Exhibit 10(a)23
SOUTHERN COMPANY
SENIOR EXECUTIVE CHANGE IN
CONTROL
SEVERANCE PLAN
AMENDED AND
RESTATED
SOUTHERN COMPANY
SENIOR EXECUTIVE CHANGE IN CONTROL
SEVERANCE 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 Senior Executive
Change in Control Severance Plan effective as of the date of
execution. The Plan was originally effective May 1, 2003 and
amended effective January 1, 2007. The Plan is an unfunded
“top hat” plan designed to provide certain severance
benefits to a select group of management or highly compensated
employees, to be paid solely from the general assets of the
respective Employing Companies.
1.2
Purpose . The Plan is primarily designed to provide benefits
to certain key executive employees of the Employing Companies,
whose employment is terminated subsequent to a change in control of
Southern or their respective Employing Company.
ARTICLE II -
DEFINITIONS
2.1 “
Annual Compensation ” shall mean a Participant’s
Base Salary plus Target Bonus under his Employing Company’s
Short Term Bonus Plan.
2.2 “
Base Salary ” shall mean a Participant’s highest
annual base salary rate during the twelve (12) month period
immediately preceding the date the Change in Control is
Consummated.
2.3 “
Beneficial Ownership ” shall mean beneficial ownership
within the meaning of Rule 13d-3 promulgated under the Exchange
Act.
2.4 “
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 2.4 hereof
another Benefits Consultant has been chosen by the Compensation
Committee, such other comparable index utilized by the Benefits
Consultant.
2.5 “
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.
2.6 “
Board of Directors ” shall mean the board of directors
of the Company.
2.7 “
Business Combination ” shall mean a reorganization,
merger or consolidation of Southern with another corporation or an
entity treated as a corporation for United States income tax
purposes.
2.8 “
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 (during the 12 month period ending on the date of the
most recent acquisition by such Person) of 20% or more of
Southern’s Voting Securities; provided, however, that for
purposes of this Section 2.8(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) and (C)
of Section 2.8(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
(iii) Consummation
of a Business Combination, unless, following such Business
Combination, all of the following three conditions are
met:
(A) all or
substantially all of the individuals and entities who held
Beneficial Ownership, respectively, of Southern’s Voting
Securities immediately prior to such Business Combination 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
(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
an Employing Company, the occurrence of any of the
following:
(i) The
Consummation of an acquisition by any Person of Beneficial
Ownership of 50% or more of the combined voting power of the then
outstanding Voting Securities of an Employing Company; provided,
however, that for purposes of this Section 2.8(b)(i), any
acquisition by an 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 an
Employing Company with another corporation or an entity treated as
a corporation for United States federal income tax purposes (an
“Employing Company Business Combination”), in each
case, unless, following such Employing Company Business
Combination, Southern or a Southern Subsidiary Controls the
corporation surviving or resulting from such Employing Company
Business Combination; or
(iii) The
Consummation of the sale or other disposition of all or
substantially all of the assets of an Employing Company to an
entity which Southern or a Southern Subsidiary does not Control
(“Subsidiary Change in Control”).
2.9 “
COBRA Coverage ” shall mean any continuation coverage
to which a Participant or his dependents may be entitled pursuant
to Code Section 4980B.
2.10 “
Code ” shall mean the Internal Revenue Code of 1986,
as amended.
2.11 “
Common Stock ” shall mean the common stock of
Southern.
2.12 “
Company ” shall mean Southern Company Services, Inc.,
its successors and assigns.
2.13 “
Compensation Committee ” shall mean the Compensation
and Management Succession Committee of the Southern
Board.
2.14 “
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.
2.15 “
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.
2.16 “
Economic Equivalent ” or “ Economic
Equivalence ” shall have the meaning set forth in Section
2.24(f) hereof.
2.17 “
Effective Date ” shall mean the date of execution
hereof.
2.18 “
Employee ” shall mean those employees of Southern, the
Company or any other Southern Subsidiary identified in either
Subsection (a) or (b) of this Section 2.18, except as otherwise
provided in Subsection (c) hereof.
(a) The
following officers shall participate in the Plan:
(i) Chief
Executive Officer of Southern;
(ii) Chief
Financial Officer of Southern;
(iii) General
Counsel of Southern;
(iv) External
Affairs Executive Vice President of Southern;
(v) Chief
Production Officer of Southern;
(vi) Chief
Executive Officer of Alabama Power Company;
(vii) Chief
Executive Officer of Georgia Power Company;
(viii) Chief
Executive Officer of Gulf Power Company;
(ix) Chief
Executive Officer of Mississippi Power Company;
(x) Chief
Executive Officer of Southern Communications Services,
Inc.;
(xi) Chief
Executive Officer of Southern Nuclear Operating Company,
Inc.
(xii) Executive
Vice President of Southern Company Services, Inc. responsible for
the Southern Company Generation and Energy Marketing business
unit;
(xiii) Executive Vice
President of Southern Nuclear Operating Company, Inc..
(b) Any
employee of Southern, the Company or any other Southern Subsidiary
that the Compensation Committee has designated as eligible to
participate in the Plan based upon the recommendation of the Chief
Executive Officer of Southern.
(c) Notwithstanding
Subsections (a) and (b) above, no employee shall participate in the
Plan if either of the following circumstances apply: (1) the
Compensation Committee has designated the employee as ineligible to
participate in the Plan based upon the recommendation of the Chief
Executive Officer of Southern; or (2) if, prior to a Change in
Control, the employee has entered into a change in control
agreement with his Employing Company.
(d) The
Compensation Committee may deem one or more Employees of a
particular Southern Subsidiary to be employed by another Employing
Company for purposes of this Plan. Such action shall be in writing
and shall cause such an Employee to be entitled to benefits under
this Plan in the event of a Change in Control of his deemed
Employing Company, not his Employing Company. Notwithstanding the
above, no Employee shall participate in the Plan if, prior to a
Change in Control, the Employee is entitled to, and elects to
receive benefits under any other change in control severance plan,
agreement or arrangement.
(e) An
Employee shall immediately cease to be an Employee who is eligible
to participate in the Plan if he no longer holds one of the named
positions set forth in Subsection (a) of this Section 2.18 unless
the Compensation Committee has designated
(upon the recommendation of the
Chief Executive Officer of Southern) the Employee as eligible to
participate in the Plan under Subsection (b) hereof.
2.19 “
Employee Outplacement Program ” shall mean the program
established by an Employing Company from time to time for the
purpose of assisting Participants covered by the Plan in finding
employment outside of the Employing Company which provides for the
following services:
(a) self
assessment, career decision and goal setting;
(b) job
market research and job sources;
(c) networking
and interviewing skills;
(d) planning
and implementation strategy;
(e) resume
writing, job hunting methods and salary negotiation; and
(f) office
support and job search resources.
2.20 “
Employing Company ” or “ Employer ”
shall mean the Company, or any other Southern Subsidiary, which the
Board of Directors may from time to time determine to bring under
the Plan and which shall adopt the Plan, and any successor of any
of them. The term “Employing Company” or
“Employer” shall also mean any other corporation or
entity Controlled by Southern which the Compensation Committee has
determined to bring under the Plan and which shall adopt the Plan,
and any successor of any of them.
2.21 “
Employing Company Business Combination ” shall have
the meaning set forth in Section 2.7(b)(ii) hereof.
2.22 “
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.
2.23 “
Exchange Act ” shall mean the Securities Exchange Act
of 1934, as amended.
2.24 “
Executive Employee ” shall mean those employees of an
Employing Company of Grade Level 10 or above regardless of whether
or not they participate in the Plan.
2.25 “
Good Reason ” shall mean, without an Employee’s
express written consent, after written notice to his Employing
Company within ninety (90) days of the initial occurrence of the
condition giving rise to Good Reason as provided herein, and after
a thirty (30) day opportunity for the Employee’s Employing
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 2.24. In the case of an Employee or Support
Employee claiming benefits under this Plan upon a Subsidiary Change
in Control, the foregoing notice and opportunity to cure will be
satisfied if the Employee or Support Employee provides to the
Compensation Committee a copy of his or her 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 2.24. The
Compensation Committee shall make a determination of whether such
written offer of employment satisfies the requirements of Sections
2.24(a)(ii), (b)(ii), (c)(ii), (d)(iii) or (e) hereof upon
consultation with the Benefits Consultant and shall notify the
Participant of its decision within thirty (30) days of receipt of
the Participant’s written offer of employment. Any dispute
regarding the Compensation Committee ’s decision shall
be resolved in accordance with Article V hereof. This definition of
“Good Reason” is intended to
constitute an involuntary separation
from service as contemplated by Treasury Regulation section
1.409A-1(n)(2).
(a)
Inconsistent Duties .
(i)
Change in Control . A meaningful and detrimental alteration
in the Employee’s position or in the nature or status of his
responsibilities from those in effect immediately prior to the
Change in Control.
(ii)
Subsidiary Change in Control . In the event of a Subsidiary
Change in Control, Good Reason shall exist if an Employee is
offered employment with the acquiring employer with a job title,
duties and status which are materially and detrimentally lower than
the Employee’s job title, duties and status in effect at his
Employing Company on the date the offer of employment is received
from the acquiring company.
(b)
Reduced Compensation .
(i)
Change in Control . A reduction of five percent (5%) or more
by the Employing 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 of the
Employing Company eligible for such compensation:
(A) the
Employee’s Base Salary;
(B) the sum
of the Employee’s Base Salary plus Target Bonus under his
Employing 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 the Employee’s Base Salary plus Target Bonus under his
Employing Company’s Short Term Bonus Plan and Long Term Bonus
Plan plus the Target Bonus under his Employing 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 . Notwithstanding Section
2.25(a)(i) hereon, in the event of a Subsidiary Change in Control,
Good Reason shall exist if an Employee or Support Employee is
offered 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
the Employee’s or Support Employee’s Base Salary plus
Target Bonus under his Employing Company’s Short Term Bonus
Plan and Long Term Bonus Plan, plus Target Bonus under his
Employing Company’s Equity Based Bonus Plan, each of which as
in effect on the day the offer of employment is received from the
acquiring company;
(c)
Relocation .
(i)
Employing Company . A change in an Employee’s work
location to a location more than fifty (50) miles from the facility
where the Employee 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 the Employee’s
principal place of residence on the day immediately preceding the
day the Change in Control is Consummated. The acceptance, if any,
by an Employee of employment by an Employing Company at a work
location which is outside the fifty mile radius set forth in this
Section 2.24(c) shall not be a waiver of the Employee’s right
to refuse subsequent transfer by an Employing Company to a location
which is more than fifty (50) miles from the Employee’s
principal place of residence 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 . Notwithstanding Section
2.25(b)(i) hereof, in the case of a Subsidiary Change in Control,
Good Reason shall exist if the Employee’s work location under
the terms of the offer of employment from the acquiring employer is
more than fifty (50) miles from the Employee’s work location
at his or her Employing 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 or the failure to take any action by the
Employing Company that would directly or indirectly cause a
Material Reduction in the Retirement and Welfare Benefits to which
an Employee is entitled under the Employing Company’s
Retirement and Welfare Benefit plans in which the Employee 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 Employing
Company to provide an Employee with at least 95% of the number of
paid vacation days or, if applicable, paid time off days to which
the Employee is entitled on the basis of years of service with the
Employing Company in accordance with the Employing Company’s
normal vacation policy 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 Employing
Company).
(iii)
Subsidiary Change in Control . Notwithstanding Section
2.25(c)(i) hereof, in the event of a Subsidiary Change in Control,
Good Reason shall exist if an Employee or Support Employee is
offered a package of Retirement and Welfare Benefits by the
acquiring employer that is not Economically Equivalent, as
determined under Sections 2.24(f) and (g) hereof.
(e)
Adoption of Severance Plan . 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 adopt a severance plan substantially in the form of Exhibit C
attached hereto.
(f)
Economic Equivalence . For purposes of Section 2.24(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 an Employee or Support Employee of
an
Employing Company undergoing a
Subsidiary Change in Control 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 the Employee
or Support Employee would have derived from his Employing
Company’s Retirement and Welfare Benefits using the Benefit
Index.
(g)
Benefit Index Guidelines . For purposes of Section 2.24(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 Employing Company and the
acquiring employer shall provide to the Benefits Consultant the
applicable benefit plan provisions for the plan year in which the
Subsidiary Change in Control is anticipated to occur. Plan
provisions for the immediately preceding plan year may be provided
if the Benefits Consultant determines that there have been no
changes to such plans that would materially affect the
determination of Economic Equivalence. If the acquiring
employer’s relevant plan provisions have not previously been
included in the Benefits Consultant’s Benefit 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 Committee 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
Employing Company shall provide to the Benefits Consultant actual
data for its Employees. The Company shall provide such data for
Support Employees whose Employing Company is the subject of the
Subsidiary Change in Control.
(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 the Employee or Support Employee
by his or her Employing 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.
2.26 “
Group ” shall have the meaning set forth in Section
14(d) of the Exchange Act.
2.27 “
Group Health Plan ” shall mean the Southern Company
Services, Inc. Healthcare Plan for Retirees, as such plan may be
amended from time to time.
2.28 “
Group Life Insurance Plan ” shall mean the Retiree
Group Life Insurance Plan for Southern Company Services, Inc., as
such plan may be amended from time to time.
2.29 “
Incumbent Board ” shall mean those individuals who
constitute the Southern Board as of January 1, 2009, 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 January 1, 2009 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.
2.30 “
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.
2.31 “
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 an
Employee 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 Employing 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
percentage of employee contributions in accordance with the
Employing Company’s prior practice measured over a
p
