Exhibit 10(a)92
SOUTHERN COMPANY
EXECUTIVE CHANGE IN CONTROL
SEVERANCE PLAN
Troutman Sanders LLP
Bank of America Plaza, Suite 5200
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Effective May 9, 2002
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. This Plan was
originally effective December 7, 1998; it was amended by a First Amendment also
effective December 7, 1998, and subsequently amended and restated effective July
10, 2000. This amended and restated Plan is effective May 9, 2002. 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 target bonus.
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(a)(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 of Southern or its subsidiary or
affiliate, or Group composed exclusively of such 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 of Southern or its subsidiary or affiliate, or Group
composed entirely of such 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 or a Southern Subsidiary 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 or a Southern Subsidiary does not Control.
Notwithstanding the foregoing, in no event shall "Change in Control" mean
an initial public offering or a spin-off of an Employing Company.
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 regular 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) not covered by a collective bargaining agreement
between the Employing Company and a union or other employee representative. The
Administrative Committee of the Southern Company Change in Control Benefit
Determination Policy may deem one or more Employees (as defined in this Section
2.13 except not employed by an Employing Company) of a particular Southern
Subsidiary, or corporation or entity Controlled by a Southern Subsidiary, to be
employed by an Employing Company for certain purposes under this Plan. Such
action shall be in writing and shall cause such an Employee to only be entitled
to benefits under this Plan in the event of a Change in Control of his deemed
Employing Company, and not his actual employing company.
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. The term "Employing Company" shall also mean any corporation or entity
Controlled by a Southern Subsidiary which the Compensation Committee of the
Southern Board has determined 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.
2.17 "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., the PPP under the Omnibus
Plan), 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 October 19, 1998 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 "Omnibus Plan" shall mean the Southern Company Omnibus Incentive
Compensation Plan, and the Design and Administrative Specifications duly adopted
thereunder, as in effect on the day before the date of a Change in Control, as
may be amended from time to time.
2.24 "Participant" shall mean an Employee or Support Employee who meets the
eligibility requirements of Section 3.1 of this Plan.
2.25 "Pension Plan" shall mean The Southern Company Pension Plan or any
successor thereto, as such plans may be amended from time to time.
2.26 "Performance Dividend Program" or "PDP" shall mean the Performance Dividend
Program under the Omnibus Plan or any replacement thereto, as such plans may be
amended from time to time.
2.27 "Performance Pay Program" or "PPP" shall mean the Performance Pay Program
under the Omnibus Plan or any replacement thereto, 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 "Plan" shall mean the Southern Company Executive Change in Control
Severance Plan.
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 Controlled
by Southern or another Southern Subsidiary.
2.33 "Support Employee" shall mean an Employee of the Company (which shall
continue to be such Employee's Employing Company for purposes of this Plan) who:
(a) Is involuntarily terminated without Cause within one year of the Change in
Control of an Employing Company (other than the Company) and either (i)
spent at least 40% of his working time performing services for such
Employing Company at the time of the Change in Control and for the six
months prior thereto, or (ii) is determined by the Administrative Committee
to be involuntarily terminated without Cause as a result of such Change in
Control; or
(b) Voluntarily terminates with Good Reason within one year of the Change in
Control of an Employing Company (other than the Company) and spent at least
40% of his working time performing services for such Employing Company at
the time of the Change in Control and for the six months prior thereto. For
purposes of this Section 2.33(b) only, Good Reason shall not include the
provisions of Section 2.17(a), entitled "Inconsistent Duties."
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 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 2.34(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 within the meaning of the
Pension Plan.
2.37 "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.
2.38 "Waiver and Release" shall mean the Waiver and Release attached hereto as
Exhibit A.
2.39 "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.
(a) Employees. 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.
(b) Deemed Employees. An Employee who is deemed to be employed by a different
Employing Company than his actual Employing Company under Section 2.13
hereof, shall be entitled to participate in this Plan and receive the
benefits described in Section 3.2 hereof in the same manner as other
Employees under Section 3.1(a) hereof; provided, however, that such deemed
Employee will be considered to be an Employee of the deemed Employing
Company solely for purposes of determining whether a Change in Control has
occurred. For all other purposes under this Plan, such deemed Employee's
actual Employing Company shall be considered.
(c) Support Employees. A Support Employee 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.
(d) Limits on Eligibility. Notwithstanding anything to the contrary herein, an
Employee or Support Employee shall not be eligible to receive benefits
under this Plan if the Employee or Support Employee:
(i) is not actively at work on his Termination Date, unless such Employee
or Support Employee is capable of returning to work within twelve (12)
weeks of the beginning of any leave of absence from work;
(ii) voluntarily terminates his employment with his Employing Company for
other than Good Reason;
(iii) is terminated by his Employing Company for Cause;
(iv) 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;
(v) 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
(vi) elects to receive the benefits of any other voluntary or involuntary
severance, separation or outplacement program, plan or agreement
maintained by his Employing Company in lieu of benefits under this
Plan; 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 employer-sponsored 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 Omnibus 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 and Restricted Stock Units as of the
Termination Date 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.
(e) Performance Pay Program. 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 Program, the defined terms of which are
incorporated in this Section 3.2(e) by reference. Provided the Participant
is not entitled to a Cash-Based Award under the PPP, if the PPP 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 Cash-Based
Award under the PPP for the performance period in which the Termination
Date shall have occurred, at target performance under the PPP and prorated
by the number of months which have passed since the beginning of the
performance period until the Termination Date.
(f) Performance Dividend Program. 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 Performance Dividend Program, the defined terms of
which are incorporated in this Section 3.2(f) by reference. Provided the
Participant is not entitled to a Cash-Based Award under the PDP, if the PDP
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 such Cash-Based Award under the PDP
held as of such date based on a payout percentage of 50% under the PDP for
the performance period in which the Termination Date shall have occurred,
and the annual dividend declared prior to the Termination Date.
(g) Other Short Term Incentives Under the Omnibus Plan. The provisions of this
Section 3.2(g) shall apply to any Participant who, as of the date of the
Change in Control is entitled to a Performance Unit or Performance Share
award under the Omnibus Plan. Provided the Participant is not otherwise
entitled to a Performance Unit/Share award under the Omnibus Plan, the
Participant shall be entitled to receive cash in an amount equal to a
prorated payout of the value of his Performance Units and/or Performance
Shares for the performance period in which the Termination Date shall have
occurred, at target performance and prorated by the number of months which
have passed since the beginning of the performance period until the
Termination Date.
(h) Other Short-Term Incentive Plans. The provisions of this Section 3.2(h)
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(h), 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 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 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.
3.5 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.
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
officers, this ____ day of ___________, 2002, to be effective as provided
herein.
SOUTHERN COMPANY SERVICES, INC.
By: __________________________________
Its: Senior Vice President
----------------------------------
Attest:
By:
--------------------------------------------
Its:
--------------------------------------------
Exhibit A
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 Title VII
of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age
Discrimination in Employment Act, the Rehabilitation Act of 1973, 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. d/b/a Southern LINC, Southern Company
Services, Inc., Southern Company Energy Solutions, LLC, Southern Nuclear
Operating Company, Inc., Southern Telecom, Inc., Southern Company Management
Development, Inc., and other current or former 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 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.
Notwithstanding anything in this Waiver to the contrary, I understand
that the Company is not discouraging or prohibiting me from engaging in any
protected activity described in Section 211 of the Energy Reorganization Act.
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. I understand I do not have to sign this Waiver.
IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this day of
- ---------- ------------------- , in the year ______.
Employee's signature
Employee's printed name
WITNESS
Acknowledged and Accepted by the Administrative Committee of the
Southern Company Executive Change in Control Severance Plan.
By:
-----------------------------------
Date:
-----------------------------------
Attachment to Exhibit A
TO: All Eligible Employees under the Southern Company Executive Change in
Control Severance Plan
FROM: _____________________
RE: ADEA Information Notice
DATE: _____________________
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. This information, in
conjunction with the information provided in the Plan, should allow you to make
an informed decision concerning your options under the Plan.
The purpose of the Plan is to provide benefits to certain key employees of The
Southern Company and certain subsidiaries of The Southern Company and its
subsidiaries ("Employing Companies") whose employment is terminated subsequent
to a change in control of The Southern Company or their respective Employing
Company. You are eligible to participate in the Plan because your employment has
been terminated under the terms of the Plan.
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.
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
- ------------------------------------- ---------------------------------- ---------------------------------------------
Department Job Title, Classification Age of
or Category of Eligible Employees Eligible Employees
- ------------------------------------- ---------------------------------- ---------------------------------------------
- ------------------------------------- ---------------------------------- ---------------------------------------------
- ------------------------------------- ---------------------------------- ---------------------------------------------
- ------------------------------------- ---------------------------------- ---------------------------------------------
[List department of each eligible [List job classification, title [List age of each eligible employee]
employee] corresponding or category of all
eligible employees]
- ------------------------------------- ---------------------------------- ---------------------------------------------
- ------------------------------------- ---------------------------------- ---------------------------------------------
Department Job Title, Classification Age of
or Category of Ineligible Ineligible Employees
Employees
- ------------------------------------- ---------------------------------- ---------------------------------------------
- ------------------------------------- ---------------------------------- ---------------------------------------------
- ------------------------------------- ---------------------------------- ---------------------------------------------
- ------------------------------------- ---------------------------------- ---------------------------------------------
[List department of each ineligible [List job classification, title [List age of each ineligible employee]
employee] corresponding or category of all
ineligible employees]
- ------------------------------------- ---------------------------------- ---------------------------------------------
Exhibit B
SOUTHERN COMPANY
EXECUTIVE CHANGE IN CONTROL
SEVERANCE PLAN
Short Term Incentive Compensation Plans