Exhibit 10(a)8
SOUTHERN COMPANY
CHANGE IN CONTROL
BENEFITS PROTECTION PLAN
AN AMENDMENT AND RESTATEMENT
Troutman Sanders LLP
Bank of America Plaza, Suite 5200
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
SOUTHERN COMPANY
CHANGE IN CONTROL
BENEFITS PROTECTION PLAN
AMENDED AND RESTATED
ARTICLE I - PURPOSE AND ADOPTION OF PLAN
1.1 Adoption of Plan. Southern Company Services, Inc. hereby adopts this
Amended and Restated Southern Company Change in Control Benefits Protection Plan
effective this 28 day of February, 2007. The Plan is an amendment and
restatement of the Plan which was originally effective November 16, 2006.
1.2 Purpose. The Plan defines the events that constitute a Southern Change
in Control and a Subsidiary Change in Control, protects the benefits to be
provided to employees of the Employing Companies under certain incentive-based
compensation plans and arrangements upon such a Change in Control and creates a
protocol for transferring funds from the Employing Companies to the Southern
Company Deferred Compensation Trust as a reserve for the payment of deferred
compensation and non-qualified retirement benefits following certain change in
control events involving Southern Company and certain of its subsidiaries.
ARTICLE II - DEFINITIONS
2.1 "Administrative Committee" shall mean the Board of Directors.
2.2 "Beneficial Ownership" shall mean beneficial ownership within the
meaning of Rule 13d-3 promulgated under the Exchange Act.
2.3 "Board of Directors" shall mean the board of directors of the Company.
2.4 "Business Combination" shall mean a reorganization, merger or
consolidation of Southern Company or a sale or other disposition of all or
substantially all of the assets of Southern Company.
2.5 "Change in Control" shall mean a Southern Change in Control or a
Subsidiary Change in Control, as applicable.
2.6 "Common Stock" shall mean the common stock of Southern Company.
2.7 "Company" shall mean Southern Company Services, Inc., its successors
and assigns.
2.8 "Consummation" shall mean the completion of the final act necessary to
complete a transaction as a matter of law, including, but not limited to, any
required approvals by the corporation's shareholders and board of directors, the
transfer of legal and beneficial title to securities or assets and the final
approval of the transaction by any applicable domestic or foreign governments or
agencies.
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2.9 "Control" shall mean, in the case of a corporation, Beneficial
Ownership of more than 50% of the combined voting power of the corporation's
Voting Securities, or in the case of any other entity, Beneficial Ownership of
more than 50% of such entity's voting equity interests.
2.10 "DCP" shall have the meaning set forth in Section 6.1 hereof.
2.11 "Employee" shall mean an employee of an Employing Company as of the
date of a Southern Change in Control.
2.12 "Employing Company" shall mean Southern Company, the Company, or any
other corporation or other entity Controlled by Southern Company, directly or
indirectly, which the Compensation and Management Succession Committee of the
Southern Company Board of Directors has authorized to participate in the Plan
and which has thereafter adopted the Plan, and any successor of any of them.
2.13 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
2.14 "Funding Change in Control" shall mean any of the following:
(a) The Consummation of an acquisition by any Person of Beneficial
Ownership of 35% or more of Southern Company's Voting Securities; provided,
however, that for purposes of this subsection (a), the following
acquisitions of Southern Company's Voting Securities shall not constitute a
Change in Control:
(i) any acquisition directly from Southern Company;
(ii) any acquisition by Southern Company;
(iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by Southern Company or any corporation
controlled by Southern Company;
(iv) any acquisition by a qualified pension plan or publicly held
mutual fund;
(v) any acquisition by an employee of Southern Company or its
subsidiary or affiliate, or Group composed exclusively of such
employees; or
(vi) any Business Combination which would not otherwise
constitute a Funding Change in Control because of the application of
clauses (i), (ii) and (iii) of this Section 2.14(a);
(b) A change in the composition of the Southern Board whereby
individuals who constitute the Incumbent Board cease for any reason to
constitute at least a majority of the Southern Board;
(c) The Consummation of a Business Combination, unless, following such
Business Combination, all of the following three conditions are met:
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(i) all or substantially all of the individuals and entities who
held Beneficial Ownership, respectively, of Southern Company's Voting
Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, 50% or more of the combined voting power
of the Voting Securities of the corporation surviving or resulting
from such Business Combination, (including, without limitation, a
corporation which as a result of such transaction holds Beneficial
Ownership of all or substantially all of Southern Company's Voting
Securities or all or substantially all of Southern Company's assets)
(such surviving or resulting corporation to be referred to as
"Surviving Company"), in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of Southern
Company's Voting Securities;
(ii) no Person (excluding any corporation resulting from such
Business Combination, any qualified pension plan, publicly held mutual
fund, Group composed exclusively of employees or employee benefit plan
(or related trust) of Southern Company, its subsidiaries or Surviving
Company) holds Beneficial Ownership, directly or indirectly, of 35% or
more of the combined voting power of the then outstanding Voting
Securities of Surviving Company except to the extent that such
ownership existed prior to the Business Combination; and
(iii) at least a majority of the members of the board of
directors of Surviving Company were members of the Incumbent Board at
the earlier of the date of execution of the initial agreement, or of
the action of the Southern Board, providing for such Business
Combination.
(d) 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 a Funding Subsidiary; provided, however,
that for purposes of this Subsection 2.14(d), any acquisition by an
employee of Southern Company or its subsidiary or affiliate, or Group
composed entirely of such employees, any qualified pension plan, publicly
held mutual fund or any employee benefit plan (or related trust) sponsored
or maintained by Southern Company or any corporation Controlled by Southern
Company shall not constitute a Funding Change in Control;
(e) The Consummation of a reorganization, merger or consolidation of a
Funding Subsidiary (a "Funding Subsidiary Business Combination"), in each
case, unless, following such Funding Subsidiary Business Combination,
Southern Company Controls the corporation surviving or resulting from such
Funding Subsidiary Business Combination, or
(f) The Consummation of the sale or other disposition of all or
substantially all of the assets of a Funding Subsidiary to an entity that
Southern Company does not Control.
2.15 "Funding Event" shall mean the occurrence of any of the following
events as administratively determined by the Southern Committee:
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(a) Southern Company or a Funding Subsidiary has entered into a
written agreement, such as, but not limited to, a letter of intent, which,
if Consummated, would result in a Funding Change in Control;
(b) Southern Company, a Funding Subsidiary or any other Person
publicly announces an intention to take or to consider taking actions
which, if Consummated, would result in a Funding Change in Control under
circumstances where the Consummation of the announced action or intended
action is legally and financially possible;
(c) Any Person acquires Beneficial Ownership of fifteen percent (15%)
or more of the Common Stock; or
(d) The Southern Board or the board of directors of a Funding
Subsidiary elects to otherwise fund the Trust in accordance with the
provisions of ARTICLE IV, V, and VI hereof.
2.16 "Funding Subsidiary" shall mean Alabama Power Company, Georgia Power
Company, Gulf Power Company and Mississippi Power Company, and any successor of
any of them, provided such companies are Employing Companies, and any other
Employing Company that the Southern Committee in its sole discretion shall
designate in writing as a Funding Subsidiary.
2.17 "Funding Subsidiary Business Combination" shall have the meaning set
forth in Section 2.14(e) hereof.
2.18 "Group" shall have the meaning set forth in Section 14(d) of the
Exchange Act.
2.19 "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 Company's shareholders was approved by a vote of at least 75% of the
directors then comprising the Incumbent Board. Notwithstanding the foregoing, no
individual who shall become a director of the Southern Board subsequent to
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.
2.20 "Omnibus Plan" shall mean the Southern Company Omnibus Incentive
Compensation Plan, including the Incentive Programs: Design and Administrative
Specifications as approved by the Compensation and Management Succession
Committee of the Southern Board, any Program thereunder, and any successor
thereto.
2.21 "Operating Committee" shall mean the committee appointed by the
Administrative Committee to conduct the day to day administration of the Plan.
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2.22 "Participant" shall mean (i) in the case of a Funding Change in
Control involving Southern Company under Section 2.14(a), (b) or (c) hereof, an
employee of an Employing Company who, as of the date of the Funding Change in
Control, has a non-forfeitable right to Retirement Income under the Pension
Plan, or (ii) in the case of a Funding Change in Control involving a Funding
Subsidiary under Section 2.14(d), (e) or (f) hereof, an employee of such Funding
Subsidiary who, on the date of such Funding Change in Control, has a
non-forfeitable right to Retirement Income under the Pension Plan.
2.23 "Person" shall mean any individual, entity or group within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act.
2.24 "Plan" shall mean this Southern Company Change in Control Benefits
Protection Plan. The Plan amends and restates the Southern Company Change in
Control Benefit Plan Determination Policy.
2.25 "Plan Termination" shall mean the termination of the Omnibus Plan (or
any Program thereunder) by Southern Company or an Employing Company following a
Southern Change in Control unless an equitable arrangement (embodied in an
ongoing substitute or replacement plan or program) has been made with respect to
the Omnibus Plan or Program in connection with the Change in Control. For
purposes of this Plan, an ongoing substitute or alternative plan or program
shall be considered an "equitable arrangement" if a nationally recognized
compensation consulting firm chosen by the Operating Committee opines in writing
that the post-Change in Control plan or program is an equitable substitute or
replacement of the Omnibus Plan or Program that was terminated.
2.26 "Preliminary Change in Control" shall mean the occurrence of any of
the following as administratively determined by the Southern Committee:
(a) Southern Company or an Employing Company has entered into a
written agreement, such as, but not limited to, a letter of intent, which,
if Consummated, would result in a Change in Control;
(b) Southern Company, an Employing Company or any other Person
publicly announces an intention to take or to consider taking actions
which, if Consummated, would result in a Change in Control under
circumstances where the Consummation of the announced action or intended
action is legally and financially possible; or
(c) Any Person acquires Beneficial Ownership of fifteen percent (15%)
or more of the Common Stock.
2.27 "SBP" shall have the meaning set forth in Section 4.1 hereof.
2.28 "SERP" shall have the meaning set forth in Section 5.1 hereof.
2.29 "Southern Board" shall mean the board of directors of Southern
Company.
2.30 "Southern Change in Control" shall mean any of the following:
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(a) The Consummation of an acquisition by any Person of Beneficial
Ownership of 20% or more of Southern Company's Voting Securities; provided,
however, that for purposes of this subsection (a), the following
acquisitions of Southern Company's Voting Securities shall not constitute a
Change in Control:
(i) any acquisition directly from Southern Company;
(ii) any acquisition by Southern Company;
(iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by Southern Company or any corporation
controlled by Southern Company;
(iv) any acquisition by a qualified pension plan or publicly held
mutual fund;
(v) any acquisition by an employee of Southern Company or its
subsidiary or affiliate, or Group composed exclusively of such
employees; or
(vi) any Business Combination which would not otherwise
constitute a Change in Control because of the application of clauses
(i), (ii) and (iii) of this Section 2.30(a);
(b) A change in the composition of the Southern Board whereby
individuals who constitute the Incumbent Board cease for any reason to
constitute at least a majority of the Southern Board; or
(c) Consummation of a Business Combination, unless, following such
Business Combination, all of the following three conditions are met:
(i) all or substantially all of the individuals and entities who held
Beneficial Ownership, respectively, of Southern Company's Voting Securities
immediately prior to such Business Combination beneficially own, directly
or indirectly, 65% or more of the combined voting power of the Voting
Securities of Surviving Company in substantially the same proportions as
their ownership, immediately prior to such Business Combination, of
Southern Company's Voting Securities;
(ii) no Person (excluding any corporation resulting from such Business
Combination, any qualified pension plan, publicly held mutual fund, Group
composed exclusively of employees or employee benefit plan (or related
trust) of Southern Company, its subsidiaries or Surviving Company) holds
Beneficial Ownership, directly or indirectly, of 20% or more of the
combined voting power of the then outstanding Voting Securities of
Surviving Company except to the extent that such ownership existed prior to
the Business Combination; and
(iii) at least a majority of the members of the board of directors of
Surviving Company were members of the Incumbent Board at the earlier of the
date of execution of the initial agreement, or of the action of the
Southern Board, providing for such Business Combination.
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2.31 "Southern Committee" shall mean the committee comprised of the
Chairman of the Southern Board, the Chief Financial Officer of Southern Company
and the General Counsel of Southern Company.
2.32 "Southern Company" shall mean The Southern Company, its successors and
assigns.
2.33 "Southern Termination" shall mean the following:
(a) The Consummation of a reorganization, merger or consolidation of
Southern Company under circumstances where either (i) Southern Company is
not the Surviving Company or (ii) Southern Company's Voting Securities are
no longer publicly traded;
(b) The Consummation of a sale or other disposition of all or
substantially all of Southern Company's assets; or
(c) The Consummation of an acquisition by any Person of Beneficial
Ownership of all of Southern Company's Voting Securities such that Southern
Company's Voting Securities are no longer publicly traded.
2.34 "Subsidiary Change in Control" shall mean any of the following:
(a) The Consummation of an acquisition by any Person of Beneficial
Ownership of 50% or more of the combined voting power of the then
outstanding Voting Securities of an Employing Company; provided, however,
that for purposes of this Subsection 2.34, any acquisition by an employee
of Southern Company or its subsidiary or affiliate, or Group composed
entirely of such employees, any qualified pension plan, publicly held
mutual fund or any employee benefit plan (or related trust) sponsored or
maintained by Southern Company or any corporation Controlled by Southern
Company shall not constitute a Change in Control;
(b) Consummation of a reorganization, merger or consolidation of an
Employing Company (an "Employing Company Business Combination"), in each
case, unless, following such Employing Company Business Combination,
Southern Company Controls the corporation surviving or resulting from such
Employing Company Business Combination; or
(c) Consummation of the sale or other disposition of all or
substantially all of the assets of an Employing Company to an entity which
Southern Company does not Control.
2.35 "Subsidiary Employee" shall mean an employee of an Employing Company
that has undergone a Subsidiary Change in Control who does not become an
employee of another Employing Company immediately following such Subsidiary
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Change in Control. The Operating Committee may in its sole discretion deem one
or more employees of any corporation or entity Controlled by Southern Company,
directly or indirectly, to be employed by an Employing Company for purposes of
being covered as a Subsidiary Employee under this Plan. Such action shall be in
writing and shall cause such an employee to be a Subsidiary Employee entitled to
benefits under this Plan only in the event of a Subsidiary Change in Control of
his deemed Employing Company, not his actual employer (which may or may not be
an Employing Company).
2.36 "Surviving Company" shall have the meaning set forth in Section
2.14(c)(i) hereof.
2.37 "Trust" shall mean the Southern Company Deferred Compensation Trust.
2.38 "Voting Securities" shall mean the outstanding voting securities of a
corporation entitling the holder thereof to vote generally in the election of
such corporation's directors.
ARTICLE III - OMNIBUS PLAN
CHANGE IN CONTROL PROVISIONS
3.1 Application. The provisions of this Article III apply to benefits
payable under the Southern Company Omnibus Incentive Compensation Plan (the
"Omnibus Plan") notwithstanding any provision in the Omnibus Plan to the
contrary. The meaning of capitalized terms not defined herein is determined
under the Omnibus Plan.
3.2 Stock-Based Awards. The provisions of this Section 3.2 apply to
stock-based awards granted under the Omnibus Plan.
(a) Southern Change in Control. In the event of a Southern Change in
Control which is not also a Southern Termination:
(i) Any Options and Stock Appreciation Rights held as of the date
of the Southern Change in Control shall remain subject to such
restrictions and vesting schedules in accordance with the terms of the
grant.
(ii) The restrictions and deferral limitations applicable to any
Restricted Stock and Restricted Stock Units shall continue in
accordance with the terms of the grant.
(iii) The restrictions, deferral limitations and other conditions
applicable to any other Awards shall continue in accordance with the
terms of the grant.
(b) Subsidiary Change in Control. In the event of a Subsidiary Change
in Control:
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(i) Any Options and Stock Appreciation Rights held by a
Subsidiary Employee which are outstanding as of the date such
Subsidiary Change in Control is determined to have occurred, and which
are not then exercisable and vested, shall become fully exercisable
and vested; provided, that in the case of a Subsidiary Employee
holding a Stock Appreciation Right who is actually subject to Section
16(b) of the Exchange Act, such Stock Appreciation Right shall not
become fully vested and exercisable unless it shall have been
outstanding for at least six months as of the date such Subsidiary
Change in Control is determined to have occurred.
(ii) The restrictions and deferral limitations applicable to any
Restricted Stock and Restricted Stock Units held by a Subsidiary
Employee shall lapse, and such Restricted Stock and Restricted Stock
Units shall become free of all restrictions and limitations and become
fully vested and transferable.
(c) Southern Termination. In the event of a Southern Termination:
(i) Any Options and Stock Appreciation Rights which are
outstanding as of the date such Southern Termination is determined to
have occurred, and which are not then exercisable and vested, shall
become fully exercisable and vested; provided, that in the case of an
Employee holding a Stock Appreciation Right who is subject to Section
16(b) of the Exchange Act, such Stock Appreciation Right shall not
become fully vested and exercisable at such time if such actions would
result in liability to the Employee under Section 16(b), provided
further, that any such actions not taken as a result of the rules
under Section 16(b) shall be effected as of the first date that such
activity would no longer result in liability under such section.
(ii) The restrictions and deferral limitations applicable to any
Restricted Stock and Restricted Stock Units held by Employees shall
lapse, and such Restricted Stock and Restricted Stock Units shall
become free of all restrictions and limitations and become fully
vested and transferable.
(iii) The restrictions, deferral limitations and other conditions
applicable to any other Awards held by Employees shall lapse, and such
other Awards shall become free of all restrictions, limitations or
conditions and become fully vested and transferable.
(iv) Any Options, Stock Appreciation Rights, Restricted Stock or
Restricted Stock Units which are outstanding as of the date such
Southern Termination is determined to have occurred, shall be
converted into or replaced by options, stock appreciation rights,
restricted stock or restricted stock units, as the case may be, in the
Surviving Company, or the corporation which has acquired all of
Southern Company's Common Stock or assets. In the event of such
conversion or replacement, the terms of the replacement options or
stock appreciation rights shall preserve with respect to each Option
and each SAR the spread between the Fair Market Value of the shares
subject to the Options or SARs and the Option Price or Base Value, as
the case may be, as determined immediately prior to the Southern
Termination. Similarly, the terms of replacement restricted stock or
restricted stock units shall preserve the Fair Market Value of each
share of Restricted Stock or Restricted Stock Unit as determined
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immediately prior to the Southern Termination. No replacement option,
stock appreciation right, share of restricted stock or restricted
stock unit received shall be subject to any terms which are less
favorable than those which existed with respect to the original
Option, SAR or share of Restricted Stock or Restricted Unit
immediately prior to the Southern Termination.
(v) In the event that it is not possible to effect the conversion
set forth in Section 3.2(c)(iv) hereof, any and all outstanding
Options, Stock Appreciation Rights, Restricted Stock and Restricted
Stock Units as of the date of the Southern Termination which are not
so converted shall be terminated and the affected Employees shall
receive within thirty (30) days of the Southern Termination cash equal
to the difference between the Option Price and Fair Market Value, in
the case of Options, the Base Value and Fair Market Value, in the case
of SARs and equal to the Fair Market Value, in the case of Restricted
Stock and Restricted Stock Units. For purposes of this Section
3.2(c)(v), Fair Market Value shall be determined as of the day prior
to the date of the Southern Termination.
3.3 Application. The provisions of this Sections 3.3 apply to benefits
payable under the Performance Pay Program under the Omnibus Plan (the "PPP").
(a) Southern Change in Control. In the event of a Southern Change in
Control, if there is no Plan Termination with respect to the PPP, payout of
Cash-Based Awards under the PPP to Employees for the performance period in
which the Southern Change in Control shall have occurred shall be the
greater of actual or target performance under the PPP.
(b) Plan Termination. In the event of a Plan Termination with respect
to the PPP within two (2) years following a Southern Change in Control,
each Employee who is an employee on the date of such Plan Termination shall
be entitled to receive within thirty (30) days of the Plan Termination,
cash in an amount equal to a pro-rated payout of his Cash-Based Award under
the PPP for the performance period in which the Plan Termination shall have
occurred, at target performance under the PPP and prorated by the number of
months which have passed since the beginning of the performance period
until the date of the Plan Termination.
(c) Subsidiary Change in Control. In the event of a Subsidiary Change
in Control, each Subsidiary Employee on the date of such Change in Control
shall be entitled to receive within thirty (30) days of the Subsidiary
Change in Control, cash in an amount equal to a prorated payout of his
Cash-Based Award under the PPP for the performance period in which the
Subsidiary Change in Control shall have occurred, at target performance
under the PPP and prorated by the number of months which have passed since
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the beginning of the performance period until the date of the Subsidiary
Change in Control.
(d) Southern Termination. In the event of a Southern Termination, each
Employee on the date of such Southern Termination shall be entitled to
receive within thirty (30) days of the Southern Termination, cash in an
amount equal to a prorated payout of his Cash-Based Award under the PPP for
the performance period in which the Southern Termination shall have
occurred, at target performance under the PPP and prorated by the number of
months which have passed since the beginning of the performance period
until the date of the Southern Termination. The PPP shall terminate
immediately following the payments provided for in this Section 3.3(d).
(e) Pro rata Calculation. For purposes of calculating any pro rata
Cash-Based Awards under this Section 3.3, a month shall not be considered
if the determining event occurs on or before the 14th day of the month, and
a month shall be considered if the determining event occurs on or after the
15th day of the month.
3.4 Application. The provisions of this Section 3.4 apply to benefits
payable under the Performance Dividend Program under the Omnibus Plan (the
"PDP").
(a) Southern Change in Control. In the event of a Southern Change in
Control, if there is no Plan Termination with respect to the PDP, payout of
Cash-Based Awards under the PDP to Employees for the performance period in
which the Southern Change in Control shall have occurred shall be based on
a payout percentage of the greater of 50% or actual performance under the
PDP for such performance period.
(b) Plan Termination. In the event of a Plan Termination with respect
to the PDP within two (2) years following a Southern Change in Control,
each Employee who is an employee on the date of such Plan Termination shall
be entitled to receive within thirty (30) days of the Plan Termination,
cash for each Cash-Based Award under the PDP held as of such date, based on
a payout percentage of the greater of 50% or actual performance under the
PDP determined as of the date of the Plan Termination, and the sum of the
quarterly dividends on the Common Stock declared during the calendar year
of and prior to the date of the Plan Termination. For purposes of this
Section 3.4(b), 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 the Plan Termination occurs,
all other remaining PPP performance measurement periods shall terminate and
no payment shall be made with respect thereto.
(c) Subsidiary Change in Control. In the event of a Subsidiary Change
in Control, each Subsidiary Employee on the date of such Change in Control
shall be entitled to receive within thirty (30) days of the Subsidiary
Change in Control, cash for each Cash-Based Award under the PDP held as of
such date, based on a payout percentage of the greater of 50% or actual
performance determined as of the date on which the Subsidiary Change in
Control shall have occurred, and the sum of the quarterly dividends on the
Common Stock declared during the calendar year of and prior to the date of
the Subsidiary Change in Control. For purposes of this Section 3.4(c),
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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 the Subsidiary Change in Control occurs, all
other remaining PPP performance measurement periods shall terminate and no
payment to such Subsidiary Employee shall be made with respect thereto.
(d) Southern Termination. In the event of a Southern Termination, each
Employee who is an employee on the date of such Southern Termination shall
be entitled to receive within thirty (30) days of the Southern Termination,
cash for each Cash-Based Award under the PDP held as of such date, based on
a payout percentage of the greater of 50% or actual performance determined
as of the date on which the Southern Termination shall have occurred, and
the sum of the quarterly dividends on the Common Stock declared during the
year of and prior to the date of the Southern Termination. For purposes of
this Section 3.4(d), 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 the Southern Termination
occurs, the PPP and all other remaining PPP performance measurement periods
shall terminate and no further payment shall be made with respect thereto.
3.5 Other Incentives. The provisions of this Section 3.5 shall apply to any
Employee or Subsidiary Employee who, as of the date of the respective Change in
Control, is entitled to a Performance Unit or Performance Share award under the
Omnibus Plan (other than those described in Section 3.2 hereof), or any cash or
stock-based award under any other plan or program sponsored by an Employing
Company. If and to the extent an Employee or Subsidiary Employee has received a
stock-based award under the Omnibus Plan (other than those described in Section
3.2 hereof) or any other plan or program sponsored by his Employing Company, in
the event of a Southern Change in Control, a Subsidiary Change in Control and/or
a Southern Termination, such award shall be subject to the provisions of this
Plan, and any restrictions, limitations and deferral limitations shall lapse if
and to the extent provided under Section 3.2 hereof for similar Awards granted
under the Omnibus Plan. If and to the extent an Employee or Subsidiary Employee
is entitled to a cash-based award under the Omnibus Plan (other than PPP or PDP)
or any other plan or program sponsored by his Employing Company, in the event of
a Southern Change in Control, a Subsidiary Change in Control and/or a Southern
Termination, such award shall be subject to the provisions of this Plan, and,
provided such Employee or Subsidiary Employee is not otherwise entitled to a
payout under any change in control provision of such plan or program, such award
shall be payable in a similar manner as set forth in Sections 3.3 and 3.4 hereof
with respect to PPP and PDP (e.g., if prorated, the award is paid at target, if
the award is for a full performance period, the award is paid at the greater of
actual or target if administratively practicable, if not, at target) as
determined by the Operating Committee on a good faith basis.
ARTICLE IV - SUPPLEMENTAL BENEFIT PLAN
CHANGE IN CONTROL AND OTHER SPECIAL PROVISIONS
4.1 Application. Upon a Funding Change in Control, the provisions of this
Article IV shall apply to the funding, calculation and payment of accrued
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benefits under The Southern Company Supplemental Benefit Plan (the "SBP")
notwithstanding any provision in the SBP to the contrary. The meaning of any
capitalized terms not defined herein shall be as defined under the SBP.
4.2 Funding of the Trust. The Trust has been established to hold assets of
the Employing Companies under certain circumstances as a reserve for the
discharge of the Employing Companies' obligations under the SBP and certain
other plans and arrangements. Upon a Funding Event involving a Funding Change in
Control under Section 2.14(a), (b) or (c) hereof, all Employing Companies shall
be obligated to immediately contribute such amounts to the Trust as may be
necessary to fully fund each Employing Company's obligations to pay the
aggregate Pension Benefits and Non-Pension Benefits to be accrued under the SBP
as of the date of the Funding Change in Control, the aggregate accrued Pension
Benefit to be determined under Section 4.4 hereof, in accordance with the
procedures set forth in Section 4.3 hereof. Upon a Funding Event involving a
Funding Subsidiary under Section 2.14(d), (e) and (f) hereof, such Funding
Subsidiary shall be obligated to immediately contribute such amounts to the
Trust as may be necessary to fully fund such Funding Subsidiary's obligations to
pay the aggregate Pension Benefits and Non-Pension Benefits to be accrued under
the SBP as of the date of the Funding Change in Control, the aggregate accrued
Pension Benefit to be determined under Section 4.4 hereof, in accordance with
the procedures set forth in Section 4.3 hereof. Under the terms of the Trust
agreement, all assets held in the Trust remain subject only to the claims of the
Employing Companies' general creditors whose claims against the Employing
Companies are not satisfied because of the Employing Companies' bankruptcy or
insolvency (as those terms are defined in the Trust). No Participant has any
preferred claim on, or beneficial ownership interest in, any assets of the Trust
before the assets are paid to the Participant and all rights created under the
Trust, as under the SBP, are unsecured contractual claims of the Participant
against his Employing Company.
4.3 Calculation of Trust Contribution. As soon as practicable following a
Funding Event, the affected Employing Companies shall contribute funds to the
Trust based upon the funding strategy adopted by the Operating Committee with
the assistance of an appointed actuary in such amounts as shall be necessary to
fulfill the Employing Companies' obligations pursuant to this Article IV and the
terms of the Trust agreement. The dollar amount necessary to satisfy each
Employing Company's obligations under this Article IV shall be estimated and
paid to the Trust as soon as practicable following a Funding Event and shall be
recalculated and trued- up immediately following the respective Funding Change
in Control. In the event of a dispute after a Funding Event between a
Participant and an Employing Company over such actuary's determination of the
dollar amount necessary to appropriately fund the Trust under the terms of this
Article IV, the respective Employing Company(ies) and any complaining
Participant(s) shall refer such dispute to an independent, third-party actuarial
consultant, chosen by mutual agreement of the Employing Company and such
Participant. If the Employing Company and the Participant cannot agree on an
independent, third-party actuarial consultant, the actuarial consultant shall be
chosen by lot from an equal number of actuaries submitted by the affected
Employing Companies and the Trustee (not to exceed four (4) each). Any such
referral shall only occur once in total and the determination by the third-party
actuarial consultant shall be final and binding upon both parties. The Employing
Companies shall be responsible for all of the fees and expenses of the
independent actuarial consultant.
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4.4 Pension Benefit Upon a Funding Change in Control. As of the date of a
Funding Change in Control, the accrued Pension Benefit of each Participant shall
be calculated based on such Participant's Earnings and Accredited Service on
such date, regardless of whether such Participant is retirement eligible on such
date. Each Participant shall be entitled to receive the amount of his accrued
Pension Benefit based on such Participant's Earnings and Accredited Service as
of the date of a Funding Change in Control adjusted to take into account
appropriate early reduction factors, if any, based on the Participant's
commencement of benefits. Such accrued Pension Benefit shall be paid in lump sum
as soon as practicable following such Participant's termination of employment or
retirement. Any Participants' Pension Benefits accrued under the SBP subsequent
to the date of a Funding Change in Control shall be calculated and distributed
pursuant to the terms of the SBP, without regard to this Article IV.
4.5 Non-Pension Benefit Distribution Election upon a Funding Change in
Control. In the event of a Funding Change in Control, notwithstanding anything
to the contrary in the SBP, the Non-Pension Benefit of a Participant shall be
paid out in a lump sum as soon as practicable following such Participant's
termination of employment or retirement if such Participant makes such an
election pursuant to those procedures established by the Operating Committee in
its sole and absolute discretion. If no such election is made, a Participant
shall receive payment of his Non-Pension Benefit Account solely in accordance
with Article V of the SBP.
ARTICLE V - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
CHANGE IN CONTROL AND OTHER SPECIAL PROVISIONS
5.1 Application. Upon a Funding Change in Control, the provisions of this
Article V shall apply to the funding, calculation and payment of accrued
benefits under The Southern Company Supplemental Executive Retirement Plan (the
"SERP") notwithstanding any provision in the SERP to the contrary. The meaning
of any capitalized terms not defined herein shall be as defined under the SERP.
5.2 Funding of the Trust. The Trust has been established to hold assets of
the Employing Companies under certain circumstances as a reserve for the
discharge of the Employing Companies' obligations under the SERP and certain
other plans and arrangements. Upon a Funding Event involving a Funding Change in
Control under Section 2.14(a), (b) or (c) hereof, all Employing Companies shall
be obligated to immediately contribute such amounts to the Trust as may be
necessary to fully fund each Employing Company's obligations to pay the
aggregate benefits to be accrued under the SERP as of the date of the Funding
Change in Control, as determined under Section 5.4 hereof, in accordance with
the procedures set forth in Section 5.3 hereof. Upon a Funding Event involving a
Funding Subsidiary under Section 2.14(d), (e) and (f) hereof, such Funding
Subsidiary shall be obligated to immediately contribute such amounts to the
Trust as may be necessary to fully fund such Funding Subsidiary's obligations to
pay the aggregate benefits to be accrued under the SERP as of the date of such
Funding Change in Control. Under the terms of the Trust agreement, all assets
held in the Trust remain subject only to the claims of the Employing Companies'
general creditors whose claims against the Employing Companies are not satisfied
because of the Employing Companies' bankruptcy or insolvency (as those terms are
defined in the Trust). No Participant has any preferred claim on, or beneficial
15
ownership interest in, any assets of the Trust before the assets are paid to the
Participant and all rights created under the Trust, as under the SERP, are
unsecured contractual claims of the Participant against his Employing Company.
5.3 Calculation of Trust Contribution. As soon as practicable following a
Funding Event, the affected Employing Companies shall contribute funds to the
Trust based upon the funding strategy adopted by the Operating Committee with
the assistance of an appointed actuary in such amounts as shall be necessary to
fulfill the Employing Companies' obligations pursuant to this Article V and the
terms of the Trust agreement. The dollar amount necessary to satisfy each
Employing Company's obligations under this Article V shall be estimated and paid
to the Trust as soon as practicable following a Funding Event and shall be
recalculated and trued- up immediately following the respective Funding Change
in Control. In the event of a dispute after a Funding Event between a
Participant and an Employing Company over such actuary's determination of the
dollar amount necessary to appropriately fund the Trust under this Article V,
the respective Employing Company(ies) and any complaining Participant(s) shall
refer such dispute to an independent, third-party actuarial consultant, chosen
by mutual agreement of the Employing Company and such Participant. If the
Employing Company and the Participant cannot agree on an independent,
third-party actuarial consultant, the actuarial consultant shall be chosen by
lot from an equal number of actuaries submitted by the affected Employing
Companies and the Trustee (not to exceed four (4) each). Any such referral shall
only occur once in total and the determination by the third-party actuarial
consultant shall be final and binding upon both parties. The Employing Companies
shall be responsible for all of the fees and expenses of the independent
actuarial consultant.
5.4 SERP Benefit Upon a Funding Change in Control. As of the date of a
Funding Change in Control, the accrued SERP Benefit of each Participant shall be
calculated based on such Participant's Earnings and Accredited Service on such
date, regardless of whether such Participant is retirement eligible on such
date. Each such Participant shall be entitled to receive the amount of his SERP
Benefit based on such Participant's Earnings and Accredited Service as of the
date of a Funding Change in Control adjusted to take into account appropriate
early reduction factors, if any, based on the Participant's commencement of
benefits. Such accrued SERP Benefit shall be paid in lump sum as soon as
practicable following such Participant's termination of employment or
retirement. Any Participants' SERP Benefits accrued under the SERP subsequent to
the date of a Funding Change in Control shall be calculated and distributed
pursuant to the terms of the SERP without regard to this Article V.
ARTICLE VI - DEFERRED COMPENSATION PLAN
CHANGE IN CONTROL AND OTHER SPECIAL PROVISIONS
6.1 Application. Upon a Funding Change in Control, the provisions of this
Article VI shall apply to the funding, calculation and payment of benefits under
the Southern Company Deferred Compensation Plan (the "DCP") notwithstanding any
provision in the DCP to the contrary. The meaning of any capitalized terms not
defined herein shall be as defined under the DCP. For purposes of this Article
VI, the term "Participant" shall have the meaning set forth in Article II of the
DCP without regard to Section 2.21 hereof.
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6.2 Funding of the Trust. The Trust has been established to hold assets of
the Employing Companies under certain circumstances as a reserve for the
discharge of the Employing Companies' obligations under the DCP and certain
other plans and arrangements. Upon a Funding Event involving a Funding Change in
Control under Section 2.14(a), (b) or (c) hereof, all Employing Companies shall
be obligated to immediately contribute such amounts to the Trust as may be
necessary to fully fund each Employing Company's obligations to pay the
aggregate benefits to be accrued under the DCP as of the date of the Funding
Change in Control in accordance with the procedures set forth in Section 6.3
hereof. Upon a Funding Event involving a Funding Subsidiary under Section
2.14(d), (e) and (f) hereof, such Funding Subsidiary shall be obligated to
immediately contribute such amounts to the Trust as may be necessary to fully
fund such Funding Subsidiary's obligations to pay the aggregate benefits to be
accrued under the DCP as of the date of the Funding Change in Control in
accordance with the procedures set forth in Section 6.3 hereof. Under the terms
of the Trust agreement, all assets held in the Trust remain subject only to the
claims of the Employing Companies' general creditors whose claims against the
Employing Companies are not satisfied because of the Employing Companies'
bankruptcy or insolvency (as those terms are defined in the Trust). No
Participant has any preferred claim on, or beneficial ownership interest in, any
assets of the Trust before the assets are paid to the Participant and all rights
created under the Trust, as under the DCP, are unsecured contractual claims of
the Participant against his Employing Company.
6.3 Calculation of Trust Contribution. As soon as practicable following a
Funding Event, the affected Employing Companies shall contribute funds to the
Trust based upon the funding strategy adopted by the Operating Committee with
the assistance of an appointed actuary in such amounts as shall be necessary to
fulfill the Employing Companies' obligations pursuant to this Article VI and the
terms of the Trust. The dollar amount necessary to satisfy each Employing
Company's obligations under this Article VI shall be estimated and paid to the
Trust as soon as practicable following a Funding Event and shall be recalculated
and trued- up immediately following the respective Funding Change in Control. In
the event of a dispute following a Funding Event between a Participant and an
Employing Company over such actuary's determination of the dollar amount
necessary to appropriately fund the Trust under this Article VI, the respective
Employing Company(ies) and any complaining Participant(s) shall refer such
dispute to an independent, third-party actuarial consultant, chosen by mutual
agreement of the Employing Company and such Participant. If the Employing
Company and the Participant cannot agree on an independent, third-party
actuarial consultant, the actuarial consultant shall be chosen by lot from an
equal number of actuaries submitted by the Employing Company and the Trustee
(not to exceed four (4) each). Any such referral shall only occur once in total
and the determination by the third-party actuarial consultant shall be final and
binding upon both parties. The Employing Companies shall be responsible for all
of the fees and expenses of the independent actuarial consultant.
6.4 Payment of DCP Account. In the event of a Funding Change in Control,
notwithstanding anything to the contrary in the DCP, a Participant's Account
under the DCP shall be paid out in a lump sum as soon as practicable following
such Participant's termination of employment or retirement if such Participant
makes such an election pursuant to those procedures established by the Operating
Committee in its sole and absolute discretion. If no such election is made, a
Participant shall receive payment of his DCP Account solely in accordance with
Article VII of the DCP.
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ARTICLE VII - ADMINISTRATION
7.1 Administrative Committee. The Administrative Committee shall appoint
the members of the Operating Committee and shall designate a Chairman thereof.
The Operating Committee shall be responsible for the general administration of
the Plan.
7.2 Duties of the Operating Committee.
(a) The Operating Committee shall be responsible for the daily
administration of the Plan and may appoint other persons or entities to
perform or assist in the performance of any of its fiduciary duties,
subject to its review and approval. The Operating Committee shall have the
right to remove any such appointee from his position without cause upon
notice. Any person, group of persons, or entity may serve in more than one
fiduciary capacity.
(b) The Operating Committee shall maintain permanent records and
accounts of Participants and of their rights under the Plan and of all
receipts, disbursements, transfers, and other transactions concerning the
Plan. Such accounts, books, and records relating thereto shall be open at
all reasonable times to inspection and audit by the Company and any persons
designated thereby.
(c) The Operating Committee shall take all steps necessary to ensure
that the Plan complies with the law at all times, including the preparation
and filing of all documents and forms required by any governmental agency;
maintenance of adequate Participant records; recording and transmission of
all notices required to be given to Participants and their beneficiaries;
receipt and dissemination, if required, of all reports and information
received from the Employing Companies; securing of such fidelity bonds as
may be required by law; and doing such other acts necessary for the proper
administration of the Plan. The Operating Committee shall keep a record of
all of its proceedings and acts, and shall keep all such books of accounts,
records, and other data as may be necessary for proper administration of
the Plan. The Operating Committee shall notify the Employing Companies upon
their request of any action taken by it, and when required, shall notify
any other interested person or persons.
7.3 Powers. The Operating Committee shall administer the Plan in accordance
with its terms and shall have all powers necessary to carry out the provisions
of the Plan as more particularly set forth herein. The Operating Committee shall
have the discretionary authority to interpret the Plan (including any
ambiguities herein) and to determine all questions arising in the
administration, interpretation, and application of the Plan. The Operating
Committee shall adopt such procedures and regulations necessary or desirable for
the discharge of its duties hereunder and may appoint such accountants, counsel,
actuaries, specialists, and other agents as it deems necessary or desirable in
connection with the administration of this Plan. The Operating Committee shall
be the legal appointed agent for the service of process.
7.4 Compensation of the Operating Committee. The Operating Committee shall
not receive any compensation from the Plan for its services.
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7.5 Payment of Expenses. The Operating Committee shall be reimbursed by the
Employing Companies for its reasonable expenses incurred in the discharge of its
duties. Such expenses shall include any expenses incident to its duties,
including, but not limited to, fees of accountants, counsel, actuaries, and
other specialists, and other costs of administering the Plan.
7.6 Indemnification. Each Employing Company shall indemnify the Operating
Committee against any and all claims, losses, damages, expenses, and liability
arising from its actions or omissions, except when the same is finally
adjudicated to be the result of gross negligence or willful misconduct. The
Employing Companies may purchase at their own expense sufficient liability
insurance for the Operating Committee to cover any and all claims, losses,
damages, and expenses arising from any action or omission in connection with the
execution of the duties as the Operating Committee.
ARTICLE VIII - MISCELLANEOUS
8.1 Amendment and Termination The Plan may be amended or terminated at any
time by the Board of Directors, provided, however, that no such amendment or
termination of the Plan shall be effective if such amendment or termination is
made or is effective within a period that is (a) six (6) months before, or at
any time after, a Preliminary Change in Control and (b) prior to (x) the earlier
of such time as the Southern Committee shall have determined that the event that
gave rise to such Preliminary Change in Control shall not be Consummated or (y)
two years following the respective Change in Control, unless such amendment or
termination during such period has the effect of increasing benefits to
Participants under the Plan, is determined by the Board of Directors to be
immaterial, or applies solely to individuals who, in the case of a Subsidiary
Change in Control, were not employees of the Employing Company undergoing the
Subsidiary Change in Control on the date of the respective Preliminary Change in
Control, or, in the case of a Southern Change in Control, are not Employees on
the date of the respective Southern Change in Control. Following a Change in
Control, nothing in this Section 8.1 shall prevent the Board of Directors from
amending or terminating the Plan as to any subsequent Change in Control provided
that no such amendment or termination shall impair any rights or reduce any
benefits previously accrued under the Plan as a result of a previous Change in
Control.
8.2 Additional Rights. Nothing in the Plan shall interfere with or limit in
any way the right of the Employing Companies to terminate any employee's
employment at any time, or confer upon any employee any right to continue in the
employ of the Employing Companies.
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IN WITNESS WHEREOF, this Southern Company Change in Control Benefits Protection
Plan has been executed by duly authorized officers of Southern Company Services,
Inc. pursuant to resolutions of the Board of Directors of Southern Company
Services, Inc. as of the date first above written.
SOUTHERN COMPANY SERVICES, INC.
By: /s/Patricia L. Roberts
Patricia L. Roberts
Secretary
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