DEFERRED COMPENSATION AGREEMENT
THIS DEFERRED COMPENSATION AGREEMENT ("Agreement") made and entered
into by and between THE SOUTHERN COMPANY, with its corporate offices located at
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxx 00000 (the "Company"), and
XXXXXXX X. XXXXXXXXX, residing at 00 Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000
("Employee").
W I T N E S S E T H
WHEREAS, Employee has been employed by the Company for approximately
thirty-seven (37) years;
WHEREAS, Employee is a highly compensated employee of the Company and
is a member of its management;
WHEREAS, in order to be eligible for benefits under this Agreement, the
parties have agreed that Employee shall retire from employment with the Company
on the earlier of the last day of a month mutually agreed upon by Employee and
the Company, the last day of the month following the date the Company makes a
pro-rata distribution to the holders of its common stock of all of the shares of
Southern Energy, Inc. stock owned by the Company or June 30, 2001, but in no
event shall Employee retire from employment with the Company prior to March 1,
2001;
WHEREAS, the parties desire to delineate their respective rights,
duties, and obligations attendant to such retirement, and desire to reach an
accord and satisfaction of all claims arising from Employee's employment and his
retirement, with appropriate releases; and
WHEREAS, the Company desires to provide Employee with deferred
compensation and other severance benefits for service he has provided or will
provide for the Company prior to retirement;
WHEREAS, it is the Company's intent that Employee otherwise receive all
benefits and compensation which Employee has accrued as of his early retirement
date, and this Agreement and the Release attached hereto is not intended in any
way to affect Employee's right to such benefits and compensation;
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 hereto, intending to be legally bound, hereby covenant and agree as
follows:
1. Retirement from Employment. Upon Employee's execution of this
Agreement, voluntary early retirement from employment on the earlier of the last
day of a month mutually agreed upon by Employee and the Company, the last day of
the month following the date the Company makes a pro-rata distribution to the
holders of its common stock of all of the shares of Southern Energy, Inc. stock
owned by the Company ("Spin-off") or June 30, 2001, but in no event prior to
March 1, 2001 (the Employee's "Early Retirement Date"), and effectiveness of the
Release attached hereto as Exhibit 1 (such effectiveness being no earlier than
the Employee's Early Retirement Date), the Company shall pay to Employee the
amounts described in Paragraph 2 hereof and shall apply the treatment set forth
in Paragraph 3 to Employee's Nonqualified Stock Options under The Southern
Company Performance Stock Plan. Employee agrees to provide the Company with at
least 30 days prior written notification of his Early Retirement Date. Employee
covenants and agrees that the consideration set forth in Paragraphs 2 and 3 is
in full satisfaction of all sums owed to Employee, if any, by the Company, and
constitutes good and complete consideration for his Release attached hereto as
Exhibit 1, those nondisclosure, non-compete and ownership obligations under
Paragraph 5 hereof and all other obligations and covenants of Employee contained
herein. Employee agrees that this Agreement provides him certain benefits to
which he would not otherwise be entitled.
2. Severance Payments to Employee. Subject to Paragraph 1, the Company
shall pay the following amounts to employee:
(a) On the effective date of the Release (such effective date
being no earlier than the Employee's Early Retirement Date), the
Company shall pay to Employee a lump sum amount equal to Five Hundred
Fifty Thousand Two Hundred and No/100 Dollars ($550,200.00), plus a
lump sum amount equal to any unused financial planning allowance as of
his Early Retirement Date that is still payable in the year of his
retirement hereunder (such financial planning allowance shall equal
Seven Thousand and No/100 Dollars ($7,000.00) as of the commencement of
the calendar year in which Employee retires, and such amount shall be
reduced prior to Employee's retirement in accordance with its use).
(b) Subject to Paragraph 1, in the event of a Spin-off,
Company shall pay to Employee an amount ("Additional Spin-off Amount")
determined in accordance with the following table:
If Spin-off occurs: Additional Spin-off Amount is:
------------------- ------------------------------
On or before December 31, 2001 $223,000.00
After December 31, 2001, but $185,833.34
before January 1, 2003
After December 31, 2002, but $148,666.67
before January 1, 2004
After December 31, 2003, but $111,500.00
before January 1, 2005
After December 31, 2004, but $74,333.34
before January 1, 2006
After December 31, 2005, but $37,166.67
before January 1, 2007
After December 31, 2006 $0
The Additional Spin-Off Amount payable to Employee in accordance with
this subparagraph 2(b), if any, shall be paid to Employee on the first day of
the first month coincident with or next following the later of (i) the date of
the Spin-Off, (ii) Employee's Early Retirement Date, and (iii) the effective
date of the Release (such effective date being no earlier than Employee's Early
Retirement Date).
(c) Subject to the terms and conditions of this Agreement,
including Paragraph 1 hereof, beginning on the effective date of the
Release (such effective date being no earlier than Employee's Early
Retirement Date), and thereafter on the first day of the month, the
Company shall commence payment to Employee of a monthly installment
("Employee Replacement Benefit"), determined in accordance with the
following table and adjusted as provided below:
Employee's Early Retirement Date is: Employee Replacement Benefit is:
March 31, 2001 $9,927.00
April 30, 2001 $9,727.00
May 31, 2001 $9,471.00
June 30, 2001 $9,268.00
Based upon the foregoing table and assuming for all purposes a single
life annuity payout under the three plans listed below, the Employee Replacement
Benefit, together with (i) the Retirement Income that Employee receives under
The Southern Company Pension Plan ("Pension Plan"); (ii) the SERP Benefit the
Employee receives under The Southern Company Supplemental Executive Retirement
Plan ("SERP"); and (iii) the Pension Benefit that Employee receives under The
Southern Company Supplemental Benefit Plan ("Supplemental Benefit Plan"), shall
result in a total annual payment to Employee of Four Hundred Two Thousand Nine
Hundred Forty-Five Dollars And No Cents ($402,945.00) ("Annual Floor").
The Employee Replacement Benefit and Annual Floor payable to Employee
described above shall be adjusted to reflect the Employee's provisional payee
option selected under The Southern Company Pension Plan ("Pension Plan") and
shall be increased from time to time to reflect future increases, if any, in
Retirement Income of retirees following the Employee's retirement.
In accordance with Paragraph 16 hereof, Employee shall be responsible
for all state and federal income taxes and his share of FICA taxes owed on the
amounts payable in accordance with subparagraphs (a), (b) and (c) of this
Paragraph 2, and Company shall make appropriate withholding of these amounts.
3. Employee's Stock Options Under The Southern Company Performance
Stock Plan. Employee's Nonqualified Stock Options ("Stock Options") covering a
total of 107,115 shares of common stock of the Company under The Southern
Company Performance Stock Plan ("Performance Stock Plan") shall continue in
accordance with their terms; provided, however, that, subject to Paragraph 1,
for all purposes of the Company's Performance Stock Plan, Employee's retirement
on his Early Retirement Date in accordance with this Agreement shall be deemed
to constitute Retirement (as defined in the Company's Performance Stock Plan)
with the result thereof to include that as of Employee's Early Retirement Date,
(i) all of Employee's existing Stock Options, and all of his rights therein,
will become fully vested and non-forfeitable; (ii) any restrictions or
reductions applicable to option holders under the Company's Performance Stock
Plan in case of early retirement shall be inapplicable; and (iii) the
sixty-month exercise period under the Performance Stock Plan with respect to
such Stock Options (which is subject to the expiration of such Stock Options)
shall commence as of Employee's Early Retirement Date. The Company agrees that
the Employee's existing Stock Options will be adjusted for the Spin-off in the
same manner as other participants under the Performance Stock Plan.
4. Publicity; No Disparaging Statement. Except as otherwise provided in
Paragraph 9 hereof, Employee and the Company covenant and agree that they shall
not engage in any communications which shall disparage one another or interfere
with their existing or prospective business relationships.
5. Non-Disclosure, Non-Solicitation and Non-Competition Provisions.
(a) Preamble. As a material inducement to the Company to enter
into this Agreement, and its recognition of the valuable experience,
knowledge and proprietary information Employee gained from his
employment with the Company, Employee agrees he will abide by and
adhere to the following Non-Disclosure, Non-Solicitation and
Non-Competition Provisions.
(b) Definitions. For purposes of this Paragraph 5, the
following terms shall have the following meanings:
(i) "Confidential Information" shall mean the proprietary
and confidential data or information, other than
"Trade Secrets" (as defined below), (A) that either
(i) belongs to the Company or (ii) pertains to the
Company and that, if it does not belong to the
Company, is either subject to a confidentiality
agreement or belongs to or is held by a third party
that the Company reasonably expects will maintain the
proprietary or confidential nature of the data or
information, including, but not limited to, attorneys
and accountants engaged by the Company, and (B) that
is of value to the Company and is not generally known
to the public but is generally known only to the
Company and those of its employees, independent
contractors or agents to whom such information must
be confided for business purposes, regarding the
products, services, contractual arrangements,
customers, suppliers, and partners of the Company
gained by Employee as a result of his employment with
the Company. Confidential Information shall also
include other items that the Company may from time to
time xxxx or otherwise identify as confidential,
provided that Employee has knowledge of such marking
or identification. As used in this subsection,
"Company" shall include any of the Company's
affiliates.
(ii) "Entity" shall mean any business, individual,
partnership, joint venture, agency, governmental
subdivision, association, firm, corporation or other
entity.
(iii) "Territory" shall include the geographic area in
which Southern Company and any of its affiliates,
exclusive of Southern Energy, Inc., provides
electrical service to retail customers as of the date
of this Agreement.
(iv) "Trade Secrets" shall mean information of the Company
or any of its affiliates which (A) derives economic
value, actual or potential, from not being generally
known to, and not being readily ascertainable by
proper means by, other persons who can obtain
economic value from its disclosure or use; and (B) is
the subject of efforts that are reasonable under the
circumstances to maintain its secrecy; it being
agreed that such information includes, without
limitation, non-public information related to the
rate making process of the Company, or its
affiliates, technical and non-technical data, a
formula, a pattern, a compilation, a program, a
device, a method, a technique, a drawing, a process,
financial data, financial plans, product plans or a
list of actual or potential customers or suppliers or
any other information which is defined as a "trade
secret" under applicable law. (v) "Work Product"
shall mean all tangible work product, property, data,
documentation, concepts or plans, inventions,
improvements, techniques and processes relating to
the Company or any of its affiliates that were
conceived, discovered, created or developed by
Employee pursuant to his employment with the Company.
(c) Nondisclosure: Ownership of Proprietary Property.
(i) In recognition of the need of the Company to protect
its legitimate business interests, Employee hereby
covenants and agrees that: (A) with regard to each
item constituting all or any portion of a Trade
Secret at all times such information remains a "trade
secret" under applicable law and (B) with regard to
any Confidential Information, for a period of three
(3) years following the Early Retirement Date
(hereafter the "Nondisclosure Period"), Employee
shall regard and treat Trade Secrets and all
Confidential Information as strictly confidential and
wholly-owned by the Company and shall not, for any
reason, in any fashion, either directly or
indirectly, use, sell, lend, lease, distribute,
license, give, transfer, assign, show, disclose,
disseminate, reproduce, copy, misappropriate or
otherwise communicate any such item or information to
any third party or Entity for any purpose other than
in accordance with this Agreement, as required by
applicable law, or to defend against litigation
brought by the Company alleging a breach by Employee
of the non-disclosure provisions of Paragraph 5 of
this Agreement. Employee shall exercise all
reasonable best efforts to ensure the continued
confidentiality of all Trade Secrets and Confidential
Information of the Company known by, disclosed to or
made available to Employee in connection with his
employment relationship with the Company or any other
past or present relationship with the Company.
Employee shall immediately notify the Company of any
unauthorized disclosure or use of any Trade Secrets
or Confidential Information of which Employee becomes
aware. Employee shall assist the Company, to the
extent necessary and reasonable, in the procurement
of any protection of the Company's rights to or in
any of the Trade Secrets or Confidential Information.
(ii) All Work Product shall be owned exclusively by the
Company. To the greatest extent possible, any Work
Product shall be deemed to be "work made for hire"
(as defined in the Copyright Act, 17 X.X.X.X.xx. 101
et seq., as amended), and Employee hereby
unconditionally and irrevocably transfers and assigns
to the Company all right, title and interest Employee
currently has or may have by operation of law or
otherwise in or to any Work Product, including,
without limitation, all patents, copyrights,
trademarks, trade secrets, service marks and other
intellectual property rights. Employee agrees to
execute and deliver to the Company any transfers,
assignments, documents or other instruments which the
Company may deem necessary or appropriate, from time
to time, to vest complete title and ownership of any
and all Work Product, and all associated intellectual
property and other rights therein, exclusively in the
Company.
(iii) Employee represents and agrees that he will keep the
terms and amount of this Agreement completely
confidential, and except to his personal agents or
legal counsel to the extent required by law or as
necessary to either defend against litigation brought
by the Company alleging a breach by Employee of the
non-disclosure provisions of Paragraph 5 of this
Agreement or arbitrate a claim or dispute pursuant to
Paragraph 19 of this Agreement, he will not hereafter
disclose this information concerning this Agreement
to anyone, including, but not limited to, any past,
present, or prospective employee or applicant for
employment with the Company. Employee may only
disclose to future, potential employers of Employee
that he participates in a deferred compensation
arrangement with the Company which imposes certain
restrictions on him related to such future, potential
employment.
(d) No Employment.
Employee agrees that he shall not hereafter seek any re-employment with
the Company, its parent, its affiliates or its subsidiaries.
(e) Non-Solicitation of Employees.
Employee agrees, during the three (3) years following the Employee's
separation from employment, that he will not, either directly or indirectly,
alone or in conjunction with any other person or entity, actively recruit,
engage in passive hiring efforts, solicit, attempt to solicit, or induce any
person who, during such three year period, or within one year prior to
Employee's separation from employment, was an exempt employee of the Company or
any of its subsidiaries, or was an officer of the Company or any of its
affiliates to leave or cease such employment for any reason whatsoever or hire
or engage the services of such person in any business substantially similar or
competitive with that in which The Southern Company and its affiliates were
engaged during the employment.
(f) Non-Competition.
Employee agrees that, for a period of two (2) years from the date of
separation of employment with the Company, he will not:
(i) be employed by an entity which is engaged in the generation,
transmission, distribution or sale, whether at retail or
wholesale, of electricity within the Territory, or
(ii) consult for or advise any entity with respect to the
acquisition or development of power generation assets located
or to be located within the Territory, or
(iii) unless requested by the Company or required by law to do so,
testify or otherwise appear with respect to or regarding a
matter affecting Southern Company, its subsidiaries or
Southern Energy, Inc., before any (A) regulatory agency,
government commission or regulatory body within the Territory,
(B) the Federal Energy Regulatory Commission or (C) the
Securities and Exchange Commission.
Notwithstanding these limitations, and by way of clarification, Employer agrees
that Employee may at any time engage in a consulting relationship with any
entity, whether or not within the Territory, to provide advice as to financial
matters, such as capital budgeting, capital processes, debt or equity offerings,
project finance, commercial paper transactions, rating agency matters, risk
management, insurance, and other similar finance related matters, provided that
such consultation does not violate the restrictions set forth in (ii) and (iii)
of this subsection (f). Further, Employee may at any time consult for, advise or
serve on the board of directors of a technology development company that is
involved in electric power technology, such as fuel cell or micro-turbine
technology, provided that such company is not involved in the generation,
transmission, distribution or sale of electricity in the Territory in excess of
ten (10) megawatts.
Employee and Company expressly covenant and agree that the scope,
territorial, time and other restrictions contained in this Agreement constitute
the most reasonable and equitable restrictions possible to protect the business
interest of the Company given: (1) the business of the Company; (2) the
competitive nature of the Company's industry; and (3) that Employee's skills are
such that he could easily find alternative, commensurate employment or
consulting work in his field which would not violate any of the provisions of
this Agreement.
6. Return of Materials. Upon the Employee's retirement or earlier
termination, or at any point after that time upon the specific request of the
Company, Employee shall return to the Company all written or descriptive
materials or any other property of any kind belonging to the Company, its
Affiliates, or its agents, including, without limitation, any Intellectual
Property, Confidential Information and Trade Secrets, in Employee's possession.
7. Cooperation. The parties agree that as a result of Employee's duties
and activities during his employment, Employee's reasonable availability may be
necessary for the Company to meaningfully respond to or address actual or
threatened litigation, or government inquiries or investigations, or required
filings with state, federal or foreign agencies (hereinafter "Company Matters").
Upon request of the Company, and at any point following termination of
employment, Employee will make himself available to the Company for reasonable
periods consistent with his future employment, if any, by other Entities and
will cooperate with its agents and attorneys as reasonably required by such
Company matters. The Company will reimburse Employee for any reasonable
out-of-pocket expenses associated with providing such cooperation.
8. Termination with Cause. In the event of Employee's termination of
employment for Cause at any time prior to Employee's Early Retirement Date, the
Employee shall forfeit all of the benefits provided in Paragraphs 2 and 3, and
the Company and Employee shall have no further obligations with respect to this
Agreement or the Release attached as Exhibit 1 other than, as to Employee, the
return of information under Paragraph 6. As used in this Agreement, the term
"Cause" shall mean Employee's gross negligence or willful misconduct in the
performance of his duties and services required in the course of employment by
the Company; or a material breach of the fiduciary obligations owed by an
officer and an employee to Southern, provided that the Company has given written
notice to Employee of such gross negligence, willful misconduct or material
breach and Employee has failed to cure such gross negligence, willful misconduct
or material breach within fifteen (15) days after Employee receives such notice.
No act or failure by Employee shall be deemed "willful" unless done, or omitted
to be done, by Employee not in good faith and without reasonable belief that his
action or omission was in the best interest of the Company.
9. Confidentiality and Legal Process. The Parties hereto each represent
and agree that they will keep the terms, amount and fact of this Agreement
confidential and that they will not hereafter disclose any information
concerning this Agreement to any one other than their respective agents or legal
counsel. Employee specifically acknowledges and agrees that he will not
hereafter disclose any information concerning this Agreement to any past,
present, or prospective employee or applicant for employment with Company.
Notwithstanding the foregoing, nothing in this Agreement shall preclude Employee
from disclosing to any prospective employer or client, in connection with its
decision to hire Employee, solely that he entered into an arrangement with the
Company which imposes certain restrictions on him related to such future
potential employment or retention. Nothing in this Agreement is intended to
prohibit either party from performing any duty or obligation that shall arise as
a matter of law. Specifically, Employee shall continue to be under a duty to
truthfully respond to any legal and valid subpoena or other legal process. This
Agreement is not intended in any way to proscribe either party's right and
ability to provide information to any federal, state or local government in the
lawful exercise of such governments' governmental functions.
10. Successors And Assigns; Applicable Law. This Agreement shall be
binding upon and inure to the benefit of Employee and his heirs, administrators,
representatives, executors, successors and assigns, and shall be binding upon
and inure to the benefit of Southern, the Company and their officers, directors,
employees, agents, shareholders, parent corporation and affiliates, and their
respective predecessors, successors, assigns, heirs, executors and
administrators and each of them, and to their heirs, administrators,
representatives, executors, successors and assigns. This Agreement shall be
construed and interpreted in accordance with the laws of the State of Georgia,
United States of America (without giving effect to principles of conflicts of
laws).
11. Complete Agreement. This Agreement shall constitute the full and
complete Agreement between the parties concerning its subject matter and fully
supersedes any and all other prior Agreements or understandings between the
parties concerning the subject matter hereof. This Agreement shall not be
modified or amended except by a written instrument signed by both Employee and
an authorized representative of the Company.
12. Severability. The unenforceability or invalidity of any particular
provision of this Agreement shall not affect its other provisions, and to the
extent necessary to give such other provisions effect, they shall be deemed
severable.
13. Waiver Of Breach; Specific Performance. The waiver of a breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any other breach. Each of the parties to this Agreement will be entitled to
enforce its or his rights under this Agreement, specifically, to recover damages
by reason of any breach of any provision of this Agreement and to exercise all
other rights existing in its or his favor. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its or his sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance or injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement. Notwithstanding anything
contained in this Agreement to the contrary, the Company acknowledges and agrees
that following Employee's retirement pursuant to this Agreement, it shall pay
all of its obligations under this Agreement when due without set off or
reduction as a result of any defense or claim that the Company may have at any
time against the Employee. Notwithstanding the preceding sentence, Employee
acknowledges that Company shall have the right to pursue Employee for recovery
of such payments for Employee's violation of the terms of this Agreement, and in
the event of a final judgment against Employee, Company shall recover pursuant
to such judgment and, if the judgment so provides, cease any additional payments
hereunder.
14. Unsecured General Creditor. The Company shall neither reserve nor
specifically set aside funds for the payment of its obligations under this
Agreement, and such obligations shall be paid solely from the general assets of
the Company. Notwithstanding that Employee may be entitled to receive the value
of his benefit under the terms and conditions of this Agreement, the assets from
which such amount may be paid shall at all times be subject to the claims of the
Company's creditors.
15. No Effect On Other Arrangements. It is expressly understood and
agreed that the payments made in accordance with this Agreement are in addition
to any other benefits or compensation to which Employee may be entitled or for
which he may be eligible, whether funded or unfunded, by reason of his
employment with the Company, including but not limited to, (i) those rights and
benefits to which Employee is entitled under the Change of Control Agreement
between The Southern Company, Southern Company Services, Inc. and Employee,
provided Employee remains employed by the Company and such Change in Control
Agreement by its terms is in effect; (ii) all benefits accrued by Employee as of
his Early Retirement Date, including, but not limited to, those provided under
the terms of The Southern Company Performance Pay Plan; and (iii) any rights to
indemnification in respect of his services as an employee, officer and/or
director of the Company or any of its subsidiaries or affiliates as provided by
law or the Certificate of Incorporation and/or By-laws (or like constitutive
documents) of the Company or any of its subsidiaries or affiliates.
16. Tax Withholding. There shall be deducted from each payment 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 Employee.
17. Compensation. Any compensation contributed on behalf of Employee
under this Agreement shall not be considered "compensation," as the term is
defined in The Southern Company Employee Savings Plan, The Southern Company
Employee Stock Ownership Plan, The Southern Company Performance Sharing Plan or
The Southern Company Pension Plan. Payments under this Agreement shall not be
considered wages, salaries or compensation under any other employee benefit
plan.
18. No Guarantee of Employment. No provision of this Agreement shall be
construed to affect in any manner the existing rights of the Company to suspend,
terminate, alter, modify, whether or not for cause, the employment relationship
of Employee and the Company.
19. Arbitration.
(a) Any dispute, controversy or claim arising out of or relating to the
Company's obligations to pay 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 benefits hereunder and the
arbitrators' award shall be final and binding.
(b) Arbitration shall be initiated by serving a written notice of
demand for arbitration to Employee, in the case of the Company, or to the
Southern Corporate Secretary, in the case of Employee.
(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 Employee, 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 borne equally by Employee and
the Company. All other costs of arbitration shall be borne equally by Employee
and the Company, provided, however, that in the event any material issue in the
dispute being arbitrated hereunder is finally resolved in Employee's favor, the
Company shall reimburse Employee for all such fees and costs paid by Employee
and Employee's legal fees incurred with respect to such dispute in an amount not
to exceed $50,000.
(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 19 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
19 has begun. The parties further agree that nothing herein shall prevent any
court from entering and enforcing 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 19.
20. Non-Qualified Benefit Security - Annuitization.
(a) Company acknowledges and agrees that Employee shall be eligible for
a partial annuitization of his non-qualified pension benefit between his Early
Retirement Date and the later of the third anniversary of his Early Retirement
Date or the date on which he attains age 65, in accordance with Company policy,
including but not limited to the following:
(i) Annuitizable benefit equals the excess, if any, of the
Employee's total non-qualified pension plan benefits over 40%
of the Employee's total qualified and non-qualified pension
plan benefits;
(ii) Pension plan benefits include only those benefits payable by:
a. Any Southern, or affiliated company sponsored, tax
qualified pension plan; and
b. The following pension plans which are not tax
qualified: Southern Company Supplemental Benefit
Plan, Southern Company Supplemental Executive
Retirement Plan, Southern Energy, Inc. Supplemental
Executive Retirement Plan, and Savannah Electric
Power Company Supplemental Executive Retirement Plan.
(b) Consistent with Company policy, with respect to any partial
annuitization of non-qualified pension benefits, the Company will "tax equalize"
the annuity benefit and provide Employee with a "tax equalization gross up" due
to the significant differences between the taxation of monthly non-qualified
pension benefits and monthly annuity benefits.
(c) The parties acknowledge and agree that the annuitization policy
described in this Paragraph 20 does not apply to any obligations of the Company
described in the preceding Paragraphs of this Agreement.
21. Notices. All notices, demands, elections, requests and other
communications hereunder shall be in writing and shall be deemed to have been
given to a party hereto, if personally delivered, on the date of such delivery,
or five days after having been mailed, postage prepaid, by certified or
registered mail, return receipt requested, to the party at its or his address as
set forth at the beginning hereof (in the case of the Company, marked to the
attention of the Secretary, or, in the case of Paragraph 19, to the attention of
the Company's Board of Directors) or to such other address as the party may
designate by notice given in conformity with the foregoing.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
this ___ day of ________________, 2001.
"COMPANY"
THE SOUTHERN COMPANY
By:
---------------------------------
Its:
---------------------------------
"EMPLOYEE"
XXXXXXX X. XXXXXXXXX
EXHIBIT 1 to
Deferred Compensation Agreement
with XXXXXXX X. XXXXXXXXX
RELEASE AGREEMENT
THIS RELEASE ("Release') is made and entered into by XXXXXXX X.
XXXXXXXXX ("Employee") for the benefit of THE SOUTHERN COMPANY, and its
successor or assigns ("Company").
WHEREAS, Employee and Company have agreed that Employee shall retire
from employment with The Southern Company on the earlier of the last day of a
month mutually agreed upon by Employee and the Company, the last day of the
month following the date the Company makes a distribution to the holders of its
common stock of all of the shares of Southern Energy, Inc. stock owned by the
Company or June 30, 2001, but in no event shall Employee retire from employment
with the Company prior to March 1, 2001;
WHEREAS, Employee and the Company have previously entered into that
certain Deferred Compensation Agreement, dated _________________, 2001
("Agreement"), that this Release is incorporated therein by reference;
WHEREAS, the Agreement delineates the Employee's and Company's
respective rights, duties and obligations attendant to such retirement, and
Employee and Company desire to reach an accord and satisfaction of all claims
arising from Employee's employment, and his retirement from employment, with
appropriate releases, in accordance with the Agreement;
WHEREAS, the Company desires to provide Employee with deferred
compensation in accordance with the Agreement for service he has or will provide
for the Company prior to his retirement;
NOW, THEREFORE, in consideration of the premises and the agreements of
the parties set forth in this Release, and other good and valuable consideration
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby covenant and agree as follows:
1. Release. Employee does hereby remise, release and forever discharge
the Company and their officers, directors, employees, agents, shareholders,
parent corporation and affiliates, and their respective predecessors,
successors, assigns, heirs, executors and administrators (collectively,
"Releasees"), of and from all manner of actions and causes of action, suits,
debts, claims and demands whatsoever at law or in equity, known or unknown,
actual or contingent, including, but not limited to, any claims which have been
asserted, or could be asserted now or in the future, against any Releasees
arising under any and all federal, state or local laws and any common law
claims, and including, but not limited to, any claims Employee may have pursuant
to the Age Discrimination in Employment Act and any claims to benefits under any
and all offer letters, employment or separation agreements, or bonus, severance,
workforce reduction, early retirement, out-placement, or other similar plans
sponsored by the Company, now or hereafter recognized (collectively, "Claims"),
which he ever had or now has or may in the future have, by reason of any matter,
cause or thing arising out of his employment relationship and privileges, his
serving as an employee of the Company or the separation from his employment
relationship or affiliation as an employee of the Company as of the date of this
Release against each of the Releasees. Notwithstanding the foregoing, Employee
does not release (i) any Claims under the Age Discrimination in Employment Act
that may arise after his execution of this Release; (ii) any rights to
indemnification from the Company in respect of Employee's Services as an
employee, officer and/or director of the Company or any of its subsidiaries or
affiliates as provided by law or the Certificate of Incorporation and/or Bylaws
(or like constitutive documents of the Company or any of its subsidiaries or
affiliates); (iii) any rights that Employee may have under the Agreement; or
(iv) any rights to benefits accrued by Employee as of his termination date.
2. No Assignment of Claim. Employee represents that he has not assigned
or transferred, or purported to assign or transfer, any Claims or any portion
thereof or interest therein to any party prior to the date of this Release.
3. Deferred Compensation. In accordance with the Deferred Compensation
Agreement, the Company agrees to provide the Employee or his spouse, as the case
may be, the benefits provided in Paragraphs 2 and 3 of the Agreement.
4. No Admission Of Liability. This Release shall not in any way be
construed as an admission by the Company or Employee of any improper actions or
liability whatsoever as to one another, and each specifically disclaims any
liability to or improper actions against the other or any other person, on the
part of itself or himself, its or his employees or agents.
5. Voluntary Execution. Employee warrants, represents and agrees that
he has been encouraged in writing to seek advice from anyone of his choosing
regarding this Release, including his attorney and accountant or tax advisor
prior to his signing it; that this Release represents written notice to do so;
that he has been given the opportunity and sufficient time to seek such advice;
and that he fully understands the meaning and contents of this Release. He
further represents and warrants that he was not coerced, threatened or otherwise
forced to sign this Release, and that his signature appearing hereinafter is
voluntary and genuine. EMPLOYEE UNDERSTANDS THAT HE MAY TAKE UP TO TWENTY-ONE
(21) DAYS TO CONSIDER WHETHER OR NOT HE DESIRES TO ENTER INTO THIS RELEASE.
6. Ability to Revoke Agreement. EMPLOYEE UNDERSTANDS THAT HE MAY REVOKE
THIS RELEASE BY NOTIFYING THE COMPANY IN WRITING OF SUCH REVOCATION WITHIN SEVEN
(7) DAYS OF HIS EXECUTION OF THIS RELEASE AND THAT THIS RELEASE IS NOT EFFECTIVE
UNTIL THE EXPIRATION OF SUCH SEVEN (7) DAY PERIOD. HE UNDERSTANDS THAT UPON THE
EXPIRATION OF SUCH SEVEN (7) DAY PERIOD THIS RELEASE WILL BE BINDING UPON HIM
AND HIS HEIRS, ADMINISTRATORS, REPRESENTATIVES, EXECUTORS, SUCCESSORS AND
ASSIGNS AND WILL BE IRREVOCABLE.
I UNDERSTAND THAT BY SIGNING THIS RELEASE, I AM GIVING UP RIGHTS I MAY HAVE. I
UNDERSTAND THAT I DO NOT HAVE TO SIGN THIS RELEASE.
"EMPLOYEE"
XXXXXXX X. XXXXXXXXX
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Date
WITNESSED BY:
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Date
