FORM OF
SOUTHERN ENERGY, INC.
EMPLOYEE STOCK PURCHASE PLAN
CONTENTS
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Article 1. Purpose and Effective Date 1
Article 2. Definitions 1
Article 3. Administration 3
Article 4. Number of Shares 4
Article 5. Eligibility Requirements 4
Article 6. Enrollment 5
Article 7. Grant of Options on Enrollment 5
Article 8. Payment 5
Article 9. Purchase of Shares 6
Article 10. Withdrawal from the Plan, Termination of Employment,
and Leave of Absence 7
Article 11. Designation of Beneficiary 8
Article 12. Miscellaneous 8
SOUTHERN ENERGY, INC. EMPLOYEE STOCK PURCHASE PLAN
ARTICLE 1. PURPOSE AND EFFECTIVE DATE
1.1 The purpose of the Southern Energy, Inc. Employee Stock
Purchase Plan (the 'Plan') is to provide an opportunity for employees of
Southern Energy, Inc. (the 'Company') to purchase shares of common stock of the
Company in a way which is both convenient and on a basis more favorable than
would otherwise be available. The Company believes that employee participation
in ownership of the Company on this basis will be to the mutual benefit of both
the employee and the Company. It is the intent of the Company to have the Plan
qualify as an 'employee stock purchase plan' under Section 423 of the Internal
Revenue Code. The provisions of the Plan shall be construed to extend and limit
participation in a manner consistent with the requirements of Section 423 of the
Internal Revenue Code.
1.2 It is intended that an initial Offering Period and Purchase
Period will begin on the IPO Date and exist for such period as designated by the
Committee prior to the IPO Date. Thereafter, it is intended that any future
Offering Periods and Purchase Periods will commence, if at all, at such times
designated by the Committee.
1.3 The Plan shall be effective on the IPO Date (the 'Effective
Date'). The Plan shall remain in effect in accordance with Section 12.7 of the
Plan.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings
set forth below, and when the meaning is intended, the initial letter of the
word shall be capitalized:
2.1 'ACCOUNT' means a recordkeeping account maintained for a
Participant to which Participant contributions and payroll
deductions, if applicable, shall be credited.
2.2 'BOARD' means the Board of Directors of the Company.
2.3 'CODE' means the Internal Revenue Code of 1986, as amended.
2.4 'COMPANY' means Southern Energy, Inc., a Delaware corporation.
2.5 'CUT-OFF DATE' means the date established by the Committee
from time to time by which enrollment forms must be received
prior to an Enrollment Date.
2.6 'EFFECTIVE DATE' shall have the meaning ascribed to it in
Section 1.3 hereof.
2.7 'ELIGIBLE EMPLOYEE' means an Employee eligible to participate
in the Plan in accordance with Section 5.
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2.8 'EMPLOYEE' means any active employee of the Company or any
active employee of any company in the Participating Company
Group.
2.9 'ENROLLMENT DATE' means the first Trading Day of an Offering
Period.
2.10 'EXCHANGE ACT' means the Securities Exchange Act of 1934, as
amended.
2.11 'FAIR MARKET VALUE' means, as of any applicable date, the
opening sale price on the principal securities exchange on
which the Shares are traded or, if there is no such sale on
the relevant date, then on the last previous day on which a
sale was reported.
2.12 'GRANT DATE' means a date on which an Eligible Employee is
granted an option under the Plan pursuant to Section 7.
2.13 'GRANT PRICE' means the Fair Market Value of a Share on the
Grant Date for such option.
2.14 'IPO DATE' shall mean the first day on which Shares are
publicly traded on the New York Stock Exchange.
2.15 'OFFERING PERIOD' means the period beginning on the IPO Date
and ending on the date designated by the Committee and each
period, if any, thereafter designated by the Committee;
provided, that each period shall, in no event end later than:
(i) five (5) years from the date the option is exercised if
the Purchase Price is to be not less than eighty-five percent
(85%) of the Fair Market Value of the Shares on the Purchase
Date; or (ii) otherwise, twenty-seven (27) months from the
Grant Date. The Offering Period may but need not be the same
as the Purchase Period, as determined by the Committee.
2.16 'PARTICIPANT' means an Eligible Employee who has enrolled in
the Plan pursuant to Section 6.
2.17 'PARTICIPATING COMPANY GROUP' means a Subsidiary which has
been designated by the Committee in accordance with Section
3.2 of the Plan as covered by the Plan.
2.18 'PURCHASE DATE' with respect to a Purchase Period means the
last Trading Day in such Purchase Period.
2.19 'PURCHASE DATE PRICE' means the Fair Market Value of a Share
on the applicable Purchase Date.
2.20 'PURCHASE PERIOD' means the period beginning on the IPO Date
and ending on the date designated by the Committee and each
period, if any, thereafter designated by the Committee;
provided, that each period shall, in no event end later than:
(i) five (5) years from the date the option is exercised if
the Purchase Price is to be not less than eighty-five percent
(85%) of the Fair Market Value of the Shares on the Purchase
Date; or (ii) otherwise, twenty-seven (27) months from the
Grant Date.
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2.21 'PURCHASE PRICE' means the price designated by the Committee,
at which each Share may be purchased under any option, but in
no event less than eighty-five percent (85%) of the lesser of:
(a) The Grant Price, as defined in Section 2.13; and
(b) The Purchase Date Price, as defined in Section 2.19.
2.22 'RETIREMENT' or 'RETIRE' means a termination of (or to
terminate) employment with the Company and its subsidiaries
after qualifying for retirement under any applicable
retirement plan of the Company or any company in the
Participating Company Group, as determined by the Committee.
2.23 'RULE 16B-3' means Rule 16b-3 under the Exchange Act.
2.24 'SHARES' means shares of the Company's common stock.
2.25 'SUBSIDIARY' means any corporation in an unbroken chain of
corporations beginning with the Company if, as of the
applicable Enrollment Date, each of the corporations other
than the last corporation in the chain owns stock possessing
fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in
the chain.
2.26 'TRADING DAY' means any day the New York Stock Exchange is
open for trading.
ARTICLE 3. ADMINISTRATION
3.1 The Plan shall be administered by a Committee appointed by the
Board (the 'Committee'). The members of the Committee shall be appointed from
time to time by, and shall serve at the discretion of the Board. The Committee
shall have the authority to delegate administrative duties to officers,
directors or employees of the Company.
3.2 The Committee shall have the power, subject to and within the
limits of the express provisions of the Plan, to construe and interpret the Plan
and options granted under it; to establish, amend, and revoke rules and
regulations for administration of the Plan (including, without limitation, the
determination and change of Offering Periods, Purchase Periods and payment
procedures and the establishment of the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars); to determine all questions of
policy and expediency that may arise in the administration of the Plan to make
any changes to the Plan or its operations to reduce or eliminate any unfavorable
accounting consequences to the extent deemed appropriate by the Committee; and,
generally, to exercise such powers and perform such acts as the Committee deems
necessary or expedient to promote the best interests of the Company, including,
but not limited to, designating from time to time which Subsidiaries of the
Company shall be part of the Participating Company Group. The Committee's
determinations as to the interpretation and operation of this Plan shall be
final and conclusive.
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In exercising the powers described in the foregoing paragraph, the
Committee may adopt special or different rules for the operation of the Plan
including, but not limited to, rules which allow employees of any foreign
Subsidiary to participate in, and enjoy the tax benefits offered by, the Plan;
provided that such rules shall not result in any grantees of options having
different rights and/or privileges under the Plan in violation of Section 423 of
the Code nor otherwise cause the Plan to fail to satisfy the requirements of
Section 423 of the Code and the regulations thereunder.
3.3 The Plan provisions relating to the administration of the Plan
may be amended by the Committee from time to time as may be desirable to satisfy
any requirements of or under the federal securities and/or other applicable laws
of the United States, to obtain any exemption under such laws, or to reduce or
eliminate any unfavorable accounting consequences.
ARTICLE 4. NUMBER OF SHARES
4.1 _________ Shares are reserved for sale and authorized for
issuance pursuant to the Plan. If any option granted under the Plan shall for
any reason terminate without having been exercised, the Shares not purchased
under such option shall again become available for the Plan.
4.2 ADJUSTMENTS. In the event of any change in corporate
capitalization such as a stock split, or a corporate transaction such as any
merger, consolidation, separation, including a spin-off, or other distribution
of stock or property of the Company, any reorganization (whether or not such
reorganization comes within the definition of such term in Code Section 368) or
any partial or complete liquidation of the Company, the Committee may make such
adjustment it deems appropriate to prevent dilution or enlargement of rights in
the number and class of Shares which may be delivered under Section 4.1, in the
number, class of and/or price of Shares available for purchase under the Plan
and in the number of Shares which an Employee is entitled to purchase and any
other adjustments it deems appropriate. Without limiting the Committee's
authority under this Plan, in the event of any transaction, the Committee may
elect to have the options hereunder assumed or such options substituted by a
successor entity, to terminate all outstanding options either prior to their
expiration or upon completion of the purchase of Shares on the next Purchase
Date, or to take such other action deemed appropriate by the Committee.
ARTICLE 5. ELIGIBILITY REQUIREMENTS
5.1 Except as provided in Section 5.2, each Employee shall become
eligible to participate in the Plan in accordance with Section 6 on the first
Enrollment Date on or following the later of (a) the date such individual
becomes an Employee; or (b) the Effective Date. Participation in the Plan is
entirely voluntary.
5.2 The following Employees are not eligible to participate in the
Plan:
(a) Employees who, immediately upon purchasing Shares
under the Plan, would own directly or indirectly, or
hold options or rights to acquire, an aggregate of
five percent (5%) or more of the total combined
voting power or value of all outstanding shares of
all classes of stock of the Company or any Subsidiary
(and for purposes of this paragraph, the rules of
Section 424(d) of the Code shall apply,
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and stock which the Employee may purchase under
outstanding options shall be treated as stock owned
by the Employee);
(b) Employees whose customary employment is for not more
than five (5) months in any calendar year; and
(c) Employees whose customary employment is twenty (20)
hours or less per week.
ARTICLE 6. ENROLLMENT
All Eligible Employees as of the Effective Date shall be deemed
enrolled in the Plan with respect to the Offering Period beginning on the IPO
Date. Thereafter, any Eligible Employee may enroll in the Plan for any future
Offering Period by completing and signing an enrollment election form or by such
other means as the Committee shall prescribe and submitting such enrollment
election to the Company or a member of the Participating Company Group in
accordance with procedures established by the Committee on or before the Cut-Off
Date with respect to such Offering Period.
ARTICLE 7. GRANT OF OPTIONS ON ENROLLMENT
7.1 Enrollment by an Eligible Employee in the Plan as of an
Enrollment Date will constitute the grant by the Company to such Participant of
an option on such Enrollment Date to purchase Shares from the Company pursuant
to the Plan.
7.2 An option granted to a Participant pursuant to this Plan shall
expire, if not terminated for any reason first, on the earliest to occur of (a)
the end of the Offering Period in which such option was granted; (b) the
completion of the purchase of Shares under the option under Section 9; or (c)
the date on which participation of such Participant in the Plan terminates for
any reason.
7.3 An option granted to a Participant under the Plan shall give
the Participant a right to purchase on a Purchase Date the largest number of
whole or fractional Shares, as designated by the Committee, which the funds
accumulated in the Participant's Account as of such Purchase Date will purchase
at the applicable Purchase Price; provided, however, that the Committee may, in
its discretion, limit the number of Shares purchased by each Participant in any
Purchase Period.
Notwithstanding anything to the contrary herein, no Employee shall be
granted an option under the Plan (or any other plan of the Company or a
Subsidiary intended to qualify under Section 423 of the Code) which would permit
the Employee to purchase Shares under the Plan (and such other plan) in any
calendar year with a Fair Market Value (determined at the time such option is
granted) in excess of $25,000.
ARTICLE 8. PAYMENT
The Committee may designate the time and manner for payment of Shares
to be purchased during the Purchase Period, including, but not limited to,
payment by each Participant in cash or by certified check on a date designated
by the Committee prior to the Purchase Date, or through payroll deductions, the
terms and conditions of which are designated by the Committee. Payment amounts
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shall be credited to a Participant's Account under this Plan. All payment
amounts may be used by the Company for any purpose and the Company shall have no
obligation to segregate such funds. No interest accrues on payments by
Participants.
ARTICLE 9. PURCHASE OF SHARES
9.1 Any option held by the Participant which was granted under
this Plan and which remains outstanding as of a Purchase Date shall be deemed to
have been exercised on such Purchase Date for the number of whole or fractional
Shares, as designated by the Committee, which the funds accumulated in the
Participant's Account as of the Purchase Date will purchase at the applicable
Purchase Price (but not in excess of the number of Shares for which options have
been granted to the Participant pursuant to Section 7.3). Options for other
Shares for which options have been granted which are not purchased on the last
Purchase Date during the Offering Period shall terminate.
9.2 If, after a Participant's exercise of an option under Section
9.1, an amount remains credited to the Participant's Account as of a Purchase
Date, then the remaining amount shall be (a) if no further Purchase Periods are
immediately contemplated by the Committee, distributed to the Participant as
soon as administratively feasible, or (b) if another Purchase Period is
contemplated by the Committee, carried forward in the Account for application to
the purchase of Shares on the next following Purchase Date. 9.3 If Shares are
purchased by a Participant pursuant to Section 9.1, then, within a reasonable
time after the Purchase Date, the Company shall deliver or cause to be delivered
to the Participant a certificate or certificates for the whole number of Shares
purchased by the Participant unless the Company has made arrangements to have
the Shares held at a bank or other appropriate institution in noncertificated
form. If any law or applicable regulation of the Securities and Exchange
Commission or other body having jurisdiction shall require that the Company or
the Participant take any action in connection with the Shares being purchased
under the option, delivery of the certificate or certificates for such Shares
shall be postponed until the necessary action shall have been completed, which
action shall be taken by the Company at its own expense, without unreasonable
delay. Certificates delivered pursuant to this Section 9.3 shall be registered
in the name of the Participant or, if the Participant so elects, in the names of
the Participant and his or her spouse, as joint tenants with rights of
survivorship, or as spousal community property, or in certain forms of trust
approved by the Committee, to the extent permitted by law.
9.4 In the case of Participants employed by a member of the
Participating Company Group, the Committee may provide for Shares to be sold
through the Subsidiary to such Participants, to the extent consistent with
Section 423 of the Code.
9.5 If the total number of Shares for which options are or could
be exercised on any Purchase Date in accordance with this Section 9, when
aggregated with all Shares for which options have been previously exercised
under this Plan, exceeds the maximum number of Shares reserved in Section 4.1,
the Company shall allocate the Shares available for delivery and distribution in
the ratio that the balance in each Participant's Account bears to the aggregate
balances of all Participants' Accounts, and the remaining balance of the amount
credited to the Account of each Participant under the Plan shall be returned to
him or her as promptly as possible.
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9.6 If a Participant or former Participant sells, transfers, or
otherwise makes a disposition of Shares purchased pursuant to an option granted
under the Plan within two (2) years after the date such option is granted or
within one (1) year after the date such Shares were transferred to the
Participant, and if such Participant or former Participant is subject to United
States federal income tax, then such Participant or former Participant shall
notify the Company or a member of the Participating Company Group in writing of
such sale, transfer or other disposition within ten (10) days of the
consummation of such sale, transfer, or other disposition.
ARTICLE 10. WITHDRAWAL FROM THE PLAN, TERMINATION OF EMPLOYMENT, AND LEAVE OF
ABSENCE
10.1 WITHDRAWAL FROM THE PLAN. A Participant may withdraw from the
Plan in full (but not in part) during any Purchase Period by delivering a notice
of withdrawal to the Company or a member of the Participating Company Group (in
a manner prescribed by the Committee) at any time up to but not including the
fifteen (15) days prior to the Purchase Date next following the date such notice
of withdrawal is delivered, or at such shorter time in advance of such Purchase
Date as the Committee may permit. If notice of withdrawal is timely received,
all funds then accumulated in the Participant's Account shall not be used to
purchase Shares, but shall instead be distributed to the Participant as soon as
administratively feasible. An Employee who has withdrawn during a Purchase
Period may not return funds to the Company or a member of the Participating
Company Group during the same Purchase Period and require the Company or member
of the Participating Company Group to apply those funds to the purchase of
Shares. Any Eligible Employee who has withdrawn from the Plan may, however,
re-enroll in the Plan on the next subsequent Enrollment Date, if any.
10.2 TERMINATION OF EMPLOYMENT. Participation in the Plan
terminates immediately when a Participant ceases to be employed by the Company
or a member of the Participating Company Group for any reason whatsoever or
otherwise ceases to be an Eligible Employee, and such terminated Participant's
outstanding options shall thereupon terminate. As soon as administratively
feasible after termination of participation, the Company or a member of the
Participating Company Group shall pay to the Participant or his or her
beneficiary or legal representative any amounts accumulated in the Participant's
Account at the time of termination of participation. Notwithstanding anything to
the contrary herein, if a Participant ceases to be an Eligible Employee by
reason of Retirement, death, or any other reason contemplated in Section 5.2
hereof and the Purchase Date is within three (3) months of the date the
Participant ceases to be an Eligible Employee, the Participant (or his or her
designated beneficiary, as applicable) shall have the right, upon ceasing to be
an Eligible Employee and in accordance with procedures prescribed by the
Committee, to elect to continue to participate in the Plan in accordance with
Section 10.1 through the end of the Purchase Period.
10.3 LEAVE OF ABSENCE. If a Participant takes a leave of absence
without terminating employment, such Participant shall have the right, at the
commencement of the leave of absence and in accordance with procedures
prescribed by the Committee, to elect to withdraw from the Plan in accordance
with Section 10.1. To the extent determined by the Committee or required by
Section 423 of the Code, certain leaves of absence may be treated as cessations
of employment for purposes of the Plan.
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ARTICLE 11. DESIGNATION OF BENEFICIARY
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom the amount in his or her Account is to be paid in case of his or her death
before he or she receives any or all of such benefit. Each such designation
shall revoke all prior designations by the same Participant, shall be in a form
prescribed by the Committee, and will be effective only when filed by the
Participant in writing with the Committee during the Participant's lifetime. In
the absence of any such designation, any Account balance remaining unpaid at the
Participant's death shall be paid to the Participant's estate.
ARTICLE 12. MISCELLANEOUS
12.1 RESTRICTIONS ON TRANSFER. Options granted under the Plan to a
Participant may not be exercised during the Participant's lifetime other than by
the Participant. Neither amounts credited to a Participant's Account nor any
rights with respect to the exercise of an option or to receive stock under the
Plan may be assigned, transferred, pledged, or otherwise disposed of in any way
by the Participant other than by will or the laws of descent and distribution.
Any such attempted assignment, transfer, pledge, or other disposition shall be
without effect, except that the Company may treat such act as an election to
withdraw from the Plan in accordance with Section 10.1.
12.2 ADMINISTRATIVE ASSISTANCE. If the Committee in its discretion
so elects, it may retain a brokerage firm, bank, or other financial institution
to assist in the purchase of Shares, delivery of reports, or other
administrative aspects of the Plan. If the Committee so elects, each Participant
shall (unless prohibited by applicable law) be deemed upon enrollment in the
Plan to have authorized the establishment of an account on his or her behalf at
such institution. Shares purchased by a Participant under the Plan shall be held
in the Account in the Participant's name, or if the Participant so indicates in
the enrollment form, in the Participant's name together with the name of his or
her spouse in joint tenancy with right of survivorship or spousal community
property, or in certain forms of trust approved by the Committee.
12.3 COSTS. All costs and expenses incurred in administering the
Plan shall be paid by the Company, except that any stamp duties, transfer taxes,
and any brokerage fees applicable to participation in the Plan may be charged to
the Account of such Participant by the Company.
12.4 WITHHOLDING. The Company or any member of the Participating
Company Group shall have the power and the right to deduct or withhold, or
require a Participant to remit to the Company or any member of the Participating
Company Group, an amount sufficient to satisfy Federal, state and local taxes,
domestic or foreign, required by law or regulation to be withheld with respect
to any taxable event arising as a result of this Plan.
12.5 EQUAL RIGHTS AND PRIVILEGES. All Eligible Employees shall have
equal rights and privileges with respect to the Plan so that the Plan qualifies
as an 'employee stock purchase plan' within the meaning of Section 423 or any
successor provision of the Code and the related regulations. Notwithstanding the
express terms of the Plan, any provision of the Plan which is inconsistent with
Section 423 or any successor provision of the Code shall without further act or
amendment by the Company or the Board be reformed to comply with the
requirements of Section 423 of the Code. This Section 12.5 shall take precedence
over all other provisions in the Plan.
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12.6 APPLICABLE LAW. The Plan shall be governed by the substantive
laws (excluding the conflict of laws rules) of the State of Delaware.
12.7 AMENDMENT AND TERMINATION. The Board may amend, alter, or
terminate the Plan at any time; provided, however, that (1) the Plan may not be
amended in a way which will cause rights issued under the Plan to fail to meet
the requirements of Section 423 of the Code; and (2) no amendment which would
amend or modify the Plan in a manner requiring stockholder approval under
Section 423 of the Code or the requirements of any securities exchange on which
the Shares are traded shall be effective unless such stockholder approval is
obtained. In addition, the Committee may amend the Plan as provided in Section
3.3, subject to the conditions set forth therein and in this Section 12.7.
If the Plan is terminated, the Board or Committee may elect to
terminate all outstanding options either prior to their expiration or upon
completion of the purchase of Shares on the next Purchase Date, or may elect to
permit options to expire in accordance with their terms (and participation to
continue through such expiration dates). If the options are terminated prior to
expiration, all funds accumulated in Participants' Accounts as of the date the
options are terminated shall be returned to the Participants as soon as
administratively feasible.
12.8 NO RIGHT OF EMPLOYMENT. Neither the grant nor the exercise of
any rights to purchase Shares under this Plan nor anything in this Plan shall
impose upon the Company or a member of the Participating Company Group any
obligation to employ or continue to employ any Employee. The right of the
Company or a member of the Participating Company Group to terminate any Employee
shall not be diminished or affected because any rights to purchase Shares have
been granted to such Employee.
12.9 RIGHTS AS SHAREHOLDER. No Participant shall have any rights as
shareholder unless and until Shares of Common Stock have been issued to him or
her.
12.10 GOVERNMENTAL REGULATION. The Company's obligation to sell and
deliver Shares of the Company's common stock under this Plan is subject to the
approval of any governmental authority required in connection with the
authorization, issuance, or sale of such Shares.
12.11 GENDER. When used herein, masculine terms shall be deemed to
include the feminine, except when the context indicates to the contrary.
12.12 CONDITION FOR PARTICIPATION. As a condition to participation
in the Plan, Eligible Employees agree to be bound by the terms of the Plan
(including, without limitation, the notification requirements of Section 9.6)
and the determinations of the Committee.
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Executed this __________ day of _____________, 2000.
SOUTHERN ENERGY, INC.
By:
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Title:
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Employee Stock Purchase Plan - Southern Energy Inc.
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