Exhibit 10(a)105
SOUTHERN COMPANY
CHANGE IN CONTROL
BENEFIT PLAN DETERMINATION POLICY
Troutman Sanders LLP
Bank of America Plaza, Suite 5200
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
SOUTHERN COMPANY
CHANGE IN CONTROL
BENEFIT PLAN DETERMINATION POLICY
AS AMENDED AND RESTATED
ARTICLE I - PURPOSE AND ADOPTION OF POLICY
1.1 Adoption of Policy. Southern Company Services, Inc. hereby adopts this
amended and restated Southern Company Change in Control Benefit Plan
Determination Policy, originally effective July 10, 2000, as amended and
restated effective May 9, 2002.
1.2 Purpose. The Policy is designed to govern the determination of a Change in
Control of Southern and/or the Employing Companies, and the benefits to be
provided to employees of Southern and the Employing Companies under certain
employee benefit plans.
ARTICLE II - DEFINITIONS
2.1 "Administrative Committee" shall mean the Vice President of Human Resources
of Southern Company, Director of System Compensation and Benefits and the
Comptroller of Southern Company.
2.2 "Beneficial Ownership" shall mean beneficial ownership within the meaning of
Rule 13d-3 promulgated under the Exchange Act.
2.3 "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.
2.4 "Change in Control" shall mean a Southern Change in Control and/or a
Subsidiary Change in Control, as applicable.
2.5 "Common Stock" shall mean the common stock of Southern Company.
2.6 "Company" shall mean Southern Company Services, Inc., its successors and
assigns.
2.7 "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.
2.8 "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.
2.9 "Employee Benefit Plan(s)" shall mean, collectively, the Southern Company
Omnibus Incentive Compensation Plan, the Southern Company Supplemental Benefit
Plan, the Southern Company Supplemental Executive Retirement Plan and the
Southern Company Deferred Compensation Plan, as may be amended from time to time
in accordance with their terms.
2.10 "Employing Company" shall mean the Company, any other corporation or other
entity Controlled by Southern Company, or any corporation or other entity
Controlled by a subsidiary of Southern Company which the Compensation Committee
of the Southern Company Board of Directors has authorized to participate in the
Change in Control Program, which has adopted the Change in Control Program, and
any successor of any of them. The Administrative Committee may deem one or more
employees of a particular subsidiary or affiliate of Southern Company, or of any
corporation or entity Controlled by a subsidiary or affiliate of Southern
Company, to be employed by an Employing Company for purposes of being covered
under this Policy. Such action shall be in writing and shall cause such an
employee to only be entitled to benefits under this Policy in the event of a
Change in Control of his deemed Employing Company, and not his actual employing
company.
2.11 "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
2.12 "Group" shall have the meaning set forth in Section 14(d) of the Exchange
Act.
2.13 "Incumbent Board" shall mean those individuals who constitute the Southern
Board as of October 19, 1998, 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
October 19, 1998, 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.
2.14 "Person" shall mean any individual, entity or group within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act.
2.15 "Plan Termination" shall mean the termination of an Employee Benefit Plan
(or a specific program under the Omnibus 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 Employee Benefit Plan in connection with the Change in
Control. For purposes of this Policy, an ongoing substitute or alternative plan
shall be considered an "equitable arrangement" if a nationally recognized
compensation consulting firm chosen by the Administrative Committee opines in
writing that the post-Change in Control plan is an equitable substitute or
replacement of the Employee Benefit Plan.
2.16 "Preliminary Change in Control" shall mean the occurrence of any of the
following as determined by the Southern Committee.
(1) Southern Company or an Employing Company has entered into
a written agreement, such as, but not limited to, a letter of intent,
which, if Consummated, would result in a Southern Change in Control or
a Subsidiary Change in Control, as the case may be;
(2) Southern Company, an Employing Company or any Person
publicly announces an intention to take or to consider taking actions
which, if Consummated, would result in a Southern Change of Control or
a Subsidiary Change in Control under circumstances where the
Consummation of the announced action or intended action is legally and
financially possible;
(3) Any Person achieves the Beneficial Ownership of fifteen
percent (15%) or more of the Common Stock; or
(4) The Southern Board or the board of directors of an
Employing Company has declared that a Preliminary Change of Control has
occurred.
2.17 "Southern Board" shall mean the board of directors of Southern Company.
2.18 "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 Company'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 of Southern Company or its subsidiary
or affiliate, or Group composed exclusively of such 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 this Section;
(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 the
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.
2.19 "Southern Committee" shall mean the committee comprised of the Chairman of
the Southern Board, Chief Financial Officer of Southern Company, General Counsel
of Southern Company and the Chairman of the Administrative Committee.
2.20 "Southern Company" shall mean The Southern Company, its successors and
assigns.
2.21 "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.
2.22 "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 2.22, any acquisition by
an employee of Southern Company or its subsidiary or affiliate, or
Group composed entirely of such 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) 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) 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.
Notwithstanding the foregoing, in no event shall "Subsidiary Change in Control"
mean an initial public offering or a spin-off of an Employing Company.
2.23 "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.
The Administrative Committee may deem one or more employees of a particular
subsidiary or affiliate of Southern Company, or of any corporation or entity
Controlled by a subsidiary or affiliate of Southern Company, to be employed by
an Employing Company for purposes of being covered under this Policy. Such
action shall be in writing and shall cause such an employee to only be entitled
to benefits under this Policy in the event of a Change in Control of his deemed
Employing Company, and not his actual employing company.
2.24 "Surviving Company" shall mean the corporation which either survives or
results from any reorganization, merger or consolidation of which Southern
Company is a party under circumstances where Southern Company does not survive.
2.25 "Trust" shall mean the Southern Company Deferred Compensation Trust.
2.26 "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.
ARTICLE III - POOLING ACCOUNTING
Notwithstanding anything to the contrary herein, if, but for any
provision of this Policy, 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 Policy 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 Policy, Pooling Accounting would be
required for such Change in Control transaction and Pooling Accounting is in
fact used for such Change in Control transaction.
ARTICLE IV - OMNIBUS PLAN
CHANGE IN CONTROL PROVISIONS
4.1 Application. The provisions of this Article IV apply to benefits payable
under the Southern Company Omnibus Incentive Compensation Plan (the "Omnibus
Plan") notwithstanding any provision in the Omnibus Plan to the contrary. The
meaning of capitalized terms not defined herein are determined under the Omnibus
Plan.
4.2 Stock-Based Awards. The provisions of this Section 4.2 apply to stock-based
awards granted under the Omnibus Plan.
(a) Subsidiary Change in Control. 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 and Restricted Stock Units held by a Subsidiary Employee shall
lapse, and such Restricted Stock and Restricted Stock Units shall
become free of all restrictions and limitations and become fully
vested and transferable to the full extent of the original grant.
(b) Southern Termination. 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 and Restricted Stock Units shall lapse, and such Restricted
Stock and Restricted Stock Units 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.
(iv) Any Options, Stock Appreciation Rights, Restricted Stock or Restricted
Stock Units 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, restricted stock or
restricted stock units, 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 or restricted stock units shall preserve
the Fair Market Value of each share of Restricted Stock or Restricted
Stock Unit as determined immediately prior to the Southern
Termination. No replacement option, stock appreciation right, share of
restricted stock or restricted stock unit 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 or
Restricted Unit immediately prior to the Southern Termination.
(v) In the event that it is not possible to effect the conversion set
forth in Section 4.2(b)(iv) hereof, any and all outstanding Options,
Stock Appreciation Rights, Restricted Stock and Restricted Stock Units
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
and Restricted Stock Units. For purposes of this Section 4.2(b)(iv),
Fair Market Value shall be determined as of the day prior to the date
of the Southern Termination.
4.3 Application. The provisions of this Sections 4.3 apply to benefits payable
under the Performance Pay Program under the Omnibus Plan (the "PPP").
(a) Southern Change in Control. In the event of a Southern Change in
Control, if there is no Plan Termination with respect to the PPP,
payout of Cash-Based Awards under the PPP 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
PPP.
(b) Plan Termination. In the event of a Plan Termination with respect to
the PPP 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
Cash-Based Award under the PPP for the performance period in which the
Plan Termination shall have occurred, at the greater of target or
actual performance under the PPP and prorated by the number of months
which have passed since the beginning of the performance period until
the date of the Plan Termination.
(c) Subsidiary Change in Control. 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 in an
amount equal to a prorated payout of his Cash-Based Award under the PPP
for the performance period in which the Subsidiary Change in Control
shall have occurred, at the greater of actual or target performance
under the PPP 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.
(d) Southern Termination. 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 Cash-Based Award under the
PPP for the performance period in which the Southern Termination shall
have occurred, at the greater of actual or target performance under the
PPP and prorated by the number of months which have passed since the
beginning of the performance period until the date of the Southern
Termination. The PPP shall terminate immediately following the payments
provided for in this Section 4.3(d).
(e) Pro rata Calculation. For purposes of calculating any pro rata
Cash-Based Awards under this Section 4.3, 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.
4.4 Application. The provisions of this Section 4.4 apply to benefits payable
under the Performance Dividend Program under the Omnibus Plan (the "PDP").
(a) Southern Change in Control. In the event of a Southern Change in
Control, if there is no Plan Termination with respect to the PDP,
payout of Cash-Based Awards under the PDP to Participants for the
performance period in which the Southern Change in Control shall have
occurred shall be based on actual performance under the PDP.
(b) Plan Termination. In the event of a Plan Termination with respect to
the PDP 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 for each Cash-Based Award under the PDP held as
of such date, based on actual performance under the PDP determined as
of the date of the Plan Termination, and the annual dividend declared
prior to the date of the Plan Termination.
(c) Subsidiary Change in Control. 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 Cash-Based Award under the PDP held as of such date, based on
actual performance 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.
(d) Southern Termination. In the event of a Southern Termination, each
Participant who is an Employee on the date of such Southern Termination
shall be entitled to receive within thirty (30) days of the Southern
Termination, cash for each Cash-Based Award under the PDP held as of
such date, based on actual performance 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.
4.5 Other Incentives. The provisions of this Section 4.5 shall apply to any
employee of an Employing Company who, as of the date of the Change in Control,
is entitled to a Performance Unit or Performance Share award under the Omnibus
Plan, or any cash or stock-based award under any plan or program sponsored by an
Employing Company, other than the Omnibus Plan. If and to the extent an employee
of an Employing Company has received a stock-based award under any plan or
program sponsored by his Employing Company, in the event of a Southern Change in
Control, a Subsidiary Change in Control and/or a Southern Termination, such
award shall be treated as if it were granted under the Omnibus Plan for purposes
of this Policy, and any restrictions, limitations and deferral limitations shall
lapse if and to the extent provided under Section 4.2 hereof. If and to the
extent an employee of an Employing Company is entitled to a cash-based award
under any plan or program sponsored by his Employing Company, in the event of a
Southern Change in Control, a Subsidiary Change in Control and/or a Southern
Termination, such award shall be treated as if it were granted under the Omnibus
Plan for purposes of this Policy, and, provided such employee is not otherwise
entitled to a plan payout under any change in control provision of such plan or
program, such award shall be payable if and to the extent provided under
Sections 4.3 and 4.4 hereof.
ARTICLE V - SUPPLEMENTAL BENEFIT PLAN
CHANGE IN CONTROL AND OTHER SPECIAL PROVISIONS
5.1 Application. The provisions of this Article V apply to benefits payable
under The Southern Company Supplemental Benefit Plan (the "SBP"),
notwithstanding any provision in the SBP to the contrary. The meaning of
capitalized terms not defined herein are determined under the SBP.
5.2 General. Notwithstanding any other terms of the SBP to the contrary, upon a
Southern Change in Control or a Subsidiary Change in Control, the provisions of
this Article V shall become operative and apply to the calculation and payment
of benefits under the SBP with respect to any Subsidiary Employee who is a
Participant on such date.
5.3 Funding of Trust. The Trust has been established to hold assets of the
Employing Companies under certain circumstances as a reserve for the discharge
of the Employing Companies' obligations under the SBP. In the event of a
Preliminary Change in Control of Southern Company, all Employing Companies shall
be obligated to immediately contribute such amounts to the Trust as may be
necessary to fully fund the Pension Benefit and Non-Pension Benefit payable
under the SBP, the Pension Benefit to be determined under Section 5.5 hereof, in
accordance with the procedures set forth in Section 5.4 hereof. In the event of
a Preliminary Change in Control of an Employing Company, such Employing Company
shall be obligated to immediately contribute such amounts to the Trust as may be
necessary to fully fund the Pension Benefit and Non-Pension Benefit payable to
its Subsidiary Employees under the SBP, the Pension Benefit to be determined
under Section 5.6 hereof, in accordance with the procedures set forth in Section
5.4 hereof. In addition, in order to provide the added protections for certain
individuals in accordance with Paragraph 7(b) of the Trust, the Employing
Companies may fund the Trust prior to a Preliminary Change in Control of
Southern Company or an Employing Company. All assets held in the Trust remain
subject only to the claims of the Employing Companies' general creditors whose
claims against the Employing Companies are not satisfied because of the
Employing Companies' bankruptcy or insolvency (as those terms are defined in the
Trust). No Participant has any preferred claim on, or beneficial ownership
interest in, any assets of the Trust before the assets are paid to the
Participant and all rights created under the Trust, as under the SBP, are
unsecured contractual claims of the Participant against his Employing Company.
5.4 Calculation of Trust Contribution. As soon as practicable following either a
Preliminary Change in Control of Southern Company or of an Employing Company,
the affected Employing Companies shall contribute an amount based upon the
funding strategy adopted by the Administrative Committee with the assistance of
an appointed actuary necessary to fulfill the Employing Companies' obligations
pursuant to this Article V. In the event of a dispute after a Change in Control
over such actuary's determination, the respective Employing Company(ies) and any
complaining Participant(s) shall refer such dispute to an independent,
third-party actuarial consultant, chosen by the Employing Company and such
Participant. If the Employing Company and the Participant cannot agree on an
independent, third-party actuarial consultant, the actuarial consultant shall be
chosen by lot from an equal number of actuaries submitted by the affected
Employing Companies and the Trustee. Any such referral shall only occur once in
total and the determination by the third-party actuarial consultant shall be
final and binding upon both parties. The Employing Companies shall be
responsible for all of the fees and expenses of the independent actuarial
consultant.
5.5 Pension Benefit Upon Southern Change in Control. On the date of a Southern
Change in Control, the Pension Benefit of each Participant who is an Employee of
an Employing Company and who has a non-forfeitable right to Retirement Income
under the Pension Plan, will be calculated based on such Participant's Earnings
and Accredited Service on such date, regardless of whether such Participant is
retirement eligible on such date. Each Participant, who is an Employee of an
Employing Company, will be entitled to receive the amount of his Pension Benefit
based on such Participant's Earnings and Accredited Service as of the date of a
Southern Change in Control adjusted to take into account appropriate early
reduction factors, if any, based on the Participant's commencement of benefits.
Such benefit shall be paid in lump sum, upon termination of employment or
retirement. Any benefits accrued under the SBP subsequent to the date of a
Southern Change in Control will be calculated and distributed pursuant to the
terms of the SBP, without regard to this Article V.
5.6 Pension Benefit Upon Subsidiary Change in Control. On the date of a
Subsidiary Change in Control of an Employing Company, the Pension Benefit of
each Participant who is an Employee of such Employing Company and who has a
non-forfeitable right to Retirement Income under the Pension Plan, will be
calculated based on such Participant's Earnings and Accredited Service on such
date, regardless of whether such Participant is retirement eligible on such
date. Each Participant, who is an Employee of such Employing Company, will be
entitled to receive the amount of his Pension Benefit based on such
Participant's Earnings and Accredited Service as of the date of a Subsidiary
Change in Control adjusted to take into account appropriate early reduction
factors, if any, based on the Participant's commencement of benefits. Such
benefit shall be paid in lump sum, upon termination of employment or retirement.
Any benefits accrued under the SBP subsequent to the date of a Subsidiary Change
in Control will be calculated and distributed pursuant to the terms of the SBP,
without regard to this Article V.
5.7 Non-Pension Benefit Distribution Election upon Change in Control. In the
event of a Southern Change in Control or a Subsidiary Change in Control,
notwithstanding anything to the contrary in the SBP, upon termination or
retirement from employment, that Non-Pension Benefit of a Participant who was an
Employee of an Employing Company affected by such a Change in Control shall be
paid out in a lump sum if such Participant makes an election pursuant to
procedures established by the Administrative Committee in its sole and absolute
discretion. If no such election is made, the Participant shall receive payment
of his Account solely in accordance with Article V of the SBP.
ARTICLE VI - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
CHANGE IN CONTROL AND OTHER SPECIAL PROVISIONS
6.1 Application. The provisions of this Article VI apply to benefits payable
under The Southern Company Supplemental Executive Retirement Plan (the "SERP"),
notwithstanding any provision in the SERP to the contrary. The meaning of
capitalized terms not defined herein are determined under the SERP.
6.2 General. Notwithstanding any other terms of the SERP to the contrary, upon a
Southern Change in Control or a Subsidiary Change in Control, the provisions of
this Article VI shall become operative and apply to the calculation and payment
of benefits under the SERP with respect to any Subsidiary Employee who is a
Participant on such date.
6.3 Funding of Trust. The Trust has been established to hold assets of the
Employing Companies under certain circumstances as a reserve for the discharge
of the Employing Companies' obligations under the SERP. In the event of a
Preliminary Change in Control of Southern Company, all Employing Companies shall
be obligated to immediately contribute such amounts to the Trust as may be
necessary to fully fund all benefits payable under the SERP, as determined under
Section 6.5 hereof, in accordance with the procedures set forth in Section 6.4
hereof. In the event of a Preliminary Change in Control of an Employing Company,
such Employing Company shall be obligated to immediately contribute such amounts
to the Trust as may be necessary to fully fund all benefits payable to its
Subsidiary Employees under the SERP, as determined under Section 6.6 hereof, in
accordance with the procedures set forth in Section 6.4 hereof. In addition, in
order to provide the added protections for certain individuals in accordance
with Paragraph 7(b) of the Trust, the Employing Companies may fund the Trust
prior to a Preliminary Change in Control of Southern Company or an Employing
Company. All assets held in the Trust remain subject only to the claims of the
Employing Companies' general creditors whose claims against the Employing
Companies are not satisfied because of the Employing Companies' bankruptcy or
insolvency (as those terms are defined in the Trust). No Participant has any
preferred claim on, or beneficial ownership interest in, any assets of the Trust
before the assets are paid to the Participant and all rights created under the
Trust, as under the SERP, are unsecured contractual claims of the Participant
against his Employing Company.
6.4 Calculation of Trust Contribution. As soon as practicable following either a
Preliminary Change in Control of Southern Company or of an Employing Company,
the affected Employing Companies shall contribute an amount based upon the
funding strategy adopted by the Administrative Committee with the assistance of
an appointed actuary necessary to fulfill the Employing Companies' obligations
pursuant to this Article VI. In the event of a dispute after a Change in Control
over such actuary's determination, the respective Employing Company(ies) and any
complaining Participant(s) shall refer such dispute to an independent,
third-party actuarial consultant, chosen by the Employing Company and such
Participant. If the Employing Company and the Participant cannot agree on an
independent, third-party actuarial consultant, the actuarial consultant shall be
chosen by lot from an equal number of actuaries submitted by the affected
Employing Companies and the Trustee. Any such referral shall only occur once in
total and the determination by the third-party actuarial consultant shall be
final and binding upon both parties. The Employing Companies shall be
responsible for all of the fees and expenses of the independent actuarial
consultant.
6.5 SERP Benefit Upon Southern Change in Control. On the date of a Southern
Change in Control, the SERP Benefit of each Participant, who is an Employee of
an Employing Company and who has a non-forfeitable right to Retirement Income
under the Pension Plan, will be calculated based on such Participant's Earnings
and Accredited Service on such date, regardless of whether such Participant is
retirement eligible on such date. Each such Participant, who is an Employee of
an Employing Company, will be entitled to receive the amount of his SERP Benefit
based on such Participant's Earnings and Accredited Service as of the date of a
Southern Change in Control adjusted to take into account appropriate early
reduction factors, if any, based on the Participant's commencement of benefits.
Such benefit shall be paid in lump sum, upon termination of employment or
retirement. Any benefits accrued under the SERP subsequent to the date of a
Southern Change in Control will be calculated and distributed pursuant to the
terms of the SERP, without regard to this Article VI.
6.6 SERP Benefit Upon Subsidiary Change in Control. On the date of a Subsidiary
Change in Control of an Employing Company, the SERP Benefit of each Participant,
who is an Employee of such Employing Company and who has a non-forfeitable right
to Retirement Income under the Pension Plan, will be calculated based on such
Participant's Earnings and Accredited Service on such date, regardless of
whether such Participant is retirement eligible on such date. Each such
Participant, who is an Employee of such Employing Company, will be entitled to
receive the amount of his SERP Benefit based on such Participant's Earnings and
Accredited Service as of the date of a Subsidiary Change in Control adjusted to
take into account appropriate early reduction factors, if any, based on the
Participant's commencement of benefits. Such benefit shall be paid in lump sum,
upon termination of employment or retirement. Any benefits accrued under the
SERP subsequent to the date of a Subsidiary Change in Control will be calculated
and distributed pursuant to the terms of the SERP, without regard to this
Article VI.
ARTICLE VII - DEFERRED COMPENSATION PLAN
CHANGE IN CONTROL AND OTHER SPECIAL PROVISIONS
7.1 Application. The provisions of this Article VII apply to benefits payable
under the Southern Company Deferred Compensation Plan (the "DCP"),
notwithstanding any provision in the DCP to the contrary. The meaning of
capitalized terms not defined herein are determined under the DCP.
7.2 Notwithstanding any other terms of the DCP to the contrary, following a
Southern Change in Control or a Subsidiary Change in Control, the provisions of
this Article VII shall apply to the payment of benefits under the DCP with
respect to any Subsidiary Employee who is a Participant on such date.
7.3 The Trust has been established to hold assets of the Employing Companies
under certain circumstances as a reserve for the discharge of the Employing
Companies' obligations under the DCP. In the event of a Preliminary Change in
Control of Southern, all Employing Companies shall be obligated to immediately
contribute such amounts to the Trust as may be necessary to fully fund all
benefits payable under the DCP in accordance with the procedures set forth in
Section 7.4 hereof. In the event of a Preliminary Change in Control of an
Employing Company, such Employing Company shall be obligated to immediately
contribute such amounts to the Trust as may be necessary to fully fund all
benefits payable to its Subsidiary Employees under the DCP in accordance with
the procedures set forth in Section 7.4 hereof. In addition, in order to provide
the added protections for certain individuals in accordance with Paragraph 7(b)
of the Trust, the Employing Companies may fund the Trust prior to a Preliminary
Change in Control of Southern or an Employing Company in accordance with the
terms of the Trust. All assets held in the Trust remain subject only to the
claims of the Employing Companies' general creditors whose claims against the
Employing Companies are not satisfied because of the Employing Companies'
bankruptcy or insolvency (as those terms are defined in the Trust). No
Participant has any preferred claim on, or beneficial ownership interest in, any
assets of the Trust before the assets are paid to the Participant and all rights
created under the Trust, as under the DCP, are unsecured contractual claims of
the Participant against his Employing Company.
7.4 As soon as practicable following either a Preliminary Change in Control of
Southern or of an Employing Company, the affected Employing Companies shall
contribute an amount based upon the funding strategy adopted by the Committee
with the assistance of an appointed actuary necessary to fulfill the Employing
Companies' obligations pursuant to this Article VII. In the event of a dispute
over such actuary's determination, the respective Employing Company(ies) and any
complaining Participant(s) shall refer such dispute to an independent,
third-party actuarial consultant, chosen by the Employing Company and such
Participant. If the Employing Company and the Participant cannot agree on an
independent, third-party actuarial consultant, the actuarial consultant shall be
chosen by lot from an equal number of actuaries submitted by the Employing
Company and the Trustee. Any such referral shall only occur once in total and
the determination by the third-party actuarial consultant shall be final and
binding upon both parties. The Employing Companies shall be responsible for all
of the fees and expenses of the independent actuarial consultant.
7.5 In the event of a Southern Change in Control or a Subsidiary Change in
Control, notwithstanding anything to the contrary in the DCP, upon termination
or retirement from employment, the Account of a Participant who was an Employee
of an Employing Company affected by such a Change in Control shall be paid out
in a lump sum if such Participant makes an election pursuant to procedures
established by the Committee in its sole and absolute discretion. If no such
election is made, the Participant shall receive payment of his Account solely in
accordance with Article VII of the DCP.
ARTICLE VIII - ADMINISTRATION
8.1 Administrative Committee. The committee designated as administrator of each
of the Employee Benefit Plans shall be responsible for the general
administration of this Policy as it relates to such committee's respective
Employee Benefit Plan.
ARTICLE IX - MISCELLANEOUS
9.1 Amendment and Termination. This Policy may be amended or terminated at any
time by the board of directors of Southern Company Services, Inc. (or its
successors and assigns, if applicable), provided, however, the Policy 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 in the Employee Benefit Plans which have accrued
hereunder prior to any such amendment or termination.
9.2 Additional Rights. Nothing in the Policy shall interfere with or limit in
any way the right of the Employing Companies to terminate any employee's
employment at any time, or confer upon any employee any right to continue in the
employ of the Employing Companies.
IN WITNESS WHEREOF, this amended and restated Southern Company Change in
Control Benefit Plan Determination Policy has been executed by duly authorized
officers of Southern Company Services, Inc. pursuant to resolutions of the Board
of Directors of Southern Company Services, Inc. this ______ day of
________________________, 2002.
SOUTHERN COMPANY SERVICES, INC.
By: ____________________________________
Its: Senior Vice President
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Attest:
By:
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Its:
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