DEFERRED COMPENSATION AGREEMENT
THIS DEFERRED COMPENSATION AGREEMENT ("Agreement") is made and entered
into by and between THE SOUTHERN COMPANY ("Southern"), SOUTHERN COMPANY
SERVICES, INC. (the "Company") and STEPHEN A. WAKEFIELD ("Employee").
W I T N E S S E T H
WHEREAS, Employee is a highly compensated employee of the Company and
is a member of its management;
WHEREAS, the parties desire to provide Employee with deferred
compensation upon the occurrence of certain enumerated events for service he has
provided or will provide for 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 hereto, intending to be legally bound, hereby covenant and agree as
follows:
1. Severance Benefit. If the Employee's employment with the Company is
terminated without cause, 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
termination. As used in this Agreement, the term "cause" shall mean fraud or
dishonesty, willful failure to perform 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. Except for termination for cause, the Company shall give Employee at
least thirty (30) days written notice in the event it terminates the Employee's
employment. Employee shall be responsible for all state and federal income taxes
and his share of FICA taxes owed on the foregoing amounts.
2. Supplemental Pension Payment to Employee.
a. Upon the Employee's retirement from the Company and his
entering into an effective Release in the form attached hereto as
Exhibit 1, the Company agrees to pay the Employee an amount equal to
the difference between his Retirement Income payable in accordance with
the terms and provisions of The Southern Company Pension Plan as
applicable to the Employee on his date of hire and as may be amended
from time to time (hereinafter referred to as the "Pension Plan"), and
the amount of Retirement Income the Employee would have been entitled
to receive under the Pension Plan as if the Employee's period of
Accredited Service under the Pension Plan included an additional ten
(10) years. Similarly, such additional service shall also be credited
to Employee for purposes of calculating a benefit under the Southern
Company Supplemental Executive Retirement Plan ("SERP"). The benefits
in this Paragraph 2(a) shall be recalculated from time to time to
reflect future increases, if any, in the Retirement Income of retirees
following the Employee's retirement. The Employee's years of service
(or any portion thereof) provided in this Paragraph 2(a) and
application of the special definition of "Final Average Pay" set forth
in Paragraph 2(c) below granted under this Agreement shall not be
recognized for purposes of calculating the above benefits in the event
of his termination of service with the Company prior to accrual of five
(5) years of vesting service as defined under the Pension Plan, unless
such termination occurs on account of death or disability or unless
such termination results in eligibility for severance benefits under
Paragraph 2(a) of the Change in Control Agreement between the Employee
and the Company and Southern (hereinafter referred to as the "Change in
Control Agreement").
b. For purposes of calculating the Retirement Income amount
provided in Paragraph 2(a) above, no limitation on benefits imposed by
the Internal Revenue Code as it now exists or is hereinafter amended or
any limiting legislation shall be taken into account. Any amounts
payable in accordance with this Paragraph 2(b) shall be recalculated
from time to time to reflect future increases, if any, in Retirement
Income of retirees following the Employee's retirement.
c. In determining the benefit described in Paragraphs 2(a) and
(b) above, Final Average Pay shall be determined by uniformly
substituting "three years" for "five years" in the definition of "Final
Average Pay" in every instance it is necessary to calculate the
benefit.
d. For purposes of this Agreement, without regard to whether
the Employee has accrued ten (10) years of Accredited Service, any
termination of Employee's employment with the Company after Employee
shall have completed five years of vesting service as defined under the
Pension Plan, or termination at any time on account of death or
disability, or eligibility for severance benefits under Paragraph 2(a)
of the Change in Control Agreement, shall be deemed to be a retirement.
The Employee's benefit under this Agreement shall be subject to such
early retirement reduction factors as would apply to a participant in
the Pension Plan based on the Employee's date of retirement under this
Agreement. Subject to such reduction factors, the Employee shall be
eligible under this Agreement upon retirement before attainment of age
sixty-five (65) to receive a monthly benefit equal to the sum of the
following: (i) the monthly benefit the Employee would be eligible to
receive under the Pension Plan as of the Employee's retirement under
this Agreement; (ii) the monthly benefit the Employee would be eligible
to receive under the Southern Company Supplemental Benefit Plan
("Supplemental Benefit Plan") and the SERP; and (iii) the monthly
benefit the Employee would be eligible to receive under this Agreement
as provided for in Paragraphs 2(a) and (b) above as of the Employee's
retirement under this Agreement. Upon attainment of age sixty-five
(65), the Employee shall be eligible under this Agreement to receive a
monthly benefit equal to that amount provided for in the preceding
sentence above reduced, if necessary, so that the total amount of
monthly payments received by the Employee considering the monthly
benefits payable under this Agreement, the Pension Plan, Supplemental
Benefit Plan and SERP, respectively, at age sixty-five (65) equals the
total amount of payments provided for in the preceding sentence.
3. Consideration. Employee covenants and agrees that the consideration
set forth in Paragraphs 1 and 2 shall be in full satisfaction of all sums owed
to Employee, if any, by the Company and that the consideration set forth in
Paragraph 2 shall constitute good and complete consideration for the Release
attached hereto as Exhibit 1, those nondisclosure and ownership obligations
under Paragraph 6 hereof, and all other obligations and covenants of Employee
contained herein.
4. Commencement and Form of Payment of Supplemental Pension Benefit.
The benefit provided in accordance with Paragraph 2 above shall be paid in
monthly installments on the first day of each month in accordance with the
election to receive Retirement Income under the Pension Plan. In the event the
Employee is married, predeceases his spouse, and his spouse is entitled to
payments as a Provisional Payee, monthly payments shall be made in the same
manner as provided by the Provisional Payee option elected by the Employee under
the Pension Plan taking into account the additional Accredited Service and the
special three year "Final Average Pay" treatment set forth in Paragraphs 2(a)
and (c) above. In the event the Employee shall not be married or shall not be
survived by his spouse, the benefit described in the preceding sentence shall be
forfeited. The Employee or his surviving spouse shall not, under any
circumstances, have any option or right to require payments hereunder otherwise
than in accordance with the terms hereof.
5. Publicity; No Disparaging Statement. Except as otherwise provided in
Paragraph 8 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.
6. Non-Disclosure and Non-Solicitation.
a. Definitions. For purposes of this Paragraph 6, 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
non-affiliated 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 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 termination.
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
termination, 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.
7. Transfer of Employment to Southern or a Southern Subsidiary or
Affiliate. In the event that Employee's employment by the Company is terminated
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 attached hereto and incorporated herein as Exhibit 1. 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.
8. 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.
9. 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).
10. 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 including but not limited to that
certain employment agreement dated June 2, 1997. 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.
11. 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.
12. 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.
13. 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 benefit 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.
14. 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, and that the Release attached hereto as Exhibit 1
is not intended and does not waive any rights to such benefits. Notwithstanding
the foregoing, the Employee shall not be eligible for the severance benefit
under Paragraph 1 hereof if he elects to receive the severance benefits under
the Change in Control Agreement or any voluntary or involuntary severance or
separation program maintained by the Company or Southern.
15. 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.
16. 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, The Southern Company Performance Sharing 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.
17. 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 ________________, 1999.
"SOUTHERN"
THE SOUTHERN COMPANY
By:
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Its:
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"COMPANY"
SOUTHERN COMPANY SERVICES, INC.
By:
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Its:
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"EMPLOYEE"
STEPHEN A. WAKEFIELD
WITNESSED BY:
EXHIBIT 1 to
Deferred Compensation Agreement
of Stephen A. Wakefield
RELEASE AGREEMENT
THIS RELEASE ("Release') is made and entered into by and between
STEPHEN A. WAKEFIELD ("Employee"), THE SOUTHERN COMPANY ("Southern") and
SOUTHERN COMPANY SERVICES, INC. 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 the Company have previously entered
into that certain Deferred Compensation Agreement, dated _______, 1999
("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, out-placement, 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 the Deferred Compensation
Agreement, the Company agrees to pay the Employee or his spouse, as the case may
be, the amounts outlined in Paragraphs 2 and 4 of the Agreement.
4. 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.
5. 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.
6. 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:
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Its:
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"COMPANY"
SOUTHERN COMPANY SERVICES, INC.
By:
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Its:
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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"
STEPHEN A. WAKEFIELD
Date
WITNESSED BY:
Date