Exhibit 10.38
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 Xx. Xxxxxxx Xxxxxxx XxXxxxx ("Xx.
XxXxxxx") (hereinafter collectively referred to as the "Parties") is effective
July 10, 2000. This Agreement amends and restates the Change in Control
Agreement entered into by the Parties, originally effective and executed on
December 7, 1998.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Xx. XxXxxxx is the Executive Vice President of the Company;
WHEREAS, the Parties entered into a Change in Control Agreement
effective December 7, 1998 (the "Original Agreement") to provide to Xx. XxXxxxx
certain severance benefits under certain circumstances following a change in
control (as defined herein) of Southern or the Company;
WHEREAS, pursuant to Section 6(d) of the Original Agreement, the
Parties may amend the Original Agreement by written agreement;
WHEREAS, the Parties wish to enter into this Amended and Restated
Change in Control Agreement pursuant to Section 6(d), to (i) change certain
references from normal market bonus to target bonus, (ii) clarify that an
initial public offering and a spin-off of the Company does not constitute a
"change in control" under the Agreement, (iii) delete references to the
"Productivity Improvement Plan," (iv) add Southern Energy, Inc. as a company
released in the waiver and release attached hereto, and (v) certain other
technical and miscellaneous modifications;
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:
1. Definitions. For purposes of this Agreement, the
following terms shall have the following meanings:
(a) "Annual Compensation" shall mean Xx. XxXxxxx'x highest
annual base salary rate for the twelve (12) month period immediately
preceding the date of the Change in Control plus target bonus.
(b) "Beneficial Ownership" shall mean beneficial ownership
within the meaning of Rule 13d-3 promulgated under the Exchange Act.
(c) "Board" shall mean the board of directors of the
Company.
(d) "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.
(e) "Change in Control" shall mean 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
Paragraph 1.(e)(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 a Group composed exclusively of employees
of Southern, or any Southern Subsidiary;
(F) any acquisition by Xx. XxXxxxx or any Group of which Xx.
XxXxxxx is a party; or
(G) any Business Combination which would not otherwise constitute
a change in control because of the application of clauses (A), (B) and
(C) of Paragraph 1.(e)(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;
(iii) Consummation of a Business Combination,
provided, however, that such a Business Combination shall not
constitute a Change in Control if all three (3) of the
following conditions are met:
(A) all or substantially all of the
individuals and entities who held Beneficial
Ownership, respectively, of Southern's Voting
Securities immediately prior to such Business
Combination beneficially own, directly or indirectly,
65% or more of the combined voting power of the
Voting Securities of the corporation surviving or
resulting from such Business Combination, (including,
without limitation, a corporation which as a result
of such transaction holds Beneficial Ownership of all
or substantially all of Southern's Voting Securities
or all or substantially all of Southern's assets)
(such surviving or resulting corporation to be
referred to as "Surviving Company"), in substantially
the same proportions as their ownership, immediately
prior to such Business Combination, of Southern's
Voting Securities;
(B) no Person (excluding any corporation
resulting from such Business Combination, any
employee benefit plan (or related trust) of Southern,
any Southern Subsidiary or Surviving Company, Xx.
XxXxxxx, any Group of which Xx. XxXxxxx is a party,
any Group composed exclusively of Company employees,
any qualified pension plan (or related trust) or any
publicly held mutual fund) holds Beneficial
Ownership, directly or indirectly, of 20% or more of
the combined voting power of the then outstanding
Voting Securities of Surviving Company except to the
extent that such ownership existed prior to the
Business Combination; and
(C) at least a majority of the members of
the board of directors of Surviving Company were
members of the Incumbent Board at the earlier of the
date of execution of the initial agreement, or of the
action of the Southern Board, providing for such
Business Combination.
(iv) 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 Paragraph 1.(e)(iv), any
acquisition by Xx. XxXxxxx, any Group composed exclusively of
employees of the Company, any Group of which Xx. XxXxxxx is a party,
any qualified pension plan (or related trust), any publicly held
mutual fund, any employee benefit plan (or related trust) sponsored or
maintained by Southern or any Southern Subsidiary shall not constitute
a Change in Control;
(v) Consummation of a reorganization, merger or consolidation of
the Company (an "Employing Company Business Combination"), in each
case, unless, following such Employing Company Business Combination,
Southern Controls the corporation or other entity surviving or
resulting from such Employing Company Business Combination; or
(vi) Consummation of the sale or other disposition of all or
substantially all of the assets of the Company to a corporation or
other entity which Southern does not Control. Notwithstanding the
foregoing, in no event shall "Change in Control" mean an initial
public offering or a spin-off of the Company.
(f) "COBRA Coverage" shall mean any continuation coverage to
which Xx. XxXxxxx or his dependents may be entitled pursuant to Code
Section 4980B.
(g) "Code" shall mean the Internal Revenue Code of
1986, as amended.
(h) "Company" shall mean Southern Company Services,
Inc., its successors and assigns.
(i) "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.
(j) "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.
(k) "Effective Date" shall mean the date of execution
of this Agreement.
(l) "Employee Outplacement Program" shall mean the
program established by the Company from time to time for the
purpose of assisting participants covered by the plan in
finding employment outside of the Company which provides for
the following services: (i) self-assessment, career decision
and goal setting; (ii) job market research and job sources;
(iii) networking and interviewing skills; (iv) planning and
implementation strategy; (v) resume writing, job hunting
methods and salary negotiation; and (vi) office support and
job search resources.
(m) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(n) "Good Reason" shall mean, without Xx. XxXxxxx'x
express written consent, after written notice to the Board,
and after a thirty (30) day opportunity for the Board to
cure, the continuing occurrence of any of the following
events:
(i) Inconsistent Duties. A meaningful and detrimental
alteration in Xx. XxXxxxx'x position or in the nature or
status of his responsibilities from those in effect
immediately prior to the Change in Control;
(ii) Reduced Salary. A reduction of five percent (5%)
or more by the Company in either of the following: (i) Xx.
XxXxxxx'x annual base salary rate as in effect immediately
prior to the Change in Control (except for a less than ten
percent (10%), across-the-board annual base salary rate
reduction similarly affecting at least ninety-five percent
(95%) of the Executive Employees of the Company); or (ii) the
sum of Xx. XxXxxxx'x annual base salary rate plus target bonus
under the PPP Plan (except for a less than ten percent (10%),
across-the-board reduction of annual base salary rate plus
target bonus under the PPP Plan similarly affecting at least
ninety-five percent (95%) of the Executive Employees of the
Company);
(iii) Pension and Compensation Plans. The failure by
the Company to continue in effect any pension or compensation
plan or agreement in which Xx. XxXxxxx participates or is a
party as of the date of the Change in Control or the
elimination of Xx. XxXxxxx'x participation therein, (except
for across-the-board plan changes or terminations similarly
affecting at least ninety-five percent (95%) of the Executive
Employees of the Company). For purposes of this Paragraph
1.(n), a "pension plan or agreement" shall mean any written
arrangement executed by an authorized officer of the Company
which provides for payments upon retirement; and a
"compensation plan or arrangement" shall mean any written
arrangement executed by an authorized officer of the Company
which provides for periodic, non-discretionary compensatory
payments in the nature of bonuses.
(iv) Relocation. A change in Xx. XxXxxxx'x work
location to a location more than fifty (50) miles from the
office where Xx. XxXxxxx is located at the time of the Change
in Control, unless such new work location is within fifty (50)
miles from Xx. XxXxxxx'x principal place of residence at the
time of the Change in Control. The acceptance, if any, by Xx.
XxXxxxx of employment by the Company at a work location which
is outside the fifty mile radius set forth in this Paragraph
1.(n)(iv) shall not be a waiver of Xx. XxXxxxx'x right to
refuse subsequent transfer by the Company to a location which
is more than fifty (50) miles from Xx. XxXxxxx'x principal
place of residence at the time of the Change in Control, and
such subsequent unconsented transfer shall be "Good Reason"
under this Agreement; or
(v) Benefits and Perquisites. The taking of any
action by the Company which would directly or indirectly
materially reduce the benefits enjoyed by Xx. XxXxxxx under
the Company's retirement, life insurance, medical, health and
accident, disability, deferred compensation or savings plans
in which Xx. XxXxxxx was participating immediately prior to
the Change in Control; or the failure by the Company to
provide Xx. XxXxxxx with the number of paid vacation days to
which Xx. XxXxxxx is entitled on the basis of years of service
with the Company in accordance with the Company's normal
vacation policy in effect immediately prior to the Change in
Control (except for across-the-board plan or vacation policy
changes or plan terminations similarly affecting at least
ninety-five percent (95%) of the Executive Employees of the
Company).
(vi) For purposes of this Paragraph 1.(n), the term
"Executive Employee" shall mean those employees of the Company of
Grade Level 10 or above.
(o) "Group" shall have the meaning set forth in Section
14(d) of the Exchange Act.
(p) "Group Health Plan" shall mean the group health plan
covering Xx. XxXxxxx, as such plan may be amended from time to
time.
(q) "Group Life Insurance Plan" shall mean the group life
insurance program covering Xx. XxXxxxx, as such plan may be amended
from time to time.
(r) "Incumbent Board" shall mean those individuals who
constitute the Southern Board as of October 19, 1998 plus any
individual who shall become a director subsequent to such date whose
election or nomination for election by Southern's shareholders was
approved by a vote of at least 75% of the directors then comprising the
Incumbent Board. Notwithstanding the foregoing, no individual who shall
become a director of the Southern Board subsequent to October 19, 1998
whose initial assumption of office occurs as a result of an actual or
threatened election contest (within the meaning of Rule 14a-11 of the
Regulations promulgated under the Exchange Act) with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other
than the Southern Board shall be a member of the Incumbent Board.
(s) "Month of Service" shall mean any calendar month during
which Xx. XxXxxxx has worked at least one (1) hour or was on approved
leave of absence while in the employ of the Company or any affiliate or
subsidiary of Southern.
(t) "Pension Plan" shall mean The Southern Company Pension
Plan, as such plan may be amended from time to time.
(u) "Performance Dividend Plan" shall mean the Southern
Company Performance Dividend Plan or any replacement thereto, as such
plans may be amended from time to time.
(v) "Performance Stock Plan" shall mean the Southern Company
Performance Stock Plan or any replacement thereto, as such plans may be
amended from time to time.
(w) "Person" shall mean any individual, entity or group
within the meaning of Section 13(d)(3) or 14(d)(2) of Act.
(x) "Performance Pay Plan" or "PPP Plan" shall mean the
Southern Company Performance Pay Plan or any replacement thereto, as
such plans may be amended from time to time.
(y) "Southern" shall mean The Southern Company, its
successors and assigns.
(z) "Southern Board" shall mean the board of directors
of Southern.
(aa) "Southern Subsidiary" shall mean any corporation
or other entity Controlled by Southern.
(bb) "Termination for Cause" or "Cause" shall mean the
termination of Xx. XxXxxxx'x employment by the Company upon the
occurrence of any of the following:
(i) The willful and continued failure by Xx. XxXxxxx
substantially to perform his duties with the Company (other
than any such failure resulting from Xx. XxXxxxx'x Total
Disability or from Xx. XxXxxxx'x retirement or any such actual
or anticipated failure resulting from termination by Xx.
XxXxxxx 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 that he has not
substantially performed his duties; or
(ii) The willful engaging by Xx. XxXxxxx in conduct
that is demonstrably and materially injurious to the Company,
monetarily or otherwise, including, but not limited to any of
the following:
(A) any willful act involving fraud or dishonesty in
the course of Xx. XxXxxxx'x employment by the Company;
(B) the willful carrying out of any activity or the
making of any statement which would materially prejudice or
impair the good name and standing of the Company, Southern
or any Southern Subsidiary or would bring the Company,
Southern or any Southern Subsidiary into contempt, ridicule
or would reasonably shock or offend any community in which
the Company, Southern or such Southern Subsidiary is
located;
(C) attendance 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;
(D) 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;
(E) assault or other act of violence against any person
during the course of employment; or
(F) indictment of any felony or any misdemeanor
involving moral turpitude. No act or failure to act by Xx.
XxXxxxx shall be deemed "willful" unless done, or omitted to
be done, by Xx. XxXxxxx not in good faith and without
reasonable belief that his action or omission was in the
best interest of the Company. Notwithstanding the foregoing,
Xx. XxXxxxx 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 not less than three quarters of the entire
membership of the Southern Board at a meeting of the
Southern Board called and held for such purpose (after
reasonable notice to Xx. XxXxxxx 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, Xx. XxXxxxx was guilty of conduct set forth
above in clause (i) or (ii) of this Paragraph 1.(bb) and
specifying the particulars thereof in detail. (cc)
"Termination Date" shall mean the date on which Xx.
XxXxxxx'x employment with the Company is terminated;
provided, however, that solely for purposes of Paragraph
2.(c) hereof, the Termination Date shall be the effective
date of his retirement pursuant to the terms of the Pension
Plan. (dd) "Total Disability" shall mean Xx. XxXxxxx'x total
disability within the meaning of the Pension Plan. (ee)
"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. (ff) "Waiver and Release" shall mean the Waiver
and Release attached hereto as Exhibit A. (gg) "Year of
Service" shall mean Xx. XxXxxxx'x 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 Xx. XxXxxxx has a break in his service
with the Company, he will receive credit under this
Agreement for service prior to the break in service only if
the break in service is less than five years. 2. Severance
Benefits. (a) Eligibility. Except as otherwise provided in
this Paragraph 2.(a), if Xx. XxXxxxx'x employment is
involuntarily terminated by the Company at any time during
the two year period following a Change in Control for
reasons other than Cause, or if Xx. XxXxxxx voluntarily
terminates his employment with the Company for Good Reason
at any time during the two year period following a Change in
Control, Xx. XxXxxxx shall be entitled to receive the
benefits described in this Agreement upon the Company's
receipt of an effective Waiver and Release. Notwithstanding
anything to the contrary herein, Xx. XxXxxxx shall not be
eligible to receive benefits under this Agreement if Xx.
XxXxxxx: (i) voluntarily terminates his employment with the
Company for other than Good Reason; (ii) has his employment
terminated by the Company for Cause; (iii) accepts the
transfer of his employment to Southern, any Southern
Subsidiary or any employer that succeeds to all or
substantially all of the assets of the Company, Southern or
any Southern Subsidiary; (iv) refuses an offer of continued
employment with the Company, any Southern Subsidiary, or any
employer that succeeds to all or substantially all of the
assets of the Company, Southern, or any Southern Subsidiary
under circumstances where such refusal would not amount to
Good Reason for voluntary termination of employment; or (v)
elects to receive the benefits of any other voluntary or
involuntary severance or separation program, plan or
agreement maintained by the Company in lieu of benefits
under this Agreement; provided however, that the receipt of
benefits under the terms of any retention plan or agreement
shall not be deemed to be the receipt of severance or
separation benefits for purposes of this Agreement. (b)
Severance Benefits. If Xx. XxXxxxx meets the eligibility
requirements of Paragraph 2.(a) hereof, he shall be entitled
to a cash severance benefit in 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 Xx. XxXxxxx 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
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 Xx. XxXxxxx under Code Section
280G exceeds three (3) times Xx. XxXxxxx'x "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 Xx. XxXxxxx'x Base Amount, less
all other "parachute payments" (as such term is defined
under Code Section 280G) received by Xx. XxXxxxx, 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 Paragraph 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 the tax
department of the independent public accounting firm then
responsible for preparing Southern's consolidated federal
income tax return, and such calculations or determinations
shall be binding upon the parties hereto. (c) Welfare
Benefits. If Xx. XxXxxxx meets the eligibility requirements
of Paragraph 2.(a) hereof and is not otherwise eligible to
receive retiree medical and life insurance benefits provided
to certain retirees pursuant to the terms of the Pension
Plan, the Group Health Plan and the Group Life Insurance
Plan, he shall be entitled to the benefits set forth in this
Paragraph 2.(c). (i) Xx. XxXxxxx shall be eligible to
participate in the Company's Group Health Plan, upon payment
of both the Company's and his monthly premium under such
plan, for a period of six (6) months for each of Xx.
XxXxxxx'x Years of Service, not to exceed five (5) years. If
Xx. XxXxxxx elects to receive this extended medical
coverage, he shall also be entitled to elect coverage under
the Group Health Plan for his dependents who were
participating in the Group Health Plan on Xx. XxXxxxx'x
Termination Date (and for such other dependents as may be
entitled to coverage under the provisions of the Health
Insurance Portability and Accountability Act of 1996) for
the duration of Xx. XxXxxxx'x extended medical coverage
under this Paragraph 2.(c)(i) to the extent such dependents
remain eligible for dependent coverage under the terms of
the Group Health Plan. (A) The extended medical coverage
afforded to Xx. XxXxxxx pursuant to Paragraph 2.(c)(i), as
well as the premiums to be paid by Xx. XxXxxxx 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 Xx. XxXxxxx in
connection with this extended coverage shall be due on the
first day of each month; provided, however, that if he fails
to pay his premium within thirty (30) days of its due date,
such extended coverage shall be terminated. (B) Any Group
Health Plan coverage provided under Paragraph 2.(c)(i) shall
be a part of and not in addition to any COBRA Coverage which
Xx. XxXxxxx or his dependents may elect. In the event that
Xx. XxXxxxx or his dependents become 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 Company's Group Health
Plan available to Xx. XxXxxxx or his dependents by virtue of
the provisions of Paragraph 2.(c)(i) shall terminate, except
as may otherwise be required by law, and shall not be
renewed. (ii) Xx. XxXxxxx shall be entitled to receive cash
in an amount equal to the Company's and Xx. XxXxxxx'x cost
of premiums for three (3) years of coverage under the Group
Health Plan and Group Life Insurance Plan in accordance with
the terms of such plans as of the date of the Change in
Control. (d) Incentive Plans. If Xx. XxXxxxx meets the
eligibility requirements of Paragraph 2.(a) hereof he shall
be entitled to the following benefits under the Company's
incentive plans: (i) Stock Option Plan. (A) Any of Xx.
XxXxxxx'x Options and Stock Appreciation Rights under the
Performance Stock Plan (the defined terms of which are
incorporated in this Paragraph 2.(d)(i) by reference) which
are outstanding as of the Termination Date and which are not
then exercisable and vested, shall become fully exercisable
and vested to the full extent of the original grant;
provided, that in the case of a Stock Appreciation Right, if
Xx. XxXxxxx 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 Xx. XxXxxxx 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. (B) The restrictions and deferral
limitations applicable to any of Xx. XxXxxxx'x Restricted
Stock as of the Termination Date shall lapse, and such
Restricted Stock shall become free of all restrictions and
limitations and become fully vested and transferable to the
full extent of the original grant. (C) The restrictions and
deferral limitations and other conditions applicable to any
other Awards held by Xx. XxXxxxx under the Stock Performance
Plan as of the Termination Date shall lapse, and such other
Awards shall become free of all restrictions, limitations or
conditions and become fully vested and transferable to the
full extent of the original grant. (ii) Performance Pay
Plan. Provided Xx. XxXxxxx is not entitled to benefits under
Article V of the PPP Plan, (the defined terms of which are
incorporated in this Paragraph 2.(d)(ii) by reference), if
the PPP Plan is in place through Xx. XxXxxxx'x Termination
Date and to the extent Xx. XxXxxxx is entitled to
participate therein, Xx. XxXxxxx shall be entitled to
receive cash in an amount equal to a prorated payout of his
Incentive Pay Awards under the PPP Plan for the Performance
Period in which the Termination Date shall have occurred, at
target performance under the PPP Plan and prorated by the
number of months which have passed since the beginning of
the Performance Period until the Termination Date. (iii)
Performance Dividend Plan. Provided Xx. XxXxxxx is not
entitled to benefits under the Performance Dividend Plan
(the defined terms of which are incorporated in this
Paragraph 2.(d)(iii) by reference), if the Performance
Dividend Plan is in place through Xx. XxXxxxx'x Termination
Date and to the extent Xx. XxXxxxx is entitled to
participate therein, Xx. XxXxxxx shall be entitled to
receive cash for each Award held by Xx. XxXxxxx on his
Termination Date, based on actual performance under Section
4.1 of the Performance Dividend Plan determined as of the
most recently completed calendar quarter of the Performance
Period in which the Termination Date shall have occurred,
and the Annual Dividend declared prior to the Termination
Date. (iv) Other Short Term Incentive Plans. The provisions
of this Paragraph 2.(d)(iv) shall apply if and to the extent
that Xx. XxXxxxx is a participant in any other "short term
compensation plan" not otherwise previously referred to in
this Paragraph 2.(d). Provided Xx. XxXxxxx is not otherwise
entitled to a plan payout under any change of control
provisions of such plans, if the "short term compensation
plan" is in place as of the Termination Date and to the
extent Xx. XxXxxxx is entitled to participate therein, Xx.
XxXxxxx shall receive cash in an amount equal to his award
under the Company's "short term incentive plan" for the
annual performance period in which the Termination Date
shall have occurred, at Xx. XxXxxxx'x target performance
level and prorated by the number of months which have passed
since the beginning of the annual performance period until
his Termination Date. For purposes of this Paragraph
2.(d)(iv) 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 based upon articulated
performance criteria. (e) Payment of Benefits. Any amounts
due under this Agreement shall be paid in one (1) lump sum
payment as soon as administratively practicable following
the later of: (i) Xx. XxXxxxx'x Termination Date, or (ii)
upon Xx. XxXxxxx'x tender of an effective Waiver and Release
to the Company 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. (f) Benefits in the Event of Death. In the
event of Xx. XxXxxxx'x death prior to the payment of all
amounts due under this Agreement, Xx. XxXxxxx'x estate shall
be entitled to receive as due any amounts not yet paid under
this Agreement upon the tender by the executor or
administrator of the estate of an effective Waiver and
Release. (g) Legal Fees. In the event of a dispute between
Xx. XxXxxxx and the Company with regard to any amounts due
hereunder, if any material issue in such dispute is finally
resolved in Xx. XxXxxxx'x favor, the Company shall reimburse
Xx. XxXxxxx'x legal fees incurred with respect to all issues
in such dispute in an amount not to exceed fifty thousand
dollars ($50,000). (h) Employee Outplacement Services. Xx.
XxXxxxx shall be eligible to participate in the Employee
Outplacement Program, which program shall not be less than
six (6) months duration measured from Xx. XxXxxxx'x
Termination Date. (i) Non-qualified Retirement and Deferred
Compensation Plans. The Parties agree that subsequent to a
Change in Control, any claims by Xx. XxXxxxx 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 provisions and
procedures set forth in Paragraph 5 hereof and if any
material issue in such dispute is finally resolved in Xx.
XxXxxxx'x favor, the Company shall reimburse Xx. XxXxxxx'x
legal fees in the manner provided in Paragraph 2.(g) hereof.
3. Transfer of Employment. In the event that Xx. XxXxxxx'x
employment by the Company is terminated during the two year
period following a Change in Control and Xx. XxXxxxx accepts
employment by Southern, a Southern Subsidiary, or any
employer that succeeds to all or substantially all of the
assets of the Company, Southern or any Southern Subsidiary,
the Company shall assign this Agreement to Southern, such
Southern Subsidiary, or successor employer, Southern shall
accept such assignment or cause such Southern Subsidiary or
successor employer to accept such assignment, and such
assignee shall become the "Company" for all purposes
hereunder. 4. No Mitigation. If Xx. XxXxxxx is otherwise
eligible to receive benefits under Paragraph 2 of this
Agreement, he shall have no duty or obligation to seek other
employment following his Termination Date and, except as
otherwise provided in Paragraph 2.(a)(iii) hereof, the
amounts due Xx. XxXxxxx hereunder shall not be reduced or
suspended if Xx. XxXxxxx accepts such subsequent employment.
5. Arbitration. (a) 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 Paragraph 5 are not
intended to apply to any other disputes, claims or
controversies arising out of or relating to Xx. XxXxxxx'x
employment by the Company or the termination thereof. (b)
Arbitration shall be initiated by serving a written notice
of demand for arbitration to Xx. XxXxxxx, in the case of the
Company, or to the Southern Board, in the case of Xx.
XxXxxxx. (c) The arbitration shall be held in Atlanta,
Georgia. The arbitrators shall apply the law of the State of
Georgia, to the extent not preempted by federal law,
excluding any law which would require the application of the
law of another state. (d) The parties shall appoint
arbitrators 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 Xx. XxXxxxx, 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. (e) The arbitration filing fee shall be paid by Xx.
XxXxxxx. All other costs of arbitration shall be borne
equally by Xx. XxXxxxx 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 Xx. XxXxxxx'x favor and Xx. XxXxxxx is reimbursed legal
fees under Paragraph 2.(g) hereof. (f) The parties agree
that they will faithfully observe the rules that govern any
arbitration between them, they will abide by and perform any
award rendered by the arbitrators in any such arbitration,
including any award of injunctive relief, and a judgment of
a court having jurisdiction may be entered upon an award.
(g) The parties agree that nothing in this Paragraph 5 is
intended to preclude upon application of either party any
court having jurisdiction from issuing and enforcing in any
lawful manner such temporary restraining orders, preliminary
injunctions, and other interim measures of relief as may be
necessary to prevent harm to a party's interests or as
otherwise may be appropriate pending the conclusion of
arbitration proceedings pursuant to this Agreement;
regardless of whether an arbitration proceeding under this
Paragraph 5 has begun. The parties further agree that
nothing herein shall 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
Paragraph 5.
6. Miscellaneous.
-------------
(a) Funding of Benefits. Unless the Board in its discretion shall
determine otherwise, the benefits payable to Xx. XxXxxxx 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.
(b) Withholding. There shall be deducted from the payment of any
benefit 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 Xx. XxXxxxx.
(c) Assignment. Xx. XxXxxxx shall have no rights to sell, assign,
transfer, encumber, or otherwise convey the right to receive the
payment of any benefit due hereunder, which payment and the rights
thereto are expressly declared to be nonassignable and
nontransferable. Any attempt to do so shall be null and void and of no
effect.
(d) Amendment and Termination. The Agreement may be amended or
terminated only by a writing executed by the parties.
(e) Construction. This Agreement shall be construed in accordance
with and governed by the laws of the State of Georgia, to the extent
not preempted by federal law, disregarding any provision of law which
would require the application of the law of another state.
(f) Pooling Accounting. Notwithstanding anything to the contrary
herein, if, but for any provision of this Agreement, a Change in
Control transaction would otherwise be accounted for as a
pooling-of-interests under XXX Xx.00 ("Pooling Accounting") (after
giving effect to any and all other facts and circumstances affecting
whether such Change in Control transaction would use Pooling
Accounting), such provision or provisions of this Agreement which
would otherwise cause the Change in Control transaction to be
ineligible for Pooling Accounting shall be void and ineffective in
such a manner and to the extent that by eliminating such provision or
provisions of this Agreement, Pooling Accounting would be required for
such Change in Control transaction.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement this ____ day of __________________, 2000.
THE SOUTHERN COMPANY
By: ____________________________________
SOUTHERN COMPANY SERVICES, INC.
By: ____________________________________
XX. XXXXXXX
-----------------------------
Xxxxxxx Xxxxxxx XxXxxxx
Exhibit A
CHANGE IN CONTROL AGREEMENT
Waiver and Release
The attached Waiver and Release is to be given to Xx. Xxxxxxx Xxxxxxx
XxXxxxx upon the occurrence of an event that triggers eligibility for severance
benefits under the Change in Control Agreement, as described in Paragraph 2(a)
of such agreement.
CHANGE IN CONTROL AGREEMENT
Waiver and Release
I, Xxxxxxx Xxxxxxx XxXxxxx, understand that I am entitled to receive
the severance benefits described in Section 2 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 the benefits I elect to receive, I hereby irrevocably
waive and release all claims, of any kind whatsoever, whether known or unknown
in connection with any claim which I ever had, may have, or now have against The
Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, Savannah Electric and Power Company,
Southern Communication Services, Inc., Southern Company Services, Inc., Southern
Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern
Nuclear Operating Company, Inc., Southern Energy, Inc. and other direct or
indirect subsidiaries of The Southern Company and their past, present and future
officers, directors, employees, agents and attorneys. Nothing in this Waiver
shall be construed to release claims or causes of action under the Age
Discrimination in Employment Act 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 Southern 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.
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 _____.
Xxxxxxx Xxxxxxx XxXxxxx
Sworn to and subscribed to me this
____ day of ____________, _____.
Notary Public
My Commission Expires:
(Notary Seal)
Acknowledged and Accepted by the Company, as defined in the Waiver.
By:
-----------------------------------
Date:
-----------------------------------
