Exhibit 10.3
AMENDED AND RESTATED
CHANGE IN CONTROL AGREEMENT
THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT ("Agreement")
made and entered into by and between The Southern Company ("Southern"), Southern
Company Services, Inc. (the "Company") and Mr. Thomas A. Fanning ("Mr. Fanning")
(hereinafter collectively referred to as the "Parties") is effective November
16, 2006. This Agreement amends and restates the Amended and Restated Change in
Control Agreement entered into by Mr. Fanning, Southern and the Company,
effective June 1, 2004.
WITNESSETH:
WHEREAS, Mr. Fanning is the Executive Vice President and Chief
Financial Officer of the Company;
WHEREAS, the Company wishes to provide to Mr. Fanning certain severance
benefits under certain circumstances following a change in control (as defined
herein) of Southern or the Company;
NOW, THEREFORE, in consideration of the premises, and the agreements of
the Parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
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ARTICLE I - DEFINITIONS.
For purposes of this Agreement, the following terms
shall have the following meanings:
1.1 "Annual Compensation" shall mean Mr. Fanning's Base Salary plus Target Bonus
under the Company's Short Term Bonus Plan and Long Term Bonus Plan.
1.2 "Base Salary" shall mean Mr. Fanning's highest annual base salary rate
during the twelve (12) month period immediately preceding the date the Change
in Control is Consummated.
1.3 "Beneficial Ownership" shall mean beneficial ownership within the meaning of
Rule 13d-3 promulgated under the Exchange Act.
1.4 "Benefit Index" shall mean the Hewitt Associates' Benefit Index(r), or if
such index is no longer available, cannot be used, or if pursuant to
Section 1.5 hereof another Benefits Consultant has been chosen by the
Compensation Committee, such other comparable index utilized by the Benefits
Consultant.
1.5 "Benefits Consultant" shall mean Hewitt Associates or such other nationally
recognized employee benefits consulting firm as shall be designated in writing
by the Compensation Committee upon the occurrence of a Preliminary Change in
Control that would result in a Subsidiary Change in Control.
1.6 "Board of Directors" shall mean the board of directors of the Company.
1.7 "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.
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1.8 "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 1.8(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 a
Southern Subsidiary, 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) or (C) of Section 1.8(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
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(iii) The 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 hold
Beneficial Ownership, directly or indirectly, of 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
Business Combination 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 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
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(C) at least a majority of the members of the board
of directors of Surviving Company were members of the
Incumbent Board on the date of the Preliminary Change in
Control.
(b) with respect to the 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 the Company; provided,
however, that for purposes of this Section 1.8(b)(i), any
acquisition by Mr. Fanning, any other employee of Southern or
a Southern Subsidiary, 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 the Company ("Company Business Combination"), in each case,
unless, following such Company Business Combination, Southern
or a Southern Subsidiary Controls the corporation surviving or
resulting from such Company Business Combination; or
(iii) The Consummation of the sale or other disposition of all or
substantially all of the assets of the Company to an entity
which Southern or a Southern Subsidiary does not Control
("Subsidiary Change in Control").
1.9 "COBRA Coverage" shall mean any continuation coverage to which Mr. Fanning
or his dependents may be entitled pursuant to Code Section 4980B.
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1.10 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.11 "Common Stock" shall mean the common stock of Southern.
1.12 "Company" shall mean Southern Company Services, Inc., its successors
and assigns.
1.13 "Compensation Committee" shall mean the Compensation and Management
Succession Committee of the Southern Board.
1.14 "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.
1.15 "Control" shall mean, in the case of a corporation, Beneficial Ownership of
more than 50% of the combined voting power of the corporation's Voting
Securities, or in the case of any other entity, Beneficial Ownership of more
than 50% of such entity's voting equity interests.
1.16 "Economic Equivalent" or "Economic Equivalence" shall have the
meaning set forth in Section 1.23(f) hereof.
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1.17 "Employee Outplacement Program" shall mean the program established by
the Company from time to time for the purpose of assisting employees in finding
employment outside of the 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.
1.18 "Company" shall mean Southern Company Services, Inc., its successors and
assigns.
1.19 "Company Business Combination" shall have the meaning set forth in Section
1.8(b)(ii) hereof.
1.20 "Equity Based Bonus Plan" shall mean a plan or arrangement that
provides for the grant to participants of stock options, restricted stock, stock
appreciation rights, phantom stock, phantom stock appreciation rights or any
other similar rights the terms of which provide a participant with the potential
to receive the benefit of any increase in value of the underlying equity or
notional amount (e.g., number of phantom shares) from the date of grant through
a subsequent date.
1.21 "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
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1.22 "Executive Employee" shall mean those employees of the Company of Grade
Level 10 or above.
1.23 "Good Reason" shall mean, without Mr. Fanning's express written consent,
after written notice to the Company, and after a thirty (30) day
opportunity for the Company to cure, the continuing occurrence of any of
the events described in Subsections (a)(i), (b)(i), (c)(i), (d)(i) or
(d)(ii) of this Section 1.23. In the case of Mr. Fanning claiming benefits
under this Agreement upon a Subsidiary Change in Control, the foregoing
notice and opportunity to cure will be satisfied if Mr. Fanning provides to
the Compensation Committee a copy of his written offer of employment by the
acquiring company within thirty (30) days of such offer along with a
written explanation describing how the terms of such offer satisfy the
requirements of Subsections (a)(ii), (b)(ii), (c)(ii), (d)(iii) or (e) of
this Section 1.23. The Compensation Committee shall make a determination of
whether such written offer of employment satisfies the requirements of
Sections 1.23(a)(ii), (b)(ii), (c)(ii), (d)(iii) or (e) hereof upon
consultation with the Benefits Consultant and shall notify Mr. Fanning of
its decision within thirty (30) days of receipt of Mr. Fanning's written
offer of employment. Any dispute regarding the Compensation Committee's
decision shall be resolved in accordance with Article III hereof.
(a) Inconsistent Duties.
(i) Change in Control. A meaningful and detrimental alteration in
Mr. Fanning's position or in the nature or status of his
responsibilities from those in effect immediately prior to the
Change in Control.
(ii) Subsidiary Change in Control. In the event of a Subsidiary
Change in Control, Good Reason shall exist if Mr. Fanning is
offered employment with the acquiring employer with a job
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title, duties and status which are materially and
detrimentally lower than Mr. Fanning's job title, duties and
status in effect at the Company as of the date the offer of
employment is received.
(b) Reduced Compensation.
(i) Change in Control. A reduction of five percent (5%) or more by
the Company in any of the following amounts of compensation
expressed in subparagraphs (A), (B) or (C) hereof, except for
a less than ten percent (10%), across-the-board reduction in
such compensation amounts similarly affecting ninety-five
percent (95%) or more of the Executive Employees eligible for
such compensation:
(A) Mr. Fanning's Base Salary;
(B) the sum of Mr. Fanning's Base Salary plus Target Bonus
under the Company's Short Term Bonus Plan, as in effect
on the day immediately preceding the day the
Change in Control is Consummated; or
(C)the sum of Mr. Fanning's Base Salary plus Target Bonus under
the Company's Short Term Bonus Plan and Long Term Bonus Plan
plus the Target Bonus under the Company's Equity Based Bonus
Plan, each of which as in effect on the day immediately
preceding the day the Change in Control is Consummated.
(ii) Subsidiary Change in Control. In the event of a Subsidiary
Change in Control, Good Reason shall exist if Mr. Fanning is
offered Base Salary, Target Bonus under the acquiring
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company's Short Term Bonus Plan and Long Term Bonus Plan and
Target Bonus under the acquiring company's Equity Based Bonus
Plan that, in the aggregate, is less than ninety percent (95%)
of Mr. Fanning's Base Salary plus Target Bonus under the
Company's Short Term Bonus Plan and Long Term Bonus Plan, plus
Target Bonus under the Company's Equity Based Bonus Plan, each
of which as in effect on the day the offer of employment is
received;
(c) Relocation.
(i) Company. A change in Mr. Fanning's work location to a
location more than fifty (50) miles from the facility where Mr. Fanning
was located on the day immediately preceding the day the Change in
Control is Consummated, unless such new work location is within
fifty (50) miles of Mr. Fanning's principal place of residence on the
day immediately preceding the day the Change in Control is Consummated.
The acceptance, if any, by Mr. Fanning of employment by the Company at
a work location which is outside the fifty mile radius set forth in
this Section 1.23(c) shall not be a waiver of Mr. Fanning's right to
refuse subsequent transfer by the Company to a location which
is more than fifty (50) miles from Mr. Fanning's principal place of
residence on the day immediately preceding the day the Change in Control is
Consummated, and such subsequent nonconsensual transfer shall be "Good
Reason" under this Agreement;
(ii) Subsidiary Change in Control. In the case of a Subsidiary
Change in Control, Good Reason shall exist if Mr. Fanning's
work location under the terms of the offer of employment from
the acquiring employer is more than fifty (50) miles from Mr.
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Fanning's work location at the Company as of the date the
offer of employment by the acquiring employer is received.
(d) Benefits and Perquisites.
(i) Change in Control - Retirement and Welfare Benefits. The
taking of any action by the Company that would directly or
indirectly cause a Material Reduction in the Retirement and
Welfare Benefits to which Mr. Fanning is entitled under the
Company's Retirement and Welfare Benefit plans in which Mr.
Fanning was participating on the day immediately preceding the
day the Change in Control is Consummated.
(ii) Vacation and Paid Time Off. The failure by the Company to
provide Mr. Fanning with the number of paid vacation days or,
if applicable, paid time off days to which Mr. Fanning is
entitled on the basis of years of service with the Company in
accordance with the Company's normal vacation policy or the
paid time off program (whichever applicable) in effect on the
day immediately preceding the day the Change in Control is
Consummated (except for across-the-board vacation policy or
paid time off program changes or policy or program
terminations similarly affecting at least ninety-five percent
(95%) of all Executive Employees of the Company).
(iii) Subsidiary Change in Control. In the event of a Subsidiary
Change in Control, Good Reason shall exist if Mr. Fanning is
offered a package of Retirement and Welfare Benefits by the
acquiring employer that is not Economically Equivalent, as
determined under Sections 1.23(f) and (g) hereof.
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(e) Adoption of Severance Agreement. In the event of a Subsidiary
Change in Control, Good Reason shall exist if the offer of
employment by the acquiring employer does not include an
agreement to enter into a severance agreement substantially in
the form of Exhibit B attached hereto.
(f) Economic Equivalence. For purposes of Section 1.23(d)(iii)
above, an acquiring employer's package of Retirement and
Welfare Benefits shall be considered Economically Equivalent
if, in the written opinion of the Benefits Consultant, the
anticipated, employer-provided value of what Mr. Fanning is
expected to derive from the acquiring employer's Retirement
and Welfare Benefits is equal to or greater than ninety
percent (90%) of such value Mr. Fanning would have derived
from the Company's Retirement and Welfare Benefits using the
Benefit Index.
(g) Benefit Index Guidelines. For purposes of Section 1.23(f)
above, the following guidelines shall be followed by the
Company, the acquiring employer and the Benefits Consultant in
the performance of the Benefit Index calculations:
(i)Upon a Preliminary Change in Control that if Consummated
would result in a Subsidiary Change in Control, the Company and the
acquiring employer shall provide to the Benefits Consultant the
applicable benefit plan provisions for the plan year in which the
Subsidiary Change in Control is anticipated to occur. Plan provisions
for the immediately preceding plan year may be provided if the
Benefits Consultant determines that there have been no changes
to such plans that would materially affect the determination of
Economic Equivalence. If the acquiring employer's relevant plan provisions
have not previously been included in the Benefits Consultant's Benefit
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Index database, the acquiring employer shall provide to the Benefits
Consultant such plan information as the Benefits Consultant shall request
in writing as soon as practicable following such request. The Compensation
Committees shall take such action as is reasonably required to facilitate
the transfer of such information from the acquiring employer to the
Benefits Consultant.
(ii) The standard Benefit Index assumptions for the plan year
from which the plan provisions are taken shall be used.
(iii)The Company shall provide to the Benefit Consultant actual
data for its Employees.
(iv) The determination of whether or not the acquiring
employer's Retirement and Welfare Benefits are Economically Equivalent to
the Retirement and Welfare Benefits provided to Mr. Fanning by the Company
shall be determined on an aggregate basis. All assessments shall consider
all benefits in total and no individual-by-individual, plan-by-plan
determination of Economic Equivalence shall be made.
1.24 "Group" shall have the meaning set forth in Section 14(d) of the Exchange
Act.
1.25 "Group Health Plan" shall mean the group health plan covering Mr. Fanning,
as such plan may be amended from time to time.
1.26 "Group Life Insurance Plan"shall mean the group life insurance plan
covering Mr. Fanning, as such plan may be amended from time to time.
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1.27 "Incumbent Board" shall mean those individuals who constitute the Southern
Board as of February 23, 2006, 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 February 23, 2006
whose initial assumption of office occurs as a result of an actual or threatened
election contest (within the meaning of Rule 14a-11 of the Regulations
promulgated under the Exchange Act) with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Southern Board shall be a member of the
Incumbent Board.
1.28 "Long Term Bonus Plan" shall mean any bonus type plan or
arrangement designed to provide incentive based compensation to participants
upon the achievement of objective or subjective goals that measure performance
over a period of more than twelve months.
1.29 "Month of Service" shall mean any calendar month during which Mr. Fanning
has worked at least one (1) hour or was on approved leave of absence while in
the employ of the Company or any other Southern Subsidiary.
1.30 "Material Reduction" shall mean (i) any change in a retirement plan or
arrangement that has the effect of reducing the present value of the projected
benefits to be provided to Mr. Fanning by five percent (5%) or more, (ii) any
five percent (5%) or more reduction in medical, health and accident and
disability benefits as a percentage of premiums or premium equivalents in
accordance with the Company's prior practice as measured over a period of the
three previous plan years from the date the Change in Control is Consummated, or
(iii) any five percent (5%) or more reduction in employer matching funds as a
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percentage of employee contributions in accordance with the Company's prior
practice measured over a period of the previous three plan years from the date
the Change in Control is Consummated.
1.31 "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 date a Change in Control is Consummated.
1.32 "Pension Plan" shall mean The Southern Company Pension Plan or any
successor thereto, as in effect on the date a Change in Control is Consummated.
1.33 "Performance Dividend Program" or "PDP" shall mean the Performance Dividend
Program under the Omnibus Plan or any replacement thereto, as in effect on the
date a Change in Control is Consummated.
1.34 "Performance Pay Program" or "PPP" shall mean the Performance Pay Program
under the Omnibus Plan or any replacement thereto, as in effect on the date a
Change in Control is Consummated.
1.35 "Person" shall mean any individual, entity or group within the meaning of
Section 13(d)(3) or 14(d)(2) of Exchange Act.
1.36 "Preliminary Change in Control" shall mean the occurrence of any of the
following as administratively determined by the Southern Committee.
(a) Southern or the Company has entered into a written agreement, such as,
but not limited to, a letter of intent, which, if Consummated, would
result in a Change in Control;
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(b) Southern, the Company or any Person publicly announces an intention to
take or to consider taking actions which, if Consummated, would result
in a Change of Control under circumstances where the Consummation of
the announced action or intended action is legally and financially
possible;
(c) Any Person achieves the Beneficial Ownership of fifteen percent (15%)
or more of the Common Stock; or
(d) The Southern Board or the Board of Directors has declared that a
Preliminary Change of Control has occurred.
1.37 "Retirement and Welfare Benefits" shall mean benefits provided by the
following types of plans and arrangements: pension plans, defined contribution
plans (matched savings, profit sharing, money purchase, ESOP, and similar plans
and arrangements), plans providing for death benefits while employed or retired
(life insurance, survivor income, and similar plans and arrangements), plans
providing for short-term disability benefits (including accident and sick time),
plans providing for long-term disability benefits, plans providing health-care
benefits (including reimbursements during active employment or retirement
related to expenses for medical, vision, hearing, dental, and similar plans and
arrangements).
1.38 "Separation Date" shall mean the date on which Mr. Fanning's employment
with the Company is terminated; provided, however, that solely for purposes of
Section 2.2(c) hereof, if, upon termination of employment with the Company, Mr.
Fanning is deemed to have retired pursuant to the provisions of Section 2.3
hereof, Mr. Fanning's Separation Date shall be the effective date of his
retirement pursuant to the terms of the Pension Plan.
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1.39 "Short Term Bonus Plan" shall mean any bonus type plan or arrangement
designed to provide incentive based compensation to participants upon the
achievement of objective or subjective goals that measure performance over a
period of twelve months or less.
1.40 "Southern" shall mean The Southern Company, its successors and assigns.
1.41 "Southern Board" shall mean the board of directors of Southern.
1.42 "Southern Committee" shall mean the committee comprised of the Chairman of
the Southern Board, the Chief Financial Officer of Southern and the General
Counsel of Southern.
1.43 "Southern Subsidiary" shall mean any corporation or
other entity Controlled by Southern or another Southern Subsidiary.
1.44 "Subsidiary Change in Control" shall have the meaning set forth in Section
1.8(b)(iii) hereof.
1.45 "Target Bonus" shall mean the amount of incentive compensation
expressed as either a percent of salary or pay, an expected dollar
amount, the number of awards granted or such other quantifiable measure to
determine the amount to be paid or awards granted under the terms of the
respective Short Term Bonus Plan, Long Term Bonus Plan or Equity Based Bonus
Plan, as used by the Company or respective acquiring employer to measure the
market competitiveness of its employee compensation programs.
1.46 "Termination for Cause" or "Cause" shall mean Mr. Fanning's termination
of employment with the Company upon the occurrence of any of the following:
(a) The willful and continued failure by Mr. Fanning to
substantially perform his duties with the Company (other than
any such failure resulting from Mr. Fanning's Total Disability
or from Mr. Fanning's retirement or any such actual or
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anticipated failure resulting from termination by Mr. Fanning
for Good Reason) after a written demand for substantial
performance is delivered to him by the Southern Board, which
demand specifically identifies the manner in which the
Southern Board believes Mr. Fanning has not substantially
performed his duties; or
(b) The willful engaging by Mr. Fanning in conduct that is
demonstrably and materially injurious to the 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
Mr. Fanning's employment by the Company;
(ii) the willful carrying out of any activity or the making of any
statement by Mr. Fanning which would materially prejudice or
impair the good name and standing of the Company, Southern or
any other Southern Subsidiary or would bring the Company,
Southern or any other Southern Subsidiary into contempt,
ridicule or would reasonably shock or offend any community in
which the Company, Southern or such other Southern Subsidiary
is located;
(iii) attendance by Mr. Fanning 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 the Company's policies on drug and alcohol usage,
fitness for duty requirements or similar policies as may exist
from time to time as adopted by the Company's safety officer;
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(v) assault or other act of violence by Mr. Fanning against any
person during the course of employment; or (vi) Mr. Fanning's
indictment for any felony or any misdemeanor involving moral
turpitude.
No act or failure to act by Mr. Fanning shall be deemed
"willful" unless done, or omitted to be done, by Mr. Fanning not in
good faith and without reasonable belief that his action or omission
was in the best interest of the Company.
Notwithstanding the foregoing, Mr. Fanning 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 Southern Board at a meeting
called and held for such purpose (after reasonable notice to Mr.
Fanning and an opportunity for him, together with counsel, to be heard
before the Southern Board), finding that, in the good faith opinion of
the Southern Board, Mr. Fanning was guilty of conduct set forth in
Section 1.46(a) or (b) hereof and specifying the particulars thereof
in detail.
1.47 "Total Disability" shall mean total disability under the terms of the
Pension Plan.
1.48 "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.
1.49 "Waiver and Release" shall mean the Waiver and Release substantially in
the form of Exhibit A attached hereto.
1.50 "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
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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 II - SEVERANCE BENEFITS
2.1 Eligibility.
(a) Except as otherwise provided herein, if Mr. Fanning's
employment is involuntarily terminated by the Company at any
time during the two year period following a Change in Control
of Southern or the Company for reasons other than Cause or if
Mr. Fanning voluntarily terminates his employment with the
Company for Good Reason at any time during the two year period
following a Change in Control of Southern or the Company, he
shall be entitled to receive the benefits described in Section
2.2 hereof, subject to the terms and conditions described in
this Article II.
(b) Limits on Eligibility. Notwithstanding anything to the
contrary herein, Mr. Fanning shall not be eligible to receive
benefits under this Plan if Mr. Fanning :
(i) is not actively at work on his Separation Date, unless Mr.
Fanning 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 the Company for
other than Good Reason;
(iii) has his employment terminated by the Company for Cause;
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(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;
(v) accepts the transfer of his employment to any employer (or its
affiliate) that acquires all or substantially all of the
assets of a Southern Subsidiary or the Company and becomes an
employee of any such employer (or its affiliate) following
such acquisition (provided, however, that if Mr. Fanning would
otherwise have been entitled to severance benefits under this
Agreement but for this Section 2.1(b)(v), Mr. Fanning shall be
eligible for benefits under this Agreement except for those
outplacement, severance and welfare benefits described in
Sections 2.2(a), (b) and (c) hereof);
(vi) is involuntarily separated from service with the Company after
refusing an offer of employment by Southern or a Southern
Subsidiary, under circumstances where the terms of such offer
would not have amounted to Good Reason for voluntary
termination of employment from the Company by comparing each
item of compensation and benefits of such offer of employment
as set forth in Section 1.23(a)(i), (b)(i), (c)(i), (d)(i) and
(d)(ii) above, with such items of compensation and benefits to
which he is entitled at the Company as of the day immediately
preceding the day of such offer of employment;
(vii) refuses an offer of employment by an acquiring employer in a
Subsidiary Change in Control under circumstances where such
offer does not provide Good Reason under the requirements of
Section 1.23(a)(ii), (b)(ii), (c)(ii), (d)(iii) or (e) hereof.
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(viii) elects to receive the benefits of any other voluntary or
involuntary severance, separation or outplacement program,
plan or agreement maintained by the Company in lieu of
benefits under this Agreement; 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 Agreement.
2.2 Severance Benefits. Upon the Company's receipt of an effective
Waiver and Release, Mr. Fanning shall be entitled to receive
the following severance benefits:
(a) Employee Outplacement Services. Mr. Fanning shall be eligible
to participate in the Employee Outplacement Program, which program shall not
be less than six (6) months duration measured from Mr. Fanning's Separation
Date.
(b) Severance Amount. Mr. Fanning shall be paid in cash an amount
equal to three times his Annual Compensation (the "Severance Amount").
If any portion of the Severance Amount constitutes an "excess parachute
payment" (as such term is defined under Code Section 280G ("Excess
Parachute Payment")), the Company shall pay to Mr. Fanning an additional
amount calculated by determining the amount of tax under Code Section 4999 that
he otherwise would have paid on any Excess Parachute Payment with respect to
the Change in Control and dividing such amount by a decimal determined by
adding the tax rate under Code Section 4999 ("Excise Tax"), the hospital
insurance tax under Code Section 3101(b) ("HI Tax") and federal and state
22
income tax measured at the highest marginal rates ("Income Tax") and
subtracting such result from the number one (1) (the "280G Gross-up");
provided, however, that no 280G Gross-up shall be paid unless the Severance
Amount plus all other "parachute payments" to Mr. Fanning under Code
Section 280G exceeds three (3) times Mr. Fanning's "base amount" (as such
term is defined under Code Section 280G ("Base Amount")) by ten percent
(10%) or more; provided further, that if no 280G Gross-up is paid, the
Severance Amount shall be capped at three (3) times Mr. Fanning's Base
Amount, less all other "parachute payments" (as such term is defined under
Code Section 280G) received by Mr. Fanning, less one dollar (the "Capped
Amount"), if the Capped Amount, reduced by HI Tax and Income Tax, exceeds
what otherwise would have been the Severance Amount, reduced by HI Tax,
Income Tax and Excise Tax.
For purposes of this Section 2.2(b), whether any amount would
constitute an Excess Parachute Payment and any other calculations of
tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts,
e.g., Base Amount, Capped Amount, etc., shall be determined by a
nationally recognized firm specializing in federal income taxes as
selected by the Compensation Committee, and such calculations or
determinations shall be binding upon Mr. Fanning, Southern and the
Company.
(c) Welfare Benefit.
(i) Except as provided in Section 2.3 hereof, Mr. Fanning shall be
eligible to participate in the Company's Group Health Plan for a
period of six (6) months for each of Mr. Fanning's Years of Service,
not to exceed a period of five (5) years, beginning on the first day of
the first month following
23
Mr. Fanning's Separation Date unless otherwise specifically provided under
such plan, upon Mr. Fanning's payment of both the Company's and Mr.
Fanning's premium under such plan. Mr. Fanning shall also be entitled to
elect coverage under the Group Health Plan for his dependents who are
participating in the Group Health Plan on Mr. Fanning's Separation Date
(and for such other dependents as may be entitled to coverage under the
provisions of the Health Insurance Portability and Accountability Act of
1996) for the duration of Mr. Fanning's extended medical coverage under
this Section 2.2(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 Mr. Fanning pursuant
to this Section 2.2(c) as well as the premiums to be paid by Mr. Fanning in
connection with such coverage shall be determined in accordance with
the terms of the Group Health Plan and shall be subject to any changes
in the terms and conditions of the Group Health Plan as well as any
future increases in premiums under the Group Health Plan. The premiums
to be paid by Mr. Fanning in connection with this extended coverage
shall be due on the first day of each month; provided, however, that
if Mr. Fanning fails to pay his premium within thirty (30) days of its
due date, his extended coverage shall be terminated.
(iii) Any Group Health Plan coverage provided under this Section 2.2(c)
shall be a part of and not in addition to any COBRA Coverage which Mr.
Fanning or his dependent may elect. In the event that Mr. Fanning or
his dependent becomes eligible to be covered, by virtue of
re-employment or otherwise, by any employer-sponsored group health
24
plan or is eligible for coverage under any government-sponsored health
plan during the above period, coverage under the Company's Group
Health Plan available to Mr. Fanning or his dependent by virtue of the
provisions of this Article II shall terminate, except as may otherwise
be required by law, and shall not be renewed. It shall be the duty of
Mr. Fanning to inform the Company of his eligibility to participate in
any such health plan.
(iv) Except as otherwise provided in Section 2.3 hereof, regardless of
whether Mr. Fanning elects the extended coverage described in Section
2.2(c) hereof, the Company shall pay to Mr. Fanning a cash amount
equal to the Company's and Mr. Fanning's cost of premiums for three
(3) 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 2.2(d) shall
apply to any equity based awards under the Omnibus Plan, the defined
terms of which are incorporated in this Section 2.2(d) by reference.
(i) Any of Mr. Fanning's Options and Stock Appreciation Rights outstanding
as of the Separation Date which are not then exercisable and vested,
shall become fully exercisable and vested; provided, that in the case
of a Stock Appreciation Right, if Mr. Fanning is subject to Section
16(b) of the Exchange Act, such Stock Appreciation Right shall not
become fully vested and exercisable at such time if such actions would
result in liability to Mr. Fanning 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
25
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 Mr.
Fanning's Restricted Stock and Restricted Stock Units as of the
Separation 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.
(e) Performance Pay Program. The provisions of this Section 2.2(e) shall
apply to the Performance Pay Program under the Omnibus Plan, the
defined terms of which are incorporated in this Section 2.2(e) by
reference. Provided Mr. Fanning is not entitled to a Cash-Based Award
under the PPP, if the PPP is in place as of Mr. Fanning's Separation
Date and to the extent Mr. Fanning is entitled to participate therein,
Mr. Fanning 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 Separation 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 Separation Date.
(f) Performance Dividend Program. The provisions of this Section 2.2(f) shall
apply to the Performance Dividend Program, the defined terms of which are
incorporated in this Section 2.2(f) by reference. Provided Mr. Fanning is
not entitled to a Cash-Based Award under the PDP, if the PDP is in
place through Mr. Fanning's Separation Date and to the extent
Mr. Fanning is entitled to participate therein, Mr. Fanning shall be
entitled to receive cash for each
26
such Cash-Based Award under the PDP held as of such date based on a payout
percentage of the greater of 50% or actual performance under the PDP for
the performance period in which the Separation Date shall have occurred,
and the sum of the quarterly dividends declared on the Common Stock in the
performance year of and prior to the Separation Date. For purposes of this
Section 2.2(f), payout of each Cash-Based Award under the PDP shall be
based upon the performance measurement period that would otherwise have
ended on December 31st of the year in which Mr. Fanning's Separation Date
occurs, all other remaining PPP performance measurement periods shall
terminate with respect to Mr. Fanning and no payment to Mr. Fanning shall
be made with respect thereto.
(g) Other Short Term Incentives Under the Omnibus Plan. The provisions of
this Section 2.2(g) shall apply to Performance Unit or Performance
Share awards under the Omnibus Plan. Provided Mr. Fanning is not
otherwise entitled to a Performance Unit/Share award under the Omnibus
Plan, Mr. Fanning 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 Separation
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 Separation Date.
(h) Other Short-Term Incentive Plans. The provisions of this Section 2.2(h)
shall apply to Mr.Fanning to the extent that he, 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 2.2. Provided Mr. Fanning is not otherwise entitled to a plan
payout under any change in control
27
provisions of such plans, if the "short term incentive compensation plan"
is in place through Mr. Fanning's Separation Date and to the extent Mr.
Fanning is entitled to participate therein, Mr. Fanning shall be entitled
to receive cash in an amount equal to his award under the Company's "short
term incentive compensation plan" for the annual performance period in
which the Separation Date shall have occurred, at Mr. Fanning's target
performance level and prorated by the number of months which have passed
since the beginning of the annual performance period until the Separation
Date. For purposes of this Section 2.2(h), the term "short term incentive
compensation plan" shall mean any incentive compensation plan or
arrangement adopted in writing by the Company which provides for annual,
recurring compensatory bonuses to participants based upon articulated
performance criteria, and which have been identified by the Compensation
Committee and listed on Exhibit B hereto, which may be amended from time to
time to reflect plan additions, terminations and amendments.
(i) Pro rata Calculation. For purposes of calculating any pro rata
Cash-Based Awards under Section 2.2(e), (f), (g) and (h) hereof, 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.
(j) No Duplicate Benefits. Notwithstanding anything in this Section 2.2 to
the contrary, in the event that Mr. Fanning has received or is
entitled to receive a Cash-Based Award under the PPP or the PDP as
determined under the provisions of the Southern Company Change in
Control Benefits Protection Plan (the "BPP") for the Performance
Period which includes Mr. Fanning's Separation Date, then the amount
28
of any such Cash-Based Award under this Plan shall be reduced
dollar-for-dollar by any such amount received or to be received under
the BPP.
2.3 Coordination with Retiree Medical and Life Insurance Coverage.
Notwithstanding anything to the contrary above, if Mr. Fanning is otherwise
eligible to retire pursuant to the terms of the Pension Plan, he shall be deemed
to have retired for purposes of all employee benefit plans sponsored by the
Company of which Mr. Fanning is a participant. If Mr. Fanning is deemed to have
retired in accordance with the preceding sentence, he shall not be eligible to
receive the benefits described in Section 2.2(c) hereof if, upon his Separation
Date, Mr. Fanning 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.
2.4 Payment of Benefits.
(a) Except as otherwise provided in Section 2.4(b) hereof, the total
amount payable under this Article II shall be paid to Mr. Fanning in
one (1) lump sum payment within two (2) payroll periods of the later
of the following to occur: (a) Mr. Fanning's Separation Date, or (b)
the tender to the Company by Mr. Fanning 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 Company.
(b) Notwithstanding anything to the contrary in Section 2.4(a) above, if
the Compensation Committee determines that it is necessary to delay
any payment under this Article II in order to avoid any tax liability
pursuant to Code Section 409A(a)(1), such payment shall be delayed for
29
the period set forth in Section 409A(a)(2)(B)(i) and such delayed
payment shall bear a reasonable rate of interest as determined by the
Compensation Committee.
2.5 Benefits in the Event of Death. In the event of Mr. Fanning's death prior to
the payment of all benefits due under this Article II, Mr. Fanning's estate
shall be entitled to receive as due any amounts not yet paid under this Article
II upon the tender by the executor or administrator of the estate of an
effective Waiver and Release.
2.6 Legal Fees. In the event of a dispute between Mr. Fanning and the Company
with regard to any amounts due hereunder, if any material issue in such dispute
is finally resolved in Mr. Fanning's favor, the Company shall reimburse Mr.
Fanning's legal fees incurred with respect to all issues in such dispute in an
amount not to exceed fifty thousand dollars ($50,000).
2.7 No Mitigation. Mr. Fanning shall have no duty or obligation to seek other
employment following his Separation Date and, except as otherwise provided
in Subsection 2.1(b) hereof, the amounts due Mr. Fanning hereunder shall
not be reduced or suspended if he accepts such subsequent employment.
2.8 Non-qualified Retirement and Deferred Compensation Plans. Subsequent to a
Change in Control, any claims by Mr. Fanning 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 III hereof and if any material issue in such
dispute is finally resolved in Mr. Fanning's favor, the Company shall reimburse
Mr. Fanning's legal fees in the manner provided in Section 2.6 hereof.
ARTICLE III - ARBITRATION
30
3.1 General. Any dispute, controversy or claim arising out of or relating to the
Company's obligations to pay severance benefits under this Agreement, or the
breach thereof, shall be settled and resolved solely by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association ("AAA") except as otherwise provided herein. The arbitration shall
be the sole and exclusive forum for resolution of any such claim for severance
benefits and the arbitrators' award shall be final and binding. The provisions
of this Article III are not intended to apply to any other disputes, claims or
controversies arising out of or relating to Mr. Fanning's employment by the
Company or the termination thereof.
3.2 Demand for Arbitration. Arbitration shall be initiated by serving a written
notice of demand for arbitration to Mr. Fanning, in the case of the Company, or
to the Compensation Committee, in the case of Mr. Fanning.
3.3 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.
3.4 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 Mr. Fanning,
one arbitrator shall be appointed by the Company, and the two arbitrators shall
appoint a third. If the arbitrators cannot agree on a third arbitrator within
thirty (30) business days after the service of demand for arbitration, the third
arbitrator shall be selected by the AAA.
3.5 Costs. The arbitration filing fee shall be paid by Mr. Fanning. All other
costs of arbitration shall be borne equally by Mr. Fanning and the Company,
provided, however, that the Company
31
shall reimburse such fees and costs in the event any material issue in such
dispute is finally resolved in Mr. Fanning's favor and Mr. Fanning is reimbursed
legal fees under Section 2.6 hereof.
3.6 Interim and Injunctive Relief. Nothing in this Article III 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 III 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 III.
ARTICLE IV - TRANSFER OF EMPLOYMENT
4.1 Transfer of Employment. In the event that Mr. Fanning's employment by the
Company is terminated during the two year period following a Change in Control
and Mr. Fanning accepts employment by Southern or a another Southern Subsidiary,
the Company shall assign this Agreement to Southern or such Southern Subsidiary,
Southern shall accept such assignment or cause such Southern Subsidiary to
accept such assignment, and such assignee shall become the "Company" for all
purposes hereunder.
ARTICLE V - MISCELLANEOUS
5.1 Funding of Benefits. Unless the Board of Directors in its discretion
determines otherwise, the amounts payable to Mr. Fanning under the this
Agreement shall not be funded in any manner and shall be paid by the Company out
32
of its general assets, which assets are subject to the claims of the Company's
creditors.
5.2 Withholding. There shall be deducted from the payment of any amount due
under this Agreement the amount of any tax required by any governmental
authority to be withheld and paid over by the Company to such governmental
authority for the account of Mr. Fanning.
5.3 Assignment. Neither Mr. Fanning nor his beneficiaries shall have any rights
to sell, assign, transfer, encumber, or otherwise convey the right to receive
the payment of any amount 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.
5.4 Interpretation. This Agreement is intended to comply with the
provisions of Code Section 409A and the Treasury Regulations promulgated
thereunder in order to avoid any additional tax under Section 409A(a)(1). In the
event it is necessary to interpret the provisions of this Agreement for purposes
of its operation, such interpretation shall, to the extent possible, be
consistent with such intent.
5.5 Amendment and Termination. The Agreement may be amended or
terminated only by a writing executed by the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
this 16 day of November 30, 2006.
THE SOUTHERN COMPANY
By: /s/ David M. Ratcliffe
SOUTHERN COMPANY SERVICES, INC.
By: /s/ Robert A. Bell
MR. FANNING
/s/ Thomas A. Fanning
Thomas A. Fanning
Exhibit A
CHANGE IN CONTROL AGREEMENT
Waiver and Release
The attached Waiver and Release is to be given to Mr. Thomas A. Fanning
upon the occurrence of an event that triggers eligibility for severance benefits
under the Change in Control Agreement, as described in Section 2.2 of such
Agreement.
CHANGE IN CONTROL AGREEMENT
Waiver and Release
I, Thomas A. Fanning, understand that I am entitled to receive the
severance benefits described in Article II of the Change in Control Agreement
(the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand
that the benefits I will receive under the Agreement are in excess of those I
would have received from The Southern Company and Southern Company Services,
Inc. (collectively, the "Company") if I had not elected to sign this Waiver.
I recognize that I may have a claim against the Company under the Civil
Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the
Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended,
the Americans with Disabilities Act or other federal, state and local laws.
In exchange for receiving the severance and welfare benefits under
Article II of the Agreement, I hereby voluntarily and irrevocably waive,
release, dismiss with prejudice, and withdraw all claims, complaints, suits or
demands of any kind whatsoever (whether known or unknown) which I ever had, may
have, or now have against The Southern Company, Southern Company Services, Inc.,
Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi
Power Company, Savannah Electric and Power Company, Southern Communications
Services, Inc. d/b/a Southern LINC, Southern Company Energy Solutions, L.L.C.,
Southern Nuclear Operating Company, Inc., Southern Telecom, Inc., Southern
Company Management Development, Inc., and other current or former subsidiaries
or affiliates of The Southern Company and their past, present and future
officers, directors, employees, agents, insurers and attorneys (collectively,
the "Releasees"), arising from or relating to (directly or indirectly) my
employment or the termination of my employment or other events occurred as of
the date of execution of this Agreement, including but not limited to:
(a) claims for violations of Title VII of the Civil Rights Act
of 1964, the Age Discrimination in Employment Act, the Fair Labor
Standards Act, the Civil Rights Act of 1991, the Americans With
Disabilities Act, the Equal Pay Act, the Family and Medical Leave Act,
42 U.S.C. ss. 1981, the National Labor Relations Act, the Labor
Management Relations Act, Executive Order 11246, Executive Order 11141,
the Rehabilitation Act of 1973, the Sarbanes-Oxley Act of 2002 or the
Employee Retirement Income Security Act;
(b) claims for violations of any other federal or state
statute or regulation or local ordinance;
(c) claims for lost or unpaid wages, compensation, or
benefits, defamation, intentional or negligent infliction of emotional
distress, assault, battery, wrongful or constructive discharge,
negligent hiring, retention or supervision, fraud, misrepresentation,
conversion, tortious interference, breach of contract, or breach of
fiduciary duty;
(d) claims to benefits under any bonus, severance, workforce
reduction, early retirement, outplacement, or any other similar type
plan sponsored by the Company (except for those plans listed below); or
(e) any other claims under state law arising in tort or
contract.
In signing this Agreement, I am not releasing any claims that may arise
under the terms of this Agreement or which may arise out of events occurring
after the date I execute this Agreement.
I am also not releasing claims to benefits that I am already entitled
to receive under The Southern Company Pension Plan, The Southern Company
Employee Stock Ownership Plan, The Southern Company Employee Savings Plan, The
Southern Company Omnibus Incentive Compensation Plan, The Southern Company
Change in Control Benefits Protection Plan or under any workers' compensation
laws. 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.
Nothing in this Agreement shall prohibit me from engaging in protected
activities under applicable law (including protected activities described in
Section 211 of the Energy Reorganization Act) or from communicating, either
voluntarily or otherwise, with any governmental agency concerning any potential
violation of the law.
I understand and agree for a period of two (2) years after the date I
execute this Agreement, I will regard and treat as strictly confidential all
valuable, non-public, competitively sensitive data and information relating to
the Releasees' business that is not generally known by or readily available to
Releasees' competitors and I will not for any reason, either directly or
indirectly, use, sell, lend, lease, distribute, license, transfer, assign, show,
disclose, disseminate, reproduce, copy, or otherwise communicate any such
information to any third party for my own benefit or for any purpose, other than
in accordance with the express, written instructions of the Company or
Releasees.
I further understand and agree that I will regard and treat as strictly
confidential all trade secrets of Releasees for as long as such items remain
trade secrets under applicable law and I will not for any reason, either
directly or indirectly, use, sell, lend, lease, distribute, license, transfer,
assign, show, disclose, disseminate, reproduce, copy, or otherwise communicate
any such trade secrets to any third party for my own benefit or for any purpose,
other than in accordance with the express, written instructions of the Company
or Releasees.
I further agree to keep confidential and not disclose the terms of this
Agreement, including, but not limited to, the benefits under the Agreement,
except to my spouse, attorneys or financial advisors (who must be informed of
and agree to be bound by the confidentiality provisions contained in this
Agreement before I disclose any information to them about this Agreement), or
where such disclosure is required by law.
I agree to return to the Company prior to my last day of employment all
property of the Company, including but not limited to data, lists, information,
memoranda, documents, identification cards, credit cards, parking cards, keys,
computers, fax machines, beepers, phones, and files (including copies thereof).
I understand and agree that I will not seek re-employment as an
employee, leased employee or independent contractor with the Company or any
Southern Company subsidiary or affiliate during the twenty-four (24) month
period beginning immediately following my execution of this Agreement.
I have carefully read this agreement and I fully understand all of the
provisions of this Waiver.
I have been encouraged and advised in writing to seek advice from
anyone of my choosing regarding this Waiver (including my attorney, accountant
or tax advisor). Prior to signing this Waiver, I have been given the opportunity
and sufficient time to seek such advice.
I have had the opportunity to review and consider this Waiver for a
period of at least twenty-one (21) days before signing it.
I understand that I may revoke this Waiver at any time during the seven
(7) calendar day period after I sign this Waiver. In order to revoke this
Waiver, I must deliver written notification of such revocation to the
Compensation Committee. 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. Revocation of this
Waiver will not alter or change the termination of my employment by the Company.
In signing this Waiver, I am not relying on any representation or
statement (written or oral) not specifically set forth in this Waiver, the
Agreement or by the company or any of its representatives with regard to the
subject matter, basis, or effect of this Waiver or otherwise.
I was not coerced, threatened, or otherwise forced to sign this Waiver.
I am voluntarily signing and delivering this Waiver of my own free will.
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 _____.
---------------------------
Thomas A. Fanning
Sworn to and subscribed to me this
___day of _________, ____
- --------------------------
Notary Public
My Commission Expires:
- ---------------------------
(Notary Seal)
Acknowledged and Accepted by the Company.
By:
-----------------------------------
Date:
-----------------------------------
EXHIBIT B
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT ("Agreement") made and entered into by and between
Acquiring Company ("Company") and Mr. ________________ ("Executive")
(hereinafter collectively referred to as the "Parties") effective
______________, 200__.
WITNESSETH:
WHEREAS, the Company wishes to provide to Executive certain severance
benefits under certain circumstances;
NOW, THEREFORE, in consideration of the premises, and the agreements of
the Parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereby agree as follows:
ARTICLE I - DEFINITIONS
1.1 "Annual Compensation" shall Executive's Base Salary plus Target Bonus under
the Company's Short Term Bonus Plan.
1.2 "Base Salary" shall mean Executive's
annual base salary rate during the twelve (12) month period immediately
preceding his Separation Date plus target bonus.
1.3 "Board of Directors" shall mean the board of directors of the Company.
1.4 "COBRA Coverage" shall mean any continuation coverage to which
Executive or his dependents may be entitled pursuant to Code Section 4980B.
1.5 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.6 "Company" shall mean Acquiring Company, its successors and assigns.
1.7 "Employee Outplacement Program" shall mean the program established by the
Company from time to time for the purpose of assisting employees find employment
outside of the 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.
1.8 "Employment Date" shall mean the date that Executive is hired by the Company
as a full time employee.
1.9 "Equity Based Bonus Plan" shall mean a plan or
arrangement that provides for the grant to participants of stock options,
restricted stock, stock appreciation rights, phantom stock, phantom stock
appreciation rights or any other similar rights the terms of which provide a
participant with the potential to receive the benefit of any increase in value
of the underlying equity or notional amount (e.g., number of phantom shares)
from the date of grant through a subsequent date.
1.10 "Good Reason" shall mean, without Executive's express written consent,
after written notice to the Board of Directors, and after a thirty (30) day
opportunity for the Board of Directors to cure, the continuing occurrence of any
of the events described in Subsections (a), (b), (c) or (d) of this Section
1.10.
(a) Inconsistent Duties. A meaningful and detrimental alteration in
Executive's position or in the nature or status of his responsibilities from
those in effect on the Employment Date.
(b) Reduced Compensation. A reduction of five percent (5%) or
more by the Company in any of the following amounts of compensation
expressed in subparagraphs (i), (ii) or (iii) hereof, except for a less
than ten percent (10%), across-the-board reduction in such compensation
amounts similarly affecting ninety-five percent (95%) or more of all
employees of the Company eligible for such compensation:
(i) Executive's Base Salary;
(ii) the sum of Executive's Base Salary plus Target Bonus under the
Company's Short Term Bonus Plan, as in effect on the
Employment Date; or
(iii) the sum of Executive's Base Salary plus Target Bonus under the
Short Term Bonus Plan and Long Term Bonus Plan plus the Target
Award under the Equity Based Bonus Plan, each of which as in
effect on the Employment Date.
(c) Relocation. A change in Executive's work location to a location
more than fifty (50) miles from the facility where Executive was located at
the time of his Employment Date, unless such new work location is within fifty
(50) miles from Executive's principal place of residence on his Employment
Date. The acceptance, if any, by Executive of employment by the Company at a
work location which is outside the fifty mile radius set forth in this Section
1.10(c) shall not be a waiver of Executive's right to refuse subsequent
transfer by an Company to a location which is more than fifty (50) miles
from Executive's principal place of residence on his Employment Date, and
such subsequent nonconsensual transfer shall be "Good Reason" under
this Agreement;
(d) Benefits and Perquisites.
(i) Change in Control - Retirement and Welfare Benefits. The
taking of any action by the Company that would directly or
indirectly cause a Material Reduction in the Retirement and
Welfare Benefits to which Executive is entitled under the
Company's Retirement and Welfare Benefit plans in which
Executive was participating on his Employment Date.
(ii) Vacation and Paid Time Off. The failure by the Company to
provide Executive with the number of paid vacation days or, if
applicable, paid time off days to which Executive is entitled
on the basis of years of service with a Southern Entity and
the Company in accordance with the Company's normal vacation
policy or the paid time off program (whichever applicable) in
effect on the Employment Date (except for across-the-board
vacation policy or paid time off program changes or policy or
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program terminations similarly affecting at least ninety-five
percent (95%) of all employees of the Company).
1.11 "Group Health Agreement" shall mean the group health plan covering
Executive, as such plan may be amended from time to time.
1.12 "Group Life Insurance Agreement" shall mean the group life insurance
plan covering Executive, as such plan may be amended from time to time.
1.13 "Long Term Bonus Plan" shall mean any bonus type plan or arrangement
designed to provide incentive based compensation to participants upon the
achievement of objective or subjective goals that measure performance over a
period of more than twelve months.
1.14 "Material Reduction" shall mean (i) any change in a retirement plan or
arrangement that has the effect of reducing the present value of the projected
benefits to be provided to Executive by five percent (5%) or more, (ii) any five
percent (5%) or more reduction in medical, health and accident and disability
benefits as a percentage of premiums or premium equivalents in accordance with
the Company's prior practice as measured over a period of the three previous
plan years from the Employment Date, or (iii) any five percent (5%) or more
reduction in employer matching funds as a percentage of employee contributions
in accordance with the Company's prior practice measured over a period of the
previous three plan years from the Employment Date.
1.15 "Month of Service"shall mean any calendar month during which Executive
worked at least one (1) hour or was on approved leave of absence while in the
employ of a Southern Entity or Acquiring Company and its affiliates.
1.16 "Pension Plan" shall mean the Company Pension Plan or any successor
thereto, as in effect on the Employment Date.
1.17 "Retirement and Welfare Benefits" shall mean benefits provided by the
following types of plans and arrangements: pension plans, defined contribution
plans (matched savings, profit sharing, money purchase, ESOP, and similar
plans and arrangements), plans providing for death benefits while employed or
retired (life insurance, survivor income, and similar plans and arrangements),
plans providing for short-term disability benefits (including accident and
sick time), plans providing for long-term disability benefits, plans providing
health-care benefits (including reimbursements during active employment or
retirement related to expenses for medical, vision, hearing, dental, and
similar plans and arrangements).
1.18 "Separation Date" shall mean the date on which Executive is separated from
the Company's regular payroll.
1.19 "Short Term Bonus Plan" shall mean any bonus type plan or arrangement
designed to provide incentive based compensation to participants upon the
achievement of objective or subjective goals that measure performance over a
period of twelve months or less.
1.20 "Southern Entity" shall mean The Southern Company or any of its
subsidiaries and affiliates.
1.21 "Target Bonus" shall mean the amount of incentive compensation expressed
as either a percent of salary or pay, an expected dollar amount, the number of
awards granted or such other quantifiable measure to determine the amount to be
paid or granted under the terms of the respective Short Term Bonus Plan, Long
Term Bonus Plan or Equity Based Bonus Plan as used by the Company to measure
the market competitiveness of its employee compensation programs.
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1.22 "Termination for Cause" or "Cause" shall mean Executive's termination of
employment with the Company upon the occurrence of any of the following:
(a) The willful and continued failure by Executive to substantially
perform his duties with the Company
(other than any such failure resulting from Executive's Total
Disability or from Executive's retirement or any such actual or
anticipated failure resulting from termination by Executive for Good
Reason) after a written demand for substantial performance is
delivered to him by the Board of Directors, which demand specifically
identifies the manner in which such corporate officer believes
Executive has not substantially performed his duties; or
(b) The willful engaging by Executive in conduct that is demonstrably and
materially injurious to the 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
Executive's employment by the Company;
(ii) the willful carrying out of any activity or the making of any
statement by Executive which would materially prejudice or
impair the good name and standing of the Company, or would bring
the Company into contempt, ridicule or would reasonably shock or
offend any community in which the Company is located;
(iii) attendance by Executive 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 the Company's policies on drug and alcohol usage,
fitness for duty requirements or similar policies as may exist
from time to time as adopted by the Company's safety officer;
(v) assault or other act of violence by Executive against any
person during the course of employment; or
(vi) Executive's indictment for any felony or any misdemeanor
involving moral turpitude.
No act or failure to act by Executive shall be deemed
"willful" unless done, or omitted to be done, by Executive not in good
faith and without reasonable belief that his action or omission was in
the best interest of the Company.
Notwithstanding the foregoing, Executive 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 Board of Directors at a meeting called and held
for such purpose (after reasonable notice to Executive and an
opportunity for him, together with counsel, to be heard before the Board
of Directors), finding that, in the good faith opinion of the Board of
Directors, Executive was guilty of conduct set forth in Section 1.22(a)
or (b) hereof and specifying the particulars thereof in detail.
1.23 "Total Disability" shall mean total disability under the terms of the
Pension Plan.
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1.24 "Waiver and Release" shall mean the Waiver and Release substantially
in the form of Exhibit A attached hereto.
1.25 "Year of Service" shall mean Executive'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 Executive had a break in service
during his employment with a Southern Entity, he or she will receive credit
under this Agreement for his service prior to such break in service provided the
break in service was less than five (5) years and his service with the Southern
Entity prior to the break exceeded the length of such break in service.
ARTICLE II - SEVERANCE BENEFITS
2.1 Eligibility.
(a) Except as otherwise provided herein, if Executive's employment
is involuntarily terminated by the Company at any time during
the two year period following his Employment Date for reasons
other than Cause or if Executive shall voluntarily terminate
his employment with the Company for Good Reason at any time
during the two year period following his Employment Date,
Executive shall be entitled to receive the amounts described
in Section 2.2 hereof, subject to the terms and conditions
described in this Article II.
(b) Limits on Eligibility. Notwithstanding anything to the
contrary herein, Executive shall not be eligible to receive
amounts under this Agreement if Executive:
(i) is not actively at work on his Separation Date, unless
Executive 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 the Company for
other than Good Reason;
(iii) has his employment terminated by the Company for Cause;
(iv) accepts the transfer of his employment to an affiliate of
the Company;
(v) elects to receive the benefits of any other voluntary or
involuntary severance, separation or outplacement program,
plan or agreement maintained by the Company in lieu of
benefits under this Agreement.
2.2 Benefits. Upon the Company's receipt of an effective Waiver and
Release, Executive shall be entitled to receive the following:
(a) Employee Outplacement Services. Executive shall be eligible to
participate in the Employee Outplacement Program, which program shall not be
less than six (6) months duration measured from Executive's Separation Date.
(b) Severance Benefit. Executive shall be paid in cash an amount equal to
three times Executive's Annual Compensation (the "Severance Amount"). If any
portion of the Severance Amount constitutes an "excess parachute payment" (as
such term is defined under Code Section 280G ("Excess Parachute Payment")), the
5
Company shall pay to Executive an additional amount calculated by determining
the amount of tax under Code Section 4999 that he otherwise would have paid on
any Excess Parachute Payment and dividing such amount by a decimal determined by
adding the tax rate under Code Section 4999 ("Excise Tax"), the hospital
insurance tax under Code Section 3101(b) ("HI Tax") and federal and state income
tax measured at the highest marginal rates ("Income Tax") and subtracting such
result from the number one (1) (the "280G Gross-up"); provided, however, that no
280G Gross-up shall be paid unless the Severance Amount plus all other
"parachute payments" to Executive under Code Section 280G exceeds three (3)
times Executive's "base amount" (as such term is defined under Code Section 280G
("Base Amount")) by ten percent (10%) or more; provided further, that if no 280G
Gross-up is paid, the Severance Amount shall be capped at three (3) times
Executive's Base Amount, less all other "parachute payments" (as such term is
defined under Code Section 280G) received by Executive, less one dollar (the
"Capped Amount"), if the Capped Amount, reduced by HI Tax and Income Tax,
exceeds what otherwise would have been the Severance Amount, reduced by HI Tax,
Income Tax and Excise Tax.
For purposes of this Section 2.2(b), whether any amount would
constitute an Excess Parachute Payment and any other calculations of
tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts,
e.g., Base Amount, Capped Amount, etc., shall be determined by a
nationally recognized firm specializing in federal income taxes as
selected by the Board of Directors, and such calculations or
determinations shall be binding upon Executive and the Company.
(c) Welfare Benefit.
(i) Except as provided in Section 2.3 hereof, Executive shall be eligible
to participate in the Company's Group Health Plan for a period of six (6) months
for each of Executive's Years of Service, not to exceed a period of five (5)
years, beginning on the first day of the first month following Executive's
Separation Date unless otherwise specifically provided under such plan, upon
Executive's payment of both the Company's and Executive's premium under such
plan. Executive shall also be entitled to elect coverage under the Group Health
Plan for his dependents who are participating in the Group Health Plan on
Executive's Separation 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 Executive's extended medical
coverage under this Section 2.2(c) to the extent such dependents remain eligible
for dependent coverage under the terms of the Group Health Agreement.
(ii) The extended medical coverage afforded to Executive pursuant to this
Section 2.2(c) as well as the premiums to be paid by Executive 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 Executive in connection with this
extended coverage shall be due on the first day of each month; provided,
however, that if Executive fails to pay his premium within thirty (30) days of
its due date, Executive's extended coverage shall be terminated.
6
(iii) Any Group Health Plan coverage provided under this Section 2.2(c)
shall be a part of and not in addition to any COBRA Coverage which Executive or
his dependent may elect. In the event that Executive 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 Executive or his dependent by
virtue of the provisions of this Article II shall terminate, except as may
otherwise be required by law, and shall not be renewed. It shall be the duty of
Executive to inform the Company of his eligibility to participate in any such
health plan.
(iv) Except as otherwise provided in Section 2.3 hereof, regardless of
whether Executive elects the extended coverage described in Section 2.2(c)
hereof, the Company shall pay to Executive a cash amount equal to the Company's
and Executive's cost of premiums for three (3) years of coverage under the Group
Health Plan and Group Life Insurance Plan.
(d)Equity Based Awards. Any Equity Based Awards outstanding as of
the Separation Date which are not then exercisable and
vested, shall become fully exercisable and vested; provided, that in the
case of a stock appreciation right, if Executive 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 Executive 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.
(e)Incentive Plans. To the extent that Executive, as of the Separation Date,
is a participant in any Short Term Bonus Plan or Long Term Bonus Plan,
Executive shall be entitled to receive cash in an amount equal to his
awards under such Plans for the period in which the Separation Date shall
have occurred, at Executive's Target Bonus and prorated by the number of
months which have passed since the beginning of the performance period
until the Separation Date. For this purpose a month shall not be considered
if the Separation Date occurs on or before the 14th day of the month, and a
month shall be considered if the Separation Date occurs on or after the
15th day of the month.
2.3 Payment of Benefits. The total amount payable under this Article II shall be
paid to Executive in one (1) lump sum payment within two (2) payroll periods of
the later of the following to occur: (a) Executive's Separation Date, or (b) the
tender to the Company by Executive of an effective Waiver and Release (in
substantially 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 Company.
2.4 Benefits in the Event of Death. In the event of Executive's death prior to
the payment of all benefits due under this Article II, Executive's estate shall
be entitled to receive as due any amounts not yet paid under this Article II
upon the tender by the executor or administrator of the estate of an effective
Waiver and Release.
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2.5 Legal Fees. In the event of a dispute between Executive and the Company with
regard to any amounts due hereunder, if any material issue in such dispute is
finally resolved in Executive's favor, the Company shall reimburse Executive's
legal fees incurred with respect to all issues in such dispute in an amount not
to exceed fifty thousand dollars ($50,000).
2.6 No Mitigation. Executive shall have no duty or obligation to seek other
employment following his Separation Date and, except as otherwise provided in
Subsection 2.1(b) hereof, the amounts due Executive hereunder shall not be
reduced or suspended if Executive accepts such subsequent employment.
ARTICLE III - ARBITRATION
3.1 General. Any dispute, controversy or claim arising out of or relating to the
Company's obligations to pay severance amounts under this Agreement, or the
breach thereof, shall be settled and resolved solely by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association ("AAA") except as otherwise provided herein. The arbitration shall
be the sole and exclusive forum for resolution of any such claim for severance
benefits and the arbitrators' award shall be final and binding. The provisions
of this Article III are not intended to apply to any other disputes, claims or
controversies arising out of or relating to Executive's employment by the
Company or the termination thereof.
3.2 Demand for Arbitration. Arbitration shall be initiated by serving a written
notice of demand for arbitration to Executive, in the case of the Company, or to
the Board of Directors, in the case of Executive.
3.3 Law and Venue. The arbitrators shall apply the laws of the State in
which the Company's headquarters are located, 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 such State.
3.4 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 Executive,
one arbitrator shall be appointed by the Company, and the two arbitrators shall
appoint a third. If the arbitrators cannot agree on a third arbitrator within
thirty (30) business days after the service of demand for arbitration, the third
arbitrator shall be selected by the AAA.
3.5 Costs. The arbitration filing fee shall be paid by Executive. All other
costs of arbitration shall be borne equally by Executive and the Company,
provided, however, that the Company shall reimburse such fees and costs in the
event any material issue in such dispute is finally resolved in Executive's
favor and Executive is reimbursed legal fees under Section 2.5 hereof.
3.6 Interim and Injunctive Relief. Nothing in this Article III 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 III 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 III.
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ARTICLE IV - MISCELLANEOUS
4.1 Funding of Benefits. Unless the Board of Directors in its discretion
determines otherwise, amounts payable to Executive under this Agreement shall
not be funded in any manner and shall be paid by the Company out of its general
assets, which assets are subject to the claims of the Company's creditors.
4.2 Withholding. There shall be deducted from the payment of any amount due
under this Agreement the amount of any tax required by any governmental
authority to be withheld and paid over by the Company to such governmental
authority for the account of Executive entitled to such payment.
4.3 Assignment. Neither Executive nor his beneficiaries shall have any rights to
sell, assign, transfer, encumber, or otherwise convey the right to receive the
payment of any amount 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.
4.4 Amendment and Termination. The Agreement may be amended or terminated only
by a writing executed by the parties.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement this ____ day of ______________, _____.
ACQUIRING COMPANY
By: ____________________________________
EXECUTIVE
-----------------------------
9
Exhibit A
SEVERANCE AGREEMENT
Waiver and Release
The attached Waiver and Release is to be given to Executive upon the
occurrence of an event that triggers eligibility for severance benefits under
the Severance Agreement, as described in Paragraph 2.1(a) of such agreement.
10
Waiver and Release
I, _________________, understand that I am entitled to receive the
severance benefits described in Article II of the Severance Agreement (the
"Agreement") if I execute this Waiver and Release ("Waiver"). I understand that
the benefits I will receive under the Agreement are in excess of those I would
have received from Acquiring Company (the "Company") if I had not elected to
sign this Waiver.
I recognize that I may have a claim against the Company under the Civil
Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the
Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended,
the Americans with Disabilities Act or other federal, state and local laws.
In exchange for the benefits I elect to receive, I hereby irrevocably
waive and release all claims, of any kind whatsoever, whether known or unknown
in connection with any claim which I ever had, may have, or now have against
Acquiring Company and other direct or indirect subsidiaries of Acquiring Company
and their past, present and future officers, directors, employees, agents and
attorneys. Nothing in this Waiver shall be construed to release claims or causes
of action under the Age Discrimination in Employment Act or the Energy
Reorganization Act of 1974, as amended, which arise out of events occurring
after the execution date of this Waiver.
In further exchange for the benefits I elect to receive, I understand
and agree that I will respect the proprietary and confidential nature of any
information I have obtained in the course of my service with the Company or any
subsidiary or affiliate of the Company. However, nothing in this Waiver shall
prohibit me from engaging in protected activities under applicable law or from
communicating, either voluntary or otherwise, with any governmental agency
concerning any potential violation of the law.
In signing this Waiver, I am not releasing claims to benefits that I am
already entitled to under any workers' compensation laws or under any retirement
plan or welfare benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, as amended, which is sponsored by or adopted by the
Company and/or any of its direct or indirect subsidiaries. However, I understand
and acknowledge that nothing herein is intended to or shall be construed to
require the Company to institute or continue in effect any particular plan or
benefit sponsored by the Company and the Company hereby reserves the right to
amend or terminate any of its benefit programs at any time in accordance with
the procedures set forth in such plans.
In signing this Waiver, I realize that I am waiving and releasing,
among other things, any claims to benefits under any and all bonus, severance,
workforce reduction, early retirement, outplacement, or any other similar type
plan sponsored by the Company.
I have been encouraged and advised in writing to seek advice from
anyone of my choosing regarding this Waiver, including my attorney, and my
accountant or tax advisor. Prior to signing this Waiver, I have been given the
opportunity and sufficient time to seek such advice, and I fully understand the
meaning and contents of this Waiver.
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I understand that I may take up to twenty-one (21) calendar days to
consider whether or not I desire to enter this Waiver. I was not coerced,
threatened or otherwise forced to sign this Waiver. I have made my choice to
sign this Waiver voluntarily and of my own free will.
I understand that I may revoke this Waiver at any time during the seven
(7) calendar day period after I sign and deliver this Waiver to the Company. If
I revoke this Waiver, I must do so in writing delivered to the Company. I
understand that this Waiver is not effective until the expiration of this seven
(7) calendar day revocation period. I understand that upon the expiration of
such seven (7) calendar day revocation period this entire Waiver will be binding
upon me and will be irrevocable.
I understand that by signing this Waiver I am giving up rights I may
have.
IN WITNESS WHEREOF, the undersigned hereby executes this
Waiver this ____ day of ________, in the year
- ----.
---------------------------
Executive
Sworn to and subscribed to me this
___day of _________, ____