2) calculated in accordance with Section 5.1;
(2) The amount estimated to pay the federal and state income tax withholding liability due on the amount paid under paragraph (1) above; and (3) An adjusted monthly benefit determined on an actuarially equivalent basis in accordance with the terms of the Pension Plan which takes into account the amounts paid under paragraph (1) and (2) above and taking into account the form of benefit elected by the Participant under the Pension Plan. Upon adjustment, the remaining monthly payments shall equal the amount described in paragraph (3) above. The Beneficiary of a Participant's Pension Benefit shall be the same as the Provisional Payee, if any, of the Participant's Retirement Income under the Pension Plan. 4. Effective July 1, 1998, the Plan shall include an Appendix A setting forth the Affiliated Employers as such term is defined therein as follows: APPENDIX A THE SOUTHERN COMPANY SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AFFILIATED COMPANIES AS OF JULY 1, 1998 Alabama Power Company Georgia Power Company Gulf Power Company Mississippi Power Company Savannah Electric and Power Company Southern Communications Services, Inc. Southern Company Energy Solutions, Inc. Southern Company Services, Inc. Southern Nuclear Operating Company, Inc. 5. All parts of the Plan not inconsistent herewith are hereby ratified and affirmed. IN WITNESS WHEREOF, this Amendment has been executed by a duly authorized officer of Southern Company Services, Inc. pursuant to resolutions of the Board of Directors of the Company this ____ day of _______________________, 1998. SOUTHERN COMPANY SERVICES, INC. By: Christopher C. Womack Senior Vice President, Human Resources ATTEST: By: Its:
SECOND AMENDMENT TO THE SOUTHERN COMPANY SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN WHEREAS, effective as of January 1, 1997, Southern Company Services, Inc. ("Company") established The Southern Company Supplemental Executive Retirement Plan ("Plan") to provide deferred compensation benefits primarily for a select group of management or highly compensated employees which are not otherwise payable under The Southern Company Pension Plan as a result of the exclusion of incentive pay from the definition of earnings set forth under such Plan; and WHEREAS, the Company, through its Board of Directors, has reserved unto itself the authority to amend the
SECOND AMENDMENT TO THE SOUTHERN COMPANY SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN WHEREAS, effective as of January 1, 1997, Southern Company Services, Inc. ("Company") established The Southern Company Supplemental Executive Retirement Plan ("Plan") to provide deferred compensation benefits primarily for a select group of management or highly compensated employees which are not otherwise payable under The Southern Company Pension Plan as a result of the exclusion of incentive pay from the definition of earnings set forth under such Plan; and WHEREAS, the Company, through its Board of Directors, has reserved unto itself the authority to amend the Plan at any time and approve participation in the Plan by subsidiaries of The Southern Company; and WHEREAS, the Company desires to permit Southern Energy Resources, Inc. to become an Affiliated Employer under the terms of the Plan. Accordingly, the Plan is hereby amended in the following particulars, to be effective as set forth below: 1. Effective June 25, 1998, amend Appendix A of the Plan adding thereto Southern Energy Resources, Inc. as an Affiliated Employer. 2. All parts of the Plan not inconsistent herewith are hereby ratified and affirmed. IN WITNESS WHEREOF, this Amendment has been executed by a duly authorized officer of Southern Company Services, Inc. pursuant to resolutions of the Board of Directors of the Company this ____ day of _______________________, 1998. SOUTHERN COMPANY SERVICES, INC. By: Christopher C. Womack Senior Vice President, Human Resources ATTEST: By: Its:
EXHIBIT 10(a)76 FIRST AMENDMENT TO THE SOUTHERN COMPANY PERFORMANCE SHARING PLAN WHEREAS, Southern Company Services, Inc. ("Company") heretofore adopted The Southern Company Performance Sharing Plan ("Plan"), effective as of January 1, 1997, and WHEREAS, the Performance Sharing Plan Committee ("Committee") desires to amend the Plan in order to make certain design and other changes; and WHEREAS, the Committee is authorized pursuant to Section 12.1 of the Plan to amend the Plan at any time, provided that the amendment does not involve a substantial increase in cost to any Employing Company or is necessary or desirable to comply with the laws and regulations applicable to the Plan;
EXHIBIT 10(a)76 FIRST AMENDMENT TO THE SOUTHERN COMPANY PERFORMANCE SHARING PLAN WHEREAS, Southern Company Services, Inc. ("Company") heretofore adopted The Southern Company Performance Sharing Plan ("Plan"), effective as of January 1, 1997, and WHEREAS, the Performance Sharing Plan Committee ("Committee") desires to amend the Plan in order to make certain design and other changes; and WHEREAS, the Committee is authorized pursuant to Section 12.1 of the Plan to amend the Plan at any time, provided that the amendment does not involve a substantial increase in cost to any Employing Company or is necessary or desirable to comply with the laws and regulations applicable to the Plan; NOW, THEREFORE, the Committee hereby amends the Plan as follows: I. Effective as of January 1, 1997, Section 2.12 shall be amended by deleting the first paragraph of such Section in its entirety and substituting a new paragraph as follows: 2.12 "Compensation" shall mean the base salary or wages paid to a Participant by an Affiliated Employer for the Plan Year during which he is eligible to participate, including all amounts contributed by an Affiliated Employer to The Southern Company Employee Savings Plan and/or The Southern Company Flexible Benefits Plan on behalf of a Participant pursuant to a salary reduction arrangement under such plans. Compensation shall also include all awards under any incentive pay plans sponsored by an Affiliated Employer as shall be determined by the Committee from time to time and set forth in Appendix B attached hereto, monthly shift and monthly seven-day schedule differentials, scheduled shift pay, geographic premiums, monthly nuclear plant premiums, and monthly customer service premiums. Compensation shall exclude regular overtime pay, any hourly shift differentials, substitution pay, such amounts which are reimbursements to a Participant paid by any Affiliated Employer including, but not limited to, reimbursement for such items as moving expenses and travel and entertainment expenses, and imputed income for automobile expenses, tax preparation expenses and health and life insurance premiums paid by the Affiliated Employer. II. Effective as of January 1, 1997, Section 2.28 shall be amended by deleting such section its entirety and substituting a new Section 2.28 as follows: 2.28 "Highly Compensated Employee" shall mean (in accordance with and subject to Code Section 414(q) and any regulations, rulings, notices or procedures thereunder), with respect to any Plan Year: (1) any Employee who was a five percent (5%) or greater owner during the Plan Year or the immediately preceding Plan Year, or (2) any Employee who earned more than $80,000 in the preceding Plan Year. The $80,000 amount shall be adjusted for inflation and for short Plan Years, pursuant to Code Section 414(q). The Employer may, at its election, limit Employees earning $80,000 or more to only those Employees who fall within the "top-paid group," as defined in Code Section 414(q) excluding those employees described in Code Section 414(q)(8) for such purpose. In determining whether an Employee is a Highly Compensated Employee, the Committee may make any elections authorized under applicable regulations, rulings, notices, or procedures. III. Effective as of the date hereof, Article III shall be amended to add a new Section 3.6 as follows: 3.6 Former Commonwealth Edison of Indiana Employees. Effective January 1, 1998, notwithstanding any other provision of the Plan to the contrary, with respect to a former employee of Commonwealth Edison of Indiana ("ComEd") who was employed by Southern Energy, Inc. as set forth on a schedule of employees acknowledged by the Committee:
(a) shall become a Participant as of January 1, 1998; and (b) shall be entitled for vesting purposes hereunder to years of vesting service accrued under the Commonwealth Edison Company of Indiana Service Annuity System Plan after January 1, 1997, in addition to any Years of Service accrued under this Plan. IV. Effective as of January 1, 1997, Section 5.1(c) shall be amended by deleting such section in its entirety and substituting a new Section 5.1(c) as follows: For purposes of this Section 5.1, whenever the term "compensation" is used, such term shall mean "compensation" within the meaning of Code Section 415(c)(3) and any rulings or regulations thereunder. V. Effective as of January 1, 1998, Sections 9.1, 9.2, 9.5, and 9.11 shall be amended by replacing each reference therein to "$3,500" with a reference to "$5,000". VI. Effective as of January 1, 1997, Section 14.2 is amended to add the following sentence to the end of the first paragraph: In addition, a Participant's benefits may be offset pursuant to a judgment, order, or decree issued (or settlement agreement entered into) on or after August 5, 1997, if and to the extent that such offset is permissible or required under Code Section 401(a)(13). VII. Except as amended herein by this First Amendment, the Plan shall remain in full force and effect. IN WITNESS WHEREOF, Southern Company Services, Inc. through the duly authorized members of the Performance Sharing Plan Committee has adopted this First Amendment to The Southern Company Performance Sharing Plan this ____ day of _________________________, 1998 to be effective as stated herein. PERFORMANCE SHARING PLAN COMMITTEE
APPENDIX B - INCENTIVE PAY PLANS Effective as of January 1, 1997, all awards under the following incentive pay plans shall be counted as compensation for purposes of Section 2.12 of the Plan: The Southern Company Performance Pay Plan The Southern Company Productivity Improvement Plan The Southern Company Executive Productivity Improvement Plan Incentive Compensation Plan for Southern Energy, Inc. Georgia Power Company 1998 Customer Partnership Teams Incentive Plan Georgia Power Company 1998 Residential Customer Partnership Team Incentive Plan Georgia Power Company 1998 Northwest Region Residential Sales Team Incentive Plan Georgia Power Company Customer Choice Group 1998 Compensation Plan Georgia Power Company Olympic Project Management Group 1998 Short Term Incentive Plan Southern Company National Accounts 1998 Incentive Plan Southern Communications Performance Improvement Plan (PIP) Southern Communications Performance Pay Plan (PPP) Southern Company Energy Solutions, Inc. 1998 Officer and Staff Incentive Compensation Plan
APPENDIX B - INCENTIVE PAY PLANS Effective as of January 1, 1997, all awards under the following incentive pay plans shall be counted as compensation for purposes of Section 2.12 of the Plan: The Southern Company Performance Pay Plan The Southern Company Productivity Improvement Plan The Southern Company Executive Productivity Improvement Plan Incentive Compensation Plan for Southern Energy, Inc. Georgia Power Company 1998 Customer Partnership Teams Incentive Plan Georgia Power Company 1998 Residential Customer Partnership Team Incentive Plan Georgia Power Company 1998 Northwest Region Residential Sales Team Incentive Plan Georgia Power Company Customer Choice Group 1998 Compensation Plan Georgia Power Company Olympic Project Management Group 1998 Short Term Incentive Plan Southern Company National Accounts 1998 Incentive Plan Southern Communications Performance Improvement Plan (PIP) Southern Communications Performance Pay Plan (PPP) Southern Company Energy Solutions, Inc. 1998 Officer and Staff Incentive Compensation Plan
SECOND AMENDMENT TO THE SOUTHERN COMPANY PERFORMANCE SHARING PLAN WHEREAS, Southern Company Services, Inc. ("Company") heretofore adopted The Southern Company Performance Sharing Plan ("Plan"), effective as of January 1, 1997, and WHEREAS, the Performance Sharing Plan Committee ("Committee") previously amended the Plan and desires again to amend the Plan in order to make certain clarifying and design changes; and WHEREAS, the Committee is authorized pursuant to Section 12.1 of the Plan to amend the Plan at any time, provided that the amendment does not involve a substantial increase in cost to any Employing Company or is necessary or desirable to comply with the laws and regulations applicable to the Plan; NOW, THEREFORE, the Committee hereby amends the Plan as follows: I. Effective as of January 1, 1997, Section 2.12 shall be amended by deleting the first paragraph of such Section in its entirety and substituting a new paragraph as follows: 2.12 "Compensation" shall mean the base salary or wages paid to a Participant by an Affiliated Employer for the Plan Year during which he is eligible to participate, including all amounts contributed by an Affiliated Employer to The Southern Company Employee Savings Plan and/or The Southern Company Flexible Benefits Plan on behalf of a Participant pursuant to a salary reduction arrangement under such plans. Compensation shall also include all awards under any incentive pay plans sponsored by an Affiliated Employer as shall be determined by the Committee from time to time and set forth in Appendix B attached hereto, monthly shift and monthly seven-day schedule differentials, scheduled shift pay, geographic premiums, monthly nuclear plant premiums, monthly customer service premiums, and all awards under the incentive pay plans sponsored by Southern Energy, Inc. (or Southern Energy Resources, Inc.) provided that such awards do not exceed the maximum annual award of such Participant for the Plan Year under the Southern Energy, Inc. Short Term Incentive Plan. Compensation shall exclude regular overtime pay, any hourly shift differentials, substitution pay, such amounts which are reimbursements to a Participant paid by any Affiliated Employer including, but not limited to, reimbursement for such items as moving expenses and travel and entertainment expenses, and imputed income for automobile expenses, tax preparation expenses and health and life insurance premiums paid by the Affiliated Employer. II. Effective as of January 1, 1997, Section 2.19 shall be amended by deleting subsection (y) of such Section in its entirety and substituting a new subsection (y) as follows:
SECOND AMENDMENT TO THE SOUTHERN COMPANY PERFORMANCE SHARING PLAN WHEREAS, Southern Company Services, Inc. ("Company") heretofore adopted The Southern Company Performance Sharing Plan ("Plan"), effective as of January 1, 1997, and WHEREAS, the Performance Sharing Plan Committee ("Committee") previously amended the Plan and desires again to amend the Plan in order to make certain clarifying and design changes; and WHEREAS, the Committee is authorized pursuant to Section 12.1 of the Plan to amend the Plan at any time, provided that the amendment does not involve a substantial increase in cost to any Employing Company or is necessary or desirable to comply with the laws and regulations applicable to the Plan; NOW, THEREFORE, the Committee hereby amends the Plan as follows: I. Effective as of January 1, 1997, Section 2.12 shall be amended by deleting the first paragraph of such Section in its entirety and substituting a new paragraph as follows: 2.12 "Compensation" shall mean the base salary or wages paid to a Participant by an Affiliated Employer for the Plan Year during which he is eligible to participate, including all amounts contributed by an Affiliated Employer to The Southern Company Employee Savings Plan and/or The Southern Company Flexible Benefits Plan on behalf of a Participant pursuant to a salary reduction arrangement under such plans. Compensation shall also include all awards under any incentive pay plans sponsored by an Affiliated Employer as shall be determined by the Committee from time to time and set forth in Appendix B attached hereto, monthly shift and monthly seven-day schedule differentials, scheduled shift pay, geographic premiums, monthly nuclear plant premiums, monthly customer service premiums, and all awards under the incentive pay plans sponsored by Southern Energy, Inc. (or Southern Energy Resources, Inc.) provided that such awards do not exceed the maximum annual award of such Participant for the Plan Year under the Southern Energy, Inc. Short Term Incentive Plan. Compensation shall exclude regular overtime pay, any hourly shift differentials, substitution pay, such amounts which are reimbursements to a Participant paid by any Affiliated Employer including, but not limited to, reimbursement for such items as moving expenses and travel and entertainment expenses, and imputed income for automobile expenses, tax preparation expenses and health and life insurance premiums paid by the Affiliated Employer. II. Effective as of January 1, 1997, Section 2.19 shall be amended by deleting subsection (y) of such Section in its entirety and substituting a new subsection (y) as follows: (y) any individual or Employee who is classified by the Employing Company as a temporary employee (who was not a participant in the pension plan of an Employing Company before July 1, 1991 (or July 1, 1990 for employees of Georgia Power Company)) or an independent contractor, regardless of whether such classification is in error, or III. Effective as provided therein, Appendix A and Appendix B shall be modified in the forms attached hereto. IV. Except as amended herein by this Second Amendment, the Plan shall remain in full force and effect. IN WITNESS WHEREOF, Southern Company Services, Inc. through the duly authorized members of the Performance Sharing Plan Committee has adopted this Second Amendment to The Southern Company Performance Sharing Plan this ____ day of _________________________, 1998 to be effective as stated herein.
PERFORMANCE SHARING PLAN COMMITTEE
APPENDIX A - EMPLOYING COMPANIES The Employing Companies as of January 1, 1998 are: Alabama Power Company Georgia Power Company Gulf Power Company Mississippi Power Company Savannah Electric and Power Company Southern Communications Services, Inc. Southern Company Services, Inc. Southern Energy Resources, Inc. Southern Energy Solutions, Inc. Southern Nuclear Operating Company, Inc.
APPENDIX B - INCENTIVE PAY PLANS Effective as of January 1, 1997, all awards under the following incentive pay plans shall be counted as compensation for purposes of Section 2.12 of the Plan: The Southern Company Performance Pay Plan The Southern Company Productivity Improvement Plan The Southern Company Executive Productivity Improvement Plan Georgia Power Company 1998 Customer Partnership Teams Incentive Plan Georgia Power Company 1998 Residential Customer Partnership Team Incentive Plan Georgia Power Company 1998 Northwest Region Residential Sales Team Incentive Plan Georgia Power Company Customer Choice Group 1998 Compensation Plan Georgia Power Company Olympic Project Management Group 1998 Short Term Incentive Plan Southern Company National Accounts 1998 Incentive Plan Southern Communications Performance Improvement Plan (PIP) Southern Communications Performance Pay Plan (PPP) Southern Company Energy Solutions, Inc. 1998 Officer and Staff Incentive Compensation Plan
THIRD AMENDMENT TO THE SOUTHERN COMPANY PERFORMANCE SHARING PLAN WHEREAS, Southern Company Services, Inc. ("Company") heretofore adopted The Southern Company Performance Sharing Plan ("Plan"), effective as of January 1, 1997; and WHEREAS, the Performance Sharing Plan Committee ("Committee") previously amended the Plan on two separate occasions and desires to amend the Plan again in order to (i) clarify the definition of "Compensation" under the Plan; (ii) clarify the grant of prior service credit under the Plan to certain employees formerly employed by Commonwealth Edison of Indiana; (iii) discontinue, effective September 1, 1998, eligibility under the Plan for employees classified as temporary employees; (iv) reflect the corporate name change of certain Employing Companies; and (v) clarify distribution requirements with respect to alternate payees; and WHEREAS, the Committee is authorized pursuant to Section 12.1 of the Plan to amend the Plan at any time, provided that the amendment does not involve a substantial increase in cost to any Employing Company or is necessary or desirable to comply with the laws and regulations applicable to the Plan. NOW, THEREFORE, the Committee hereby amends the Plan as follows: I.
APPENDIX A - EMPLOYING COMPANIES The Employing Companies as of January 1, 1998 are: Alabama Power Company Georgia Power Company Gulf Power Company Mississippi Power Company Savannah Electric and Power Company Southern Communications Services, Inc. Southern Company Services, Inc. Southern Energy Resources, Inc. Southern Energy Solutions, Inc. Southern Nuclear Operating Company, Inc.
APPENDIX B - INCENTIVE PAY PLANS Effective as of January 1, 1997, all awards under the following incentive pay plans shall be counted as compensation for purposes of Section 2.12 of the Plan: The Southern Company Performance Pay Plan The Southern Company Productivity Improvement Plan The Southern Company Executive Productivity Improvement Plan Georgia Power Company 1998 Customer Partnership Teams Incentive Plan Georgia Power Company 1998 Residential Customer Partnership Team Incentive Plan Georgia Power Company 1998 Northwest Region Residential Sales Team Incentive Plan Georgia Power Company Customer Choice Group 1998 Compensation Plan Georgia Power Company Olympic Project Management Group 1998 Short Term Incentive Plan Southern Company National Accounts 1998 Incentive Plan Southern Communications Performance Improvement Plan (PIP) Southern Communications Performance Pay Plan (PPP) Southern Company Energy Solutions, Inc. 1998 Officer and Staff Incentive Compensation Plan
THIRD AMENDMENT TO THE SOUTHERN COMPANY PERFORMANCE SHARING PLAN WHEREAS, Southern Company Services, Inc. ("Company") heretofore adopted The Southern Company Performance Sharing Plan ("Plan"), effective as of January 1, 1997; and WHEREAS, the Performance Sharing Plan Committee ("Committee") previously amended the Plan on two separate occasions and desires to amend the Plan again in order to (i) clarify the definition of "Compensation" under the Plan; (ii) clarify the grant of prior service credit under the Plan to certain employees formerly employed by Commonwealth Edison of Indiana; (iii) discontinue, effective September 1, 1998, eligibility under the Plan for employees classified as temporary employees; (iv) reflect the corporate name change of certain Employing Companies; and (v) clarify distribution requirements with respect to alternate payees; and WHEREAS, the Committee is authorized pursuant to Section 12.1 of the Plan to amend the Plan at any time, provided that the amendment does not involve a substantial increase in cost to any Employing Company or is necessary or desirable to comply with the laws and regulations applicable to the Plan. NOW, THEREFORE, the Committee hereby amends the Plan as follows: I. Effective as of January 1, 1998, Section 2.12 shall be amended by deleting the first paragraph of such Section in its entirety and substituting a new paragraph as follows: 2.12 "Compensation" shall mean the base salary or wages paid to a Participant by an Affiliated Employer for the Plan Year during which he is eligible to participate, including all amounts contributed by an Affiliated Employer to
APPENDIX B - INCENTIVE PAY PLANS Effective as of January 1, 1997, all awards under the following incentive pay plans shall be counted as compensation for purposes of Section 2.12 of the Plan: The Southern Company Performance Pay Plan The Southern Company Productivity Improvement Plan The Southern Company Executive Productivity Improvement Plan Georgia Power Company 1998 Customer Partnership Teams Incentive Plan Georgia Power Company 1998 Residential Customer Partnership Team Incentive Plan Georgia Power Company 1998 Northwest Region Residential Sales Team Incentive Plan Georgia Power Company Customer Choice Group 1998 Compensation Plan Georgia Power Company Olympic Project Management Group 1998 Short Term Incentive Plan Southern Company National Accounts 1998 Incentive Plan Southern Communications Performance Improvement Plan (PIP) Southern Communications Performance Pay Plan (PPP) Southern Company Energy Solutions, Inc. 1998 Officer and Staff Incentive Compensation Plan
THIRD AMENDMENT TO THE SOUTHERN COMPANY PERFORMANCE SHARING PLAN WHEREAS, Southern Company Services, Inc. ("Company") heretofore adopted The Southern Company Performance Sharing Plan ("Plan"), effective as of January 1, 1997; and WHEREAS, the Performance Sharing Plan Committee ("Committee") previously amended the Plan on two separate occasions and desires to amend the Plan again in order to (i) clarify the definition of "Compensation" under the Plan; (ii) clarify the grant of prior service credit under the Plan to certain employees formerly employed by Commonwealth Edison of Indiana; (iii) discontinue, effective September 1, 1998, eligibility under the Plan for employees classified as temporary employees; (iv) reflect the corporate name change of certain Employing Companies; and (v) clarify distribution requirements with respect to alternate payees; and WHEREAS, the Committee is authorized pursuant to Section 12.1 of the Plan to amend the Plan at any time, provided that the amendment does not involve a substantial increase in cost to any Employing Company or is necessary or desirable to comply with the laws and regulations applicable to the Plan. NOW, THEREFORE, the Committee hereby amends the Plan as follows: I. Effective as of January 1, 1998, Section 2.12 shall be amended by deleting the first paragraph of such Section in its entirety and substituting a new paragraph as follows: 2.12 "Compensation" shall mean the base salary or wages paid to a Participant by an Affiliated Employer for the Plan Year during which he is eligible to participate, including all amounts contributed by an Affiliated Employer to The Southern Company Employee Savings Plan and/or The Southern Company Flexible Benefits Plan on behalf of a Participant pursuant to a salary reduction arrangement under such plans. Compensation shall also include all awards under any incentive pay plans sponsored by an Affiliated Employer as shall be determined by the Committee from time to time and set forth in Appendix B attached hereto, monthly shift and monthly seven-day schedule differentials, scheduled shift pay, geographic premiums, monthly nuclear plant premiums, monthly customer service premiums, all awards under the incentive pay plans sponsored by Southern Energy, Inc. (or Southern Energy Resources, Inc.) provided that such awards do not exceed the maximum annual award of such Participant for the Plan Year under the Southern Energy, Inc. Short Term Incentive Plan and, effective January 1, 1998, sales commissions paid under a sales commission payment program sponsored by an Affiliated Employer for sales commissioned based employees. Compensation shall exclude regular overtime pay, any hourly shift differentials, substitution pay, such amounts which are reimbursements to a Participant paid by any Affiliated Employer including, but not limited to, reimbursement for such items as moving expenses and travel and entertainment expenses, and imputed income for automobile expenses, tax preparation expenses and health and life insurance premiums paid by the Affiliated Employer. II.
THIRD AMENDMENT TO THE SOUTHERN COMPANY PERFORMANCE SHARING PLAN WHEREAS, Southern Company Services, Inc. ("Company") heretofore adopted The Southern Company Performance Sharing Plan ("Plan"), effective as of January 1, 1997; and WHEREAS, the Performance Sharing Plan Committee ("Committee") previously amended the Plan on two separate occasions and desires to amend the Plan again in order to (i) clarify the definition of "Compensation" under the Plan; (ii) clarify the grant of prior service credit under the Plan to certain employees formerly employed by Commonwealth Edison of Indiana; (iii) discontinue, effective September 1, 1998, eligibility under the Plan for employees classified as temporary employees; (iv) reflect the corporate name change of certain Employing Companies; and (v) clarify distribution requirements with respect to alternate payees; and WHEREAS, the Committee is authorized pursuant to Section 12.1 of the Plan to amend the Plan at any time, provided that the amendment does not involve a substantial increase in cost to any Employing Company or is necessary or desirable to comply with the laws and regulations applicable to the Plan. NOW, THEREFORE, the Committee hereby amends the Plan as follows: I. Effective as of January 1, 1998, Section 2.12 shall be amended by deleting the first paragraph of such Section in its entirety and substituting a new paragraph as follows: 2.12 "Compensation" shall mean the base salary or wages paid to a Participant by an Affiliated Employer for the Plan Year during which he is eligible to participate, including all amounts contributed by an Affiliated Employer to The Southern Company Employee Savings Plan and/or The Southern Company Flexible Benefits Plan on behalf of a Participant pursuant to a salary reduction arrangement under such plans. Compensation shall also include all awards under any incentive pay plans sponsored by an Affiliated Employer as shall be determined by the Committee from time to time and set forth in Appendix B attached hereto, monthly shift and monthly seven-day schedule differentials, scheduled shift pay, geographic premiums, monthly nuclear plant premiums, monthly customer service premiums, all awards under the incentive pay plans sponsored by Southern Energy, Inc. (or Southern Energy Resources, Inc.) provided that such awards do not exceed the maximum annual award of such Participant for the Plan Year under the Southern Energy, Inc. Short Term Incentive Plan and, effective January 1, 1998, sales commissions paid under a sales commission payment program sponsored by an Affiliated Employer for sales commissioned based employees. Compensation shall exclude regular overtime pay, any hourly shift differentials, substitution pay, such amounts which are reimbursements to a Participant paid by any Affiliated Employer including, but not limited to, reimbursement for such items as moving expenses and travel and entertainment expenses, and imputed income for automobile expenses, tax preparation expenses and health and life insurance premiums paid by the Affiliated Employer. II. Effective September 1, 1998, Section 2.19 of the Plan, as amended by the Second Amendment to the Plan, is further amended by deleting the first paragraph of such Section and substituting the following in lieu thereof: 2.19 "Eligible Employee" shall mean an Employee who is employed by an Employing Company and who is classified by the Employing Company as a regular full-time, regular part-time or cooperative education employee who: III. Effective September 1, 1998, Section 2.19 is further amended by deleting subsection (y) of such Section in its entirety and substituting a new subsection (y) as follows: (y) any individual or Employee who is classified by the Employing Company as a temporary employee or as an independent contractor, regardless of prior inclusion under the Plan or whether such classification is determined to be in error; or
IV. Effective January 1, 1998, Section 3.6 of the Plan, as added by the First Amendment to the Plan, is amended by deleting such Section in its entirety and substituting the following in lieu thereof: 3.6 Former Commonwealth Edison of Indiana Employees. Effective January 1, 1998, notwithstanding any other provision of the Plan to the contrary, any former employee of Commonwealth Edison of Indiana ("ComEd") who was employed by Southern Energy Resources, Inc. on or before December 31, 1997 and is set forth on a schedule of employees acknowledged by the Committee, shall become a Participant as of January 1, 1998 and shall be entitled for vesting purposes hereunder to years of vesting service accrued under the Commonwealth Edison Company of Indiana Service Annuity System Plan ("ComEd Plan") on or after January 1, 1997, in addition to any Years of Service accrued under this Plan. In addition, any former employee of ComEd who becomes employed by Southern Energy Resources, Inc. on or after January 1, 1998 but prior to April 1, 1998 (hereafter "Date of Employment") and is set forth on the schedule of employees acknowledged by the Committee, shall become a Participant as of the Enrollment Date coincident with or next following such employee's Date of Employment, and shall be entitled for vesting purposes hereunder to years of vesting service accrued under the ComEd Plan on or after January 1, 1997, in addition to any Years of Service accrued under this Plan. V. Section 9.9 of the Plan is hereby amended by deleting such Section in its entirety and substituting the following in lieu thereof: 9.9 Distributions to Alternate Payees. If the Participant's Account under the Plan shall become subject to a domestic relations order which (a) is a qualified domestic relations order satisfying the requirements of Section 414(p) of the Code and (b) requires the distribution in a single lump sum of the entire portion of the Participant's Account required to be segregated for the benefit of an alternate payee, then the entire interest of such alternate payee shall be distributed in a single lump sum within ninety (90) days following the later of: (a) the Employing Company's determination that such domestic relations order is qualified in accordance with Section 414(p) of the Code; and (b) such Participant's Account becoming fully vested in accordance with Article VIII, or as soon as practicable thereafter. Such distribution to an alternate payee shall be made even if the Participant has not separated from the service of the Affiliated Employers. Any other distribution pursuant to a qualified domestic relations order shall not be made earlier than the later of: (a) the Participant's termination of service, or his attainment of age fifty (50), if earlier, and (b) such Participant's Account becoming fully vested in accordance with Article VIII. In no event shall a distribution to an alternate payee commence later than the date the Participant's (or his Beneficiary's) benefit payments otherwise commence. Such distribution to an alternate payee shall be made only in a manner permitted under this Article IX. VI. Appendix A of the Plan is amended by deleting such Appendix in its entirety and substituting the following in lieu thereof: APPENDIX A - EMPLOYING COMPANIES The Employing Companies as of January 1, 1998 are: Alabama Power Company Georgia Power Company Gulf Power Company Mississippi Power Company Savannah Electric and Power Company Southern Communications Services, Inc. Southern Company Energy Solutions, Inc. Southern Company Services, Inc. Southern Energy Resources, Inc. Southern Nuclear Operating Company, Inc.
VII. Except as amended herein by this Third Amendment, the Plan shall remain in full force and effect. IN WITNESS WHEREOF, Southern Company Services, Inc., through the duly authorized members of the Performance Sharing Plan Committee, has adopted this Third Amendment to The Southern Company Performance Sharing Plan this ____ day of _______, 1998 to be effective as stated herein. PERFORMANCE SHARING PLAN COMMITTEE Christopher C. Womack Robert A. Bell W. Dean Hudson
FOURTH AMENDMENT TO THE SOUTHERN COMPANY PERFORMANCE SHARING PLAN WHEREAS, Southern Company Services, Inc. ("Company") heretofore adopted The Southern Company Performance Sharing Plan ("Plan"), effective as of January 1, 1997; and WHEREAS, the Performance Sharing Plan Committee ("Committee") desires to amend the Plan in order to make certain design and other changes; and WHEREAS, the Committee is authorized pursuant to Section 12.1 of the Plan to amend the Plan at any time, provided that the amendment does not involve a substantial increase in cost to any Employing Company or is necessary or desirable to comply with the laws and regulations applicable to the Plan. NOW, THEREFORE, the Committee hereby amends the Plan as follows, to be effective as provided herein: I. Effective as of the date hereof, Article III of the Plan shall be amended by adding a new Section 3.7 thereto as follows: 3.7 Former Commonwealth Energy System Employees. Notwithstanding any other provision of the Plan to the contrary, with respect to a former employee of the Commonwealth Energy System ("ComElectric") who is employed by Southern Energy Resources, Inc. and is set forth on a schedule of employees acknowledged by the Committee, such employee shall become a Participant as of the Enrollment Date coincident with or next following such employee's date of employment, and shall be entitled, for vesting purposes hereunder, to years of vesting service accrued under the Pension Plan for Employees of Commonwealth Energy System and Subsidiary Companies ("ComElectric Plan") on or after January 1, 1997, in addition to any Years of Service accrued under this Plan. II. Except as amended herein by this Fourth Amendment, the Plan shall remain in full force and effect. IN WITNESS WHEREOF, Southern Company Services, Inc., through the duly authorized members of the Performance Sharing Committee, has adopted this Fourth Amendment to The Southern Company Performance Sharing Plan this _____ day of ________________, 1998, to be effective as stated herein. PERFORMANCE SHARING PLAN COMMITTEE:
FOURTH AMENDMENT TO THE SOUTHERN COMPANY PERFORMANCE SHARING PLAN WHEREAS, Southern Company Services, Inc. ("Company") heretofore adopted The Southern Company Performance Sharing Plan ("Plan"), effective as of January 1, 1997; and WHEREAS, the Performance Sharing Plan Committee ("Committee") desires to amend the Plan in order to make certain design and other changes; and WHEREAS, the Committee is authorized pursuant to Section 12.1 of the Plan to amend the Plan at any time, provided that the amendment does not involve a substantial increase in cost to any Employing Company or is necessary or desirable to comply with the laws and regulations applicable to the Plan. NOW, THEREFORE, the Committee hereby amends the Plan as follows, to be effective as provided herein: I. Effective as of the date hereof, Article III of the Plan shall be amended by adding a new Section 3.7 thereto as follows: 3.7 Former Commonwealth Energy System Employees. Notwithstanding any other provision of the Plan to the contrary, with respect to a former employee of the Commonwealth Energy System ("ComElectric") who is employed by Southern Energy Resources, Inc. and is set forth on a schedule of employees acknowledged by the Committee, such employee shall become a Participant as of the Enrollment Date coincident with or next following such employee's date of employment, and shall be entitled, for vesting purposes hereunder, to years of vesting service accrued under the Pension Plan for Employees of Commonwealth Energy System and Subsidiary Companies ("ComElectric Plan") on or after January 1, 1997, in addition to any Years of Service accrued under this Plan. II. Except as amended herein by this Fourth Amendment, the Plan shall remain in full force and effect. IN WITNESS WHEREOF, Southern Company Services, Inc., through the duly authorized members of the Performance Sharing Committee, has adopted this Fourth Amendment to The Southern Company Performance Sharing Plan this _____ day of ________________, 1998, to be effective as stated herein. PERFORMANCE SHARING PLAN COMMITTEE: Christopher C. Womack Robert A. Bell W. Dean Hudson
FIFTH AMENDMENT TO THE SOUTHERN COMPANY PERFORMANCE SHARING PLAN WHEREAS, Southern Company Services, Inc. ("Company") heretofore adopted The Southern Company Performance Sharing Plan ("Plan"), effective as of January 1, 1997; and WHEREAS, the Performance Sharing Plan Committee ("Committee") desires to amend the Plan to modify the definition of Compensation for appliance salespersons to include certain nonproductive pay earnings types as may be determined from time to time by the Committee; and
FIFTH AMENDMENT TO THE SOUTHERN COMPANY PERFORMANCE SHARING PLAN WHEREAS, Southern Company Services, Inc. ("Company") heretofore adopted The Southern Company Performance Sharing Plan ("Plan"), effective as of January 1, 1997; and WHEREAS, the Performance Sharing Plan Committee ("Committee") desires to amend the Plan to modify the definition of Compensation for appliance salespersons to include certain nonproductive pay earnings types as may be determined from time to time by the Committee; and WHEREAS, the Committee is authorized pursuant to Section 12.1 of the Plan to amend the Plan at any time, provided that the amendment does not involve a substantial increase in cost to any Employing Company or is necessary or desirable to comply with the laws and regulations applicable to the Plan. NOW, THEREFORE, the Committee hereby amends the Plan as follows, to be effective as provided herein: I. Effective as of January 1, 1998, Section 2.12 of the Plan (as previously amended by the Third Amendment) shall be amended by replacing the period at the end of the second sentence with a comma, and by adding the following to the end of said second sentence: , and, for appliance salespersons, certain nonproductive pay earnings types as determined from time to time by the Committee and set forth on Appendix C to the Plan, which Appendix may be updated from time to time. II. Except as amended herein by this Fifth Amendment, the Plan shall remain in full force and effect. IN WITNESS WHEREOF, Southern Company Services, Inc., through the duly authorized members of the Performance Sharing Committee, has adopted this Fifth Amendment to The Southern Company Performance Sharing Plan this _____ day of ________________, 1999, to be effective as stated herein. PERFORMANCE SHARING PLAN COMMITTEE: Christopher C. Womack Robert A. Bell W. Dean Hudson
APPENDIX C
Nonproductive Pay Earnings Types Earnings Code 003 092 093 095 096 100 106 108 111 112 Earnings Description Salesperson - Hourly Holiday Taken Meetings Meetings - Safety Disability 100% Disability Extended Approval Leave - Death Occupational Injury Jury Duty Training
APPENDIX C
Nonproductive Pay Earnings Types Earnings Code 003 092 093 095 096 100 106 108 111 112 113 115 116 117 118 119 125 127 442 Earnings Description Salesperson - Hourly Holiday Taken Meetings Meetings - Safety Disability 100% Disability Extended Approval Leave - Death Occupational Injury Jury Duty Training Safety Training Vacation Vacation Special Circumstances Vacation FMLA Employee Vacation FMLA Family Care Time Off With Pay Holiday Banked - Taken Vacation In Lieu Of Disability DISABILITY FMLA EMPLOYEE
SIXTH AMENDMENT TO THE SOUTHERN COMPANY PERFORMANCE SHARING PLAN WHEREAS, Southern Company Services, Inc. ("Company") heretofore adopted The Southern Company Performance Sharing Plan ("Plan"), effective as of January 1, 1997; and WHEREAS, the Performance Sharing Plan Committee ("Committee") desires to amend the Plan in order to make a technical change; and WHEREAS, the Committee is authorized pursuant to Section 12.1 of the Plan to amend the Plan at any time, provided that the amendment does not involve a substantial increase in cost to any Employing Company or is necessary or desirable to comply with the laws and regulations applicable to the Plan. NOW, THEREFORE, the Committee hereby amends the Plan as follows, to be effective as provided herein: I. Effective as of January 1, 1997, Subsection (w) of Section 2.19 of the Plan shall be amended as follows: (w) an Employee who is treated as such solely by reason of the "leased employee" rules of Code Section 414(n) such that, pursuant to an agreement between an Employing Company and any other person, such individual has performed services for the Employing Company (or the Employing Company and related persons as described in Code Section 414(n)(6)) on a substantially full-time basis for a period of at least one year and such services were performed under the primary direction or control of the Employing Company; II. Except as amended herein by this Sixth Amendment, the Plan shall remain in full force and effect. IN WITNESS WHEREOF, Southern Company Services, Inc., through the duly authorized members of the Performance Sharing Plan Committee, has adopted this Sixth Amendment to The Southern Company Performance Sharing Plan this _____ day of ________________, 1999, to be effective as stated herein.
SIXTH AMENDMENT TO THE SOUTHERN COMPANY PERFORMANCE SHARING PLAN WHEREAS, Southern Company Services, Inc. ("Company") heretofore adopted The Southern Company Performance Sharing Plan ("Plan"), effective as of January 1, 1997; and WHEREAS, the Performance Sharing Plan Committee ("Committee") desires to amend the Plan in order to make a technical change; and WHEREAS, the Committee is authorized pursuant to Section 12.1 of the Plan to amend the Plan at any time, provided that the amendment does not involve a substantial increase in cost to any Employing Company or is necessary or desirable to comply with the laws and regulations applicable to the Plan. NOW, THEREFORE, the Committee hereby amends the Plan as follows, to be effective as provided herein: I. Effective as of January 1, 1997, Subsection (w) of Section 2.19 of the Plan shall be amended as follows: (w) an Employee who is treated as such solely by reason of the "leased employee" rules of Code Section 414(n) such that, pursuant to an agreement between an Employing Company and any other person, such individual has performed services for the Employing Company (or the Employing Company and related persons as described in Code Section 414(n)(6)) on a substantially full-time basis for a period of at least one year and such services were performed under the primary direction or control of the Employing Company; II. Except as amended herein by this Sixth Amendment, the Plan shall remain in full force and effect. IN WITNESS WHEREOF, Southern Company Services, Inc., through the duly authorized members of the Performance Sharing Plan Committee, has adopted this Sixth Amendment to The Southern Company Performance Sharing Plan this _____ day of ________________, 1999, to be effective as stated herein. PERFORMANCE SHARING PLAN COMMITTEE: Christopher C. Womack Robert A. Bell W. Dean Hudson
EXHIBIT 10(a)77 THE SOUTHERN COMPANY SUPPLEMENTAL BENEFIT PLAN (Amended and Restated Effective as of January 1, 1998)
THE SOUTHERN COMPANY SUPPLEMENTAL BENEFIT PLAN
EXHIBIT 10(a)77 THE SOUTHERN COMPANY SUPPLEMENTAL BENEFIT PLAN (Amended and Restated Effective as of January 1, 1998)
THE SOUTHERN COMPANY SUPPLEMENTAL BENEFIT PLAN
Page
ARTICLE I -PURPOSE AND ADOPTION OF PLAN..........................1 1.1 Adoption.....................................................1 1.2 Purpose......................................................2
ARTICLE II - DEFINITIONS.........................................3 2.1 Account......................................................3 2.2 Beneficiary..................................................3 2.3 Board of Directors...........................................3 2.4 Code 3 2.5 Common Stock.................................................3 2.6 Company......................................................3 2.7 Deferred Compensation Plan...................................3 2.8 Effective Date...............................................3 2.9 Employee.....................................................3 2.10 Employing Company...........................................4 2.11 ESOP........................................................4 2.12 Non-Pension Benefit.........................................4 2.13 Participant.................................................4 2.14 Pension Benefit.............................................4 2.15 Pension Plan................................................4 2.16 Performance Sharing Plan....................................4 2.17 Phantom Common Stock........................................4 2.18 Plan........................................................5 2.19 Plan Year...................................................5 2.20 Purchase Price..............................................5 2.21 Retirement Board............................................5 2.22 Sales Price.................................................5 2.23 Savings Plan................................................5 2.24 Valuation Date..............................................5
ARTICLE III - ADMINISTRATION OF PLAN.............................7 3.1 Administrator................................................7 3.2 Powers.......................................................7 3.3 Duties of the Retirement Board...............................7 3.4 Indemnification..............................................8
ARTICLE IV - ELIGIBILITY........................................10 4.1 Eligibility Requirements....................................10 4.2 Determination of Eligibility................................10 4.3 Eligibility of Employees of Savannah Electric and Power Company...............................................11
ARTICLE V - BENEFITS............................................12 5.1 Pension Benefit.............................................12 5.2 Non-Pension Benefit.........................................12 5.3 Distribution of Benefits....................................15 5.4 Allocation of Pension Benefit Liability.....................18 5.5 Funding of Benefits.........................................19 5.6 Withholding.................................................19
THE SOUTHERN COMPANY SUPPLEMENTAL BENEFIT PLAN
Page
ARTICLE I -PURPOSE AND ADOPTION OF PLAN..........................1 1.1 Adoption.....................................................1 1.2 Purpose......................................................2
ARTICLE II - DEFINITIONS.........................................3 2.1 Account......................................................3 2.2 Beneficiary..................................................3 2.3 Board of Directors...........................................3 2.4 Code 3 2.5 Common Stock.................................................3 2.6 Company......................................................3 2.7 Deferred Compensation Plan...................................3 2.8 Effective Date...............................................3 2.9 Employee.....................................................3 2.10 Employing Company...........................................4 2.11 ESOP........................................................4 2.12 Non-Pension Benefit.........................................4 2.13 Participant.................................................4 2.14 Pension Benefit.............................................4 2.15 Pension Plan................................................4 2.16 Performance Sharing Plan....................................4 2.17 Phantom Common Stock........................................4 2.18 Plan........................................................5 2.19 Plan Year...................................................5 2.20 Purchase Price..............................................5 2.21 Retirement Board............................................5 2.22 Sales Price.................................................5 2.23 Savings Plan................................................5 2.24 Valuation Date..............................................5
ARTICLE III - ADMINISTRATION OF PLAN.............................7 3.1 Administrator................................................7 3.2 Powers.......................................................7 3.3 Duties of the Retirement Board...............................7 3.4 Indemnification..............................................8
ARTICLE IV - ELIGIBILITY........................................10 4.1 Eligibility Requirements....................................10 4.2 Determination of Eligibility................................10 4.3 Eligibility of Employees of Savannah Electric and Power Company...............................................11
ARTICLE V - BENEFITS............................................12 5.1 Pension Benefit.............................................12 5.2 Non-Pension Benefit.........................................12 5.3 Distribution of Benefits....................................15 5.4 Allocation of Pension Benefit Liability.....................18 5.5 Funding of Benefits.........................................19 5.6 Withholding.................................................19
ARTICLE VI - MISCELLANEOUS......................................20 6.1 Assignment..................................................20 6.2 Amendment and Termination...................................20 6.3 No Guarantee of Employment..................................20 6.4 Construction................................................21
THE SOUTHERN COMPANY SUPPLEMENTAL BENEFIT PLAN ARTICLE I - PURPOSE AND ADOPTION OF PLAN 1.1......Adoption: The Southern Company Supplemental Benefit Plan, effective as of January 1, 1998 and hereinafter set forth (the "Plan"), is a modification and continuation of the Supplemental Benefit Plan for Southern Company Services, Inc. and Southern Electric International, Inc., which originally became effective January 1, 1983, and which has been amended from time to time. .........Effective January 1, 1998, the following other plans are merged into the Plan: o Supplemental Benefit Plan for Alabama Power Company o Supplemental Benefit Plan for Georgia Power Company o Supplemental Benefit Plan for Gulf Power Company o Supplemental Benefit Plan for Mississippi Power Company o Supplemental Benefit Plan for Southern Company Services, Inc. and Southern Electric International, Inc., as adopted by Southern Communications Services, Inc. o Supplemental Benefit Plan for Southern Company Services, Inc. and Southern Electric International, Inc., as adopted by Southern Development and Investment Group, Inc. o Supplemental Benefit Plan for Southern Nuclear Operating Company, Inc. .........Employees participating in the merged plans and employed by an Employing Company on January 1, 1998 shall become immediately covered under the Plan; provided, however, that the terms of the prior plans govern an Employee's circumstances with regard to actions taken or occurring before January 1, 1998. The benefits of former Employees are payable in accordance with the provisions of the prior plans. 1.2......Purpose: The Plan is designed to provide certain retirement and other deferred compensation benefits primarily for a select group of management or highly compensated employees which are not otherwise payable or cannot otherwise be provided by the Employing Companies (1) under The Southern Company Pension Plan, The Southern Company Employee Savings Plan, The Southern Company Employee Stock Ownership Plan and The Southern Company Performance Sharing Plan, as a result of the limitations set forth under Sections 401(a)(17), 401(k), 401(m), 402(g), or 415 of the Internal Revenue Code of 1986, as amended from time to time; and (2) to compensate for lost benefits resulting from participation in The Southern Company Deferred Compensation Plan, as amended from time to time. The Plan shall be an unfunded deferred compensation arrangement whose benefits shall be paid solely from the general assets of the Employing Companies.
ARTICLE II - DEFINITIONS 2.1......"Account" shall mean the total amount credited to the account of a Participant to reflect the interest of a Participant in the Plan resulting from a Participant's Non-Pension Benefit calculated in accordance with Section 5.2. 2.2......"Beneficiary" shall mean any person, estate, trust, or organization entitled to receive any payment under the Plan upon the death of a Participant. 2.3......"Board of Directors" shall mean the Board of Directors of the Company. 2.4......"Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. 2.5......"Common Stock" shall mean common stock of The Southern Company. 2.6......"Company" shall mean Southern Company Services, Inc. 2.7......"Deferred Compensation Plan" shall mean The Southern Company Deferred Compensation Plan, as amended from time to time.
ARTICLE II - DEFINITIONS 2.1......"Account" shall mean the total amount credited to the account of a Participant to reflect the interest of a Participant in the Plan resulting from a Participant's Non-Pension Benefit calculated in accordance with Section 5.2. 2.2......"Beneficiary" shall mean any person, estate, trust, or organization entitled to receive any payment under the Plan upon the death of a Participant. 2.3......"Board of Directors" shall mean the Board of Directors of the Company. 2.4......"Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. 2.5......"Common Stock" shall mean common stock of The Southern Company. 2.6......"Company" shall mean Southern Company Services, Inc. 2.7......"Deferred Compensation Plan" shall mean The Southern Company Deferred Compensation Plan, as amended from time to time. 2.8......"Effective Date" of this amendment and restatement and the consolidation of plans shall mean January 1, 1998. 2.9......"Employee" shall mean any person who is currently employed by an Employing Company. 2.10....."Employing Company" shall mean the Company and any affiliate or subsidiary of The Southern Company which the Board of Directors may from time to time determine to bring under the Plan and any successor to them. The Employing Companies are set forth in Appendix A to the Plan, as amended from time to time. 2.11....."ESOP" shall mean The Southern Company Employee Stock Ownership Plan, as amended from time to time. 2.12....."Non-Pension Benefit" shall mean the benefit described in Section 5.2. 2.13....."Participant" shall mean an Employee or former Employee of an Employing Company who is eligible to participate in the Plan pursuant to Sections 4.1 and 4.2. 2.14....."Pension Benefit" shall mean the benefit described in Section 5.1. 2.15....."Pension Plan" shall mean The Southern Company Pension Plan, as amended from time to time. 2.16....."Performance Sharing Plan" shall mean The Southern Company Performance Sharing Plan, as amended from time to time. 2.17....."Phantom Common Stock" shall mean the Common Stock in which a Participant is deemed to invest his Non-Pension Benefit as if such Common Stock had been purchased upon contribution to the Savings Plan, the ESOP and/or the Performance Sharing Plan, as the case may be. 2.18....."Plan" shall mean The Southern Company Supplemental Benefit Plan, as amended from time to time. 2.19....."Plan Year" shall mean the calendar year. 2.20....."Purchase Price" shall mean for purposes of deemed purchases of Phantom Common Stock the following: (a) with respect to the Savings Plan and the Performance Sharing Plan, the weighted average purchase price of a share of the Common Stock under the Savings Plan as of the applicable Valuation Date; (b) with respect to any investment of dividends attributable to Phantom Common Stock, the dividend reinvestment price of a share of the Common Stock under the Savings Plan as of the applicable Valuation Date; and (c) with respect
to the ESOP, the price at which a share of Common Stock is purchased with regard to a contribution made for each applicable Plan Year. 2.21....."Retirement Board" shall mean the Retirement Board of the Pension Plan. 2.22....."Sales Price" shall mean the weighted average sales price of a share of Common Stock under the Savings Plan as of each applicable Valuation Date. 2.23....."Savings Plan" shall mean The Southern Company Employee Savings Plan, as amended from time to time. 2.24....."Valuation Date" shall mean each business day of the New York Stock Exchange. Where the context requires, the definitions of all terms set forth in the Pension Plan, the ESOP, the Performance Sharing Plan, the Savings Plan and the Deferred Compensation Plan shall apply with equal force and effect for purposes of interpretation and administration of the Plan, unless said terms are otherwise specifically defined in the Plan. The masculine pronoun shall be construed to include the feminine pronoun and the singular shall include the plural, where the context so requires.
ARTICLE III - ADMINISTRATION OF PLAN 3.1......Administrator. The general administration of the Plan shall be placed in the Retirement Board. 3.2......Powers. The Retirement Board shall administer the Plan in accordance with its terms and shall have all powers necessary to carry out the provisions of the Plan more particularly set forth herein. It shall have the discretion to interpret the Plan and shall determine all questions arising in the administration, interpretation and application of the Plan. Any such determination by it shall be conclusive and binding on all persons. It may adopt such regulations as it deems desirable for the conduct of its affairs. It may appoint such accountants, counsel, actuaries, specialists and other persons as it deems necessary or desirable in connection with the administration of this Plan, and shall be the agent for the service of process. 3.3......Duties of the Retirement Board. .........(a) The Retirement Board is responsible for the daily administration of the Plan. It may appoint other persons or entities to perform any of its fiduciary functions. The Retirement Board and any such appointee may employ advisors and other persons necessary or convenient to help it carry out its duties, including its fiduciary duties. The Retirement Board shall have the right to remove any such appointee from his position. Any person, group of persons or entity may serve in more than one fiduciary capacity. .........(b) The Retirement Board shall maintain accurate and detailed records and accounts of Participants and of their rights under the Plan and of all receipts, disbursements, transfers and other transactions concerning the Plan. Such accounts, books and records relating thereto shall be open at all reasonable times to inspection and audit by persons designated by the Retirement Board. .........(c) The Retirement Board shall take all steps necessary to ensure that the Plan complies with the law at all times. These steps shall include such items as the preparation and filing of all documents and forms required by any governmental agency; maintaining of adequate Participants' records; recording and transmission of all notices required to be given to Participants and their Beneficiaries; the receipt and dissemination, if required, of all reports and information received from an Employing Company; securing of such fidelity bonds as may be required by law; and doing such other acts necessary for the proper administration of the Plan. The Retirement Board shall keep a record of all of its proceedings and acts, and shall keep all such books of account, records and other data as may be necessary for proper administration of the Plan. 3.4......Indemnification. The Employing Companies shall indemnify the Retirement Board against any and all claims, losses, damages, expenses and liability arising from an action or failure to act, except when the same is finally judicially determined to be due to gross negligence or willful misconduct. The Employing Companies may purchase at their own expense sufficient liability insurance for the Retirement Board to cover any and all claims, losses, damages and expenses arising from any action or failure to act in connection with the execution of the duties as Retirement Board. No member of the Retirement Board who is also an Employee of the Employing Companies shall receive any compensation from the Plan for his services in administering the Plan.
ARTICLE III - ADMINISTRATION OF PLAN 3.1......Administrator. The general administration of the Plan shall be placed in the Retirement Board. 3.2......Powers. The Retirement Board shall administer the Plan in accordance with its terms and shall have all powers necessary to carry out the provisions of the Plan more particularly set forth herein. It shall have the discretion to interpret the Plan and shall determine all questions arising in the administration, interpretation and application of the Plan. Any such determination by it shall be conclusive and binding on all persons. It may adopt such regulations as it deems desirable for the conduct of its affairs. It may appoint such accountants, counsel, actuaries, specialists and other persons as it deems necessary or desirable in connection with the administration of this Plan, and shall be the agent for the service of process. 3.3......Duties of the Retirement Board. .........(a) The Retirement Board is responsible for the daily administration of the Plan. It may appoint other persons or entities to perform any of its fiduciary functions. The Retirement Board and any such appointee may employ advisors and other persons necessary or convenient to help it carry out its duties, including its fiduciary duties. The Retirement Board shall have the right to remove any such appointee from his position. Any person, group of persons or entity may serve in more than one fiduciary capacity. .........(b) The Retirement Board shall maintain accurate and detailed records and accounts of Participants and of their rights under the Plan and of all receipts, disbursements, transfers and other transactions concerning the Plan. Such accounts, books and records relating thereto shall be open at all reasonable times to inspection and audit by persons designated by the Retirement Board. .........(c) The Retirement Board shall take all steps necessary to ensure that the Plan complies with the law at all times. These steps shall include such items as the preparation and filing of all documents and forms required by any governmental agency; maintaining of adequate Participants' records; recording and transmission of all notices required to be given to Participants and their Beneficiaries; the receipt and dissemination, if required, of all reports and information received from an Employing Company; securing of such fidelity bonds as may be required by law; and doing such other acts necessary for the proper administration of the Plan. The Retirement Board shall keep a record of all of its proceedings and acts, and shall keep all such books of account, records and other data as may be necessary for proper administration of the Plan. 3.4......Indemnification. The Employing Companies shall indemnify the Retirement Board against any and all claims, losses, damages, expenses and liability arising from an action or failure to act, except when the same is finally judicially determined to be due to gross negligence or willful misconduct. The Employing Companies may purchase at their own expense sufficient liability insurance for the Retirement Board to cover any and all claims, losses, damages and expenses arising from any action or failure to act in connection with the execution of the duties as Retirement Board. No member of the Retirement Board who is also an Employee of the Employing Companies shall receive any compensation from the Plan for his services in administering the Plan.
ARTICLE IV - ELIGIBILITY 4.1......Eligibility Requirements. Subject to Section 4.3, all Employees who are determined eligible to participate in accordance with Section 4.2: (a) whose benefits under the Pension Plan are limited by the limitations set forth in Sections 401(a)(17) or 415 of the Code, (b) for whom contributions by their Employing Company to the Savings Plan are limited by the limitations set forth in Sections 401(a)(17), 401(k), 401(m), 402(g) or 415 of the Code, (c) for whom contributions by their Employing Company to the ESOP are limited by the limitations set forth in Sections 401(a)(17) or 415 of the Code, (d) for whom contributions by their Employing Company to the Performance Sharing Plan are limited by the limitations set forth in Sections 401(a)(17) or 415 of the Code, or (e) who make deferrals under the Deferred Compensation Plan, shall be eligible to receive benefits under the Plan. 4.2......Determination of Eligibility. The Retirement Board shall determine which Employees are eligible to participate. Upon becoming a Participant, an Employee shall be deemed to have assented to the Plan and to any amendments hereafter adopted. The Retirement Board shall be authorized to rescind the eligibility of any Participant if necessary to insure that the Plan is maintained primarily for the purpose of providing deferred compensation to a select group of management or highly compensated employees under the Employee Retirement Income Security Act of 1974, as amended. 4.3......Eligibility of Employees of Savannah Electric and Power Company. .........(a) Employees of Savannah Electric and Power Company meeting the requirements of Sections 4.1 and 4.2 on or after January 1, 1997 shall be eligible to participate in the Plan provided that such employees are not participating in the Supplemental Executive Retirement Plan of Savannah Electric and Power Company. Such Employees' benefits shall include any accruals for the Plan Year ending December 31, 1997 as determined in accordance with Sections 5.1 and 5.2. .........(b) Notwithstanding paragraph (a) above, Employees of Savannah Electric and Power Company who have participated in The Southern Company Deferred Compensation Plan on and after January 1, 1996, shall be eligible to participate in the Plan but only to the extent that the Plan compensates employees for lost benefits resulting from participation in The Southern Company Deferred Compensation Plan. Such Employees' benefits shall include any accruals permitted under the preceding sentence for Plan Years ending December 31, 1996 and December 31, 1997 determined in accordance with Sections 5.1 and 5.2.
ARTICLE V - BENEFITS 5.1......Pension Benefit. .........(a) Each Participant shall be entitled to a Pension Benefit equal to that portion of his Retirement Income under the Pension Plan which is not payable under the Pension Plan as a result of the limitations imposed by Sections 401(a)(17), 415(b), or 415(e) of the Code. .........(b) For purposes of this Section 5.1, the Pension Benefit of a Participant shall be calculated based on the Participant's Earnings that are considered under the Pension Plan in calculating his Retirement Income, without regard to the limitation of Section 401(a)(17) of the Code, including any portion of his compensation he may have elected to defer under the Deferred Compensation Plan, but excluding incentive pay he deferred under such Deferred Compensation Plan. .........(c) To the extent that a Participant's Retirement Income under the Pension Plan is recalculated as a result of an amendment to the Pension Plan in order to increase the amount of his Retirement Income, the Participant's Pension Benefit shall also be recalculated in order to properly reflect such increase in determining payments of the Participant's Pension Benefit made on or after the effective date of such increase. 5.2......Non-Pension Benefit. .........(a) A Participant shall be entitled to a Non-Pension Benefit which is determined under this Section 5.2. An
ARTICLE V - BENEFITS 5.1......Pension Benefit. .........(a) Each Participant shall be entitled to a Pension Benefit equal to that portion of his Retirement Income under the Pension Plan which is not payable under the Pension Plan as a result of the limitations imposed by Sections 401(a)(17), 415(b), or 415(e) of the Code. .........(b) For purposes of this Section 5.1, the Pension Benefit of a Participant shall be calculated based on the Participant's Earnings that are considered under the Pension Plan in calculating his Retirement Income, without regard to the limitation of Section 401(a)(17) of the Code, including any portion of his compensation he may have elected to defer under the Deferred Compensation Plan, but excluding incentive pay he deferred under such Deferred Compensation Plan. .........(c) To the extent that a Participant's Retirement Income under the Pension Plan is recalculated as a result of an amendment to the Pension Plan in order to increase the amount of his Retirement Income, the Participant's Pension Benefit shall also be recalculated in order to properly reflect such increase in determining payments of the Participant's Pension Benefit made on or after the effective date of such increase. 5.2......Non-Pension Benefit. .........(a) A Participant shall be entitled to a Non-Pension Benefit which is determined under this Section 5.2. An Account shall be established for the Participant as of his initial Plan Year of participation in the Plan. Each Plan Year, such Account shall be credited with an amount equal to the amount that his Employing Company is prohibited from contributing (1) to the Savings Plan on behalf of the Participant as a result of the limitations imposed by Sections 401(a)(17), 401(k), 401(m), 402(g), 415(c) or 415(e) of the Code, (2) to the ESOP on behalf of the Participant as a result of the limitations imposed by Sections 401(a)(17), 415(c) or 415(e) of the Code and (3) to the Performance Sharing Plan (including for the 1997 Plan Year) on behalf of the Participant as a result of the limitations imposed by Sections 401(a)(17), 415(c) or 415(e) of the Code. .........(b) For purposes of this Section 5.2, the Non-Pension Benefit of a Participant shall be calculated based on the Participant's compensation that would have been considered in calculating allocations to his accounts under the Savings Plan, ESOP and Performance Sharing Plan, without regard to the limitations of Section 401(a)(17) or Section 402(g) of the Code, including any portion of his compensation he may have elected to defer under the Deferred Compensation Plan, but with respect to the Savings Plan only excluding incentive pay he deferred under the Deferred Compensation Plan. .........(c) The Non-Pension Benefit of the Participant shall be deemed to be invested in Phantom Common Stock. On each such date of investment, a Participant's Account shall be credited with the number of shares (including fractional shares) of Phantom Common Stock which could have been purchased on such date, based upon the Common Stock's Purchase Price. As of the date upon which occurs the payment of dividends on the Common Stock, there shall be credited with respect to shares of Phantom Common Stock in the Participant's Account on such date, such additional shares (including fractional shares) of Phantom Common Stock as follows: (1) In the case of cash dividends, such additional shares as could be purchased at the Purchase Price with the dividends which would have been payable if the credited shares had been outstanding; (2) In the case of dividends payable in property other than cash or Common Stock, such additional shares as could be purchased at the Purchase Price with the fair market value of the property which would have been payable if the credited shares had been outstanding; or (3) In the case of dividends payable in Common Stock, such additional shares as would have been payable on the credited shares if they had been outstanding. (d) As soon as practicable following the first day of his eligibility to have benefits credited to his Account, a Participant shall designate in writing on a form to be prescribed by the Retirement Board the method of payment of his Account, which shall be the payment of a single lump sum or a series of annual installments not to exceed twenty (20). The method of distribution initially designated by a Participant shall not be revoked and shall govern
the distribution of a Participant's Account. Notwithstanding the foregoing, in the sole discretion of the Retirement Board, upon application by the Participant, the method of distribution designated by such Participant may be modified not prior to 395 days nor later than 365 days prior to a Participant's date of separation from service in order to change the form of distribution of his Account in accordance with the terms of the Plan; provided, however, that any Participant who is required to file reports pursuant to Section 16(a) of the Securities and Exchange Act of 1934, as amended, with respect to equity securities of The Southern Company shall not be permitted to amend his distribution election during any time period for which such Participant is required to file any such reports with respect to his Non-Pension Benefit unless such amendment is specifically approved by the Retirement Board in its sole discretion. Each Participant, his Beneficiary, and legal representative shall be bound as to any action taken pursuant to the method of distribution elected by a Participant and the terms of the Plan. 5.3 Distribution of Benefits. (a) The Pension Benefit, as determined in accordance with Section 5.1, shall be payable in monthly increments on the first day of the month concurrently with the Participant's Retirement Income under the Pension Plan. The form in which the Pension Benefit is paid will be the same as elected by the Participant under the Pension Plan except that the amount of the monthly benefit will be modified at the appropriate time based on the commencement of payments as follows. Payments shall be adjusted to include three components: (1) The amount necessary to pay the Hospital Insurance portion of the tax due under the Federal Insurance Contributions Act with respect to the accrued Pension Benefit determined upon retirement (or such other appropriate "resolution date" as defined under Treasury Regulation Section 31.3121(v)-2) calculated in accordance with Section 5.1; (2) The amount estimated to pay the federal and state income tax withholding liability due on the amount paid under paragraph (1) above; and (3) An adjusted monthly benefit determined on an actuarially equivalent basis in accordance with the terms of the Pension Plan which takes into account the amounts paid under paragraph (1) and (2) above and taking into account the form of benefit elected by the Participant under the Pension Plan. Upon adjustment, the remaining monthly payments shall equal the amount described in paragraph (3) above. The Beneficiary of a Participant's Pension Benefit shall be the same as the Provisional Payee, if any, of the Participant's Retirement Income under the Pension Plan. (b) When a Participant terminates his employment with an Employing Company, said Participant shall be entitled to receive the market value of any shares of Phantom Common Stock (and fractions thereof) reflected in his Account in a single lump sum distribution or annual installments not to exceed twenty (20). Such distribution shall be made not later than sixty (60) days following the date on which his termination of employment occurs, or as soon as reasonably practicable thereafter. The transfer by a Participant between companies within The Southern Company shall not be deemed to be a termination of employment with an Employing Company. With regard to any distribution made under this Article, the market value of any shares of Phantom Common Stock credited to a Participant's Account shall be based on the Sales Price. No portion of a Participant's Account shall be distributed in Common Stock. (c) In the event a Participant elects to receive the distribution of his Account in annual installments, the first payment shall be made not later than sixty (60) days following the date on which his termination of employment occurs, or as soon as reasonably practicable thereafter. Installments shall equal the balance in the Participant's Account taking into account the tax due under the Federal Insurance Contributions Act divided by the number of annual installment payments. Each subsequent annual payment shall be an amount equal to the balance in the Participant's Account as of the Valuation Date, divided by the number of the remaining annual payments and shall be due on the anniversary of the preceding payment date. (d) Upon the death of a Participant, or a former Participant prior to the payment of the market value of any shares of Phantom Common Stock (and fractions thereof) credited to said Participant's Account based on the Sales Price, the unpaid balance shall be paid in the sole discretion of the Retirement Board (1) in a lump sum to the designated Beneficiary of a Participant or former Participant within sixty (60) days following the date on which the Retirement Board is provided evidence of the Participant's death (or as soon as reasonably practicable
thereafter) or (2) in accordance with the distribution method chosen by such Participant or former Participant. The Beneficiary designation may be changed by the Participant or former Participant at any time without the consent of the prior Beneficiary. In the event a Beneficiary designation is not on file or the designated Beneficiary is deceased or cannot be located, payment will be made to the person or persons in the first of the following classes of successive preference, if then living: (1) the Participant's spouse on the date of his death; (2) the Participant's children, equally; (3) the Participant's parents, equally; (4) the Participant's brothers and sisters, equally; or (5) the Participant's executors or administrators. Payment to such one or more persons shall completely discharge the Plan with respect to the amount so paid. (e) Upon the total disability of a Participant or former Participant, as determined by the Social Security Administration prior to the payment of the market value of any shares of Phantom Common Stock (and practices thereof) credited to such Participant's Account based on the Sales Price, the unpaid balance of his Account shall be paid in the sole discretion of the Retirement Board (1) in a lump sum to the Participant or former Participant, or his legal representative within sixty (60) days following the date on which the Retirement Board receives notification of the determination of a disability by the Social Security Administration (or as soon as reasonably practicable thereafter) or (2) in accordance with the distribution method elected by such Participant or former Participant. (f) The Retirement Board, in its sole discretion upon application made by the Participant, a designated Beneficiary, or their legal representative, may determine to accelerate payments or, in the event of death or total disability (as determined by Social Security Administration), to extend or otherwise make payments in a manner different from the manner in which such payment would be made under the method of distribution elected by the Participant in the absence of such determination. 5.4 Allocation of Pension Benefit Liability. In the event that a Participant eligible to receive a Pension Benefit has been employed at more than one Employing Company, the Pension Benefit liability shall be apportioned so that each such Employing Company is obligated in accordance with Section 5.5 to cover the percentage of the total Pension Benefit as determined below. Each Employing Company's share of the Pension Benefit liability shall be calculated by multiplying the Pension Benefit by a fraction where the numerator of such fraction is the pay, as defined by the Retirement Board, received by the Participant at the respective Employing Company multiplied by the Accredited Service earned by the Participant at the respective Employing Company and where the denominator of such fraction is the sum of all numerators calculated for each respective Employing Company for which the Participant has been employed. 5.5 Funding of Benefits. Neither the Company nor any Employing Company hereunder shall reserve or otherwise set aside funds for the payment of its obligations under the Plan, and such obligations shall be paid solely from the general assets of the Employing Companies. Notwithstanding that a Participant shall be entitled to receive the balance of his Account under the Plan, the assets from which such amount shall be paid shall at all times remain subject to the claims of the creditors of the Participant's Employing Company. 5.6 Withholding. There shall be deducted from payments and, if necessary, from the Non-Pension Account under the Plan the amount of any tax required by any governmental authority to be withheld and paid over by an Employing Company to such governmental authority for the account of the Participant or Beneficiary.
ARTICLE VI - MISCELLANEOUS 6.1 Assignment. Neither the Participant, his Beneficiary, nor his legal representative shall have any rights to sell, assign, transfer or otherwise convey the right to receive the payment of any Pension Benefit or Non-Pension Benefit due hereunder, which payment and the right thereto are expressly declared to be nonassignable and nontransferable. Any attempt to assign or transfer the right to payment under the Plan shall be null and void and of no effect. 6.2 Amendment and Termination. The Plan may be amended or terminated at any time by the Board of Directors, provided that no amendment or termination shall cause a forfeiture or reduction in any benefits accrued as of the date of such amendment or termination. The Plan may also be amended by the Retirement Board (a) if such amendment does not involve a substantial increase in cost to any Employing Company, or (b) as may be necessary, proper, or desirable in order to comply with laws or regulations enacted or promulgated by any
ARTICLE VI - MISCELLANEOUS 6.1 Assignment. Neither the Participant, his Beneficiary, nor his legal representative shall have any rights to sell, assign, transfer or otherwise convey the right to receive the payment of any Pension Benefit or Non-Pension Benefit due hereunder, which payment and the right thereto are expressly declared to be nonassignable and nontransferable. Any attempt to assign or transfer the right to payment under the Plan shall be null and void and of no effect. 6.2 Amendment and Termination. The Plan may be amended or terminated at any time by the Board of Directors, provided that no amendment or termination shall cause a forfeiture or reduction in any benefits accrued as of the date of such amendment or termination. The Plan may also be amended by the Retirement Board (a) if such amendment does not involve a substantial increase in cost to any Employing Company, or (b) as may be necessary, proper, or desirable in order to comply with laws or regulations enacted or promulgated by any federal or state governmental authority. 6.3 No Guarantee of Employment. Participation hereunder shall not be construed as creating any contract of employment between any Employing Company and a Participant, nor shall it limit the right of an Employing Company to suspend, terminate, alter, or modify, whether or not for cause, the employment relationship between such Employing Company and a Participant. 6.4 Construction. This Plan shall be construed in accordance with and governed by the laws of the State of Georgia, to the extent such laws are not otherwise superseded by the laws of the United States.
IN WITNESS WHEREOF, the Plan has been executed by a duly authorize officer of Southern Company Services, Inc., pursuant to resolutions of the Board of Directors of the Company, this day of , 1998. SOUTHERN COMPANY SERVICES, INC. By: _____________________________________________________ Christopher C. Womack Vice President, Human Resources ATTEST: By: _________________________________________________________ Title:________________________________________________________
APPENDIX A THE SOUTHERN COMPANY SUPPLEMENTAL BENEFIT PLAN EMPLOYING COMPANIES AS OF JULY 1, 1998 Alabama Power Company Georgia Power Company Gulf Power Company Mississippi Power Company Savannah Electric and Power Company Southern Communications Services, Inc. Southern Company Energy Solutions, Inc. Southern Company Services, Inc. Southern Energy Resources, Inc. Southern Nuclear Operating Company, Inc.
IN WITNESS WHEREOF, the Plan has been executed by a duly authorize officer of Southern Company Services, Inc., pursuant to resolutions of the Board of Directors of the Company, this day of , 1998. SOUTHERN COMPANY SERVICES, INC. By: _____________________________________________________ Christopher C. Womack Vice President, Human Resources ATTEST: By: _________________________________________________________ Title:________________________________________________________
APPENDIX A THE SOUTHERN COMPANY SUPPLEMENTAL BENEFIT PLAN EMPLOYING COMPANIES AS OF JULY 1, 1998 Alabama Power Company Georgia Power Company Gulf Power Company Mississippi Power Company Savannah Electric and Power Company Southern Communications Services, Inc. Southern Company Energy Solutions, Inc. Southern Company Services, Inc. Southern Energy Resources, Inc. Southern Nuclear Operating Company, Inc.
EXHIBIT 10(a)78 SOUTHERN COMPANY CHANGE IN CONTROL SEVERANCE PLAN Troutman Sanders LLP NationsBank Plaza, Suite 5200 600 Peachtree Street, N.E.
Atlanta, Georgia 30308 Effective December 7, 1998
SOUTHERN COMPANY CHANGE IN CONTROL SEVERANCE PLAN ARTICLE 1 - PURPOSE AND ADOPTION OF PLAN 1.1 Adoption of Plan. Southern Company Services, Inc. hereby adopts this Southern Company Change in Control Severance Plan, effective December 7, 1998. The Plan shall be an unfunded severance pay plan that is a welfare plan as such term is defined by the Employee Retirement Income Security Act of 1974, the benefits of
APPENDIX A THE SOUTHERN COMPANY SUPPLEMENTAL BENEFIT PLAN EMPLOYING COMPANIES AS OF JULY 1, 1998 Alabama Power Company Georgia Power Company Gulf Power Company Mississippi Power Company Savannah Electric and Power Company Southern Communications Services, Inc. Southern Company Energy Solutions, Inc. Southern Company Services, Inc. Southern Energy Resources, Inc. Southern Nuclear Operating Company, Inc.
EXHIBIT 10(a)78 SOUTHERN COMPANY CHANGE IN CONTROL SEVERANCE PLAN Troutman Sanders LLP NationsBank Plaza, Suite 5200 600 Peachtree Street, N.E.
Atlanta, Georgia 30308 Effective December 7, 1998
SOUTHERN COMPANY CHANGE IN CONTROL SEVERANCE PLAN ARTICLE 1 - PURPOSE AND ADOPTION OF PLAN 1.1 Adoption of Plan. Southern Company Services, Inc. hereby adopts this Southern Company Change in Control Severance Plan, effective December 7, 1998. The Plan shall be an unfunded severance pay plan that is a welfare plan as such term is defined by the Employee Retirement Income Security Act of 1974, the benefits of which shall be paid solely from the general assets of the respective Employing Companies. 1.2 Purpose. The Plan is primarily designed to provide benefits to certain employees of the Employing Companies, whose employment is terminated subsequent to a change in control of Southern or their respective Employing Company. ARTICLE 2 - DEFINITIONS 2.1 "Administrative Committee" shall mean the Board of Directors, plus, in the event of any act necessary to be taken in connection with the Plan relative to a particular Participant, the Chief Executive Officer of the Participant's Employing Company, if such Chief Executive Officer is not already a member of the Board of Directors. 2.2 "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. 2.3 "Board of Directors" shall mean the board of directors of the Company.
EXHIBIT 10(a)78 SOUTHERN COMPANY CHANGE IN CONTROL SEVERANCE PLAN Troutman Sanders LLP NationsBank Plaza, Suite 5200 600 Peachtree Street, N.E.
Atlanta, Georgia 30308 Effective December 7, 1998
SOUTHERN COMPANY CHANGE IN CONTROL SEVERANCE PLAN ARTICLE 1 - PURPOSE AND ADOPTION OF PLAN 1.1 Adoption of Plan. Southern Company Services, Inc. hereby adopts this Southern Company Change in Control Severance Plan, effective December 7, 1998. The Plan shall be an unfunded severance pay plan that is a welfare plan as such term is defined by the Employee Retirement Income Security Act of 1974, the benefits of which shall be paid solely from the general assets of the respective Employing Companies. 1.2 Purpose. The Plan is primarily designed to provide benefits to certain employees of the Employing Companies, whose employment is terminated subsequent to a change in control of Southern or their respective Employing Company. ARTICLE 2 - DEFINITIONS 2.1 "Administrative Committee" shall mean the Board of Directors, plus, in the event of any act necessary to be taken in connection with the Plan relative to a particular Participant, the Chief Executive Officer of the Participant's Employing Company, if such Chief Executive Officer is not already a member of the Board of Directors. 2.2 "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. 2.3 "Board of Directors" shall mean the board of directors of the Company.
2.4 "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern. 2.5 "Change in Control" shall mean, (a) with respect to Southern, the occurrence of any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Section 2.5(i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control:
(A) any acquisition directly from Southern; (B) any acquisition by Southern; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary;
SOUTHERN COMPANY CHANGE IN CONTROL SEVERANCE PLAN ARTICLE 1 - PURPOSE AND ADOPTION OF PLAN 1.1 Adoption of Plan. Southern Company Services, Inc. hereby adopts this Southern Company Change in Control Severance Plan, effective December 7, 1998. The Plan shall be an unfunded severance pay plan that is a welfare plan as such term is defined by the Employee Retirement Income Security Act of 1974, the benefits of which shall be paid solely from the general assets of the respective Employing Companies. 1.2 Purpose. The Plan is primarily designed to provide benefits to certain employees of the Employing Companies, whose employment is terminated subsequent to a change in control of Southern or their respective Employing Company. ARTICLE 2 - DEFINITIONS 2.1 "Administrative Committee" shall mean the Board of Directors, plus, in the event of any act necessary to be taken in connection with the Plan relative to a particular Participant, the Chief Executive Officer of the Participant's Employing Company, if such Chief Executive Officer is not already a member of the Board of Directors. 2.2 "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. 2.3 "Board of Directors" shall mean the board of directors of the Company.
2.4 "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern. 2.5 "Change in Control" shall mean, (a) with respect to Southern, the occurrence of any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Section 2.5(i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control:
(A) any acquisition directly from Southern; (B) any acquisition by Southern; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary; (D) any acquisition by a qualified pension plan or publicly held mutual fund; (E) any acquisition by an Employee or Group composed exclusively of Employees; or (F) any Business Combination which would not otherwise constitute a Change in Control because of the application of clauses (A), (B) and (C) of Section 2.5(a)(iii); (ii) A change in the composition of the Southern Board whereby individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Southern Board; or (iii) Consummation of a Business Combination, unless, following such Business Combination, all of the following three conditions are met: (A) all or substantially all of the individuals and entities who held Beneficial Ownership, respectively, of Southern's Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, 65% or more of the combined voting power of the Voting Securities of the corporation surviving or resulting from such Business Combination, (including, without limitation, a corporation which as a result of such transaction holds Beneficial Ownership of all or substantially all of Southern's Voting Securities or all or substantially all of Southern's assets) (such surviving or resulting corporation to be referred to as "Surviving Company"), in substantially the same proportions as their ownership, immediately prior to such Business Combination, of
2.4 "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern. 2.5 "Change in Control" shall mean, (a) with respect to Southern, the occurrence of any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Section 2.5(i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control:
(A) any acquisition directly from Southern; (B) any acquisition by Southern; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary; (D) any acquisition by a qualified pension plan or publicly held mutual fund; (E) any acquisition by an Employee or Group composed exclusively of Employees; or (F) any Business Combination which would not otherwise constitute a Change in Control because of the application of clauses (A), (B) and (C) of Section 2.5(a)(iii); (ii) A change in the composition of the Southern Board whereby individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Southern Board; or (iii) Consummation of a Business Combination, unless, following such Business Combination, all of the following three conditions are met: (A) all or substantially all of the individuals and entities who held Beneficial Ownership, respectively, of Southern's Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, 65% or more of the combined voting power of the Voting Securities of the corporation surviving or resulting from such Business Combination, (including, without limitation, a corporation which as a result of such transaction holds Beneficial Ownership of all or substantially all of Southern's Voting Securities or all or substantially all of Southern's assets) (such surviving or resulting corporation to be referred to as "Surviving Company"), in substantially the same proportions as their ownership, immediately prior to such Business Combination, of Southern's Voting Securities; (B) no Person (excluding any corporation resulting from such Business Combination, any qualified pension plan, publicly held mutual fund, Group composed exclusively of Employees or employee benefit plan (or related trust) of Southern, any Southern Subsidiary or Surviving Company) holds Beneficial Ownership, directly or indirectly, of 20% or more of the combined voting power of the then outstanding Voting Securities of Surviving Company except to the extent that such ownership existed prior to the Business Combination; and (C) at least a majority of the members of the board of directors of Surviving Company were members of the Incumbent Board at the earlier of the date of execution of the initial agreement, or of the action of the Southern Board, providing for such Business Combination. (b) with respect to an Employing Company, the occurrence of any of the following: (i) Consummation of an acquisition by any Person of Beneficial Ownership of 50% or more of the combined voting power of the then outstanding Voting Securities of an Employing Company; provided, however, that for purposes of this Section 2.5(b)(i), any acquisition by an Employee, or Group composed entirely of Employees, any qualified pension plan, any publicly held mutual fund or any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary shall not constitute a Change in Control; (ii) Consummation of a reorganization, merger or consolidation of an Employing Company (an "Employing Company Business Combination"), in each case, unless, following such Employing Company Business Combination, Southern Controls the corporation surviving or resulting from such Employing Company Business Combination; or (iii) Consummation of the sale or other disposition of all or substantially all of the assets of an Employing Company to an entity which Southern does not Control. 2.5 "COBRA Coverage" shall mean any continuation coverage to which a Participant or his dependents may be entitled pursuant to Code Section 4980B. 2.6 "Code" shall mean the Internal Revenue Code of 1986, as amended. 2.7 "Company" shall mean Southern Company Services, Inc., its successors and assigns.
2.8 "Consummation" shall mean the completion of the final act necessary to complete a transaction as a matter of law, including, but not limited to, any required approvals by the corporation's shareholders and board of directors, the transfer of legal and beneficial title to securities or assets and the final approval of the transaction by any applicable domestic or foreign governments or governmental agencies. 2.9 "Control" shall mean, in the case of a corporation, Beneficial Ownership of more than 50% of the combined voting power of the corporation's Voting Securities, or in the case of any other entity, Beneficial Ownership of more than 50% of such entity's voting equity interests. 2.10 "Effective Date" shall mean the date of execution hereof. 2.11 "Employee" shall mean each active exempt and nonexempt employee of an Employing Company of Grade 9 or below (or, if the Grade system is not used, below $130,000 of annual base salary rate for the twelve month period immediately preceding the Change in Control) not covered by a collective bargaining agreement between the Employing Company and a union or other employee representative. 2.12 "Employee Outplacement Program" shall mean the program established by the Employing Company from time to time for the purpose of assisting Participants covered by the Plan in finding employment outside of the Employing Company which provides for the following services: (a) self assessment, career decision and goal setting; (b) job market research and job sources; (c) networking and interviewing skills; (d) planning and implementation strategy; (e) resume writing, job hunting methods and salary negotiation; and (f) office support and job search resources. 2.13 "Employing Company" shall mean the Company, or any other Southern Subsidiary, which the Board of Directors may from time to time determine to bring under the Plan and which shall adopt the Plan, and any successor of any of them. 2.14 "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. 2.15 "Good Reason" shall mean, without an Employee's express written consent, after written notice to his Employing Company, and after a thirty (30) day opportunity for the Employee's Employing Company to cure, the continuing occurrence of any of the following events: (a) Reduced Salary. A reduction of five percent (5%) or more by the Employing Company in either of the following: (i) the Employee's annual base salary rate for the twelve month period immediately preceding the Change in Control ("Base Salary") (except for a less than ten percent (10%), across-the-board Base Salary reduction similarly affecting at least ninety-five percent (95%) of all Employees of the Employing Company) or (ii) the sum of the Employee's Base Salary plus target bonus under his Employing Company's short term bonus plan (e.g., either the PPP Plan or the Southern Energy, Inc. Short Term Plan, as the case may be), as in effect immediately prior to the Change in Control (except for a less than ten percent (10%), across-the-board reduction of Base Salary plus target bonus under such short term plans similarly affecting at least ninety-five (95%) of all Employees of the Employing Company); (b) Relocation. A change in an Employee's work location to a location more than fifty (50) miles from the facility where the Employee was located at the time of the Change in Control, unless such new work location is within fifty (50) miles from the Employee's principal place of residence at the time of the Change in Control. The acceptance, if any, by an Employee of employment by an Employing Company at a work location which is outside the fifty mile radius set forth in this Section 2.15(b) shall not be a waiver of the Employee's right to refuse subsequent transfer by an Employing Company to a location which is more than fifty (50) miles from the Employee's principal place of residence at the time of the Change in Control, and such subsequent unconsented transfer shall be "Good Reason" under this Agreement; (c) Compensation Plans. The failure by an Employing Company to continue in effect any "compensation plan or agreement" in which an Employee participates or the elimination of the Employee's participation in any such plan (except for across-the-board plan changes or terminations similarly affecting at least ninety-five percent (95%) of all Employees of the Employing Company); For purposes of this Section 2.15(c), the term "compensation plan or agreement" shall mean any written arrangement executed by an authorized officer of the Employing Company which provides for periodic, non-discretionary compensatory payments to Employees in the nature of bonuses. (d) Benefits and Perquisites. The taking of any action by the Employing Company that would directly or indirectly materially reduce the benefits enjoyed by an Employee under the Employing Company's retirement, life insurance, medical, health and accident, disability, deferred compensation or savings plans in which the Employee was participating immediately prior to the Change in Control, or the failure by the Employing Company to provide an Employee with the number of paid vacation days to which the Employee is entitled on the basis of years of service with the Employing Company in accordance with the Employing Company's normal vacation policy in effect immediately prior to the Change in Control (except for across-the-board plan or vacation policy changes or plan terminations similarly affecting at least ninety-five percent (95%) of all Employees of the Employing Company). 2.16 "Group" shall have the meaning set forth in Section 14(d) of the Exchange Act. 2.17 "Group Health Plan" shall mean the group health plan covering the Participant, as such plan may be amended from time to time.
2.18 "Group Life Insurance Plan" shall mean the group life insurance program covering the Participant, as such plan may be amended from time to time. 2.19 "Incumbent Board" shall mean those individuals who constitute the Southern Board as of the Effective Date plus any individual who shall become a director subsequent to such date whose election or nomination for election by Southern's shareholders was approved by a vote of at least 75% of the directors then comprising the Incumbent Board. Notwithstanding the foregoing, no individual who shall become a director of the Southern Board subsequent to the Effective Date whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Regulations promulgated under the Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Southern Board shall be a member of the Incumbent Board. 2.20 "Month of Service" shall mean any calendar month during which a Participant has worked at least one (1) hour or was on approved leave of absence while in the employ of an Employing Company or any other Southern Subsidiary. 2.21 "Participant" shall mean an Employee who meets the eligibility requirements of Section 3.1 of this Plan. 2.22 "Pension Plan" shall mean The Southern Company Pension Plan or any successor thereto, as such plans may be amended from time to time. 2.23 "Performance Dividend Plan" or "PDP Plan" shall mean the Southern Company Performance Dividend Plan or any successor thereto which is considered an "equitable arrangement" under Section 1.25 thereof, as such plans may be amended from time to time. 2.24 "Performance Pay Plan" or "PPP Plan" shall mean the Southern Company Performance Pay Plan or any successor thereto which is considered an "equitable arrangement" under Section 1.31 thereof, as such plans may be amended from time to time. 2.25 "Performance Stock Plan" shall mean the Southern Company Performance Stock Plan or any successor thereto which is considered an "equitable arrangement" under Section 1.33 thereof, as such plans may be amended from time to time. 2.26 "Person" shall mean any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of Exchange Act. 2.27 "Plan" shall mean the Southern Company Change in Control Severance Plan. 2.28 "PIP Plan" shall mean the "Southern Company Productivity Improvement Plan or any successor thereto which is considered an "equitable arrangement" under Section 1.30 thereof, as such plans may be amended from time to time. 2.29 "Short Term Plan" shall mean the Southern Energy Resources, Inc. Short Term Plan, as amended from time to time. 2.30 "Southern" shall mean The Southern Company, its successors and assigns. 2.31 "Southern Board" shall mean the board of directors of Southern. 2.32 "Southern Subsidiary" shall mean any corporation or other entity which Southern Controls. 2.33 "Straight Time Pay" shall mean a Participant's highest base salary during the calendar year in which his Termination Date occurs. Base salary shall include "add ons" such as monthly shift differential, monthly premium pay, etc., but shall not include overtime pay. For Participants who were part-time Employees "Straight Time Pay" shall mean the actual average salary paid during the calendar year in which the Participant's Termination Date occurs. 2.34 "Termination for Cause" or "Cause" shall mean an Employee's termination of employment with his Employing Company upon the occurrence of any of the following: (a) The willful and continued failure by the Employee to substantially perform his duties with his Employing Company (other than any such failure resulting from the Employee's Total Disability or from the Employee's retirement or any such actual or anticipated failure resulting from termination by the Employee for Good Reason) after a written demand for substantial performance is delivered to him by the Employee's responsible corporate officer, which demand specifically identifies the manner in which such corporate officer believes the Employee has not substantially performed his duties; or (b) The willful engaging by the Employee in conduct that is demonstrably and materially injurious to his Employing Company, monetarily or otherwise, including but not limited to any of the following: (i) any willful act involving fraud or dishonesty in the course of an Employee's employment by his Employing Company; (ii) the willful carrying out of any activity or the making of any statement by an Employee which would materially prejudice or impair the good name and standing of his Employing Company, Southern or any other Southern
Subsidiary or would bring his Employing Company, Southern or any other Southern Subsidiary into contempt, ridicule or would reasonably shock or offend any community in which his Employing Company, Southern or such other Southern Subsidiary is located; (iii) attendance by an Employee at work in a state of intoxication or otherwise being found in possession at his workplace of any prohibited drug or substance, possession of which would amount to a criminal offense; (iv) violation of his Employing Company's policies on drug and alcohol usage, fitness for duty requirements or similar policies as may exist from time to time as adopted by the Employing Company's safety officer; (v) assault or other act of violence by an Employee against any person during the course of employment; or (vi) an Employee's indictment for any felony or any misdemeanor involving moral turpitude. No act or failure to act by an Employee shall be deemed "willful" unless done, or omitted to be done, by the Employee not in good faith and without reasonable belief that his action or omission was in the best interest of his Employing Company. Notwithstanding the foregoing, an Employee shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to him a copy of a resolution duly adopted by the affirmative vote of the majority of the Administrative Committee at a meeting called and held for such purpose (after reasonable notice to the Employee and an opportunity for him, together with counsel, to be heard before the Administrative Committee), finding that, in the good faith opinion of the Administrative Committee, the Employee was guilty of conduct set forth in Section 2.34(a) or (b) hereof and specifying the particulars thereof in detail. 2.35 "Termination Date" shall mean the date on which a Participant is separated from his Employing Company's regular payroll; provided, however, that solely for purposes of Section 3.2(c) hereof, the Termination Date of Participants who are deemed to be retired pursuant to the provisions of Section 3.3 hereof, shall be the effective date of their retirement pursuant to the terms of the Pension Plan. 2.36 "Total Disability" shall mean total disability under the terms of the Pension Plan. 2.37 "Value Creation Plan" shall mean the Southern Energy Resources, Inc. Value Creation Plan or any replacement thereto which is considered an "equitable arrangement" under Section 1.30 thereof, as such plans may be amended from time to time. 2.36 "Voting Securities" shall mean the outstanding voting securities of a corporation entitling the holder thereof to vote generally in the election of such corporation's directors. 2.37 "Waiver and Release" shall mean the Waiver and Release attached hereto as Exhibit A. 2.38 "Year of Service" shall mean an Employee's Months of Service divided by twelve (12) rounded to the nearest whole year, rounding up if the remaining number of months is seven (7) or greater and rounding down if the remaining number of months is less than seven (7). If an Employee has a break in his service with his Employing Company, he will receive credit under this Plan for the service prior to the break in service only if the break in service was less than five years and his service prior to the break exceeds the length of the break in service. ARTICLE 3 - SEVERANCE BENEFITS 3.1 Eligibility. Except as otherwise provided herein, any Employee whose employment is involuntarily terminated by his Employing Company at any time during the two year period following a Change in Control of Southern or his Employing Company for reasons other than Cause or who shall voluntarily terminate his employment with his Employing Company for Good Reason at any time during the two year period following a Change in Control of Southern or his Employing Company shall be entitled to participate in this Plan and receive the benefits described in Section 3.2 hereof, subject to the terms and conditions described in this Article 3. Notwithstanding anything to the contrary herein, an Employee shall not be eligible to receive benefits under this Plan if the Employee: (a) is not actively at work on his Termination Date, unless such Employee is capable of returning to work within twelve (12) weeks of the beginning of any leave of absence from work; (b) voluntarily terminates his employment with his Employing Company for other than Good Reason; (c) is terminated by his Employing Company for Cause; (d) accepts the transfer of his employment to Southern, any Southern Subsidiary or any employer that acquires all or substantially all of the assets of Southern, a Southern Subsidiary or his Employing Company; (e) refuses an offer of continued employment with his Employing Company, Southern or a Southern Subsidiary,
or any employer that acquires all or substantially all of the assets of Southern, a Southern Subsidiary or his Employing Company, under circumstances where such refusal would not amount to Good Reason for voluntary termination of employment and such employer agrees to adopt this Plan as it applies to such Participant; or (f) elects to receive the benefits of any other voluntary or involuntary severance, separation or outplacement program maintained by his Employing Company; provided however, that the receipt of benefits under any retention plan or agreement shall not be deemed to be the receipt of benefits under any severance, separation or outplacement program for purposes of this Plan. 3.2 Benefits. Upon the Employing Company's receipt of an effective Waiver and Release, Participants shall be entitled to receive the following benefits: (a) Employee Outplacement Services. Each Participant shall be eligible to participate in the Employee Outplacement Program, which program shall not be less than six (6) months duration measured from the Participant's Termination Date. (b) Severance Benefit. Each Participant shall be paid a cash amount equal to the sum of the following amounts: (i) eight (8) weeks' Straight Time Pay, (ii) one (1) week's Straight Time Pay for each of the Participant's first five (5) Years of Service; (iii) two (2) weeks' Straight Time Pay for each of the Participant's sixth (6th) through tenth (10th) Years of Service; (iv) three (3) weeks' Straight Time Pay for each of the Participant's eleventh (11th) through fifteenth (15th) Years of Service; (v) five (5) weeks' Straight Time Pay for each of the Participant's sixteenth (16th) through twentieth (20th) Years of Service; and (vi) six (6) weeks' Straight Time Pay for each of the Participant's Years of Service in excess of twenty (20) Years of Service. (c) Welfare Benefit. (i) Except as provided in Section 3.3 hereof, each Participant shall be eligible to participate in the Employing Company's Group Health Plan for a period of six (6) months for each of the Participant's Years of Service, not to exceed a period of five (5) years, beginning on the first day of the first month following the Participant's Termination Date unless otherwise specifically provided under such plan, upon the Participant's payment of both the Employing Company's and the Participant's premium under such plan. A Participant who receives this extended medical coverage shall also be entitled to elect coverage under the Group Health Plan for his dependents who are participating in the Group Health Plan on the Participant's Termination Date (and for such other dependents as may be entitled to coverage under the provisions of the Health Insurance Portability and Accountability Act of 1996) for the duration of the Participant's extended medical coverage under this Section 3.2(c) to the extent such dependents remain eligible for dependent coverage under the terms of the Group Health Plan. (ii) The extended medical coverage afforded to a Participant pursuant to this Section 3.2(c) as well as the premiums to be paid by the Participant in connection with such coverage shall be determined in accordance with the terms of the Group Health Plan and shall be subject to any changes in the terms and conditions of the Group Health Plan as well as any future increases in premiums under the Group Health Plan. The premiums to be paid by the Participant in connection with this extended coverage shall be due on the first day of each month; provided, however, that if a Participant fails to pay his premium within thirty (30) days of its due date, such Participant's extended coverage shall be terminated. (iii) Any Group Health Plan coverage provided under this Section 3.2(c) shall be a part of and not in addition to any COBRA Coverage which a Participant or his dependent may elect. In the event that a Participant or his dependent becomes eligible to be covered, by virtue of re-employment or otherwise, by any employersponsored group health plan or is eligible for coverage under any government-sponsored health plan during the above period, coverage under the Employing Company's Group Health Plan available to the Participant or his dependent by virtue of the provisions of this Article 3 shall terminate, except as may otherwise be required by law, and shall not be renewed. It shall be the duty of a Participant to inform the Employing Company of his eligibility to participate in any such health plan. (iv) Except as otherwise provided in Section 3.3 hereof, regardless of whether a Participant elects the extended coverage described in Section 3.2(c) hereof, the Employing Company shall pay to each Participant a cash amount equal to the Employing Company's and the Participant's cost of premiums for coverage under the Group Health Plan and Group Life Insurance Plan, if the Participant was participating in such plans on his Termination Date, for a period equal to the total number of weeks of pay the Participant receives as a severance benefit under Section 3.2(b) hereof. (d) Stock Option Vesting. The provisions of this Section 3.2(d) shall apply to any Participant who, as of the date of the Change in Control, was a participant in the Performance Stock Plan, the defined terms of which are incorporated in this Section 3.2(d) by reference.
(i) Any of the Participant's Options and Stock Appreciation Rights outstanding as of the Termination Date which are not then exercisable and vested, shall become fully exercisable and vested to the full extent of the original grant; provided, that in the case of a Participant holding a Stock Appreciation Right who is subject to Section 16 (b) of the Exchange Act, such Stock Appreciation Right shall not become fully vested and exercisable at such time if such actions would result in liability to the Participant under Section 16(b) of the Exchange Act, provided further, that any such actions not taken as a result of the rules under Section 16(b) of the Exchange Act shall be effected as of the first date that such activity would no longer result in liability under Section 16(b) of the Exchange Act. (ii) The restrictions and deferral limitations applicable to any of the Participant's Restricted Stock as of the Termination Date shall lapse, and such Restricted Stock shall become free of all restrictions and limitations and become fully vested and transferable to the full extent of the original grant. (iii) The restrictions and deferral limitations and other conditions applicable to any other Awards held by the Participant under the Performance Stock Plan as of the Termination Date shall lapse, and such other Awards shall become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent of the original grant. (e) Performance Pay Plan. The provisions of this Section 3.2(e) shall apply to any Participant who, as of the date of the Change in Control, was a participant in the Performance Pay Plan, the defined terms of which are incorporated in this Section 3.2(e) by reference. Provided the Participant is not entitled to benefits under Article V of the PPP Plan, if the PPP Plan is in place through the Participant's Termination Date and to the extent the Participant is entitled to participate therein, the Participant shall be entitled to receive cash in an amount equal to a prorated payout of his Incentive Pay Award under the PPP Plan for the Performance Period in which the Termination Date shall have occurred, at target performance under the PPP Plan and prorated by the number of months which have passed since the beginning of the Performance Period until the Termination Date. (f) PIP Plan. The provisions of this Section 3.2(f) shall apply to any Participant who, as of the date of the Change in Control, was a participant in the PIP Plan, the defined terms of which are incorporated in this Section 3.2(f) by reference. Provided the Participant is not entitled to benefits under Article IV of the PIP Plan, if the PIP Plan is in place through the Participant's Termination Date and to the extent the Participant is entitled to participate therein, the Participant shall be entitled to receive cash in an amount equal to his Award Opportunity under the PIP Plan for the Computation Periods in which the Termination Date shall have occurred, at a target Value of Performance Unit of $1.00, prorated for each Computation Period by the number of months which have passed since the beginning of each of the Computation Periods until the Termination Date. (g) Performance Dividend Plan. The provisions of this Section 3.2(g) shall apply to any Participant who, as of the date of the Change in Control, was a participant in the Performance Dividend Plan, the defined terms of which are incorporated in this Section 3.2(g) by reference. Provided the Participant is not entitled to benefits under Article V of the Performance Dividend Plan, if the Performance Dividend Plan is in place through the Participant's Termination Date and to the extent the Participant is entitled to participate therein, the Participant shall be entitled to receive cash for each Award held as of such date based on a Payout Percentage of 50% under Section 4.1 of the Performance Dividend Plan for the Performance Period in which the Termination Date shall have occurred, and the Annual Dividend declared prior to the Termination Date. (h) Value Creation Plan. The provisions of this Section 3.2(h) shall apply to any Participant who, as of the date of the Change in Control, was a participant in the Value Creation Plan, the defined terms of which are incorporated in this Section 3.2(h) by reference. Any of the Participant's Appreciation Rights or Indexed Rights outstanding as of the Termination Date which are not then exercisable and vested, shall become fully exercisable and vested to the full extent of the original grant. Notwithstanding anything in the Value Creation Plan to the contrary, Share Value with respect to any Appreciation Rights or Indexed Rights held by the Participant following his Termination Date shall be no less than the Share Value as of the date of the Change in Control of Southern or his Employing Company, as the case may be. (i) Short Term Plan. The provisions of this Section 3.2(i) shall apply to any Participant who, as of the date of the Change in Control was a Participant in the Short Term Plan, the defined terms of which are incorporated in this Section 3.2(i) by reference. Provided the Participant is not entitled to benefits under Article V of the Short Term Plan, if the Short Term Plan is in place through the Participant's Termination Date and to the extent the Participant is entitled to participate therein, the Participant shall be entitled to receive cash in an amount equal to his Award under the Short Term Plan for the Performance Period in which the Termination Date shall have occurred, at Total Target for the Participant's Job Category and prorated by the number of months which have passed since the beginning of the Performance Period until the Termination Date. (j) Other Short Term Incentive Plans. The provisions of this
Section 3.2(j) shall apply to any Participant who, as of the date of the Change in Control is a participant in any other "short term incentive compensation plan" not otherwise previously referred to in this Section 3.2. Provided the Participant is not otherwise entitled to a plan payout under any change in control provisions of such plans, if the "short term incentive compensation plan" is in place through the Participant's Termination Date and to the extent the Participant is entitled to participate therein, the Participant shall be entitled to receive cash in an amount equal to his award under his respective Employing Company's "short term incentive compensation plan" for the annual performance period in which the Termination Date shall have occurred, at the Participant's target performance level and prorated by the number of months which have passed since the beginning of the annual performance period until the Termination Date. For purposes of this Section 3.2(j), the term "short term incentive compensation plan" shall mean any incentive compensation plan or arrangement adopted in writing by an Employing Company which provides for annual, recurring compensatory bonuses to participants based upon articulated performance criteria, and which have been identified by the Board of Directors and listed on Exhibit B hereto which may be amended from time to time to reflect plan additions, terminations and amendments. 3.3 Coordination with Retiree Medical and Life Insurance Coverage. Notwithstanding anything to the contrary above, any Participant who is otherwise eligible to retire pursuant to the terms of the Pension Plan, shall be deemed to have retired for purposes of all employee benefit plans sponsored by the Employing Company of which the Participant is a participant. A Participant who is deemed to have retired in accordance with the preceding sentence shall not be eligible to receive the benefits described in Section 3.2(c) hereof if, upon his Termination Date, such Participant becomes eligible to receive the retiree medical and life insurance coverage provided to certain retirees pursuant to the terms of the Pension Plan, the Group Health Plan and the Group Life Insurance Plan. 3.4 Maximum Benefit. Notwithstanding anything to the contrary above, with respect to each Participant, the maximum benefit payable under this Article 3 shall be an amount equal to two (2) times such Participant's "annual compensation" as defined in Department of Labor Regulation Section 2510.3-2(b), which, for purposes of this Plan shall be no less than Straight Time Pay plus thirty percent (30%). When necessary, the Administrative Committee shall reduce the severance benefits described in Section 3.2(b) and 3.2(c)(iv) hereof to comply with this Section 3.4. 3.5 Payment of Benefits. The total amount payable under this Article 3 shall be paid to a Participant in one (1) lump sum payment within two (2) payroll periods of the later of the following to occur: (a) the Participant's Termination Date, or (b) the tender to the Employing Company by the Participant of an effective Waiver and Release (in the form of Exhibit A attached hereto) and the expiration of any applicable revocation period for such waiver. In the event of a dispute with respect to liability or amount of any benefit due hereunder, an effective Waiver and Release shall be tendered at the time of final resolution of any such dispute when payment is tendered by the Employing Company. 3.6 Benefits in the Event of Death. In the event of the Participant's death prior to the payment of all benefits due under this Article 3, the Participant's estate shall be entitled to receive as due any amounts not yet paid under this Article 3 upon the tender by the executor or administrator of the estate of an effective Waiver and Release. 3.7 Legal Fees. In the event of a dispute between a Participant and his Employing Company with regard to any amounts due hereunder, if any material issue in such dispute is finally resolved in the Participant's favor, his Employing Company shall reimburse the Participant's legal fees incurred with respect to all issues in such dispute in an amount not to exceed fifteen thousand dollars ($15,000). 3.8 No Mitigation. A Participant who receives benefits under Section 3.2 of this Plan shall have no duty or obligation to seek other employment following his Termination Date and, except as otherwise provided in Subsection 3.1(d) hereof, the amounts due a Participant hereunder shall not be reduced or suspended if such Participant accepts such subsequent employment. 3.9 Non-qualified Retirement and Deferred Compensation Plans. Subsequent to a Change in Control, any claims by a Participant for benefits under any of the Company's non-qualified retirement or deferred compensation plans shall be resolved through binding arbitration in accordance with the procedures and provisions set forth in Article 5 hereof and if any material issue in such dispute is finally resolved in the Participant's favor, the Company shall reimburse the Participant's legal fees in the manner provided in Section 3.7 hereof. ARTICLE 4 - ADMINISTRATION 4.1 Administrative Committee. The Administrative Committee shall be responsible for the general administration of the Plan and shall be a "named fiduciary" under Section 402 of the Employee Retirement Income Security Act of 1974, as amended. 4.2 Duties of the Administrative Committee. (a) The Administrative Committee shall be responsible for the daily administration of the Plan and may appoint other persons or entities to perform or assist in the performance of any of its fiduciary duties, subject to its review
and approval. The Administrative Committee shall have the right to remove any such appointee from his position without cause upon notice. Any person, group of persons, or entity may serve in more than one fiduciary capacity. (b) The Administrative Committee shall maintain permanent records and accounts of Participants and of their rights under the Plan and of all receipts, disbursements, transfers, and other transactions concerning the Plan. Such accounts, books, and records relating thereto shall be open at all reasonable times to inspection and audit by the Company and any persons designated thereby. (c) The Administrative Committee shall take all steps necessary to ensure that the Plan complies with the law at all times, including the preparation and filing of all documents and forms required by any governmental agency; maintenance of adequate Participant records; recording and transmission of all notices required to be given to Participants and their beneficiaries; receipt and dissemination, if required, of all reports and information received from the Employing Companies; securing of such fidelity bonds as may be required by law; and doing such other acts necessary for the proper administration of the Plan. The Administrative Committee shall keep a record of all of its proceedings and acts, and shall keep all such books of accounts, records, and other data as may be necessary for proper administration of the Plan. The Administrative Committee shall notify the Employing Companies upon their request of any action taken by it, and when required, shall notify any other interested person or persons. 4.3 Powers. The Administrative Committee shall administer the Plan in accordance with its terms and shall have all powers necessary to carry out the provisions of the Plan as more particularly set forth herein. The Administrative Committee shall have the discretionary authority to interpret the Plan (including any ambiguities herein) and to determine all questions arising in the administration, interpretation, and application of the Plan. The Administrative Committee shall adopt such procedures and regulations necessary or desirable for the discharge of its duties hereunder and may appoint such accountants, counsel, actuaries, specialists, and other agents as it deems necessary or desirable in connection with the administration of this Plan. The Administrative Committee shall be the legal appointed agent for the service of process. 4.4 Compensation of the Administrative Committee. The Administrative Committee shall not receive any compensation from the Plan for its services. 4.5 Payment of Expenses. The Administrative Committee shall be reimbursed by the Employing Companies for its reasonable expenses incurred in the discharge of its duties. Such expenses shall include any expenses incident to its duties, including, but not limited to, fees of accountants, counsel, actuaries, and other specialists, and other costs of administering the Plan. 4.6 Indemnification. Each Employing Company shall indemnify the Administrative Committee against any and all claims, losses, damages, expenses, and liability arising from its actions or omissions, except when the same is finally adjudicated to be the result of gross negligence or willful misconduct. The Employing Companies may purchase at their own expense sufficient liability insurance for the Administrative Committee to cover any and all claims, losses, damages, and expenses arising from any action or omission in connection with the execution of the duties as the Administrative Committee. ARTICLE 5 - ARBITRATION 5.1 General. Any dispute, controversy or claim arising out of or relating to the Company's obligations to pay severance benefits under this Plan, or the breach thereof, shall be settled and resolved solely by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA") except as otherwise provided herein. The arbitration shall be the sole and exclusive forum for resolution of any such claim for severance benefits and the arbitrators' award shall be final and binding. The provisions of this Article 5 are not intended to apply to any other disputes, claims or controversies arising out of or relating to a Participant's employment by an Employing Company or the termination thereof. 5.2 Demand for Arbitration. Arbitration shall be initiated by serving a written notice of demand for arbitration to the Participant, in the case of an Employing Company, or to the Administrative Committee, in the case of a Participant. 5.3 Law and Venue. The arbitrators shall apply the laws of the State of Georgia, except to the extent pre-empted by federal law, excluding any law which would require the use of the law of another state. The arbitration shall be held in Atlanta, Georgia. 5.4 Appointment of Arbitrators. Arbitrators shall be appointed within fifteen (15) business days following service of the demand for arbitration. The number of arbitrators shall be three. One arbitrator shall be appointed by the Participant, one arbitrator shall be appointed by the Employing Company, and the two arbitrators shall appoint a third. If the arbitrators cannot agree on a third arbitrator within thirty (30) business days after the service of demand for arbitration, the third arbitrator shall be selected by the AAA. 5.5 Costs. The arbitration filing fee shall be paid by the Participant. All other costs of arbitration shall be borne equally by the Participant and his Employing Company, provided, however, that such Employing Company shall
reimburse such fees and costs in the event any material issue in such dispute is finally resolved in the Participant's favor and the Participant is reimbursed legal fees under Section 3.7 hereof. 5.6 Interim and Injunctive Relief. Nothing in this Article 5 is intended to preclude, upon application of either party, any court having jurisdiction from issuing and enforcing in any lawful manner such temporary restraining orders, preliminary injunctions, and other interim measures of relief as may be necessary to prevent harm to either party's interests or as otherwise may be appropriate pending the conclusion of arbitration proceedings pursuant to this Article 5 and nothing herein is intended to prevent any court from entering and enforcing in any lawful manner such judgments for permanent equitable relief as may be necessary to prevent harm to a party's interests or as otherwise may be appropriate following the issuance of arbitral awards pursuant to this Article 5. ARTICLE 6 - MISCELLANEOUS 6.1 Funding of Benefits. Unless the Board of Directors in its discretion determines otherwise, the benefits payable to a Participant under the Plan shall not be funded in any manner and shall be paid by the Employing Companies out of their general assets, which assets are subject to the claims of the Employing Companies' creditors. 6.2 Withholding. There shall be deducted from the payment of any benefit due under the Plan the amount of any tax required by any governmental authority to be withheld and paid over by the Employing Companies to such governmental authority for the account of the Participant entitled to such payment. 6.3 Assignment. No Participant or beneficiary shall have any rights to sell, assign, transfer, encumber, or otherwise convey the right to receive the payment of any benefit due hereunder, which payment and the rights thereto are expressly declared to be nonassignable and nontransferable. Any attempt to do so shall be null and void and of no effect. 6.4 Amendment and Termination. The Plan may be amended or terminated at any time by the Board of Directors, provided, however, the Plan may not be amended in any material of respect or terminated within the two (2) year period following a Change in Control nor shall any amendment or termination impair the rights of any Participant which have accrued hereunder prior to any such amendment or termination. 6.5 Pooling Accounting. Notwithstanding anything to the contrary herein, if, but for any provision of this Plan, a Change in Control transaction would otherwise be accounted for as a pooling-of-interests under APB No.16 ("Pooling Accounting") (after giving effect to any and all other facts and circumstances affecting whether such Change in Control transaction would use Pooling Accounting), such provision or provisions of this Plan which would otherwise cause the Change in Control transaction to be ineligible for Pooling Accounting shall be void and ineffective in such a manner and to the extent that by eliminating such provision or provisions of this Plan, Pooling Accounting would be required for such Change in Control transaction. IN WITNESS WHEREOF, this Southern Company Change in Control Severance Plan has been executed by the Company through its duly authorized officer, this ____ day of ___________, 1999, to be effective as provided herein. SOUTHERN COMPANY SERVICES, INC. By: Christopher C. Womack Senior Vice President
Exhibit A SOUTHERN COMPANY CHANGE IN CONTROL SEVERANCE PLAN Waiver and Release I understand that I am entitled to receive the severance benefits described in Article 3 of the Southern Company Change in Control Severance Plan (the "Plan") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I have elected to receive under the Plan are in excess of those I would have received from ____________________ (the "Company") if I had not elected to participate in the Plan and sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws.
Exhibit A SOUTHERN COMPANY CHANGE IN CONTROL SEVERANCE PLAN Waiver and Release I understand that I am entitled to receive the severance benefits described in Article 3 of the Southern Company Change in Control Severance Plan (the "Plan") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I have elected to receive under the Plan are in excess of those I would have received from ____________________ (the "Company") if I had not elected to participate in the Plan and sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. I understand and agree that I am obligated to keep confidential and not disclose the terms of this Waiver, including, but not limited to, the benefits under this Plan, except to my attorneys, financial advisors, or except where such disclosure is required by law. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to any vested or accrued benefits that I have under any workers' compensation laws or any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company and/or any of its direct or indirect subsidiaries; however, I understand and acknowledge that nothing herein is intended to or shall be construed to require the Company to institute or continue in effect any particular plan or benefit sponsored by the Company and the Company hereby reserves the right to amend or terminate any of its benefit programs at any time in accordance with the procedures set forth in such plans. In signing this Waiver, I realize that I am waiving and releasing, among other things, any claims to benefits under any and all bonus, severance, workforce reduction, early retirement, outplacement, or any other similar type plan sponsored by the Company except for programs specifically designed for participants in the Plan. I have been encouraged and advised in writing to seek advice from anyone of my choosing regarding this Waiver, including my attorney, and my accountant or tax advisor. Prior to signing this Waiver, I have been given the opportunity and sufficient time to seek such advice, and I fully understand the meaning and contents of this Waiver. I understand that I may take up to forty-five (45) calendar days to consider whether or not I desire to enter this Waiver. I was not coerced, threatened or otherwise forced to sign this Waiver. I have made my choice to sign this Waiver voluntarily and of my own free will. I understand that I may revoke this Waiver at any time during the seven
(7) calendar day period after I sign and deliver this Waiver to the Company. If I revoke this Waiver, I must do so in writing delivered to the Company. I understand that this Waiver is not effective until the expiration of this seven (7) calendar day revocation period. I understand that upon the expiration of such seven (7) calendar day revocation period this entire Waiver will be binding upon me and will be irrevocable. I understand that by signing this Waiver I am giving up rights I may have. IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this _____ day of ________________, in the year ___. Employee's signature Employee's printed name Acknowledged and Accepted by the Administrative Committee of the Southern Company Change in Control Severance Plan. By: Date:
Attachment to Exhibit A TO: All Eligible Employees under the Southern Company Change in Control Severance Plan FROM: _____________________ RE: ADEA Information Notice DATE: _____________________ A severance plan known as the Southern Company Change in Control Severance Plan ("Plan") has been approved and established by The Southern Company, its affiliates and its direct and indirect subsidiaries (collectively the "Company"). You are eligible to participate in the Plan subject to the terms of the Plan. In accordance with the Age Discrimination in Employment Act ("ADEA"), the Company is providing you the following information pertaining to eligibility and participation in the Plan. o The purpose of the Plan is to provide benefits to certain employees of The Southern Company and certain subsidiaries of The Southern Company ("Employing Companies") whose employment is terminated subsequent to a change in control of The Southern Company or their respective Employing Company. A full description of the benefits under the Plan as well as any restrictions or limitations that may be applicable can be found in the Summary Plan Description you have been given. o Each active exempt and non-exempt employee of an Employing Company of Grade 9 or below (or, if the Grade System is not used, below $130,000 of annual base salary rate for the 12 month period immediately preceding the change in control) not covered by a collective bargaining agreement is generally eligible to participate in the Plan if during the two year period following a change in control: (i) his employment is involuntarily terminated for reasons other than cause, or (ii) he voluntarily terminates his employment for good reason. o All eligible employees may elect to receive severance benefits under the Plan by signing an Election Form and Waiver Agreement no later than 45 calendar days from the date it is received. The Agreement will remain revocable by you for a seven day period after you sign it. o Attached is a list sorted by job title and age of each employee eligible to participate in the Plan as well as a list of the ages of all employees in the same job classification who are not eligible to participate in the Plan. In furtherance of you making an informed decision, the Company urges you to seek a financial advisor, legal
Attachment to Exhibit A TO: All Eligible Employees under the Southern Company Change in Control Severance Plan FROM: _____________________ RE: ADEA Information Notice DATE: _____________________ A severance plan known as the Southern Company Change in Control Severance Plan ("Plan") has been approved and established by The Southern Company, its affiliates and its direct and indirect subsidiaries (collectively the "Company"). You are eligible to participate in the Plan subject to the terms of the Plan. In accordance with the Age Discrimination in Employment Act ("ADEA"), the Company is providing you the following information pertaining to eligibility and participation in the Plan. o The purpose of the Plan is to provide benefits to certain employees of The Southern Company and certain subsidiaries of The Southern Company ("Employing Companies") whose employment is terminated subsequent to a change in control of The Southern Company or their respective Employing Company. A full description of the benefits under the Plan as well as any restrictions or limitations that may be applicable can be found in the Summary Plan Description you have been given. o Each active exempt and non-exempt employee of an Employing Company of Grade 9 or below (or, if the Grade System is not used, below $130,000 of annual base salary rate for the 12 month period immediately preceding the change in control) not covered by a collective bargaining agreement is generally eligible to participate in the Plan if during the two year period following a change in control: (i) his employment is involuntarily terminated for reasons other than cause, or (ii) he voluntarily terminates his employment for good reason. o All eligible employees may elect to receive severance benefits under the Plan by signing an Election Form and Waiver Agreement no later than 45 calendar days from the date it is received. The Agreement will remain revocable by you for a seven day period after you sign it. o Attached is a list sorted by job title and age of each employee eligible to participate in the Plan as well as a list of the ages of all employees in the same job classification who are not eligible to participate in the Plan. In furtherance of you making an informed decision, the Company urges you to seek a financial advisor, legal counsel and a qualified tax advisor to assist you in fully understanding your rights and benefits under the plan and the Election Form and Waiver Agreement that you will be required to sign to receive severance benefits under the Plan. If you have any questions or need additional information, please call me at _______________. Sincerely, [Name] [Title]
ADEA INFORMATION NOTICE
------------------------------------------------------------ -------------------------------------------Job Title, Classification Age of or Category of Eligible Employees Eligible Employees ------------------------------------------------------------ ------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------- --------------------------------------------
ADEA INFORMATION NOTICE
------------------------------------------------------------ -------------------------------------------Job Title, Classification Age of or Category of Eligible Employees Eligible Employees ------------------------------------------------------------ ------------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------------------------------------------------------------------[List job classification, title or category of all eligible employees] -------------------------------------------------------------------------------------------------------------------------------------------------[List corresponding age of each eligible emp --------------------------------------------
------------------------------------------------------------ -------------------------------------------Job Title, Classification Age of or Category of Ineligible Employees Ineligible Employees ------------------------------------------------------------ ------------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------------------------------------------------------------------[List job classification, title or category of all ineligible employees] -------------------------------------------------------------------------------------------------------------------------------------------------[List corresponding age of each ineligible e --------------------------------------------
Exhibit B SOUTHERN COMPANY CHANGE IN CONTROL SEVERANCE PLAN Short Term Incentive Compensation Plans
EXHIBIT 10(a)79 SOUTHERN COMPANY EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN Troutman Sanders LLP NationsBank Plaza, Suite 5200 600 Peachtree Street, N.E.
Atlanta, Georgia 30308 Effective December 7, 1998
SOUTHERN COMPANY EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN ARTICLE 1 - PURPOSE AND ADOPTION OF PLAN 1.1 Adoption of Plan. Southern Company Services, Inc. hereby adopts this Southern Company Executive Change in Control Severance Plan, effective December 7, 1998. The Plan shall be an unfunded "top hat" plan designed to provide certain severance benefits to a select group of management or highly compensated
Exhibit B SOUTHERN COMPANY CHANGE IN CONTROL SEVERANCE PLAN Short Term Incentive Compensation Plans
EXHIBIT 10(a)79 SOUTHERN COMPANY EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN Troutman Sanders LLP NationsBank Plaza, Suite 5200 600 Peachtree Street, N.E.
Atlanta, Georgia 30308 Effective December 7, 1998
SOUTHERN COMPANY EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN ARTICLE 1 - PURPOSE AND ADOPTION OF PLAN 1.1 Adoption of Plan. Southern Company Services, Inc. hereby adopts this Southern Company Executive Change in Control Severance Plan, effective December 7, 1998. The Plan shall be an unfunded "top hat" plan designed to provide certain severance benefits to a select group of management or highly compensated employees, to be paid solely from the general assets of the respective Employing Companies. 1.2 Purpose. The Plan is primarily designed to provide benefits to certain key employees of the Employing Companies, whose employment is terminated subsequent to a change in control of Southern or their respective Employing Company. ARTICLE 2 - DEFINITIONS 2.1 "Administrative Committee" shall mean the Board of Directors, plus, in the event of any act necessary to be taken in connection with the Plan relative to a particular Participant, the Chief Executive Officer of the Participant's Employing Company, if such Chief Executive Officer is not already a member of the Board of Directors. 2.2 "Annual Compensation" shall mean a Participant's highest annual base salary rate for the twelve month period immediately preceding the date of the Change in Control plus market level target annual bonus as specified by Exhibit A attached hereto. 2.3 "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. 2.4 "Board of Directors" shall mean the board of directors of the Company. 2.5 "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern. 2.6 "Change in Control" shall mean, (a) with respect to Southern, the occurrence of any of the following:
EXHIBIT 10(a)79 SOUTHERN COMPANY EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN Troutman Sanders LLP NationsBank Plaza, Suite 5200 600 Peachtree Street, N.E.
Atlanta, Georgia 30308 Effective December 7, 1998
SOUTHERN COMPANY EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN ARTICLE 1 - PURPOSE AND ADOPTION OF PLAN 1.1 Adoption of Plan. Southern Company Services, Inc. hereby adopts this Southern Company Executive Change in Control Severance Plan, effective December 7, 1998. The Plan shall be an unfunded "top hat" plan designed to provide certain severance benefits to a select group of management or highly compensated employees, to be paid solely from the general assets of the respective Employing Companies. 1.2 Purpose. The Plan is primarily designed to provide benefits to certain key employees of the Employing Companies, whose employment is terminated subsequent to a change in control of Southern or their respective Employing Company. ARTICLE 2 - DEFINITIONS 2.1 "Administrative Committee" shall mean the Board of Directors, plus, in the event of any act necessary to be taken in connection with the Plan relative to a particular Participant, the Chief Executive Officer of the Participant's Employing Company, if such Chief Executive Officer is not already a member of the Board of Directors. 2.2 "Annual Compensation" shall mean a Participant's highest annual base salary rate for the twelve month period immediately preceding the date of the Change in Control plus market level target annual bonus as specified by Exhibit A attached hereto. 2.3 "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. 2.4 "Board of Directors" shall mean the board of directors of the Company. 2.5 "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern. 2.6 "Change in Control" shall mean, (a) with respect to Southern, the occurrence of any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Section 2.6 (i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control: (A) any acquisition directly from Southern; (B) any acquisition by Southern; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Southern or any
SOUTHERN COMPANY EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN ARTICLE 1 - PURPOSE AND ADOPTION OF PLAN 1.1 Adoption of Plan. Southern Company Services, Inc. hereby adopts this Southern Company Executive Change in Control Severance Plan, effective December 7, 1998. The Plan shall be an unfunded "top hat" plan designed to provide certain severance benefits to a select group of management or highly compensated employees, to be paid solely from the general assets of the respective Employing Companies. 1.2 Purpose. The Plan is primarily designed to provide benefits to certain key employees of the Employing Companies, whose employment is terminated subsequent to a change in control of Southern or their respective Employing Company. ARTICLE 2 - DEFINITIONS 2.1 "Administrative Committee" shall mean the Board of Directors, plus, in the event of any act necessary to be taken in connection with the Plan relative to a particular Participant, the Chief Executive Officer of the Participant's Employing Company, if such Chief Executive Officer is not already a member of the Board of Directors. 2.2 "Annual Compensation" shall mean a Participant's highest annual base salary rate for the twelve month period immediately preceding the date of the Change in Control plus market level target annual bonus as specified by Exhibit A attached hereto. 2.3 "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. 2.4 "Board of Directors" shall mean the board of directors of the Company. 2.5 "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern. 2.6 "Change in Control" shall mean, (a) with respect to Southern, the occurrence of any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Section 2.6 (i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control: (A) any acquisition directly from Southern; (B) any acquisition by Southern; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary; (D) any acquisition by a qualified pension plan or publicly held mutual fund; (E) any acquisition by an Employee or Group composed exclusively of Employees; or (F) any Business Combination which would not otherwise constitute a Change in Control because of the application of clauses (A), (B) and (C) of Section 2.6(a)(iii). (ii) A change in the composition of the Southern Board whereby individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Southern Board; or (iii) Consummation of a Business Combination, unless, following such Business Combination, all of the following three conditions are met:
(A) all or substantially all of the individuals and entities who held Beneficial Ownership, respectively, of Southern's Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, 65% or more of the combined voting power of the Voting Securities of the corporation surviving or resulting from such Business Combination, (including, without limitation, a corporation which as a result of such transaction holds Beneficial Ownership of all or substantially all of Southern's Voting Securities or all or substantially all of Southern's assets) (such surviving or resulting corporation to be referred to as "Surviving Company"), in substantially the same proportions as their ownership, immediately prior to such Business Combination, of Southern's Voting Securities; (B) no Person (excluding any corporation resulting from such Business Combination, any qualified pension plan, publicly held mutual fund, Group composed exclusively of Employees or employee benefit plan (or related trust) of Southern, any Southern Subsidiary or Surviving Company) holds Beneficial Ownership, directly or indirectly, of 20% or more of the combined voting power of the then outstanding Voting Securities of Surviving Company except to the extent that such ownership existed prior to the Business Combination; and (C) at least a majority of the members of the board of directors of Surviving Company were members of the Incumbent Board at the earlier of the date of execution of the initial agreement, or of the action of the Southern Board, providing for such Business Combination. (b) with respect to an Employing Company, the occurrence of any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 50% or more of the combined voting power of the then outstanding Voting Securities of an Employing Company; provided, however, that for purposes of this Section 2.6(b)(i), any acquisition by an Employee, or Group composed entirely of Employees, any qualified pension plan, any publicly held mutual fund or any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary shall not constitute a Change in Control; (ii) The Consummation of a reorganization, merger or consolidation of an Employing Company (an "Employing Company Business Combination"), in each case, unless, following such Employing Company Business Combination, Southern Controls the corporation surviving or resulting from such Employing Company Business Combination; or (iii) The Consummation of the sale or other disposition of all or substantially all of the assets of an Employing Company to an entity which Southern does not Control. 2.7 "COBRA Coverage" shall mean any continuation coverage to which a Participant or his dependents may be entitled pursuant to Code Section 4980B. 2.8 "Code" shall mean the Internal Revenue Code of 1986, as amended. 2.9 "Company" shall mean Southern Company Services, Inc., its successors and assigns. 2.10 "Consummation" shall mean the completion of the final act necessary to complete a transaction as a matter of law, including, but not limited to, any required approvals by the corporation's shareholders and board of directors, the transfer of legal and beneficial title to securities or assets and the final approval of the transaction by any applicable domestic or foreign governments or governmental agencies. 2.11 "Control" shall mean, in the case of a corporation, Beneficial Ownership of more than 50% of the combined voting power of the corporation's Voting Securities, or in the case of any other entity, Beneficial Ownership of more than 50% of such entity's voting equity interests. 2.12 "Effective Date" shall mean the date of execution hereof. 2.13 "Employee" shall mean each full-time or regular part-time employee of an Employing Company of Grades 10 to 13 (or, if the Grade system is not used, $130,000 or more of annual base salary rate for the twelve month period immediately preceding the Change in Control who has not otherwise entered into a Change in Control agreement with his Employing Company and elects to receive benefits under such agreement) and is not covered by a collective bargaining agreement between the Employing Company and a union or other employee representative. 2.14 "Employee Outplacement Program" shall mean the program established by the Employing Company from time to time for the purpose of assisting Participants covered by the Plan in finding employment outside of the Employing Company which provides for the following services: (a) self assessment, career decision and goal setting; (b) job market research and job sources; (c) networking and interviewing skills; (d) planning and implementation strategy; (e) resume writing, job hunting methods and salary negotiation; and (f) office support and job search resources. 2.15 "Employing Company" shall mean the Company, or any other Southern Subsidiary, which the Board of Directors may from time to time determine to bring under the Plan and which shall adopt the Plan, and any successor of any of them. 2.16 "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
2.16 "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. 2.17 "Good Reason" shall mean, without an Employee's express written consent, after written notice to his Employing Company, and after a thirty (30) day opportunity for the Employee's Employing Company to cure, the continuing occurrence of any of the following events: (a) Inconsistent Duties. A meaningful and detrimental alteration in the Employee's position or in the nature or status of his responsibilities from those in effect immediately prior to the Change in Control; (b) Reduced Salary. A reduction of five percent (5%) or more by the Employing Company in either of the following: (i) the Employee's annual base salary rate for the twelve month period immediately preceding the date of the Change in Control ("Base Salary") (except for a less than ten percent (10%), across-the-board Base Salary reduction similarly affecting at least ninety-five percent (95%) of all Employees of the Employing Company); or (ii) the sum of the Employee's Base Salary plus target bonus under his Employing Company's short term bonus plan (e.g., either the PPP Plan or the Southern Energy, Inc. Short Term Plan, as the case may be), as in effect immediately prior to the Change in Control (except for a less than ten percent (10%), across-the-board reduction of Base Salary plus target bonus under such short term plan similarly affecting at least ninety-five percent (95%) of all Employees of the Employing Company); (c) Compensation Plans. The failure by the Employing Company to continue in effect any "compensation plan or agreement" in which an Employee participates as of the date of the Change in Control or the elimination of the Employee's participation in any such plan, (except for across-the-board plan changes or terminations similarly affecting at least ninety-five percent (95%) of all Employees of the Employing Company); For purposes of this Section 2.17(c), the "compensation plan or agreement" shall mean any written arrangement executed by an authorized officer of the Employing Company which provides for periodic, non-discretionary compensatory payments to employees in the nature of bonuses. (d) Relocation. A change in an Employee's work location to a location more than fifty (50) miles from the facility where the Employee was located at the time of the Change in Control, unless such new work location is within fifty (50) miles from the Employee's principal place of residence at the time of the Change in Control. The acceptance, if any, by an Employee of employment by an Employing Company at a work location which is outside the fifty mile radius set forth in this Section 2.17(d) shall not be a waiver of the Employee's right to refuse subsequent transfer by an Employing Company to a location which is more than fifty (50) miles from the Employee's principal place of residence at the time of the Change in Control, and such subsequent, unconsented transfer shall be "Good Reason" under this Agreement; or (e) Benefits and Perquisites. The taking of any action by the Employing Company that would directly or indirectly materially reduce the benefits enjoyed by an Employee under the Employing Company's retirement, life insurance, medical, health and accident, disability, deferred compensation or savings plans in which the Employee was participating immediately prior to the Change in Control, or the failure by the Employing Company to provide an Employee with the number of paid vacation days to which the Employee is entitled on the basis of years of service with the Employing Company in accordance with the Employing Company's normal vacation policy in effect immediately prior to the Change in Control (except for across-the-board plan or vacation policy changes or plan terminations similarly affecting at least ninety-five percent (95%) of all Employees of the Employing Company). 2.18 "Group" shall have the meaning set forth in Section 14(d) of the Exchange Act. 2.19 "Group Health Plan" shall mean the group health plan covering the Participant, as such plan may be amended from time to time. 2.20 "Group Life Insurance Plan" shall mean the group life insurance program covering the Participant, as such plan may be amended from time to time. 2.21 "Incumbent Board" shall mean those individuals who constitute the Southern Board as of the Effective Date plus any individual who shall become a director subsequent to such date whose election or nomination for election by Southern's shareholders was approved by a vote of at least 75% of the directors then comprising the Incumbent Board. Notwithstanding the foregoing, no individual who shall become a director of the Southern Board subsequent to the Effective Date whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Regulations promulgated under the Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Southern Board shall be a member of the Incumbent Board. 2.22 "Month of Service" shall mean any calendar month during which a Participant has worked at least one (1) hour or was on approved leave of absence while in the employ of an Employing Company or any other Southern
Subsidiary. 2.23 "Participant" shall mean an Employee who meets the eligibility requirements of Section 3.1 of this Plan. 2.24 "Pension Plan" shall mean The Southern Company Pension Plan or any successor thereto, as such plans may be amended from time to time. 2.25 "Performance Dividend Plan" or "PDP Plan" shall mean the Southern Company Performance Dividend Plan or any successor thereto which is considered an "equitable arrangement" under Section 1.25 thereof, as such plans may be amended from time to time. 2.26 "Performance Pay Plan" or "PPP Plan" shall mean the Southern Company Performance Pay Plan or any successor thereto which is considered an "equitable arrangement" under Section 1.31 thereof, as such plans may be amended from time to time. 2.27 "Performance Stock Plan" shall mean the Southern Company Performance Stock Plan or any successor thereto which is considered an "equitable arrangement" under Section 1.33 thereof, as such plans may be amended from time to time. 2.28 "Person" shall mean any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of Exchange Act. 2.29 "PIP Plan" shall mean the Southern Company Productivity Improvement Plan or any successor thereto which is considered an "equitable arrangement" under Section 1.30 thereof, as such plans may be amended from time to time. 2.30 "Plan" shall mean the Southern Company Executive Change in Control Severance Plan. 2.31 "Short Term Plan" shall mean the Southern Energy Resources, Inc. Short Term Plan, as amended from time to time. 2.32 "Southern" shall mean The Southern Company, its successors and assigns. 2.33 "Southern Board" shall mean the board of directors of Southern. 2.34 "Southern Subsidiary" shall mean any corporation or other entity Controlled by Southern. 2.35 "Termination for Cause" or "Cause" shall mean an Employee's termination of employment with his Employing Company upon the occurrence of any of the following: (a) The willful and continued failure by the Employee to substantially perform his duties with his Employing Company (other than any such failure resulting from the Employee's Total Disability or from the Employee's retirement or any such actual or anticipated failure resulting from termination by the Employee for Good Reason) after a written demand for substantial performance is delivered to him by the Administrative Committee, which demand specifically identifies the manner in which the Administrative Committee believes that he has not substantially performed his duties; or (b) The willful engaging by the Employee in conduct that is demonstrably and materially injurious to his Employing Company, monetarily or otherwise, including but not limited to any of the following: (i) any willful act involving fraud or dishonesty in the course of an Employee's employment by his Employing Company; (ii) the willful carrying out of any activity or the making of any statement by an Employee which would materially prejudice or impair the good name and standing of his Employing Company, Southern or any other Southern Subsidiary or would bring his Employing Company, Southern or any other Southern Subsidiary into contempt, ridicule or would reasonably shock or offend any community in which his Employing Company, Southern or such other Southern Subsidiary is located; (iii) attendance by an Employee at work in a state of intoxication or otherwise being found in possession at his workplace of any prohibited drug or substance, possession of which would amount to a criminal offense; (iv) violation of his Employing Company's policies on drug and alcohol usage, fitness for duty requirements or similar policies as may exist from time to time as adopted by the Employing Company's safety officer; (v) assault or other act of violence by an Employee against any person during the course of employment; or (vi) an Employee's indictment for any felony or any misdemeanor involving moral turpitude. No act or failure to act by an Employee shall be deemed "willful" unless done, or omitted to be done, by the Employee not in good faith and without reasonable belief that his action or omission was in the best interest of his Employing Company. Notwithstanding the foregoing, an Employee shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to him a copy of a resolution duly adopted by the affirmative vote of the
majority of the Administrative Committee at a meeting called and held for such purpose (after reasonable notice to the Employee and an opportunity for him, together with counsel, to be heard before the Administrative Committee), finding that, in the good faith opinion of the Administrative Committee, the Employee was guilty of conduct set forth in Section 2.35(a) or (b) hereof and specifying the particulars thereof in detail. 2.36 "Termination Date" shall mean the date on which a Participant is separated from his Employing Company's regular payroll; provided, however, that solely for purposes of Section 3.2(c) hereof, the Termination Date of Participants who are deemed to be retired pursuant to the provisions of Section 3.3 hereof, shall be the effective date of their retirement pursuant to the terms of the Pension Plan. 2.37 "Total Disability" shall mean total disability within the meaning of the Pension Plan. 2.38 "Value Creation Plan" shall mean the Southern Energy Resources, Inc. Value Creation Plan or any replacement thereto which is considered an "equitable arrangement" under Section 1.30 thereof, as such plans may be amended from time to time. 2.39 "Voting Securities" shall mean the outstanding voting securities of a corporation entitling the holder thereof to vote generally in the election of such corporation's directors. 2.40 "Waiver and Release" shall mean the Waiver and Release attached hereto as Exhibit B. 2.41 "Year of Service" shall mean an Employee's Months of Service divided by twelve (12) rounded to the nearest whole year, rounding up if the remaining number of months is seven (7) or greater and rounding down if the remaining number of months is less than seven (7). If an Employee has a break in his service with his Employing Company, he will receive credit under this Plan for the service prior to the break in service only if the break in service was less than five years and his service prior to the break exceeds the length of the break in service. ARTICLE 3 - SEVERANCE BENEFITS 3.1 Eligibility. Except as otherwise provided herein, any Employee whose employment is involuntarily terminated by his Employing Company at any time during the two year period following a Change in Control of Southern or his Employing Company for reasons other than Cause or who shall voluntarily terminate his employment with his Employing Company for Good Reason at any time during the two year period following a Change in Control of Southern or his Employing Company shall be entitled to participate in this Plan and receive the benefits described in Section 3.2 hereof, subject to the terms and conditions described in this Article 3. Notwithstanding anything to the contrary herein, an Employee shall not be eligible to receive benefits under this Plan if the Employee: (a) is not actively at work on his Termination Date, unless such Employee is capable of returning to work within twelve (12) weeks of the beginning of any leave of absence from work; (b) voluntarily terminates his employment with his Employing Company for other than Good Reason; (c) is terminated by his Employing Company for Cause; (d) accepts the transfer of his employment to Southern, any Southern Subsidiary or any employer that acquires all or substantially all of the assets of Southern, a Southern Subsidiary or his Employing Company; (e) refuses an offer of continued employment with his Employing Company, Southern or a Southern Subsidiary, or any employer that acquires all or substantially all of the assets of Southern, a Southern Subsidiary or his Employing Company, under circumstances where such refusal would not amount to Good Reason for voluntary termination of employment and such employer agrees to adopt this Plan as it applies to such Participant; or (f) elects to receive the benefits of any other voluntary or involuntary severance, separation or outplacement program maintained by his Employing Company; provided however, that the receipt of benefits under any retention plan or agreement shall not be deemed to be the receipt of benefits under any severance, separation or outplacement program for purposes of this Plan. 3.2 Benefits. Upon the Employing Company's receipt of an effective Waiver and Release, Participants shall be entitled to receive the following benefits: (a) Employee Outplacement Services. Each Participant shall be eligible to participate in the Employee Outplacement Program, which program shall not be less than six (6) months duration measured from the Participant's Termination Date. (b) Severance Benefit. Participants shall be paid in cash an amount equal to two times the Participant's Annual Compensation, but not in excess of the Capped Amount. For purposes of this Section 3.2(b), the Capped
Amount shall be the amount otherwise payable under this Section 3.2(b), reduced in such amount and to such extent that no amount of the payment under this Section 3.2(b), plus all other "parachute payments" under Code Section 280G, would constitute an "excess parachute payment" under Code Section 280G, but only to the extent that if the payment under this Section 3.2(b) were increased by one additional dollar ($1.00), a portion of the payment under this Section 3.2(b) would be an "excess parachute payment" under Code Section 280G. The calculation of the Capped Amount and any other determinations relating to the applicability of Code Section 280G (and the rules and regulations promulgated thereunder) to the payments contemplated by this Plan shall be made by the tax department of the independent public accounting firm then responsible for preparing Southern's consolidated federal income tax return, and such determinations shall be binding upon the Participants, Southern and the Employing Company. (c) Welfare Benefit. (i) Except as provided in Section 3.3 hereof, each Participant shall be eligible to participate in the Employing Company's Group Health Plan for a period of six (6) months for each of the Participant's Years of Service, not to exceed a period of five (5) years, beginning on the first day of the first month following the Participant's Termination Date unless otherwise specifically provided under such plan, upon the Participant's payment of both the Employing Company's and the Participant's premium under such plan. A Participant who receives this extended medical coverage shall also be entitled to elect coverage under the Group Health Plan for his dependents who are participating in the Group Health Plan on the Participant's Termination Date (and for such other dependents as may be entitled to coverage under the provisions of the Health Insurance Portability and Accountability Act of 1996) for the duration of the Participant's extended medical coverage under this Section 3.2(c) to the extent such dependents remain eligible for dependent coverage under the terms of the Group Health Plan. (ii) The extended medical coverage afforded to a Participant pursuant to this Section 3.2(c) as well as the premiums to be paid by the Participant in connection with such coverage shall be determined in accordance with the terms of the Group Health Plan and shall be subject to any changes in the terms and conditions of the Group Health Plan as well as any future increases in premiums under the Group Health Plan. The premiums to be paid by the Participant in connection with this extended coverage shall be due on the first day of each month; provided, however, that if a Participant fails to pay his premium within thirty (30) days of its due date, such Participant's extended coverage shall be terminated. (iii) Any Group Health Plan coverage provided under this Section 3.2(c) shall be a part of and not in addition to any COBRA Coverage which a Participant or his dependent may elect. In the event that a Participant or his dependent becomes eligible to be covered, by virtue of re-employment or otherwise, by any employersponsored group health plan or is eligible for coverage under any government-sponsored health plan during the above period, coverage under the Employing Company's Group Health Plan available to the Participant or his dependent by virtue of the provisions of this Article 3 shall terminate, except as may otherwise be required by law, and shall not be renewed. It shall be the duty of a Participant to inform the Employing Company of his eligibility to participate in any such health plan. (iv) Except as otherwise provided in Section 3.3 hereof, regardless of whether a Participant elects the extended coverage described in Section 3.2(a) hereof, the Employing Company shall pay to each Participant a cash amount equal to the Employing Company's and the Participant's cost of premiums for two (2) years of coverage under the Group Health Plan and Group Life Insurance Plan, as such Plans were in effect as of the date of the Change in Control. (d) Stock Option Vesting. The provisions of this Section 3.2(d) shall apply to any Participant who, as of the date of the Change in Control, was a participant in the Performance Stock Plan, the defined terms of which are incorporated in this Section 3.2(d) by reference. (i) Any of the Participant's Options and Stock Appreciation Rights outstanding as of the Termination Date which are not then exercisable and vested, shall become fully exercisable and vested to the full extent of the original grant; provided, that in the case of a Participant holding a Stock Appreciation Right who is subject to Section 16 (b) of the Exchange Act, such Stock Appreciation Right shall not become fully vested and exercisable at such time if such actions would result in liability to the Participant under Section 16(b) of the Exchange Act, provided further that any such actions not taken as a result of the rules under Section 16(b) of the Exchange Act shall be effected as of the first date that such activity would no longer result in liability under Section 16(b) of the Exchange Act. (ii) The restrictions and deferral limitations applicable to any of the Participant's Restricted Stock as of the Termination Date shall lapse, and such Restricted Stock shall become free of all restrictions and limitations and become fully vested and transferable to the full extent of the original grant.
(iii) The restrictions and deferral limitations and other conditions applicable to any other Awards held by the Participant under the Performance Stock Plan as of the Termination Date shall lapse, and such other Awards shall become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent of the original grant. (e) Performance Pay Plan. The provisions of this Section 3.2(e) shall apply to any Participant who, as of the date of the Change in Control, was a participant in the Performance Pay Plan, the defined terms of which are incorporated in this Section 3.2(e) by reference. Provided the Participant is not entitled to benefits under Article V of the PPP Plan, if the PPP Plan is in place as of the Participant's Termination Date and to the extent the Participant is entitled to participate therein, the Participant shall be entitled to receive cash in an amount equal to a prorated payout of his Incentive Pay Award under the PPP Plan for the Performance Period in which the Termination Date shall have occurred, at target performance under the PPP Plan and prorated by the number of months which have passed since the beginning of the Performance Period until the Termination Date. (f) PIP Plan. The provisions of this Section 3.2(f) shall apply to any Participant who, as of the date of the Change in Control, was a participant in the PIP Plan, the defined terms of which are incorporated in this Section 3.2(f) by reference. Provided the Participant is not entitled to benefits under Article IV of the PIP Plan, if the PIP Plan is in place through the Participant's Termination Date and to the extent the Participant is entitled to participate therein, the Participant shall be entitled to receive cash in an amount equal to his Award Opportunity under the PIP Plan for the Computation Periods in which the Termination Date shall have occurred, at a target Value of Performance Unit of $1.00, prorated for each Performance Period by the number of months which have passed since the beginning of each of the Computation Periods until the Termination Date. (g) Performance Dividend Plan. The provisions of this Section 3.2(g) shall apply to any Participant who, as of the date of the Change in Control, was a participant in the Performance Dividend Plan, the defined terms of which are incorporated in this Section 3.2(g) by reference. Provided the Participant is not entitled to benefits under Article V of the Performance Dividend Plan, if the Performance Dividend Plan is in place through the Participant's Termination Date and to the extent the Participant is entitled to participate therein, the Participant shall be entitled to receive cash for each Award held as of such date based on a Payout Percentage of 50% under Section 4.1 of the Performance Dividend Plan for the Performance Period in which the Termination Date shall have occurred, and the Annual Dividend declared prior to the Termination Date. (h) Value Creation Plan. The provisions of this Section 3.2(h) shall apply to any Participant who, as of the date of the Change in Control, was a participant in the Value Creation Plan, the defined terms of which are incorporated in this Section 3.2(h) by reference. Any of the Participant's Appreciation Rights or Indexed Rights outstanding as of the Termination Date which are not then exercisable and vested, shall become fully exercisable and vested to the full extent of the original grant. Notwithstanding anything in the Value Creation Plan to the contrary, Share Value with respect to any Appreciation Rights or Indexed Rights held by the Participant following his Termination Date shall be no less than the Share Value as of the date of the Change in Control of Southern or his Employing Company, as the case may be. (i) Short Term Plan. The provisions of this Section 3.2(i) shall apply to any Participant who, as of the date of the Change in Control was a Participant in the Short Term Plan, the defined terms of which are incorporated in this Section 3.2(i) by reference. Provided the Participant is not entitled to benefits under Article V of the Short Term Plan, if the Short Term Plan is in place through the Participant's Termination Date and to the extent the Participant is entitled to participate therein, the Participant shall be entitled to receive cash in an amount equal to his Award under the Short Term Plan for the Performance Period in which the Termination Date shall have occurred, at Total Target for the Participant's Job Category and prorated by the number of months which have passed since the beginning of the Performance Period until the Termination Date. (j) Other Short Term Incentive Plans. The provisions of this Section 3.2(j) shall apply to any Participant who, as of the date of the Change in Control is a participant in any other "short term incentive compensation plan" not otherwise previously referred to in this Section 3.2. Provided the Participant is not otherwise entitled to a plan payout under any change in control provisions of such plans, if the "short term incentive compensation plan" is in place through the Participant's Termination Date and to the extent the Participant is entitled to participate therein, the Participant shall be entitled to receive cash in an amount equal to his award under his respective Employing Company's "short term incentive compensation plan" for the annual performance period in which the Termination Date shall have occurred, at the Participant's target performance level and prorated by the number of months which have passed since the beginning of the annual performance period until the Termination Date. For purposes of this Section 3.2(j), the term "short term incentive compensation plan" shall mean any incentive compensation plan or arrangement adopted in writing by an Employing Company which provides for annual, recurring compensatory bonuses to participants based upon articulated performance criteria, and which have been identified by the Board of Directors and listed on Exhibit C
hereto, which may be amended from time to time to reflect plan additions, terminations and amendments. 3.3 Coordination with Retiree Medical and Life Insurance Coverage. Notwithstanding anything to the contrary above, any Participant who is otherwise eligible to retire pursuant to the terms of the Pension Plan shall be deemed to have retired for purposes of all employee benefit plans sponsored by the Employing Company of which the Participant is a participant. A Participant who is deemed to have retired in accordance with the preceding sentence shall not be eligible to receive the benefits described in Section 3.2(c) hereof if, upon his Termination Date, such Participant becomes eligible to receive the retiree medical and life insurance coverage provided to certain retirees pursuant to the terms of the Pension Plan, the Group Health Plan and the Group Life Insurance Plan. 3.4 Payment of Benefits. The amounts due a Participant under Sections 3.2(b) and (c) hereof shall be payable in one (1) lump sum payment as soon as administratively practicable within thirty (30) days of the later of the following to occur: (a) the Participant's Termination Date, or (b) the tender to the Employing Company by the Participant of an effective Waiver and Release in the form of Exhibit B attached hereto and the expiration of any applicable revocation period for such waiver. In the event of a dispute with respect to liability or amount of any benefit due hereunder, an effective Waiver and Release shall be tendered at the time of final resolution of any such dispute when payment is tendered by the Employing Company. 3.5 Benefits in the Event of Death. In the event of the Participant's death prior to the payment of all benefits due under this Article 3, the Participant's estate shall be entitled to receive as due any amounts not yet paid under this Article 3 upon the tender by the executor or administrator of the estate of an effective Waiver and Release. 3.6 Legal Fees. In the event of a dispute between a Participant and his Employing Company with regard to any amounts due hereunder, if any material issue in such dispute is finally resolved in the Participant's favor, his Employing Company shall reimburse the Participant's legal fees incurred with respect to all issues in such dispute in an amount not to exceed thirty thousand dollars ($30,000). 3.7 No Mitigation. A Participant who receives benefits under Section 3.2 of this Plan shall have no duty or obligation to seek other employment following his Termination Date and, except as otherwise provided in Subsection 3.1(d) hereof, the amounts due a Participant hereunder shall not be reduced or suspended if such Participant accepts such subsequent employment. 3.8 Non-qualified Retirement and Deferred Compensation Plans. Subsequent to a Change in Control, any claims by a Participant for benefits under any of the Company's non-qualified retirement or deferred compensation plans shall be resolved through binding arbitration in accordance with the procedures and provisions set forth in Article 5 hereof and if any material issue in such dispute is finally resolved in the Participant's favor, the Company shall reimburse the Participant's legal fees in the manner provided in Section 3.6 hereof.
ARTICLE 4 - ADMINISTRATION 4.1 Administrative Committee. The Administrative Committee shall be responsible for the general administration of the Plan and may appoint other persons or entities to perform or assist in the performance of any of its duties, subject to its review and approval. The Administrative Committee shall have the right to remove any such appointee from his position without cause upon notice. ARTICLE 5 - ARBITRATION 5.1 General. Any dispute, controversy or claim arising out of or relating to the Company's obligations to pay severance benefits under this Plan, or the breach thereof, shall be settled and resolved solely by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA") except as otherwise provided herein. The arbitration shall be the sole and exclusive forum for resolution of any such claim for severance benefits and the arbitrators' award shall be final and binding. The provisions of this Article 5 are not intended to apply to any other disputes, claims or controversies arising out of or relating to a Participant's employment by an Employing Company or the termination thereof. 5.2 Demand for Arbitration. Arbitration shall be initiated by serving a written notice of demand for arbitration to the Participant, in the case of an Employing Company, or to the Administrative Committee, in the case of a Participant. 5.3 Law and Venue. The arbitrators shall apply the laws of the State of Georgia, except to the extent pre-empted by federal law, excluding any law which would require the use of the law of another state. The arbitration shall be held in Atlanta, Georgia.
ARTICLE 4 - ADMINISTRATION 4.1 Administrative Committee. The Administrative Committee shall be responsible for the general administration of the Plan and may appoint other persons or entities to perform or assist in the performance of any of its duties, subject to its review and approval. The Administrative Committee shall have the right to remove any such appointee from his position without cause upon notice. ARTICLE 5 - ARBITRATION 5.1 General. Any dispute, controversy or claim arising out of or relating to the Company's obligations to pay severance benefits under this Plan, or the breach thereof, shall be settled and resolved solely by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA") except as otherwise provided herein. The arbitration shall be the sole and exclusive forum for resolution of any such claim for severance benefits and the arbitrators' award shall be final and binding. The provisions of this Article 5 are not intended to apply to any other disputes, claims or controversies arising out of or relating to a Participant's employment by an Employing Company or the termination thereof. 5.2 Demand for Arbitration. Arbitration shall be initiated by serving a written notice of demand for arbitration to the Participant, in the case of an Employing Company, or to the Administrative Committee, in the case of a Participant. 5.3 Law and Venue. The arbitrators shall apply the laws of the State of Georgia, except to the extent pre-empted by federal law, excluding any law which would require the use of the law of another state. The arbitration shall be held in Atlanta, Georgia. 5.4 Appointment of Arbitrators. Arbitrators shall be appointed within fifteen (15) business days following service of the demand for arbitration. The number of arbitrators shall be three. One arbitrator shall be appointed by the Participant, one arbitrator shall be appointed by the Employing Company, and the two arbitrators shall appoint a third. If the arbitrators cannot agree on a third arbitrator within thirty (30) business days after the service of demand for arbitration, the third arbitrator shall be selected by the AAA. 5.5 Costs. The arbitration filing fee shall be paid by the Participant. All other costs of arbitration shall be borne equally by the Participant and his Employing Company, provided, however, that such Employing Company shall reimburse such fees and costs in the event any material issue in such dispute is finally resolved in the Participant's favor and the Participant is reimbursed legal fees under Section 3.6 hereof. 5.6 Interim and Injunctive Relief. Nothing in this Article 5 is intended to preclude, upon application of either party, any court having jurisdiction from issuing and enforcing in any lawful manner such temporary restraining orders, preliminary injunctions, and other interim measures of relief as may be necessary to prevent harm to either party's interests or as otherwise may be appropriate pending the conclusion of arbitration proceedings pursuant to this Article 5 and nothing herein is intended to prevent any court from entering and enforcing in any lawful manner such judgments for permanent equitable relief as may be necessary to prevent harm to a party's interests or as otherwise may be appropriate following the issuance of arbitral awards pursuant to this Article 5. ARTICLE 6 - MISCELLANEOUS 6.1 Funding of Benefits. Unless the Board of Directors shall in its discretion determine otherwise, the benefits payable to a Participant under the Plan shall not be funded in any manner and shall be paid by the Employing Companies out of their general assets, which assets are subject to the claims of the Employing Companies' creditors. 6.2 Withholding. There shall be deducted from the payment of any benefit due under the Plan the amount of any tax required by any governmental authority to be withheld and paid over by the Employing Companies to such governmental authority for the account of the Participant entitled to such payment. 6.3 Assignment. No Participant or beneficiary shall have any rights to sell, assign, transfer, encumber, or otherwise convey the right to receive the payment of any benefit due hereunder, which payment and the rights thereto are expressly declared to be nonassignable and nontransferable. Any attempt to do so shall be null and void and of no effect. 6.4 Amendment and Termination. The Plan may be amended or terminated at any time by the Board of Directors, provided, however, the Plan may not be amended in any material respect or terminated within the two (2) year period following a Change in Control nor shall any amendment or termination impair the rights of any Participant which have accrued hereunder prior to any such amendment or termination. 6.5 Pooling Accounting. Notwithstanding anything to the contrary herein, if, but for any provision of this Plan, a Change in Control transaction would otherwise be accounted for as a pooling-of-interests under APB No.16
("Pooling Accounting") (after giving effect to any and all other facts and circumstances affecting whether such Change in Control transaction would use Pooling Accounting), such provision or provisions of this Plan which would otherwise cause the Change in Control transaction to be ineligible for Pooling Accounting shall be void and ineffective in such a manner and to the extent that by eliminating such provision or provisions of this Plan, Pooling Accounting would be required for such Change in Control transaction.
IN WITNESS WHEREOF, this Southern Company Executive Change in Control Severance Plan has been executed by the Company through its duly authorized officer, this ____ day of ___________, 1999, to be effective as provided herein. SOUTHERN COMPANY SERVICES, INC. By: ____________________________________ Christopher C. Womack Senior Vice President
Exhibit A SOUTHERN COMPANY EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN Market Level Target Annual Bonus For the following companies: Alabama Power Company Georgia Power Company Gulf Power Company Mississippi Power Company Savannah Electric & Power Company Southern Company Services, Inc. Southern Nuclear Operating Company, Inc. Southern Communications Services, Inc. Southern Company Energy Solutions, Inc. Target based on grade level.
Grade 10 11 12 13 Target (as a percent of base salary rate) 25% 30% 35% 40%
For the following companies: Southern Energy Resources, Inc. Vice President or large business unit head. Target (as a percent of base salary rate) 40%
Exhibit B SOUTHERN COMPANY EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN Waiver and Release
IN WITNESS WHEREOF, this Southern Company Executive Change in Control Severance Plan has been executed by the Company through its duly authorized officer, this ____ day of ___________, 1999, to be effective as provided herein. SOUTHERN COMPANY SERVICES, INC. By: ____________________________________ Christopher C. Womack Senior Vice President
Exhibit A SOUTHERN COMPANY EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN Market Level Target Annual Bonus For the following companies: Alabama Power Company Georgia Power Company Gulf Power Company Mississippi Power Company Savannah Electric & Power Company Southern Company Services, Inc. Southern Nuclear Operating Company, Inc. Southern Communications Services, Inc. Southern Company Energy Solutions, Inc. Target based on grade level.
Grade 10 11 12 13 Target (as a percent of base salary rate) 25% 30% 35% 40%
For the following companies: Southern Energy Resources, Inc. Vice President or large business unit head. Target (as a percent of base salary rate) 40%
Exhibit B SOUTHERN COMPANY EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN Waiver and Release I understand that I am entitled to receive the Severance Benefits described in Article 3 of the Southern Company Executive Change in Control Severance Plan (the "Plan") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I have elected to receive under the Plan are in excess of those I would have received from ________________________ (the "Company") if I had not elected to participate in the Plan and sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age
Exhibit A SOUTHERN COMPANY EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN Market Level Target Annual Bonus For the following companies: Alabama Power Company Georgia Power Company Gulf Power Company Mississippi Power Company Savannah Electric & Power Company Southern Company Services, Inc. Southern Nuclear Operating Company, Inc. Southern Communications Services, Inc. Southern Company Energy Solutions, Inc. Target based on grade level.
Grade 10 11 12 13 Target (as a percent of base salary rate) 25% 30% 35% 40%
For the following companies: Southern Energy Resources, Inc. Vice President or large business unit head. Target (as a percent of base salary rate) 40%
Exhibit B SOUTHERN COMPANY EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN Waiver and Release I understand that I am entitled to receive the Severance Benefits described in Article 3 of the Southern Company Executive Change in Control Severance Plan (the "Plan") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I have elected to receive under the Plan are in excess of those I would have received from ________________________ (the "Company") if I had not elected to participate in the Plan and sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of
Exhibit B SOUTHERN COMPANY EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN Waiver and Release I understand that I am entitled to receive the Severance Benefits described in Article 3 of the Southern Company Executive Change in Control Severance Plan (the "Plan") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I have elected to receive under the Plan are in excess of those I would have received from ________________________ (the "Company") if I had not elected to participate in the Plan and sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. I understand and agree that I am obligated to keep confidential and not disclose the terms of this Waiver, including, but not limited to, the benefits under this Plan, except to my attorneys, financial advisors, or except where such disclosure is required by law. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to any vested or accrued benefits that I have under any workers' compensation laws or any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company and/or any of its direct or indirect subsidiaries; however, I understand and acknowledge that nothing herein is intended to or shall be construed to require the Company to institute or continue in effect any particular plan or benefit sponsored by the Company and the Company hereby reserves the right to amend or terminate any of its benefit programs at any time in accordance with the procedures set forth in such plans. In signing this Waiver, I realize that I am waiving and releasing, among other things, any claims to benefits under any and all bonus, severance, workforce reduction, early retirement, outplacement, or any other similar type plan sponsored by the Company except for programs specifically designed for participants in the Plan. I have been encouraged and advised in writing to seek advice from anyone of my choosing regarding this Waiver, including my attorney, and my accountant or tax advisor. Prior to signing this Waiver, I have been given the opportunity and sufficient time to seek such advice, and I fully understand the meaning and contents of this Waiver. I understand that I may take up to forty-five (45) calendar days to consider whether or not I desire to enter this Waiver. I was not coerced, threatened or otherwise forced to sign this Waiver. I have made my choice to sign this Waiver voluntarily and of my own free will.
I understand that I may revoke this Waiver at any time during the seven (7) calendar day period after I sign and deliver this Waiver to the Company. If I revoke this Waiver, I must do so in writing delivered to the Company. I understand that this Waiver is not effective until the expiration of this seven (7) calendar day revocation period. I understand that upon the expiration of such seven (7) calendar day revocation period this entire Waiver will be binding upon me and will be irrevocable. I understand that by signing this Waiver I am giving up rights I may have. IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this day of , in the year. Employee's signature Employee's printed name Acknowledged and Accepted by the Administrative Committee of the Southern Company Executive Change in Control Severance Plan. By: Date:
Attachment to Exhibit B TO: All Eligible Employees under the Southern Company Executive Change in Control Severance Plan
FROM: RE: DATE: _____________________ ADEA Information Notice _____________________
A severance plan known as the Southern Company Executive Change in
Control Severance Plan ("Plan") has been approved and established by The Southern Company, its affiliates and its direct and indirect subsidiaries (collectively the "Company"). You are eligible to participate in the Plan subject to the terms of the Plan. In accordance with the Age Discrimination in Employment Act ("ADEA"), the Company is providing you the following information pertaining to eligibility and participation in the Plan. o The purpose of the Plan is to provide benefits to certain key employees of The Southern Company and certain subsidiaries of The Southern Company ("Employing Companies") whose employment is terminated subsequent to a change in control of The Southern Company or their respective Employing Company. o Each active exempt and non-exempt employee of an Employing Company of Grade 10 to 13 (or, if the Grade System is not used, $130,000 or more of annual base salary rate for the 12 month period immediately preceding the change in control) not covered by a collective bargaining agreement is generally eligible to participate in the Plan if, during the two year period following a change in control: (i) his employment is involuntarily terminated for reasons other than cause, or (ii) he voluntarily terminates employment for good reason. o All eligible employees may receive severance benefits under the Plan by signing a Waiver and Release no later than 45 calendar days from the date it is received. The Waiver and Release will remain revocable by you for a seven day period after you sign it. o Attached is a list sorted by job title and age of each employee eligible to participate in the Plan as well as a list of the ages of all employees in the same job classification who are not eligible to participate in the Plan. In furtherance of you making an informed decision, the Company urges you to seek a financial advisor, legal counsel and a qualified tax advisor to assist you in fully understanding your rights and benefits under the plan and the Waiver and Release that you will be required to sign to receive severance benefits under the Plan.
Attachment to Exhibit B TO: All Eligible Employees under the Southern Company Executive Change in Control Severance Plan
FROM: RE: DATE: _____________________ ADEA Information Notice _____________________
A severance plan known as the Southern Company Executive Change in
Control Severance Plan ("Plan") has been approved and established by The Southern Company, its affiliates and its direct and indirect subsidiaries (collectively the "Company"). You are eligible to participate in the Plan subject to the terms of the Plan. In accordance with the Age Discrimination in Employment Act ("ADEA"), the Company is providing you the following information pertaining to eligibility and participation in the Plan. o The purpose of the Plan is to provide benefits to certain key employees of The Southern Company and certain subsidiaries of The Southern Company ("Employing Companies") whose employment is terminated subsequent to a change in control of The Southern Company or their respective Employing Company. o Each active exempt and non-exempt employee of an Employing Company of Grade 10 to 13 (or, if the Grade System is not used, $130,000 or more of annual base salary rate for the 12 month period immediately preceding the change in control) not covered by a collective bargaining agreement is generally eligible to participate in the Plan if, during the two year period following a change in control: (i) his employment is involuntarily terminated for reasons other than cause, or (ii) he voluntarily terminates employment for good reason. o All eligible employees may receive severance benefits under the Plan by signing a Waiver and Release no later than 45 calendar days from the date it is received. The Waiver and Release will remain revocable by you for a seven day period after you sign it. o Attached is a list sorted by job title and age of each employee eligible to participate in the Plan as well as a list of the ages of all employees in the same job classification who are not eligible to participate in the Plan. In furtherance of you making an informed decision, the Company urges you to seek a financial advisor, legal counsel and a qualified tax advisor to assist you in fully understanding your rights and benefits under the plan and the Waiver and Release that you will be required to sign to receive severance benefits under the Plan. If you have any questions or need additional information, please call me at _______________. Sincerely, [Name] [Title]
ADEA INFORMATION NOTICE
------------------------------------------------------------ -------------------------------------------Job Title, Classification Age of or Category of Eligible Employees Eligible Employees ------------------------------------------------------------ ------------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------------------------------------------------------------------[List job classification, title or category of all eligible employees] -------------------------------------------------------------------------------------------------------------------------------------------------[List corresponding age of each eligible emp --------------------------------------------
ADEA INFORMATION NOTICE
------------------------------------------------------------ -------------------------------------------Job Title, Classification Age of or Category of Eligible Employees Eligible Employees ------------------------------------------------------------ ------------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------------------------------------------------------------------[List job classification, title or category of all eligible employees] -------------------------------------------------------------------------------------------------------------------------------------------------[List corresponding age of each eligible emp --------------------------------------------
------------------------------------------------------------ -------------------------------------------Job Title, Classification Age of or Category of Ineligible Employees Ineligible Employees ------------------------------------------------------------ ------------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------------------------------------------------------------------[List job classification, title or category of all ineligible employees] -------------------------------------------------------------------------------------------------------------------------------------------------[List corresponding age of each ineligible e --------------------------------------------
Exhibit C SOUTHERN COMPANY EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN Short Term Incentive Compensation Plans
EXHIBIT 10(a)80 DEFERRED COMPENSATION AGREEMENT THIS DEFERRED COMPENSATION AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Georgia Power Company (the "Company") and Henry Allen Franklin ("Mr. Franklin").
Exhibit C SOUTHERN COMPANY EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN Short Term Incentive Compensation Plans
EXHIBIT 10(a)80 DEFERRED COMPENSATION AGREEMENT THIS DEFERRED COMPENSATION AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Georgia Power Company (the "Company") and Henry Allen Franklin ("Mr. Franklin").
EXHIBIT 10(a)80 DEFERRED COMPENSATION AGREEMENT THIS DEFERRED COMPENSATION AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Georgia Power Company (the "Company") and Henry Allen Franklin ("Mr. Franklin"). W I T N E S S E T H: WHEREAS, Mr. Franklin is the Chief Executive Officer of the Company; WHEREAS, the Company and Southern wish to encourage Mr. Franklin to increase the profitability of the Company and to provide Mr. Franklin an interest in the Company's overall profitability; NOW, THEREFORE, in consideration of the premises, and the agreements 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. General Nature of Award. Subject to the terms and conditions of this Agreement, the Company shall establish and maintain on behalf of Mr. Franklin an account on the Company's books and records (the "Account") which, if Mr. Franklin continues to be an employee of the Company, or any affiliate or subsidiary of Southern (as set forth in Paragraph 15 hereof), shall entitle Mr. Franklin to receive on the fifth anniversary date of the effective date of this Agreement (such five year period to be referred to as the "Performance Period") an amount equal to the then Market Value (as defined below) of the equivalent of Five Hundred Thousand Dollars ($500,000) of Market Value of Southern's common stock deemed to have been purchased as of the effective date of this Agreement, including reinvested dividends thereon, increased, if certain profitability goals are met, by estimated income tax expenses. 2. Investment. (a) As of the date hereof, the Company shall credit to Mr. Franklin's Account that number of deemed shares (including fractional shares) of Southern's common stock ("Common Stock") as shall equal $500,000 in Market Value (as defined herein) determined as of the effective date of this Agreement (such hypothetical shares to be referred to herein as the "Phantom Stock"). For purposes of this Agreement, "Market Value" shall mean the average closing price of the Common Stock as reported by the New York Stock Exchange for the ten trading days immediately preceding the respective valuation date. (b) As of the day of each calendar quarter in which occurs the payment of dividends on Common Stock, there shall be credited to Mr. Franklin's Account such additional shares of Phantom Stock (including fractional shares) as could have been purchased at the Market Value on such day as follows: (i) In the case of cash dividends, such additional shares of Phantom Stock as could have been purchased with the dividends payable on the number of shares of Phantom Stock credited to the Account immediately prior to the dividend; (ii) In the case of dividends payable in property other than cash or Common Stock, such additional shares of Phantom Stock as could have been purchased with the fair market value of the property which would have been payable as dividends on the number of shares of Phantom Stock credited to the Account immediately prior to the dividend; or (iii) In the case of dividends payable in Common Stock, such additional shares of Phantom Stock as would have been payable on the number of shares of Phantom Stock credited to the Account immediately prior to the dividend. (c) In the event that the number of outstanding shares of Common Stock is changed through merger, consolidation, reorganization, recapitalization, reincorporation, stock split, stock dividend (in excess of 2%) or other change in the capital structure of Southern without consideration, or upon the occurrence of any other extraordinary corporate event involving the Common Stock causing a reduction in the value of the Common Stock, such as a corporate spin off or split up, the number of shares of Common Stock credited to the Account shall be proportionately adjusted by the Company so as to preserve the value of the Account immediately prior to such event. 3. Vesting of Account. The Market Value of Mr. Franklin's Account shall vest on the fifth anniversary of the effective date of this Agreement (the "Vesting Date"), provided Mr. Franklin is then an employee of the Company, Southern, or an affiliate or subsidiary of Southern. 4. Valuation of Account. The value of Mr. Franklin's Account on any date shall be based on the Market Value on such date multiplied by the number of shares of Phantom Stock then credited to the Account, provided, however, that if the annual profitability goals established for the Company and for Mr. Franklin by the Chief
Executive Officer of Southern have been equaled or exceeded for each fiscal year of the Company during the Performance Period as set forth on Exhibit A, and as annually documented on Exhibit B of this Agreement, (the "Profitability Goals"), the value of the Account shall be increased upon payout to cover Mr. Franklin's federal and state income tax expense as reasonably estimated by the Company for the year of payout (the "Tax Gross-up"). Failure to meet the Profitability Goals for any year of the Performance Period shall result in the forfeiture of the Tax Gross-up, provided, however, that Southern's Chief Executive Officer may, in his sole discretion, determine after the close of the Performance Period, that as a result of overall Company profitability and individual performance during the entire Performance Period, that all or a portion of the value of the Tax Gross-up shall nevertheless be paid. For purposes of this Paragraph 4, in the event that Mr. Franklin shall become Southern's Chief Executive Officer, the goals and determinations hereunder shall be made by the Compensation Committee of Southern's Board of Directors. 5. Payment of Account Balance. Provided that Mr. Franklin is then an employee of the Company, Southern, or an affiliate or subsidiary of Southern, and, with respect to the Tax Gross-up amount, has also achieved the Profitability Goals, the Company shall pay to Mr. Franklin the value of his Account, and, if applicable, the Tax Gross-up amount, in cash within ten (10) days of the Vesting Date. 6. Election to Defer. By written election filed with Southern's Vice President, Human Resources no less than thirteen (13) months prior to the Vesting Date, Mr. Franklin may defer all or a portion of the amount to be received under this Agreement by having such amount contributed on his account to The Southern Company Deferred Compensation Plan, in accordance with the terms and conditions of such Plan. 7. Death, Permanent Disability, Termination Without Cause or Termination for Good Reason. In the event of Mr. Franklin's termination of employment with the Company prior to the payout of the value of the Account for reasons of death, permanent disability, termination by the Company without Cause, or termination by Mr. Franklin for Good Reason following a Change in Control, the Company shall pay to Mr. Franklin, or his estate in the event of death, the value of the Account determined as of the date of such termination, plus, if the Profitability Goals have been met as of such date, the Tax Gross-up amount. For purposes of this Section 7, the terms Cause, Change in Control, and Good Reason shall have the meaning set forth in that certain Change in Control Agreement, dated _________________, 1999, as amended from time to time, between Southern, the Company and Mr. Franklin (the "Change in Control Agreement"), the defined terms of which are incorporated in this Section 7 by reference thereto. 8. Assignability. Neither Mr. Franklin, his estate, his beneficiaries, nor his legal representative 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 of this Agreement shall be void and have no effect. 9. 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 Mr. Franklin may be entitled to receive the value of his Account under the terms and conditions of this Agreement, the assets from which such amount may be paid shall at all times be subject to the claims of the Company's creditors. 10. Amendment; Modification; Termination. Except as otherwise provided herein, this Agreement may be amended, modified, or terminated only by a writing executed by the parties hereto. 11. No Effect On Other Arrangements. It is expressly understood and agreed that the payments made in accordance with this Agreement are in addition to any other benefits or compensation to which Mr. Franklin may be entitled or for which he may be eligible, whether funded or unfunded, by reason of his employment with the Company. 12. Tax Withholding. There shall be deducted from each payment under this Agreement 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 Mr. Franklin. 13. Compensation. Any compensation contributed on behalf of Mr. Franklin under this Agreement shall not be considered "compensation," as the term is defined in The Southern Company Employee Savings Plan, The Southern Company Employee Stock Ownership Plan, or The Southern Company Pension Plan. Distributions from Mr. Franklin's Account shall not be considered wages, salaries or compensation under any other employee benefit plan. 14. 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, modify, whether or not for Cause, the employment relationship of Mr. Franklin and the Company. 15. Transfer of Employment to Southern or a Southern Subsidiary of Affiliate. In the event that Mr. Franklin's employment by the Company is terminated during the Performance Period and Mr. Franklin shall become immediately re-employed by Southern or a subsidiary or an affiliate of Southern, the Company shall assign this Agreement to Southern or such subsidiary or affiliate, Southern shall accept such assignment or cause such
affiliate or subsidiary to accept such assignment, such assignee shall become the "Company" for all purposes hereunder and the profitability goals set forth on Exhibit A hereof shall be amended to appropriately reflect the performance of such assignee. In the event of such assignment, the expense of this Agreement shall be shared pro rata by the Company and any such assignee based upon the number of months during the Performance Period Mr. Franklin was employed by each. 16. Southern Company Change in Control Agreement. The benefits provided for herein are intended to be in addition to any benefits to which Mr. Franklin may otherwise be entitled under the terms of the Change in Control Agreement. 17. 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. IN WITNESS WHEREOF, this Agreement has been executed by the parties first listed above, effective this 27th day of February, 1998. THE SOUTHERN COMPANY By: ______________________________ GEORGIA POWER COMPANY By: Mr. FRANKLIN Henry Allen Franklin Attest: By:
Exhibit A Deferred Compensation Agreement Schedule of Profitability Goals For Performance Period The Company shall achieve a rate of return which is equal to or above the median of the Goldman Sachs comparator group of 77 utility companies for each of the Company's fiscal years included in the Performance Period, excluding extraordinary events occurring during any such fiscal years subject to the approval of the Chief Executive Officer of The Southern Company. Achievement of the goals shall be assessed annually by the Chief Executive Officer of The Southern Company and documented in Exhibit B of this Agreement.
Exhibit B Deferred Compensation Agreement Annual Documentation of Profitability Goals For Performance Period
EXHIBIT 10(a)81 DEFERRED COMPENSATION AGREEMENT THIS DEFERRED COMPENSATION AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Southern Nuclear Operating Company, Inc. (the "Company") and William G. Hairston III ("Mr. Hairston"). W I T N E S S E T H: WHEREAS, Mr. Hairston is the Chief Executive Officer of the Company; WHEREAS, the Company and Southern wish to encourage Mr. Hairston to increase the performance of the Company and to provide Mr. Hairston an interest in Southern's overall profitability;
Exhibit A Deferred Compensation Agreement Schedule of Profitability Goals For Performance Period The Company shall achieve a rate of return which is equal to or above the median of the Goldman Sachs comparator group of 77 utility companies for each of the Company's fiscal years included in the Performance Period, excluding extraordinary events occurring during any such fiscal years subject to the approval of the Chief Executive Officer of The Southern Company. Achievement of the goals shall be assessed annually by the Chief Executive Officer of The Southern Company and documented in Exhibit B of this Agreement.
Exhibit B Deferred Compensation Agreement Annual Documentation of Profitability Goals For Performance Period
EXHIBIT 10(a)81 DEFERRED COMPENSATION AGREEMENT THIS DEFERRED COMPENSATION AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Southern Nuclear Operating Company, Inc. (the "Company") and William G. Hairston III ("Mr. Hairston"). W I T N E S S E T H: WHEREAS, Mr. Hairston is the Chief Executive Officer of the Company; WHEREAS, the Company and Southern wish to encourage Mr. Hairston to increase the performance of the Company and to provide Mr. Hairston an interest in Southern's overall profitability; NOW, THEREFORE, in consideration of the premises, and the agreements 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. General Nature of Award. Subject to the terms and conditions of this Agreement, the Company shall establish and maintain on behalf of Mr. Hairston an account on the Company's books and records (the "Account") which, if Mr. Hairston continues to be an employee of the Company, or any affiliate or subsidiary of Southern (as set forth in Paragraph 15 hereof), shall entitle Mr. Hairston to receive on the fifth anniversary date of the effective date of this Agreement (such five year period to be referred to as the "Performance Period") an amount equal to the then Market Value (as defined below) of the equivalent of Two Hundred Fifty Thousand Dollars ($250,000) of Market Value of Southern's common stock deemed to have been purchased as of the effective date of this Agreement, including reinvested dividends thereon, increased, if certain performance goals are met, by estimated income tax expenses. 2. Investment. (a) As of the date hereof, the Company shall credit to Mr. Hairston's Account that number of deemed shares (including fractional shares) of Southern's common stock ("Common Stock") as shall equal $250,000 in Market Value (as defined herein) determined as of the effective date of this Agreement (such hypothetical shares to be referred to herein as the "Phantom Stock"). For purposes of this Agreement, "Market Value" shall mean the average closing price of the Common Stock as reported by the New York Stock Exchange for the ten trading days immediately preceding the respective valuation date. (b) As of the day of each calendar quarter in which occurs the payment of dividends on Common Stock, there shall be credited to Mr. Hairston's Account such additional shares of Phantom Stock (including fractional shares) as could have been purchased at the Market Value on such day as follows: (i) In the case of cash dividends, such additional shares of Phantom Stock as could have been purchased with the dividends payable on the number of shares of Phantom Stock credited to the Account immediately prior to the dividend; (ii) In the case of dividends payable in property other than cash or Common Stock, such additional shares of Phantom Stock as could have been purchased with the fair market value of the property which would have been payable as dividends on the number of shares of Phantom Stock credited to the Account immediately prior to the dividend; or
Exhibit B Deferred Compensation Agreement Annual Documentation of Profitability Goals For Performance Period
EXHIBIT 10(a)81 DEFERRED COMPENSATION AGREEMENT THIS DEFERRED COMPENSATION AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Southern Nuclear Operating Company, Inc. (the "Company") and William G. Hairston III ("Mr. Hairston"). W I T N E S S E T H: WHEREAS, Mr. Hairston is the Chief Executive Officer of the Company; WHEREAS, the Company and Southern wish to encourage Mr. Hairston to increase the performance of the Company and to provide Mr. Hairston an interest in Southern's overall profitability; NOW, THEREFORE, in consideration of the premises, and the agreements 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. General Nature of Award. Subject to the terms and conditions of this Agreement, the Company shall establish and maintain on behalf of Mr. Hairston an account on the Company's books and records (the "Account") which, if Mr. Hairston continues to be an employee of the Company, or any affiliate or subsidiary of Southern (as set forth in Paragraph 15 hereof), shall entitle Mr. Hairston to receive on the fifth anniversary date of the effective date of this Agreement (such five year period to be referred to as the "Performance Period") an amount equal to the then Market Value (as defined below) of the equivalent of Two Hundred Fifty Thousand Dollars ($250,000) of Market Value of Southern's common stock deemed to have been purchased as of the effective date of this Agreement, including reinvested dividends thereon, increased, if certain performance goals are met, by estimated income tax expenses. 2. Investment. (a) As of the date hereof, the Company shall credit to Mr. Hairston's Account that number of deemed shares (including fractional shares) of Southern's common stock ("Common Stock") as shall equal $250,000 in Market Value (as defined herein) determined as of the effective date of this Agreement (such hypothetical shares to be referred to herein as the "Phantom Stock"). For purposes of this Agreement, "Market Value" shall mean the average closing price of the Common Stock as reported by the New York Stock Exchange for the ten trading days immediately preceding the respective valuation date. (b) As of the day of each calendar quarter in which occurs the payment of dividends on Common Stock, there shall be credited to Mr. Hairston's Account such additional shares of Phantom Stock (including fractional shares) as could have been purchased at the Market Value on such day as follows: (i) In the case of cash dividends, such additional shares of Phantom Stock as could have been purchased with the dividends payable on the number of shares of Phantom Stock credited to the Account immediately prior to the dividend; (ii) In the case of dividends payable in property other than cash or Common Stock, such additional shares of Phantom Stock as could have been purchased with the fair market value of the property which would have been payable as dividends on the number of shares of Phantom Stock credited to the Account immediately prior to the dividend; or (iii) In the case of dividends payable in Common Stock, such additional shares of Phantom Stock as would have been payable on the number of shares of Phantom Stock credited to the Account immediately prior to the dividend. (c) In the event that the number of outstanding shares of Common Stock is changed through merger, consolidation, reorganization, recapitalization, reincorporation, stock split, stock dividend (in excess of 2%) or other change in the capital structure of Southern without consideration, or upon the occurrence of any other extraordinary corporate event involving the Common Stock causing a reduction in the value of the Common Stock, such as a corporate spin off or split up, the number of shares of Common Stock credited to the Account shall be proportionately adjusted by the Company so as to preserve the value of the Account immediately prior to such event. 3. Vesting of Account. The Market Value of Mr. Hairston's Account shall vest on the fifth anniversary of the
EXHIBIT 10(a)81 DEFERRED COMPENSATION AGREEMENT THIS DEFERRED COMPENSATION AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Southern Nuclear Operating Company, Inc. (the "Company") and William G. Hairston III ("Mr. Hairston"). W I T N E S S E T H: WHEREAS, Mr. Hairston is the Chief Executive Officer of the Company; WHEREAS, the Company and Southern wish to encourage Mr. Hairston to increase the performance of the Company and to provide Mr. Hairston an interest in Southern's overall profitability; NOW, THEREFORE, in consideration of the premises, and the agreements 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. General Nature of Award. Subject to the terms and conditions of this Agreement, the Company shall establish and maintain on behalf of Mr. Hairston an account on the Company's books and records (the "Account") which, if Mr. Hairston continues to be an employee of the Company, or any affiliate or subsidiary of Southern (as set forth in Paragraph 15 hereof), shall entitle Mr. Hairston to receive on the fifth anniversary date of the effective date of this Agreement (such five year period to be referred to as the "Performance Period") an amount equal to the then Market Value (as defined below) of the equivalent of Two Hundred Fifty Thousand Dollars ($250,000) of Market Value of Southern's common stock deemed to have been purchased as of the effective date of this Agreement, including reinvested dividends thereon, increased, if certain performance goals are met, by estimated income tax expenses. 2. Investment. (a) As of the date hereof, the Company shall credit to Mr. Hairston's Account that number of deemed shares (including fractional shares) of Southern's common stock ("Common Stock") as shall equal $250,000 in Market Value (as defined herein) determined as of the effective date of this Agreement (such hypothetical shares to be referred to herein as the "Phantom Stock"). For purposes of this Agreement, "Market Value" shall mean the average closing price of the Common Stock as reported by the New York Stock Exchange for the ten trading days immediately preceding the respective valuation date. (b) As of the day of each calendar quarter in which occurs the payment of dividends on Common Stock, there shall be credited to Mr. Hairston's Account such additional shares of Phantom Stock (including fractional shares) as could have been purchased at the Market Value on such day as follows: (i) In the case of cash dividends, such additional shares of Phantom Stock as could have been purchased with the dividends payable on the number of shares of Phantom Stock credited to the Account immediately prior to the dividend; (ii) In the case of dividends payable in property other than cash or Common Stock, such additional shares of Phantom Stock as could have been purchased with the fair market value of the property which would have been payable as dividends on the number of shares of Phantom Stock credited to the Account immediately prior to the dividend; or (iii) In the case of dividends payable in Common Stock, such additional shares of Phantom Stock as would have been payable on the number of shares of Phantom Stock credited to the Account immediately prior to the dividend. (c) In the event that the number of outstanding shares of Common Stock is changed through merger, consolidation, reorganization, recapitalization, reincorporation, stock split, stock dividend (in excess of 2%) or other change in the capital structure of Southern without consideration, or upon the occurrence of any other extraordinary corporate event involving the Common Stock causing a reduction in the value of the Common Stock, such as a corporate spin off or split up, the number of shares of Common Stock credited to the Account shall be proportionately adjusted by the Company so as to preserve the value of the Account immediately prior to such event. 3. Vesting of Account. The Market Value of Mr. Hairston's Account shall vest on the fifth anniversary of the effective date of this Agreement (the "Vesting Date"), provided Mr. Hairston is then an employee of the Company, Southern, or an affiliate or subsidiary of Southern. 5. Payment of Account Balance. Provided that Mr. Hairston is then an employee of the Company, Southern, or an affiliate or subsidiary of Southern, and, with respect to the Tax Gross-up amount, has also achieved the Performance Goals, the Company shall pay to Mr. Hairston the value of his Account, and, if applicable, the Tax
Gross-up amount, in cash within ten (10) days of the Vesting Date. 4. Valuation of Account. The value of Mr. Hairston's Account on any date shall be based on the Market Value on such date multiplied by the number of shares of Phantom Stock then credited to the Account, provided, however, that if the annual performance goals established for the Company and for Mr. Hairston by the Chief Executive Officer of Southern have been equaled or exceeded for each fiscal year of the Company during the Performance Period as set forth on Exhibit A, and as annually documented on Exhibit B of this Agreement, (the "Performance Goals"), the value of the Account shall be increased upon payout to cover Mr. Hairston's federal and state income tax expense as reasonably estimated by the Company for the year of payout (the "Tax Grossup"). Failure to meet the Performance Goals for any year of the Performance Period shall result in the forfeiture of the Tax Gross-up, provided, however, that Southern's Chief Executive Officer may, in his sole discretion, determine after the close of the Performance Period, that as a result of overall Company performance and individual performance during the entire Performance Period, that all or a portion of the value of the Tax Grossup shall nevertheless be paid. 6. Election to Defer. By written election filed with Southern's Vice President, Human Resources no less than thirteen (13) months prior to the Vesting Date, Mr. Hairston may defer all or a portion of the amount to be received under this Agreement by having such amount contributed on his account to The Southern Company Deferred Compensation Plan, in accordance with the terms and conditions of such Plan. 7. Death, Permanent Disability and Termination Without Cause. In the event of Mr. Hairston's termination of employment with the Company prior to the payout of the value of the Account for reasons of death, permanent disability or termination by the Company without Cause (as defined below), the Company shall pay to Mr. Hairston, or his estate in the event of death, the value of the Account determined as of the date of such termination, plus, if the Performance Goals have been met as of such date, the Tax Gross-up amount. As used in this Agreement, the term "cause" shall mean gross negligence or willful misconduct in the performance of the duties and services required in the course of employment by the Company, the final conviction of a felony or misdemeanor involving moral turpitude, the carrying out of any activity or the making of any statement which would prejudice the good name and standing of the Company or would bring the Company into contempt, ridicule or would reasonably shock or offend any community in which the Company is located, or a material breach of the fiduciary obligations owed by an officer and an employee to the Company. 8. Assignability. Neither Mr. Hairston, his estate, his beneficiaries, nor his legal representative 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 of this Agreement shall be void and have no effect. 9. 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 Mr. Hairston may be entitled to receive the value of his Account under the terms and conditions of this Agreement, the assets from which such amount may be paid shall at all times be subject to the claims of the Company's creditors. 10. Amendment; Modification; Termination. Except as otherwise provided herein, this Agreement may be amended, modified, or terminated only by a writing executed by the parties hereto. 11. No Effect On Other Arrangements. It is expressly understood and agreed that the payments made in accordance with this Agreement are in addition to any other benefits or compensation to which Mr. Hairston may be entitled or for which he may be eligible, whether funded or unfunded, by reason of his employment with the Company. 12. Tax Withholding. There shall be deducted from each payment under this Agreement 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 Mr. Hairston. 13. Compensation. Any compensation contributed on behalf of Mr. Hairston under this Agreement shall not be considered "compensation," as the term is defined in The Southern Company Employee Savings Plan, The Southern Company Employee Stock Ownership Plan, or The Southern Company Pension Plan. Distributions from Mr. Hairston's Account shall not be considered wages, salaries or compensation under any other employee benefit plan. 14. 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, modify, whether or not for Cause, the employment relationship of Mr. Hairston and the Company. 15. Transfer of Employment to Southern or a Southern Subsidiary of Affiliate. In the event that Mr. Hairston's employment by the Company is terminated during the Performance Period and Mr. Hairston shall become immediately re-employed by Southern or a subsidiary or an affiliate of Southern, the Company shall assign this Agreement to Southern or such subsidiary or affiliate, Southern shall accept such assignment or cause such affiliate or subsidiary to accept such assignment, such assignee shall become the "Company" for all purposes
hereunder and the performance goals set forth on Exhibit A hereof shall be amended to appropriately reflect the performance of such assignee. In the event of such assignment, the expense of this Agreement shall be shared pro rata by the Company and any such assignee based upon the number of months during the Performance Period Mr. Hairston was employed by each. 16. 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.
IN WITNESS WHEREOF, this Agreement has been executed by the parties first listed above, effective this ___ day of February, 1998. THE SOUTHERN COMPANY By: ______________________________ SOUTHERN NUCLEAR OPERATING COMPANY, INC. By: MR. HAIRSTON William G. Hairston III Attest: By:
Exhibit A Deferred Compensation Agreement Schedule of Performance Goals For Performance Period The Company shall achieve an assessment ranking of Level 2 or better in INPO Evaluations. The Company shall experience no catastrophic event in the operations of its nuclear facilities. The Company shall meet a cost goal of 2.0 cents/kwh for all cost except FNP steam generator replacement cost and embedded capital. The FNP steam generators shall be replaced at a cost of less than $250 million which includes AFUDC. The annual individual performance goals established for Mr. Hairston shall be met or exceeded, barring an extraordinary event occurring during any of the fiscal years, subject to the approval of the Chief Executive Officer of Southern. Achievement of the goals shall be assessed annually by the Chief Executive Officer of Southern and documented in Exhibit B of this Agreement.
Cost Goal Basis: 1998 ---Nuclear O&M Other Non-capital Capital Additions Less Farley SGR --------------Non-fuel Costs Millions of MWH 454.3 113.8 107.5 (63.3) ---612.3 42.90 1999 ---443.0 105.4 95.0 (60.6) ---582.8 44.39 2000 ---436.8 102.7 104.5 (49.5) ---594.5 44.10 2001 ---445.8 106.3 63.4 (22.3) ---593.2 43.88 2002 ---444.6 111.0 64.0 0.0 --619.6 44.15
IN WITNESS WHEREOF, this Agreement has been executed by the parties first listed above, effective this ___ day of February, 1998. THE SOUTHERN COMPANY By: ______________________________ SOUTHERN NUCLEAR OPERATING COMPANY, INC. By: MR. HAIRSTON William G. Hairston III Attest: By:
Exhibit A Deferred Compensation Agreement Schedule of Performance Goals For Performance Period The Company shall achieve an assessment ranking of Level 2 or better in INPO Evaluations. The Company shall experience no catastrophic event in the operations of its nuclear facilities. The Company shall meet a cost goal of 2.0 cents/kwh for all cost except FNP steam generator replacement cost and embedded capital. The FNP steam generators shall be replaced at a cost of less than $250 million which includes AFUDC. The annual individual performance goals established for Mr. Hairston shall be met or exceeded, barring an extraordinary event occurring during any of the fiscal years, subject to the approval of the Chief Executive Officer of Southern. Achievement of the goals shall be assessed annually by the Chief Executive Officer of Southern and documented in Exhibit B of this Agreement.
Cost Goal Basis: 1998 ---Nuclear O&M Other Non-capital Capital Additions Less Farley SGR --------------Non-fuel Costs Millions of MWH Non-fuel Cost/Kwh Fuel Cost/Kwh 4% Contingency -------------Goal Cost/Kwh 454.3 113.8 107.5 (63.3) ---612.3 42.90 1.43 0.51 0.08 ---2.02 1999 ---443.0 105.4 95.0 (60.6) ---582.8 44.39 1.31 0.51 0.07 ---1.89 2000 ---436.8 102.7 104.5 (49.5) ---594.5 44.10 1.35 0.51 0.07 ---1.93 2001 ---445.8 106.3 63.4 (22.3) ---593.2 43.88 1.35 0.52 0.07 ---1.94 2002 ---444.6 111.0 64.0 0.0 --619.6 44.15 1.40 0.54 0.08 ---2.02
Exhibit A Deferred Compensation Agreement Schedule of Performance Goals For Performance Period The Company shall achieve an assessment ranking of Level 2 or better in INPO Evaluations. The Company shall experience no catastrophic event in the operations of its nuclear facilities. The Company shall meet a cost goal of 2.0 cents/kwh for all cost except FNP steam generator replacement cost and embedded capital. The FNP steam generators shall be replaced at a cost of less than $250 million which includes AFUDC. The annual individual performance goals established for Mr. Hairston shall be met or exceeded, barring an extraordinary event occurring during any of the fiscal years, subject to the approval of the Chief Executive Officer of Southern. Achievement of the goals shall be assessed annually by the Chief Executive Officer of Southern and documented in Exhibit B of this Agreement.
Cost Goal Basis: 1998 ---Nuclear O&M Other Non-capital Capital Additions Less Farley SGR --------------Non-fuel Costs Millions of MWH Non-fuel Cost/Kwh Fuel Cost/Kwh 4% Contingency -------------Goal Cost/Kwh 454.3 113.8 107.5 (63.3) ---612.3 42.90 1.43 0.51 0.08 ---2.02 1999 ---443.0 105.4 95.0 (60.6) ---582.8 44.39 1.31 0.51 0.07 ---1.89 2000 ---436.8 102.7 104.5 (49.5) ---594.5 44.10 1.35 0.51 0.07 ---1.93 2001 ---445.8 106.3 63.4 (22.3) ---593.2 43.88 1.35 0.52 0.07 ---1.94 2002 ---444.6 111.0 64.0 0.0 --619.6 44.15 1.40 0.54 0.08 ---2.02
Exhibit B Deferred Compensation Agreement Annual Documentation of Performance Goals For Performance Period
EXHIBIT 10(a)82 DEFERRED COMPENSATION AGREEMENT THIS DEFERRED COMPENSATION AGREEMENT ("Agreement") made and entered into by and between THE SOUTHERN COMPANY ("Southern"), GEORGIA POWER COMPANY (the "Company") and WARREN Y. JOBE ("Employee"). W I T N E S S E T H WHEREAS, Employee has been employed by the Company for approximately ___________(____) years; WHEREAS, Employee is a highly compensated employee of the Company and is a member of its management; WHEREAS, the parties acknowledge that certain events ("Eligibility Events") may occur upon the termination of the Employee's employment with the Company; WHEREAS, the parties desire to delineate their respective rights, duties, and obligations attendant to the occurrence of an Eligibility Event and desire to reach an accord and satisfaction of all claims arising from Employee's employment and the occurrence of an Eligibility Event, with appropriate releases; and WHEREAS, the parties desire to provide Employee with deferred compensation upon the occurrence of an Eligibility Event for service he has provided or will provide for the Company; WHEREAS, the parties desire to enter into a consulting arrangement upon the occurrence of an Eligibility Event; NOW, THEREFORE, in
Cost Goal Basis: 1998 ---Nuclear O&M Other Non-capital Capital Additions Less Farley SGR --------------Non-fuel Costs Millions of MWH Non-fuel Cost/Kwh Fuel Cost/Kwh 4% Contingency -------------Goal Cost/Kwh 454.3 113.8 107.5 (63.3) ---612.3 42.90 1.43 0.51 0.08 ---2.02 1999 ---443.0 105.4 95.0 (60.6) ---582.8 44.39 1.31 0.51 0.07 ---1.89 2000 ---436.8 102.7 104.5 (49.5) ---594.5 44.10 1.35 0.51 0.07 ---1.93 2001 ---445.8 106.3 63.4 (22.3) ---593.2 43.88 1.35 0.52 0.07 ---1.94 2002 ---444.6 111.0 64.0 0.0 --619.6 44.15 1.40 0.54 0.08 ---2.02
Exhibit B Deferred Compensation Agreement Annual Documentation of Performance Goals For Performance Period
EXHIBIT 10(a)82 DEFERRED COMPENSATION AGREEMENT THIS DEFERRED COMPENSATION AGREEMENT ("Agreement") made and entered into by and between THE SOUTHERN COMPANY ("Southern"), GEORGIA POWER COMPANY (the "Company") and WARREN Y. JOBE ("Employee"). W I T N E S S E T H WHEREAS, Employee has been employed by the Company for approximately ___________(____) years; WHEREAS, Employee is a highly compensated employee of the Company and is a member of its management; WHEREAS, the parties acknowledge that certain events ("Eligibility Events") may occur upon the termination of the Employee's employment with the Company; WHEREAS, the parties desire to delineate their respective rights, duties, and obligations attendant to the occurrence of an Eligibility Event and desire to reach an accord and satisfaction of all claims arising from Employee's employment and the occurrence of an Eligibility Event, with appropriate releases; and WHEREAS, the parties desire to provide Employee with deferred compensation upon the occurrence of an Eligibility Event for service he has provided or will provide for the Company; WHEREAS, the parties desire to enter into a consulting arrangement upon the occurrence of an Eligibility Event; NOW, THEREFORE, in consideration of the premises, and the agreements 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 hereto, intending to be legally bound, hereby covenant and agree as follows: 1. Event Rendering Employee Eligible For Deferred Compensation. The Employee shall become eligible for benefits under the terms of this Agreement if one of the following Eligibility Events occurs: a. The Employee terminates employment with the Company on or after attaining age sixty-two (62) and enters into a release in the form attached hereto as Exhibit 1; or b. The Employee, after entering into this Agreement but while employed by the Company, becomes totally and permanently disabled as determined by a medical doctor selected by the Company and enters into a release in the form attached hereto as Exhibit 1. c. Upon the occurrence of the Eligibility Event in Paragraph (a) above, and subject to Paragraph 5, the Company agrees to pay to Employee the amounts described in Paragraphs 2, 3 and 4 hereof. Upon the occurrence of the Eligibility Event in Paragraph (b) above, and subject to Paragraph 5, the Company agrees to pay to Employee the amounts described in Paragraph 2 and 3 hereof. Employee covenants and agrees that the consideration set forth in Paragraphs 2, 3 and 4 shall be in full satisfaction of all sums owed to Employee, if any, by the Company upon the occurrence of an Eligibility Event, and shall constitute good and complete consideration for the Release attached hereto as Exhibit 1, those nondisclosure and ownership obligations under Paragraph 7 hereof and all other obligations and covenants of Employee contained herein.
Exhibit B Deferred Compensation Agreement Annual Documentation of Performance Goals For Performance Period
EXHIBIT 10(a)82 DEFERRED COMPENSATION AGREEMENT THIS DEFERRED COMPENSATION AGREEMENT ("Agreement") made and entered into by and between THE SOUTHERN COMPANY ("Southern"), GEORGIA POWER COMPANY (the "Company") and WARREN Y. JOBE ("Employee"). W I T N E S S E T H WHEREAS, Employee has been employed by the Company for approximately ___________(____) years; WHEREAS, Employee is a highly compensated employee of the Company and is a member of its management; WHEREAS, the parties acknowledge that certain events ("Eligibility Events") may occur upon the termination of the Employee's employment with the Company; WHEREAS, the parties desire to delineate their respective rights, duties, and obligations attendant to the occurrence of an Eligibility Event and desire to reach an accord and satisfaction of all claims arising from Employee's employment and the occurrence of an Eligibility Event, with appropriate releases; and WHEREAS, the parties desire to provide Employee with deferred compensation upon the occurrence of an Eligibility Event for service he has provided or will provide for the Company; WHEREAS, the parties desire to enter into a consulting arrangement upon the occurrence of an Eligibility Event; NOW, THEREFORE, in consideration of the premises, and the agreements 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 hereto, intending to be legally bound, hereby covenant and agree as follows: 1. Event Rendering Employee Eligible For Deferred Compensation. The Employee shall become eligible for benefits under the terms of this Agreement if one of the following Eligibility Events occurs: a. The Employee terminates employment with the Company on or after attaining age sixty-two (62) and enters into a release in the form attached hereto as Exhibit 1; or b. The Employee, after entering into this Agreement but while employed by the Company, becomes totally and permanently disabled as determined by a medical doctor selected by the Company and enters into a release in the form attached hereto as Exhibit 1. c. Upon the occurrence of the Eligibility Event in Paragraph (a) above, and subject to Paragraph 5, the Company agrees to pay to Employee the amounts described in Paragraphs 2, 3 and 4 hereof. Upon the occurrence of the Eligibility Event in Paragraph (b) above, and subject to Paragraph 5, the Company agrees to pay to Employee the amounts described in Paragraph 2 and 3 hereof. Employee covenants and agrees that the consideration set forth in Paragraphs 2, 3 and 4 shall be in full satisfaction of all sums owed to Employee, if any, by the Company upon the occurrence of an Eligibility Event, and shall constitute good and complete consideration for the Release attached hereto as Exhibit 1, those nondisclosure and ownership obligations under Paragraph 7 hereof and all other obligations and covenants of Employee contained herein. d. Notwithstanding Paragraph (a) above, in the event Employee dies after entering into this Agreement but before incurring this Eligibility Event, the amounts described in Paragraphs 2 and 3 shall be paid to Employee's spouse, if living, or if not only the amounts payable under Paragraph 2 hereof shall be paid to the Employee's estate. 2. Severance Benefit. Subject to the terms and conditions of this Agreement including paragraph 5 hereof, on the first day of the first month following the Employee's Eligibility Event, the Company shall pay to Employee a lump sum amount equal to two (2) times base pay in effect at the time of the Employee's Eligibility Event. Employee shall be responsible for all state and federal income taxes and his share of FICA taxes owed on the foregoing amounts. 3. Replacement Benefit. On the first day of the first month following the Employee's Eligibility Event, the Company shall pay to Employee a lump sum amount equal to the present value of the following benefits determined as of the Employee's Eligibility Event: the monthly Early Retirement Reduction Percentage of Employee's Accrued Retirement Income under the Pension Plan (determined without regard to the limitations described under Sections 401(a)(17), 415(b) or 415(e) of the Internal Revenue Code of 1986 ("Code"), plus an amount equal to the reduction of the Employee's monthly SERP Benefit under Section 5.1 (a)(1) of The Southern Company Supplemental Retirement Plan, effective January 1, 1997, for commencement of benefits prior to Employee's Normal Retirement Date under the Pension Plan. In calculating the benefit with respect to the
EXHIBIT 10(a)82 DEFERRED COMPENSATION AGREEMENT THIS DEFERRED COMPENSATION AGREEMENT ("Agreement") made and entered into by and between THE SOUTHERN COMPANY ("Southern"), GEORGIA POWER COMPANY (the "Company") and WARREN Y. JOBE ("Employee"). W I T N E S S E T H WHEREAS, Employee has been employed by the Company for approximately ___________(____) years; WHEREAS, Employee is a highly compensated employee of the Company and is a member of its management; WHEREAS, the parties acknowledge that certain events ("Eligibility Events") may occur upon the termination of the Employee's employment with the Company; WHEREAS, the parties desire to delineate their respective rights, duties, and obligations attendant to the occurrence of an Eligibility Event and desire to reach an accord and satisfaction of all claims arising from Employee's employment and the occurrence of an Eligibility Event, with appropriate releases; and WHEREAS, the parties desire to provide Employee with deferred compensation upon the occurrence of an Eligibility Event for service he has provided or will provide for the Company; WHEREAS, the parties desire to enter into a consulting arrangement upon the occurrence of an Eligibility Event; NOW, THEREFORE, in consideration of the premises, and the agreements 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 hereto, intending to be legally bound, hereby covenant and agree as follows: 1. Event Rendering Employee Eligible For Deferred Compensation. The Employee shall become eligible for benefits under the terms of this Agreement if one of the following Eligibility Events occurs: a. The Employee terminates employment with the Company on or after attaining age sixty-two (62) and enters into a release in the form attached hereto as Exhibit 1; or b. The Employee, after entering into this Agreement but while employed by the Company, becomes totally and permanently disabled as determined by a medical doctor selected by the Company and enters into a release in the form attached hereto as Exhibit 1. c. Upon the occurrence of the Eligibility Event in Paragraph (a) above, and subject to Paragraph 5, the Company agrees to pay to Employee the amounts described in Paragraphs 2, 3 and 4 hereof. Upon the occurrence of the Eligibility Event in Paragraph (b) above, and subject to Paragraph 5, the Company agrees to pay to Employee the amounts described in Paragraph 2 and 3 hereof. Employee covenants and agrees that the consideration set forth in Paragraphs 2, 3 and 4 shall be in full satisfaction of all sums owed to Employee, if any, by the Company upon the occurrence of an Eligibility Event, and shall constitute good and complete consideration for the Release attached hereto as Exhibit 1, those nondisclosure and ownership obligations under Paragraph 7 hereof and all other obligations and covenants of Employee contained herein. d. Notwithstanding Paragraph (a) above, in the event Employee dies after entering into this Agreement but before incurring this Eligibility Event, the amounts described in Paragraphs 2 and 3 shall be paid to Employee's spouse, if living, or if not only the amounts payable under Paragraph 2 hereof shall be paid to the Employee's estate. 2. Severance Benefit. Subject to the terms and conditions of this Agreement including paragraph 5 hereof, on the first day of the first month following the Employee's Eligibility Event, the Company shall pay to Employee a lump sum amount equal to two (2) times base pay in effect at the time of the Employee's Eligibility Event. Employee shall be responsible for all state and federal income taxes and his share of FICA taxes owed on the foregoing amounts. 3. Replacement Benefit. On the first day of the first month following the Employee's Eligibility Event, the Company shall pay to Employee a lump sum amount equal to the present value of the following benefits determined as of the Employee's Eligibility Event: the monthly Early Retirement Reduction Percentage of Employee's Accrued Retirement Income under the Pension Plan (determined without regard to the limitations described under Sections 401(a)(17), 415(b) or 415(e) of the Internal Revenue Code of 1986 ("Code"), plus an amount equal to the reduction of the Employee's monthly SERP Benefit under Section 5.1 (a)(1) of The Southern Company Supplemental Retirement Plan, effective January 1, 1997, for commencement of benefits prior to Employee's Normal Retirement Date under the Pension Plan. In calculating the benefit with respect to the preceding sentence, any service granted the Employee under an agreement with the Company shall be taken into account. Employee shall be responsible for all state and federal income taxes and his share of FICA taxes owed on the foregoing amounts. 4. Payments for Consulting. Upon terminating from the Company in accordance with Paragraph 1(a), Employee agrees to provide consulting services to Company as an independent contractor in accordance with the
agreement set forth in Exhibit 2: 5. Termination for Cause. In the event the Employee is terminated for cause, no benefits shall be payable under this Agreement. As used in the preceding sentence, the term "cause" shall mean gross negligence or willful misconduct in the performance of the duties and services required in the course of employment by the Company, the final conviction of a felony or misdemeanor involving moral turpitude, the carrying out of any activity or the making of any statement which would prejudice the good name and standing of the Company or would bring the Company into contempt, ridicule or would reasonably shock or offend any community in which the Company is located, or a material breach of the fiduciary obligations owed by an officer and an employee to the Company. 6. Publicity; No Disparaging Statement. Except as otherwise provided in Paragraph 9 hereof, Employee, Southern and the Company covenant and agree that they shall not engage in any communications which shall disparage one another or interfere with their existing or prospective business relationships. 7. Non-Disclosure and Non-Solicitation. a. Definitions. For purposes of this Paragraph 7, the following terms shall have the following meanings: i) "Entity" shall mean any business, individual, partnership, joint venture, agency, governmental subdivision, association, firm, corporation or other entity. ii) "Affiliate" shall mean the following Entities: (A) any Entity which owns an Interest (as defined below) in the Company either directly or indirectly through any other Entity, (B) any Entity an Interest in which is owned directly or indirectly by any Entity which owns directly or indirectly an Interest in the Company or (C) any Entity in which the Company owns an Interest either directly or indirectly through any other Entity. For purposes of this Agreement, the term "Interest" shall include any equity interest in an Entity in an amount equal to or greater than 30% of the Entity's total outstanding equity interests. iii) "Confidential Information" shall mean proprietary and confidential data or information other than Trade Secrets (as defined below), which is valuable to, and related to the business of, the Company, its Affiliates or nonaffiliated Entities with whom the Company or its Affiliates has or have business relationships (collectively, "Third Parties"), and the details of which are generally unknown to the public or to the Company's competitors, including, without limitation, information regarding the Company's employees, business strategies, models and systems, customers, suppliers, partners and affiliates, gained by Employee as a result of his or her affiliation with the Company or its Affiliates, and other items that the Company or its Affiliates may from time to time mark or otherwise identify as confidential. iv) "Trade Secrets" shall mean information of or related to the Company, its Affiliates or Third Parties which (A) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (B) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy; it being agreed that such information includes, without limitation, technical and non-technical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans or a list of actual or potential customers or suppliers. v) "Intellectual Property" shall mean all work product, property, data, documentation, "know-how", concepts or plans, inventions, discovery, compositions, innovations, computer programs, improvements, techniques, processes, designs, article of manufacture or information of any kind, or any new or useful improvements of any of the foregoing and any Trade Secrets, patents, copyrights, Confidential Information, mask work, trademark or service mark, relating in any way to the Company or its Affiliates and its or their business prepared, conceived, revised, discovered, developed, or created by Employee for the Company or its Affiliates or by using the Company's or its Affiliates' time, personnel, facilities, or material. b. Nondisclosure: Ownership of Proprietary Property. i) Nondisclosure. In recognition of the Company's need to protect its legitimate business interests, Employee hereby acknowledges that he has been given access to valuable Trade Secrets and Confidential Information; and Employee hereby covenants and agrees that he will use the Trade Secrets and Confidential Information for the Company's business purposes only, and that he will not for any reason, in any fashion, form or manner, other than as instructed by a duly authorized representative of the Company, copy, disclose, disseminate, communicate, transfer or otherwise convey to any Entity any item: (A) which is a Trade Secret, for so long as such item remains
a trade secret under applicable law; or (B) which is Confidential Information, other than Trade Secrets, for a period of two (2) years from the Employee's Eligibility Event. ii) Notification of Unauthorized Disclosure. Employee shall exercise his best efforts to ensure the continued confidentiality of all Trade Secrets and Confidential Information known by, disclosed or made available to Employee. Employee shall immediately notify the Company of any unauthorized disclosure or use of any Trade Secrets or Confidential Information of which Employee becomes aware. Employee shall assist the Company, to the extent necessary, in the procurement or protection of the Company's or its Affiliates' rights to or in any Intellectual Property, Trade Secrets or Confidential Information and, upon the Company's request, shall assist, to the extent necessary, in the procurement or protection of any Third Party's rights to or in any Intellectual Property, Trade Secrets or Confidential Information. iii) Ownership. To the greatest extent possible, any and all Intellectual Property shall be deemed to be "work made for hire" (as defined in the Copyright Act, 17 U.S.C.A. ss.ss. 101 et seq.), and Employee hereby unconditionally and irrevocably transfers and assigns to the Company or its Affiliates all rights, title and interest Employee currently has or in the future may have by operation of law or otherwise in or to any Intellectual Property, including, without limitation, all patents, copyrights, trademarks, service marks and other Intellectual Property rights and agrees that the Company or its Affiliates shall have the exclusive world-wide ownership of such Intellectual Property, and that no Intellectual Property shall be treated as or deemed to be a "joint work" (as defined by the Copyright Act) of Employee and the Company, its Affiliates or otherwise. Employee agrees to execute and deliver to the Company or its Affiliates any transfers, assignments, documents or other instruments which the Company or its Affiliates may deem necessary or appropriate to vest complete title and ownership of any Intellectual Property, and all rights therein, exclusively in the Company or its Affiliates, as the case may be. iv) Return of Materials. Upon the Employee's Eligibility Event, or at any point after that time upon the specific request of the Company, Employee shall return to the Company all written or descriptive materials of any kind belonging or relating to the Company or its Affiliates, including, without limitation, any Intellectual Property, Confidential Information and Trade Secrets, in Employee's possession. 8. Transfer of Employment to Southern or a Southern Subsidiary or Affiliate. In the event that Employee's employment by the Company is terminated prior to Employee's Eligibility Event and Employee shall become immediately re-employed by Southern or a subsidiary or an affiliate of Southern, the Company shall assign this Agreement to Southern or such subsidiary or affiliate, Southern shall accept such assignment or cause such affiliate or subsidiary to accept such assignment, such assignee shall become the "Company" for all purposes hereunder, including but not limited to the Release and Consulting Agreement attached hereto and incorporated herein as Exhibit 1 and 2 respectively. In the event of such assignment, the expense of this Agreement shall be shared pro rata by the Company and any such assignee based upon the number of months after the effective date of this Agreement that the Employee is employed by the Company, and/or Southern and/or such affiliate or subsidiary of Southern, as the case may be. 9. Confidentiality and Legal Process. Employee represents and agrees that he will keep the terms, amount and fact of this Agreement confidential and that he will not hereafter disclose any information concerning this Agreement to any one other than his personal agents, including, but not limited to, any past, present, or prospective employee or applicant for employment with Company. Notwithstanding the foregoing, nothing in this Agreement is intended to prohibit Employee from performing any duty or obligation that shall arise as a matter of law. Specifically, Employee shall continue to be under a duty to truthfully respond to any legal and valid subpoena or other legal process. 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. 10. Successors And Assigns; Applicable Law. This Agreement shall be binding upon and inure to the benefit of Employee and his heirs, administrators, representatives, executors, successors and assigns, and shall be binding upon and inure to the benefit of Southern, the Company and their officers, directors, employees, agents, shareholders, parent corporation and affiliates, and their respective predecessors, successors, assigns, heirs, executors and administrators and each of them, and to their heirs, administrators, representatives, executors, successors and assigns. This Agreement shall be construed and interpreted in accordance with the laws of the State of Georgia, United States of America (without giving effect to principles of conflicts of laws). 11. Complete Agreement. This Agreement shall constitute the full and complete Agreement between the parties concerning its subject matter and fully supersedes any and all other prior Agreements or understandings between the parties concerning the subject matter hereof. This Agreement shall not be modified or amended except by a
written instrument signed by both Employee and an authorized representative of Southern and the Company. 12. Severability. The unenforceability or invalidity of any particular provision of this Agreement shall not affect its other provisions, and to the extent necessary to give such other provisions effect, they shall be deemed severable. 13. Waiver Of Breach; Specific Performance. The waiver of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other breach. Each of the parties to this Agreement will be entitled to enforce its or his rights under this Agreement, specifically, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights existing in its or his favor. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that any party may in its or his sole discretion apply to any court of law or equity of competent jurisdiction for specific performance or injunctive relief in order to enforce or prevent any violations of the provisions of this Agreement. 14. 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 the value of his Account under the terms and conditions of this Agreement, the assets from which such amount may be paid shall at all times be subject to the claims of the Company's creditors. 15. No Effect On Other Arrangements. It is expressly understood and agreed that the 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. 16. Tax Withholding. There shall be deducted from each payment under this Agreement 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. 17. Compensation. Any compensation contributed on behalf of Employee under this Agreement shall not be considered "compensation," as the term is defined in The Southern Company Employee Savings Plan, The Southern Company Employee Stock Ownership Plan, or The Southern Company Pension Plan. Payments under this Agreement shall not be considered wages, salaries or compensation under any other employee benefit plan. 18. 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, modify, whether or not for Cause, the employment relationship of Employee and the Company. IN WITNESS WHEREOF, the parties hereto have executed this Agreement, this ___ day of ________________, 1998. "SOUTHERN" THE SOUTHERN COMPANY By:______________________ Its:_____________________ "COMPANY" GEORGIA POWER COMPANY By:______________________ Its:_____________________ "EMPLOYEE" WARREN Y. JOBE
WITNESSED BY:
Exhibit 1 to Deferred Compensation Agreement with Warren Y. Jobe RELEASE AGREEMENT THIS RELEASE ("Release') is made and entered into by and between WARREN Y. JOBE ("Employee"), THE SOUTHERN COMPANY ("Southern") and GEORGIA POWER COMPANY and its successor or assigns
SOUTHERN COMPANY ("Southern") and GEORGIA POWER COMPANY and its successor or assigns ("Company"). WHEREAS, Employee, Southern and Company have agreed that Employee's employment with _________________ shall terminate on -------------, -------; WHEREAS, Employee, Southern and Georgia Power Company have previously entered into that certain Deferred Compensation Agreement, dated _______, 1998 ("Agreement"), that this Release is incorporated into by reference; WHEREAS, Employee, Southern and Company desire to delineate their respective rights, duties and obligations attendant to such termination and desire to reach an accord and satisfaction of all claims arising from Employee's employment, and his termination of employment, with appropriate releases, in accordance with the Agreement; WHEREAS, the Company desires to provide Employee with deferred compensation in accordance with the Agreement for service he has or will provide for the Company; NOW, THEREFORE, in consideration of the premises and the agreements of the parties set forth in this Release, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby covenant and agree as follows: 1._______Release. Employee does hereby remise, release and forever discharge Southern and the Company and their officers, directors, employees, agents, shareholders, parent corporation and affiliates, and their respective predecessors, successors, assigns, heirs, executors and administrators (collectively, "Releasees"), of and from all manner of actions and causes of action, suits, debts, claims and demands whatsoever at law or in equity, known or unknown, actual or contingent, including, but not limited to, any claims which have been asserted, or could be asserted now or in the future, against any Releasees arising under any and all federal, state or local laws and any common law claims, and including, but not limited to, any claims Employee may have pursuant to the Age Discrimination in Employment Act and any claims to benefits under any and all offer letters, employment or separation agreements, or bonus, severance, workforce reduction, early retirement, outplacement, or other similar plans sponsored by the Company, now or hereafter recognized (collectively, "Claims"), which he ever had or now has or may in the future have, by reason of any matter, cause or thing arising out of his employment relationship and privileges, his serving as an employee of the Company or the separation from his employment relationship or affiliation as an employee of the Company as of the date of this Release against each of the Releasees. Notwithstanding the foregoing, Employee does not release any Claims under the Age Discrimination in Employment Act that may arise after his execution of this Release. 2._______No Assignment of Claim. Employee represents that he has not assigned or transferred, or purported to assign or transfer, any Claims or any portion thereof or interest therein to any party prior to the date of this Release. 3._______Deferred Compensation. In accordance with Paragraph 1 of the Deferred Compensation Agreement, the Company agrees to pay the Employee, his spouse or estate, as the case may be, the amounts outlined in Paragraphs 2 and 3 of the Agreement. 4._______Consulting Services. If the Employee terminates from the Company in accordance with Paragraph 4 of the Deferred Compensation Agreement, the Employee agrees to provide consulting services as set forth under the Consulting Agreement referred to therein. 5._______No Admission Of Liability. This Release shall not in any way be construed as an admission by Southern, the Company or Employee of any improper actions or liability whatsoever as to one another, and each specifically disclaims any liability to or improper actions against the other or any other person, on the part of itself or himself, its or his employees or agents. 6._______Voluntary Execution. Employee warrants, represents and agrees that he has been encouraged in writing to seek advice from anyone of his choosing regarding this Release, including his attorney and accountant or tax advisor prior to his signing it; that this Release represents written notice to do so; that he has been given the opportunity and sufficient time to seek such advice; and that he fully understands the meaning and contents of this Release. He further represents and warrants that he was not coerced, threatened or otherwise forced to sign this Release, and that his signature appearing hereinafter is voluntary and genuine. EMPLOYEE UNDERSTANDS THAT HE MAY TAKE UP TO TWENTY-ONE (21) DAYS TO CONSIDER WHETHER OR NOT HE DESIRES TO ENTER INTO THIS RELEASE. 7. Ability to Revoke Agreement. EMPLOYEE UNDERSTANDS THAT HE MAY REVOKE THIS RELEASE BY NOTIFYING THE COMPANY IN WRITING OF SUCH REVOCATION WITHIN SEVEN (7) DAYS OF HIS EXECUTION OF THIS RELEASE AND THAT THIS RELEASE IS NOT EFFECTIVE UNTIL THE EXPIRATION OF SUCH SEVEN (7) DAY PERIOD. HE UNDERSTANDS THAT UPON THE EXPIRATION OF SUCH SEVEN (7) DAY PERIOD THIS RELEASE WILL BE BINDING UPON HIM AND HIS HEIRS, ADMINISTRATORS, REPRESENTATIVES, EXECUTORS, SUCCESSORS AND ASSIGNS AND WILL BE IRREVOCABLE.
Acknowledged and Agreed To: "SOUTHERN" THE SOUTHERN COMPANY By: Its: "COMPANY" GEORGIA POWER COMPANY By: Its: I UNDERSTAND THAT BY SIGNING THIS RELEASE, I AM GIVING UP RIGHTS I MAY HAVE. I UNDERSTAND THAT I DO NOT HAVE TO SIGN THIS RELEASE. "EMPLOYEE" WARREN Y. JOBE Date WITNESSED BY:
Date
CONSULTING AGREEMENT THIS CONSULTING AGREEMENT ("Agreement") is entered into by and between THE SOUTHERN COMPANY ("Southern"), GEORGIA POWER COMPANY (the "Company") and WARREN Y. JOBE ("Consultant"). WITNESSETH WHEREAS, Southern and the Company conduct business in the electric utility industry; WHEREAS, Consultant has expertise with respect to this industry and about Southern and the Company; WHEREAS, Southern and the Company desire to retain certain consulting services of Consultant and Consultant desires to provide such consulting services to Company in accordance with the terms and conditions of this Agreement. NOW THEREFORE, for and in consideration of the premises, the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereby agree as follows: 1. Engagement as an Independent Contractor. Company hereby agrees to engage Consultant as an independent contractor and Consultant hereby accepts such engagement as an independent contractor, upon the terms and conditions set forth in this Agreement. 2. Term. The term of this Agreement shall be for four (4) years and shall commence upon the occurrence of the Eligibility Event set forth under Paragraph 1(a) of the Deferred Compensation Agreement. Notwithstanding the preceding sentence, the term shall be shortened so that Consultant shall not be required to render consulting services beyond his sixty-sixth (66th) birthday. However, either party may terminate the Agreement at any time by providing a one hundred and eighty (180) day written notice of intent to terminate pursuant to Section 7 below. 3. Duties. Unless otherwise detailed in a specific letter or memorandum, Consultant shall manage, perform, and provide professional consulting services and advice as Company may request in writing from time to time.
Acknowledged and Agreed To: "SOUTHERN" THE SOUTHERN COMPANY By: Its: "COMPANY" GEORGIA POWER COMPANY By: Its: I UNDERSTAND THAT BY SIGNING THIS RELEASE, I AM GIVING UP RIGHTS I MAY HAVE. I UNDERSTAND THAT I DO NOT HAVE TO SIGN THIS RELEASE. "EMPLOYEE" WARREN Y. JOBE Date WITNESSED BY:
Date
CONSULTING AGREEMENT THIS CONSULTING AGREEMENT ("Agreement") is entered into by and between THE SOUTHERN COMPANY ("Southern"), GEORGIA POWER COMPANY (the "Company") and WARREN Y. JOBE ("Consultant"). WITNESSETH WHEREAS, Southern and the Company conduct business in the electric utility industry; WHEREAS, Consultant has expertise with respect to this industry and about Southern and the Company; WHEREAS, Southern and the Company desire to retain certain consulting services of Consultant and Consultant desires to provide such consulting services to Company in accordance with the terms and conditions of this Agreement. NOW THEREFORE, for and in consideration of the premises, the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereby agree as follows: 1. Engagement as an Independent Contractor. Company hereby agrees to engage Consultant as an independent contractor and Consultant hereby accepts such engagement as an independent contractor, upon the terms and conditions set forth in this Agreement. 2. Term. The term of this Agreement shall be for four (4) years and shall commence upon the occurrence of the Eligibility Event set forth under Paragraph 1(a) of the Deferred Compensation Agreement. Notwithstanding the preceding sentence, the term shall be shortened so that Consultant shall not be required to render consulting services beyond his sixty-sixth (66th) birthday. However, either party may terminate the Agreement at any time by providing a one hundred and eighty (180) day written notice of intent to terminate pursuant to Section 7 below. 3. Duties. Unless otherwise detailed in a specific letter or memorandum, Consultant shall manage, perform, and provide professional consulting services and advice as Company may request in writing from time to time. Consultant must obtain prior written approval from the Company before Consultant contracts with or in any other
CONSULTING AGREEMENT THIS CONSULTING AGREEMENT ("Agreement") is entered into by and between THE SOUTHERN COMPANY ("Southern"), GEORGIA POWER COMPANY (the "Company") and WARREN Y. JOBE ("Consultant"). WITNESSETH WHEREAS, Southern and the Company conduct business in the electric utility industry; WHEREAS, Consultant has expertise with respect to this industry and about Southern and the Company; WHEREAS, Southern and the Company desire to retain certain consulting services of Consultant and Consultant desires to provide such consulting services to Company in accordance with the terms and conditions of this Agreement. NOW THEREFORE, for and in consideration of the premises, the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereby agree as follows: 1. Engagement as an Independent Contractor. Company hereby agrees to engage Consultant as an independent contractor and Consultant hereby accepts such engagement as an independent contractor, upon the terms and conditions set forth in this Agreement. 2. Term. The term of this Agreement shall be for four (4) years and shall commence upon the occurrence of the Eligibility Event set forth under Paragraph 1(a) of the Deferred Compensation Agreement. Notwithstanding the preceding sentence, the term shall be shortened so that Consultant shall not be required to render consulting services beyond his sixty-sixth (66th) birthday. However, either party may terminate the Agreement at any time by providing a one hundred and eighty (180) day written notice of intent to terminate pursuant to Section 7 below. 3. Duties. Unless otherwise detailed in a specific letter or memorandum, Consultant shall manage, perform, and provide professional consulting services and advice as Company may request in writing from time to time. Consultant must obtain prior written approval from the Company before Consultant contracts with or in any other way employs any agents or subcontractors to perform work in any way related to this Agreement. Consultant shall cause its agents, employees and subcontractors to perform such duties in a professional and competent manner which shall be consistent with Company's Code of Ethics. Additionally, during the term of this Agreement, Consultant agrees to promote the best interests of Company and to take no actions that in any way damage the public image or reputation of Company or its affiliates or to knowingly assist, in any way, a competitor of Company. 4. Consultant as an Independent Contractor. a. The parties acknowledge and intend that the relationship of Consultant, and its agents, employees and subcontractors, to Company under this Agreement shall be that of independent contractors. In performing its duties under this Agreement, Consultant shall cause the services required to be completed according to its own means and methods of work which shall be in the exclusive charge and control of Consultant and which shall not be subject to the control or supervision of Company, except as to the results of its work. Consultant shall determine its own working hours and schedule for its agents, employees and subcontractors and shall not be subject to Company's personnel policies and procedures except for Company's Code of Ethics. Consultant shall be entirely and solely responsible for its actions or in-actions and the actions or in-actions of its agents, employees or subcontractors, if any, while performing services hereunder. Consultant agrees that neither it nor any of its agents, employees or subcontractors shall, in any form or fashion, maintain, hold out, represent, state or imply to any other individual or entity that an employer/employee relationship exists between Company and Consultant, its agents and employees, or between Company and any subcontractor or its agents and employees, and neither Consultant nor its agents, employees or subcontractors are granted nor shall they represent that they are granted any right or authority to make any representation or warranty or assume or create any obligation or responsibility, express or implied, for, on behalf of or in the name of Company, to incur debts for Company or to bind Company in any manner whatsoever. Additionally, Consultant hereby waives and relinquishes any right of subrogation it might have against Company under the provisions of the Workers' Compensation Act of Georgia on account of any injury to its employees or employees of its subcontractors, if any, caused in whole or in part by any negligence of Company. Consultant further agrees that it will require its Workers' Compensation insurer, if any, to likewise waive and relinquish such subrogation rights and furnish evidence of such waiver to Company.
b. Consultant agrees that neither its agents, employees or subcontractors nor the agents or employees of its subcontractors shall be eligible to participate in any employee benefit plan sponsored by Company or its affiliates, including, but not limited to, any retirement plan, insurance program, disability plan, medical benefits plan or any other fringe benefit program sponsored and maintained by Company for its employees. 5. Compensation and Payments. a. As payment for the services provided under this Agreement, Consultant shall receive compensation in accordance with the following schedule: Minimum Days Required
to be Available to Company 30 30 20 20 Retainer for Minimum Days $60,000 $60,000 $40,000 $40,000 Rate for Days in Excess of Minimum Required Days $2,000 $2,000 $2,000 $2,000
Year 1 2 3 4
The provided amounts will be payable upon execution by the Company of this Agreement and each succeeding anniversary thereof for the term of the Agreement. Consultant shall be reimbursed by Company for reasonable expenses incurred while conducting work as Consultant under this Agreement which are approved by the Company in advance upon remittance of the same to Company. b. Consultant hereby recognizes, covenants and agrees that, except as specifically set forth to the contrary in this Agreement, Consultant shall be solely and exclusively responsible and liable for all expenses, costs, liabilities, assessments, taxes, maintenance, insurance, undertakings and other obligations incurred by Consultant, its agents, employees and all subcontractors at any time and for any reason as a result of this Agreement or the performance of services by Consultant including, but not limited to, withholding taxes, social security taxes, unemployment taxes, sales/use taxes and workers' compensation insurance premiums. 6. Transfer of Employment to Southern or a Southern Subsidiary or Affiliate. In the event that Employee's employment by the Company is terminated prior to Employee's Eligibility Event under the Deferred Compensation Agreement and Employee shall become immediately re-employed by Southern or a subsidiary or an affiliate of Southern, the Company shall assign this Agreement to Southern or such subsidiary or affiliate, Southern shall accept such assignment or cause such affiliate or subsidiary to accept such assignment, such assignee shall become the "Company" for all purposes hereunder. 7. Notices. All notices required, necessary or desired to be given pursuant to this Agreement shall be in writing and shall be effective when delivered or on the third day following the date upon which such notice is deposited, postage prepaid, in the United States mail, certified return receipt requested, and addressed to the party at the address set forth below:
8. Indemnification. Consultant shall and does hereby expressly agree to indemnify and hold harmless Southern and Company, its officers, directors, shareholders, employees, parent and affiliates against any and all suits, actions, judgments, costs (including, without limitation, all court costs and attorneys' fees), losses, damages, or claims of whatever nature arising out of or related to any acts or omissions of Consultant, its agents, employees or subcontractors, including, but not limited to, any injuries to or deaths of persons or any damage to property or equipment. Consultant further agrees to defend any and all such actions in any court or in arbitration. 9. Non-Disclosure, Non-Competition And Non-Solicitation Provisions. a. Definitions. For purposes of this Section 9, the following terms shall have the following meanings: i) "Confidential Information" shall mean proprietary and confidential data or information other than Trade Secrets (as defined below), which is valuable to, and related to the business of the Company, its Affiliates or nonaffiliated Entities with whom the Company or its Affiliates has or have business relationships (collectively, "Third Parties") and the details of which are generally unknown to the public or to the Company's Competitors including, without limitation, information regarding the Company's employees, business strategies, models and systems, customers, suppliers, partners and affiliates, gained by Consultant as a result of his or her affiliation with the
Company or its Affiliates, and other items that the Company or its Affiliates may from time to time mark or otherwise identify as confidential. ii) "Trade Secrets" shall mean information of or related to the Company, its Affiliates or Third Parties which (A) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (B) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy; it being agreed that such information includes, without limitation and without regard to form, technical and non-technical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans or a list of actual or potential customers or suppliers. iii) "Intellectual Property" shall mean all work product, property, data, documentation, "know-how", concepts or plans, inventions, discovery, compositions, innovations, computer programs, improvements, techniques, processes, designs, article of manufacture or information of any kind, or any new or useful improvements of any of the foregoing and any Trade Secrets, patents, copyrights, Confidential Information, mask work, trademark or service mark, relating in any way to the Company or its Affiliates and its or their business prepared, conceived, revised, discovered, developed, or created by Consultant for the Company or its Affiliates or any of Company's or its Affiliates' clients or Customers or by using the Company's or its Affiliates' time, personnel, facilities, or material. iv) "Competitive Position" shall mean: any employment or independent contractor arrangement with any Customer whereby Consultant will serve such Customer in the same or substantially similar capacity as that which it performs for Company or its Affiliates pursuant to the terms of this Agreement. v) "Customer" shall have the meaning ascribed by Section 9.c. hereof. vi) "Entity" shall mean any business, individual, partnership, joint venture, agency, governmental subdivision, association, firm, corporation or other entity. vii) "Affiliate" shall mean the following Entities: (A) any Entity which owns an Interest (as defined below) in the Company either directly or indirectly through any other Entity, (B) any Entity an Interest in which is owned directly or indirectly by any Entity which owns directly or indirectly an Interest in the Company or (C) any Entity in which the Company owns an Interest either directly or indirectly through any other Entity. For purposes of this Agreement, the term "Interest" shall include any equity interest in an Equity in an amount equal to or greater than 30% of the Entity's total outstanding equity interests. b. Nondisclosure: Ownership of Proprietary Property. i) Nondisclosure. In recognition of the need of Company and its Affiliates to protect its legitimate business interests, Consultant hereby covenants and agrees that: (A) with regard to each item constituting all or any portion of a Trade Secret (before or after the termination of this Agreement); and (B) with regard to any Confidential Information, at all times during this Agreement and for a period of three (3) years following the expiration or termination of this Agreement for any reason, Consultant, its agents, employees and subcontractors shall regard and treat all Trade Secrets and all Confidential Information as strictly confidential and wholly-owned by Company and its Affiliates and will not, for any reason, in any fashion, either directly or indirectly, use, sell, lend, lease, distribute, license, give, transfer, assign, show, disclose, disseminate, reproduce, copy, misappropriate or otherwise communicate any such item or information to any Third Party for any purpose other than in accordance with this Agreement or as required by applicable law. ii) Allowed Disclosures. Notwithstanding Section 9.b.i) hereof, Consultant may disclose Confidential Information and Trade Secrets to those of its agents, employees and subcontractors who need to know such particular Trade Secrets or Confidential Information in order for Consultant to perform its obligations under this Agreement. Consultant shall require each and every person to whom it discloses any Trade Secrets or Confidential Information to execute confidentiality agreements in a form reasonably acceptable to Company and shall use its best efforts to cause such persons to comply with the restrictions contained in such confidentiality agreements. Consultant shall remain responsible for every person to whom it provides Trade Secrets or Confidential Information.
iii) Notification of Unauthorized Disclosure. Consultant shall exercise its best efforts and shall cause its agents, employees and subcontractors to exercise their best efforts to ensure the continued confidentiality of all Trade Secrets and Confidential Information of Company or its Affiliates known by, disclosed or made available to Consultant, whether in connection with this Agreement or any other past or present relationship with Company or its Affiliates. Consultant shall immediately notify Company of any unauthorized disclosure or use of any Trade Secrets or Confidential Information of which Consultant becomes aware. Consultant shall assist Company and its Affiliates, to the extent necessary, in the procurement or protection of Company's and its Affiliates' rights to or in any Intellectual Property, Trade Secrets or Confidential Information. iv) Ownership. To the greatest extent possible, any and all Intellectual Property shall be deemed to be "work made for hire" (as defined in the Copyright Act, 17 U.S.C.A. ss.ss. 101 et seq.), and Consultant hereby unconditionally and irrevocably transfers and assigns and shall cause its agents, employees and subcontractors to unconditionally and irrevocably transfer and assign to Company or its Affiliates all rights, title and interest Consultant or such persons currently have or in the future may have by operation of law or otherwise in or to any Intellectual Property, including, without limitation, all patents, copyrights, trademarks, service marks and other Intellectual Property rights and agrees that Company and its Affiliates shall have the exclusive world-wide ownership of such Intellectual Property, and that no Intellectual Property shall be treated as or deemed to be a "joint work" (as defined by the Copyright Act) of Consultant, Company and its Affiliates or otherwise. Consultant agrees to execute and deliver and to cause its agents, employees and subcontractors to execute and deliver to Company any transfers, assignments, documents or other instruments which Company may deem necessary or appropriate to vest complete title and ownership of any Intellectual Property, and all rights therein, exclusively in Company or its Affiliates. v) Return of Materials. Immediately upon termination of the Agreement, or at any point prior to or after that time upon the specific request of Company or its Affiliates, Consultant shall return and shall cause its agents, employees and subcontractors to return to Company and its Affiliates all written or descriptive materials of any kind including, without limitation, any Intellectual Property, Confidential Information and Trade Secrets, in Consultant's or such persons' possession. The confidentiality obligations described in this Agreement shall continue until their expiration under the terms of this Agreement. vi) Public Statements and Press Releases. Company shall issue all public statements concerning the work hereunder. Neither Consultant nor its agents, employees or subcontractors shall issue any press releases, publications or other public communications describing or concerning any acknowledged project of Company or its Affiliates without the prior written consent of the Company. c. Non-solicitation of Customers, Non-referral and Non-compete. Consultant covenants and agrees that during the term of this Agreement, and for a period of three (3) years thereafter, it shall not, nor shall its agents, employees or subcontractors either directly or indirectly, for itself or themselves or in conjunction with or on behalf of any Entity: (a) solicit, divert or appropriate or attempt to solicit, divert or appropriate any customer or actively sought prospective customer of Company or its Affiliates whom Consultant, its agents, employees or subcontractors, has solicited, provided service to or otherwise had significant contact with while providing services to Company and its Affiliates pursuant to this Agreement (hereinafter "Customer"); (b) refer, recommend or otherwise suggest to any Customer the services of any Entity other than Company or its Affiliates with respect to those types of services which Company and its Affiliates are regularly in the business of providing; (c) refer, recommend or otherwise suggest to any Entity to provide or seek to provide services to any Customer with respect to those types of services which Company and its Affiliates are in the business of providing; (d) seek or accept a Competitive Position with a Customer; or (e) solicit, divert or appropriate or attempt to solicit, divert or appropriate any employee or other contractor of Company or its Affiliates. Consultant agrees to require each of its agents, employees or subcontractors who will perform services pursuant to this agreement for a Customer to execute a non-solicitation, non-referral and non-compete agreement in a form reasonably acceptable to Company and its Affiliates and shall use its best efforts to cause such persons to comply with such agreement. d. Remedies. The parties represent and agree that any disclosure or use of any Trade Secrets or Confidential Information by Consultant, its agents, employees or subcontractors except as otherwise authorized by the Company in writing, or any other violation of this Section 9 would be wrongful and cause immediate, significant, continuing and irreparable injury and damage to Company and its Affiliates that is not fully compensable by monetary damages. Should Consultant breach or threaten to breach any provision of this Section 9, Company and its Affiliates shall be entitled to obtain immediate relief and remedies in a court of competent jurisdiction (including but not limited to damages, preliminary or permanent injunctive relief and an accounting for all profits and benefits arising out of Consultant's breach),
cumulative of and in addition to any other rights or remedies to which Company and its Affiliates may be entitled by this Agreement, at law or in equity. 10. Laws, Regulations and Public Ordinances. Consultant shall comply with all federal, state, and local statutes, regulations, and public ordinances governing its work hereunder and shall indemnify, defend and hold Company and Southern harmless from any and all liability, damage, cost, fine, penalty, fee and expense arising from Consultant's failure to do so. 11. Political Activities. Of particular importance to Company and Southern are those laws and regulations that regulate or proscribe conduct relating to lobbying, political campaign contributions or other dealings with public officials or candidates for public office. The parties expressly acknowledge that all amounts paid by Company to Consultant consist solely of payment for professional services rendered or reimbursement of all normal "out of pocket" expenses related thereto; and no portion of such payment shall be forwarded to any political campaign, any candidate for political office or any candidate's campaign committee or to any other entity if Company or Southern itself could not lawfully make such a payment. While Consultant expressly agrees not to make any campaign contributions for or on behalf of Company or Southern in any form, Consultant retains the right to make such contributions in its corporate capacity as otherwise permitted by law. 12. Foreign Corrupt Practices. Consultant acknowledges that Company and Southern are subject to the provisions of United States Public Law 95-213, the Foreign Corrupt Practices Act of 1977 and any amendments thereto ("FCPA") and that it is familiar with Company's policy to comply strictly with the FCPA. Consultant hereby agrees to meet and comply with the FCPA and Company's policy in all respects and to require its employees, agents, advisors, affiliates, associates, vendors and subcontractors to do the same. Consultant specifically understands and agrees that it shall not make any offer, gift, promise to give, or authorization of the giving of anything of value, to any official, any political party or official thereof or any candidate for political office, or any other person, that is contrary to the prohibitions set forth in the FCPA, including, without limitation, articles 78dd-1(a) or 78dd-2(a) thereof ("Improper Payments"). Consultant hereby further represents and warrants within the meaning of the FCPA that: (i) no person or entity affiliated with Consultant is a foreign official of a foreign political party, or a candidate for foreign political office, or a person who will offer all or a portion of the consideration received by Consultant or such person or entity to any foreign official, foreign political party or official thereof, or to any candidate for political office; and (ii) the consideration, or any portion thereof, paid by Company to Consultant, pursuant to this Agreement or otherwise, constitutes (or will constitute) consideration only for the services rendered hereunder and is not given, directly or indirectly, in order to influence any act or decision of a foreign official in its official capacity or to induce such foreign official to use its influence with a foreign government or instrumentality to affect or influence any act or decision of such government or instrumentality in order to assist Company or Southern in obtaining or retaining business. In the event that Consultant or any of its agents, employees or subcontractors makes any Improper Payment or otherwise violates the provisions of this Section 12, then in addition to other rights and remedies available to Company and Southern hereunder and under applicable law, Company and Southern shall have the right to immediately terminate this Agreement and recover from Consultant or withhold from compensation due Consultant under this Agreement or any agreement entered into pursuant hereto: (i) the amount or value of the Improper Payment; and (ii) any fines, expenses or attorneys' fees incurred in connection with the Improper Payment or violation hereof. 12. Waiver of Breach. The waiver by any party to this Agreement of a breach of any provision, section or paragraph of this Agreement shall not operate or be construed as a waiver of any subsequent breach of the same, or of a different provision, section or paragraph, by any party hereto. 13. Assignment by Consultant. Consultant may not assign, transfer or subcontract any of its rights or obligations under this Agreement to any party without the prior written consent of the Company. Consultant's obligations under this Agreement shall be binding on Consultant's successors and permitted assigns. Any assignment, transfer or subcontracting in violation of this provision shall be null and void. 14. Survival. Notwithstanding any expiration or termination of this Agreement, the provisions of Sections 6, 7, 8, 9, 10, 11, 14, 15, 16, 17 and 18 hereof shall survive and remain in full force and effect, as shall any other provision hereof that, by its terms or reasonable interpretation thereof, sets forth obligations that extend beyond the termination of this Agreement. 15. Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of Georgia. 16. Severability. The unenforceability or invalidity of any term, provision or Section of this Agreement shall not affect the validity or enforceability of the remaining terms, provisions, or sections hereof, but such remaining
terms, provisions or sections shall be construed and interpreted in such a manner as to carry out fully the intent of the parties hereto; provided however, that should any judicial body interpreting this Agreement deem any provision hereof to be unreasonably broad in time, territory, scope or otherwise, it is the intent and desire of the parties hereto that such judicial body, to the greatest extent possible, reduce the breadth of such provision to the maximum legally allowable parameters rather than deeming such provision totally unenforceable or invalid. 17. Interpretation. Should a provision of this Agreement require judicial interpretation, it is agreed that the judicial body interpreting or construing the Agreement shall not apply the assumption that the terms hereof shall be more strictly construed against one party by reason of the rule of construction that an instrument is to be construed more strictly against the party which itself or through its agents prepared the agreement, it being agreed that all parties and/or their agents have participated in the preparation hereof. 18. Entire Agreement. This Agreement embodies the entire agreement of the parties and supersedes all prior agreements between the parties hereto relating to the subject matter hereof. It may not be changed orally, but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought. IN WITNESS WHEREOF, the parties hereto have executed this Agreement this ____ day of ________________, _____.
"COMPANY" GEORGIA POWER COMPANY "CONSULTANT" WARREN Y. JOBE
By:_________________________________ Its:________________________________ "SOUTHERN" THE SOUTHERN COMPANY
____________________________ Witnessed By:_______________
By:_________________________________
Its:________________________________
Exhibit 10(a)83 CHANGE IN CONTROL AGREEMENT THIS CHANGE IN CONTROL AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Southern Energy Resources, Inc. (the "Company") and Mr. Thomas G. Boren ("Mr. Boren"). W I T N E S S E T H: WHEREAS, Mr. Boren is the President and Chief Executive Officer of the Company; WHEREAS, the Company wish to provide to Mr. Boren certain severance benefits under certain circumstances following a change in control (as defined herein) of Southern or the Company; NOW, THEREFORE, in consideration of the premises, and the agreements 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. Definitions. For purposes of this Agreement, the following terms shall have the following meanings: (a) "Annual Compensation" shall mean Mr. Boren's highest annual base salary rate for the twelve (12) month period immediately preceding the date of the Change in Control plus market level target annual bonus as set forth on Exhibit A hereof. (b) "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under
Exhibit 10(a)83 CHANGE IN CONTROL AGREEMENT THIS CHANGE IN CONTROL AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Southern Energy Resources, Inc. (the "Company") and Mr. Thomas G. Boren ("Mr. Boren"). W I T N E S S E T H: WHEREAS, Mr. Boren is the President and Chief Executive Officer of the Company; WHEREAS, the Company wish to provide to Mr. Boren certain severance benefits under certain circumstances following a change in control (as defined herein) of Southern or the Company; NOW, THEREFORE, in consideration of the premises, and the agreements 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. Definitions. For purposes of this Agreement, the following terms shall have the following meanings: (a) "Annual Compensation" shall mean Mr. Boren's highest annual base salary rate for the twelve (12) month period immediately preceding the date of the Change in Control plus market level target annual bonus as set forth on Exhibit A hereof. (b) "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. (c) "Board" shall mean the board of directors of the Company. (d) "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern. (e) "Change in Control" shall mean any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Paragraph 1.(e)(i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control: (A) any acquisition directly from Southern; (B) any acquisition by Southern; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary; (D) any acquisition by a qualified pension plan or publicly held mutual fund; (E) any acquisition by a Group composed exclusively of employees of Southern, or any Southern Subsidiary; (F) any acquisition by Mr. Boren or any Group of which Mr. Boren is a party; or (G) any Business Combination which would not otherwise constitute a change in control because of the application of clauses (A), (B) and (C) of Paragraph 1.(e)(iii); (ii) A change in the composition of the Southern Board whereby individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Southern Board;
(iii) Consummation of a Business Combination, provided, however, that such a Business Combination shall not constitute a Change in Control if all three (3) of the following conditions are met: (A) all or substantially all of the individuals and entities who held Beneficial Ownership, respectively, of Southern's Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, 65% or more of the combined voting power of the Voting Securities of the corporation surviving or resulting from such Business Combination, (including, without limitation, a corporation which as a result of such transaction holds Beneficial Ownership of all or substantially all of Southern's Voting Securities or all or substantially all of Southern's assets) (such surviving or resulting corporation to be referred to as "Surviving Company"), in substantially the same proportions as their ownership, immediately prior to such Business Combination, of Southern's Voting Securities; (B) no Person (excluding any corporation resulting from such Business Combination, any employee benefit plan (or related trust) of Southern, any Southern Subsidiary or Surviving Company, Mr. Boren, any Group of which Mr. Boren is a party, any Group composed exclusively of Company employees, any qualified pension plan (or related trust) or any publicly held mutual fund) holds Beneficial Ownership, directly or indirectly, of 20% or more of the combined voting power of the then outstanding Voting Securities of Surviving Company except to the extent that such ownership existed prior to the Business Combination; and (C) at least a majority of the members of the board of directors of Surviving Company were members of the Incumbent Board at the earlier of the date of execution of the initial agreement, or of the action of the Southern Board, providing for such Business Combination. (iv) The Consummation of an acquisition by any Person of Beneficial Ownership of 50% or more of the combined voting power of the then outstanding Voting Securities of the Company; provided, however, that for purposes of this Paragraph 1.(e)(iv), any acquisition by Mr. Boren, any Group composed exclusively of employees of the Company, any Group of which Mr. Boren is a party, any qualified pension plan (or related trust), any publicly held mutual fund, any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary shall not constitute a Change in Control; (v) Consummation of a reorganization, merger or consolidation of the Company (an "Employing Company Business Combination"), in each case, unless, following such Employing Company Business Combination, Southern Controls the corporation or other entity surviving or resulting from such Employing Company Business Combination; or (vi) Consummation of the sale or other disposition of all or substantially all of the assets of the Company to a corporation or other entity which Southern does not Control. (f) "COBRA Coverage" shall mean any continuation coverage to which Mr. Boren or his dependents may be entitled pursuant to Code Section 4980B. (g) "Code" shall mean the Internal Revenue Code of 1986, as amended. (h) "Company" shall mean Southern Energy Resources, Inc., its successors and assigns. (i) "Consummation" shall mean the completion of the final act necessary to complete a transaction as a matter of law, including, but not limited to, any required approvals by the corporation's shareholders and board of directors, the transfer of legal and beneficial title to securities or assets and the final approval of the transaction by any applicable domestic or foreign governments or governmental agencies. (j) "Control" shall mean, in the case of a corporation, Beneficial Ownership of more than 50% of the combined voting power of the corporation's Voting Securities, or in the case of any other entity, Beneficial Ownership of more than 50% of such entity's voting equity interests. (k) "Effective Date" shall mean the date of execution of this Agreement. (l) "Employee Outplacement Program" shall mean the program established by the Company from time to time for the purpose of assisting participants covered by the plan in finding employment outside of the Employing Company which provides for the following services: (i) self-assessment, career decision and goal setting; (ii) job market research and job sources; (iii) networking and interviewing skills; (iv) planning and implementation strategy; (v) resume writing, job hunting
methods and salary negotiation; and (vi) office support and job search resources. (m) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. (n) "Good Reason" shall mean, without Mr. Boren's express written consent, after written notice to the Board, and after a thirty (30) day opportunity for the Board to cure, the continuing occurrence of any of the following events: (i) Inconsistent Duties. A meaningful and detrimental alteration in Mr. Boren's position or in the nature or status of his responsibilities from those in effect immediately prior to the Change in Control; (ii) Reduced Salary. A reduction of five percent (5%) or more by the Company in either of the following: (i) Mr. Boren's annual base salary rate as in effect immediately prior to the Change in Control (except for a less than ten percent (10%), across-the-board annual base salary rate reduction similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); or (ii) the sum of Mr. Boren's annual base salary rate plus target bonus under the Company's Short Term Plan (except for a less than ten percent (10%), across-the-board reduction of annual base salary rate plus target bonus under the Short Term Plan similarly affecting at least ninetyfive percent (95%) of the Executive Employees of the Company); (iii) Pension and Compensation Plans. The failure by the Company to continue in effect any pension or compensation plan or agreement in which Mr. Boren participates or is a party as of the date of the Change in Control or the elimination of Mr. Boren's participation therein, (except for across-the-board plan changes or terminations similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); For purposes of this Paragraph 1.(n), a "pension plan or agreement" shall mean any written arrangement executed by an authorized officer of the Company which provides for payments upon retirement; and a "compensation plan or arrangement" shall mean any written arrangement executed by an authorized officer of the Company which provides for periodic, nondiscretionary compensatory payments in the nature of bonuses. (iv) Relocation. A change in Mr. Boren's work location to a location more than fifty (50) miles from the office where Mr. Boren is located at the time of the Change in Control, unless such new work location is within fifty (50) miles from Mr. Boren's principal place of residence at the time of the Change in Control. The acceptance, if any, by Mr. Boren of employment by the Company at a work location which is outside the fifty mile radius set forth in this Paragraph 1.(n)(iv) shall not be a waiver of Mr. Boren's right to refuse subsequent transfer by the Company to a location which is more than fifty (50) miles from Mr. Boren's principal place of residence at the time of the Change in Control, and such subsequent unconsented transfer shall be "Good Reason" under this Agreement; or (v) Benefits and Perquisites. The taking of any action by the Company which would directly or indirectly materially reduce the benefits enjoyed by Mr. Boren under the Company's retirement, life insurance, medical, health and accident, disability, deferred compensation or savings plans in which Mr. Boren was participating immediately prior to the Change in Control; or the failure by the Company to provide Mr. Boren with the number of paid vacation days to which Mr. Boren is entitled on the basis of years of service with the Company in accordance with the Company's normal vacation policy in effect immediately prior to the Change in Control (except for across-the-board plan or vacation policy changes or plan terminations similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company). (vi) For purposes of this Paragraph 1.(n), the term "Executive Employee" shall mean employees of the Company whose annual base salary is $130,000 or more. (o) "Group" shall have the meaning set forth in Section 14(d) of the Exchange Act. (p) "Group Health Plan" shall mean the group health plan covering Mr. Boren, as such plan may be amended from time to time. (q) "Group Life Insurance Plan" shall mean the group life insurance program covering Mr. Boren, as such plan may be amended from time to time. (r) "Incumbent Board" shall mean those individuals who constitute the Southern Board as of the Effective Date plus any individual who shall become a director subsequent to such date whose election or nomination for election by Southern's shareholders was approved by a vote of at least 75% of the directors then comprising the
Incumbent Board. Notwithstanding the foregoing, no individual who shall become a director of the Southern Board subsequent to the Effective Date whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Regulations promulgated under the Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Southern Board shall be a member of the Incumbent Board. (s) "Month of Service" shall mean any calendar month during which Mr. Boren has worked at least one (1) hour or was on approved leave of absence while in the employ of the Company or any affiliate or subsidiary of Southern. (t) "Pension Plan" shall mean The Southern Company Pension Plan, as such plan may be amended from time to time. (u) "Performance Dividend Plan" shall mean the Southern Company Performance Dividend Plan or any replacement thereto, as such plans may be amended from time to time. (v) "Performance Stock Plan" shall mean the Southern Company Performance Stock Plan or any replacement thereto, as such plans may be amended from time to time. (w) "Person" shall mean any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of Act. (x) "Southern" shall mean The Southern Company, its successors and assigns. (y) "Southern Board" shall mean the board of directors of Southern. (z) "Southern Subsidiary" shall mean any corporation or other entity Controlled by Southern. (a) "Termination for Cause" or "Cause" shall mean the termination of Mr. Boren's employment by the Company upon the occurrence of any of the following: (i) The willful and continued failure by Mr. Boren substantially to perform his duties with the Company (other than any such failure resulting from Mr. Boren's Total Disability or from Mr. Boren's retirement or any such actual or anticipated failure resulting from termination by Mr. Boren for Good Reason) after a written demand for substantial performance is delivered to him by the Southern Board, which demand specifically identifies the manner in which the Southern Board believes that he has not substantially performed his duties; or (ii) The willful engaging by Mr. Boren in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise, including, but not limited to any of the following: (A) any willful act involving fraud or dishonesty in the course of Mr. Boren's employment by the Company; (B) the willful carrying out of any activity or the making of any statement which would materially prejudice or impair the good name and standing of the Company, Southern or any Southern Subsidiary or would bring the Company, Southern or any other Southern Subsidiary into contempt, ridicule or would reasonably shock or offend any community in which the Company, Southern or such Southern Subsidiary is located; (C) attendance at work in a state of intoxication or otherwise being found in possession at his workplace of any prohibited drug or substance, possession of which would amount to a criminal offense; (D) violation of the Company's policies on drug and alcohol usage, fitness for duty requirements or similar policies as may exist from time to time as adopted by the Company's safety officer; (E) assault or other act of violence against any person during the course of employment; or (F) indictment of any felony or any misdemeanor involving moral turpitude. No act or failure to act by Mr. Boren shall be deemed "willful" unless done, or omitted to be done, by Mr. Boren not in good faith and without reasonable belief that his action or omission was in the best interest of the Company.
Notwithstanding the foregoing, Mr. Boren shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to him a copy of a resolution duly adopted by the affirmative vote of not less than three quarters of the entire membership of the Southern Board at a meeting of the Southern Board called and held for such purpose (after reasonable notice to Mr. Boren and an opportunity for him, together with counsel, to be heard before the Southern Board), finding that, in the good faith opinion of the Southern Board, Mr. Boren was guilty of conduct set forth above in clause (i) or (ii) of this Paragraph 1.(aa) and specifying the particulars thereof in detail. (bb) "Termination Date" shall mean the date on which Mr. Boren's employment with the Company is terminated; provided, however, that solely for purposes of Paragraph 2.(c) hereof, the Termination Date shall be the effective date of his retirement pursuant to the terms of the Pension Plan. (cc) "Total Disability" shall mean Mr. Boren's total disability within the meaning of the Pension Plan. (dd) "Value Creation Plan" shall mean the Southern Energy Resources, Inc. Value Creation Plan or any replacement thereto, as such plans may be amended from time to time. (ee) "Voting Securities" shall mean the outstanding voting securities of a corporation entitling the holder thereof to vote generally in the election of such corporation's directors. (ff) "Waiver and Release" shall mean the Waiver and Release attached hereto as Exhibit B. (gg) "Year of Service" shall mean Mr. Boren's Months of Service divided by twelve (12) rounded to the nearest whole year, rounding up if the remaining number of months is seven (7) or greater and rounding down if the remaining number of months is less than seven (7). If Mr. Boren has a break in his service with the Company, he will receive credit under this Agreement for service prior to the break in service only if the break in service is less than five years. 2. Severance Benefits. (a) Eligibility. Except as otherwise provided in this Paragraph 2.(a), if Mr. Boren's employment is involuntarily terminated by the Company at any time during the two year period following a Change in Control for reasons other than Cause, or if Mr. Boren voluntarily terminates his employment with the Company for Good Reason at any time during the two year period following a Change in Control, Mr. Boren shall be entitled to receive the benefits described in this Agreement upon the Company's receipt of an effective Waiver and Release. Notwithstanding anything to the contrary herein, Mr. Boren shall not be eligible to receive benefits under this Agreement if Mr. Boren: (i) voluntarily terminates his employment with the Company for other than Good Reason; (ii) has his employment terminated by the Company for Cause; (iii) accepts the transfer of his employment to Southern, any Southern Subsidiary or any employer that succeeds to all or substantially all of the assets of the Company, Southern or any Southern Subsidiary; (iv) refuses an offer of continued employment with the Company, any Southern Subsidiary, or any employer that succeeds to all or substantially all of the assets of the Company, Southern, or any Southern Subsidiary under circumstances where such refusal would not amount to Good Reason for voluntary termination of employment; or (v) elects to receive the benefits of any other voluntary or involuntary severance or separation program maintained by the Company; provided however, that the receipt of benefits under the terms of any retention plan or agreement shall not be deemed to be the receipt of severance or separation benefits for purposes of this Agreement. (b) Severance Benefits. If Mr. Boren meets the eligibility requirements of Paragraph 2.(a) hereof, he shall be entitled to a cash severance benefit in an amount equal to three times his Annual Compensation (the "Severance Amount"). If any portion of the Severance Amount constitutes an "excess parachute payment" (as such term is defined under Code Section 280G ("Excess Parachute Payment")), the Company shall pay to Mr. Boren an additional amount calculated by determining the amount of tax under Code Section 4999 that he otherwise would have paid on any Excess Parachute Payment with respect to the Change in Control and dividing such amount by a decimal determined by adding the tax rate under Code Section 4999 ("Excise Tax"), the
hospital insurance tax under Code Section 3101(b) ("HI Tax") and federal and state income tax measured at the highest marginal rates ("Income Tax") and subtracting such result from the number one (1) (the "280G Grossup"); provided, however, that no 280G Gross-up shall be paid unless the Severance Amount plus all other "parachute payments" to Mr. Boren under Code Section 280G exceeds three (3) times Mr. Boren's "base amount" (as such term is defined under Code Section 280G ("Base Amount")) by ten percent (10%) or more; provided further, that if no 280G Gross-up is paid, the Severance Amount shall be capped at three (3) times Mr. Boren's Base Amount, less all other "parachute payments" (as such term is defined under Code Section 280G) received by Mr. Boren, less one dollar (the "Capped Amount"), if the Capped Amount, reduced by HI Tax and Income Tax, exceeds what otherwise would have been the Severance Amount, reduced by HI Tax, Income Tax and Excise Tax. For purposes of this Paragraph 2.(b), whether any amount would constitute an Excess Parachute Payment and any other calculations of tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts, e.g., Base Amount, Capped Amount, etc., shall be determined by the tax department of the independent public accounting firm then responsible for preparing Southern's consolidated federal income tax return, and such calculations or determinations shall be binding upon the parties hereto. (c) Welfare Benefits. If Mr. Boren meets the eligibility requirements of Paragraph 2.(a) hereof and is not otherwise eligible to receive retiree medical and life insurance benefits provided to certain retirees pursuant to the terms of the Pension Plan, the Group Health Plan and the Group Life Insurance Plan, shall be entitled to the benefits set forth in this Paragraph 2.(c). (i) Mr. Boren shall be eligible to participate in the Company's Group Health Plan, upon payment of both the Company's and his monthly premium under such plan, for a period of six (6) months for each of Mr. Boren's Years of Service, not to exceed five (5) years. If Mr. Boren elects to receive this extended medical coverage, he shall also be entitled to elect coverage under the Group Health Plan for his dependents who were participating in the Group Health Plan on Mr. Boren's Termination Date (and for such other dependents as may be entitled to coverage under the provisions of the Health Insurance Portability and Accountability Act of 1996) for the duration of Mr. Boren's extended medical coverage under this Paragraph 2.(c)(i) to the extent such dependents remain eligible for dependent coverage under the terms of the Group Health Plan. (A) The extended medical coverage afforded to Mr. Boren pursuant to Paragraph 2.(c)(i), as well as the premiums to be paid by Mr. Boren in connection with such coverage shall be determined in accordance with the terms of the Group Health Plan and shall be subject to any changes in the terms and conditions of the Group Health Plan as well as any future increases in premiums under the Group Health Plan. The premiums to be paid by Mr. Boren in connection with this extended coverage shall be due on the first day of each month; provided, however, that if he fails to pay his premium within thirty (30) days of its due date, such extended coverage shall be terminated. (B) Any Group Health Plan coverage provided under Paragraph 2.(c)(i) shall be a part of and not in addition to any COBRA Coverage which Mr. Boren or his dependent may elect. In the event that Mr. Boren or his dependent becomes eligible to be covered, by virtue of re-employment or otherwise, by any employersponsored group health plan or is eligible for coverage under any government-sponsored health plan during the above period, coverage under the Company's Group Health Plan available to Mr. Boren or his dependent by virtue of the provisions of Paragraph 2.(c)(i) shall terminate, except as may otherwise be required by law, and shall not be renewed. (ii) Mr. Boren shall be entitled to receive cash in an amount equal to the Company's and Mr. Boren's cost of premiums for three (3) years of coverage under the Group Health Plan and Group Life Insurance Plan in accordance with the terms of such plans as of the date of the Change in Control. (d) Incentive Plans. If Mr. Boren meets the eligibility requirements of Paragraph 2.(a) hereof he shall be entitled to the following benefits under the Company's incentive plans: (i) Stock Option Plan. (A) Any of Mr. Boren's Options and Stock Appreciation Rights under the Performance Stock Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(i) by reference) which are outstanding as of the Termination Date and which are not then exercisable and vested, shall become fully exercisable and vested to the full extent of the original grant; provided, that in the case of a Stock Appreciation Right, if Mr. Boren is subject to
Section 16(b) of the Exchange Act, such Stock Appreciation Right shall not become fully vested and exercisable at such time if such action would result in liability to Mr. Boren under Section 16(b) of the Exchange Act, provided further, that any such action not taken as a result of the rules of Section 16(b) of the Exchange Act shall be effective as of the first date that such activity would no longer result in liability under Section 16(b) of the Exchange Act. (B) The restrictions and deferral limitations applicable to any of Mr. Boren's Restricted Stock as of the Termination Date shall lapse, and such Restricted Stock shall become free of all restrictions and limitations and become fully vested and transferable to the full extent of the original grant. (C) The restrictions and deferral limitations and other conditions applicable to any other Awards held by Mr. Boren under the Stock Performance Plan as of the Termination Date shall lapse, and such other Awards shall become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent of the original grant. (ii) Performance Dividend Plan. Provided Mr. Boren is not entitled to benefits under the Performance Dividend Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(ii) by reference), if the Performance Dividend Plan is in place through Mr. Boren's Termination Date and to the extent Mr. Boren is entitled to participate therein, Mr. Boren shall be entitled to receive cash for each Award held by Mr. Boren on his Termination Date, based on actual performance under Section 4.1 of the Performance Dividend Plan determined as of the most recently completed calendar quarter of the Performance Period in which the Termination Date shall have occurred, and the Annual Dividend declared prior to the Termination Date. (iii) Value Creation Plan. Any of Mr. Boren's Appreciation Rights or Indexed Rights under the Value Creation Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(iii) by reference) which are outstanding as of the Termination Date and which are not then exercisable and vested, shall become fully exercisable and fully vested to the full extent of the original grant. Notwithstanding anything in the Value Creation Plan to the contrary, Share Value with respect to any Appreciation Rights or Indexed Rights held by Mr. Boren following his Termination Date shall be no less than the Share Value as of the date of the Change in Control of Southern or the Company, as the case may be. (iv) Other Short Term Incentive Plans. The provisions of this Paragraph 2.(d)(iv) shall apply if and to the extent that Mr. Boren is a participant in any other "short term compensation plan" not otherwise previously referred to in this Paragraph 2.(d). Provided Mr. Boren is not otherwise entitled to a plan payout under any change of control provisions of such plans, if the "short term compensation plan" is in place as of the Termination Date and to the extent Mr. Boren is entitled to participate therein, Mr. Boren shall receive cash in an amount equal to his award under the Company's "short term incentive plan" for the annual performance period in which the Termination Date shall have occurred, at Mr. Boren's target performance level and prorated by the number of months which have passed since the beginning of the annual performance period until his Termination Date. For purposes of this Paragraph 2.(d)(iv) the term "short term incentive compensation plan" shall mean any incentive compensation plan or arrangement adopted in writing by the Company which provides for annual, recurring compensatory bonuses based upon articulated performance criteria. (e) Payment of Benefits. Any amounts due under this Agreement shall be paid in one (1) lump sum payment as soon as administratively practicable following the later of: (i) Mr. Boren's Termination Date, or (ii) upon Mr. Boren's tender of an effective Waiver and Release to the Company in the form of Exhibit B attached hereto and the expiration of any applicable revocation period for such waiver. In the event of a dispute with respect to liability or amount of any benefit due hereunder, an effective Waiver and Release shall be tendered at the time of final resolution of any such dispute when payment is tendered by the Company. (f) Benefits in the Event of Death. In the event of Mr. Boren's death prior to the payment of all amounts due under this Agreement, Mr. Boren's estate shall be entitled to receive as due any amounts not yet paid under this Agreement upon the tender by the executor or administrator of the estate of an effective Waiver and Release. (g) Legal Fees. In the event of a dispute between Mr. Boren and the Company with regard to any amounts due hereunder, if any material issue in such dispute is finally resolved in Mr. Boren's favor, the Company shall reimburse Mr. Boren's legal fees incurred with respect to all issues in such dispute in an amount not to exceed fifty thousand dollars ($50,000). (h) Employee Outplacement Services. Mr. Boren shall be eligible to participate in the Employee Outplacement Program, which program shall not be less than six (6) months duration measured from Mr. Boren's Termination Date.
(i) Non-qualified Retirement and Deferred Compensation Plans. The Parties agree that subsequent to a Change in Control, any claims by Mr. Boren for benefits under any of the Company's non-qualified retirement or deferred compensation plans shall be resolved through binding arbitration in accordance with the provisions and procedures set forth in Paragraph 5 hereof and if any material issue in such dispute is finally resolved in Mr. Boren's favor, the Company shall reimburse Mr. Boren's legal fees in the manner provided in Paragraph 2.(g) hereof. 3. Transfer of Employment. In the event that Mr. Boren's employment by the Company is terminated during the two year period following a Change in Control and Mr. Boren accepts employment by Southern, a Southern Subsidiary, or any employer that succeeds to all or substantially all of the assets of the Company, Southern or any Southern Subsidiary, the Company shall assign this Agreement to Southern, such Southern Subsidiary, or successor employer, Southern shall accept such assignment or cause such Southern Subsidiary or successor employer to accept such assignment, and such assignee shall become the "Company" for all purposes hereunder. 4. No Mitigation. If Mr. Boren is otherwise eligible to receive benefits under Paragraph 2 of this Agreement, he shall have no duty or obligation to seek other employment following his Termination Date and, except as otherwise provided in Paragraph 2.(a)(iii) hereof, the amounts due Mr. Boren hereunder shall not be reduced or suspended if Mr. Boren accepts such subsequent employment. 5. Arbitration. (a) Any dispute, controversy or claim arising out of or relating to the Company's obligations to pay severance benefits under this Agreement, or the breach thereof, shall be settled and resolved solely by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA") except as otherwise provided herein. The arbitration shall be the sole and exclusive forum for resolution of any such claim for severance benefits and the arbitrators' award shall be final and binding. The provisions of this Paragraph 5 are not intended to apply to any other disputes, claims or controversies arising out of or relating to Mr. Boren's employment by the Company or the termination thereof. (b) Arbitration shall be initiated by serving a written notice of demand for arbitration to Mr. Boren, in the case of the Company, or to the Southern Board, in the case of Mr. Boren. (c) The arbitration shall be held in Atlanta, Georgia. The arbitrators shall apply the law of the State of Georgia, to the extent not preempted by federal law, excluding any law which would require the application of the law of another state. (d) The parties shall appoint arbitrators within fifteen (15) business days following service of the demand for arbitration. The number of arbitrators shall be three. One arbitrator shall be appointed by Mr. Boren, one arbitrator shall be appointed by the Company, and the two arbitrators shall appoint a third. If the arbitrators cannot agree on a third arbitrator within thirty (30) business days after the service of demand for arbitration, the third arbitrator shall be selected by the AAA. (e) The arbitration filing fee shall be paid by Mr. Boren. All other costs of arbitration shall be borne equally by Mr. Boren and the Company, provided, however, that the Company shall reimburse such fees and costs in the event any material issue in such dispute is finally resolved in Mr. Boren's favor and Mr. Boren is reimbursed legal fees under Paragraph 2.(g) hereof. (f) The parties agree that they will faithfully observe the rules that govern any arbitration between them, they will abide by and perform any award rendered by the arbitrators in any such arbitration, including any award of injunctive relief, and a judgment of a court having jurisdiction may be entered upon an award. (g) The parties agree that nothing in this Paragraph 5 is intended to preclude any court having jurisdiction from issuing and enforcing in any lawful manner such temporary restraining orders, preliminary injunctions, and other interim measures of relief as may be necessary to prevent harm to a party's interests or as otherwise may be appropriate pending the conclusion of arbitration proceedings pursuant to this Agreement regardless of whether an arbitration proceeding under this Paragraph 5 has begun. The parties further agree that nothing herein shall prevent any court from entering and enforcing in any lawful manner such judgments for permanent equitable relief as may be necessary to prevent harm to a party's interests or as otherwise may be appropriate following the issuance of arbitral awards pursuant to this Agreement.
6. Miscellaneous. (a) Funding of Benefits. Unless the Board in its discretion shall determine otherwise, the benefits payable to Mr. Boren under this Agreement shall not be funded in any manner and shall be paid by the Company out of its general assets, which assets are subject to the claims of the Company's creditors. (b) Withholding. There shall be deducted from the payment of any benefit due under this Agreement 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 Mr. Boren. (c) Assignment. Mr. Boren shall have no rights to sell, assign, transfer, encumber, or otherwise convey the right to receive the payment of any benefit due hereunder, which payment and the rights thereto are expressly declared to be nonassignable and nontransferable. Any attempt to do so shall be null and void and of no effect. (d) Amendment and Termination. The Agreement may be amended or terminated only by a writing executed by the parties. (e) Construction. This Agreement shall be construed in accordance with and governed by the laws of the State of Georgia, to the extent not preempted by federal law, disregarding any provision of law which would require the application of the law of another state. (f) Pooling Accounting. Notwithstanding anything to the contrary herein, if, but for any provision of this Agreement, a Change in Control transaction would otherwise be accounted for as a pooling-of-interests under APB No.16 ("Pooling Accounting") (after giving effect to any and all other facts and circumstances affecting whether such Change in Control transaction would use Pooling Accounting,), such provision or provisions of this Agreement which would otherwise cause the Change in Control transaction to be ineligible for Pooling Accounting shall be void and ineffective in such a manner and to the extent that by eliminating such provision or provisions of this Agreement, Pooling Accounting would be required for such Change in Control transaction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement this ____ day of __________________, 199__. THE SOUTHERN COMPANY By: ____________________________________ SOUTHERN ENERGY RESOURCES, INC. By: ____________________________________ MR. BOREN Thomas G. Boren
Exhibit A CHANGE IN CONTROL AGREEMENT Target Annual Bonus for Mr. Thomas G. Boren
IN WITNESS WHEREOF, the parties hereto have executed this Agreement this ____ day of __________________, 199__. THE SOUTHERN COMPANY By: ____________________________________ SOUTHERN ENERGY RESOURCES, INC. By: ____________________________________ MR. BOREN Thomas G. Boren
Exhibit A CHANGE IN CONTROL AGREEMENT Target Annual Bonus for Mr. Thomas G. Boren 65%
Exhibit B CHANGE IN CONTROL AGREEMENT Waiver and Release The attached Waiver and Release is to be given to Mr. Thomas G. Boren upon the occurrence of an event that triggers eligibility for severance benefits under the Change in Control Agreement, as described in Paragraph 2(a) of such agreement.
CHANGE IN CONTROL AGREEMENT Waiver and Release I, Thomas G. Boren, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Southern Energy Resources, Inc. (collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws.
Exhibit A CHANGE IN CONTROL AGREEMENT Target Annual Bonus for Mr. Thomas G. Boren 65%
Exhibit B CHANGE IN CONTROL AGREEMENT Waiver and Release The attached Waiver and Release is to be given to Mr. Thomas G. Boren upon the occurrence of an event that triggers eligibility for severance benefits under the Change in Control Agreement, as described in Paragraph 2(a) of such agreement.
CHANGE IN CONTROL AGREEMENT Waiver and Release I, Thomas G. Boren, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Southern Energy Resources, Inc. (collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee
Exhibit B CHANGE IN CONTROL AGREEMENT Waiver and Release The attached Waiver and Release is to be given to Mr. Thomas G. Boren upon the occurrence of an event that triggers eligibility for severance benefits under the Change in Control Agreement, as described in Paragraph 2(a) of such agreement.
CHANGE IN CONTROL AGREEMENT Waiver and Release I, Thomas G. Boren, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Southern Energy Resources, Inc. (collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company and/or any of its direct or indirect subsidiaries; however, I understand and acknowledge that nothing herein is intended to or shall be construed to require the Company to institute or continue in effect any particular plan or benefit sponsored by the Company and the Company hereby reserves the right to amend or terminate any of its benefit programs at any time in accordance with the procedures set forth in such plans. In signing this Waiver, I realize that I am waiving and releasing, among other things, any claims to benefits under any and all bonus, severance, workforce reduction, early retirement, outplacement, or any other similar type plan sponsored by the Company. I have been encouraged and advised in writing to seek advice from anyone of my choosing regarding this Waiver, including my attorney, and my accountant or tax advisor. Prior to signing this Waiver, I have been given the
CHANGE IN CONTROL AGREEMENT Waiver and Release I, Thomas G. Boren, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Southern Energy Resources, Inc. (collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company and/or any of its direct or indirect subsidiaries; however, I understand and acknowledge that nothing herein is intended to or shall be construed to require the Company to institute or continue in effect any particular plan or benefit sponsored by the Company and the Company hereby reserves the right to amend or terminate any of its benefit programs at any time in accordance with the procedures set forth in such plans. In signing this Waiver, I realize that I am waiving and releasing, among other things, any claims to benefits under any and all bonus, severance, workforce reduction, early retirement, outplacement, or any other similar type plan sponsored by the Company. I have been encouraged and advised in writing to seek advice from anyone of my choosing regarding this Waiver, including my attorney, and my accountant or tax advisor. Prior to signing this Waiver, I have been given the opportunity and sufficient time to seek such advice, and I fully understand the meaning and contents of this Waiver. I understand that I may take up to twenty-one (21) calendar days to consider whether or not I desire to enter this Waiver. I was not coerced, threatened or otherwise forced to sign this Waiver. I have made my choice to sign this Waiver voluntarily and of my own free will. I understand that I may revoke this Waiver at any time during the seven (7) calendar day period after I sign and deliver this Waiver to the Company. If I revoke this Waiver, I must do so in writing delivered to the Company. I understand that this Waiver is not effective until the expiration of this seven (7) calendar day revocation period. I understand that upon the expiration of such seven (7) calendar day revocation period this entire Waiver will be binding upon me and will be irrevocable.
I understand that by signing this Waiver I am giving up rights I may have. IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this ____ day of ____________________, in the year _____. Thomas G. Boren Sworn to and subscribed to me this ____ day of ____________, _____. Notary Public My Commission Expires: (Notary Seal) Acknowledged and Accepted by the Company, as defined in the Waiver. By: Date:
EXHIBIT 10(a)84 CHANGE IN CONTROL AGREEMENT THIS CHANGE IN CONTROL AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Gulf Power Company (the "Company") and Mr. Travis J. Bowden ("Mr. Bowden"). W I T N E S S E T H: WHEREAS, Mr. Bowden is the President and Chief Executive Officer of the Company; WHEREAS, the Company wish to provide to Mr. Bowden certain severance benefits under certain circumstances following a change in control (as defined herein) of Southern or the Company; NOW, THEREFORE, in consideration of the premises, and the agreements 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. Definitions. For purposes of this Agreement, the following terms shall have the following meanings: (a) "Annual Compensation" shall mean Mr. Bowden's highest annual base salary rate for the twelve (12) month period immediately preceding the date of the Change in Control plus market level target annual bonus as set forth on Exhibit A hereof. (b) "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. (c) "Board" shall mean the board of directors of the Company. (d) "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern. (e) "Change in Control" shall mean any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Paragraph 1.(e)(i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control:
EXHIBIT 10(a)84 CHANGE IN CONTROL AGREEMENT THIS CHANGE IN CONTROL AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Gulf Power Company (the "Company") and Mr. Travis J. Bowden ("Mr. Bowden"). W I T N E S S E T H: WHEREAS, Mr. Bowden is the President and Chief Executive Officer of the Company; WHEREAS, the Company wish to provide to Mr. Bowden certain severance benefits under certain circumstances following a change in control (as defined herein) of Southern or the Company; NOW, THEREFORE, in consideration of the premises, and the agreements 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. Definitions. For purposes of this Agreement, the following terms shall have the following meanings: (a) "Annual Compensation" shall mean Mr. Bowden's highest annual base salary rate for the twelve (12) month period immediately preceding the date of the Change in Control plus market level target annual bonus as set forth on Exhibit A hereof. (b) "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. (c) "Board" shall mean the board of directors of the Company. (d) "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern. (e) "Change in Control" shall mean any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Paragraph 1.(e)(i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control: (A) any acquisition directly from Southern; (B) any acquisition by Southern; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary; (D) any acquisition by a qualified pension plan or publicly held mutual fund; (E) any acquisition by a Group composed exclusively of employees of Southern, or any Southern Subsidiary; (F) any acquisition by Mr. Bowden or any Group of which Mr. Bowden is a party; or (G) any Business Combination which would not otherwise constitute a change in control because of the application of clauses (A), (B) and (C) of Paragraph 1.(e)(iii); (ii) A change in the composition of the Southern Board whereby individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Southern Board; (iii) Consummation of a Business Combination, provided, however, that such a Business Combination shall not
constitute a Change in Control if all three (3) of the following conditions are met: (A) all or substantially all of the individuals and entities who held Beneficial Ownership, respectively, of Southern's Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, 65% or more of the combined voting power of the Voting Securities of the corporation surviving or resulting from such Business Combination, (including, without limitation, a corporation which as a result of such transaction holds Beneficial Ownership of all or substantially all of Southern's Voting Securities or all or substantially all of Southern's assets) (such surviving or resulting corporation to be referred to as "Surviving Company"), in substantially the same proportions as their ownership, immediately prior to such Business Combination, of Southern's Voting Securities; (B) no Person (excluding any corporation resulting from such Business Combination, any employee benefit plan (or related trust) of Southern, any Southern Subsidiary or Surviving Company, Mr. Bowden, any Group of which Mr. Bowden is a party, any Group composed exclusively of Company employees, any qualified pension plan (or related trust) or any publicly held mutual fund) holds Beneficial Ownership, directly or indirectly, of 20% or more of the combined voting power of the then outstanding Voting Securities of Surviving Company except to the extent that such ownership existed prior to the Business Combination; and (C) at least a majority of the members of the board of directors of Surviving Company were members of the Incumbent Board at the earlier of the date of execution of the initial agreement, or of the action of the Southern Board, providing for such Business Combination. (iv) The Consummation of an acquisition by any Person of Beneficial Ownership of 50% or more of the combined voting power of the then outstanding Voting Securities of the Company; provided, however, that for purposes of this Paragraph 1.(e)(iv), any acquisition by Mr. Bowden, any Group composed exclusively of employees of the Company, any Group of which Mr. Bowden is a party, any qualified pension plan (or related trust), any publicly held mutual fund, any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary shall not constitute a Change in Control; (v) Consummation of a reorganization, merger or consolidation of the Company (an "Employing Company Business Combination"), in each case, unless, following such Employing Company Business Combination, Southern Controls the corporation or other entity surviving or resulting from such Employing Company Business Combination; or (vi) Consummation of the sale or other disposition of all or substantially all of the assets of the Company to a corporation or other entity which Southern does not Control. (f) "COBRA Coverage" shall mean any continuation coverage to which Mr. Bowden or his dependents may be entitled pursuant to Code Section 4980B. (g) "Code" shall mean the Internal Revenue Code of 1986, as amended. (h) "Company" shall mean Gulf Power Company, its successors and assigns. (i) "Consummation" shall mean the completion of the final act necessary to complete a transaction as a matter of law, including, but not limited to, any required approvals by the corporation's shareholders and board of directors, the transfer of legal and beneficial title to securities or assets and the final approval of the transaction by any applicable domestic or foreign governments or governmental agencies. (j) "Control" shall mean, in the case of a corporation, Beneficial Ownership of more than 50% of the combined voting power of the corporation's Voting Securities, or in the case of any other entity, Beneficial Ownership of more than 50% of such entity's voting equity interests. (k) "Effective Date" shall mean the date of execution of this Agreement. (l) "Employee Outplacement Program" shall mean the program established by the Company from time to time for the purpose of assisting participants covered by the plan in finding employment outside of the Company which provides for the following services: (i) self-assessment, career decision and goal setting; (ii) job market research and job sources; (iii) networking and interviewing skills; (iv) planning and implementation strategy; (v) resume writing, job hunting methods and salary negotiation; and (vi) office support and job search resources.
(m) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. (n) "Good Reason" shall mean, without Mr. Bowden's express written consent, after written notice to the Board, and after a thirty (30) day opportunity for the Board to cure, the continuing occurrence of any of the following events: (i) Inconsistent Duties. A meaningful and detrimental alteration in Mr. Bowden's position or in the nature or status of his responsibilities from those in effect immediately prior to the Change in Control; (ii) Reduced Salary. A reduction of five percent (5%) or more by the Company in either of the following: (i) Mr. Bowden's annual base salary rate as in effect immediately prior to the Change in Control (except for a less than ten percent (10%), across-the-board annual base salary rate reduction similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); or (ii) the sum of Mr. Bowden's annual base salary rate plus target bonus under the PPP Plan (except for a less than ten percent (10%), across-the-board reduction of annual base salary plus target bonus under the PPP Plan similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); (iii) Pension and Compensation Plans. The failure by the Company to continue in effect any pension or compensation plan or agreement in which Mr. Bowden participates or is a party as of the date of the Change in Control or the elimination of Mr. Bowden's participation therein, (except for across-the-board plan changes or terminations similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); For purposes of this Paragraph 1.(n), a "pension plan or agreement" shall mean any written arrangement executed by an authorized officer of the Company which provides for payments upon retirement; and a "compensation plan or arrangement" shall mean any written arrangement executed by an authorized officer of the Company which provides for periodic, nondiscretionary compensatory payments in the nature of bonuses. (iv) Relocation. A change in Mr. Bowden's work location to a location more than fifty (50) miles from the office where Mr. Bowden is located at the time of the Change in Control, unless such new work location is within fifty (50) miles from Mr. Bowden's principal place of residence at the time of the Change in Control. The acceptance, if any, by Mr. Bowden of employment by the Company at a work location which is outside the fifty mile radius set forth in this Paragraph 1.(n)(iv) shall not be a waiver of Mr. Bowden's right to refuse subsequent transfer by the Company to a location which is more than fifty (50) miles from Mr. Bowden's principal place of residence at the time of the Change in Control, and such subsequent unconsented transfer shall be "Good Reason" under this Agreement; or (v) Benefits and Perquisites. The taking of any action by the Company which would directly or indirectly materially reduce the benefits enjoyed by Mr. Bowden under the Company's retirement, life insurance, medical, health and accident, disability, deferred compensation or savings plans in which Mr. Bowden was participating immediately prior to the Change in Control; or the failure by the Company to provide Mr. Bowden with the number of paid vacation days to which Mr. Bowden is entitled on the basis of years of service with the Company in accordance with the Company's normal vacation policy in effect immediately prior to the Change in Control (except for across-the-board plan or vacation policy changes or plan terminations similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company). (vi) For purposes of this Paragraph 1.(n), the term "Executive Employee" shall mean those employees of the Company of Grade Level 10 or above. (o) "Group" shall have the meaning set forth in Section 14(d) of the Exchange Act. (p) "Group Health Plan" shall mean the group health plan covering Mr. Bowden, as such plan may be amended from time to time. (q) "Group Life Insurance Plan" shall mean the group life insurance program covering Mr. Bowden, as such plan may be amended from time to time. (r) "Incumbent Board" shall mean those individuals who constitute the Southern Board as of the Effective Date plus any individual who shall become a director subsequent to such date whose election or nomination for election by Southern's shareholders was approved by a vote of at least 75% of the directors then comprising the Incumbent Board. Notwithstanding the foregoing, no individual who shall become a director of the Southern Board subsequent to the Effective Date whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Regulations promulgated under the
Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Southern Board shall be a member of the Incumbent Board. (s) "Month of Service" shall mean any calendar month during which Mr. Bowden has worked at least one (1) hour or was on approved leave of absence while in the employ of the Company or any affiliate or subsidiary of Southern. (t) "Pension Plan" shall mean The Southern Company Pension Plan, as such plan may be amended from time to time. (u) "Performance Dividend Plan" shall mean the Southern Company Performance Dividend Plan or any replacement thereto, as such plans may be amended from time to time. (v) "Performance Stock Plan" shall mean the Southern Company Performance Stock Plan or any replacement thereto, as such plans may be amended from time to time. (w) "Person" shall mean any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of Act. (x) "Performance Pay Plan" or "PPP Plan" shall mean the Southern Company Performance Pay Plan or any replacement thereto, as such plans may be amended from time to time. (y) "Productivity Improvement Plan" or "PIP Plan" shall mean the Southern Company Productivity Improvement Plan or replacement thereto, as such plans may be amended from time to time. (z) "Southern" shall mean The Southern Company, its successors and assigns. (aa) "Southern Board" shall mean the board of directors of Southern. (bb) "Southern Subsidiary" shall mean any corporation or other entity Controlled by Southern. (cc) "Termination for Cause" or "Cause" shall mean the termination of Mr. Bowden's employment by the Company upon the occurrence of any of the following: (i) The willful and continued failure by Mr. Bowden substantially to perform his duties with the Company (other than any such failure resulting from Mr. Bowden's Total Disability or from Mr. Bowden's retirement or any such actual or anticipated failure resulting from termination by Mr. Bowden for Good Reason) after a written demand for substantial performance is delivered to him by the Southern Board, which demand specifically identifies the manner in which the Southern Board believes that he has not substantially performed his duties; or (ii) The willful engaging by Mr. Bowden in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise, including, but not limited to any of the following: (A) any willful act involving fraud or dishonesty in the course of Mr. Bowden's employment by the Company; (B) the willful carrying out of any activity or the making of any statement which would materially prejudice or impair the good name and standing of the Company, Southern or any Southern Subsidiary or would bring the Company, Southern or any Southern Subsidiary into contempt, ridicule or would reasonably shock or offend any community in which the Company, Southern or such Southern Subsidiary is located; (C) attendance at work in a state of intoxication or otherwise being found in possession at his workplace of any prohibited drug or substance, possession of which would amount to a criminal offense; (D) violation of the Company's policies on drug and alcohol usage, fitness for duty requirements or similar policies as may exist from time to time as adopted by the Company's safety officer; (E) assault or other act of violence against any person during the course of employment; or (F) indictment of any felony or any misdemeanor involving moral turpitude.
No act or failure to act by Mr. Bowden shall be deemed "willful" unless done, or omitted to be done, by Mr. Bowden not in good faith and without reasonable belief that his action or omission was in the best interest of the Company. Notwithstanding the foregoing, Mr. Bowden shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to him a copy of a resolution duly adopted by the affirmative vote of not less than three quarters of the entire membership of the Southern Board at a meeting of the Southern Board called and held for such purpose (after reasonable notice to Mr. Bowden and an opportunity for him, together with counsel, to be heard before the Southern Board), finding that, in the good faith opinion of the Southern Board, Mr. Bowden was guilty of conduct set forth above in clause (i) or (ii) of this Paragraph 1.(cc) and specifying the particulars thereof in detail. (dd) "Termination Date" shall mean the date on which Mr. Bowden's employment with the Company is terminated; provided, however, that solely for purposes of Paragraph 2.(c) hereof, the Termination Date shall be the effective date of his retirement pursuant to the terms of the Pension Plan. (ee) "Total Disability" shall mean Mr. Bowden's total disability within the meaning of the Pension Plan. (ff) "Voting Securities" shall mean the outstanding voting securities of a corporation entitling the holder thereof to vote generally in the election of such corporation's directors. (gg) "Waiver and Release" shall mean the Waiver and Release attached hereto as Exhibit B. (hh) "Year of Service" shall mean Mr. Bowden's Months of Service divided by twelve (12) rounded to the nearest whole year, rounding up if the remaining number of months is seven (7) or greater and rounding down if the remaining number of months is less than seven (7). If Mr. Bowden has a break in his service with the Company, he will receive credit under this Agreement for service prior to the break in service only if the break in service is less than five years. 2. Severance Benefits. (a) Eligibility. Except as otherwise provided in this Paragraph 2.(a), if Mr. Bowden's employment is involuntarily terminated by the Company at any time during the two year period following a Change in Control for reasons other than Cause, or if Mr. Bowden voluntarily terminates his employment with the Company for Good Reason at any time during the two year period following a Change in Control, Mr. Bowden shall be entitled to receive the benefits described in this Agreement upon the Company's receipt of an effective Waiver and Release. Notwithstanding anything to the contrary herein, Mr. Bowden shall not be eligible to receive benefits under this Agreement if Mr. Bowden: (i) voluntarily terminates his employment with the Company for other than Good Reason; (ii) has his employment terminated by the Company for Cause; (iii) accepts the transfer of his employment to Southern, any Southern Subsidiary or any employer that succeeds to all or substantially all of the assets of the Company, Southern or any Southern Subsidiary; (iv) refuses an offer of continued employment with the Company, any Southern Subsidiary, or any employer that succeeds to all or substantially all of the assets of the Company, Southern, or any Southern Subsidiary under circumstances where such refusal would not amount to Good Reason for voluntary termination of employment; or (v) elects to receive the benefits of any other voluntary or involuntary severance or separation program maintained by the Company; provided however, that the receipt of benefits under the terms of any retention plan or agreement shall not be deemed to be the receipt of severance or separation benefits for purposes of this Agreement. (b) Severance Benefits. If Mr. Bowden meets the eligibility requirements of Paragraph 2.(a) hereof, he shall be entitled to a cash severance benefit in an amount equal to three times his Annual Compensation (the "Severance Amount"). If any portion of the Severance Amount constitutes an "excess parachute payment" (as such term is defined under Code Section 280G ("Excess Parachute Payment")), the Company shall pay to Mr. Bowden an additional amount calculated by determining the amount of tax under Code Section 4999 that he otherwise would have paid on any Excess Parachute Payment with respect to the Change in Control and dividing such amount by a decimal determined by adding the tax rate under Code Section 4999 ("Excise Tax"), the hospital insurance tax under Code Section 3101(b) ("HI Tax") and federal and state income tax measured at the highest marginal rates
("Income Tax") and subtracting such result from the number one (1) (the "280G Gross-up"); provided, however, that no 280G Gross-up shall be paid unless the Severance Amount plus all other "parachute payments" to Mr. Bowden under Code Section 280G exceeds three (3) times Mr. Bowden's "base amount" (as such term is defined under Code Section 280G ("Base Amount")) by ten percent (10%) or more; provided further, that if no 280G Gross-up is paid, the Severance Amount shall be capped at three (3) times Mr. Bowden's Base Amount, less all other "parachute payments" (as such term is defined under Code Section 280G) received by Mr. Bowden, less one dollar (the "Capped Amount"), if the Capped Amount, reduced by HI Tax and Income Tax, exceeds what otherwise would have been the Severance Amount, reduced by HI Tax, Income Tax and Excise Tax. For purposes of this Paragraph 2.(b), whether any amount would constitute an Excess Parachute Payment and any other calculations of tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts, e.g., Base Amount, Capped Amount, etc., shall be determined by the tax department of the independent public accounting firm then responsible for preparing Southern's consolidated federal income tax return, and such calculations or determinations shall be binding upon the parties hereto. (c) Welfare Benefits. If Mr. Bowden meets the eligibility requirements of Paragraph 2.(a) hereof and is not otherwise eligible to receive retiree medical and life insurance benefits provided to certain retirees pursuant to the terms of the Pension Plan, the Group Health Plan and the Group Life Insurance Plan, he shall be entitled to the benefits set forth in this Paragraph 2.(c). (i) Mr. Bowden shall be eligible to participate in the Company's Group Health Plan, upon payment of both the Company's and his monthly premium under such plan, for a period of six (6) months for each of Mr. Bowden's Years of Service, not to exceed five (5) years. If Mr. Bowden elects to receive this extended medical coverage, he shall also be entitled to elect coverage under the Group Health Plan for his dependents who were participating in the Group Health Plan on Mr. Bowden's Termination Date (and for such other dependents as may be entitled to coverage under the provisions of the Health Insurance Portability and Accountability Act of 1996) for the duration of Mr. Bowden's extended medical coverage under this Paragraph 2.(c)(i) to the extent such dependents remain eligible for dependent coverage under the terms of the Group Health Plan. (A) The extended medical coverage afforded to Mr. Bowden pursuant to Paragraph 2.(c)(i), as well as the premiums to be paid by Mr. Bowden in connection with such coverage shall be determined in accordance with the terms of the Group Health Plan and shall be subject to any changes in the terms and conditions of the Group Health Plan as well as any future increases in premiums under the Group Health Plan. The premiums to be paid by Mr. Bowden in connection with this extended coverage shall be due on the first day of each month; provided, however, that if he fails to pay his premium within thirty (30) days of its due date, such extended coverage shall be terminated. (B) Any Group Health Plan coverage provided under Paragraph 2.(c)(i) shall be a part of and not in addition to any COBRA Coverage which Mr. Bowden or his dependents may elect. In the event that Mr. Bowden or his dependents become eligible to be covered, by virtue of re-employment or otherwise, by any employersponsored group health plan or is eligible for coverage under any government-sponsored health plan during the above period, coverage under the Company's Group Health Plan available to Mr. Bowden or his dependents by virtue of the provisions of Paragraph 2.(c)(i) shall terminate, except as may otherwise be required by law, and shall not be renewed. (ii) Mr. Bowden shall be entitled to receive cash in an amount equal to the Company's and Mr. Bowden's cost of premiums for three (3) years of coverage under the Group Health Plan and Group Life Insurance Plan in accordance with the terms of such plans as of the date of the Change in Control. (d) Incentive Plans. If Mr. Bowden meets the eligibility requirements of Paragraph 2.(a) hereof he shall be entitled to the following benefits under the Company's incentive plans: (i) Stock Option Plan. (A) Any of Mr. Bowden's Options and Stock Appreciation Rights under the Performance Stock Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(i) by reference) which are outstanding as of the Termination Date and which are not then exercisable and vested, shall become fully exercisable and vested to the full extent of the original grant; provided, that in the case of a Stock Appreciation Right, if Mr. Bowden is subject to Section 16(b) of the Exchange Act, such Stock Appreciation Right shall not become fully vested and exercisable
at such time if such actions would result in liability to Mr. Bowden under Section 16(b) of the Exchange Act, provided further, that any such actions not taken as a result of the rules under Section 16(b) of the Exchange Act shall be effected as of the first date that such activity would no longer result in liability under Section 16(b) of the Exchange Act. (B) The restrictions and deferral limitations applicable to any of Mr. Bowden's Restricted Stock as of the Termination Date shall lapse, and such Restricted Stock shall become free of all restrictions and limitations and become fully vested and transferable to the full extent of the original grant. (C) The restrictions and deferral limitations and other conditions applicable to any other Awards held by Mr. Bowden under the Stock Performance Plan as of the Termination Date shall lapse, and such other Awards shall become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent of the original grant. (ii) Performance Pay Plan. Provided Mr. Bowden is not entitled to benefits under Article V of the PPP Plan, (the defined terms of which are incorporated in this Paragraph 2.(d)(ii) by reference), if the PPP Plan is in place through Mr. Bowden's Termination Date and to the extent Mr. Bowden is entitled to participate therein, Mr. Bowden shall be entitled to receive cash in an amount equal to a prorated payout of his Incentive Pay Awards under the PPP Plan for the Performance Period in which the Termination Date shall have occurred, at target performance under the PPP Plan and prorated by the number of months which have passed since the beginning of the Performance Period until the Termination Date. (iii) PIP Plan. Provided Mr. Bowden is not entitled to benefits under Article IV of the PIP Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(iii) by reference), if the PIP Plan is in place through Mr. Bowden's Termination Date and to the extent Mr. Bowden is entitled to participate therein, Mr. Bowden shall be entitled to receive cash in an amount equal to his Award Opportunity for the Computation Periods in which the Termination Date shall have occurred at a target Value of Performance Unit of $1.00, prorated for each Computation Period by the number of months which have passed since the beginning of the Computation Periods until the Termination Date. (iv) Performance Dividend Plan. Provided Mr. Bowden is not entitled to benefits under the Performance Dividend Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(iv) by reference), if the Performance Dividend Plan is in place through Mr. Bowden's Termination Date and to the extent Mr. Bowden is entitled to participate therein, Mr. Bowden shall be entitled to receive cash for each Award held by Mr. Bowden on his Termination Date, based on actual performance under Section 4.1 of the Performance Dividend Plan determined as of the most recently completed calendar quarter of the Performance Period in which the Termination Date shall have occurred, and the Annual Dividend declared prior to the Termination Date. (v) Other Short Term Incentive Plans. The provisions of this Paragraph 2.(d)(v) shall apply if and to the extent that Mr. Bowden is a participant in any other "short term compensation plan" not otherwise previously referred to in this Paragraph 2.(d). Provided Mr. Bowden is not otherwise entitled to a plan payout under any change of control provisions of such plans, if the "short term compensation plan" is in place as of the Termination Date and to the extent Mr. Bowden is entitled to participate therein, Mr. Bowden shall receive cash in an amount equal to his award under the Company's "short term incentive plan" for the annual performance period in which the Termination Date shall have occurred, at Mr. Bowden's target performance level and prorated by the number of months which have passed since the beginning of the annual performance period until his Termination Date. For purposes of this Paragraph 2.(d)(v), the term "short term incentive compensation plan" shall mean any incentive compensation plan or arrangement adopted in writing by the Company which provides for annual, recurring compensatory bonuses based upon articulated performance criteria. (e) Payment of Benefits. Any amounts due under this Agreement shall be paid in one (1) lump sum payment as soon as administratively practicable following the later of: (i) Mr. Bowden's Termination Date, or (ii) upon Mr. Bowden's tender of an effective Waiver and Release to the Company in the form of Exhibit B attached hereto and the expiration of any applicable revocation period for such waiver. In the event of a dispute with respect to liability or amount of any benefit due hereunder, an effective Waiver and Release shall be tendered at the time of final resolution of any such dispute when payment is tendered by the Company. (f) Benefits in the Event of Death. In the event of Mr. Bowden's death prior to the payment of all amounts due under this Agreement, Mr. Bowden's estate shall be entitled to receive as due any amounts not yet paid under this Agreement upon the tender by the executor or administrator of the estate of an effective Waiver and Release. (g) Legal Fees. In the event of a dispute between Mr. Bowden and the Company with regard to any amounts due
hereunder, if any material issue in such dispute is finally resolved in Mr. Bowden's favor, the Company shall reimburse Mr. Bowden's legal fees incurred with respect to all issues in such dispute in an amount not to exceed fifty thousand dollars ($50,000). (h) Employee Outplacement Services. Mr. Bowden shall be eligible to participate in the Employee Outplacement Program, which program shall not be less than six (6) months duration measured from Mr. Bowden's Termination Date. (i) Non-qualified Retirement and Deferred Compensation Plans. The Parties agree that subsequent to a Change in Control, any claims by Mr. Bowden for benefits under any of the Company's non-qualified retirement or deferred compensation plans shall be resolved through binding arbitration in accordance with the provisions and procedures set forth in Paragraph 5 hereof and if any material issue in such dispute is finally resolved in Mr. Bowden's favor, the Company shall reimburse Mr. Bowden's legal fees in the manner provided in Paragraph 2.(g) hereof. 3. Transfer of Employment. In the event that Mr. Bowden's employment by the Company is terminated during the two year period following a Change in Control and Mr. Bowden accepts employment by Southern, Southern Subsidiary, or any employer that succeeds to all or substantially all of the assets of the Company, Southern or any Southern Subsidiary, the Company shall assign this Agreement to Southern, such Southern Subsidiary, or successor employer, Southern shall accept such assignment or cause such Southern Subsidiary or successor employer to accept such assignment, and such assignee shall become the "Company" for all purposes hereunder. 4. No Mitigation. If Mr. Bowden is otherwise eligible to receive benefits under Paragraph 2 of this Agreement, he shall have no duty or obligation to seek other employment following his Termination Date and, except as otherwise provided in Paragraph 2.(a)(iii) hereof, the amounts due Mr. Bowden hereunder shall not be reduced or suspended if Mr. Bowden accepts such subsequent employment. 5. Arbitration. (a) Any dispute, controversy or claim arising out of or relating to the Company's obligations to pay severance benefits under this Agreement, or the breach thereof, shall be settled and resolved solely by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA") except as otherwise provided herein. The arbitration shall be the sole and exclusive forum for resolution of any such claim for severance benefits and the arbitrators' award shall be final and binding. The provisions of this Paragraph 5 are not intended to apply to any other disputes, claims or controversies arising out of or relating to Mr. Bowden's employment by the Company or the termination thereof. (b) Arbitration shall be initiated by serving a written notice of demand for arbitration to Mr. Bowden, in the case of the Company, or to the Southern Board, in the case of Mr. Bowden. (c) The arbitration shall be held in Atlanta, Georgia. The arbitrators shall apply the law of the State of Georgia, to the extent not preempted by federal law, excluding any law which would require the application of the law of another state. (d) The parties shall appoint arbitrators within fifteen (15) business days following service of the demand for arbitration. The number of arbitrators shall be three. One arbitrator shall be appointed by Mr. Bowden, one arbitrator shall be appointed by the Company, and the two arbitrators shall appoint a third. If the arbitrators cannot agree on a third arbitrator within thirty (30) business days after the service of demand for arbitration, the third arbitrator shall be selected by the AAA. (e) The arbitration filing fee shall be paid by Mr. Bowden. All other costs of arbitration shall be borne equally by Mr. Bowden and the Company, provided, however, that the Company shall reimburse such fees and costs in the event any material issue in such dispute is finally resolved in Mr. Bowden's favor and Mr. Bowden is reimbursed legal fees under Paragraph 2.(g) hereof. (f) The parties agree that they will faithfully observe the rules that govern any arbitration between them, they will abide by and perform any award rendered by the arbitrators in any such arbitration, including any award of injunctive relief, and a judgment of a court having jurisdiction may be entered upon an award. (g) The parties agree that nothing in this Paragraph 5 is intended to preclude upon application of either party any
court having jurisdiction from issuing and enforcing in any lawful manner such temporary restraining orders, preliminary injunctions, and other interim measures of relief as may be necessary to prevent harm to a party's interests or as otherwise may be appropriate pending the conclusion of arbitration proceedings pursuant to this Agreement; regardless of whether an arbitration proceeding under this Paragraph 5 has begun. The parties further agree that nothing herein shall prevent any court from entering and enforcing in any lawful manner such judgments for permanent equitable relief as may be necessary to prevent harm to a party's interests or as otherwise may be appropriate following the issuance of arbitral awards pursuant to this Paragraph 5. 6. Miscellaneous. (a) Funding of Benefits. Unless the Board in its discretion shall determine otherwise, the benefits payable to Mr. Bowden under this Agreement shall not be funded in any manner and shall be paid by the Company out of its general assets, which assets are subject to the claims of the Company's creditors. (b) Withholding. There shall be deducted from the payment of any benefit due under this Agreement 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 Mr. Bowden. (c) Assignment. Mr. Bowden shall have no rights to sell, assign, transfer, encumber, or otherwise convey the right to receive the payment of any benefit due hereunder, which payment and the rights thereto are expressly declared to be nonassignable and nontransferable. Any attempt to do so shall be null and void and of no effect. (d) Amendment and Termination. The Agreement may be amended or terminated only by a writing executed by the parties. (e) Construction. This Agreement shall be construed in accordance with and governed by the laws of the State of Georgia, to the extent not preempted by federal law, disregarding any provision of law which would require the application of the law of another state. (f) Pooling Accounting. Notwithstanding anything to the contrary herein, if, but for any provision of this Agreement, a Change in Control transaction would otherwise be accounted for as a pooling-of-interests under APB No.16 ("Pooling Accounting") (after giving effect to any and all other facts and circumstances affecting whether such Change in Control transaction would use Pooling Accounting), such provision or provisions of this Agreement which would otherwise cause the Change in Control transaction to be ineligible for Pooling Accounting shall be void and ineffective in such a manner and to the extent that by eliminating such provision or provisions of this Agreement, Pooling Accounting would be required for such Change in Control transaction. IN WITNESS WHEREOF, the parties hereto have executed this Agreement this ____ day of __________________, 199__. THE SOUTHERN COMPANY By: ____________________________________ GULF POWER COMPANY By: ____________________________________ MR. BOWDEN Travis J. Bowden
Exhibit A CHANGE IN CONTROL AGREEMENT Target Annual Bonus for
Exhibit A CHANGE IN CONTROL AGREEMENT Target Annual Bonus for Mr. Travis J. Bowden 50%
Exhibit B CHANGE IN CONTROL AGREEMENT Waiver and Release The attached Waiver and Release is to be given to Mr. Travis J. Bowden upon the occurrence of an event that triggers eligibility for severance benefits under the Change in Control Agreement, as described in Paragraph 2(a) of such agreement.
CHANGE IN CONTROL AGREEMENT Waiver and Release I, Travis J. Bowden, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Gulf Power Company (collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company
Exhibit B CHANGE IN CONTROL AGREEMENT Waiver and Release The attached Waiver and Release is to be given to Mr. Travis J. Bowden upon the occurrence of an event that triggers eligibility for severance benefits under the Change in Control Agreement, as described in Paragraph 2(a) of such agreement.
CHANGE IN CONTROL AGREEMENT Waiver and Release I, Travis J. Bowden, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Gulf Power Company (collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company and/or any of its direct or indirect subsidiaries; however, I understand and acknowledge that nothing herein is intended to or shall be construed to require the Company to institute or continue in effect any particular plan or benefit sponsored by the Company and the Company hereby reserves the right to amend or terminate any of its benefit programs at any time in accordance with the procedures set forth in such plans. In signing this Waiver, I realize that I am waiving and releasing, among other things, any claims to benefits under any and all bonus, severance, workforce reduction, early retirement, outplacement, or any other similar type plan sponsored by the Company. I have been encouraged and advised in writing to seek advice from anyone of my choosing regarding this Waiver, including my attorney, and my accountant or tax advisor. Prior to signing this Waiver, I have been given the opportunity and sufficient time to seek such advice, and I fully understand the meaning and contents of this
CHANGE IN CONTROL AGREEMENT Waiver and Release I, Travis J. Bowden, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Gulf Power Company (collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company and/or any of its direct or indirect subsidiaries; however, I understand and acknowledge that nothing herein is intended to or shall be construed to require the Company to institute or continue in effect any particular plan or benefit sponsored by the Company and the Company hereby reserves the right to amend or terminate any of its benefit programs at any time in accordance with the procedures set forth in such plans. In signing this Waiver, I realize that I am waiving and releasing, among other things, any claims to benefits under any and all bonus, severance, workforce reduction, early retirement, outplacement, or any other similar type plan sponsored by the Company. I have been encouraged and advised in writing to seek advice from anyone of my choosing regarding this Waiver, including my attorney, and my accountant or tax advisor. Prior to signing this Waiver, I have been given the opportunity and sufficient time to seek such advice, and I fully understand the meaning and contents of this Waiver. I understand that I may take up to twenty-one (21) calendar days to consider whether or not I desire to enter this Waiver. I was not coerced, threatened or otherwise forced to sign this Waiver. I have made my choice to sign this Waiver voluntarily and of my own free will. I understand that I may revoke this Waiver at any time during the seven (7) calendar day period after I sign and deliver this Waiver to the Company. If I revoke this Waiver, I must do so in writing delivered to the Company. I understand that this Waiver is not effective until the expiration of this seven (7) calendar day revocation period. I understand that upon the expiration of such seven (7) calendar day revocation period this entire Waiver will be binding upon me and will be irrevocable.
I understand that by signing this Waiver I am giving up rights I may have. IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this ____ day of ____________________, in the year _____. Travis J. Bowden Sworn to and subscribed to me this ____ day of ____________, _____. Notary Public My Commission Expires: (Notary Seal) Acknowledged and Accepted by the Company, as defined in the Waiver. By: Date:
EXHIBIT 10(a)85 CHANGE IN CONTROL AGREEMENT THIS CHANGE IN CONTROL AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Southern Company Services, Inc. (the "Company") and Mr. A. W. Dahlberg ("Mr. Dahlberg"). W I T N E S S E T H: WHEREAS, Mr. Dahlberg is the Chairman of the Board and Chief Executive Officer of Southern; WHEREAS, Mr. Dahlberg is the Chairman of the Executive Committee of the Company; WHEREAS, Southern and the Company wish to provide to Mr. Dahlberg certain severance benefits under certain circumstances following a change in control (as defined herein) of Southern or the Company; NOW, THEREFORE, in consideration of the premises, and the agreements 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. Definitions. For purposes of this Agreement, the following terms shall have the following meanings: (a) "Annual Compensation" shall mean Mr. Dahlberg's highest annual base salary rate for the twelve (12) month period immediately preceding the date of the Change in Control plus market level target annual bonus as set forth on Exhibit A hereof. (b) "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. (c) "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern. (d) "Change in Control" shall mean any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Paragraph 1.(d)(i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control:
EXHIBIT 10(a)85 CHANGE IN CONTROL AGREEMENT THIS CHANGE IN CONTROL AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Southern Company Services, Inc. (the "Company") and Mr. A. W. Dahlberg ("Mr. Dahlberg"). W I T N E S S E T H: WHEREAS, Mr. Dahlberg is the Chairman of the Board and Chief Executive Officer of Southern; WHEREAS, Mr. Dahlberg is the Chairman of the Executive Committee of the Company; WHEREAS, Southern and the Company wish to provide to Mr. Dahlberg certain severance benefits under certain circumstances following a change in control (as defined herein) of Southern or the Company; NOW, THEREFORE, in consideration of the premises, and the agreements 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. Definitions. For purposes of this Agreement, the following terms shall have the following meanings: (a) "Annual Compensation" shall mean Mr. Dahlberg's highest annual base salary rate for the twelve (12) month period immediately preceding the date of the Change in Control plus market level target annual bonus as set forth on Exhibit A hereof. (b) "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. (c) "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern. (d) "Change in Control" shall mean any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Paragraph 1.(d)(i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control: (A) any acquisition directly from Southern; (B) any acquisition by Southern; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary; (D) any acquisition by a qualified pension plan or publicly held mutual fund; (E) any acquisition by a Group composed exclusively of employees of Southern, or any Southern Subsidiary; (F) any acquisition by Mr. Dahlberg or any Group of which Mr. Dahlberg is a party; or (G) any Business Combination which would not otherwise constitute a change in control because of the application of clauses (A), (B) and (C) of Paragraph 1.(d)(iii); (ii) A change in the composition of the Southern Board whereby individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Southern Board; (iii) Consummation of a Business Combination, provided, however, that such a Business Combination shall not
constitute a Change in Control if all three (3) of the following conditions are met: (A) all or substantially all of the individuals and entities who held Beneficial Ownership, respectively, of Southern's Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, 65% or more of the combined voting power of the Voting Securities of the corporation surviving or resulting from such Business Combination, (including, without limitation, a corporation which as a result of such transaction holds Beneficial Ownership of all or substantially all of Southern's Voting Securities or all or substantially all of Southern's assets) (such surviving or resulting corporation to be referred to as "Surviving Company"), in substantially the same proportions as their ownership, immediately prior to such Business Combination, of Southern's Voting Securities; (B) no Person (excluding any corporation resulting from such Business Combination, any employee benefit plan (or related trust) of Southern, any Southern Subsidiary or Surviving Company, Mr. Dahlberg, any Group of which Mr. Dahlberg is a party, any Group composed exclusively of Company employees, any qualified pension plan (or related trust) or any publicly held mutual fund) holds Beneficial Ownership, directly or indirectly, of 20% or more of the combined voting power of the then outstanding Voting Securities of Surviving Company except to the extent that such ownership existed prior to the Business Combination; and (C) at least a majority of the members of the board of directors of Surviving Company were members of the Incumbent Board at the earlier of the date of execution of the initial agreement, or of the action of the Southern Board, providing for such Business Combination. (iv) The Consummation of an acquisition by any Person of Beneficial Ownership of 50% or more of the combined voting power of the then outstanding Voting Securities of the Company; provided, however, that for purposes of this Paragraph 1.(e)(iv), any acquisition by Mr. Dahlberg, any Group composed exclusively of employees of the Company, any Group of which Mr. Dahlberg is a party, any qualified pension plan (or related trust), any publicly held mutual fund, any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary shall not constitute a Change in Control; (v) Consummation of a reorganization, merger or consolidation of the Company (an "Employing Company Business Combination"), in each case, unless, following such Employing Company Business Combination, Southern Controls the corporation or other entity surviving or resulting from such Employing Company Business Combination; or (vi) Consummation of the sale or other disposition of all or substantially all of the assets of the Company to a corporation or other entity which Southern does not Control. (e) "COBRA Coverage" shall mean any continuation coverage to which Mr. Dahlberg or his dependents may be entitled pursuant to Code Section 4980B. (f) "Code" shall mean the Internal Revenue Code of 1986, as amended. (g) "Company" shall mean Southern Company Services, Inc., its successors and assigns. (h) "Consummation" shall mean the completion of the final act necessary to complete a transaction as a matter of law, including, but not limited to, any required approvals by the corporation's shareholders and board of directors, the transfer of legal and beneficial title to securities or assets and the final approval of the transaction by any applicable domestic or foreign governments or governmental agencies. (i) "Control" shall mean, in the case of a corporation, Beneficial Ownership of more than 50% of the combined voting power of the corporation's Voting Securities, or in the case of any other entity, Beneficial Ownership of more than 50% of such entity's voting equity interests. (j) "Effective Date" shall mean the date of execution of this Agreement. (k) "Employee Outplacement Program" shall mean the program established by the Company from time to time for the purpose of assisting participants covered by the plan in finding employment outside of the Company which provides for the following services: (i) self assessment, career decision and goal setting; (ii) job market research and job sources; (iii) networking and interviewing skills; (iv) planning and implementation strategy; (v) resume writing, job hunting methods and salary negotiation; and (vi) office support and job search resources.
(l) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. (m) "Good Reason" shall mean, without Mr. Dahlberg's express written consent, after written notice to the Board, and after a thirty (30) day opportunity for the Board to cure, the continuing occurrence of any of the following events: (i) Inconsistent Duties. A meaningful and detrimental alteration in Mr. Dahlberg's position or in the nature or status of his responsibilities from those in effect immediately prior to the Change in Control; (ii) Reduced Salary. A reduction of five percent (5%) or more by the Company in either of the following: (i) Mr. Dahlberg's annual base salary rate as in effect immediately prior to the Change in Control (except for a less than ten percent (10%), across-the-board annual base salary rate reduction similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); or (ii) the sum of Mr. Dahlberg's annual base salary rate plus target bonus under the PPP Plan (except for a less than ten percent (10%), across-the-board reduction of annual base salary rate plus target bonus under the PPP Plan similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); (iii) Pension and Compensation Plans. The failure by the Company to continue in effect any pension or compensation plan or agreement in which Mr. Dahlberg participates or is a party as of the date of the Change in Control or the elimination of Mr. Dahlberg's participation therein, (except for across-the-board plan changes or terminations similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); For purposes of this Paragraph 1.(n), a "pension plan or agreement" shall mean any written arrangement executed by an authorized officer of the Company which provides for payments upon retirement; and a "compensation plan or arrangement" shall mean any written arrangement executed by an authorized officer of the Company which provides for periodic, nondiscretionary compensatory payments in the nature of bonuses. (iv) Relocation. A change in Mr. Dahlberg's work location to a location more than fifty (50) miles from the office where Mr. Dahlberg is located at the time of the Change in Control, unless such new work location is within fifty (50) miles from Mr. Dahlberg's principal place of residence at the time of the Change in Control. The acceptance, if any, by Mr. Dahlberg of employment by the Company at a work location which is outside the fifty mile radius set forth in this Paragraph 1.(m)(iv) shall not be a waiver of Mr. Dahlberg's right to refuse subsequent transfer by the Company to a location which is more than fifty (50) miles from Mr. Dahlberg's principal place of residence at the time of the Change in Control, and such subsequent unconsented transfer shall be "Good Reason" under this Agreement; or (v) Benefits and Perquisites. The taking of any action by the Company which would directly or indirectly materially reduce the benefits enjoyed by Mr. Dahlberg under the Company's retirement, life insurance, medical, health and accident, disability, deferred compensation or savings plans in which Mr. Dahlberg was participating immediately prior to the Change in Control; or the failure by the Company to provide Mr. Dahlberg with the number of paid vacation days to which Mr. Dahlberg is entitled on the basis of years of service with the Company in accordance with the Company's normal vacation policy in effect immediately prior to the Change in Control (except for across-the-board plan or vacation policy changes or plan terminations similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company). (vi) For purposes of this Paragraph 1.(n), the term "Executive Employee" shall mean those employees of the Company of Grade Level 10 or above. (n) "Group" shall have the meaning set forth in Section 14(d) of the Exchange Act. (o) "Group Health Plan" shall mean the group health plan covering Mr. Dahlberg as such plan may be amended from time to time. (p) "Group Life Insurance Plan" shall mean the group life insurance program covering Mr. Dahlberg as such plan may be amended from time to time. (q) "Incumbent Board" shall mean those individuals who constitute the Southern Board as of the Effective Date plus any individual who shall become a director subsequent to such date whose election or nomination for election by Southern's shareholders was approved by a vote of at least 75% of the directors then comprising the Incumbent Board. Notwithstanding the foregoing, no individual who shall become a director of the Southern Board subsequent to the Effective Date whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Regulations promulgated under the
Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Southern Board shall be a member of the Incumbent Board. (r) "Month of Service" shall mean any calendar month during which Mr. Dahlberg has worked at least one (1) hour or was on approved leave of absence while in the employ of the Company or any affiliate or subsidiary of Southern. (s) "Pension Plan" shall mean The Southern Company Pension Plan, as such plan may be amended from time to time. (t) "Performance Dividend Plan" shall mean the Southern Company Performance Dividend Plan or any replacement thereto, as such plans may be amended from time to time. (u) "Performance Stock Plan" shall mean the Southern Company Performance Stock Plan or any replacement thereto, as such plans may be amended from time to time. (v) "Person" shall mean any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of Act. (w) "Performance Pay Plan" or "PPP Plan" shall mean the Southern Company Performance Pay Plan or any replacement thereto, as such plans may be amended from time to time. (x) "Productivity Improvement Plan" or "PIP Plan" shall mean the Southern Company Productivity Improvement Plan or replacement thereto, as such plans may be amended from time to time. (y) "Southern" shall mean The Southern Company, its successors and assigns. (z) "Southern Board" shall mean the board of directors of Southern. (aa) "Southern Subsidiary" shall mean any corporation or other entity Controlled by Southern. (bb) "Termination for Cause" or "Cause" shall mean the termination of Mr. Dahlberg's employment by the Company upon the occurrence of any of the following: (i) The willful and continued failure by Mr. Dahlberg substantially to perform his duties with the Company (other than any such failure resulting from Mr. Dahlberg's Total Disability or from Mr. Dahlberg's retirement or any such actual or anticipated failure resulting from termination by Mr. Dahlberg for Good Reason) after a written demand for substantial performance is delivered to him by the Southern Board, which demand specifically identifies the manner in which the Southern Board believes that he has not substantially performed his duties; or (ii) The willful engaging by Mr. Dahlberg in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise, including, but not limited to any of the following: (A) any willful act involving fraud or dishonesty in the course of Mr. Dahlberg's employment by the Company; (B) the willful carrying out of any activity or the making of any statement which would materially prejudice or impair the good name and standing of the Company, Southern or any Southern Subsidiary or would bring the Company, Southern or any Southern Subsidiary into contempt, ridicule or would reasonably shock or offend any community in which the Company, Southern or such Southern Subsidiary is located; (C) attendance at work in a state of intoxication or otherwise being found in possession at his workplace of any prohibited drug or substance, possession of which would amount to a criminal offense; (D) violation of the Company's policies on drug and alcohol usage, fitness for duty requirements or similar policies as may exist from time to time as adopted by the Company's safety officer; (E) assault or other act of violence against any person during the course of employment; or (F) indictment of any felony or any misdemeanor involving moral turpitude.
No act or failure to act by Mr. Dahlberg shall be deemed "willful" unless done, or omitted to be done, by Mr. Dahlberg not in good faith and without reasonable belief that his action or omission was in the best interest of the Company. Notwithstanding the foregoing, Mr. Dahlberg shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to him a copy of a resolution duly adopted by the affirmative vote of not less than three quarters of the entire membership of the Southern Board at a meeting of the Southern Board called and held for such purpose (after reasonable notice to Mr. Dahlberg and an opportunity for him, together with counsel, to be heard before the Southern Board), finding that, in the good faith opinion of the Southern Board, Mr. Dahlberg was guilty of conduct set forth above in clause (i) or (ii) of this Paragraph 1.(bb) and specifying the particulars thereof in detail. (cc) "Termination Date" shall mean the date on which Mr. Dahlberg's employment with the Company is terminated; provided, however, that solely for purposes of Paragraph 2.(b) hereof, the Termination Date shall be the effective date of his retirement pursuant to the terms of the Pension Plan. (dd) "Total Disability" shall mean Mr. Dahlberg's total disability within the meaning of the Pension Plan. (ee) "Voting Securities" shall mean the outstanding voting securities of a corporation entitling the holder thereof to vote generally in the election of such corporation's directors. (ff) "Waiver and Release" shall mean the Waiver and Release attached hereto as Exhibit B. (gg) "Year of Service" shall mean Mr. Dahlberg's Months of Service divided by twelve (12) rounded to the nearest whole year, rounding up if the remaining number of months is seven (7) or greater and rounding down if the remaining number of months is less than seven (7). If Mr. Dahlberg has a break in his service with the Company, he will receive credit under this Agreement for service prior to the break in service only if the break in service is less than five years. 2. Severance Benefits. (a) Eligibility. Except as otherwise provided in this Paragraph 2.(a), if Mr. Dahlberg's employment is involuntarily terminated by the Company at any time during the two year period following a Change in Control for reasons other than Cause, or if Mr. Dahlberg voluntarily terminates his employment with the Company for Good Reason at any time during the two year period following a Change in Control, Mr. Dahlberg shall be entitled to receive the benefits described in this Agreement upon the Company's receipt of an effective Waiver and Release. Notwithstanding anything to the contrary herein, Mr. Dahlberg shall not be eligible to receive benefits under this Agreement if Mr. Dahlberg: (i) voluntarily terminates his employment with the Company for other than Good Reason; (ii) has his employment terminated by the Company for Cause; (iii) accepts the transfer of his employment to any Southern Subsidiary or any employer that succeeds to all or substantially all of the assets of Southern or any Southern Subsidiary; (iv) refuses an offer of continued employment with the Company, any Southern Subsidiary, or any employer that succeeds to all or substantially all of the assets of the Company, or any Southern Subsidiary under circumstances where such refusal would not amount to Good Reason for voluntary termination of employment; or (v) elects to receive the benefits of any other voluntary or involuntary severance or separation program maintained by the Company; provided however, that the receipt of benefits under the terms of any retention plan or agreement shall not be deemed to be the receipt of severance or separation benefits for purposes of this Agreement. (b) Severance Benefits. If Mr. Dahlberg meets the eligibility requirements of Paragraph 2.(a) hereof, he shall be entitled to a cash severance benefit in an amount equal to three times his Annual Compensation (the "Severance Amount"). If any portion of the Severance Amount constitutes an "excess parachute payment" (as such term is defined under Code Section 280G ("Excess Parachute Payment")), the Company shall pay to Mr. Dahlberg an additional amount calculated by determining the amount of tax under Code Section 4999 that he otherwise would have paid on any Excess Parachute Payment with respect to the Change in Control and dividing
such amount by a decimal determined by adding the tax rate under Code Section 4999 ("Excise Tax"), the hospital insurance tax under Code Section 3101(b) ("HI Tax") and federal and state income tax measured at the highest marginal rates ("Income Tax") and subtracting such result from the number one (1) (the "280G Grossup"); provided, however, that no 280G Gross-up shall be paid unless the Severance Amount plus all other "parachute payments" to Mr. Dahlberg under Code Section 280G exceeds three (3) times Mr. Dahlberg's "base amount" (as such term is defined under Code Section 280G ("Base Amount")) by ten percent (10%) or more; provided further, that if no 280G Gross-up is paid, the Severance Amount shall be capped at three (3) times Mr. Dahlberg's Base Amount, less all other "parachute payments" (as such term is defined under Code Section 280G) received by Mr. Dahlberg, less one dollar (the "Capped Amount"), if the Capped Amount, reduced by HI Tax and Income Tax, exceeds what otherwise would have been the Severance Amount, reduced by HI Tax, Income Tax and Excise Tax. For purposes of this Paragraph 2.(b), whether any amount would constitute an Excess Parachute Payment and any other calculations of tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts, e.g., Base Amount, Capped Amount, etc., shall be determined by the tax department of the independent public accounting firm then responsible for preparing Southern's consolidated federal income tax return, and such calculations or determinations shall be binding upon the parties hereto. (c) Welfare Benefits. If Mr. Dahlberg meets the eligibility requirements of Paragraph 2.(a) hereof and is not otherwise eligible to receive retiree medical and life insurance benefits provided to certain retirees pursuant to the terms of the Pension Plan, the Group Health Plan and the Group Life Insurance Plan, he shall be entitled to the benefits set forth in this Paragraph 2.(c). (i) Mr. Dahlberg shall be eligible to participate in the Company's Group Health Plan, upon payment of both the Company's and his monthly premium under such plan, for a period of six (6) months for each of Mr. Dahlberg's Years of Service, not to exceed five (5) years. If Mr. Dahlberg elects to receive this extended medical coverage, he shall also be entitled to elect coverage under the Group Health Plan for his dependents who were participating in the Group Health Plan on Mr. Dahlberg's Termination Date (and for such other dependents as may be entitled to coverage under the provisions of the Health Insurance Portability and Accountability Act of 1996) for the duration of Mr. Dahlberg's extended medical coverage under this Paragraph 2.(c)(i) to the extent such dependents remain eligible for dependent coverage under the terms of the Group Health Plan. (A) The extended medical coverage afforded to Mr. Dahlberg pursuant to Paragraph 2.(c)(i), as well as the premiums to be paid by Mr. Dahlberg in connection with such coverage shall be determined in accordance with the terms of the Group Health Plan and shall be subject to any changes in the terms and conditions of the Group Health Plan as well as any future increases in premiums under the Group Health Plan. The premiums to be paid by Mr. Dahlberg in connection with this extended coverage shall be due on the first day of each month; provided, however, that if he fails to pay his premium within thirty (30) days of its due date, such extended coverage shall be terminated. (B) Any Group Health Plan coverage provided under Paragraph 2.(c)(i) shall be a part of and not in addition to any COBRA Coverage which Mr. Dahlberg or his dependents may elect. In the event that Mr. Dahlberg or his dependents become eligible to be covered, by virtue of re-employment or otherwise, by any employersponsored group health plan or is eligible for coverage under any government-sponsored health plan during the above period, coverage under the Company's Group Health Plan available to Mr. Dahlberg or his dependents by virtue of the provisions of Paragraph 2.(c)(i) shall terminate, except as may otherwise be required by law, and shall not be renewed. (ii) Mr. Dahlberg shall be entitled to receive cash in an amount equal to the Company's and Mr. Dahlberg's cost of premiums for three (3) years of coverage under the Group Health Plan and Group Life Insurance Plan in accordance with the terms of such plans as of the date of the Change in Control. (d) Incentive Plans. If Mr. Dahlberg meets the eligibility requirements of Paragraph 2.(a) hereof he shall be entitled to the following benefits under the Company's incentive plans: (i) Stock Option Plan. (A) Any of Mr. Dahlberg's Options and Stock Appreciation Rights under the Performance Stock Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(i) by reference) which are outstanding as of the Termination Date and which are not then exercisable and vested, shall become fully exercisable and vested to the full extent of the original grant; provided, that in the case of a Stock Appreciation Right, if Mr. Dahlberg is subject
to Section 16(b) of the Exchange Act, such Stock Appreciation Right shall not become fully vested and exercisable at such time if such actions would result in liability to Mr. Dahlberg under Section 16(b) of the Exchange Act, provided further, that any such actions not taken as a result of the rules under Section 16(b) of the Exchange Act shall be effected as of the first date that such activity would no longer result in liability under Section 16(b) of the Exchange Act. (B) The restrictions and deferral limitations applicable to any of Mr. Dahlberg's Restricted Stock as of the Termination Date shall lapse, and such Restricted Stock shall become free of all restrictions and limitations and become fully vested and transferable to the full extent of the original grant. (C) The restrictions and deferral limitations and other conditions applicable to any other Awards held by Mr. Dahlberg under the Stock Performance Plan as of the Termination Date shall lapse, and such other Awards shall become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent of the original grant. (ii) Performance Pay Plan. Provided Mr. Dahlberg is not entitled to benefits under Article V of the PPP Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(ii) by reference), if the PPP Plan is in place through Mr. Dahlberg's Termination Date and to the extent Mr. Dahlberg is entitled to participate therein, Mr. Dahlberg shall be entitled to receive cash in an amount equal to a prorated payout of his Incentive Pay Awards under the PPP Plan for the Performance Period in which the Termination Date shall have occurred, at target performance under the PPP Plan and prorated by the number of months which have passed since the beginning of the Performance Period until the Termination Date. (iii) PIP Plan. Provided Mr. Dahlberg is not entitled to benefits under Article IV of the PIP Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(iii) by reference), if the PIP Plan is in place through Mr. Dahlberg's Termination Date and to the extent Mr. Dahlberg is entitled to participate therein, Mr. Dahlberg shall be entitled to receive cash in an amount equal to his Award Opportunity for the Computation Periods in which the Termination Date shall have occurred at a target Value of Performance Unit of $1.00, prorated for each Performance Period by the number of months which have passed since the beginning of each of the Computation Periods until the Termination Date. (iv) Performance Dividend Plan. Provided Mr. Dahlberg is not entitled to benefits under the Performance Dividend Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(iv) by reference), if the Performance Dividend Plan is in place through Mr. Dahlberg's Termination Date and to the extent Mr. Dahlberg is entitled to participate therein, Mr. Dahlberg shall be entitled to receive cash for each Award held by Mr. Dahlberg on his Termination Date, based on actual performance under Section 4.1 of the Performance Dividend Plan determined as of the most recently completed calendar quarter of the Performance Period in which the Termination Date shall have occurred, and the Annual Dividend declared prior to the Termination Date. (v) Other Short Term Incentive Plans. The provisions of this Paragraph 2.(d)(v) shall apply if and to the extent that Mr. Dahlberg is a participant in any other "short term compensation plan" not otherwise previously referred to in this Paragraph 2.(d). Provided Mr. Dahlberg is not otherwise entitled to a plan payout under any change of control provisions of such plans, if the "short term compensation plan" is in place as of the Termination Date and to the extent Mr. Dahlberg is entitled to participate therein, Mr. Dahlberg shall receive cash in an amount equal to his award under the Company's "short term incentive plan" for the annual performance period in which the Termination Date shall have occurred, at Mr. Dahlberg's target performance level and prorated by the number of months which have passed since the beginning of the annual performance period until his Termination Date. For purposes of this Paragraph 2.(d)(v) the term "short term incentive compensation plan" shall mean any incentive compensation plan or arrangement adopted in writing by the Company which provides for annual, recurring compensatory bonuses based upon articulated performance criteria. (e) Payment of Benefits. Any amounts due under this Agreement shall be paid in one (1) lump sum payment as soon as administratively practicable following the later of: (i) Mr. Dahlberg's Termination Date, or (ii) upon Mr. Dahlberg's tender of an effective Waiver and Release to the Company in the form of Exhibit B attached hereto and the expiration of any applicable revocation period for such waiver. In the event of a dispute with respect to liability or amount of any benefit due hereunder, an effective Waiver and Release shall be tendered at the time of final resolution of any such dispute when payment is tendered by the Company. (f) Benefits in the Event of Death. In the event of Mr. Dahlberg's death prior to the payment of all amounts due
under this Agreement, Mr. Dahlberg's estate shall be entitled to receive as due any amounts not yet paid under this Agreement upon the tender by the executor or administrator of the estate of an effective Waiver and Release. (g) Legal Fees. In the event of a dispute between Mr. Dahlberg and the Company with regard to any amounts due hereunder, if any material issue in such dispute is finally resolved in Mr. Dahlberg's favor, the Company shall reimburse Mr. Dahlberg's legal fees incurred with respect to all issues in such dispute in an amount not to exceed fifty thousand dollars ($50,000). (h) Employee Outplacement Services. Mr. Dahlberg shall be eligible to participate in the Employee Outplacement Program, which program shall not be less than six (6) months duration measured from Mr. Dahlberg's Termination Date. (i) Non-qualified Retirement and Deferred Compensation Plans. The Parties agree that subsequent to a Change in Control, any claims by Mr. Dahlberg for benefits under any of the Company's non-qualified retirement or deferred compensation plans shall be resolved through binding arbitration in accordance with the provisions and procedures set forth in Paragraph 5 hereof and if any material issue in such dispute is finally resolved in Mr. Dalhberg's favor, the Company shall reimburse Mr. Dahlberg's legal fees in the manner provided in Paragraph 2.(g) hereof. 3. Transfer of Employment. In the event that Mr. Dahlberg's employment by the Company is terminated during the two year period following a Change in Control and Mr. Dahlberg accepts employment by Southern, a Southern Subsidiary, or any employer that succeeds to all or substantially all of the assets of the Company, Southern or any Southern Subsidiary, the Company shall assign this Agreement to Southern, such Southern Subsidiary, or successor employer, Southern shall accept such assignment or cause such Southern Subsidiary or successor employer to accept such assignment, and such assignee shall become the "Company" for all purposes hereunder. 4. No Mitigation. If Mr. Dahlberg is otherwise eligible to receive benefits under Paragraph 2 of this Agreement, he shall have no duty or obligation to seek other employment following his Termination Date and, except as otherwise provided in Paragraph 2.(a)(iii) hereof, the amounts due Mr. Dahlberg hereunder shall not be reduced or suspended if Mr. Dahlberg accepts such subsequent employment. 5. Arbitration. (a) Any dispute, controversy or claim arising out of or relating to the Company's obligations to pay severance benefits under this Agreement, or the breach thereof, shall be settled and resolved solely by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA") except as otherwise provided herein. The arbitration shall be the sole and exclusive forum for resolution of any such claim for severance benefits and the arbitrators' award shall be final and binding. The provisions of this Paragraph 5 are not intended to apply to any other disputes, claims or controversies arising out of or relating to Mr. Dahlberg's employment by the Company or the termination thereof. (b) Arbitration shall be initiated by serving a written notice of demand for arbitration to Mr. Dahlberg, in the case of the Company, or to the Southern Board, in the case of Mr. Dahlberg. (c) The arbitration shall be held in Atlanta, Georgia. The arbitrators shall apply the law of the State of Georgia, to the extent not preempted by federal law, excluding any law which would require the application of the law of another state. (d) The parties shall appoint arbitrators within fifteen (15) business days following service of the demand for arbitration. The number of arbitrators shall be three. One arbitrator shall be appointed by Mr. Dahlberg, one arbitrator shall be appointed by the Company, and the two arbitrators shall appoint a third. If the arbitrators cannot agree on a third arbitrator within thirty (30) business days after the service of demand for arbitration, the third arbitrator shall be selected by the AAA. (e) The arbitration filing fee shall be paid by Mr. Dahlberg. All other costs of arbitration shall be borne equally by Mr. Dahlberg and the Company, provided, however, that the Company shall reimburse such fees and costs in the event any material issue in such dispute is finally resolved in Mr. Dahlberg's favor and Mr. Dahlberg is reimbursed legal fees under Paragraph 2.(g) hereof. (f) The parties agree that they will faithfully observe the rules that govern any arbitration between them, they will
abide by and perform any award rendered by the arbitrators in any such arbitration, including any award of injunctive relief, and a judgment of a court having jurisdiction may be entered upon an award. (g) The parties agree that nothing in this Paragraph 5 is intended to preclude upon application of either party any court having jurisdiction from issuing and enforcing in any lawful manner such temporary restraining orders, preliminary injunctions, and other interim measures of relief as may be necessary to prevent harm to a party's interests or as otherwise may be appropriate pending the conclusion of arbitration proceedings pursuant to this Agreement; regardless of whether an arbitration proceeding under this Paragraph 5 has begun. The parties further agree that nothing herein shall prevent any court from entering and enforcing in any lawful manner such judgments for permanent equitable relief as may be necessary to prevent harm to a party's interests or as otherwise may be appropriate following the issuance of arbitral awards pursuant to this Paragraph 5. 6. Miscellaneous. (a) Funding of Benefits. Unless the Board in its discretion shall determine otherwise, the benefits payable to Mr. Dahlberg under this Agreement shall not be funded in any manner and shall be paid by the Company out of its general assets, which assets are subject to the claims of the Company's creditors. (b) Withholding. There shall be deducted from the payment of any benefit due under this Agreement 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 Mr. Dahlberg. (c) Assignment. Mr. Dahlberg shall have no rights to sell, assign, transfer, encumber, or otherwise convey the right to receive the payment of any benefit due hereunder, which payment and the rights thereto are expressly declared to be nonassignable and nontransferable. Any attempt to do so shall be null and void and of no effect. (d) Amendment and Termination. The Agreement may be amended or terminated only by a writing executed by the parties. (e) Construction. This Agreement shall be construed in accordance with and governed by the laws of the State of Georgia, to the extent not preempted by federal law, disregarding any provision of law which would require the application of the law of another state. (f) Pooling Accounting. Notwithstanding anything to the contrary herein, if, but for any provision of this Agreement, a Change in Control transaction would otherwise be accounted for as a pooling-of-interests under APB No.16 ("Pooling Accounting") (after giving effect to any and all other facts and circumstances affecting whether such Change in Control transaction would use Pooling Accounting), such provision or provisions of this Agreement which would otherwise cause the Change in Control transaction to be ineligible for Pooling Accounting shall be void and ineffective in such a manner and to the extent that by eliminating such provision or provisions of this Agreement, Pooling Accounting would be required for such Change in Control transaction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement this ____ day of __________________, 199__. THE SOUTHERN COMPANY By: ____________________________________ SOUTHERN COMPANY SERVICES, INC. By: ____________________________________ MR. DAHLBERG A.W. Dahlberg
IN WITNESS WHEREOF, the parties hereto have executed this Agreement this ____ day of __________________, 199__. THE SOUTHERN COMPANY By: ____________________________________ SOUTHERN COMPANY SERVICES, INC. By: ____________________________________ MR. DAHLBERG A.W. Dahlberg
Exhibit A CHANGE IN CONTROL AGREEMENT Target Annual Bonus for Mr. A. W. Dahlberg 65%
Exhibit B CHANGE IN CONTROL AGREEMENT Waiver and Release The attached Waiver and Release is to be given to Mr. A.W. Dahlberg upon the occurrence of an event that triggers eligibility for severance benefits under the Change in Control Agreement, as described in Paragraph 2(a) of such agreement.
CHANGE IN CONTROL AGREEMENT Waiver and Release I, A.W. Dahlberg, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Southern Company Services, Inc.(collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company,
Exhibit A CHANGE IN CONTROL AGREEMENT Target Annual Bonus for Mr. A. W. Dahlberg 65%
Exhibit B CHANGE IN CONTROL AGREEMENT Waiver and Release The attached Waiver and Release is to be given to Mr. A.W. Dahlberg upon the occurrence of an event that triggers eligibility for severance benefits under the Change in Control Agreement, as described in Paragraph 2(a) of such agreement.
CHANGE IN CONTROL AGREEMENT Waiver and Release I, A.W. Dahlberg, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Southern Company Services, Inc.(collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company
Exhibit B CHANGE IN CONTROL AGREEMENT Waiver and Release The attached Waiver and Release is to be given to Mr. A.W. Dahlberg upon the occurrence of an event that triggers eligibility for severance benefits under the Change in Control Agreement, as described in Paragraph 2(a) of such agreement.
CHANGE IN CONTROL AGREEMENT Waiver and Release I, A.W. Dahlberg, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Southern Company Services, Inc.(collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company and/or any of its direct or indirect subsidiaries; however, I understand and acknowledge that nothing herein is intended to or shall be construed to require the Company to institute or continue in effect any particular plan or benefit sponsored by the Company and the Company hereby reserves the right to amend or terminate any of its benefit programs at any time in accordance with the procedures set forth in such plans. In signing this Waiver, I realize that I am waiving and releasing, among other things, any claims to benefits under any and all bonus, severance, workforce reduction, early retirement, outplacement, or any other similar type plan sponsored by the Company. I have been encouraged and advised in writing to seek advice from anyone of my choosing regarding this Waiver, including my attorney, and my accountant or tax advisor. Prior to signing this Waiver, I have been given the opportunity and sufficient time to seek such advice, and I fully understand the meaning and contents of this
CHANGE IN CONTROL AGREEMENT Waiver and Release I, A.W. Dahlberg, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Southern Company Services, Inc.(collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company and/or any of its direct or indirect subsidiaries; however, I understand and acknowledge that nothing herein is intended to or shall be construed to require the Company to institute or continue in effect any particular plan or benefit sponsored by the Company and the Company hereby reserves the right to amend or terminate any of its benefit programs at any time in accordance with the procedures set forth in such plans. In signing this Waiver, I realize that I am waiving and releasing, among other things, any claims to benefits under any and all bonus, severance, workforce reduction, early retirement, outplacement, or any other similar type plan sponsored by the Company. I have been encouraged and advised in writing to seek advice from anyone of my choosing regarding this Waiver, including my attorney, and my accountant or tax advisor. Prior to signing this Waiver, I have been given the opportunity and sufficient time to seek such advice, and I fully understand the meaning and contents of this Waiver. I understand that I may take up to twenty-one (21) calendar days to consider whether or not I desire to enter this Waiver. I was not coerced, threatened or otherwise forced to sign this Waiver. I have made my choice to sign this Waiver voluntarily and of my own free will. I understand that I may revoke this Waiver at any time during the seven (7) calendar day period after I sign and deliver this Waiver to the Company. If I revoke this Waiver, I must do so in writing delivered to the Company. I understand that this Waiver is not effective until the expiration of this seven (7) calendar day revocation period. I understand that upon the expiration of such seven (7) calendar day revocation period this entire Waiver will be binding upon me and will be irrevocable.
I understand that by signing this Waiver I am giving up rights I may have. IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this ____ day of ____________________, in the year _____. A.W. Dahlberg Sworn to and subscribed to me this ____ day of ____________, _____. Notary Public My Commission Expires: (Notary Seal) Acknowledged and Accepted by the Company, as defined in the Waiver. By: Date:
EXHIBIT 10(a)86 CHANGE IN CONTROL AGREEMENT THIS CHANGE IN CONTROL AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Southern Company Services, Inc. (the "Company") and Mr. Paul J. DeNicola ("Mr. DeNicola"). W I T N E S S E T H: WHEREAS, Mr. DeNicola is the President and Chief Executive Officer of the Company; WHEREAS, the Company wishes to provide to Mr. DeNicola certain severance benefits under certain circumstances following a change in control (as defined herein) of Southern or the Company; NOW, THEREFORE, in consideration of the premises, and the agreements 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. Definitions. For purposes of this Agreement, the following terms shall have the following meanings: (a) "Annual Compensation" shall mean Mr. DeNicola's highest annual base salary rate for the twelve (12) month period immediately preceding the date of the Change in Control plus market level target annual bonus as set forth on Exhibit A hereof. (b) "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. (c) "Board" shall mean the board of directors of the Company. (d) "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern. (e) "Change in Control" shall mean any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Paragraph 1.(e)(i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control:
EXHIBIT 10(a)86 CHANGE IN CONTROL AGREEMENT THIS CHANGE IN CONTROL AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Southern Company Services, Inc. (the "Company") and Mr. Paul J. DeNicola ("Mr. DeNicola"). W I T N E S S E T H: WHEREAS, Mr. DeNicola is the President and Chief Executive Officer of the Company; WHEREAS, the Company wishes to provide to Mr. DeNicola certain severance benefits under certain circumstances following a change in control (as defined herein) of Southern or the Company; NOW, THEREFORE, in consideration of the premises, and the agreements 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. Definitions. For purposes of this Agreement, the following terms shall have the following meanings: (a) "Annual Compensation" shall mean Mr. DeNicola's highest annual base salary rate for the twelve (12) month period immediately preceding the date of the Change in Control plus market level target annual bonus as set forth on Exhibit A hereof. (b) "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. (c) "Board" shall mean the board of directors of the Company. (d) "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern. (e) "Change in Control" shall mean any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Paragraph 1.(e)(i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control: (A) any acquisition directly from Southern; (B) any acquisition by Southern; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary; (D) any acquisition by a qualified pension plan or publicly held mutual fund; (E) any acquisition by a Group composed exclusively of employees of Southern, or any Southern Subsidiary; (F) any acquisition by Mr. DeNicola or any Group of which Mr. DeNicola is a party; or (G) any Business Combination which would not otherwise constitute a change in control because of the application of clauses (A), (B) and (C) of Paragraph 1.(e)(iii); (ii) A change in the composition of the Southern Board whereby individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Southern Board; (iii) Consummation of a Business Combination, provided, however, that such a Business Combination shall not constitute a Change in Control if all three (3) of the following conditions are met:
(A) all or substantially all of the individuals and entities who held Beneficial Ownership, respectively, of Southern's Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, 65% or more of the combined voting power of the Voting Securities of the corporation surviving or resulting from such Business Combination, (including, without limitation, a corporation which as a result of such transaction holds Beneficial Ownership of all or substantially all of Southern's Voting Securities or all or substantially all of Southern's assets) (such surviving or resulting corporation to be referred to as "Surviving Company"), in substantially the same proportions as their ownership, immediately prior to such Business Combination, of Southern's Voting Securities; (B) no Person (excluding any corporation resulting from such Business Combination, any employee benefit plan (or related trust) of Southern, any Southern Subsidiary or Surviving Company, Mr. DeNicola, any Group of which Mr. DeNicola is a party, any Group composed exclusively of Company employees, any qualified pension plan (or related trust) or any publicly held mutual fund) holds Beneficial Ownership, directly or indirectly, of 20% or more of the combined voting power of the then outstanding Voting Securities of Surviving Company except to the extent that such ownership existed prior to the Business Combination; and (C) at least a majority of the members of the board of directors of Surviving Company were members of the Incumbent Board at the earlier of the date of execution of the initial agreement, or of the action of the Southern Board, providing for such Business Combination. (iv) The Consummation of an acquisition by any Person of Beneficial Ownership of 50% or more of the combined voting power of the then outstanding Voting Securities of the Company; provided, however, that for purposes of this Paragraph 1.(e)(iv), any acquisition by Mr. DeNicola, any Group composed exclusively of employees of the Company, any Group of which Mr. DeNicola is a party, any qualified pension plan (or related trust), any publicly held mutual fund, any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary shall not constitute a Change in Control; (v) Consummation of a reorganization, merger or consolidation of the Company (an "Employing Company Business Combination"), in each case, unless, following such Employing Company Business Combination, Southern Controls the corporation or other entity surviving or resulting from such Employing Company Business Combination; or (vi) Consummation of the sale or other disposition of all or substantially all of the assets of the Company to a corporation or other entity which Southern does not Control. (f) "COBRA Coverage" shall mean any continuation coverage to which Mr. DeNicola or his dependents may be entitled pursuant to Code Section 4980B. (g) "Code" shall mean the Internal Revenue Code of 1986, as amended. (h) "Company" shall mean Southern Company Services, Inc., its successors and assigns. (i) "Consummation" shall mean the completion of the final act necessary to complete a transaction as a matter of law, including, but not limited to, any required approvals by the corporation's shareholders and board of directors, the transfer of legal and beneficial title to securities or assets and the final approval of the transaction by any applicable domestic or foreign governments or governmental agencies. (j) "Control" shall mean, in the case of a corporation, Beneficial Ownership of more than 50% of the combined voting power of the corporation's Voting Securities, or in the case of any other entity, Beneficial Ownership of more than 50% of such entity's voting equity interests. (k) "Effective Date" shall mean the date of execution of this Agreement. (l) "Employee Outplacement Program" shall mean the program established by the Company from time to time for the purpose of assisting participants covered by the plan in finding employment outside of the Company which provides for the following services: (i) self-assessment, career decision and goal setting; (ii) job market research and job sources; (iii) networking and interviewing skills; (iv) planning and implementation strategy; (v) resume writing, job hunting methods and salary negotiation; and (vi) office support and job search resources. (m) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
(m) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. (n) "Good Reason" shall mean, without Mr. DeNicola's express written consent, after written notice to the Board, and after a thirty (30) day opportunity for the Board to cure, the continuing occurrence of any of the following events: (i) Inconsistent Duties. A meaningful and detrimental alteration in Mr. DeNicola's position or in the nature or status of his responsibilities from those in effect immediately prior to the Change in Control; (ii) Reduced Salary. A reduction of five percent (5%) or more by the Company in either of the following: (i) Mr. DeNicola's annual base salary rate as in effect immediately prior to the Change in Control (except for a less than ten percent (10%), across-the-board annual base salary rate reduction similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); or (ii) the sum of Mr. DeNicola's annual base salary rate plus target bonus under the PPP Plan (except for a less than ten percent (10%), across-the-board reduction of annual base salary rate plus target bonus under the PPP Plan similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); (iii) Pension and Compensation Plans. The failure by the Company to continue in effect any pension or compensation plan or agreement in which Mr. DeNicola participates or is a party as of the date of the Change in Control or the elimination of Mr. DeNicola's participation therein, (except for across-the-board plan changes or terminations similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); For purposes of this Paragraph 1.(n), a "pension plan or agreement" shall mean any written arrangement executed by an authorized officer of the Company which provides for payments upon retirement; and a "compensation plan or arrangement" shall mean any written arrangement executed by an authorized officer of the Company which provides for periodic, nondiscretionary compensatory payments in the nature of bonuses. (iv) Relocation. A change in Mr. DeNicola's work location to a location more than fifty (50) miles from the office where Mr. DeNicola is located at the time of the Change in Control, unless such new work location is within fifty (50) miles from Mr. DeNicola's principal place of residence at the time of the Change in Control. The acceptance, if any, by Mr. DeNicola of employment by the Company at a work location which is outside the fifty mile radius set forth in this Paragraph 1.(n)(iv) shall not be a waiver of Mr. DeNicola's right to refuse subsequent transfer by the Company to a location which is more than fifty (50) miles from Mr. DeNicola's principal place of residence at the time of the Change in Control, and such subsequent unconsented transfer shall be "Good Reason" under this Agreement; or (v) Benefits and Perquisites. The taking of any action by the Company which would directly or indirectly materially reduce the benefits enjoyed by Mr. DeNicola under the Company's retirement, life insurance, medical, health and accident, disability, deferred compensation or savings plans in which Mr. DeNicola was participating immediately prior to the Change in Control; or the failure by the Company to provide Mr. DeNicola with the number of paid vacation days to which Mr. DeNicola is entitled on the basis of years of service with the Company in accordance with the Company's normal vacation policy in effect immediately prior to the Change in Control (except for across-the-board plan or vacation policy changes or plan terminations similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company). (vi) For purposes of this Paragraph 1.(n), the term "Executive Employee" shall mean those employees of the Company of Grade Level 10 or above. (o) "Group" shall have the meaning set forth in Section 14(d) of the Exchange Act. (p) "Group Health Plan" shall mean the group health plan covering Mr. DeNicola, as such plan may be amended from time to time. (q) "Group Life Insurance Plan" shall mean the group life insurance program covering Mr. DeNicola, as such plan may be amended from time to time. (r) "Incumbent Board" shall mean those individuals who constitute the Southern Board as of the Effective Date plus any individual who shall become a director subsequent to such date whose election or nomination for election by Southern's shareholders was approved by a vote of at least 75% of the directors then comprising the Incumbent Board. Notwithstanding the foregoing, no individual who shall become a director of the Southern Board subsequent to the Effective Date whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Regulations promulgated under the
Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Southern Board shall be a member of the Incumbent Board. (s) "Month of Service" shall mean any calendar month during which Mr. DeNicola has worked at least one (1) hour or was on approved leave of absence while in the employ of the Company or any affiliate or subsidiary of Southern. (t) "Pension Plan" shall mean The Southern Company Pension Plan, as such plan may be amended from time to time. (u) "Performance Dividend Plan" shall mean the Southern Company Performance Dividend Plan or any replacement thereto, as such plans may be amended from time to time. (v) "Performance Stock Plan" shall mean the Southern Company Performance Stock Plan or any replacement thereto, as such plans may be amended from time to time. (w) "Person" shall mean any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of Act. (x) "Performance Pay Plan" or "PPP Plan" shall mean the Southern Company Performance Pay Plan or any replacement thereto, as such plans may be amended from time to time. (y) "Productivity Improvement Plan" or "PIP Plan" shall mean the Southern Company Productivity Improvement Plan or replacement thereto, as such plans may be amended from time to time. (z) "Southern" shall mean The Southern Company, its successors and assigns. (aa) "Southern Board" shall mean the board of directors of Southern. (bb) "Southern Subsidiary" shall mean any corporation or other entity Controlled by Southern. (cc) "Termination for Cause" or "Cause" shall mean the termination of Mr. DeNicola's employment by the Company upon the occurrence of any of the following: (i) The willful and continued failure by Mr. DeNicola substantially to perform his duties with the Company (other than any such failure resulting from Mr. DeNicola's Total Disability or from Mr. DeNicola's retirement or any such actual or anticipated failure resulting from termination by Mr. DeNicola for Good Reason) after a written demand for substantial performance is delivered to him by the Southern Board, which demand specifically identifies the manner in which the Southern Board believes that he has not substantially performed his duties; or (ii) The willful engaging by Mr. DeNicola in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise, including, but not limited to any of the following: (A) any willful act involving fraud or dishonesty in the course of Mr. DeNicola's employment by the Company; (B) the willful carrying out of any activity or the making of any statement which would materially prejudice or impair the good name and standing of the Company, Southern or any Southern Subsidiary or would bring the Company, Southern or any Southern Subsidiary into contempt, ridicule or would reasonably shock or offend any community in which the Company, Southern or such Southern Subsidiary is located; (C) attendance at work in a state of intoxication or otherwise being found in possession at his workplace of any prohibited drug or substance, possession of which would amount to a criminal offense; (D) violation of the Company's policies on drug and alcohol usage, fitness for duty requirements or similar policies as may exist from time to time as adopted by the Company's safety officer; (E) assault or other act of violence against any person during the course of employment; or (F) indictment of any felony or any misdemeanor involving moral turpitude. No act or failure to act by Mr. DeNicola shall be deemed "willful" unless done, or omitted to be done, by Mr. DeNicola not in good faith and without reasonable belief that his action or omission was in the best interest of the
Company. Notwithstanding the foregoing, Mr. DeNicola shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to him a copy of a resolution duly adopted by the affirmative vote of not less than three quarters of the entire membership of the Southern Board at a meeting of the Southern Board called and held for such purpose (after reasonable notice to Mr. DeNicola and an opportunity for him, together with counsel, to be heard before the Southern Board), finding that, in the good faith opinion of the Southern Board, Mr. DeNicola was guilty of conduct set forth above in clause (i) or (ii) of this Paragraph 1.(cc) and specifying the particulars thereof in detail. (dd) "Termination Date" shall mean the date on which Mr. DeNicola's employment with the Company is terminated; provided, however, that solely for purposes of Paragraph 2.(c) hereof, the Termination Date shall be the effective date of his retirement pursuant to the terms of the Pension Plan. (ee) "Total Disability" shall mean Mr. DeNicola's total disability within the meaning of the Pension Plan. (ff) "Voting Securities" shall mean the outstanding voting securities of a corporation entitling the holder thereof to vote generally in the election of such corporation's directors. (gg) "Waiver and Release" shall mean the Waiver and Release attached hereto as Exhibit B. (hh) "Year of Service" shall mean Mr. DeNicola's Months of Service divided by twelve (12) rounded to the nearest whole year, rounding up if the remaining number of months is seven (7) or greater and rounding down if the remaining number of months is less than seven (7). If Mr. DeNicola has a break in his service with the Company, he will receive credit under this Agreement for service prior to the break in service only if the break in service is less than five years. 2. Severance Benefits. (a) Eligibility. Except as otherwise provided in this Paragraph 2.(a), if Mr. DeNicola's employment is involuntarily terminated by the Company at any time during the two year period following a Change in Control for reasons other than Cause, or if Mr. DeNicola voluntarily terminates his employment with the Company for Good Reason at any time during the two year period following a Change in Control, Mr. DeNicola shall be entitled to receive the benefits described in this Agreement upon the Company's receipt of an effective Waiver and Release. Notwithstanding anything to the contrary herein, Mr. DeNicola shall not be eligible to receive benefits under this Agreement if Mr. DeNicola: (i) voluntarily terminates his employment with the Company for other than Good Reason; (ii) has his employment terminated by the Company for Cause; (iii) accepts the transfer of his employment to Southern, any Southern Subsidiary or any employer that succeeds to all or substantially all of the assets of the Company, Southern or any Southern Subsidiary; (iv) refuses an offer of continued employment with the Company, any Southern Subsidiary, or any employer that succeeds to all or substantially all of the assets of the Company, Southern, or any Southern Subsidiary under circumstances where such refusal would not amount to Good Reason for voluntary termination of employment; or (v) elects to receive the benefits of any other voluntary or involuntary severance or separation program maintained by the Company; provided however, that the receipt of benefits under the terms of any retention plan or agreement shall not be deemed to be the receipt of severance or separation benefits for purposes of this Agreement. (b) Severance Benefits. If Mr. DeNicola meets the eligibility requirements of Paragraph 2.(a) hereof, he shall be entitled to a cash severance benefit in an amount equal to three times his Annual Compensation (the "Severance Amount"). If any portion of the Severance Amount constitutes an "excess parachute payment" (as such term is defined under Code Section 280G ("Excess Parachute Payment")), the Company shall pay to Mr. DeNicola an additional amount calculated by determining the amount of tax under Code Section 4999 that he otherwise would have paid on any Excess Parachute Payment with respect to the Change in Control and dividing such amount by a decimal determined by adding the tax rate under Code Section 4999 ("Excise Tax"), the hospital insurance tax under Code Section 3101(b) ("HI Tax") and federal and state income tax measured at the highest marginal rates ("Income Tax") and subtracting such result from the number one (1) (the "280G Gross-up"); provided, however, that no 280G Gross-up shall be paid unless the Severance Amount plus all other "parachute payments" to Mr. DeNicola under Code Section 280G exceeds three (3) times Mr. DeNicola's "base amount" (as such term is
defined under Code Section 280G ("Base Amount")) by ten percent (10%) or more; provided further, that if no 280G Gross-up is paid, the Severance Amount shall be capped at three (3) times Mr. DeNicola's Base Amount, less all other "parachute payments" (as such term is defined under Code Section 280G) received by Mr. DeNicola, less one dollar (the "Capped Amount"), if the Capped Amount, reduced by HI Tax and Income Tax, exceeds what otherwise would have been the Severance Amount, reduced by HI Tax, Income Tax and Excise Tax. For purposes of this Paragraph 2.(b), whether any amount would constitute an Excess Parachute Payment and any other calculations of tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts, e.g., Base Amount, Capped Amount, etc., shall be determined by the tax department of the independent public accounting firm then responsible for preparing Southern's consolidated federal income tax return, and such calculations or determinations shall be binding upon the parties hereto. (c) Welfare Benefits. If Mr. DeNicola meets the eligibility requirements of Paragraph 2.(a) hereof and is not otherwise eligible to receive retiree medical and life insurance benefits provided to certain retirees pursuant to the terms of the Pension Plan, the Group Health Plan and the Group Life Insurance Plan, he shall be entitled to the benefits set forth in this Paragraph 2.(c). (i) Mr. DeNicola shall be eligible to participate in the Company's Group Health Plan, upon payment of both the Company's and his monthly premium under such plan, for a period of six (6) months for each of Mr. DeNicola's Years of Service, not to exceed five (5) years. If Mr. DeNicola elects to receive this extended medical coverage, he shall also be entitled to elect coverage under the Group Health Plan for his dependents who were participating in the Group Health Plan on Mr. DeNicola's Termination Date (and for such other dependents as may be entitled to coverage under the provisions of the Health Insurance Portability and Accountability Act of 1996) for the duration of Mr. DeNicola's extended medical coverage under this Paragraph 2.(c)(i) to the extent such dependents remain eligible for dependent coverage under the terms of the Group Health Plan. (A) The extended medical coverage afforded to Mr. DeNicola pursuant to Paragraph 2.(c)(i), as well as the premiums to be paid by Mr. DeNicola in connection with such coverage shall be determined in accordance with the terms of the Group Health Plan and shall be subject to any changes in the terms and conditions of the Group Health Plan as well as any future increases in premiums under the Group Health Plan. The premiums to be paid by Mr. DeNicola in connection with this extended coverage shall be due on the first day of each month; provided, however, that if he fails to pay his premium within thirty (30) days of its due date, such extended coverage shall be terminated. (B) Any Group Health Plan coverage provided under Paragraph 2.(c)(i) shall be a part of and not in addition to any COBRA Coverage which Mr. DeNicola or his dependents may elect. In the event that Mr. DeNicola or his dependents become eligible to be covered, by virtue of re-employment or otherwise, by any employersponsored group health plan or is eligible for coverage under any government-sponsored health plan during the above period, coverage under the Company's Group Health Plan available to Mr. DeNicola or his dependents by virtue of the provisions of Paragraph 2.(c)(i) shall terminate, except as may otherwise be required by law, and shall not be renewed. (ii) Mr. DeNicola shall be entitled to receive cash in an amount equal to the Company's and Mr. DeNicola's cost of premiums for three (3) years of coverage under the Group Health Plan and Group Life Insurance Plan in accordance with the terms of such plans as of the date of the Change in Control. (d) Incentive Plans. If Mr. DeNicola meets the eligibility requirements of Paragraph 2.(a) hereof he shall be entitled to the following benefits under the Company's incentive plans: (i) Stock Option Plan. (A) Any of Mr. DeNicola's Options and Stock Appreciation Rights under the Performance Stock Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(i) by reference) which are outstanding as of the Termination Date and which are not then exercisable and vested, shall become fully exercisable and vested to the full extent of the original grant; provided, that in the case of a Stock Appreciation Right, if Mr. DeNicola is subject to Section 16(b) of the Exchange Act, such Stock Appreciation Right shall not become fully vested and exercisable at such time if such actions would result in liability to Mr. DeNicola under Section 16(b) of the Exchange Act, provided further, that any such actions not taken as a result of the rules under
Section 16(b) of the Exchange Act shall be effected as of the first date that such activity would no longer result in liability under Section 16(b) of the Exchange Act. (B) The restrictions and deferral limitations applicable to any of Mr. DeNicola's Restricted Stock as of the Termination Date shall lapse, and such Restricted Stock shall become free of all restrictions and limitations and become fully vested and transferable to the full extent of the original grant. (C) The restrictions and deferral limitations and other conditions applicable to any other Awards held by Mr. DeNicola under the Stock Performance Plan as of the Termination Date shall lapse, and such other Awards shall become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent of the original grant. (ii) Performance Pay Plan. Provided Mr. DeNicola is not entitled to benefits under Article V of the PPP Plan, (the defined terms of which are incorporated in this Paragraph 2.(d)(ii) by reference), if the PPP Plan is in place through Mr. DeNicola's Termination Date and to the extent Mr. DeNicola is entitled to participate therein, Mr. DeNicola shall be entitled to receive cash in an amount equal to a prorated payout of his Incentive Pay Awards under the PPP Plan for the Performance Period in which the Termination Date shall have occurred, at target performance under the PPP Plan and prorated by the number of months which have passed since the beginning of the Performance Period until the Termination Date. (iii) PIP Plan. Provided Mr. DeNicola is not entitled to benefits under Article IV of the PIP Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(iii) by reference), if the PIP Plan is in place through Mr. DeNicola's Termination Date and to the extent Mr. DeNicola is entitled to participate therein, Mr. DeNicola shall be entitled to receive cash in an amount equal to his Award Opportunity for the Computation Periods in which the Termination Date shall have occurred at a target Value of Performance Unit of $1.00, prorated for each Computation Period by the number of months which have passed since the beginning of the Computation Periods until the Termination Date. (iv) Performance Dividend Plan. Provided Mr. DeNicola is not entitled to benefits under the Performance Dividend Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(iv) by reference), if the Performance Dividend Plan is in place through Mr. DeNicola's Termination Date and to the extent Mr. DeNicola is entitled to participate therein, Mr. DeNicola shall be entitled to receive cash for each Award held by Mr. DeNicola on his Termination Date, based on actual performance under Section 4.1 of the Performance Dividend Plan determined as of the most recently completed calendar quarter of the Performance Period in which the Termination Date shall have occurred, and the Annual Dividend declared prior to the Termination Date. (v) Other Short Term Incentive Plans. The provisions of this Paragraph 2.(d)(v) shall apply if and to the extent that Mr. DeNicola is a participant in any other "short term compensation plan" not otherwise previously referred to in this Paragraph 2.(d). Provided Mr. DeNicola is not otherwise entitled to a plan payout under any change of control provisions of such plans, if the "short term compensation plan" is in place as of the Termination Date and to the extent Mr. DeNicola is entitled to participate therein, Mr. DeNicola shall receive cash in an amount equal to his award under the Company's "short term incentive plan" for the annual performance period in which the Termination Date shall have occurred, at Mr. DeNicola's target performance level and prorated by the number of months which have passed since the beginning of the annual performance period until his Termination Date. For purposes of this Paragraph 2.(d)(v) the term "short term incentive compensation plan" shall mean any incentive compensation plan or arrangement adopted in writing by the Company which provides for annual, recurring compensatory bonuses based upon articulated performance criteria. (e) Payment of Benefits. Any amounts due under this Agreement shall be paid in one (1) lump sum payment as soon as administratively practicable following the later of: (i) Mr. DeNicola's Termination Date, or (ii) upon Mr. DeNicola's tender of an effective Waiver and Release to the Company in the form of Exhibit B attached hereto and the expiration of any applicable revocation period for such waiver. In the event of a dispute with respect to liability or amount of any benefit due hereunder, an effective Waiver and Release shall be tendered at the time of final resolution of any such dispute when payment is tendered by the Company. (f) Benefits in the Event of Death. In the event of Mr. DeNicola's death prior to the payment of all amounts due under this Agreement, Mr. DeNicola's estate shall be entitled to receive as due any amounts not yet paid under this Agreement upon the tender by the executor or administrator of the estate of an effective Waiver and Release. (g) Legal Fees. In the event of a dispute between Mr. DeNicola and the Company with regard to any amounts
due hereunder, if any material issue in such dispute is finally resolved in Mr. DeNicola's favor, the Company shall reimburse Mr. DeNicola's legal fees incurred with respect to all issues in such dispute in an amount not to exceed fifty thousand dollars ($50,000). (h) Employee Outplacement Services. Mr. DeNicola shall be eligible to participate in the Employee Outplacement Program, which program shall not be less than six (6) months duration measured from Mr. DeNicola's Termination Date. (i) Non-qualified Retirement and Deferred Compensation Plans. The Parties agree that subsequent to a Change in Control, any claims by Mr. DeNicola for benefits under any of the Company's non-qualified retirement or deferred compensation plans shall be resolved through binding arbitration in accordance with the provisions and procedures set forth in Paragraph 5 hereof and if any material issue in such dispute is finally resolved in Mr. DeNicola's favor, the Company shall reimburse Mr. DeNicola's legal fees in the manner provided in Paragraph 2.(g) hereof. 3. Transfer of Employment. In the event that Mr. DeNicola's employment by the Company is terminated during the two year period following a Change in Control and Mr. DeNicola accepts employment by Southern, a Southern Subsidiary, or any employer that succeeds to all or substantially all of the assets of the Company, Southern or any Southern Subsidiary, the Company shall assign this Agreement to Southern, such Southern Subsidiary, or successor employer, Southern shall accept such assignment or cause such Southern Subsidiary or successor employer to accept such assignment, and such assignee shall become the "Company" for all purposes hereunder. 4. No Mitigation. If Mr. DeNicola is otherwise eligible to receive benefits under Paragraph 2 of this Agreement, he shall have no duty or obligation to seek other employment following his Termination Date and, except as otherwise provided in Paragraph 2.(a)(iii) hereof, the amounts due Mr. DeNicola hereunder shall not be reduced or suspended if Mr. DeNicola accepts such subsequent employment. 5. Arbitration. (a) Any dispute, controversy or claim arising out of or relating to the Company's obligations to pay severance benefits under this Agreement, or the breach thereof, shall be settled and resolved solely by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA") except as otherwise provided herein. The arbitration shall be the sole and exclusive forum for resolution of any such claim for severance benefits and the arbitrators' award shall be final and binding. The provisions of this Paragraph 5 are not intended to apply to any other disputes, claims or controversies arising out of or relating to Mr. DeNicola's employment by the Company or the termination thereof. (b) Arbitration shall be initiated by serving a written notice of demand for arbitration to Mr. DeNicola, in the case of the Company, or to the Southern Board, in the case of Mr. DeNicola. (c) The arbitration shall be held in Atlanta, Georgia. The arbitrators shall apply the law of the State of Georgia, to the extent not preempted by federal law, excluding any law which would require the application of the law of another state. (d) The parties shall appoint arbitrators within fifteen (15) business days following service of the demand for arbitration. The number of arbitrators shall be three. One arbitrator shall be appointed by Mr. DeNicola, one arbitrator shall be appointed by the Company, and the two arbitrators shall appoint a third. If the arbitrators cannot agree on a third arbitrator within thirty (30) business days after the service of demand for arbitration, the third arbitrator shall be selected by the AAA. (e) The arbitration filing fee shall be paid by Mr. DeNicola. All other costs of arbitration shall be borne equally by Mr. DeNicola and the Company, provided, however, that the Company shall reimburse such fees and costs in the event any material issue in such dispute is finally resolved in Mr. DeNicola's favor and Mr. DeNicola is reimbursed legal fees under Paragraph 2.(g) hereof. (f) The parties agree that they will faithfully observe the rules that govern any arbitration between them, they will abide by and perform any award rendered by the arbitrators in any such arbitration, including any award of injunctive relief, and a judgment of a court having jurisdiction may be entered upon an award. (g) The parties agree that nothing in this Paragraph 5 is intended to preclude upon application of either party any
court having jurisdiction from issuing and enforcing in any lawful manner such temporary restraining orders, preliminary injunctions, and other interim measures of relief as may be necessary to prevent harm to a party's interests or as otherwise may be appropriate pending the conclusion of arbitration proceedings pursuant to this Agreement; regardless of whether an arbitration proceeding under this Paragraph 5 has begun. The parties further agree that nothing herein shall prevent any court from entering and enforcing in any lawful manner such judgments for permanent equitable relief as may be necessary to prevent harm to a party's interests or as otherwise may be appropriate following the issuance of arbitral awards pursuant to this Paragraph 5. 6. Miscellaneous. (a) Funding of Benefits. Unless the Board in its discretion shall determine otherwise, the benefits payable to Mr. DeNicola under this Agreement shall not be funded in any manner and shall be paid by the Company out of its general assets, which assets are subject to the claims of the Company's creditors. (b) Withholding. There shall be deducted from the payment of any benefit due under this Agreement 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 Mr. DeNicola. (c) Assignment. Mr. DeNicola shall have no rights to sell, assign, transfer, encumber, or otherwise convey the right to receive the payment of any benefit due hereunder, which payment and the rights thereto are expressly declared to be nonassignable and nontransferable. Any attempt to do so shall be null and void and of no effect. (d) Amendment and Termination. The Agreement may be amended or terminated only by a writing executed by the parties. (e) Construction. This Agreement shall be construed in accordance with and governed by the laws of the State of Georgia, to the extent not preempted by federal law, disregarding any provision of law which would require the application of the law of another state. (f) Pooling Accounting. Notwithstanding anything to the contrary herein, if, but for any provision of this Agreement, a Change in Control transaction would otherwise be accounted for as a pooling-of-interests under APB No.16 ("Pooling Accounting") (after giving effect to any and all other facts and circumstances affecting whether such Change in Control transaction would use Pooling Accounting), such provision or provisions of this Agreement which would otherwise cause the Change in Control transaction to be ineligible for Pooling Accounting shall be void and ineffective in such a manner and to the extent that by eliminating such provision or provisions of this Agreement, Pooling Accounting would be required for such Change in Control transaction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement this ____ day of __________________, 199__. THE SOUTHERN COMPANY By: ____________________________________ SOUTHERN COMPANY SERVICES, INC. By: ____________________________________ MR. DENICOLA Paul J. DeNicola
Exhibit A CHANGE IN CONTROL AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Agreement this ____ day of __________________, 199__. THE SOUTHERN COMPANY By: ____________________________________ SOUTHERN COMPANY SERVICES, INC. By: ____________________________________ MR. DENICOLA Paul J. DeNicola
Exhibit A CHANGE IN CONTROL AGREEMENT Target Annual Bonus for Mr. Paul J. DeNicola 65%
Exhibit B CHANGE IN CONTROL AGREEMENT Waiver and Release The attached Waiver and Release is to be given to Mr. Paul J. DeNicola upon the occurrence of an event that triggers eligibility for severance benefits under the Change in Control Agreement, as described in Paragraph 2(a) of such agreement.
Exhibit A CHANGE IN CONTROL AGREEMENT Target Annual Bonus for Mr. Paul J. DeNicola 65%
Exhibit B CHANGE IN CONTROL AGREEMENT Waiver and Release The attached Waiver and Release is to be given to Mr. Paul J. DeNicola upon the occurrence of an event that triggers eligibility for severance benefits under the Change in Control Agreement, as described in Paragraph 2(a) of such agreement.
Exhibit B CHANGE IN CONTROL AGREEMENT Waiver and Release The attached Waiver and Release is to be given to Mr. Paul J. DeNicola upon the occurrence of an event that triggers eligibility for severance benefits under the Change in Control Agreement, as described in Paragraph 2(a) of such agreement.
CHANGE IN CONTROL AGREEMENT Waiver and Release I, Paul J. DeNicola, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Southern Company Services, Inc.(collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company and/or any of its direct or indirect subsidiaries; however, I understand and acknowledge that nothing herein is intended to or shall be construed to require the Company to institute or continue in effect any particular plan or benefit sponsored by the Company and the Company hereby reserves the right to amend or terminate any of its benefit programs at any time in accordance with the procedures set forth in such plans. In signing this Waiver, I realize that I am waiving and releasing, among other things, any claims to benefits under any and all bonus, severance, workforce reduction, early retirement, outplacement, or any other similar type plan sponsored by the Company. I have been encouraged and advised in writing to seek advice from anyone of my choosing regarding this Waiver, including my attorney, and my accountant or tax advisor. Prior to signing this Waiver, I have been given the opportunity and sufficient time to seek such advice, and I fully understand the meaning and contents of this
CHANGE IN CONTROL AGREEMENT Waiver and Release I, Paul J. DeNicola, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Southern Company Services, Inc.(collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company and/or any of its direct or indirect subsidiaries; however, I understand and acknowledge that nothing herein is intended to or shall be construed to require the Company to institute or continue in effect any particular plan or benefit sponsored by the Company and the Company hereby reserves the right to amend or terminate any of its benefit programs at any time in accordance with the procedures set forth in such plans. In signing this Waiver, I realize that I am waiving and releasing, among other things, any claims to benefits under any and all bonus, severance, workforce reduction, early retirement, outplacement, or any other similar type plan sponsored by the Company. I have been encouraged and advised in writing to seek advice from anyone of my choosing regarding this Waiver, including my attorney, and my accountant or tax advisor. Prior to signing this Waiver, I have been given the opportunity and sufficient time to seek such advice, and I fully understand the meaning and contents of this Waiver. I understand that I may take up to twenty-one (21) calendar days to consider whether or not I desire to enter this Waiver. I was not coerced, threatened or otherwise forced to sign this Waiver. I have made my choice to sign this Waiver voluntarily and of my own free will. I understand that I may revoke this Waiver at any time during the seven (7) calendar day period after I sign and deliver this Waiver to the Company. If I revoke this Waiver, I must do so in writing delivered to the Company. I understand that this Waiver is not effective until the expiration of this seven (7) calendar day revocation period. I understand that upon the expiration of such seven (7) calendar day revocation period this entire Waiver will be binding upon me and will be irrevocable.
I understand that by signing this Waiver I am giving up rights I may have. IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this ____ day of ____________________, in the year _____. Paul J. DeNicola Sworn to and subscribed to me this ____ day of ____________, _____. Notary Public My Commission Expires: (Notary Seal) Acknowledged and Accepted by the Company, as defined in the Waiver. By: Date:
EXHIBIT 10(a)87 CHANGE IN CONTROL AGREEMENT THIS CHANGE IN CONTROL AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Mississippi Power Company (the "Company") and Mr. Dwight H. Evans ("Mr. Evans"). W I T N E S S E T H: WHEREAS, Mr. Evans is the President and Chief Executive Officer of the Company; WHEREAS, the Company wishes to provide to Mr. Evans certain severance benefits under certain circumstances following a change in control (as defined herein) of Southern or the Company; NOW, THEREFORE, in consideration of the premises, and the agreements 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. Definitions. For purposes of this Agreement, the following terms shall have the following meanings: (a) "Annual Compensation" shall mean Mr. Evans's highest annual base salary rate for the twelve (12) month period immediately preceding the date of the Change in Control plus market level target annual bonus as set forth on Exhibit A hereof. (b) "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. (c) "Board" shall mean the board of directors of the Company. (d) "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern. (e) "Change in Control" shall mean any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Paragraph 1.(e)(i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control:
EXHIBIT 10(a)87 CHANGE IN CONTROL AGREEMENT THIS CHANGE IN CONTROL AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Mississippi Power Company (the "Company") and Mr. Dwight H. Evans ("Mr. Evans"). W I T N E S S E T H: WHEREAS, Mr. Evans is the President and Chief Executive Officer of the Company; WHEREAS, the Company wishes to provide to Mr. Evans certain severance benefits under certain circumstances following a change in control (as defined herein) of Southern or the Company; NOW, THEREFORE, in consideration of the premises, and the agreements 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. Definitions. For purposes of this Agreement, the following terms shall have the following meanings: (a) "Annual Compensation" shall mean Mr. Evans's highest annual base salary rate for the twelve (12) month period immediately preceding the date of the Change in Control plus market level target annual bonus as set forth on Exhibit A hereof. (b) "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. (c) "Board" shall mean the board of directors of the Company. (d) "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern. (e) "Change in Control" shall mean any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Paragraph 1.(e)(i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control: (A) any acquisition directly from Southern; (B) any acquisition by Southern; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary; (D) any acquisition by a qualified pension plan or publicly held mutual fund; (E) any acquisition by a Group composed exclusively of employees of Southern, or any Southern Subsidiary; (F) any acquisition by Mr. Evans or any Group of which Mr. Evans is a party; or (G) any Business Combination which would not otherwise constitute a change in control because of the application of clauses (A), (B) and (C) of Paragraph 1.(e)(iii); (ii) A change in the composition of the Southern Board whereby individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Southern Board; (iii) Consummation of a Business Combination, provided, however, that such a Business Combination shall not
constitute a Change in Control if all three (3) of the following conditions are met: (A) all or substantially all of the individuals and entities who held Beneficial Ownership, respectively, of Southern's Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, 65% or more of the combined voting power of the Voting Securities of the corporation surviving or resulting from such Business Combination, (including, without limitation, a corporation which as a result of such transaction holds Beneficial Ownership of all or substantially all of Southern's Voting Securities or all or substantially all of Southern's assets) (such surviving or resulting corporation to be referred to as "Surviving Company"), in substantially the same proportions as their ownership, immediately prior to such Business Combination, of Southern's Voting Securities; (B) no Person (excluding any corporation resulting from such Business Combination, any employee benefit plan (or related trust) of Southern, any Southern Subsidiary or Surviving Company, Mr. Evans, any Group of which Mr. Evans is a party, any Group composed exclusively of Company employees, any qualified pension plan (or related trust) or any publicly held mutual fund) holds Beneficial Ownership, directly or indirectly, of 20% or more of the combined voting power of the then outstanding Voting Securities of Surviving Company except to the extent that such ownership existed prior to the Business Combination; and (C) at least a majority of the members of the board of directors of Surviving Company were members of the Incumbent Board at the earlier of the date of execution of the initial agreement, or of the action of the Southern Board, providing for such Business Combination. (iv) The Consummation of an acquisition by any Person of Beneficial Ownership of 50% or more of the combined voting power of the then outstanding Voting Securities of the Company; provided, however, that for purposes of this Paragraph 1.(e)(iv), any acquisition by Mr. Evans, any Group composed exclusively of employees of the Company, any Group of which Mr. Evans is a party, any qualified pension plan (or related trust), any publicly held mutual fund, any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary shall not constitute a Change in Control; (v) Consummation of a reorganization, merger or consolidation of the Company (an "Employing Company Business Combination"), in each case, unless, following such Employing Company Business Combination, Southern Controls the corporation or other entity surviving or resulting from such Employing Company Business Combination; or (vi) Consummation of the sale or other disposition of all or substantially all of the assets of the Company to a corporation or other entity which Southern does not Control. (f) "COBRA Coverage" shall mean any continuation coverage to which Mr. Evans or his dependents may be entitled pursuant to Code Section 4980B. (g) "Code" shall mean the Internal Revenue Code of 1986, as amended. (h) "Company" shall mean Mississippi Power Company, its successors and assigns. (i) "Consummation" shall mean the completion of the final act necessary to complete a transaction as a matter of law, including, but not limited to, any required approvals by the corporation's shareholders and board of directors, the transfer of legal and beneficial title to securities or assets and the final approval of the transaction by any applicable domestic or foreign governments or governmental agencies. (j) "Control" shall mean, in the case of a corporation, Beneficial Ownership of more than 50% of the combined voting power of the corporation's Voting Securities, or in the case of any other entity, Beneficial Ownership of more than 50% of such entity's voting equity interests. (k) "Effective Date" shall mean the date of execution of this Agreement. (l) "Employee Outplacement Program" shall mean the program established by the Company from time to time for the purpose of assisting participants covered by the plan in finding employment outside of the Company which provides for the following services: (i) self-assessment, career decision and goal setting; (ii) job market research and job sources; (iii) networking and interviewing skills; (iv) planning and implementation strategy; (v) resume writing, job hunting methods and salary negotiation; and (vi) office support and job search resources.
(m) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. (n) "Good Reason" shall mean, without Mr. Evans's express written consent, after written notice to the Board, and after a thirty (30) day opportunity for the Board to cure, the continuing occurrence of any of the following events: (i) Inconsistent Duties. A meaningful and detrimental alteration in Mr. Evans's position or in the nature or status of his responsibilities from those in effect immediately prior to the Change in Control; (ii) Reduced Salary. A reduction of five percent (5%) or more by the Company in either of the following: (i) Mr. Evans's annual base salary rate as in effect immediately prior to the Change in Control (except for a less than ten percent (10%), across-the-board annual base salary rate reduction similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); or (ii) the sum of Mr. Evans's annual base salary rate plus target bonus under the PPP Plan (except for a less than ten percent (10%), across-the-board reduction of annual base salary rate plus target bonus under the PPP Plan similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); (iii) Pension and Compensation Plans. The failure by the Company to continue in effect any pension or compensation plan or agreement in which Mr. Evans participates or is a party as of the date of the Change in Control or the elimination of Mr. Evans' participation therein, (except for across-the-board plan changes or terminations similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); For purposes of this Paragraph 1.(n), a "pension plan or agreement" shall mean any written arrangement executed by an authorized officer of the Company which provides for payments upon retirement; and a "compensation plan or arrangement" shall mean any written arrangement executed by an authorized officer of the Company which provides for periodic, nondiscretionary compensatory payments in the nature of bonuses. (iv) Relocation. A change in Mr. Evans's work location to a location more than fifty (50) miles from the office where Mr. Evans is located at the time of the Change in Control, unless such new work location is within fifty (50) miles from Mr. Evans's principal place of residence at the time of the Change in Control. The acceptance, if any, by Mr. Evans of employment by the Company at a work location which is outside the fifty mile radius set forth in this Paragraph 1.(n)(iv) shall not be a waiver of Mr. Evans's right to refuse subsequent transfer by the Company to a location which is more than fifty (50) miles from Mr. Evans's principal place of residence at the time of the Change in Control, and such subsequent unconsented transfer shall be "Good Reason" under this Agreement; or (v) Benefits and Perquisites. The taking of any action by the Company which would directly or indirectly materially reduce the benefits enjoyed by Mr. Evans under the Company's retirement, life insurance, medical, health and accident, disability, deferred compensation or savings plans in which Mr. Evans was participating immediately prior to the Change in Control; or the failure by the Company to provide Mr. Evans with the number of paid vacation days to which Mr. Evans is entitled on the basis of years of service with the Company in accordance with the Company's normal vacation policy in effect immediately prior to the Change in Control (except for across-the-board plan or vacation policy changes or plan terminations similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company). (vi) For purposes of this Paragraph 1.(n), the term "Executive Employee" shall mean those employees of the Company of Grade Level 10 or above. (o) "Group" shall have the meaning set forth in Section 14(d) of the Exchange Act. (p) "Group Health Plan" shall mean the group health plan covering Mr. Evans, as such plan may be amended from time to time. (q) "Group Life Insurance Plan" shall mean the group life insurance program covering Mr. Evans, as such plan may be amended from time to time. (r) "Incumbent Board" shall mean those individuals who constitute the Southern Board as of the Effective Date plus any individual who shall become a director subsequent to such date whose election or nomination for election by Southern's shareholders was approved by a vote of at least 75% of the directors then comprising the Incumbent Board. Notwithstanding the foregoing, no individual who shall become a director of the Southern Board subsequent to the Effective Date whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Regulations promulgated under the
Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Southern Board shall be a member of the Incumbent Board. (s) "Month of Service" shall mean any calendar month during which Mr. Evans has worked at least one (1) hour or was on approved leave of absence while in the employ of the Company or any affiliate or subsidiary of Southern. (t) "Pension Plan" shall mean The Southern Company Pension Plan, as such plan may be amended from time to time. (u) "Performance Dividend Plan" shall mean the Southern Company Performance Dividend Plan or any replacement thereto, as such plans may be amended from time to time. (v) "Performance Stock Plan" shall mean the Southern Company Performance Stock Plan or any replacement thereto, as such plans may be amended from time to time. (w) "Person" shall mean any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of Act. (x) "Performance Pay Plan" or "PPP Plan" shall mean the Southern Company Performance Pay Plan or any replacement thereto, as such plans may be amended from time to time. (y) "Productivity Improvement Plan" or "PIP Plan" shall mean the Southern Company Productivity Improvement Plan or replacement thereto, as such plans may be amended from time to time. (z) "Southern" shall mean The Southern Company, its successors and assigns. (aa) "Southern Board" shall mean the board of directors of Southern. (bb) "Southern Subsidiary" shall mean any corporation or other entity Controlled by Southern. (cc) "Termination for Cause" or "Cause" shall mean the termination of Mr. Evans's employment by the Company upon the occurrence of any of the following: (i) The willful and continued failure by Mr. Evans substantially to perform his duties with the Company (other than any such failure resulting from Mr. Evans's Total Disability or from Mr. Evans's retirement or any such actual or anticipated failure resulting from termination by Mr. Evans for Good Reason) after a written demand for substantial performance is delivered to him by the Southern Board, which demand specifically identifies the manner in which the Southern Board believes that he has not substantially performed his duties; or (ii) The willful engaging by Mr. Evans in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise, including, but not limited to any of the following: (A) any willful act involving fraud or dishonesty in the course of Mr. Evans's employment by the Company; (B) the willful carrying out of any activity or the making of any statement which would materially prejudice or impair the good name and standing of the Company, Southern or any Southern Subsidiary or would bring the Company, Southern or any Southern Subsidiary into contempt, ridicule or would reasonably shock or offend any community in which the Company, Southern or such Southern Subsidiary is located; (C) attendance at work in a state of intoxication or otherwise being found in possession at his workplace of any prohibited drug or substance, possession of which would amount to a criminal offense; (D) violation of the Company's policies on drug and alcohol usage, fitness for duty requirements or similar policies as may exist from time to time as adopted by the Company's safety officer; (E) assault or other act of violence against any person during the course of employment; or (F) indictment of any felony or any misdemeanor involving moral turpitude.
No act or failure to act by Mr. Evans shall be deemed "willful" unless done, or omitted to be done, by Mr. Evans not in good faith and without reasonable belief that his action or omission was in the best interest of the Company. Notwithstanding the foregoing, Mr. Evans shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to him a copy of a resolution duly adopted by the affirmative vote of not less than three quarters of the entire membership of the Southern Board at a meeting of the Southern Board called and held for such purpose (after reasonable notice to Mr. Evans and an opportunity for him, together with counsel, to be heard before the Southern Board), finding that, in the good faith opinion of the Southern Board, Mr. Evans was guilty of conduct set forth above in clause (i) or (ii) of this Paragraph 1.(cc) and specifying the particulars thereof in detail. (dd) "Termination Date" shall mean the date on which Mr. Evans's employment with the Company is terminated; provided, however, that solely for purposes of Paragraph 2.(c) hereof, the Termination Date shall be the effective date of his retirement pursuant to the terms of the Pension Plan. (ee) "Total Disability" shall mean Mr. Evans's total disability within the meaning of the Pension Plan. (ff) "Voting Securities" shall mean the outstanding voting securities of a corporation entitling the holder thereof to vote generally in the election of such corporation's directors. (gg) "Waiver and Release" shall mean the Waiver and Release attached hereto as Exhibit B. (hh) "Year of Service" shall mean Mr. Evans's Months of Service divided by twelve (12) rounded to the nearest whole year, rounding up if the remaining number of months is seven (7) or greater and rounding down if the remaining number of months is less than seven (7). If Mr. Evans has a break in his service with the Company, he will receive credit under this Agreement for service prior to the break in service only if the break in service is less than five years. 2. Severance Benefits. (a) Eligibility. Except as otherwise provided in this Paragraph 2.(a), if Mr. Evans's employment is involuntarily terminated by the Company at any time during the two year period following a Change in Control for reasons other than Cause, or if Mr. Evans voluntarily terminates his employment with the Company for Good Reason at any time during the two year period following a Change in Control, Mr. Evans shall be entitled to receive the benefits described in this Agreement upon the Company's receipt of an effective Waiver and Release. Notwithstanding anything to the contrary herein, Mr. Evans shall not be eligible to receive benefits under this Agreement if Mr. Evans: (i) voluntarily terminates his employment with the Company for other than Good Reason; (ii) has his employment terminated by the Company for Cause; (iii) accepts the transfer of his employment to Southern, any Southern Subsidiary or any employer that succeeds to all or substantially all of the assets of the Company, Southern or any Southern Subsidiary; (iv) refuses an offer of continued employment with the Company, any Southern Subsidiary, or any employer that succeeds to all or substantially all of the assets of the Company, Southern, or any Southern Subsidiary under circumstances where such refusal would not amount to Good Reason for voluntary termination of employment; or (v) elects to receive the benefits of any other voluntary or involuntary severance or separation program maintained by the Company; provided however, that the receipt of benefits under the terms of any retention plan or agreement shall not be deemed to be the receipt of severance or separation benefits for purposes of this Agreement. (b) Severance Benefits. If Mr. Evans meets the eligibility requirements of Paragraph 2.(a) hereof, he shall be entitled to a cash severance benefit in an amount equal to three times his Annual Compensation (the "Severance Amount"). If any portion of the Severance Amount constitutes an "excess parachute payment" (as such term is defined under Code Section 280G ("Excess Parachute Payment")), the Company shall pay to Mr. Evans an additional amount calculated by determining the amount of tax under Code Section 4999 that he otherwise would have paid on any Excess Parachute Payment with respect to the Change in Control and dividing such amount by a decimal determined by adding the tax rate under Code Section 4999 ("Excise Tax"), the hospital insurance tax under Code Section 3101(b) ("HI Tax") and federal and state income tax measured at the highest marginal rates ("Income Tax") and subtracting such result from the number one (1) (the "280G Gross-up"); provided, however, that no 280G Gross-up shall be paid unless the Severance Amount plus all other "parachute payments" to Mr. Evans under Code Section 280G exceeds three
(3) times Mr. Evans's "base amount" (as such term is defined under Code Section 280G ("Base Amount")) by ten percent (10%) or more; provided further, that if no 280G Gross-up is paid, the Severance Amount shall be capped at three (3) times Mr. Evans's Base Amount, less all other "parachute payments" (as such term is defined under Code Section 280G) received by Mr. Evans, less one dollar (the "Capped Amount"), if the Capped Amount, reduced by HI Tax and Income Tax, exceeds what otherwise would have been the Severance Amount, reduced by HI Tax, Income Tax and Excise Tax. For purposes of this Paragraph 2.(b), whether any amount would constitute an Excess Parachute Payment and any other calculations of tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts e.g., Base Amount, Capped Amount, etc., shall be determined by the tax department of the independent public accounting firm then responsible for preparing Southern's consolidated federal income tax return, and such calculations or determinations shall be binding upon the parties hereto. (c) Welfare Benefits. If Mr. Evans meets the eligibility requirements of Paragraph 2.(a) hereof and is not otherwise eligible to receive retiree medical and life insurance benefits provided to certain retirees pursuant to the terms of the Pension Plan, the Group Health Plan and the Group Life Insurance Plan, he shall be entitled to the benefits set forth in this Paragraph 2.(c). (i) Mr. Evans shall be eligible to participate in the Company's Group Health Plan, upon payment of both the Company's and his monthly premium under such plan, for a period of six (6) months for each of Mr. Evans's Years of Service, not to exceed five (5) years. If Mr. Evans elects to receive this extended medical coverage, he shall also be entitled to elect coverage under the Group Health Plan for his dependents who were participating in the Group Health Plan on Mr. Evans's Termination Date (and for such other dependents as may be entitled to coverage under the provisions of the Health Insurance Portability and Accountability Act of 1996) for the duration of Mr. Evans's extended medical coverage under this Paragraph 2.(c)(i) to the extent such dependents remain eligible for dependent coverage under the terms of the Group Health Plan. (A) The extended medical coverage afforded to Mr. Evans pursuant to Paragraph 2.(c)(i), as well as the premiums to be paid by Mr. Evans in connection with such coverage shall be determined in accordance with the terms of the Group Health Plan and shall be subject to any changes in the terms and conditions of the Group Health Plan as well as any future increases in premiums under the Group Health Plan. The premiums to be paid by Mr. Evans in connection with this extended coverage shall be due on the first day of each month; provided, however, that if he fails to pay his premium within thirty (30) days of its due date, such extended coverage shall be terminated. (B) Any Group Health Plan coverage provided under Paragraph 2.(c)(i) shall be a part of and not in addition to any COBRA Coverage which Mr. Evans or his dependents may elect. In the event that Mr. Evans or his dependents become eligible to be covered, by virtue of re-employment or otherwise, by any employersponsored group health plan or is eligible for coverage under any government-sponsored health plan during the above period, coverage under the Company's Group Health Plan available to Mr. Evans or his dependents by virtue of the provisions of Paragraph 2.(c)(i) shall terminate, except as may otherwise be required by law, and shall not be renewed. (ii) Mr. Evans shall be entitled to receive cash in an amount equal to the Company's and Mr. Evans's cost of premiums for three (3) years of coverage under the Group Health Plan and Group Life Insurance Plan in accordance with the terms of such plans as of the date of the Change in Control. (d) Incentive Plans. If Mr. Evans meets the eligibility requirements of Paragraph 2.(a) hereof he shall be entitled to the following benefits under the Company's incentive plans: (i) Stock Option Plan. (A) Any of Mr. Evans's Options and Stock Appreciation Rights under the Performance Stock Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(i) by reference) which are outstanding as of the Termination Date and which are not then exercisable and vested, shall become fully exercisable and vested to the full extent of the original grant; provided, that in the case of a Stock Appreciation Right, if Mr. Evans is subject to Section 16(b) of the Exchange Act, such Stock Appreciation Right shall not become fully vested and exercisable at such time if such actions would result in liability to Mr. Evans under Section 16(b) of the Exchange Act, provided further, that any such actions not taken as a result of the rules under Section 16(b) of the Exchange Act shall be effected as of the first date that such activity would no longer result in liability under Section 16(b) of the
Exchange Act. (B) The restrictions and deferral limitations applicable to any of Mr. Evans' Restricted Stock as of the Termination Date shall lapse, and such Restricted Stock shall become free of all restrictions and limitations and become fully vested and transferable to the full extent of the original grant. (C) The restrictions and deferral limitations and other conditions applicable to any other Awards held by Mr. Evans under the Stock Performance Plan as of the Termination Date shall lapse, and such other Awards shall become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent of the original grant. (ii) Performance Pay Plan. Provided Mr. Evans is not entitled to benefits under Article V of the PPP Plan, (the defined terms of which are incorporated in this Paragraph 2.(d)(ii) by reference), if the PPP Plan is in place through Mr. Evans's Termination Date and to the extent Mr. Evans is entitled to participate therein, Mr. Evans shall be entitled to receive cash in an amount equal to a prorated payout of his Incentive Pay Awards under the PPP Plan for the Performance Period in which the Termination Date shall have occurred, at target performance under the PPP Plan and prorated by the number of months which have passed since the beginning of the Performance Period until the Termination Date. (iii) PIP Plan. Provided Mr. Evans is not entitled to benefits under Article IV of the PIP Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(iii) by reference), if the PIP Plan is in place through Mr. Evans's Termination Date and to the extent Mr. Evans is entitled to participate therein, Mr. Evans shall be entitled to receive cash in an amount equal to his Award Opportunity for the Computation Periods in which the Termination Date shall have occurred at a target Value of Performance Unit of $1.00, prorated for each Computation Period by the number of months which have passed since the beginning of the Computation Periods until the Termination Date. (iv) Performance Dividend Plan. Provided Mr. Evans is not entitled to benefits under the Performance Dividend Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(iv) by reference), if the Performance Dividend Plan is in place through Mr. Evans's Termination Date and to the extent Mr. Evans is entitled to participate therein, Mr. Evans shall be entitled to receive cash for each Award held by Mr. Evans on his Termination Date, based on actual performance under Section 4.1 of the Performance Dividend Plan determined as of the most recently completed calendar quarter of the Performance Period in which the Termination Date shall have occurred, and the Annual Dividend declared prior to the Termination Date. (v) Other Short Term Incentive Plans. The provisions of this Paragraph 2.(d)(v) shall apply if and to the extent that Mr. Evans is a participant in any other "short term compensation plan" not otherwise previously referred to in this Paragraph 2.(d). Provided Mr. Evans is not otherwise entitled to a plan payout under any change of control provisions of such plans, if the "short term compensation plan" is in place as of the Termination Date and to the extent Mr. Evans is entitled to participate therein, Mr. Evans shall receive cash in an amount equal to his award under the Company's "short term incentive plan" for the annual performance period in which the Termination Date shall have occurred, at Mr. Evans's target performance level and prorated by the number of months which have passed since the beginning of the annual performance period until his Termination Date. For purposes of this Paragraph 2.(d)(v) the term "short term incentive compensation plan" shall mean any incentive compensation plan or arrangement adopted in writing by the Company which provides for annual, recurring compensatory bonuses based upon articulated performance criteria. (e) Payment of Benefits. Any amounts due under this Agreement shall be paid in one (1) lump sum payment as soon as administratively practicable following the later of: (i) Mr. Evans's Termination Date, or (ii) upon Mr. Evans's tender of an effective Waiver and Release to the Company in the form of Exhibit B attached hereto and the expiration of any applicable revocation period for such waiver. In the event of a dispute with respect to liability or amount of any benefit due hereunder, an effective Waiver and Release shall be tendered at the time of final resolution of any such dispute when payment is tendered by the Company. (f) Benefits in the Event of Death. In the event of Mr. Evans's death prior to the payment of all amounts due under this Agreement, Mr. Evans's estate shall be entitled to receive as due any amounts not yet paid under this Agreement upon the tender by the executor or administrator of the estate of an effective Waiver and Release. (g) Legal Fees. In the event of a dispute between Mr. Evans and the Company with regard to any amounts due hereunder, if any material issue in such dispute is finally resolved in Mr. Evans's favor, the Company shall reimburse Mr. Evans's legal fees incurred with respect to all issues in such dispute in an amount not to exceed fifty thousand dollars ($50,000).
(h) Employee Outplacement Services. Mr. Evans shall be eligible to participate in the Employee Outplacement Program, which program shall not be less than six (6) months duration measured from Mr. Evans's Termination Date. (i) Non-qualified Retirement and Deferred Compensation Plans. The Parties agree that subsequent to a Change in Control, any claims by Mr. Evans for benefits under any of the Company's non-qualified retirement or deferred compensation plans shall be resolved through binding arbitration in accordance with the provisions and procedures set forth in Paragraph 5 hereof and if any material issue in such dispute is finally resolved in Mr. Evans' favor, the Company shall reimburse Mr. Evans' legal fees in the manner provided in Paragraph 2.(g) hereof. 3. Transfer of Employment. In the event that Mr. Evans's employment by the Company is terminated during the two year period following a Change in Control and Mr. Evans accepts employment by Southern, a Southern Subsidiary, or any employer that succeeds to all or substantially all of the assets of the Company, Southern or any Southern Subsidiary, the Company shall assign this Agreement to Southern, such Southern Subsidiary, or successor employer, Southern shall accept such assignment or cause such Southern Subsidiary or successor employer to accept such assignment, and such assignee shall become the "Company" for all purposes hereunder. 4. No Mitigation. If Mr. Evans is otherwise eligible to receive benefits under Paragraph 2 of this Agreement, he shall have no duty or obligation to seek other employment following his Termination Date and, except as otherwise provided in Paragraph 2.(a)(iii) hereof, the amounts due Mr. Evans hereunder shall not be reduced or suspended if Mr. Evans accepts such subsequent employment. 5. Arbitration. (a) Any dispute, controversy or claim arising out of or relating to the Company's obligations to pay severance benefits under this Agreement, or the breach thereof, shall be settled and resolved solely by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA") except as otherwise provided herein. The arbitration shall be the sole and exclusive forum for resolution of any such claim for severance benefits and the arbitrators' award shall be final and binding. The provisions of this Paragraph 5 are not intended to apply to any other disputes, claims or controversies arising out of or relating to Mr. Evans's employment by the Company or the termination thereof. (b) Arbitration shall be initiated by serving a written notice of demand for arbitration to Mr. Evans, in the case of the Company, or to the Southern Board, in the case of Mr. Evans. (c) The arbitration shall be held in Atlanta, Georgia. The arbitrators shall apply the law of the State of Georgia, to the extent not preempted by federal law, excluding any law which would require the application of the law of another state. (d) The parties shall appoint arbitrators within fifteen (15) business days following service of the demand for arbitration. The number of arbitrators shall be three. One arbitrator shall be appointed by Mr. Evans, one arbitrator shall be appointed by the Company, and the two arbitrators shall appoint a third. If the arbitrators cannot agree on a third arbitrator within thirty (30) business days after the service of demand for arbitration, the third arbitrator shall be selected by the AAA. (e) The arbitration filing fee shall be paid by Mr. Evans. All other costs of arbitration shall be borne equally by Mr. Evans and the Company, provided, however, that the Company shall reimburse such fees and costs in the event any material issue in such dispute is finally resolved in Mr. Evans's favor and Mr. Evans is reimbursed legal fees under Paragraph 2.(g) hereof. (f) The parties agree that they will faithfully observe the rules that govern any arbitration between them, they will abide by and perform any award rendered by the arbitrators in any such arbitration, including any award of injunctive relief, and a judgment of a court having jurisdiction may be entered upon an award. (g) The parties agree that nothing in this Paragraph 5 is intended to preclude upon application of either party any court having jurisdiction from issuing and enforcing in any lawful manner such temporary restraining orders, preliminary injunctions, and other interim measures of relief as may be necessary to prevent harm to a party's interests or as otherwise may be appropriate pending the conclusion of arbitration proceedings pursuant to this
Agreement regardless of whether an arbitration proceeding under this Paragraph 5 has begun. The parties further agree that nothing herein shall prevent any court from entering and enforcing in any lawful manner such judgments for permanent equitable relief as may be necessary to prevent harm to a party's interests or as otherwise may be appropriate following the issuance of arbitral awards pursuant to this Paragraph 5. 6. Miscellaneous. (a) Funding of Benefits. Unless the Board in its discretion shall determine otherwise the benefits payable to Mr. Evans under this Agreement shall not be funded in any manner and shall be paid by the Company out of its general assets, which assets are subject to the claims of the Company's creditors. (b) Withholding. There shall be deducted from the payment of any benefit due under this Agreement 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 Mr. Evans. (c) Assignment. Mr. Evans shall have no rights to sell, assign, transfer, encumber, or otherwise convey the right to receive the payment of any benefit due hereunder, which payment and the rights thereto are expressly declared to be nonassignable and nontransferable. Any attempt to do so shall be null and void and of no effect. (d) Amendment and Termination. The Agreement may be amended or terminated only by a writing executed by the parties. (e) Construction. This Agreement shall be construed in accordance with and governed by the laws of the State of Georgia, to the extent not preempted by federal law, disregarding any provision of law which would require the application of the law of another state. (f) Pooling Accounting. Notwithstanding anything to the contrary herein, if, but for any provision of this Agreement, a Change in Control transaction would otherwise be accounted for as a pooling-of-interests under APB No.16 ("Pooling Accounting") (after giving effect to any and all other facts and circumstances affecting whether such Change in Control transaction would use Pooling Accounting), such provision or provisions of this Agreement which would otherwise cause the Change in Control transaction to be ineligible for Pooling Accounting shall be void and ineffective in such a manner and to the extent that by eliminating such provision or provisions of this Agreement, Pooling Accounting would be required for such Change in Control transaction. IN WITNESS WHEREOF, the parties hereto have executed this Agreement this ____ day of __________________, 199__. THE SOUTHERN COMPANY By: ____________________________________ MISSISSIPPI POWER COMPANY By: ____________________________________ MR. EVANS Dwight H. Evans
Exhibit A CHANGE IN CONTROL AGREEMENT Target Annual Bonus for Mr. Dwight H. Evans
Exhibit A CHANGE IN CONTROL AGREEMENT Target Annual Bonus for Mr. Dwight H. Evans 50%
Exhibit B CHANGE IN CONTROL AGREEMENT Waiver and Release The attached Waiver and Release is to be given to Mr. Dwight H. Evans upon the occurrence of an event that triggers eligibility for severance benefits under the Change in Control Agreement, as described in Paragraph 2(a) of such agreement.
CHANGE IN CONTROL AGREEMENT Waiver and Release I, Dwight H. Evans, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Mississippi Power Company (collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company
Exhibit B CHANGE IN CONTROL AGREEMENT Waiver and Release The attached Waiver and Release is to be given to Mr. Dwight H. Evans upon the occurrence of an event that triggers eligibility for severance benefits under the Change in Control Agreement, as described in Paragraph 2(a) of such agreement.
CHANGE IN CONTROL AGREEMENT Waiver and Release I, Dwight H. Evans, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Mississippi Power Company (collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company and/or any of its direct or indirect subsidiaries; however, I understand and acknowledge that nothing herein is intended to or shall be construed to require the Company to institute or continue in effect any particular plan or benefit sponsored by the Company and the Company hereby reserves the right to amend or terminate any of its benefit programs at any time in accordance with the procedures set forth in such plans. In signing this Waiver, I realize that I am waiving and releasing, among other things, any claims to benefits under any and all bonus, severance, workforce reduction, early retirement, outplacement, or any other similar type plan sponsored by the Company. I have been encouraged and advised in writing to seek advice from anyone of my choosing regarding this Waiver, including my attorney, and my accountant or tax advisor. Prior to signing this Waiver, I have been given the opportunity and sufficient time to seek such advice, and I fully understand the meaning and contents of this
CHANGE IN CONTROL AGREEMENT Waiver and Release I, Dwight H. Evans, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Mississippi Power Company (collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company and/or any of its direct or indirect subsidiaries; however, I understand and acknowledge that nothing herein is intended to or shall be construed to require the Company to institute or continue in effect any particular plan or benefit sponsored by the Company and the Company hereby reserves the right to amend or terminate any of its benefit programs at any time in accordance with the procedures set forth in such plans. In signing this Waiver, I realize that I am waiving and releasing, among other things, any claims to benefits under any and all bonus, severance, workforce reduction, early retirement, outplacement, or any other similar type plan sponsored by the Company. I have been encouraged and advised in writing to seek advice from anyone of my choosing regarding this Waiver, including my attorney, and my accountant or tax advisor. Prior to signing this Waiver, I have been given the opportunity and sufficient time to seek such advice, and I fully understand the meaning and contents of this Waiver. I understand that I may take up to twenty-one (21) calendar days to consider whether or not I desire to enter this Waiver. I was not coerced, threatened or otherwise forced to sign this Waiver. I have made my choice to sign this Waiver voluntarily and of my own free will. I understand that I may revoke this Waiver at any time during the seven (7) calendar day period after I sign and deliver this Waiver to the Company. If I revoke this Waiver, I must do so in writing delivered to the Company. I understand that this Waiver is not effective until the expiration of this seven (7) calendar day revocation period. I understand that upon the expiration of such seven (7) calendar day revocation period this entire Waiver will be binding upon me and will be irrevocable.
I understand that by signing this Waiver I am giving up rights I may have. IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this ____ day of ____________________, in the year _____. Dwight H. Evans Sworn to and subscribed to me this ____ day of ____________, _____. Notary Public My Commission Expires: (Notary Seal) Acknowledged and Accepted by the Company, as defined in the Waiver. By: Date:
EXHIBIT 10(a)88 CHANGE IN CONTROL AGREEMENT THIS CHANGE IN CONTROL AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Alabama Power Company (the "Company") and Mr. Banks Harry Farris ("Mr. Farris"). W I T N E S S E T H: WHEREAS, Mr. Farris is the Executive Vice President of the Company; WHEREAS, the Company wishes to provide to Mr. Farris certain severance benefits under certain circumstances following a change in control (as defined herein) of Southern or the Company; NOW, THEREFORE, in consideration of the premises, and the agreements 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. Definitions. For purposes of this Agreement, the following terms shall have the following meanings: (a) "Annual Compensation" shall mean Mr. Farris's highest annual base salary rate for the twelve (12) month period immediately preceding the date of the Change in Control plus market level target annual bonus as set forth on Exhibit A hereof. (b) "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. (c) "Board" shall mean the board of directors of the Company. (d) "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern.
(e) "Change in Control" shall mean any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's
EXHIBIT 10(a)88 CHANGE IN CONTROL AGREEMENT THIS CHANGE IN CONTROL AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Alabama Power Company (the "Company") and Mr. Banks Harry Farris ("Mr. Farris"). W I T N E S S E T H: WHEREAS, Mr. Farris is the Executive Vice President of the Company; WHEREAS, the Company wishes to provide to Mr. Farris certain severance benefits under certain circumstances following a change in control (as defined herein) of Southern or the Company; NOW, THEREFORE, in consideration of the premises, and the agreements 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. Definitions. For purposes of this Agreement, the following terms shall have the following meanings: (a) "Annual Compensation" shall mean Mr. Farris's highest annual base salary rate for the twelve (12) month period immediately preceding the date of the Change in Control plus market level target annual bonus as set forth on Exhibit A hereof. (b) "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. (c) "Board" shall mean the board of directors of the Company. (d) "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern.
(e) "Change in Control" shall mean any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Paragraph 1.(e)(i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control: (A) any acquisition directly from Southern; (B) any acquisition by Southern; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary; (D) any acquisition by a qualified pension plan or publicly held mutual fund; (E) any acquisition by a Group composed exclusively of employees of Southern, or any Southern Subsidiary; (F) any acquisition by Mr. Farris or any Group of which Mr. Farris is a party; or (G) any Business Combination which would not otherwise constitute a change in control because of the application of clauses (A), (B) and (C) of Paragraph 1.(e)(iii); (ii) A change in the composition of the Southern Board whereby individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Southern Board;
(e) "Change in Control" shall mean any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Paragraph 1.(e)(i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control: (A) any acquisition directly from Southern; (B) any acquisition by Southern; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary; (D) any acquisition by a qualified pension plan or publicly held mutual fund; (E) any acquisition by a Group composed exclusively of employees of Southern, or any Southern Subsidiary; (F) any acquisition by Mr. Farris or any Group of which Mr. Farris is a party; or (G) any Business Combination which would not otherwise constitute a change in control because of the application of clauses (A), (B) and (C) of Paragraph 1.(e)(iii); (ii) A change in the composition of the Southern Board whereby individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Southern Board; (iii) Consummation of a Business Combination, provided, however, that such a Business Combination shall not constitute a Change in Control if all three (3) of the following conditions are met: (A) all or substantially all of the individuals and entities who held Beneficial Ownership, respectively, of Southern's Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, 65% or more of the combined voting power of the Voting Securities of the corporation surviving or resulting from such Business Combination, (including, without limitation, a corporation which as a result of such transaction holds Beneficial Ownership of all or substantially all of Southern's Voting Securities or all or substantially all of Southern's assets) (such surviving or resulting corporation to be referred to as "Surviving Company"), in substantially the same proportions as their ownership, immediately prior to such Business Combination, of Southern's Voting Securities; (B) no Person (excluding any corporation resulting from such Business Combination, any employee benefit plan (or related trust) of Southern, any Southern Subsidiary or Surviving Company, Mr. Farris, any Group of which Mr. Farris is a party, any Group composed exclusively of Company employees, any qualified pension plan (or related trust) or any publicly held mutual fund) holds Beneficial Ownership, directly or indirectly, of 20% or more of the combined voting power of the then outstanding Voting Securities of Surviving Company except to the extent that such ownership existed prior to the Business Combination; and (C) at least a majority of the members of the board of directors of Surviving Company were members of the Incumbent Board at the earlier of the date of execution of the initial agreement, or of the action of the Southern Board, providing for such Business Combination. (iv) The Consummation of an acquisition by any Person of Beneficial Ownership of 50% or more of the combined voting power of the then outstanding Voting Securities of the Company; provided, however, that for purposes of this Paragraph 1.(e)(iv), any acquisition by Mr. Farris, any Group composed exclusively of employees of the Company, any Group of which Mr. Farris is a party, any qualified pension plan (or related trust), any publicly held mutual fund, any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary shall not constitute a Change in Control; (v) Consummation of a reorganization, merger or consolidation of the Company (an "Employing Company Business Combination"), in each case, unless, following such Employing Company Business Combination, Southern Controls the corporation or other entity surviving or resulting from such Employing Company Business Combination; or
(vi) Consummation of the sale or other disposition of all or substantially all of the assets of the Company to a corporation or other entity which Southern does not Control. (f) "COBRA Coverage" shall mean any continuation coverage to which Mr. Farris or his dependents may be entitled pursuant to Code Section 4980B. (g) "Code" shall mean the Internal Revenue Code of 1986, as amended. (h) "Company" shall mean Alabama Power Company, its successors and assigns. (i) "Consummation" shall mean the completion of the final act necessary to complete a transaction as a matter of law, including, but not limited to, any required approvals by the corporation's shareholders and board of directors, the transfer of legal and beneficial title to securities or assets and the final approval of the transaction by any applicable domestic or foreign governments or governmental agencies. (j) "Control" shall mean, in the case of a corporation, Beneficial Ownership of more than 50% of the combined voting power of the corporation's Voting Securities, or in the case of any other entity, Beneficial Ownership of more than 50% of such entity's voting equity interests. (k) "Effective Date" shall mean the date of execution of this Agreement. (l) "Employee Outplacement Program" shall mean the program established by the Company from time to time for the purpose of assisting participants covered by the plan in finding employment outside of the Company which provides for the following services: (i) self-assessment, career decision and goal setting; (ii) job market research and job sources; (iii) networking and interviewing skills; (iv) planning and implementation strategy; (v) resume writing, job hunting methods and salary negotiation; and (vi) office support and job search resources. (m) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. (n) "Good Reason" shall mean, without Mr. Farris's express written consent, after written notice to the Board, and after a thirty (30) day opportunity for the Board to cure, the continuing occurrence of any of the following events: (i) Inconsistent Duties. A meaningful and detrimental alteration in Mr. Farris's position or in the nature or status of his responsibilities from those in effect immediately prior to the Change in Control; (ii) Reduced Salary. A reduction of five percent (5%) or more by the Company in either of the following: (i) Mr. Farris's annual base salary rate as in effect immediately prior to the Change in Control (except for a less than ten percent (10%), across-the-board annual base salary rate reduction similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); or (ii) the sum of Mr. Farris's annual base salary rate plus target bonus under the PPP Plan (except for a less than ten percent (10%), across-the-board reduction of annual base salary rate plus target bonus under the PPP Plan similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); (iii) Pension and Compensation Plans. The failure by the Company to continue in effect any pension or compensation plan or agreement in which Mr. Farris participates or is a party as of the date of the Change in Control or the elimination of Mr. Farris' participation therein, (except for across-the-board plan changes or terminations similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); For purposes of this Paragraph 1.(n), a "pension plan or agreement" shall mean any written arrangement executed by an authorized officer of the Company which provides for payments upon retirement; and a "compensation plan or arrangement" shall mean any written arrangement executed by an authorized officer of the Company which provides for periodic, nondiscretionary compensatory payments in the nature of bonuses. (iv) Relocation. A change in Mr. Farris's work location to a location more than fifty (50) miles from the office where Mr. Farris is located at the time of the Change in Control, unless such new work location is within fifty (50) miles from Mr. Farris's principal place of residence at the time of the Change in Control. The acceptance, if any, by Mr. Farris of employment by the Company at a work location which is outside the fifty mile radius set
forth in this Paragraph 1.(n)(iv) shall not be a waiver of Mr. Farris's right to refuse subsequent transfer by the Company to a location which is more than fifty (50) miles from Mr. Farris's principal place of residence at the time of the Change in Control, and such subsequent unconsented transfer shall be "Good Reason" under this Agreement; or (v) Benefits and Perquisites. The taking of any action by the Company which would directly or indirectly materially reduce the benefits enjoyed by Mr. Farris under the Company's retirement, life insurance, medical, health and accident, disability, deferred compensation or savings plans in which Mr. Farris was participating immediately prior to the Change in Control; or the failure by the Company to provide Mr. Farris with the number of paid vacation days to which Mr. Farris is entitled on the basis of years of service with the Company in accordance with the Company's normal vacation policy in effect immediately prior to the Change in Control (except for across-the-board plan or vacation policy changes or plan terminations similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company). (vi) For purposes of this Paragraph 1.(n), the term "Executive Employee" shall mean those employees of the Company of Grade Level 10 or above. (o) "Group" shall have the meaning set forth in Section 14(d) of the Exchange Act. (p) "Group Health Plan" shall mean the group health plan covering Mr. Farris, as such plan may be amended from time to time. (q) "Group Life Insurance Plan" shall mean the group life insurance program covering Mr. Farris, as such plan may be amended from time to time. (r) "Incumbent Board" shall mean those individuals who constitute the Southern Board as of the Effective Date plus any individual who shall become a director subsequent to such date whose election or nomination for election by Southern's shareholders was approved by a vote of at least 75% of the directors then comprising the Incumbent Board. Notwithstanding the foregoing, no individual who shall become a director of the Southern Board subsequent to the Effective Date whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Regulations promulgated under the Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Southern Board shall be a member of the Incumbent Board. (s) "Month of Service" shall mean any calendar month during which Mr. Farris has worked at least one (1) hour or was on approved leave of absence while in the employ of the Company or any affiliate or subsidiary of Southern. (t) "Pension Plan" shall mean The Southern Company Pension Plan, as such plan may be amended from time to time. (u) "Performance Dividend Plan" shall mean the Southern Company Performance Dividend Plan or any replacement thereto, as such plans may be amended from time to time. (v) "Performance Stock Plan" shall mean the Southern Company Performance Stock Plan or any replacement thereto, as such plans may be amended from time to time. (w) "Person" shall mean any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of Act. (x) "Performance Pay Plan" or "PPP Plan" shall mean the Southern Company Performance Pay Plan or any replacement thereto, as such plans may be amended from time to time. (y) "Productivity Improvement Plan" or "PIP Plan" shall mean the Southern Company Productivity Improvement Plan or replacement thereto, as such plans may be amended from time to time. (z) "Southern" shall mean The Southern Company, its successors and assigns. (aa) "Southern Board" shall mean the board of directors of Southern. (bb) "Southern Subsidiary" shall mean any corporation or other entity Controlled by Southern. (cc) "Termination for Cause" or "Cause" shall mean the termination of Mr. Farris's employment by the Company
upon the occurrence of any of the following: (i) The willful and continued failure by Mr. Farris substantially to perform his duties with the Company (other than any such failure resulting from Mr. Farris's Total Disability or from Mr. Farris's retirement or any such actual or anticipated failure resulting from termination by Mr. Farris for Good Reason) after a written demand for substantial performance is delivered to him by the Southern Board, which demand specifically identifies the manner in which the Southern Board believes that he has not substantially performed his duties; or (ii) The willful engaging by Mr. Farris in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise, including, but not limited to any of the following: (A) any willful act involving fraud or dishonesty in the course of Mr. Farris's employment by the Company; (B) the willful carrying out of any activity or the making of any statement which would materially prejudice or impair the good name and standing of the Company, Southern or any Southern Subsidiary or would bring the Company, Southern or any Southern Subsidiary into contempt, ridicule or would reasonably shock or offend any community in which the Company, Southern or such Southern Subsidiary is located; (C) attendance at work in a state of intoxication or otherwise being found in possession at his workplace of any prohibited drug or substance, possession of which would amount to a criminal offense; (D) violation of the Company's policies on drug and alcohol usage, fitness for duty requirements or similar policies as may exist from time to time as adopted by the Company's safety officer; (E) assault or other act of violence against any person during the course of employment; or (F) indictment of any felony or any misdemeanor involving moral turpitude. No act or failure to act by Mr. Farris shall be deemed "willful" unless done, or omitted to be done, by Mr. Farris not in good faith and without reasonable belief that his action or omission was in the best interest of the Company. Notwithstanding the foregoing, Mr. Farris shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to him a copy of a resolution duly adopted by the affirmative vote of not less than three quarters of the entire membership of the Southern Board at a meeting of the Southern Board called and held for such purpose (after reasonable notice to Mr. Farris and an opportunity for him, together with counsel, to be heard before the Southern Board), finding that, in the good faith opinion of the Southern Board, Mr. Farris was guilty of conduct set forth above in clause (i) or (ii) of this Paragraph 1.(bb) and specifying the particulars thereof in detail. (dd) "Termination Date" shall mean the date on which Mr. Farris's employment with the Company is terminated; provided, however, that solely for purposes of Paragraph 2.(c) hereof, the Termination Date shall be the effective date of his retirement pursuant to the terms of the Pension Plan. (ee) "Total Disability" shall mean Mr. Farris's total disability within the meaning of the Pension Plan. (ff) "Voting Securities" shall mean the outstanding voting securities of a corporation entitling the holder thereof to vote generally in the election of such corporation's directors. (gg) "Waiver and Release" shall mean the Waiver and Release attached hereto as Exhibit B. (hh) "Year of Service" shall mean Mr. Farris's Months of Service divided by twelve (12) rounded to the nearest whole year, rounding up if the remaining number of months is seven (7) or greater and rounding down if the remaining number of months is less than seven (7). If Mr. Farris has a break in his service with the Company, he will receive credit under this Agreement for service prior to the break in service only if the break in service is less than five years. 2. Severance Benefits. (a) Eligibility. Except as otherwise provided in this Paragraph 2.(a), if Mr. Farris's employment is involuntarily
terminated by the Company at any time during the two year period following a Change in Control for reasons other than Cause, or if Mr. Farris voluntarily terminates his employment with the Company for Good Reason at any time during the two year period following a Change in Control, Mr. Farris shall be entitled to receive the benefits described in this Agreement upon the Company's receipt of an effective Waiver and Release. Notwithstanding anything to the contrary herein, Mr. Farris shall not be eligible to receive benefits under this Agreement if Mr. Farris: (i) voluntarily terminates his employment with the Company for other than Good Reason; (ii) has his employment terminated by the Company for Cause; (iii) accepts the transfer of his employment to Southern, any Southern Subsidiary or any employer that succeeds to all or substantially all of the assets of the Company, Southern or any Southern Subsidiary; (iv) refuses an offer of continued employment with the Company, any Southern Subsidiary, or any employer that succeeds to all or substantially all of the assets of the Company, Southern, or any Southern Subsidiary under circumstances where such refusal would not amount to Good Reason for voluntary termination of employment; or (v) elects to receive the benefits of any other voluntary or involuntary severance or separation program maintained by the Company; provided however, that the receipt of benefits under the terms of any retention plan or agreement shall not be deemed to be the receipt of severance or separation benefits for purposes of this Agreement. (b) Severance Benefits. If Mr. Farris meets the eligibility requirements of Paragraph 2.(a) hereof, he shall be entitled to a cash severance benefit in an amount equal to three times his Annual Compensation (the "Severance Amount"). If any portion of the Severance Amount constitutes an "excess parachute payment" (as such term is defined under Code Section 280G ("Excess Parachute Payment")), the Company shall pay to Mr. Farris an additional amount calculated by determining the amount of tax under Code Section 4999 that he otherwise would have paid on any Excess Parachute Payment with respect to the Change in Control and dividing such amount by a decimal determined by adding the tax rate under Code Section 4999 ("Excise Tax"), the hospital insurance tax under Code Section 3101(b) ("HI Tax") and federal and state income tax measured at the highest marginal rates ("Income Tax") and subtracting such result from the number one (1) (the "280G Grossup"); provided, however, that no 280G Gross-up shall be paid unless the Severance Amount plus all other "parachute payments" to Mr. Farris under Code Section 280G exceeds three (3) times Mr. Farris's "base amount" (as such term is defined under Code Section 280G ("Base Amount")) by ten percent (10%) or more; provided further, that if no 280G Gross-up is paid, the Severance Amount shall be capped at three (3) times Mr. Farris's Base Amount, less all other "parachute payments" (as such term is defined under Code Section 280G) received by Mr. Farris, less one dollar (the "Capped Amount"), if the Capped Amount, reduced by HI Tax and Income Tax, exceeds what otherwise would have been the Severance Amount, reduced by HI Tax, Income Tax and Excise Tax. For purposes of this Paragraph 2.(b), whether any amount would constitute an Excess Parachute Payment and any other calculations of tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts e.g., Base Amount, Capped Amount, etc., shall be determined by the tax department of the independent public accounting firm then responsible for preparing Southern's consolidated federal income tax return, and such calculations or determinations shall be binding upon the parties hereto. (c) Welfare Benefits. If Mr. Farris meets the eligibility requirements of Paragraph 2.(a) hereof and is not otherwise eligible to receive retiree medical and life insurance benefits provided to certain retirees pursuant to the terms of the Pension Plan, the Group Health Plan and the Group Life Insurance Plan, he shall be entitled to the benefits set forth in this Paragraph 2.(c). (i) Mr. Farris shall be eligible to participate in the Company's Group Health Plan, upon payment of both the Company's and his monthly premium under such plan, for a period of six (6) months for each of Mr. Farris's Years of Service, not to exceed five (5) years. If Mr. Farris elects to receive this extended medical coverage, he shall also be entitled to elect coverage under the Group Health Plan for his dependents who were participating in the Group Health Plan on Mr. Farris's Termination Date (and for such other dependents as may be entitled to coverage under the provisions of the Health Insurance Portability and Accountability Act of 1996) for the duration of Mr. Farris's extended medical coverage under this Paragraph 2.(c)(i) to the extent such dependents remain eligible for dependent coverage under the terms of the Group Health Plan.
(A) The extended medical coverage afforded to Mr. Farris pursuant to Paragraph 2.(c)(i), as well as the premiums to be paid by Mr. Farris in connection with such coverage shall be determined in accordance with the terms of the Group Health Plan and shall be subject to any changes in the terms and conditions of the Group Health Plan as well as any future increases in premiums under the Group Health Plan. The premiums to be paid by Mr. Farris in connection with this extended coverage shall be due on the first day of each month; provided, however, that if he fails to pay his premium within thirty (30) days of its due date, such extended coverage shall be terminated. (B) Any Group Health Plan coverage provided under Paragraph 2.(c)(i) shall be a part of and not in addition to any COBRA Coverage which Mr. Farris or his dependents may elect. In the event that Mr. Farris or his dependents become eligible to be covered, by virtue of re-employment or otherwise, by any employersponsored group health plan or is eligible for coverage under any government-sponsored health plan during the above period, coverage under the Company's Group Health Plan available to Mr. Farris or his dependents by virtue of the provisions of Paragraph 2.(c)(i) shall terminate, except as may otherwise be required by law, and shall not be renewed. (ii) Mr. Farris shall be entitled to receive cash in an amount equal to the Company's and Mr. Farris's cost of premiums for three (3) years of coverage under the Group Health Plan and Group Life Insurance Plan in accordance with the terms of such plans as of the date of the Change in Control. (d) Incentive Plans. If Mr. Farris meets the eligibility requirements of Paragraph 2.(a) hereof he shall be entitled to the following benefits under the Company's incentive plans: (i) Stock Option Plan. (A) Any of Mr. Farris's Options and Stock Appreciation Rights under the Performance Stock Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(i) by reference) which are outstanding as of the Termination Date and which are not then exercisable and vested, shall become fully exercisable and vested to the full extent of the original grant; provided, that in the case of a Stock Appreciation Right, if Mr. Farris is subject to Section 16(b) of the Exchange Act, such Stock Appreciation Right shall not become fully vested and exercisable at such time if such actions would result in liability to Mr. Farris under Section 16(b) of the Exchange Act, provided further, that any such actions not taken as a result of the rules under Section 16(b) of the Exchange Act shall be effected as of the first date that such activity would no longer result in liability under Section 16(b) of the Exchange Act. (B) The restrictions and deferral limitations applicable to any of Farris' Restricted Stock as of the Termination Date shall lapse, and such Restricted Stock shall become free of all restrictions and limitations and become fully vested and transferable to the full extent of the original grant. (C) The restrictions and deferral limitations and other conditions applicable to any other Awards held by Mr. Farris under the Stock Performance Plan as of the Termination Date shall lapse, and such other Awards shall become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent of the original grant. (ii) Performance Pay Plan. Provided Mr. Farris is not entitled to benefits under Article V of the PPP Plan, (the defined terms of which are incorporated in this Paragraph 2.(d)(ii) by reference), if the PPP Plan is in place through Mr. Farris's Termination Date and to the extent Mr. Farris is entitled to participate therein, Mr. Farris shall be entitled to receive cash in an amount equal to a prorated payout of his Incentive Pay Awards under the PPP Plan for the Performance Period in which the Termination Date shall have occurred, at target performance under the PPP Plan and prorated by the number of months which have passed since the beginning of the Performance Period until the Termination Date. (iii) PIP Plan. Provided Mr. Farris is not entitled to benefits under Article IV of the PIP Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(iii) by reference), if the PIP Plan is in place through Mr. Farris's Termination Date and to the extent Mr. Farris is entitled to participate therein, Mr. Farris shall be entitled to receive cash in an amount equal to his Award Opportunity for the Computation Periods in which the Termination Date shall have occurred at a target Value of Performance Unit of $1.00, prorated for each Computation Period by the number of months which have passed since the beginning of the Computation Periods until the Termination Date. (iv) Performance Dividend Plan. Provided Mr. Farris is not entitled to benefits under the Performance Dividend Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(iv) by reference), if the Performance Dividend Plan is in place through Mr. Farris's Termination Date and to the extent Mr. Farris is entitled to
participate therein, Mr. Farris shall be entitled to receive cash for each Award held by Mr. Farris on his Termination Date, based on actual performance under Section 4.1 of the Performance Dividend Plan determined as of the most recently completed calendar quarter of the Performance Period in which the Termination Date shall have occurred, and the Annual Dividend declared prior to the Termination Date. (v) Other Short Term Incentive Plans. The provisions of this Paragraph 2.(d)(v) shall apply if and to the extent that Mr. Farris is a participant in any other "short term compensation plan" not otherwise previously referred to in this Paragraph 2.(d). Provided Mr. Farris is not otherwise entitled to a plan payout under any change of control provisions of such plans, if the "short term compensation plan" is in place as of the Termination Date and to the extent Mr. Farris is entitled to participate therein, Mr. Farris shall receive cash in an amount equal to his award under the Company's "short term incentive plan" for the annual performance period in which the Termination Date shall have occurred, at Mr. Farris's target performance level and prorated by the number of months which have passed since the beginning of the annual performance period until his Termination Date. For purposes of this Paragraph 2.(d)(v) the term "short term incentive compensation plan" shall mean any incentive compensation plan or arrangement adopted in writing by the Company which provides for annual, recurring compensatory bonuses based upon articulated performance criteria. (e) Payment of Benefits. Any amounts due under this Agreement shall be paid in one (1) lump sum payment as soon as administratively practicable following the later of: (i) Mr. Farris's Termination Date, or (ii) upon Mr. Farris's tender of an effective Waiver and Release to the Company in the form of Exhibit B attached hereto and the expiration of any applicable revocation period for such waiver. In the event of a dispute with respect to liability or amount of any benefit due hereunder, an effective Waiver and Release shall be tendered at the time of final resolution of any such dispute when payment is tendered by the Company. (f) Benefits in the Event of Death. In the event of Mr. Farris's death prior to the payment of all amounts due under this Agreement, Mr. Farris's estate shall be entitled to receive as due any amounts not yet paid under this Agreement upon the tender by the executor or administrator of the estate of an effective Waiver and Release. (g) Legal Fees. In the event of a dispute between Mr. Farris and the Company with regard to any amounts due hereunder, if any material issue in such dispute is finally resolved in Mr. Farris's favor, the Company shall reimburse Mr. Farris's legal fees incurred with respect to all issues in such dispute in an amount not to exceed fifty thousand dollars ($50,000). (h) Employee Outplacement Services. Mr. Farris shall be eligible to participate in the Employee Outplacement Program, which program shall not be less than six (6) months duration measured from Mr. Farris's Termination Date. (i) Non-qualified Retirement and Deferred Compensation Plans. The Parties agree that subsequent to a Change in Control, any claims by Mr. Farris for benefits under any of the Company's non-qualified retirement or deferred compensation plans shall be resolved through binding arbitration in accordance with the provisions and procedures set forth in Paragraph 5 hereof and if any material issue in such dispute is finally resolved in Mr. Farris' favor, the Company shall reimburse Mr. Farris' legal fees in the manner provided in Paragraph 2.(g) hereof. 3. Transfer of Employment. In the event that Mr. Farris's employment by the Company is terminated during the two year period following a Change in Control and Mr. Farris accepts employment by Southern, a Southern Subsidiary, or any employer that succeeds to all or substantially all of the assets of the Company, Southern or any Southern Subsidiary, the Company shall assign this Agreement to Southern, such Southern Subsidiary, or successor employer, Southern shall accept such assignment or cause such Southern Subsidiary or successor employer to accept such assignment, and such assignee shall become the "Company" for all purposes hereunder. 4. No Mitigation. If Mr. Farris is otherwise eligible to receive benefits under Paragraph 2 of this Agreement, he shall have no duty or obligation to seek other employment following his Termination Date and, except as otherwise provided in Paragraph 2.(a)(iii) hereof, the amounts due Mr. Farris hereunder shall not be reduced or suspended if Mr. Farris accepts such subsequent employment. 5. Arbitration. (a) Any dispute, controversy or claim arising out of or relating to the Company's obligations to pay severance benefits under this Agreement, or the breach thereof, shall be settled and resolved solely by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA") except as otherwise provided herein. The arbitration shall be the sole and exclusive forum for resolution of any such claim for severance benefits and the arbitrators' award shall be final and binding. The provisions of this Paragraph 5 are not intended to apply to any other disputes, claims or controversies arising out of or relating to Mr. Farris's employment by the Company or the termination thereof. (b) Arbitration shall be initiated by serving a written notice of demand for arbitration to Mr. Farris, in the case of the Company, or to the Southern Board, in the case of Mr. Farris. (c) The arbitration shall be held in Atlanta, Georgia. The arbitrators shall apply the law of the State of Georgia, to the extent not preempted by federal law, excluding any law which would require the application of the law of another state. (d) The parties shall appoint arbitrators within fifteen (15) business days following service of the demand for arbitration. The number of arbitrators shall be three. One arbitrator shall be appointed by Mr. Farris, one arbitrator shall be appointed by the Company, and the two arbitrators shall appoint a third. If the arbitrators cannot agree on a third arbitrator within thirty (30) business days after the service of demand for arbitration, the third arbitrator shall be selected by the AAA. (e) The arbitration filing fee shall be paid by Mr. Farris. All other costs of arbitration shall be borne equally by Mr. Farris and the Company, provided, however, that the Company shall reimburse such fees and costs in the event any material issue in such dispute is finally resolved in Mr. Farris's favor and Mr. Farris is reimbursed legal fees under Paragraph 2.(g) hereof. (f) The parties agree that they will faithfully observe the rules that govern any arbitration between them, they will abide by and perform any award rendered by the arbitrators in any such arbitration, including any award of injunctive relief, and a judgment of a court having jurisdiction may be entered upon an award. (g) The parties agree that nothing in this Paragraph 5 is intended to preclude upon application of either party any court having jurisdiction from issuing and enforcing in any lawful manner such temporary restraining orders, preliminary injunctions, and other interim measures of relief as may be necessary to prevent harm to a party's interests or as otherwise may be appropriate pending the conclusion of arbitration proceedings pursuant to this Agreement; regardless of whether an arbitration proceeding under this Paragraph 5 has begun. The parties further agree that nothing herein shall prevent any court from entering and enforcing in any lawful manner such judgments for permanent equitable relief as may be necessary to prevent harm to a party's interests or as otherwise may be appropriate following the issuance of arbitral awards pursuant to this Paragraph 5.
6. Miscellaneous. (a) Funding of Benefits. Unless the Board in its discretion shall determine otherwise, the benefits payable to Mr. Farris under this Agreement shall not be funded in any manner and shall be paid by the Company out of its general assets, which assets are subject to the claims of the Company's creditors. (b) Withholding. There shall be deducted from the payment of any benefit due under this Agreement 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 Mr. Farris. (c) Assignment. Mr. Farris shall have no rights to sell, assign, transfer, encumber, or otherwise convey the right to receive the payment of any benefit due hereunder, which payment and the rights thereto are expressly declared to be nonassignable and nontransferable. Any attempt to do so shall be null and void and of no effect. (d) Amendment and Termination. The Agreement may be amended or terminated only by a writing executed by the parties. (e) Construction. This Agreement shall be construed in accordance with and governed by the laws of the State of Georgia, to the extent not preempted by federal law, disregarding any provision of law which would require the application of the law of another state.
6. Miscellaneous. (a) Funding of Benefits. Unless the Board in its discretion shall determine otherwise, the benefits payable to Mr. Farris under this Agreement shall not be funded in any manner and shall be paid by the Company out of its general assets, which assets are subject to the claims of the Company's creditors. (b) Withholding. There shall be deducted from the payment of any benefit due under this Agreement 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 Mr. Farris. (c) Assignment. Mr. Farris shall have no rights to sell, assign, transfer, encumber, or otherwise convey the right to receive the payment of any benefit due hereunder, which payment and the rights thereto are expressly declared to be nonassignable and nontransferable. Any attempt to do so shall be null and void and of no effect. (d) Amendment and Termination. The Agreement may be amended or terminated only by a writing executed by the parties. (e) Construction. This Agreement shall be construed in accordance with and governed by the laws of the State of Georgia, to the extent not preempted by federal law, disregarding any provision of law which would require the application of the law of another state. (f) Pooling Accounting. Notwithstanding anything to the contrary herein, if, but for any provision of this Agreement, a Change in Control transaction would otherwise be accounted for as a pooling-of-interests under APB No.16 ("Pooling Accounting") (after giving effect to any and all other facts and circumstances affecting whether such Change in Control transaction would use Pooling Accounting), such provision or provisions of this Agreement which would otherwise cause the Change in Control transaction to be ineligible for Pooling Accounting shall be void and ineffective in such a manner and to the extent that by eliminating such provision or provisions of this Agreement, Pooling Accounting would be required for such Change in Control transaction. IN WITNESS WHEREOF, the parties hereto have executed this Agreement this ____ day of __________________, 199__. THE SOUTHERN COMPANY By: ____________________________________ ALABAMA POWER COMPANY By: ____________________________________ MR. FARRIS Banks Harry Farris
Exhibit A CHANGE IN CONTROL AGREEMENT Target Annual Bonus for Mr. Banks Harry Farris 45%
Exhibit A CHANGE IN CONTROL AGREEMENT Target Annual Bonus for Mr. Banks Harry Farris 45%
Exhibit B CHANGE IN CONTROL AGREEMENT Waiver and Release The attached Waiver and Release is to be given to Mr. Banks Harry Farris upon the occurrence of an event that triggers eligibility for severance benefits under the Change in Control Agreement, as described in Paragraph 2(a) of such agreement.
CHANGE IN CONTROL AGREEMENT Waiver and Release I, Banks Harry Farris, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Alabama Power Company (collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company
Exhibit B CHANGE IN CONTROL AGREEMENT Waiver and Release The attached Waiver and Release is to be given to Mr. Banks Harry Farris upon the occurrence of an event that triggers eligibility for severance benefits under the Change in Control Agreement, as described in Paragraph 2(a) of such agreement.
CHANGE IN CONTROL AGREEMENT Waiver and Release I, Banks Harry Farris, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Alabama Power Company (collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company and/or any of its direct or indirect subsidiaries; however, I understand and acknowledge that nothing herein is intended to or shall be construed to require the Company to institute or continue in effect any particular plan or benefit sponsored by the Company and the Company hereby reserves the right to amend or terminate any of its benefit programs at any time in accordance with the procedures set forth in such plans. In signing this Waiver, I realize that I am waiving and releasing, among other things, any claims to benefits under any and all bonus, severance, workforce reduction, early retirement, outplacement, or any other similar type plan sponsored by the Company. I have been encouraged and advised in writing to seek advice from anyone of my choosing regarding this Waiver, including my attorney, and my accountant or tax advisor. Prior to signing this Waiver, I have been given the opportunity and sufficient time to seek such advice, and I fully understand the meaning and contents of this
CHANGE IN CONTROL AGREEMENT Waiver and Release I, Banks Harry Farris, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Alabama Power Company (collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company and/or any of its direct or indirect subsidiaries; however, I understand and acknowledge that nothing herein is intended to or shall be construed to require the Company to institute or continue in effect any particular plan or benefit sponsored by the Company and the Company hereby reserves the right to amend or terminate any of its benefit programs at any time in accordance with the procedures set forth in such plans. In signing this Waiver, I realize that I am waiving and releasing, among other things, any claims to benefits under any and all bonus, severance, workforce reduction, early retirement, outplacement, or any other similar type plan sponsored by the Company. I have been encouraged and advised in writing to seek advice from anyone of my choosing regarding this Waiver, including my attorney, and my accountant or tax advisor. Prior to signing this Waiver, I have been given the opportunity and sufficient time to seek such advice, and I fully understand the meaning and contents of this Waiver. I understand that I may take up to twenty-one (21) calendar days to consider whether or not I desire to enter this Waiver. I was not coerced, threatened or otherwise forced to sign this Waiver. I have made my choice to sign this Waiver voluntarily and of my own free will. I understand that I may revoke this Waiver at any time during the seven (7) calendar day period after I sign and deliver this Waiver to the Company. If I revoke this Waiver, I must do so in writing delivered to the Company. I understand that this Waiver is not effective until the expiration of this seven (7) calendar day revocation period. I understand that upon the expiration of such seven (7) calendar day revocation period this entire Waiver will be binding upon me and will be irrevocable.
I understand that by signing this Waiver I am giving up rights I may have. IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this ____ day of ____________________, in the year _____. Banks Harry Farris Sworn to and subscribed to me this ____ day of ____________, _____. Notary Public My Commission Expires: (Notary Seal) Acknowledged and Accepted by the Company, as defined in the Waiver. By: Date:
EXHIBIT 10(a)89 CHANGE IN CONTROL AGREEMENT THIS CHANGE IN CONTROL AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Georgia Power Company (the "Company") and Mr. Henry Allen Franklin ("Mr. Franklin"). W I T N E S S E T H: WHEREAS, Mr. Franklin is the Chief Executive Officer of the Company; WHEREAS, the Company wishes to provide to Mr. Franklin certain severance benefits under certain circumstances following a change in control (as defined herein) of Southern or the Company; NOW, THEREFORE, in consideration of the premises, and the agreements 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. Definitions. For purposes of this Agreement, the following terms shall have the following meanings: (a) "Annual Compensation" shall mean Mr. Franklin's highest annual base salary rate for the twelve (12) month period immediately preceding the date of the Change in Control plus market level target annual bonus as set forth on Exhibit A hereof. (b) "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. (c) "Board" shall mean the board of directors of the Company. (d) "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern. (e) "Change in Control" shall mean any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Paragraph 1.(e)(i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control:
EXHIBIT 10(a)89 CHANGE IN CONTROL AGREEMENT THIS CHANGE IN CONTROL AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Georgia Power Company (the "Company") and Mr. Henry Allen Franklin ("Mr. Franklin"). W I T N E S S E T H: WHEREAS, Mr. Franklin is the Chief Executive Officer of the Company; WHEREAS, the Company wishes to provide to Mr. Franklin certain severance benefits under certain circumstances following a change in control (as defined herein) of Southern or the Company; NOW, THEREFORE, in consideration of the premises, and the agreements 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. Definitions. For purposes of this Agreement, the following terms shall have the following meanings: (a) "Annual Compensation" shall mean Mr. Franklin's highest annual base salary rate for the twelve (12) month period immediately preceding the date of the Change in Control plus market level target annual bonus as set forth on Exhibit A hereof. (b) "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. (c) "Board" shall mean the board of directors of the Company. (d) "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern. (e) "Change in Control" shall mean any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Paragraph 1.(e)(i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control: (A) any acquisition directly from Southern; (B) any acquisition by Southern; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary; (D) any acquisition by a qualified pension plan or publicly held mutual fund; (E) any acquisition by a Group composed exclusively of employees of Southern, or any Southern Subsidiary; (F) any acquisition by Mr. Franklin or any Group of which Mr. Franklin is a party; or (G) any Business Combination which would not otherwise constitute a change in control because of the application of clauses (A), (B) and (C) of Paragraph 1.(e)(iii); (ii) A change in the composition of the Southern Board whereby individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Southern Board; (iii) Consummation of a Business Combination, provided, however, that such a Business Combination shall not
constitute a Change in Control if all three (3) of the following conditions are met: (A) all or substantially all of the individuals and entities who held Beneficial Ownership, respectively, of Southern's Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, 65% or more of the combined voting power of the Voting Securities of the corporation surviving or resulting from such Business Combination, (including, without limitation, a corporation which as a result of such transaction holds Beneficial Ownership of all or substantially all of Southern's Voting Securities or all or substantially all of Southern's assets) (such surviving or resulting corporation to be referred to as "Surviving Company"), in substantially the same proportions as their ownership, immediately prior to such Business Combination, of Southern's Voting Securities; (B) no Person (excluding any corporation resulting from such Business Combination, any employee benefit plan (or related trust) of Southern, any Southern Subsidiary or Surviving Company, Mr. Franklin, any Group of which Mr. Franklin is a party, any Group composed exclusively of Company employees, any qualified pension plan (or related trust) or any publicly held mutual fund) holds Beneficial Ownership, directly or indirectly, of 20% or more of the combined voting power of the then outstanding Voting Securities of Surviving Company except to the extent that such ownership existed prior to the Business Combination; and (C) at least a majority of the members of the board of directors of Surviving Company were members of the Incumbent Board at the earlier of the date of execution of the initial agreement, or of the action of the Southern Board, providing for such Business Combination. (iv) The Consummation of an acquisition by any Person of Beneficial Ownership of 50% or more of the combined voting power of the then outstanding Voting Securities of the Company; provided, however, that for purposes of this Paragraph 1.(e)(iv), any acquisition by Mr. Franklin, any Group composed exclusively of employees of the Company, any Group of which Mr. Franklin is a party, any qualified pension plan (or related trust), any publicly held mutual fund, any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary shall not constitute a Change in Control; (v) Consummation of a reorganization, merger or consolidation of the Company (an "Employing Company Business Combination"), in each case, unless, following such Employing Company Business Combination, Southern Controls the corporation or other entity surviving or resulting from such Employing Company Business Combination; or (vi) Consummation of the sale or other disposition of all or substantially all of the assets of the Company to a corporation or other entity which Southern does not Control. (f) "COBRA Coverage" shall mean any continuation coverage to which Mr. Franklin or his dependents may be entitled pursuant to Code Section 4980B. (g) "Code" shall mean the Internal Revenue Code of 1986, as amended. (h) "Company" shall mean Georgia Power Company, its successors and assigns. (i) "Consummation" shall mean the completion of the final act necessary to complete a transaction as a matter of law, including, but not limited to, any required approvals by the corporation's shareholders and board of directors, the transfer of legal and beneficial title to securities or assets and the final approval of the transaction by any applicable domestic or foreign governments or governmental agencies. (j) "Control" shall mean, in the case of a corporation, Beneficial Ownership of more than 50% of the combined voting power of the corporation's Voting Securities, or in the case of any other entity, Beneficial Ownership of more than 50% of such entity's voting equity interests. (k) "Effective Date" shall mean the date of execution of this Agreement. (l) "Employee Outplacement Program" shall mean the program established by the Company from time to time for the purpose of assisting participants covered by the plan in finding employment outside of the Company which provides for the following services: (i) self-assessment, career decision and goal setting; (ii) job market research and job sources; (iii) networking and interviewing skills; (iv) planning and implementation strategy; (v) resume writing, job hunting methods and salary negotiation; and (vi) office support and job search resources.
(m) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. (n) "Good Reason" shall mean, without Mr. Franklin's express written consent, after written notice to the Board, and after a thirty (30) day opportunity for the Board to cure, the continuing occurrence of any of the following events: (i) Inconsistent Duties. A meaningful and detrimental alteration in Mr. Franklin's position or in the nature or status of his responsibilities from those in effect immediately prior to the Change in Control; (ii) Reduced Salary. A reduction of five percent (5%) or more by the Company in either of the following: (i) Mr. Franklin's annual base salary rate as in effect immediately prior to the Change in Control (except for a less than ten percent (10%), across-the-board annual base salary rate reduction similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); or (ii) the sum of Mr. Franklin's annual base salary rate plus target bonus under the PPP Plan (except for a less than ten percent (10%), across-the-board reduction of annual base salary rate plus target bonus under the PPP Plan similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); (iii) Pension and Compensation Plans. The failure by the Company to continue in effect any pension or compensation plan or agreement in which Mr. Franklin participates or is a party as of the date of the Change in Control or the elimination of Mr. Franklin's participation therein, (except for across-the-board plan changes or terminations similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); For purposes of this Paragraph 1.(n), a "pension plan or agreement" shall mean any written arrangement executed by an authorized officer of the Company which provides for payments upon retirement; and a "compensation plan or arrangement" shall mean any written arrangement executed by an authorized officer of the Company which provides for periodic, nondiscretionary compensatory payments in the nature of bonuses. (iv) Relocation. A change in Mr. Franklin's work location to a location more than fifty (50) miles from the office where Mr. Franklin is located at the time of the Change in Control, unless such new work location is within fifty (50) miles from Mr. Franklin's principal place of residence at the time of the Change in Control. The acceptance, if any, by Mr. Franklin of employment by the Company at a work location which is outside the fifty mile radius set forth in this Paragraph 1.(n)(iv) shall not be a waiver of Mr. Franklin's right to refuse subsequent transfer by the Company to a location which is more than fifty (50) miles from Mr. Franklin's principal place of residence at the time of the Change in Control, and such subsequent unconsented transfer shall be "Good Reason" under this Agreement; or (v) Benefits and Perquisites. The taking of any action by the Company which would directly or indirectly materially reduce the benefits enjoyed by Mr. Franklin under the Company's retirement, life insurance, medical, health and accident, disability, deferred compensation or savings plans in which Mr. Franklin was participating immediately prior to the Change in Control; or the failure by the Company to provide Mr. Franklin with the number of paid vacation days to which Mr. Franklin is entitled on the basis of years of service with the Company in accordance with the Company's normal vacation policy in effect immediately prior to the Change in Control (except for across-the-board plan or vacation policy changes or plan terminations similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company). (vi) For purposes of this Paragraph 1.(n), the term "Executive Employee" shall mean employees of the Company of Grade Level 10 or above. (o) "Group" shall have the meaning set forth in Section 14(d) of the Exchange Act. (p) "Group Health Plan" shall mean the group health plan covering Mr. Franklin, as such plan may be amended from time to time. (q) "Group Life Insurance Plan" shall mean the group life insurance program covering Mr. Franklin, as such plan may be amended from time to time. (r) "Incumbent Board" shall mean those individuals who constitute the Southern Board as of the Effective Date plus any individual who shall become a director subsequent to such date whose election or nomination for election by Southern's shareholders was approved by a vote of at least 75% of the directors then comprising the Incumbent Board. Notwithstanding the foregoing, no individual who shall become a director of the Southern Board subsequent to the Effective Date whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Regulations promulgated under the
Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Southern Board shall be a member of the Incumbent Board. (s) "Month of Service" shall mean any calendar month during which Mr. Franklin has worked at least one (1) hour or was on approved leave of absence while in the employ of the Company or any affiliate or subsidiary of Southern. (t) "Pension Plan" shall mean The Southern Company Pension Plan, as such plan may be amended from time to time. (u) "Performance Dividend Plan" shall mean the Southern Company Performance Dividend Plan or any replacement thereto, as such plans may be amended from time to time. (v) "Performance Stock Plan" shall mean the Southern Company Performance Stock Plan or any replacement thereto, as such plans may be amended from time to time. (w) "Person" shall mean any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of Act. (x) "Performance Pay Plan" or "PPP Plan" shall mean the Southern Company Performance Pay Plan or any replacement thereto, as such plans may be amended from time to time. (y) "Productivity Improvement Plan" or "PIP Plan" shall mean the Southern Company Productivity Improvement Plan or replacement thereto, as such plans may be amended from time to time. (z) "Southern" shall mean The Southern Company, its successors and assigns. (aa) "Southern Board" shall mean the board of directors of Southern. (bb) "Southern Subsidiary" shall mean any corporation or other entity Controlled by Southern. (cc) "Termination for Cause" or "Cause" shall mean the termination of Mr. Franklin's employment by the Company upon the occurrence of any of the following: (i) The willful and continued failure by Mr. Franklin substantially to perform his duties with the Company (other than any such failure resulting from Mr. Franklin's Total Disability or from Mr. Franklin's retirement or any such actual or anticipated failure resulting from termination by Mr. Franklin for Good Reason) after a written demand for substantial performance is delivered to him by the Southern Board, which demand specifically identifies the manner in which the Southern Board believes that he has not substantially performed his duties; or (ii) The willful engaging by Mr. Franklin in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise, including, but not limited to any of the following: (A) any willful act involving fraud or dishonesty in the course of Mr. Franklin's employment by the Company; (B) the willful carrying out of any activity or the making of any statement which would materially prejudice or impair the good name and standing of the Company, Southern or any Southern Subsidiary or would bring the Company, Southern or any Southern Subsidiary into contempt, ridicule or would reasonably shock or offend any community in which the Company, Southern or such Southern Subsidiary is located; (C) attendance at work in a state of intoxication or otherwise being found in possession at his workplace of any prohibited drug or substance, possession of which would amount to a criminal offense; (D) violation of the Company's policies on drug and alcohol usage, fitness for duty requirements or similar policies as may exist from time to time as adopted by the Company's safety officer; (E) assault or other act of violence against any person during the course of employment; or (F) indictment of any felony or any misdemeanor involving moral turpitude.
No act or failure to act by Mr. Franklin shall be deemed "willful" unless done, or omitted to be done, by Mr. Franklin not in good faith and without reasonable belief that his action or omission was in the best interest of the Company. Notwithstanding the foregoing, Mr. Franklin shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to him a copy of a resolution duly adopted by the affirmative vote of not less than three quarters of the entire membership of the Southern Board at a meeting of the Southern Board called and held for such purpose (after reasonable notice to Mr. Franklin and an opportunity for him, together with counsel, to be heard before the Southern Board), finding that, in the good faith opinion of the Southern Board, Mr. Franklin was guilty of conduct set forth above in clause (i) or (ii) of this Paragraph 1.(cc) and specifying the particulars thereof in detail. (dd) "Termination Date" shall mean the date on which Mr. Franklin's employment with the Company is terminated; provided, however, that solely for purposes of Paragraph 2.(c) hereof, the Termination Date shall be the effective date of his retirement pursuant to the terms of the Pension Plan. (ee) "Total Disability" shall mean Mr. Franklin's total disability within the meaning of the Pension Plan. (ff) "Voting Securities" shall mean the outstanding voting securities of a corporation entitling the holder thereof to vote generally in the election of such corporation's directors. (gg) "Waiver and Release" shall mean the Waiver and Release attached hereto as Exhibit B. (hh) "Year of Service" shall mean Mr. Franklin's Months of Service divided by twelve (12) rounded to the nearest whole year, rounding up if the remaining number of months is seven (7) or greater and rounding down if the remaining number of months is less than seven (7). If Mr. Franklin has a break in his service with the Company, he will receive credit under this Agreement for service prior to the break in service only if the break in service is less than five years. 2. Severance Benefits. (a) Eligibility. Except as otherwise provided in this Paragraph 2.(a), if Mr. Franklin's employment is involuntarily terminated by the Company at any time during the two year period following a Change in Control for reasons other than Cause, or if Mr. Franklin voluntarily terminates his employment with the Company for Good Reason at any time during the two year period following a Change in Control, Mr. Franklin shall be entitled to receive the benefits described in this Agreement upon the Company's receipt of an effective Waiver and Release. Notwithstanding anything to the contrary herein, Mr. Franklin shall not be eligible to receive benefits under this Agreement if Mr. Franklin: (i) voluntarily terminates his employment with the Company for other than Good Reason; (ii) has his employment terminated by the Company for Cause; (iii) accepts the transfer of his employment to Southern, any Southern Subsidiary or any employer that succeeds to all or substantially all of the assets of the Company, Southern or any Southern Subsidiary; (iv) refuses an offer of continued employment with the Company, any Southern Subsidiary, or any employer that succeeds to all or substantially all of the assets of the Company, Southern, or any Southern Subsidiary under circumstances where such refusal would not amount to Good Reason for voluntary termination of employment; or (v) elects to receive the benefits of any other voluntary or involuntary severance or separation program maintained by the Company; provided however, that the receipt of benefits under the terms of any retention plan or agreement shall not be deemed to be the receipt of severance or separation benefits for purposes of this Agreement. (b) Severance Benefits. If Mr. Franklin meets the eligibility requirements of Paragraph 2.(a) hereof, he shall be entitled to a cash severance benefit in an amount equal to three times his Annual Compensation (the "Severance Amount"). If any portion of the Severance Amount constitutes an "excess parachute payment" (as such term is defined under Code Section 280G ("Excess Parachute Payment")), the Company shall pay to Mr. Franklin an additional amount calculated by determining the amount of tax under Code Section 4999 that he otherwise would have paid on any Excess Parachute Payment with respect to the Change in Control and dividing
such amount by a decimal determined by adding the tax rate under Code Section 4999 ("Excise Tax"), the hospital insurance tax under Code Section 3101(b) ("HI Tax") and federal and state income tax measured at the highest marginal rates ("Income Tax") and subtracting such result from the number one (1) (the "280G Grossup"); provided, however, that no 280G Gross-up shall be paid unless the Severance Amount plus all other "parachute payments" to Mr. Franklin under Code Section 280G exceeds three (3) times Mr. Franklin's "base amount" (as such term is defined under Code Section 280G ("Base Amount")) by ten percent (10%) or more; provided further, that if no 280G Gross-up is paid, the Severance Amount shall be capped at three (3) times Mr. Franklin's Base Amount, less all other "parachute payments" (as such term is defined under Code Section 280G) received by Mr. Franklin, less one dollar (the "Capped Amount"), if the Capped Amount, reduced by HI Tax and Income Tax, exceeds what otherwise would have been the Severance Amount, reduced by HI Tax, Income Tax and Excise Tax. For purposes of this Paragraph 2.(b), whether any amount would constitute an Excess Parachute Payment and any other calculations of tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts, e.g., Base Amount, Capped Amount, etc., shall be determined by the tax department of the independent public accounting firm then responsible for preparing Southern's consolidated federal income tax return, and such calculations or determinations shall be binding upon the parties hereto. (c) Welfare Benefits. If Mr. Franklin meets the eligibility requirements of Paragraph 2.(a) hereof and is not otherwise eligible to receive retiree medical and life insurance benefits provided to certain retirees pursuant to the terms of the Pension Plan, the Group Health Plan and the Group Life Insurance Plan, he shall be entitled to the benefits set forth in this Paragraph 2.(c). (i) Mr. Franklin shall be eligible to participate in the Company's Group Health Plan, upon payment of both the Company's and his monthly premium under such plan, for a period of six (6) months for each of Mr. Franklin's Years of Service, not to exceed five (5) years. If Mr. Franklin elects to receive this extended medical coverage, he shall also be entitled to elect coverage under the Group Health Plan for his dependents who were participating in the Group Health Plan on Mr. Franklin's Termination Date (and for such other dependents as may be entitled to coverage under the provisions of the Health Insurance Portability and Accountability Act of 1996) for the duration of Mr. Franklin's extended medical coverage under this Paragraph 2.(c)(i) to the extent such dependents remain eligible for dependent coverage under the terms of the Group Health Plan. (A) The extended medical coverage afforded to Mr. Franklin pursuant to Paragraph 2.(c)(i), as well as the premiums to be paid by Mr. Franklin in connection with such coverage shall be determined in accordance with the terms of the Group Health Plan and shall be subject to any changes in the terms and conditions of the Group Health Plan as well as any future increases in premiums under the Group Health Plan. The premiums to be paid by Mr. Franklin in connection with this extended coverage shall be due on the first day of each month; provided, however, that if he fails to pay his premium within thirty (30) days of its due date, such extended coverage shall be terminated. (B) Any Group Health Plan coverage provided under Paragraph 2.(c)(i) shall be a part of and not in addition to any COBRA Coverage which Mr. Franklin or his dependents may elect. In the event that Mr. Franklin or his dependents become eligible to be covered, by virtue of re-employment or otherwise, by any employersponsored group health plan or is eligible for coverage under any government-sponsored health plan during the above period, coverage under the Company's Group Health Plan available to Mr. Franklin or his dependents by virtue of the provisions of Paragraph 2.(c)(i) shall terminate, except as may otherwise be required by law, and shall not be renewed. (ii) Mr. Franklin shall be entitled to receive cash in an amount equal to the Company's and Mr. Franklin's cost of premiums for three (3) years of coverage under the Group Health Plan and Group Life Insurance Plan in accordance with the terms of such plans as of the date of the Change in Control. (d) Incentive Plans. If Mr. Franklin meets the eligibility requirements of Paragraph 2.(a) hereof he shall be entitled to the following benefits under the Company's incentive plans: (i) Stock Option Plan. (A) Any of Mr. Franklin's Options and Stock Appreciation Rights under the Performance Stock Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(i) by reference) which are outstanding as of the Termination Date and which are not then exercisable and vested, shall become fully exercisable and vested to the full extent of the original grant; provided, that in the case of a Stock Appreciation Right, if Mr. Franklin is subject
to Section 16(b) of the Exchange Act, such Stock Appreciation Right shall not become fully vested and exercisable at such time if such actions would result in liability to Mr. Franklin under Section 16(b) of the Exchange Act, provided further, that any such actions not taken as a result of the rules under Section 16(b) of the Exchange Act shall be effected as of the first date that such activity would no longer result in liability under Section 16(b) of the Exchange Act. (B) The restrictions and deferral limitations applicable to any of Franklin's Restricted Stock as of the Termination Date shall lapse, and such Restricted Stock shall become free of all restrictions and limitations and become fully vested and transferable to the full extent of the original grant. (C) The restrictions and deferral limitations and other conditions applicable to any other Awards held by Mr. Franklin under the Stock Performance Plan as of the Termination Date shall lapse, and such other Awards shall become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent of the original grant. (ii) Performance Pay Plan. Provided Mr. Franklin is not entitled to benefits under Article V of the PPP Plan, (the defined terms of which are incorporated in this Paragraph 2.(d)(ii) by reference), if the PPP Plan is in place through Mr. Franklin's Termination Date and to the extent Mr. Franklin is entitled to participate therein, Mr. Franklin shall be entitled to receive cash in an amount equal to a prorated payout of his Incentive Pay Awards under the PPP Plan for the Performance Period in which the Termination Date shall have occurred, at target performance under the PPP Plan and prorated by the number of months which have passed since the beginning of the Performance Period until the Termination Date. (iii) PIP Plan. Provided Mr. Franklin is not entitled to benefits under Article IV of the PIP Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(iii) by reference), if the PIP Plan is in place through Mr. Franklin's Termination Date and to the extent Mr. Franklin is entitled to participate therein, Mr. Franklin shall be entitled to receive cash in an amount equal to his Award Opportunity for the Computation Periods in which the Termination Date shall have occurred at a target Value of Performance Unit of $1.00, prorated for each Computation Period by the number of months which have passed since the beginning of each of the Computation Periods until the Termination Date. (iv) Performance Dividend Plan. Provided Mr. Franklin is not entitled to benefits under the Performance Dividend Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(iv) by reference), if the Performance Dividend Plan is in place through Mr. Franklin's Termination Date and to the extent Mr. Franklin is entitled to participate therein, Mr. Franklin shall be entitled to receive cash for each Award held by Mr. Franklin on his Termination Date, based on actual performance under Section 4.1 of the Performance Dividend Plan determined as of the most recently completed calendar quarter of the Performance Period in which the Termination Date shall have occurred, and the Annual Dividend declared prior to the Termination Date. (v) Other Short Term Incentive Plans. The provisions of this Paragraph 2.(d)(v) shall apply if and to the extent that Mr. Franklin is a participant in any other "short term compensation plan" not otherwise previously referred to in this Paragraph 2.(d). Provided Mr. Franklin is not otherwise entitled to a plan payout under any change of control provisions of such plans, if the "short term compensation plan" is in place as of the Termination Date and to the extent Mr. Franklin is entitled to participate therein, Mr. Franklin shall receive cash in an amount equal to his award under the Company's "short term incentive plan" for the annual performance period in which the Termination Date shall have occurred, at Mr. Franklin's target performance level and prorated by the number of months which have passed since the beginning of the annual performance period until his Termination Date. For purposes of this Paragraph 2.(d)(v) the term "short term incentive compensation plan" shall mean any incentive compensation plan or arrangement adopted in writing by the Company which provides for annual, recurring compensatory bonuses based upon articulated performance criteria. (e) Payment of Benefits. Any amounts due under this Agreement shall be paid in one (1) lump sum payment as soon as administratively practicable following the later of: (i) Mr. Franklin's Termination Date, or (ii) upon Mr. Franklin's tender of an effective Waiver and Release to the Company in the form of Exhibit B attached hereto and the expiration of any applicable revocation period for such waiver. In the event of a dispute with respect to liability or amount of any benefit due hereunder, an effective Waiver and Release shall be tendered at the time of final resolution of any such dispute when payment is tendered by the Company. (f) Benefits in the Event of Death. In the event of Mr. Franklin's death prior to the payment of all amounts due under this Agreement, Mr. Franklin's estate shall be entitled to receive as due any amounts not yet paid under this Agreement upon the tender by the executor or administrator of the estate of an effective Waiver and Release.
(g) Legal Fees. In the event of a dispute between Mr. Franklin and the Company with regard to any amounts due hereunder, if any material issue in such dispute is finally resolved in Mr. Franklin's favor, the Company shall reimburse Mr. Franklin's legal fees incurred with respect to all issues in such dispute in an amount not to exceed fifty thousand dollars ($50,000). (h) Employee Outplacement Services. Mr. Franklin shall be eligible to participate in the Employee Outplacement Program, which program shall not be less than six (6) months duration measured from Mr. Franklin's Termination Date. (i) Non-qualified Retirement and Deferred Compensation Plans. The Parties agree that subsequent to a Change in Control, any claims by Mr. Franklin for benefits under any of the Company's non-qualified retirement or deferred compensation plans shall be resolved through binding arbitration in accordance with the provisions and procedures set forth in Paragraph 5 hereof and if any material issue in such dispute is finally resolved in Mr. Franklin's favor, the Company shall reimburse Mr. Franklin's legal fees in the manner provided in Paragraph 2.(g) hereof. 3. Transfer of Employment. In the event that Mr. Franklin's employment by the Company is terminated during the two year period following a Change in Control and Mr. Franklin accepts employment by Southern, a Southern Subsidiary, or any employer that succeeds to all or substantially all of the assets of the Company, Southern or any Southern Subsidiary, the Company shall assign this Agreement to Southern, such Southern Subsidiary, or successor employer, Southern shall accept such assignment or cause such Southern Subsidiary or successor employer to accept such assignment, and such assignee shall become the "Company" for all purposes hereunder. 4. No Mitigation. If Mr. Franklin is otherwise eligible to receive benefits under Paragraph 2 of this Agreement, he shall have no duty or obligation to seek other employment following his Termination Date and, except as otherwise provided in Paragraph 2.(a)(iii) hereof, the amounts due Mr. Franklin hereunder shall not be reduced or suspended if Mr. Franklin accepts such subsequent employment. 5. Arbitration. (a) Any dispute, controversy or claim arising out of or relating to the Company's obligations to pay severance benefits under this Agreement, or the breach thereof, shall be settled and resolved solely by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA") except as otherwise provided herein. The arbitration shall be the sole and exclusive forum for resolution of any such claim for severance benefits and the arbitrators' award shall be final and binding. The provisions of this Paragraph 5 are not intended to apply to any other disputes, claims or controversies arising out of or relating to Mr. Franklin's employment by the Company or the termination thereof. (b) Arbitration shall be initiated by serving a written notice of demand for arbitration to Mr. Franklin, in the case of the Company, or to the Southern Board, in the case of Mr. Franklin. (c) The arbitration shall be held in Atlanta, Georgia. The arbitrators shall apply the law of the State of Georgia, to the extent not preempted by federal law, excluding any law which would require the application of the law of another state. (d) The parties shall appoint arbitrators within fifteen (15) business days following service of the demand for arbitration. The number of arbitrators shall be three. One arbitrator shall be appointed by Mr. Franklin, one arbitrator shall be appointed by the Company, and the two arbitrators shall appoint a third. If the arbitrators cannot agree on a third arbitrator within thirty (30) business days after the service of demand for arbitration, the third arbitrator shall be selected by the AAA. (e) The arbitration filing fee shall be paid by Mr. Franklin. All other costs of arbitration shall be borne equally by Mr. Franklin and the Company, provided, however, that the Company shall reimburse such fees and costs in the event any material issue in such dispute is finally resolved in Mr. Franklin's favor and Mr. Franklin is reimbursed legal fees under Paragraph 2.(g) hereof. (f) The parties agree that they will faithfully observe the rules that govern any arbitration between them, they will abide by and perform any award rendered by the arbitrators in any such arbitration, including any award of injunctive relief, and a judgment of a court having jurisdiction may be entered upon an award.
(g) The parties agree that nothing in this Paragraph 5 is intended to preclude upon application of either party any court having jurisdiction from issuing and enforcing in any lawful manner such temporary restraining orders, preliminary injunctions, and other interim measures of relief as may be necessary to prevent harm to a party's interests or as otherwise may be appropriate pending the conclusion of arbitration proceedings pursuant to this Agreement; regardless of whether an arbitration proceeding under this Paragraph 5 has begun. The parties further agree that nothing herein shall prevent any court from entering and enforcing in any lawful manner such judgments for permanent equitable relief as may be necessary to prevent harm to a party's interests or as otherwise may be appropriate following the issuance of arbitral awards pursuant to this Paragraph 5. 6. Miscellaneous. (a) Funding of Benefits. Unless the Board in its discretion shall determine otherwise, the benefits payable to Mr. Franklin under this Agreement shall not be funded in any manner and shall be paid by the Company out of its general assets, which assets are subject to the claims of the Company's creditors. (b) Withholding. There shall be deducted from the payment of any benefit due under this Agreement 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 Mr. Franklin. (c) Assignment. Mr. Franklin shall have no rights to sell, assign, transfer, encumber, or otherwise convey the right to receive the payment of any benefit due hereunder, which payment and the rights thereto are expressly declared to be nonassignable and nontransferable. Any attempt to do so shall be null and void and of no effect. (d) Amendment and Termination. The Agreement may be amended or terminated only by a writing executed by the parties. (e) Construction. This Agreement shall be construed in accordance with and governed by the laws of the State of Georgia, to the extent not preempted by federal law, disregarding any provision of law which would require the application of the law of another state. (f) Pooling Accounting. Notwithstanding anything to the contrary herein, if, but for any provision of this Agreement, a Change in Control transaction would otherwise be accounted for as a pooling-of-interests under APB No.16 ("Pooling Accounting") (after giving effect to any and all other facts and circumstances affecting whether such Change in Control transaction would use Pooling Accounting), such provision or provisions of this Agreement which would otherwise cause the Change in Control transaction to be ineligible for Pooling Accounting shall be void and ineffective in such a manner and to the extent that by eliminating such provision or provisions of this Agreement, Pooling Accounting would be required for such Change in Control transaction. IN WITNESS WHEREOF, the parties hereto have executed this Agreement this ____ day of __________________, 199__. THE SOUTHERN COMPANY By: ____________________________________ GEORGIA POWER COMPANY By: ____________________________________ MR. FRANKLIN Henry Allen Franklin
Exhibit A CHANGE IN CONTROL AGREEMENT
Exhibit A CHANGE IN CONTROL AGREEMENT Target Annual Bonus for Mr. Henry Allen Franklin 65%
Exhibit B CHANGE IN CONTROL AGREEMENT Waiver and Release The attached Waiver and Release is to be given to Mr. Henry Allen Franklin upon the occurrence of an event that triggers eligibility for severance benefits under the Change in Control Agreement, as described in Paragraph 2 (a) of such agreement.
CHANGE IN CONTROL AGREEMENT Waiver and Release I, Henry Allen Franklin, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Georgia Power Company (collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company
Exhibit B CHANGE IN CONTROL AGREEMENT Waiver and Release The attached Waiver and Release is to be given to Mr. Henry Allen Franklin upon the occurrence of an event that triggers eligibility for severance benefits under the Change in Control Agreement, as described in Paragraph 2 (a) of such agreement.
CHANGE IN CONTROL AGREEMENT Waiver and Release I, Henry Allen Franklin, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Georgia Power Company (collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company and/or any of its direct or indirect subsidiaries; however, I understand and acknowledge that nothing herein is intended to or shall be construed to require the Company to institute or continue in effect any particular plan or benefit sponsored by the Company and the Company hereby reserves the right to amend or terminate any of its benefit programs at any time in accordance with the procedures set forth in such plans. In signing this Waiver, I realize that I am waiving and releasing, among other things, any claims to benefits under any and all bonus, severance, workforce reduction, early retirement, outplacement, or any other similar type plan sponsored by the Company. I have been encouraged and advised in writing to seek advice from anyone of my choosing regarding this Waiver, including my attorney, and my accountant or tax advisor. Prior to signing this Waiver, I have been given the opportunity and sufficient time to seek such advice, and I fully understand the meaning and contents of this
CHANGE IN CONTROL AGREEMENT Waiver and Release I, Henry Allen Franklin, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Georgia Power Company (collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company and/or any of its direct or indirect subsidiaries; however, I understand and acknowledge that nothing herein is intended to or shall be construed to require the Company to institute or continue in effect any particular plan or benefit sponsored by the Company and the Company hereby reserves the right to amend or terminate any of its benefit programs at any time in accordance with the procedures set forth in such plans. In signing this Waiver, I realize that I am waiving and releasing, among other things, any claims to benefits under any and all bonus, severance, workforce reduction, early retirement, outplacement, or any other similar type plan sponsored by the Company. I have been encouraged and advised in writing to seek advice from anyone of my choosing regarding this Waiver, including my attorney, and my accountant or tax advisor. Prior to signing this Waiver, I have been given the opportunity and sufficient time to seek such advice, and I fully understand the meaning and contents of this Waiver. I understand that I may take up to twenty-one (21) calendar days to consider whether or not I desire to enter this Waiver. I was not coerced, threatened or otherwise forced to sign this Waiver. I have made my choice to sign this Waiver voluntarily and of my own free will. I understand that I may revoke this Waiver at any time during the seven (7) calendar day period after I sign and deliver this Waiver to the Company. If I revoke this Waiver, I must do so in writing delivered to the Company. I understand that this Waiver is not effective until the expiration of this seven (7) calendar day revocation period. I understand that upon the expiration of such seven (7) calendar day revocation period this entire Waiver will be binding upon me and will be irrevocable.
I understand that by signing this Waiver I am giving up rights I may have. IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this ____ day of ____________________, in the year _____. Henry Allen Franklin Sworn to and subscribed to me this ____ day of ____________, _____. Notary Public My Commission Expires: (Notary Seal) Acknowledged and Accepted by the Company, as defined in the Waiver. By: Date:
EXHIBIT 10(a)90 CHANGE IN CONTROL AGREEMENT THIS CHANGE IN CONTROL AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Southern Nuclear Operating Company, Inc. (the "Company") and Mr. William G. Hairston, III ("Mr. Hairston"). W I T N E S S E T H: WHEREAS, Mr. Hairston is the President and Chief Executive Officer of the Company; WHEREAS, the Company wishes to provide to Mr. Hairston certain severance benefits under certain circumstances following a change in control (as defined herein) of Southern or the Company; NOW, THEREFORE, in consideration of the premises, and the agreements 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. Definitions. For purposes of this Agreement, the following terms shall have the following meanings: (a) "Annual Compensation" shall mean Mr. Hairston's highest annual base salary rate for the twelve (12) month period immediately preceding the date of the Change in Control plus market level target annual bonus as set forth on Exhibit A hereof. (b) "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. (c) "Board" shall mean the board of directors of the Company. (d) "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern. (e) "Change in Control" shall mean any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Paragraph 1.(e)(i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control:
EXHIBIT 10(a)90 CHANGE IN CONTROL AGREEMENT THIS CHANGE IN CONTROL AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Southern Nuclear Operating Company, Inc. (the "Company") and Mr. William G. Hairston, III ("Mr. Hairston"). W I T N E S S E T H: WHEREAS, Mr. Hairston is the President and Chief Executive Officer of the Company; WHEREAS, the Company wishes to provide to Mr. Hairston certain severance benefits under certain circumstances following a change in control (as defined herein) of Southern or the Company; NOW, THEREFORE, in consideration of the premises, and the agreements 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. Definitions. For purposes of this Agreement, the following terms shall have the following meanings: (a) "Annual Compensation" shall mean Mr. Hairston's highest annual base salary rate for the twelve (12) month period immediately preceding the date of the Change in Control plus market level target annual bonus as set forth on Exhibit A hereof. (b) "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. (c) "Board" shall mean the board of directors of the Company. (d) "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern. (e) "Change in Control" shall mean any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Paragraph 1.(e)(i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control: (A) any acquisition directly from Southern; (B) any acquisition by Southern; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary; (D) any acquisition by a qualified pension plan or publicly held mutual fund; (E) any acquisition by a Group composed exclusively of employees of Southern, or any Southern Subsidiary; (F) any acquisition by Mr. Hairston or any Group of which Mr. Hairston is a party; or (G) any Business Combination which would not otherwise constitute a change in control because of the application of clauses (A), (B) and (C) of Paragraph 1.(e)(iii); (ii) A change in the composition of the Southern Board whereby individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Southern Board; (iii) Consummation of a Business Combination, provided, however, that such a Business Combination shall not
constitute a Change in Control if all three (3) of the following conditions are met: (A) all or substantially all of the individuals and entities who held Beneficial Ownership, respectively, of Southern's Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, 65% or more of the combined voting power of the Voting Securities of the corporation surviving or resulting from such Business Combination, (including, without limitation, a corporation which as a result of such transaction holds Beneficial Ownership of all or substantially all of Southern's Voting Securities or all or substantially all of Southern's assets) (such surviving or resulting corporation to be referred to as "Surviving Company"), in substantially the same proportions as their ownership, immediately prior to such Business Combination, of Southern's Voting Securities; (B) no Person (excluding any corporation resulting from such Business Combination, any employee benefit plan (or related trust) of Southern, any Southern Subsidiary or Surviving Company, Mr. Hairston, any Group of which Mr. Hairston is a party, any Group composed exclusively of Company employees, any qualified pension plan (or related trust) or any publicly held mutual fund) holds Beneficial Ownership, directly or indirectly, of 20% or more of the combined voting power of the then outstanding Voting Securities of Surviving Company except to the extent that such ownership existed prior to the Business Combination; and (C) at least a majority of the members of the board of directors of Surviving Company were members of the Incumbent Board at the earlier of the date of execution of the initial agreement, or of the action of the Southern Board, providing for such Business Combination. (iv) The Consummation of an acquisition by any Person of Beneficial Ownership of 50% or more of the combined voting power of the then outstanding Voting Securities of the Company; provided, however, that for purposes of this Paragraph 1.(e)(iv), any acquisition by Mr. Hairston, any Group composed exclusively of employees of the Company, any Group of which Mr. Hairston is a party, any qualified pension plan (or related trust), any publicly held mutual fund, any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary shall not constitute a Change in Control; (v) Consummation of a reorganization, merger or consolidation of the Company (an "Employing Company Business Combination"), in each case, unless, following such Employing Company Business Combination, Southern Controls the corporation or other entity surviving or resulting from such Employing Company Business Combination; or (vi) Consummation of the sale or other disposition of all or substantially all of the assets of the Company to a corporation or other entity which Southern does not Control. (f) "COBRA Coverage" shall mean any continuation coverage to which Mr. Hairston or his dependents may be entitled pursuant to Code Section 4980B. (g) "Code" shall mean the Internal Revenue Code of 1986, as amended. (h) "Company" shall mean Southern Nuclear Operating Company, Inc., its successors and assigns. (i) "Consummation" shall mean the completion of the final act necessary to complete a transaction as a matter of law, including, but not limited to, any required approvals by the corporation's shareholders and board of directors, the transfer of legal and beneficial title to securities or assets and the final approval of the transaction by any applicable domestic or foreign governments or governmental agencies. (j) "Control" shall mean, in the case of a corporation, Beneficial Ownership of more than 50% of the combined voting power of the corporation's Voting Securities, or in the case of any other entity, Beneficial Ownership of more than 50% of such entity's voting equity interests. (k) "Effective Date" shall mean the date of execution of this Agreement. (l) "Employee Outplacement Program" shall mean the program established by the Company from time to time for the purpose of assisting participants covered by the plan in finding employment outside of the Company which provides for the following services: (i) self-assessment, career decision and goal setting; (ii) job market research and job sources; (iii) networking and interviewing skills; (iv) planning and implementation strategy; (v) resume writing, job hunting methods and salary negotiation; and (vi) office support and job search resources.
(m) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. (n) "Good Reason" shall mean, without Mr. Hairston's express written consent, after written notice to the Board, and after a thirty (30) day opportunity for the Board to cure, the continuing occurrence of any of the following events: (i) Inconsistent Duties. A meaningful and detrimental alteration in Mr. Hairston's position or in the nature or status of his responsibilities from those in effect immediately prior to the Change in Control; (ii) Reduced Salary. A reduction of five percent (5%) or more by the Company in either of the following: (i) Mr. Hairston's annual base salary rate as in effect immediately prior to the Change in Control (except for a less than ten percent (10%), across-the-board annual base salary rate reduction similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); or (ii) the sum of Mr. Hairston's annual base salary rate plus target bonus under the PPP Plan (except for a less than ten percent (10%), across-the-board reduction of annual base salary rate plus target bonus under the PPP Plan similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); (iii) Pension and Compensation Plans. The failure by the Company to continue in effect any pension or compensation plan or agreement in which Mr. Hairston participates or is a party as of the date of the Change in Control or the elimination of Mr. Hairston's participation therein, (except for across-the-board plan changes or terminations similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); For purposes of this Paragraph 1.(n), a "pension plan or agreement" shall mean any written arrangement executed by an authorized officer of the Company which provides for payments upon retirement; and a "compensation plan or arrangement" shall mean any written arrangement executed by an authorized officer of the Company which provides for periodic, nondiscretionary compensatory payments in the nature of bonuses. (iv) Relocation. A change in Mr. Hairston's work location to a location more than fifty (50) miles from the office where Mr. Hairston is located at the time of the Change in Control, unless such new work location is within fifty (50) miles from Mr. Hairston's principal place of residence at the time of the Change in Control. The acceptance, if any, by Mr. Hairston of employment by the Company at a work location which is outside the fifty mile radius set forth in this Paragraph 1.(n)(iv) shall not be a waiver of Mr. Hairston's right to refuse subsequent transfer by the Company to a location which is more than fifty (50) miles from Mr. Hairston's principal place of residence at the time of the Change in Control, and such subsequent unconsented transfer shall be "Good Reason" under this Agreement; or (v) Benefits and Perquisites. The taking of any action by the Company which would directly or indirectly materially reduce the benefits enjoyed by Mr. Hairston under the Company's retirement, life insurance, medical, health and accident, disability, deferred compensation or savings plans in which Mr. Hairston was participating immediately prior to the Change in Control; or the failure by the Company to provide Mr. Hairston with the number of paid vacation days to which Mr. Hairston is entitled on the basis of years of service with the Company in accordance with the Company's normal vacation policy in effect immediately prior to the Change in Control (except for across-the-board plan or vacation policy changes or plan terminations similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company). (vi) For purposes of this Paragraph 1.(n), the term "Executive Employee" shall mean those employees of the Company of Grade Level 10 or above. (o) "Group" shall have the meaning set forth in Section 14(d) of the Exchange Act. (p) "Group Health Plan" shall mean the group health plan covering Mr. Hairston, as such plan may be amended from time to time. (q) "Group Life Insurance Plan" shall mean the group life insurance program covering Mr. Hairston, as such plan may be amended from time to time. (r) "Incumbent Board" shall mean those individuals who constitute the Southern Board as of the Effective Date plus any individual who shall become a director subsequent to such date whose election or nomination for election by Southern's shareholders was approved by a vote of at least 75% of the directors then comprising the Incumbent Board. Notwithstanding the foregoing, no individual who shall become a director of the Southern Board subsequent to the Effective Date whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Regulations promulgated under the
Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Southern Board shall be a member of the Incumbent Board. (s) "Month of Service" shall mean any calendar month during which Mr. Hairston has worked at least one (1) hour or was on approved leave of absence while in the employ of the Company or any affiliate or subsidiary of Southern. (t) "Pension Plan" shall mean The Southern Company Pension Plan, as such plan may be amended from time to time. (u) "Performance Dividend Plan" shall mean the Southern Company Performance Dividend Plan or any replacement thereto, as such plans may be amended from time to time. (v) "Performance Stock Plan" shall mean the Southern Company Performance Stock Plan or any replacement thereto, as such plans may be amended from time to time. (w) "Person" shall mean any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of Act. (x) "Performance Pay Plan" or "PPP Plan" shall mean the Southern Company Performance Pay Plan or any replacement thereto, as such plans may be amended from time to time. (y) "Productivity Improvement Plan" or "PIP Plan" shall mean the Southern Company Productivity Improvement Plan or replacement thereto, as such plans may be amended from time to time. (z) "Southern" shall mean The Southern Company, its successors and assigns. (aa) "Southern Board" shall mean the board of directors of Southern. (bb) "Southern Subsidiary" shall mean any corporation or other entity Controlled by Southern. (cc) "Termination for Cause" or "Cause" shall mean the termination of Mr. Hairston's employment by the Company upon the occurrence of any of the following: (i) The willful and continued failure by Mr. Hairston substantially to perform his duties with the Company (other than any such failure resulting from Mr. Hairston's Total Disability or from Mr. Hairston's retirement or any such actual or anticipated failure resulting from termination by Mr. Hairston for Good Reason) after a written demand for substantial performance is delivered to him by the Southern Board, which demand specifically identifies the manner in which the Southern Board believes that he has not substantially performed his duties; or (ii) The willful engaging by Mr. Hairston in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise, including, but not limited to any of the following: (A) any willful act involving fraud or dishonesty in the course of Mr. Hairston's employment by the Company; (B) the willful carrying out of any activity or the making of any statement which would materially prejudice or impair the good name and standing of the Company, Southern or any Southern Subsidiary or would bring the Company, Southern or any Southern Subsidiary into contempt, ridicule or would reasonably shock or offend any community in which the Company, Southern or such Southern Subsidiary is located; (C) attendance at work in a state of intoxication or otherwise being found in possession at his workplace of any prohibited drug or substance, possession of which would amount to a criminal offense; (D) violation of the Company's policies on drug and alcohol usage, fitness for duty requirements or similar policies as may exist from time to time as adopted by the Company's safety officer; (E) assault or other act of violence against any person during the course of employment; or (F) indictment of any felony or any misdemeanor involving moral turpitude.
No act or failure to act by Mr. Hairston shall be deemed "willful" unless done, or omitted to be done, by Mr. Hairston not in good faith and without reasonable belief that his action or omission was in the best interest of the Company. Notwithstanding the foregoing, Mr. Hairston shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to him a copy of a resolution duly adopted by the affirmative vote of not less than three quarters of the entire membership of the Southern Board at a meeting of the Southern Board called and held for such purpose (after reasonable notice to Mr. Hairston and an opportunity for him, together with counsel, to be heard before the Southern Board), finding that, in the good faith opinion of the Southern Board, Mr. Hairston was guilty of conduct set forth above in clause (i) or (ii) of this Paragraph 1.(cc) and specifying the particulars thereof in detail. (dd) "Termination Date" shall mean the date on which Mr. Hairston's employment with the Company is terminated; provided, however, that solely for purposes of Paragraph 2.(c) hereof, the Termination Date shall be the effective date of his retirement pursuant to the terms of the Pension Plan. (ee) "Total Disability" shall mean Mr. Hairston's total disability within the meaning of the Pension Plan. (ff) "Voting Securities" shall mean the outstanding voting securities of a corporation entitling the holder thereof to vote generally in the election of such corporation's directors. (gg) "Waiver and Release" shall mean the Waiver and Release attached hereto as Exhibit B. (hh) "Year of Service" shall mean Mr. Hairston's Months of Service divided by twelve (12) rounded to the nearest whole year, rounding up if the remaining number of months is seven (7) or greater and rounding down if the remaining number of months is less than seven (7). If Mr. Hairston has a break in his service with the Company, he will receive credit under this Agreement for service prior to the break in service only if the break in service is less than five years. 2. Severance Benefits. (a) Eligibility. Except as otherwise provided in this Paragraph 2.(a), if Mr. Hairston's employment is involuntarily terminated by the Company at any time during the two year period following a Change in Control for reasons other than Cause, or if Mr. Hairston voluntarily terminates his employment with the Company for Good Reason at any time during the two year period following a Change in Control, Mr. Hairston shall be entitled to receive the benefits described in this Agreement upon the Company's receipt of an effective Waiver and Release. Notwithstanding anything to the contrary herein, Mr. Hairston shall not be eligible to receive benefits under this Agreement if Mr. Hairston: (i) voluntarily terminates his employment with the Company for other than Good Reason; (ii) has his employment terminated by the Company for Cause; (iii) accepts the transfer of his employment to Southern, any Southern Subsidiary or any employer that succeeds to all or substantially all of the assets of the Company, Southern or any Southern Subsidiary; (iv) refuses an offer of continued employment with the Company, any Southern Subsidiary, or any employer that succeeds to all or substantially all of the assets of the Company, Southern, or any Southern Subsidiary under circumstances where such refusal would not amount to Good Reason for voluntary termination of employment; or (v) elects to receive the benefits of any other voluntary or involuntary severance or separation program maintained by the Company; provided however, that the receipt of benefits under the terms of any retention plan or agreement shall not be deemed to be the receipt of severance or separation benefits for purposes of this Agreement. (b) Severance Benefits. If Mr. Hairston meets the eligibility requirements of Paragraph 2.(a) hereof, he shall be entitled to a cash severance benefit in an amount equal to three times his Annual Compensation (the "Severance Amount"). If any portion of the Severance Amount constitutes an "excess parachute payment" (as such term is defined under Code Section 280G ("Excess Parachute Payment")), the Company shall pay to Mr. Hairston an additional amount calculated by determining the amount of tax under Code Section 4999 that he otherwise would have paid on any Excess Parachute Payment with respect to the Change in Control and dividing
such amount by a decimal determined by adding the tax rate under Code Section 4999 ("Excise Tax"), the hospital insurance tax under Code Section 3101(b) ("HI Tax") and federal and state income tax measured at the highest marginal rates ("Income Tax") and subtracting such result from the number one (1) (the "280G Grossup"); provided, however, that no 280G Gross-up shall be paid unless the Severance Amount plus all other "parachute payments" to Mr. Hairston under Code Section 280G exceeds three (3) times Mr. Hairston's "base amount" (as such term is defined under Code Section 280G ("Base Amount")) by ten percent (10%) or more; provided further, that if no 280G Gross-up is paid, the Severance Amount shall be capped at three (3) times Mr. Hairston's Base Amount, less all other "parachute payments" (as such term is defined under Code Section 280G) received by Mr. Hairston, less one dollar (the "Capped Amount"), if the Capped Amount, reduced by HI Tax and Income Tax, exceeds what otherwise would have been the Severance Amount, reduced by HI Tax, Income Tax and Excise Tax. For purposes of this Paragraph 2.(b), whether any amount would constitute an Excess Parachute Payment and any other calculations of tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts e.g., Base Amount, Capped Amount, etc., shall be determined by the tax department of the independent public accounting firm then responsible for preparing Southern's consolidated federal income tax return, and such calculations or determinations shall be binding upon the parties hereto. (c) Welfare Benefits. If Mr. Hairston meets the eligibility requirements of Paragraph 2.(a) hereof and is not otherwise eligible to receive retiree medical and life insurance benefits provided to certain retirees pursuant to the terms of the Pension Plan, the Group Health Plan and the Group Life Insurance Plan, he shall be entitled to the benefits set forth in this Paragraph 2.(c). (i) Mr. Hairston shall be eligible to participate in the Company's Group Health Plan, upon payment of both the Company's and his monthly premium under such plan, for a period of six (6) months for each of Mr. Hairston's Years of Service, not to exceed five (5) years. If Mr. Hairston elects to receive this extended medical coverage, he shall also be entitled to elect coverage under the Group Health Plan for his dependents who were participating in the Group Health Plan on Mr. Hairston's Termination Date (and for such other dependents as may be entitled to coverage under the provisions of the Health Insurance Portability and Accountability Act of 1996) for the duration of Mr. Hairston's extended medical coverage under this Paragraph 2.(c)(i) to the extent such dependents remain eligible for dependent coverage under the terms of the Group Health Plan. (A) The extended medical coverage afforded to Mr. Hairston pursuant to Paragraph 2.(c)(i), as well as the premiums to be paid by Mr. Hairston in connection with such coverage shall be determined in accordance with the terms of the Group Health Plan and shall be subject to any changes in the terms and conditions of the Group Health Plan as well as any future increases in premiums under the Group Health Plan. The premiums to be paid by Mr. Hairston in connection with this extended coverage shall be due on the first day of each month; provided, however, that if he fails to pay his premium within thirty (30) days of its due date, such extended coverage shall be terminated. (B) Any Group Health Plan coverage provided under Paragraph 2.(c)(i) shall be a part of and not in addition to any COBRA Coverage which Mr. Hairston or his dependents may elect. In the event that Mr. Hairston or his dependents become eligible to be covered, by virtue of re-employment or otherwise, by any employersponsored group health plan or is eligible for coverage under any government-sponsored health plan during the above period, coverage under the Company's Group Health Plan available to Mr. Hairston or his dependents by virtue of the provisions of Paragraph 2.(c)(i) shall terminate, except as may otherwise be required by law, and shall not be renewed. (ii) Mr. Hairston shall be entitled to receive cash in an amount equal to the Company's and Mr. Hairston's cost of premiums for three (3) years of coverage under the Group Health Plan and Group Life Insurance Plan in accordance with the terms of such plans as of the date of the Change in Control. (d) Incentive Plans. If Mr. Hairston meets the eligibility requirements of Paragraph 2.(a) hereof he shall be entitled to the following benefits under the Company's incentive plans: (i) Stock Option Plan. (A) Any of Mr. Hairston's Options and Stock Appreciation Rights under the Performance Stock Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(i) by reference) which are outstanding as of the Termination Date and which are not then exercisable and vested, shall become fully exercisable and vested to the full extent of the original grant; provided, that in the case of a Stock Appreciation Right, if Mr. Hairston is subject
to Section 16(b) of the Exchange Act, such Stock Appreciation Right shall not become fully vested and exercisable at such time if such actions would result in liability to Mr. Hairston under Section 16(b) of the Exchange Act, provided further, that any such actions not taken as a result of the rules under Section 16(b) of the Exchange Act shall be effected as of the first date that such activity would no longer result in liability under Section 16(b) of the Exchange Act. (B) The restrictions and deferral limitations applicable to any of Mr. Hairston's Restricted Stock as of the Termination Date shall lapse, and such Restricted Stock shall become free of all restrictions and limitations and become fully vested and transferable to the full extent of the original grant. (C) The restrictions and deferral limitations and other conditions applicable to any other Awards held by Mr. Hairston under the Stock Performance Plan as of the Termination Date shall lapse, and such other Awards shall become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent of the original grant. (ii) Performance Pay Plan. Provided Mr. Hairston is not entitled to benefits under Article V of the PPP Plan, (the defined terms of which are incorporated in this Paragraph 2.(d)(ii) by reference), if the PPP Plan is in place through Mr. Hairston's Termination Date and to the extent Mr. Hairston is entitled to participate therein, Mr. Hairston shall be entitled to receive cash in an amount equal to a prorated payout of his Incentive Pay Awards under the PPP Plan for the Performance Period in which the Termination Date shall have occurred, at target performance under the PPP Plan and prorated by the number of months which have passed since the beginning of the Performance Period until the Termination Date. (iii) PIP Plan. Provided Mr. Hairston is not entitled to benefits under Article IV of the PIP Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(iii) by reference), if the PIP Plan is in place through Mr. Hairston's Termination Date and to the extent Mr. Hairston is entitled to participate therein, Mr. Hairston shall be entitled to receive cash in an amount equal to his Award Opportunity for the Computation Periods in which the Termination Date shall have occurred at a target Value of Performance Unit of $1.00, prorated for each Computation Period by the number of months which have passed since the beginning of the Computation Periods until the Termination Date. (iv) Performance Dividend Plan. Provided Mr. Hairston is not entitled to benefits under the Performance Dividend Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(iv) by reference), if the Performance Dividend Plan is in place through Mr. Hairston's Termination Date and to the extent Mr. Hairston is entitled to participate therein, Mr. Hairston shall be entitled to receive cash for each Award held by Mr. Hairston on his Termination Date, based on actual performance under Section 4.1 of the Performance Dividend Plan determined as of the most recently completed calendar quarter of the Performance Period in which the Termination Date shall have occurred, and the Annual Dividend declared prior to the Termination Date. (v) Other Short Term Incentive Plans. The provisions of this Paragraph 2.(d)(v) shall apply if and to the extent that Mr. Hairston is a participant in any other "short term compensation plan" not otherwise previously referred to in this Paragraph 2.(d). Provided Mr. Hairston is not otherwise entitled to a plan payout under any change of control provisions of such plans, if the "short term compensation plan" is in place as of the Termination Date and to the extent Mr. Hairston is entitled to participate therein, Mr. Hairston shall receive cash in an amount equal to his award under the Company's "short term incentive plan" for the annual performance period in which the Termination Date shall have occurred, at Mr. Hairston's target performance level and prorated by the number of months which have passed since the beginning of the annual performance period until his Termination Date. For purposes of this Paragraph 2.(d)(v) the term "short term incentive compensation plan" shall mean any incentive compensation plan or arrangement adopted in writing by the Company which provides for annual, recurring compensatory bonuses based upon articulated performance criteria. (e) Payment of Benefits. Any amounts due under this Agreement shall be paid in one (1) lump sum payment as soon as administratively practicable following the later of: (i) Mr. Hairston's Termination Date, or (ii) upon Mr. Hairston's tender of an effective Waiver and Release to the Company in the form of Exhibit B attached hereto and the expiration of any applicable revocation period for such waiver. In the event of a dispute with respect to liability or amount of any benefit due hereunder, an effective Waiver and Release shall be tendered at the time of final resolution of any such dispute when payment is tendered by the Company. (f) Benefits in the Event of Death. In the event of Mr. Hairston's death prior to the payment of all amounts due under this Agreement, Mr. Hairston's estate shall be entitled to receive as due any amounts not yet paid under this Agreement upon the tender by the executor or administrator of the estate of an effective Waiver and Release.
(g) Legal Fees. In the event of a dispute between Mr. Hairston and the Company with regard to any amounts due hereunder, if any material issue in such dispute is finally resolved in Mr. Hairston's favor, the Company shall reimburse Mr. Hairston's legal fees incurred with respect to all issues in such dispute in an amount not to exceed fifty thousand dollars ($50,000). (h) Employee Outplacement Services. Mr. Hairston shall be eligible to participate in the Employee Outplacement Program, which program shall not be less than six (6) months duration measured from Mr. Hairston's Termination Date. (i) Non-qualified Retirement and Deferred Compensation Plans. The Parties agree that subsequent to a Change in Control, any claims by Mr. Hairston for benefits under any of the Company's non-qualified retirement or deferred compensation plans shall be resolved through binding arbitration in accordance with the provisions and procedures set forth in Paragraph 5 hereof and if any material issue in such dispute is finally resolved in Mr. Hairston's favor, the Company shall reimburse Mr. Hairston's legal fees in the manner provided in Paragraph 2.(g) hereof. 3. Transfer of Employment. In the event that Mr. Hairston's employment by the Company is terminated during the two year period following a Change in Control and Mr. Hairston accepts employment by Southern, a Southern Subsidiary, or any employer that succeeds to all or substantially all of the assets of the Company, Southern or any Southern Subsidiary, the Company shall assign this Agreement to Southern, such Southern Subsidiary, or successor employer, Southern shall accept such assignment or cause such Southern Subsidiary or successor employer to accept such assignment, and such assignee shall become the "Company" for all purposes hereunder. 4. No Mitigation. If Mr. Hairston is otherwise eligible to receive benefits under Paragraph 2 of this Agreement, he shall have no duty or obligation to seek other employment following his Termination Date and, except as otherwise provided in Paragraph 2.(a)(iii) hereof, the amounts due Mr. Hairston hereunder shall not be reduced or suspended if Mr. Hairston accepts such subsequent employment. 5. Arbitration. (a) Any dispute, controversy or claim arising out of or relating to the Company's obligations to pay severance benefits under this Agreement, or the breach thereof, shall be settled and resolved solely by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA") except as otherwise provided herein. The arbitration shall be the sole and exclusive forum for resolution of any such claim for severance benefits and the arbitrators' award shall be final and binding. The provisions of this Paragraph 5 are not intended to apply to any other disputes, claims or controversies arising out of or relating to Mr. Hairston's employment by the Company or the termination thereof. (b) Arbitration shall be initiated by serving a written notice of demand for arbitration to Mr. Hairston, in the case of the Company, or to the Southern Board, in the case of Mr. Hairston. (c) The arbitration shall be held in Atlanta, Georgia. The arbitrators shall apply the law of the State of Georgia, to the extent not preempted by federal law, excluding any law which would require the application of the law of another state. (d) The parties shall appoint arbitrators within fifteen (15) business days following service of the demand for arbitration. The number of arbitrators shall be three. One arbitrator shall be appointed by Mr. Hairston, one arbitrator shall be appointed by the Company, and the two arbitrators shall appoint a third. If the arbitrators cannot agree on a third arbitrator within thirty (30) business days after the service of demand for arbitration, the third arbitrator shall be selected by the AAA. (e) The arbitration filing fee shall be paid by Mr. Hairston. All other costs of arbitration shall be borne equally by Mr. Hairston and the Company, provided, however, that the Company shall reimburse such fees and costs in the event any material issue in such dispute is finally resolved in Mr. Hairston's favor and Mr. Hairston is reimbursed legal fees under Paragraph 2.(g) hereof. (f) The parties agree that they will faithfully observe the rules that govern any arbitration between them, they will abide by and perform any award rendered by the arbitrators in any such arbitration, including any award of injunctive relief, and a judgment of a court having jurisdiction may be entered upon an award.
(g) The parties agree that nothing in this Paragraph 5 is intended to preclude upon application of either party any court having jurisdiction from issuing and enforcing in any lawful manner such temporary restraining orders, preliminary injunctions, and other interim measures of relief as may be necessary to prevent harm to a party's interests or as otherwise may be appropriate pending the conclusion of arbitration proceedings pursuant to this Agreement regardless of whether an arbitration proceeding under this Paragraph 5 has begun. The parties further agree that nothing herein shall prevent any court from entering and enforcing in any lawful manner such judgments for permanent equitable relief as may be necessary to prevent harm to a party's interests or as otherwise may be appropriate following the issuance of arbitral awards pursuant to this Paragraph 5. 6. Miscellaneous. (a) Funding of Benefits. Unless the Board in its discretion shall determine otherwise, the benefits payable to Mr. Hairston under this Agreement shall not be funded in any manner and shall be paid by the Company out of its general assets, which assets are subject to the claims of the Company's creditors. (b) Withholding. There shall be deducted from the payment of any benefit due under this Agreement 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 Mr. Hairston. (c) Assignment. Mr. Hairston shall have no rights to sell, assign, transfer, encumber, or otherwise convey the right to receive the payment of any benefit due hereunder, which payment and the rights thereto are expressly declared to be nonassignable and nontransferable. Any attempt to do so shall be null and void and of no effect. (d) Amendment and Termination. The Agreement may be amended or terminated only by a writing executed by the parties. (e) Construction. This Agreement shall be construed in accordance with and governed by the laws of the State of Georgia, to the extent not preempted by federal law, disregarding any provision of law which would require the application of the law of another state. (f) Pooling Accounting. Notwithstanding anything to the contrary herein, if, but for any provision of this Agreement, a Change in Control transaction would otherwise be accounted for as a pooling-of-interests under APB No.16 ("Pooling Accounting") (after giving effect to any and all other facts and circumstances affecting whether such Change in Control transaction would use Pooling Accounting), such provision or provisions of this Agreement which would otherwise cause the Change in Control transaction to be ineligible for Pooling Accounting shall be void and ineffective in such a manner and to the extent that by eliminating such provision or provisions of this Agreement, Pooling Accounting would be required for such Change in Control transaction. IN WITNESS WHEREOF, the parties hereto have executed this Agreement this ____ day of __________________, 199__. THE SOUTHERN COMPANY By: ____________________________________ SOUTHERN NUCLEAR OPERATING COMPANY, INC. By: ____________________________________ MR. HAIRSTON William G. Hairston, III
Exhibit A CHANGE IN CONTROL AGREEMENT
Exhibit A CHANGE IN CONTROL AGREEMENT Target Annual Bonus for Mr. William G. Hairston, III 50%
Exhibit B CHANGE IN CONTROL AGREEMENT Waiver and Release The attached Waiver and Release is to be given to Mr. William G. Hairston, III upon the occurrence of an event that triggers eligibility for severance benefits under the Change in Control Agreement, as described in Paragraph 2 (a) of such agreement.
CHANGE IN CONTROL AGREEMENT Waiver and Release I, William G. Hairston, III, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Southern Nuclear Operating Company, Inc. (collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company
Exhibit B CHANGE IN CONTROL AGREEMENT Waiver and Release The attached Waiver and Release is to be given to Mr. William G. Hairston, III upon the occurrence of an event that triggers eligibility for severance benefits under the Change in Control Agreement, as described in Paragraph 2 (a) of such agreement.
CHANGE IN CONTROL AGREEMENT Waiver and Release I, William G. Hairston, III, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Southern Nuclear Operating Company, Inc. (collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company and/or any of its direct or indirect subsidiaries; however, I understand and acknowledge that nothing herein is intended to or shall be construed to require the Company to institute or continue in effect any particular plan or benefit sponsored by the Company and the Company hereby reserves the right to amend or terminate any of its benefit programs at any time in accordance with the procedures set forth in such plans. In signing this Waiver, I realize that I am waiving and releasing, among other things, any claims to benefits under any and all bonus, severance, workforce reduction, early retirement, outplacement, or any other similar type plan sponsored by the Company. I have been encouraged and advised in writing to seek advice from anyone of my choosing regarding this Waiver, including my attorney, and my accountant or tax advisor. Prior to signing this Waiver, I have been given the opportunity and sufficient time to seek such advice, and I fully understand the meaning and contents of this
CHANGE IN CONTROL AGREEMENT Waiver and Release I, William G. Hairston, III, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Southern Nuclear Operating Company, Inc. (collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company and/or any of its direct or indirect subsidiaries; however, I understand and acknowledge that nothing herein is intended to or shall be construed to require the Company to institute or continue in effect any particular plan or benefit sponsored by the Company and the Company hereby reserves the right to amend or terminate any of its benefit programs at any time in accordance with the procedures set forth in such plans. In signing this Waiver, I realize that I am waiving and releasing, among other things, any claims to benefits under any and all bonus, severance, workforce reduction, early retirement, outplacement, or any other similar type plan sponsored by the Company. I have been encouraged and advised in writing to seek advice from anyone of my choosing regarding this Waiver, including my attorney, and my accountant or tax advisor. Prior to signing this Waiver, I have been given the opportunity and sufficient time to seek such advice, and I fully understand the meaning and contents of this Waiver. I understand that I may take up to twenty-one (21) calendar days to consider whether or not I desire to enter this Waiver. I was not coerced, threatened or otherwise forced to sign this Waiver. I have made my choice to sign this Waiver voluntarily and of my own free will. I understand that I may revoke this Waiver at any time during the seven (7) calendar day period after I sign and deliver this Waiver to the Company. If I revoke this Waiver, I must do so in writing delivered to the Company. I understand that this Waiver is not effective until the expiration of this seven (7) calendar day revocation period. I understand that upon the expiration of such seven (7) calendar day revocation period this entire Waiver will be binding upon me and will be irrevocable.
I understand that by signing this Waiver I am giving up rights I may have. IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this ____ day of ____________________, in the year _____. William G. Hairston, III Sworn to and subscribed to me this ____ day of ____________, _____. Notary Public My Commission Expires: (Notary Seal) Acknowledged and Accepted by the Company, as defined in the Waiver. By: Date:
EXHIBIT 10(a)91 CHANGE IN CONTROL AGREEMENT THIS CHANGE IN CONTROL AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Alabama Power Company (the "Company") and Mr. Elmer B. Harris ("Mr. Harris"). W I T N E S S E T H: WHEREAS, Mr. Harris is the President and Chief Executive Officer of the Company; WHEREAS, the Company wishes to provide to Mr. Harris certain severance benefits under certain circumstances following a change in control (as defined herein) of Southern or the Company; NOW, THEREFORE, in consideration of the premises, and the agreements 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. Definitions. For purposes of this Agreement, the following terms shall have the following meanings: (a) "Annual Compensation" shall mean Mr. Harris's highest annual base salary rate for the twelve (12) month period immediately preceding the date of the Change in Control plus market level target annual bonus as set forth on Exhibit A hereof. (b) "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. (c) "Board" shall mean the board of directors of the Company. (d) "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern. (e) "Change in Control" shall mean any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Paragraph 1.(e)(i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control:
EXHIBIT 10(a)91 CHANGE IN CONTROL AGREEMENT THIS CHANGE IN CONTROL AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Alabama Power Company (the "Company") and Mr. Elmer B. Harris ("Mr. Harris"). W I T N E S S E T H: WHEREAS, Mr. Harris is the President and Chief Executive Officer of the Company; WHEREAS, the Company wishes to provide to Mr. Harris certain severance benefits under certain circumstances following a change in control (as defined herein) of Southern or the Company; NOW, THEREFORE, in consideration of the premises, and the agreements 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. Definitions. For purposes of this Agreement, the following terms shall have the following meanings: (a) "Annual Compensation" shall mean Mr. Harris's highest annual base salary rate for the twelve (12) month period immediately preceding the date of the Change in Control plus market level target annual bonus as set forth on Exhibit A hereof. (b) "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. (c) "Board" shall mean the board of directors of the Company. (d) "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern. (e) "Change in Control" shall mean any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Paragraph 1.(e)(i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control: (A) any acquisition directly from Southern; (B) any acquisition by Southern; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary; (D) any acquisition by a qualified pension plan or publicly held mutual fund; (E) any acquisition by a Group composed exclusively of employees of Southern, or any Southern Subsidiary; (F) any acquisition by Mr. Harris or any Group of which Mr. Harris is a party; or (G) any Business Combination which would not otherwise constitute a change in control because of the application of clauses (A), (B) and (C) of Paragraph 1.(e)(iii); (ii) A change in the composition of the Southern Board whereby individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Southern Board; (iii) Consummation of a Business Combination, provided, however, that such a Business Combination shall not
constitute a Change in Control if all three (3) of the following conditions are met: (A) all or substantially all of the individuals and entities who held Beneficial Ownership, respectively, of Southern's Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, 65% or more of the combined voting power of the Voting Securities of the corporation surviving or resulting from such Business Combination, (including, without limitation, a corporation which as a result of such transaction holds Beneficial Ownership of all or substantially all of Southern's Voting Securities or all or substantially all of Southern's assets) (such surviving or resulting corporation to be referred to as "Surviving Company"), in substantially the same proportions as their ownership, immediately prior to such Business Combination, of Southern's Voting Securities; (B) no Person (excluding any corporation resulting from such Business Combination, any employee benefit plan (or related trust) of Southern, any Southern Subsidiary or Surviving Company, Mr. Harris, any Group of which Mr. Harris is a party, any Group composed exclusively of Company employees, any qualified pension plan (or related trust) or any publicly held mutual fund) holds Beneficial Ownership, directly or indirectly, of 20% or more of the combined voting power of the then outstanding Voting Securities of Surviving Company except to the extent that such ownership existed prior to the Business Combination; and (C) at least a majority of the members of the board of directors of Surviving Company were members of the Incumbent Board at the earlier of the date of execution of the initial agreement, or of the action of the Southern Board, providing for such Business Combination. (iv) The Consummation of an acquisition by any Person of Beneficial Ownership of 50% or more of the combined voting power of the then outstanding Voting Securities of the Company; provided, however, that for purposes of this Paragraph 1.(e)(iv), any acquisition by Mr. Harris, any Group composed exclusively of employees of the Company, any Group of which Mr. Harris is a party, any qualified pension plan (or related trust), any publicly held mutual fund, any employee benefit plan (or related trust) sponsored or maintained by Southern or Southern Subsidiary shall not constitute a Change in Control; (v) Consummation of a reorganization, merger or consolidation of the Company (an "Employing Company Business Combination"), in each case, unless, following such Employing Company Business Combination, Southern Controls the corporation or other entity surviving or resulting from such Employing Company Business Combination; or (vi) Consummation of the sale or other disposition of all or substantially all of the assets of the Company to a corporation or other entity which Southern does not Control. (f) "COBRA Coverage" shall mean any continuation coverage to which Mr. Harris or his dependents may be entitled pursuant to Code Section 4980B. (g) "Code" shall mean the Internal Revenue Code of 1986, as amended. (h) "Company" shall mean Alabama Power Company, its successors and assigns. (i) "Consummation" shall mean the completion of the final act necessary to complete a transaction as a matter of law, including, but not limited to, any required approvals by the corporation's shareholders and board of directors, the transfer of legal and beneficial title to securities or assets and the final approval of the transaction by any applicable domestic or foreign governments or governmental agencies. (j) "Control" shall mean, in the case of a corporation, Beneficial Ownership of more than 50% of the combined voting power of the corporation's Voting Securities, or in the case of any other entity, Beneficial Ownership of more than 50% of such entity's voting equity interests. (k) "Effective Date" shall mean the date of execution of this Agreement. (l) "Employee Outplacement Program" shall mean the program established by the Company from time to time for the purpose of assisting participants covered by the plan in finding employment outside of the Company which provides for the following services: (i) self-assessment, career decision and goal setting; (ii) job market research and job sources; (iii) networking and interviewing skills; (iv) planning and implementation strategy; (v) resume writing, job hunting methods and salary negotiation; and (vi) office support and job search resources.
(m) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. (n) "Good Reason" shall mean, without Mr. Harris's express written consent, after written notice to the Board, and after a thirty (30) day opportunity for the Board to cure, the continuing occurrence of any of the following events: (i) Inconsistent Duties. A meaningful and detrimental alteration in Mr. Harris's position or in the nature or status of his responsibilities from those in effect immediately prior to the Change in Control; (ii) Reduced Salary. A reduction of five percent (5%) or more by the Company in either of the following: (i) Mr. Harris's annual base salary rate as in effect immediately prior to the Change in Control (except for a less than ten percent (10%), across-the-board annual base salary rate reduction similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); or (ii) the sum of Mr. Harris's annual base salary rate plus target bonus under the PPP Plan (except for a less than ten percent (10%), across-the-board reduction of annual base salary rate plus target bonus under the PPP Plan similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); (iii) Pension and Compensation Plans. The failure by the Company to continue in effect any pension or compensation plan or agreement in which Mr. Harris participates or is a party as of the date of the Change in Control or the elimination of Mr. Harris' participation therein, (except for across-the-board plan changes or terminations similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company); For purposes of this Paragraph 1.(n), a "pension plan or agreement" shall mean any written arrangement executed by an authorized officer of the Company which provides for payments upon retirement; and a "compensation plan or arrangement" shall mean any written arrangement executed by an authorized officer of the Company which provides for periodic, nondiscretionary compensatory payments in the nature of bonuses. (iv) Relocation. A change in Mr. Harris's work location to a location more than fifty (50) miles from the office where Mr. Harris is located at the time of the Change in Control, unless such new work location is within fifty (50) miles from Mr. Harris's principal place of residence at the time of the Change in Control. The acceptance, if any, by Mr. Harris of employment by the Company at a work location which is outside the fifty mile radius set forth in this Paragraph 1.(n)(iv) shall not be a waiver of Mr. Harris's right to refuse subsequent transfer by the Company to a location which is more than fifty (50) miles from Mr. Harris's principal place of residence at the time of the Change in Control, and such subsequent unconsented transfer shall be "Good Reason" under this Agreement; or (v) Benefits and Perquisites. The taking of any action by the Company which would directly or indirectly materially reduce the benefits enjoyed by Mr. Harris under the Company's retirement, life insurance, medical, health and accident, disability, deferred compensation or savings plans in which Mr. Harris was participating immediately prior to the Change in Control; or the failure by the Company to provide Mr. Harris with the number of paid vacation days to which Mr. Harris is entitled on the basis of years of service with the Company in accordance with the Company's normal vacation policy in effect immediately prior to the Change in Control (except for across-the-board plan or vacation policy changes or plan terminations similarly affecting at least ninety-five percent (95%) of the Executive Employees of the Company). (vi) For purposes of this Paragraph 1.(n), the term "Executive Employee" shall mean those employees of the Company of Grade Level 10 or above. (o) "Group" shall have the meaning set forth in Section 14(d) of the Exchange Act. (p) "Group Health Plan" shall mean the group health plan covering Mr. Harris, as such plan may be amended from time to time. (q) "Group Life Insurance Plan" shall mean the group life insurance program covering Mr. Harris, as such plan may be amended from time to time. (r) "Incumbent Board" shall mean those individuals who constitute the Southern Board as of the Effective Date plus any individual who shall become a director subsequent to such date whose election or nomination for election by Southern's shareholders was approved by a vote of at least 75% of the directors then comprising the Incumbent Board. Notwithstanding the foregoing, no individual who shall become a director of the Southern Board subsequent to the Effective Date whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Regulations promulgated under the
Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Southern Board shall be a member of the Incumbent Board. (s) "Month of Service" shall mean any calendar month during which Mr. Harris has worked at least one (1) hour or was on approved leave of absence while in the employ of the Company or any affiliate or subsidiary of Southern. (t) "Pension Plan" shall mean The Southern Company Pension Plan, as such plan may be amended from time to time. (u) "Performance Dividend Plan" shall mean the Southern Company Performance Dividend Plan or any replacement thereto, as such plans may be amended from time to time. (v) "Performance Stock Plan" shall mean the Southern Company Performance Stock Plan or any replacement thereto, as such plans may be amended from time to time. (w) "Person" shall mean any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of Act. (x) "Performance Pay Plan" or "PPP Plan" shall mean the Southern Company Performance Pay Plan or any replacement thereto, as such plans may be amended from time to time. (y) "Productivity Improvement Plan" or "PIP Plan" shall mean the Southern Company Productivity Improvement Plan or replacement thereto, as such plans may be amended from time to time. (z) "Southern" shall mean The Southern Company, its successors and assigns. (aa) "Southern Board" shall mean the board of directors of Southern. (bb) "Southern Subsidiary" shall mean any corporation or other entity Controlled by Southern. (cc) "Termination for Cause" or "Cause" shall mean the termination of Mr. Harris's employment by the Company upon the occurrence of any of the following: (i) The willful and continued failure by Mr. Harris substantially to perform his duties with the Company (other than any such failure resulting from Mr. Harris's Total Disability or from Mr. Harris's retirement or any such actual or anticipated failure resulting from termination by Mr. Harris for Good Reason) after a written demand for substantial performance is delivered to him by the Southern Board, which demand specifically identifies the manner in which the Southern Board believes that he has not substantially performed his duties; or (ii) The willful engaging by Mr. Harris in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise, including, but not limited to any of the following: (A) any willful act involving fraud or dishonesty in the course of Mr. Harris's employment by the Company; (B) the willful carrying out of any activity or the making of any statement which would materially prejudice or impair the good name and standing of the Company, Southern or any Southern Subsidiary or would bring the Company, Southern or any Southern Subsidiary into contempt, ridicule or would reasonably shock or offend any community in which the Company, Southern or such Southern Subsidiary is located; (C) attendance at work in a state of intoxication or otherwise being found in possession at his workplace of any prohibited drug or substance, possession of which would amount to a criminal offense; (D) violation of the Company's policies on drug and alcohol usage, fitness for duty requirements or similar policies as may exist from time to time as adopted by the Company's safety officer; (E) assault or other act of violence against any person during the course of employment; or (F) indictment of any felony or any misdemeanor involving moral turpitude.
No act or failure to act by Mr. Harris shall be deemed "willful" unless done, or omitted to be done, by Mr. Harris not in good faith and without reasonable belief that his action or omission was in the best interest of the Company. Notwithstanding the foregoing, Mr. Harris shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to him a copy of a resolution duly adopted by the affirmative vote of not less than three quarters of the entire membership of the Southern Board at a meeting of the Southern Board called and held for such purpose (after reasonable notice to Mr. Harris and an opportunity for him, together with counsel, to be heard before the Southern Board), finding that, in the good faith opinion of the Southern Board, Mr. Harris was guilty of conduct set forth above in clause (i) or (ii) of this Paragraph 1.(cc) and specifying the particulars thereof in detail. (dd) "Termination Date" shall mean the date on which Mr. Harris's employment with the Company is terminated; provided, however, that solely for purposes of Paragraph 2.(c) hereof, the Termination Date shall be the effective date of his retirement pursuant to the terms of the Pension Plan. (ee) "Total Disability" shall mean Mr. Harris's total disability within the meaning of the Pension Plan. (ff) "Voting Securities" shall mean the outstanding voting securities of a corporation entitling the holder thereof to vote generally in the election of such corporation's directors. (gg) "Waiver and Release" shall mean the Waiver and Release attached hereto as Exhibit B. (hh) "Year of Service" shall mean Mr. Harris's Months of Service divided by twelve (12) rounded to the nearest whole year, rounding up if the remaining number of months is seven (7) or greater and rounding down if the remaining number of months is less than seven (7). If Mr. Harris has a break in his service with the Company, he will receive credit under this Agreement for service prior to the break in service only if the break in service is less than five years. 2. Severance Benefits. (a) Eligibility. Except as otherwise provided in this Paragraph 2.(a), if Mr. Harris's employment is involuntarily terminated by the Company at any time during the two year period following a Change in Control for reasons other than Cause, or if Mr. Harris voluntarily terminates his employment with the Company for Good Reason at any time during the two year period following a Change in Control, Mr. Harris shall be entitled to receive the benefits described in this Agreement upon the Company's receipt of an effective Waiver and Release. Notwithstanding anything to the contrary herein, Mr. Harris shall not be eligible to receive benefits under this Agreement if Mr. Harris: (i) voluntarily terminates his employment with the Company for other than Good Reason; (ii) has his employment terminated by the Company for Cause; (iii) accepts the transfer of his employment to Southern, any Southern Subsidiary or any employer that succeeds to all or substantially all of the assets of the Company, Southern or any Southern Subsidiary; (iv) refuses an offer of continued employment with the Company, any Southern Subsidiary, or any employer that succeeds to all or substantially all of the assets of the Company, Southern, or any Southern Subsidiary under circumstances where such refusal would not amount to Good Reason for voluntary termination of employment; or (v) elects to receive the benefits of any other voluntary or involuntary severance or separation program maintained by the Company; provided however, that the receipt of benefits under the terms of any retention plan or agreement shall not be deemed to be the receipt of severance or separation benefits for purposes of this Agreement. (b) Severance Benefits. If Mr. Harris meets the eligibility requirements of Paragraph 2.(a) hereof, he shall be entitled to a cash severance benefit in an amount equal to three times his Annual Compensation (the "Severance Amount"). If any portion of the Severance Amount constitutes an "excess parachute payment" (as such term is defined under Code Section 280G ("Excess Parachute Payment")), the Company shall pay to Mr. Harris an additional amount calculated by determining the amount of tax under Code Section 4999 that he otherwise would have paid on any Excess Parachute Payment with respect to the Change in Control and dividing such amount by a decimal determined by adding the tax rate under Code Section 4999 ("Excise Tax"), the
hospital insurance tax under Code Section 3101(b) ("HI Tax") and federal and state income tax measured at the highest marginal rates ("Income Tax") and subtracting such result from the number one (1) (the "280G Grossup"); provided, however, that no 280G Gross-up shall be paid unless the Severance Amount plus all other "parachute payments" to Mr. Harris under Code Section 280G exceeds three (3) times Mr. Harris's "base amount" (as such term is defined under Code Section 280G ("Base Amount")) by ten percent (10%) or more; provided further, that if no 280G Gross-up is paid, the Severance Amount shall be capped at three (3) times Mr. Harris's Base Amount, less all other "parachute payments" (as such term is defined under Code Section 280G) received by Mr. Harris, less one dollar (the "Capped Amount"), if the Capped Amount, reduced by HI Tax and Income Tax, exceeds what otherwise would have been the Severance Amount, reduced by HI Tax, Income Tax and Excise Tax. For purposes of this Paragraph 2.(b), whether any amount would constitute an Excess Parachute Payment and any other calculations of tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts, e.g., Base Amount, Capped Amount, etc., shall be determined by the tax department of the independent public accounting firm then responsible for preparing Southern's consolidated federal income tax return, and such calculations or determinations shall be binding upon the parties hereto. (c) Welfare Benefits. If Mr. Harris meets the eligibility requirements of Paragraph 2.(a) hereof and is not otherwise eligible to receive retiree medical and life insurance benefits provided to certain retirees pursuant to the terms of the Pension Plan, the Group Health Plan and the Group Life Insurance Plan, he shall be entitled to the benefits set forth in this Paragraph 2.(c). (i) Mr. Harris shall be eligible to participate in the Company's Group Health Plan, upon payment of both the Company's and his monthly premium under such plan, for a period of six (6) months for each of Mr. Harris's Years of Service, not to exceed five (5) years. If Mr. Harris elects to receive this extended medical coverage, he shall also be entitled to elect coverage under the Group Health Plan for his dependents who were participating in the Group Health Plan on Mr. Harris's Termination Date (and for such other dependents as may be entitled to coverage under the provisions of the Health Insurance Portability and Accountability Act of 1996) for the duration of Mr. Harris's extended medical coverage under this Paragraph 2.(c)(i) to the extent such dependents remain eligible for dependent coverage under the terms of the Group Health Plan. (A) The extended medical coverage afforded to Mr. Harris pursuant to Paragraph 2.(c)(i), as well as the premiums to be paid by Mr. Harris in connection with such coverage shall be determined in accordance with the terms of the Group Health Plan and shall be subject to any changes in the terms and conditions of the Group Health Plan as well as any future increases in premiums under the Group Health Plan. The premiums to be paid by Mr. Harris in connection with this extended coverage shall be due on the first day of each month; provided, however, that if he fails to pay his premium within thirty (30) days of its due date, such extended coverage shall be terminated. (B) Any Group Health Plan coverage provided under Paragraph 2.(c)(i) shall be a part of and not in addition to any COBRA Coverage which Mr. Harris or his dependents may elect. In the event that Mr. Harris or his dependents become eligible to be covered, by virtue of re-employment or otherwise, by any employersponsored group health plan or is eligible for coverage under any government-sponsored health plan during the above period, coverage under the Company's Group Health Plan available to Mr. Harris or his dependents by virtue of the provisions of Paragraph 2.(c)(i) shall terminate, except as may otherwise be required by law, and shall not be renewed. (ii) Mr. Harris shall be entitled to receive cash in an amount equal to the Company's and Mr. Harris's cost of premiums for three (3) years of coverage under the Group Health Plan and Group Life Insurance Plan in accordance with the terms of such plans as of the date of the Change in Control. (d) Incentive Plans. If Mr. Harris meets the eligibility requirements of Paragraph 2.(a) hereof he shall be entitled to the following benefits under the Company's incentive plans: (i) Stock Option Plan. (A) Any of Mr. Harris's Options and Stock Appreciation Rights under the Performance Stock Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(i) by reference) which are outstanding as of the Termination Date and which are not then exercisable and vested, shall become fully exercisable and vested to the full extent of the original grant; provided, that in the case of a Stock Appreciation Right, if Mr. Harris is subject to
Section 16(b) of the Exchange Act, such Stock Appreciation Right shall not become fully vested and exercisable at such time if such actions would result in liability to Mr. Harris under Section 16(b) of the Exchange Act, provided further, that any such actions not taken as a result of the rules under Section 16(b) of the Exchange Act shall be effected as of the first date that such activity would no longer result in liability under Section 16(b) of the Exchange Act. (B) The restrictions and deferral limitations applicable to any of Mr. Harris' Restricted Stock as of the Termination Date shall lapse, and such Restricted Stock shall become free of all restrictions and limitations and become fully vested and transferable to the full extent of the original grant. (C) The restrictions and deferral limitations and other conditions applicable to any other Awards held by Mr. Harris under the Stock Performance Plan as of the Termination Date shall lapse, and such other Awards shall become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent of the original grant. (ii) Performance Pay Plan. Provided Mr. Harris is not entitled to benefits under Article V of the PPP Plan, (the defined terms of which are incorporated in this Paragraph 2.(d)(ii) by reference), if the PPP Plan is in place through Mr. Harris's Termination Date and to the extent Mr. Harris is entitled to participate therein, Mr. Harris shall be entitled to receive cash in an amount equal to a prorated payout of his Incentive Pay Awards under the PPP Plan for the Performance Period in which the Termination Date shall have occurred, at target performance under the PPP Plan and prorated by the number of months which have passed since the beginning of the Performance Period until the Termination Date. (iii) PIP Plan. Provided Mr. Harris is not entitled to benefits under Article IV of the PIP Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(iii) by reference), if the PIP Plan is in place through Mr. Harris's Termination Date and to the extent Mr. Harris is entitled to participate therein, Mr. Harris shall be entitled to receive cash in an amount equal to his Award Opportunity for the Computation Periods in which the Termination Date shall have occurred at a target Value of Performance Unit of $1.00, prorated for each Computation Period by the number of months which have passed since the beginning of the Computation Periods until the Termination Date. (iv) Performance Dividend Plan. Provided Mr. Harris is not entitled to benefits under the Performance Dividend Plan (the defined terms of which are incorporated in this Paragraph 2.(d)(iv) by reference), if the Performance Dividend Plan is in place through Mr. Harris's Termination Date and to the extent Mr. Harris is entitled to participate therein, Mr. Harris shall be entitled to receive cash for each Award held by Mr. Harris on his Termination Date, based on actual performance under Section 4.1 of the Performance Dividend Plan determined as of the most recently completed calendar quarter of the Performance Period in which the Termination Date shall have occurred, and the Annual Dividend declared prior to the Termination Date. (v) Other Short Term Incentive Plans. The provisions of this Paragraph 2.(d)(v) shall apply if and to the extent that Mr. Harris is a participant in any other "short term compensation plan" not otherwise previously referred to in this Paragraph 2.(d). Provided Mr. Harris is not otherwise entitled to a plan payout under any change of control provisions of such plans, if the "short term compensation plan" is in place as of the Termination Date and to the extent Mr. Harris is entitled to participate therein, Mr. Harris shall receive cash in an amount equal to his award under the Company's "short term incentive plan" for the annual performance period in which the Termination Date shall have occurred, at Mr. Harris's target performance level and prorated by the number of months which have passed since the beginning of the annual performance period until his Termination Date. For purposes of this Paragraph 2.(d)(v) the term "short term incentive compensation plan" shall mean any incentive compensation plan or arrangement adopted in writing by the Company which provides for annual, recurring compensatory bonuses based upon articulated performance criteria. (e) Payment of Benefits. Any amounts due under this Agreement shall be paid in one (1) lump sum payment as soon as administratively practicable following the later of: (i) Mr. Harris's Termination Date, or (ii) upon Mr. Harris's tender of an effective Waiver and Release to the Company in the form of Exhibit B attached hereto and the expiration of any applicable revocation period for such waiver. In the event of a dispute with respect to liability or amount of any benefit due hereunder, an effective Waiver and Release shall be tendered at the time of final resolution of any such dispute when payment is tendered by the Company. (f) Benefits in the Event of Death. In the event of Mr. Harris's death prior to the payment of all amounts due under this Agreement, Mr. Harris's estate shall be entitled to receive as due any amounts not yet paid under this Agreement upon the tender by the executor or administrator of the estate of an effective Waiver and Release.
(g) Legal Fees. In the event of a dispute between Mr. Harris and the Company with regard to any amounts due hereunder, if any material issue in such dispute is finally resolved in Mr. Harris's favor, the Company shall reimburse Mr. Harris's legal fees incurred with respect to all issues in such dispute in an amount not to exceed fifty thousand dollars ($50,000). (h) Employee Outplacement Services. Mr. Harris shall be eligible to participate in the Employee Outplacement Program, which program shall not be less than six (6) months duration measured from Mr. Harris's Termination Date. (i) Non-qualified Retirement and Deferred Compensation Plans. The Parties agree that subsequent to a Change in Control, any claims by Mr. Harris for benefits under any of the Company's non-qualified retirement or deferred compensation plans shall be resolved through binding arbitration in accordance with the provisions and procedures set forth in Paragraph 5 hereof and if any material issue in such dispute is finally resolved in Mr. Harris' favor, the Company shall reimburse Mr. Harris' legal fees in the manner provided in Paragraph 2.(g) hereof. 3. Transfer of Employment. In the event that Mr. Harris's employment by the Company is terminated during the two year period following a Change in Control and Mr. Harris accepts employment by Southern, a Southern Subsidiary, or any employer that succeeds to all or substantially all of the assets of the Company, Southern or any Southern Subsidiary, the Company shall assign this Agreement to Southern, Southern Subsidiary, or successor employer, Southern shall accept such assignment or cause such Southern Subsidiary or successor employer to accept such assignment, and such assignee shall become the "Company" for all purposes hereunder. 4. No Mitigation. If Mr. Harris is otherwise eligible to receive benefits under Paragraph 2 of this Agreement, he shall have no duty or obligation to seek other employment following his Termination Date and, except as otherwise provided in Paragraph 2.(a)(iii) hereof, the amounts due Mr. Harris hereunder shall not be reduced or suspended if Mr. Harris accepts such subsequent employment. 5. Arbitration. (a) Any dispute, controversy or claim arising out of or relating to the Company's obligations to pay severance benefits under this Agreement, or the breach thereof, shall be settled and resolved solely by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA") except as otherwise provided herein. The arbitration shall be the sole and exclusive forum for resolution of any such claim for severance benefits and the arbitrators' award shall be final and binding. The provisions of this Paragraph 5 are not intended to apply to any other disputes, claims or controversies arising out of or relating to Mr. Harris's employment by the Company or the termination thereof. (b) Arbitration shall be initiated by serving a written notice of demand for arbitration to Mr. Harris, in the case of the Company, or to the Southern Board, in the case of Mr. Harris. (c) The arbitration shall be held in Atlanta, Georgia. The arbitrators shall apply the law of the State of Georgia, to the extent not preempted by federal law, excluding any law which would require the application of the law of another state. (d) The parties shall appoint arbitrators within fifteen (15) business days following service of the demand for arbitration. The number of arbitrators shall be three. One arbitrator shall be appointed by Mr. Harris, one arbitrator shall be appointed by the Company, and the two arbitrators shall appoint a third. If the arbitrators cannot agree on a third arbitrator within thirty (30) business days after the service of demand for arbitration, the third arbitrator shall be selected by the AAA. (e) The arbitration filing fee shall be paid by Mr. Harris. All other costs of arbitration shall be borne equally by Mr. Harris and the Company, provided, however, that the Company shall reimburse such fees and costs in the event any material issue in such dispute is finally resolved in Mr. Harris's favor and Mr. Harris is reimbursed legal fees under Paragraph 2.(g) hereof. (f) The parties agree that they will faithfully observe the rules that govern any arbitration between them, they will abide by and perform any award rendered by the arbitrators in any such arbitration, including any award of injunctive relief, and a judgment of a court having jurisdiction may be entered upon an award.
(g) The parties agree that nothing in this Paragraph 5 is intended to preclude upon application of either party any court having jurisdiction from issuing and enforcing in any lawful manner such temporary restraining orders, preliminary injunctions, and other interim measures of relief as may be necessary to prevent harm to a party's interests or as otherwise may be appropriate pending the conclusion of arbitration proceedings pursuant to this Agreement; regardless of whether an arbitration proceeding under this Paragraph 5 has begun. The parties further agree that nothing herein shall prevent any court from entering and enforcing in any lawful manner such judgments for permanent equitable relief as may be necessary to prevent harm to a party's interests or as otherwise may be appropriate following the issuance of arbitral awards pursuant to this Paragraph 5. 6. Miscellaneous. (a) Funding of Benefits. Unless the Board in its discretion shall determine otherwise, the benefits payable to Mr. Harris under this Agreement shall not be funded in any manner and shall be paid by the Company out of its general assets, which assets are subject to the claims of the Company's creditors. (b) Withholding. There shall be deducted from the payment of any benefit due under this Agreement 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 Mr. Harris. (c) Assignment. Mr. Harris shall have no rights to sell, assign, transfer, encumber, or otherwise convey the right to receive the payment of any benefit due hereunder, which payment and the rights thereto are expressly declared to be nonassignable and nontransferable. Any attempt to do so shall be null and void and of no effect. (d) Amendment and Termination. The Agreement may be amended or terminated only by a writing executed by the parties. (e) Construction. This Agreement shall be construed in accordance with and governed by the laws of the State of Georgia, to the extent not preempted by federal law, disregarding any provision of law which would require the application of the law of another state. (f) Pooling Accounting. Notwithstanding anything to the contrary herein, if, but for any provision of this Agreement, a Change in Control transaction would otherwise be accounted for as a pooling-of-interests under APB No.16 ("Pooling Accounting") (after giving effect to any and all other facts and circumstances affecting whether such Change in Control transaction would use Pooling Accounting), such provision or provisions of this Agreement which would otherwise cause the Change in Control transaction to be ineligible for Pooling Accounting shall be void and ineffective in such a manner and to the extent that by eliminating such provision or provisions of this Agreement, Pooling Accounting would be required for such Change in Control transaction. IN WITNESS WHEREOF, the parties hereto have executed this Agreement this ____ day of __________________, 199__. THE SOUTHERN COMPANY By: ____________________________________ ALABAMA POWER COMPANY By: ____________________________________ MR. HARRIS Elmer B. Harris
Exhibit A CHANGE IN CONTROL AGREEMENT
Exhibit A CHANGE IN CONTROL AGREEMENT Target Annual Bonus for Mr. Elmer B. Harris 65%
Exhibit B CHANGE IN CONTROL AGREEMENT Waiver and Release The attached Waiver and Release is to be given to Mr. Elmer B. Harris upon the occurrence of an event that triggers eligibility for severance benefits under the Change in Control Agreement, as described in Paragraph 2(a) of such agreement.
CHANGE IN CONTROL AGREEMENT Waiver and Release I, Elmer B. Harris, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Alabama Power Company (collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company
Exhibit B CHANGE IN CONTROL AGREEMENT Waiver and Release The attached Waiver and Release is to be given to Mr. Elmer B. Harris upon the occurrence of an event that triggers eligibility for severance benefits under the Change in Control Agreement, as described in Paragraph 2(a) of such agreement.
CHANGE IN CONTROL AGREEMENT Waiver and Release I, Elmer B. Harris, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Alabama Power Company (collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company and/or any of its direct or indirect subsidiaries; however, I understand and acknowledge that nothing herein is intended to or shall be construed to require the Company to institute or continue in effect any particular plan or benefit sponsored by the Company and the Company hereby reserves the right to amend or terminate any of its benefit programs at any time in accordance with the procedures set forth in such plans. In signing this Waiver, I realize that I am waiving and releasing, among other things, any claims to benefits under any and all bonus, severance, workforce reduction, early retirement, outplacement, or any other similar type plan sponsored by the Company. I have been encouraged and advised in writing to seek advice from anyone of my choosing regarding this Waiver, including my attorney, and my accountant or tax advisor. Prior to signing this Waiver, I have been given the opportunity and sufficient time to seek such advice, and I fully understand the meaning and contents of this
CHANGE IN CONTROL AGREEMENT Waiver and Release I, Elmer B. Harris, understand that I am entitled to receive the severance benefits described in Section 2 of the Change in Control Agreement (the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand that the benefits I will receive under the Agreement are in excess of those I would have received from The Southern Company and Alabama Power Company (collectively, the "Company") if I had not elected to sign this Waiver. I recognize that I may have a claim against the Company under the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended, the Americans with Disabilities Act or other federal, state and local laws. In exchange for the benefits I elect to receive, I hereby irrevocably waive and release all claims, of any kind whatsoever, whether known or unknown in connection with any claim which I ever had, may have, or now have against The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Communication Services, Inc., Southern Company Services, Inc., Southern Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The Southern Company and their past, present and future officers, directors, employees, agents and attorneys. Nothing in this Waiver shall be construed to release claims or causes of action under the Age Discrimination in Employment Act or the Energy Reorganization Act of 1974, as amended, which arise out of events occurring after the execution date of this Waiver. In further exchange for the benefits I elect to receive, I understand and agree that I will respect the proprietary and confidential nature of any information I have obtained in the course of my service with the Company or any subsidiary or affiliate of The Southern Company. However, nothing in this Waiver shall prohibit me from engaging in protected activities under applicable law or from communicating, either voluntary or otherwise, with any governmental agency concerning any potential violation of the law. In signing this Waiver, I am not releasing claims to benefits that I am already entitled to under any workers' compensation laws or under any retirement plan or welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, which is sponsored by or adopted by the Company and/or any of its direct or indirect subsidiaries; however, I understand and acknowledge that nothing herein is intended to or shall be construed to require the Company to institute or continue in effect any particular plan or benefit sponsored by the Company and the Company hereby reserves the right to amend or terminate any of its benefit programs at any time in accordance with the procedures set forth in such plans. In signing this Waiver, I realize that I am waiving and releasing, among other things, any claims to benefits under any and all bonus, severance, workforce reduction, early retirement, outplacement, or any other similar type plan sponsored by the Company. I have been encouraged and advised in writing to seek advice from anyone of my choosing regarding this Waiver, including my attorney, and my accountant or tax advisor. Prior to signing this Waiver, I have been given the opportunity and sufficient time to seek such advice, and I fully understand the meaning and contents of this Waiver. I understand that I may take up to twenty-one (21) calendar days to consider whether or not I desire to enter this Waiver. I was not coerced, threatened or otherwise forced to sign this Waiver. I have made my choice to sign this Waiver voluntarily and of my own free will. I understand that I may revoke this Waiver at any time during the seven (7) calendar day period after I sign and deliver this Waiver to the Company. If I revoke this Waiver, I must do so in writing delivered to the Company. I understand that this Waiver is not effective until the expiration of this seven (7) calendar day revocation period. I understand that upon the expiration of such seven (7) calendar day revocation period this entire Waiver will be binding upon me and will be irrevocable.
I understand that by signing this Waiver I am giving up rights I may have. IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this ____ day of ____________________, in the year _____. Elmer B. Harris Sworn to and subscribed to me this ____ day of ____________, _____. Notary Public My Commission Expires: (Notary Seal) Acknowledged and Accepted by the Company, as defined in the Waiver. By: Date:
EXHIBIT 10(a)92 CHANGE IN CONTROL AGREEMENT THIS CHANGE IN CONTROL AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Savannah Electric & Power Company (the "Company") and Mr. G. Edison Holland, Jr. ("Mr. Holland"). W I T N E S S E T H: WHEREAS, Mr. Holland is the President and Chief Executive Officer of the Company; WHEREAS, the Company wishes to provide to Mr. Holland certain severance benefits under certain circumstances following a change in control (as defined herein) of Southern or the Company; NOW, THEREFORE, in consideration of the premises, and the agreements 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. Definitions. For purposes of this Agreement, the following terms shall have the following meanings: (a) "Annual Compensation" shall mean Mr. Holland's highest annual base salary rate for the twelve (12) month period immediately preceding the date of the Change in Control plus market level target annual bonus as set forth on Exhibit A hereof. (b) "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. (c) "Board" shall mean the board of directors of the Company. (d) "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern. (e) "Change in Control" shall mean any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Paragraph 1.(e)(i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control:
EXHIBIT 10(a)92 CHANGE IN CONTROL AGREEMENT THIS CHANGE IN CONTROL AGREEMENT ("Agreement") made and entered into by and between The Southern Company ("Southern"), Savannah Electric & Power Company (the "Company") and Mr. G. Edison Holland, Jr. ("Mr. Holland"). W I T N E S S E T H: WHEREAS, Mr. Holland is the President and Chief Executive Officer of the Company; WHEREAS, the Company wishes to provide to Mr. Holland certain severance benefits under certain circumstances following a change in control (as defined herein) of Southern or the Company; NOW, THEREFORE, in consideration of the premises, and the agreements 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. Definitions. For purposes of this Agreement, the following terms shall have the following meanings: (a) "Annual Compensation" shall mean Mr. Holland's highest annual base salary rate for the twelve (12) month period immediately preceding the date of the Change in Control plus market level target annual bonus as set forth on Exhibit A hereof. (b) "Beneficial Ownership" shall mean beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act. (c) "Board" shall mean the board of directors of the Company. (d) "Business Combination" shall mean a reorganization, merger or consolidation of Southern or sale or other disposition of all or substantially all of the assets of Southern. (e) "Change in Control" shall mean any of the following: (i) The Consummation of an acquisition by any Person of Beneficial Ownership of 20% or more of Southern's Voting Securities; provided, however, that for purposes of this Paragraph 1.(e)(i), the following acquisitions of Southern's Voting Securities shall not constitute a Change in Control: (A) any acquisition directly from Southern; (B) any acquisition by Southern; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Southern or any Southern Subsidiary; (D) any acquisition by a qualified pension plan or publicly held mutual fund; (E) any acquisition by a Group composed exclusively of employees of Southern, or any Southern Subsidiary; (F) any acquisition by Mr. Holland or any Group of which Mr. Holland is a party; or (G) any Business Combination which would not otherwise constitute a change in control because of the application of clauses (A), (B) and (C) of Paragraph 1.(e)(iii); (ii) A change in the composition of the Southern Board whereby individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Southern Board; (iii) Consummation of a Business Combination, provided, however, that such a Business Combination shall not
constitute a Change in Control if all three (3) of the following conditions are met: (A) all or substantially all of the individuals and entities who held Beneficial Ownership, respectively, of Southern's Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, 65% or more of the combined voting power of the Voting Securities of the corporation surviving or resulting from such Business Combination, (including, without limitation, a corporation which as a result of such transaction holds Beneficial Ownership of all or substantially all of Southern's Voting Securities or all or substantially all of Southern's assets) (such surviving or resulting corporation to be referred to as "Survivi