Exhibit 10(a)8
AMENDED AND RESTATED
CHANGE IN CONTROL AGREEMENT
THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT
("Agreement")
made and entered into by and between The Southern Company
("Southern"), Southern
Company Services, Inc. (the "Company") and Mr. G. Edison Holland
("Mr. Holland")
(hereinafter collectively referred to as the "Parties") is
effective January 1,
2007. This Agreement amends and restates the Amended and Restated
Change in
Control Agreement entered into by Mr. Holland, Southern and the
Company,
effective June 1, 2004.
WITNESSETH:
WHEREAS, Mr. Holland is the Executive Vice President and General
Counsel of
the Company;
WHEREAS, the Company wishes to provide to Mr. Holland certain
severance
benefits under certain circumstances following a change in control
(as defined
herein) of Southern or the Company;
NOW, THEREFORE, in
consideration of the premises, and the agreements of the
Parties set forth in this Agreement, and other good and valuable
consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereby
agree as follows:
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ARTICLE 1 - DEFINITIONS.
For
purposes of this Agreement, the following terms shall have the
following meanings:
1.1
"Annual Compensation" shall mean Mr. Holland's Base Salary plus
Target
Bonus under the Company's Short Term Bonus Plan.
1.2
"Base Salary" shall mean Mr. Holland's highest annual base salary
rate
during the twelve (12) month period immediately preceding the date
the Change in
Control is Consummated.
1.3
"Beneficial Ownership" shall mean beneficial ownership within
the
meaning of Rule 13d-3 promulgated under the Exchange Act.
1.4
"Benefit Index" shall mean the Hewitt Associates' Benefit Index(r),
or
if such index is no longer available, cannot be used, or if
pursuant to Section
1.5 hereof another Benefits Consultant has been chosen by the
Compensation
Committee, such other comparable index utilized by the Benefits
Consultant.
1.5
"Benefits Consultant" shall mean Hewitt Associates or such
other
nationally recognized employee benefits consulting firm as shall be
designated
in writing by the Compensation Committee upon the occurrence of a
Preliminary
Change in Control that would result in a Subsidiary Change in
Control.
1.6
"Board of Directors" shall mean the board of directors of the
Company.
1.7
"Business Combination" shall mean a reorganization, merger or
consolidation of Southern or sale or other disposition of all or
substantially
all of the assets of Southern.
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1.8
"Change in Control" shall mean,
(a) with respect to Southern, the occurrence of any of the
following:
(i) The Consummation of an acquisition by any Person of
Beneficial Ownership of 20% or more of Southern's Voting
Securities;
provided, however, that for purposes of this Section 1.8(a)(i)
the
following acquisitions of Southern's Voting Securities shall
not
constitute a Change in Control:
(A) any acquisition directly from Southern;
(B) any acquisition by Southern;
(C) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by Southern or any Southern
Subsidiary;
(D) any acquisition by a qualified pension plan or publicly
held mutual fund;
(E) any acquisition by an employee of Southern or a Southern
Subsidiary, or Group composed exclusively of such employees; or
(F) any Business Combination which would not otherwise
constitute a Change in Control because of the application of
clauses (A), (B) or (C) of Section 1.8(a)(iii);
(ii) A change in the composition of the Southern Board whereby
individuals who constitute the Incumbent Board cease for any reason
to
constitute at least a majority of the Southern Board; or
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(iii) The Consummation of a Business Combination, unless,
following such Business Combination, all of the following three
conditions are met:
(A) all or substantially all of the individuals and entities
who held Beneficial Ownership, respectively, of Southern's
Voting
Securities immediately prior to such Business Combination hold
Beneficial Ownership, directly or indirectly, of 65% or more of
the combined voting power of the Voting Securities of the
corporation surviving or resulting from such Business
Combination, (including, without limitation, a corporation
which
as a
result of such Business Combination holds Beneficial
Ownership of all or substantially all of Southern's Voting
Securities or all or substantially all of Southern's assets)
(such surviving or resulting corporation to be referred to as
"Surviving Company"), in substantially the same proportions as
their ownership, immediately prior to such Business
Combination,
of Southern's Voting Securities;
(B)
no Person (excluding any qualified pension plan,
publicly held mutual fund, Group composed exclusively of
Employees or employee benefit plan (or related trust) of
Southern, any Southern Subsidiary or Surviving Company) holds
Beneficial Ownership, directly or indirectly, of 20% or more of
the combined voting power of the then outstanding Voting
Securities of Surviving Company except to the extent that such
ownership existed prior to the Business Combination; and
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(C) at least a majority of the members of the board of
directors of Surviving Company were members of the Incumbent
Board on the date of the Preliminary Change in Control.
(b) with respect to the Company, the occurrence of any of the
following:
(i) The Consummation of an acquisition by any Person of
Beneficial Ownership of 50% or more of the combined voting power
of
the then outstanding Voting Securities of the Company;
provided,
however, that for purposes of this Section 1.8(b)(i), any
acquisition
by Mr. Holland, any other employee of Southern or a Southern
Subsidiary, or Group composed entirely of such employees, any
qualified pension plan, any publicly held mutual fund or any
employee
benefit plan (or related trust) sponsored or maintained by Southern
or
any Southern Subsidiary shall not constitute a Change in
Control;
(ii) The Consummation of a reorganization, merger or
consolidation of the Company ("Company Business Combination"), in
each
case, unless, following such Company Business Combination, Southern
or
a Southern Subsidiary Controls the corporation surviving or
resulting
from such Company Business Combination; or
(iii) The Consummation of the sale or other disposition of all
or
substantially all of the assets of the Company to an entity
which
Southern or a Southern Subsidiary does not Control ("Subsidiary
Change
in Control").
1.9
"COBRA Coverage" shall mean any continuation coverage to which
Mr.
Holland or his dependents may be entitled pursuant to Code Section
4980B.
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1.10
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
1.11
"Common Stock" shall mean the common stock of Southern.
1.12
"Company" shall mean Southern Company Services, Inc., its
successors
and assigns.
1.13
"Compensation Committee" shall mean the Compensation and
Management
Succession Committee of the Southern Board.
1.14 "Consummation"
shall mean the completion of the final act necessary to
complete a transaction as a matter of law, including, but not
limited to, any
required approvals by the corporation's shareholders and board of
directors, the
transfer of legal and beneficial title to securities or assets and
the final
approval of the transaction by any applicable domestic or foreign
governments or
governmental agencies.
1.15
"Control" shall mean, in the case of a corporation, Beneficial
Ownership of more than 50% of the combined voting power of the
corporation's
Voting Securities, or in the case of any other entity, Beneficial
Ownership of
more than 50% of such entity's voting equity interests.
1.16
"Economic Equivalent" or "Economic Equivalence" shall have the
meaning
set forth in Section 1.23(f) hereof.
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1.17
"Employee Outplacement Program" shall mean the program established
by
the Company from time to time for the purpose of assisting
employees in finding
employment outside of the Company which provides for the following
services: (a)
self assessment, career decision and goal setting; (b) job market
research and
job sources; (c) networking and interviewing skills; (d) planning
and
implementation strategy; (e) resume writing, job hunting methods
and salary
negotiation; and (f) office support and job search resources.
1.18
"Company" shall mean Southern Company Services, Inc., its
successors
and assigns.
1.19
"Company Business Combination" shall have the meaning set forth
in
Section 1.8(b)(ii) hereof.
1.20
"Equity Based Bonus Plan" shall mean a plan or arrangement that
provides for the grant to participants of stock options, restricted
stock, stock
appreciation rights, phantom stock, phantom stock appreciation
rights or any
other similar rights the terms of which provide a participant with
the potential
to receive the benefit of any increase in value of the underlying
equity or
notional amount (e.g., number of phantom shares) from the date of
grant through
a subsequent date.
1.21
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as
amended.
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1.22
"Executive Employee" shall mean those employees of the Company
of
Grade Level 10 or above.
1.23
"Good Reason" shall mean, without Mr. Holland's express written
consent, after written notice to the Company, and after a thirty
(30) day
opportunity for the Company to cure, the continuing occurrence of
any of the
events described in Subsections (a)(i), (b)(i), (c)(i), (d)(i) or
(d)(ii) of
this Section 1.23. In the case of Mr. Holland claiming benefits
under this
Agreement upon a Subsidiary Change in Control, the foregoing notice
and
opportunity to cure will be satisfied if Mr. Holland provides to
the
Compensation Committee a copy of his written offer of employment by
the
acquiring company within thirty (30) days of such offer along with
a written
explanation describing how the terms of such offer satisfy the
requirements of
Subsections (a)(ii), (b)(ii), (c)(ii), (d)(iii) or (e) of this
Section 1.23. The
Compensation Committee shall make a determination of whether such
written offer
of employment satisfies the requirements of Sections 1.23(a)(ii),
(b)(ii),
(c)(ii), (d)(iii) or (e) hereof upon consultation with the Benefits
Consultant
and shall notify Mr. Holland of its decision within thirty (30)
days of receipt
of Mr. Holland's written offer of employment. Any dispute regarding
the
Compensation Committee's decision shall be resolved in accordance
with Article
III hereof.
(a) Inconsistent Duties.
(i) Change in Control. A meaningful and detrimental alteration
in
Mr. Holland's position or in the nature or status of his
responsibilities from those in effect immediately prior to the
Change
in Control.
(ii) Subsidiary Change in Control. In the event of a Subsidiary
Change in Control, Good Reason shall exist if Mr. Holland is
offered
employment with the acquiring employer with a job title, duties
and
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status which are materially and detrimentally lower than Mr.
Holland's
job title, duties and status in effect at the Company as of the
date
the offer of employment is received.
(b) Reduced Compensation.
(i) Change in Control. A reduction of five percent (5%) or more
by the Company in any of the following amounts of compensation
expressed
in subparagraphs (A), (B) or (C) hereof, except for a less
than ten percent (10%), across-the-board reduction in such
compensation amounts similarly affecting ninety-five percent (95%)
or
more of the Executive Employees eligible for such compensation:
(A) Mr. Holland's Base Salary;
(B) the sum of Mr. Holland's Base Salary plus Target Bonus
under the Company's Short Term Bonus Plan, as in effect on the
day immediately preceding the day the Change in Control is
Consummated; or
(C) the sum of Mr. Holland's Base Salary plus Target Bonus
under the Company's Short Term Bonus Plan and Long Term Bonus
Plan plus the Target Bonus under the Company's Equity Based
Bonus
Plan, each of which as in effect on the day immediately
preceding
the day the Change in Control is Consummated.
(ii) Subsidiary Change in Control. In the event of a Subsidiary
Change in Control, Good Reason shall exist if Mr. Holland is
offered
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Base Salary, Target Bonus under the acquiring company's Short
Term
Bonus Plan and Long Term Bonus Plan and Target Bonus under the
acquiring company's Equity Based Bonus Plan that, in the aggregate,
is
less than ninety percent (95%) of Mr. Holland's Base Salary
plus
Target Bonus under the Company's Short Term Bonus Plan and Long
Term
Bonus Plan, plus Target Bonus under the Company's Equity Based
Bonus
Plan, each of which as in effect on the day the offer of employment
is
received;
(c) Relocation.
(i) Company. A change in Mr. Holland's work location to a
location more than fifty (50) miles from the facility where Mr.
Holland was located on the day immediately preceding the day
the
Change in Control is Consummated, unless such new work location
is
within fifty (50) miles of Mr. Holland's principal place of
residence
on the day immediately preceding the day the Change in Control
is
Consummated. The acceptance, if any, by Mr. Holland of employment
by
the Company at a work location which is outside the fifty mile
radius
set forth in this Section 1.23(c) shall not be a waiver of Mr.
Holland's right to refuse subsequent transfer by the Company to
a
location which is more than fifty (50) miles from Mr. Holland's
principal place of residence on the day immediately preceding the
day
the Change in Control is Consummated, and such subsequent
nonconsensual transfer shall be "Good Reason" under this
Agreement;
(ii) Subsidiary Change in Control. In the case of a Subsidiary
Change in Control, Good Reason shall exist if Mr. Holland's
work
location under the terms of the offer of employment from the
acquiring
employer is more than fifty (50) miles from Mr. Holland's work
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location at the Company as of the date the offer of employment by
the
acquiring employer is received.
(d) Benefits and Perquisites.
(i) Change in Control - Retirement and Welfare Benefits. The
taking of any action by the Company that would directly or
indirectly
cause a Material Reduction in the Retirement and Welfare Benefits
to
which Mr. Holland is entitled under the Company's Retirement
and
Welfare Benefit plans in which Mr. Holland was participating on
the
day immediately preceding the day the Change in Control is
Consummated.
(ii) Vacation and Paid Time Off. The failure by the Company to
provide Mr. Holland with the number of paid vacation days or,
if
applicable, paid time off days to which Mr. Holland is entitled on
the
basis of years of service with the Company in accordance with
the
Company's normal vacation policy or the paid time off program
(whichever applicable) in effect on the day immediately preceding
the
day the Change in Control is Consummated (except for
across-the-board
vacation policy or paid time off program changes or policy or
program
terminations similarly affecting at least ninety-five percent (95%)
of
all Executive Employees of the Company).
(iii) Subsidiary Change in Control. In the event of a
Subsidiary
Change in Control, Good Reason shall exist if Mr. Holland is
offered a
package of Retirement and Welfare Benefits by the acquiring
employer
that
is not Economically Equivalent, as determined under Sections
1.23(f) and (g) hereof.
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(e) Adoption of Severance Agreement. In the event of a
Subsidiary
Change in Control, Good Reason shall exist if the offer of
employment by
the
acquiring employer does not include an agreement to enter into
a
severance agreement substantially in the form of Exhibit B attached
hereto.
(f) Economic Equivalence. For purposes of Section 1.23(d)(iii)
above,
an
acquiring employer's package of Retirement and Welfare Benefits
shall be
considered Economically Equivalent if, in the written opinion of
the
Benefits Consultant, the anticipated, employer-provided value of
what Mr.
Holland is expected to derive from the acquiring employer's
Retirement and
Welfare Benefits is equal to or greater than ninety percent (90%)
of such
value Mr. Holland would have derived from the Company's Retirement
and
Welfare Benefits using the Benefit Index.
(g) Benefit Index Guidelines. For purposes of Section 1.23(f)
above,
the
following guidelines shall be followed by the Company, the
acquiring
employer and the Benefits Consultant in the performance of the
Benefit
Index calculations:
(i) Upon a Preliminary Change in Control that if Consummated
would result in a Subsidiary Change in Control, the Company and
the
acquiring employer shall provide to the Benefits Consultant the
applicable benefit plan provisions for the plan year in which
the
Subsidiary Change in Control is anticipated to occur. Plan
provisions
for the immediately preceding plan year may be provided if the
Benefits Consultant determines that there have been no changes to
such
plans that would materially affect the determination of
Economic
Equivalence. If the acquiring employer's relevant plan provisions
have
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not previously been included in the Benefits Consultant's
Benefit
Index database, the acquiring employer shall provide to the
Benefits
Consultant such plan information as the Benefits Consultant
shall
request in writing as soon as practicable following such request.
The
Compensation Committees shall take such action as is reasonably
required to facilitate the transfer of such information from
the
acquiring employer to the Benefits Consultant.
(ii) The standard Benefit Index assumptions for the plan year
from which the plan provisions are taken shall be used.
(iii) The Company shall provide to the Benefit Consultant
actual
data for
its Employees.
(iv) The determination of whether or not the acquiring
employer's
Retirement and Welfare Benefits are Economically Equivalent to
the
Retirement and Welfare Benefits provided to Mr. Holland by the
Company
shall be determined on an aggregate basis. All assessments
shall
consider all benefits in total and no individual-by-individual,
plan-by-plan determination of Economic Equivalence shall be
made.
1.24
"Group" shall have the meaning set forth in Section 14(d) of
the
Exchange Act.
1.25
"Group Health Plan" shall mean the group health plan covering
Mr.
Holland, as such plan may be amended from time to time.
1.26
"Group Life Insurance Plan" shall mean the group life insurance
plan
covering Mr. Holland, as such plan may be amended from time to
time.
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1.27
"Incumbent Board" shall mean those individuals who constitute
the
Southern Board as of February 23, 2006, plus any individual who
shall become a
director subsequent to such date whose election or nomination for
election by
Southern's shareholders was approved by a vote of at least 75% of
the directors
then comprising the Incumbent Board. Notwithstanding the foregoing,
no
individual who shall become a director of the Southern Board
subsequent to
February 23, 2006 whose initial assumption of office occurs as a
result of an
actual or threatened election contest (within the meaning of Rule
14a-11 of the
Regulations promulgated under the Exchange Act) with respect to the
election or
removal of directors or other actual or threatened solicitation of
proxies or
consents by or on behalf of a Person other than the Southern Board
shall be a
member of the Incumbent Board.
1.28
"Long Term Bonus Plan" shall mean any bonus type plan or
arrangement
designed to provide incentive based compensation to participants
upon the
achievement of objective or subjective goals that measure
performance over a
period of more than twelve months.
1.29
"Month of Service" shall mean any calendar month during which
Mr.
Holland has worked at least one (1) hour or was on approved leave
of absence
while in the employ of the Company or any other Southern
Subsidiary.
1.30
"Material Reduction" shall mean (i) any change in a retirement plan
or
arrangement that has the effect of reducing the present value of
the projected
benefits to be provided to Mr. Holland by five percent (5%) or
more, (ii) any
five percent (5%) or more reduction in medical, health and accident
and
disability benefits as a percentage of premiums or premium
equivalents in
accordance with the Company's prior practice as measured over a
period of the
three previous plan years from the date the Change in Control is
Consummated, or
(iii) any five percent (5%) or more reduction in employer matching
funds as a
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percentage of employee contributions in accordance with the
Company's prior
practice measured over a period of the previous three plan years
from the date
the Change in Control is Consummated.
1.31
"Omnibus Plan" shall mean the Southern Company Omnibus
Incentive
Compensation Plan, and the Design and Administrative Specifications
duly adopted
thereunder, as in effect on the date a Change in Control is
Consummated.
1.32
"Pension Plan" shall mean The Southern Company Pension Plan or
any
successor thereto, as in effect on the date a Change in Control is
Consummated.
1.33
"Performance Dividend Program" or "PDP" shall mean the
Performance
Dividend Program under the Omnibus Plan or any replacement thereto,
as in effect
on the date a Change in Control is Consummated.
1.34
"Performance Pay Program" or "PPP" shall mean the Performance
Pay
Program under the Omnibus Plan or any replacement thereto, as in
effect on the
date a Change in Control is Consummated.
1.35
"Person" shall mean any individual, entity or group within the
meaning
of Section 13(d)(3) or 14(d)(2) of Exchange Act.
1.36
"Preliminary Change in Control" shall mean the occurrence of any
of
the following as administratively determined by the Southern
Committee.
(a) Southern or the Company has entered into a written agreement,
such
as,
but not limited to, a letter of intent, which, if Consummated,
would
result in a Change in Control;
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(b) Southern, the Company or any Person publicly announces an
intention to take or to consider taking actions which, if
Consummated,
would result in a Change of Control under circumstances where
the
Consummation of the announced action or intended action is legally
and
financially possible;
(c) Any Person achieves the Beneficial Ownership of fifteen
percent
(15%) or more of the Common Stock; or
(d) The Southern Board or the Board of Directors has declared that
a
Preliminary Change of Control has occurred.
1.37
"Retirement and Welfare Benefits" shall mean benefits provided by
the
following types of plans and arrangements: pension plans, defined
contribution
plans (matched savings, profit sharing, money purchase, ESOP, and
similar plans
and arrangements), plans providing for death benefits while
employed or retired
(life insurance, survivor income, and similar plans and
arrangements), plans
providing for short-term disability benefits (including accident
and sick time),
plans providing for long-term disability benefits, plans providing
health-care
benefits (including reimbursements during active employment or
retirement
related to expenses for medical, vision, hearing, dental, and
similar plans and
arrangements).
1.38
"Separation Date" shall mean the date on which Mr. Holland's
employment with the Company is terminated; provided, however, that
solely for
purposes of Section 2.2(c) hereof, if, upon termination of
employment with the
Company, Mr. Holland is deemed to have retired pursuant to the
provisions of
Section 2.3 hereof, Mr. Holland's Separation Date shall be the
effective date of
his retirement pursuant to the terms of the Pension Plan.
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1.39
"Short Term Bonus Plan" shall mean any bonus type plan or
arrangement
designed to provide incentive based compensation to participants
upon the
achievement of objective or subjective goals that measure
performance over a
period of twelve months or less.
1.40
"Southern" shall mean The Southern Company, its successors and
assigns.
1.41
"Southern Board" shall mean the board of directors of Southern.
1.42
"Southern Committee" shall mean the committee comprised of the
Chairman of the Southern Board, the Chief Financial Officer of
Southern and the
General Counsel of Southern.
1.43
"Southern Subsidiary" shall mean any corporation or other
entity
Controlled by Southern or another Southern Subsidiary.
1.44
"Subsidiary Change in Control" shall have the meaning set forth
in
Section 1.8(b)(iii) hereof.
1.45
"Target Bonus" shall mean the amount of incentive compensation
expressed as either a percent of salary or pay, an expected dollar
amount, the
number of awards granted or such other quantifiable measure to
determine the
amount to be paid
