AMENDED AND RESTATED
EMPLOYMENT RETENTION AGREEMENT FOR SERI
THIS AMENDED AND RESTATED EMPLOYMENT RETENTION AGREEMENT ("Agreement")
made and entered into by and between Southern Energy Resources, L.L.C. ("SERI")
and (the "Employee") on , 2000, to be
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effective as of , 2000 (the "Effective Date").
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W I T N E S S E T H:
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WHEREAS, the Employee is the (insert title) of SERI; and
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WHEREAS, SERI and the Employee entered into an Employment Retention
Agreement on , 1999 (the "Original Effective Date")
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(the "Original Agreement"); and
WHEREAS, SERI and the Employee subsequently entered into an Amended and
Restated Employment Retention Agreement on (the "First
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Amended Agreement"); and
WHEREAS, SERI and the Employee wish to supersede the Original Agreement
and the First Amended Agreement with this Agreement; and
WHEREAS, this Agreement incorporates the definition of a "Change in
Control" from the Southern Energy Resources, Inc. Change in Control Benefit Plan
Determination Policy, and replaces references to Southern Company with
references to Southern Energy, Inc. ("Southern Energy") due to the spin-off of
Southern Energy from Southern Company; and
WHEREAS, SERI wishes to continue to encourage the Employee to remain
with SERI and to provide the Employee with an interest in SERI's overall
profitability.
NOW, THEREFORE, in consideration of the premises, and the agreements of
the parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. General Award. Subject to the terms and conditions of this
Agreement, SERI shall pay to the Employee an amount equal to ______________ (the
"Base Award") plus an additional amount calculated as provided in Section 3
below (the "Value Award") (collectively referred to as the "Award Amount").
2. Vesting of Award Amount. Payment of the Award Amount is subject to
Employee satisfying the following vesting requirements. The Award Amount shall
vest on the earlier of: (1) January 1, 2003 (the "Vesting Period"), provided the
Employee is then an employee of SERI, or an affiliate or subsidiary of Southern
Energy; or (2) upon a Change in Control as defined in the Southern Energy
Resources, Inc. Change in Control Benefit Plan Determination Policy, as amended
from time to time in accordance with the provisions therein (collectively the
"Vesting Date").
3. Value Award. The Value Award shall be calculated by multiplying the
Base Award times a percentage that is equal to the increase (expressed as a
percentage) in the Share Value of Southern Energy as determined on the most
recent Valuation Date preceding the Original Effective Date, this Share Value
converted in a manner consistent with the conversion under the former Southern
Energy Resources, Inc. Value Creation Plan, as in effect immediately prior to
the termination thereof (the "VCP"), and the increase in this "converted" Share
Value attributable to the increase, if any, in the common stock of Southern
Energy as determined on the Vesting Date. In the event of termination of
employment under Section 6, the Employee, or his estate in the event of death,
shall be entitled to a partial payment of the Value Award (the "Partial Value
Award"). Notwithstanding the above, the payment of any Value Award or Partial
Value Award under this Section 3 is expressly conditioned upon the determination
that the Share Value of Southern Energy as of the Vesting Date or the date of
termination of employment, whichever is applicable, is greater than the Share
Value of Southern Energy on the Original Effective Date. The "Share Value" on
the Original Effective Date shall be determined under the VCP; the "Share Value"
on the Vesting Date or the date of termination of employment shall be the fair
market value of the common stock of Southern Energy on the Valuation Date on or
immediately preceding the Vesting Date or the date of termination of employment,
as applicable. The "Valuation Date" with respect to the Original Effective Date
shall be determined under the VCP; the "Valuation Date" with respect to the
Vesting Date or the date of termination of employment shall be each day the New
York Stock Exchange conducts business.
4. Payment of Account Balance. Provided that the Employee is then an
employee of SERI, or an affiliate or subsidiary of Southern Energy, SERI shall
pay to the Employee the value of his Award Amount, in cash, within ten (10) days
of the Vesting Date.
5. Election to Defer. If eligible and permitted under the Southern
Energy, Inc. Deferred Compensation Plan for Directors and Select Employees, by
written election timely filed with the Deferred Compensation Plan Committee, the
Employee may defer all or a portion of the amount to be received under this
Agreement, by having such amount contributed on his account in accordance with
the terms and conditions of such Plan.
6. Death, Permanent Disability or Termination Without Cause. In the
event of the Employee's termination of employment with SERI, prior to the payout
of the Award Amount, for reasons of death, permanent disability or termination
by SERI without Cause (as defined in Section 7), SERI shall pay, within a
reasonable time after such event, to the Employee, or his estate in the event of
death, the Base Amount and the applicable Partial Value Amount determined under
Section 3 as of the date of such termination.
7. Termination for Cause or Resignation by Employee. In the event of
the Employee's termination of employment for Cause, or the Employee's
resignation (which includes the Employee's retirement), prior to the Vesting
Date, the Employee shall forfeit the entire Award Amount and SERI shall have no
further obligations with respect to any amount under this Agreement. As used in
this Agreement, the term "Cause" shall mean gross negligence or willful
misconduct in the performance of the duties and services required in the course
of employment by SERI; the final conviction of a felony or misdemeanor involving
moral turpitude; the carrying out of any activity or the making of any statement
which would prejudice the good name and standing of SERI, or an affiliate or
subsidiary of Southern Energy (collectively "SEI Group") or would bring the SEI
Group into contempt, ridicule or would reasonably shock or offend any community
in which the SEI Group is located; a material breach of the fiduciary
obligations owed by an officer and an employee to the SEI Group; or the
Employee's unsatisfactory performance of the duties and services required by his
or her employment provided that SERI has given the Employee notice of his
unsatisfactory performance and the actions required on the part of the Employee
to make such performance satisfactory and the Employee has not improved his or
her performance to a satisfactory level within a ninety (90) day period.
8. Confidentiality and Legal Process. The Employee represents and
agrees that he will keep the terms, amount and fact of this Agreement
confidential and that he will not hereafter disclose any information concerning
this Agreement to anyone other than his personal agents, including, but not
limited to, any past, present, or prospective employee or applicant for
employment with SERI, Southern Energy, or its affiliates. Notwithstanding the
foregoing, nothing in this Agreement is intended to prohibit the Employee from
performing any duty or obligation that shall arise as a matter of law.
Specifically, the Employee shall continue to be under a duty to truthfully
respond to matters of law. Specifically, the 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 the Employee's
right and ability to provide information to any federal, state or local
government in the lawful exercise of such government's governmental functions.
9. Assignability. Neither the Employee, his estate, his beneficiaries,
nor his legal representative shall have any rights to commute, sell, assign,
transfer or otherwise convey the right to receive any payments hereunder, which
payments and the rights thereto are expressly declared to be nonassignable and
nontransferable. Any attempt to assign or transfer the right to payments of this
Agreement shall be void and have no effect.
10. Unsecured General Creditor. SERI 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
SERI. Notwithstanding that the Employee may be entitled to receive the Award
Amount 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 SERI's
creditors.
11. Guarantee of Southern Energy. If SERI fails or refuses to make
payments under this Agreement, the Employee may have the right to obtain payment
by Southern Energy pursuant to the terms of the "Guarantee Agreement Concerning
Southern Energy Resources, Inc. Compensation and Benefit Arrangements" entered
into by SERI and Southern Energy. The Employee's right to payment is not
increased as a result of this Guarantee. The Employee has the same right to
payment from Southern Energy as from SERI. Any demand to enforce this Guarantee
should be made in writing and should reasonably and briefly specify the manner
and the amount SERI has failed to pay. Such writing given by personal delivery
or mail shall be effective upon actual receipt. Any writing given by telegram or
telecopier shall be effective upon actual receipt if received during Southern
Energy's normal business hours, or at the beginning of the next business day
after receipt, if not received during Southern Energy's normal business hours.
All arrivals by telegram or telecopier shall be confirmed promptly after
transmission in writing by certified mail or personal delivery.
12. Amendment; Modification; Termination. Except as otherwise provided
herein, this Agreement may be amended, modified, or terminated only by a writing
executed by the parties hereto.
13. 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 the Employee may be entitled or
for which he may be eligible, whether funded or unfunded, by reason of his
employment with the SERI.
14. 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 SERI to such governmental authority for the account
of the Employee.
15. Compensation. Any compensation contributed on behalf of the
Employee under this Agreement shall not be considered "compensation," as the
term is defined in the Southern Energy Resources Employee Savings Plan, or the
Southern Energy Resources Pension Plan. Distributions from the Employee's
Account shall not be considered wages, salaries or compensation under any other
employee benefit plan.
16. No Guarantee of Employment. No provision of this Agreement shall
be construed to affect in any manner the existing rights of SERI to suspend,
terminate, alter, modify, whether or not for Cause, the employment relationship
of the Employee and SERI.
17. Transfer of Employment to a Southern Energy Subsidiary or an
Affiliate. In the event that the Employee's employment by SERI is terminated
during the Vesting Period and the Employee shall become immediately re-employed
by another subsidiary or an affiliate of Southern Energy, SERI shall assign this
Agreement to such subsidiary or affiliate; such subsidiary or affiliate shall
accept such assignment or cause such affiliate or subsidiary to accept such
assignment; such assignee shall become "SERI" for all purposes hereunder; and
this Agreement shall be amended to appropriately reflect the performance of such
assignee. In the event of such assignment, the expense of this Agreement shall
be the sole responsibility of SERI.
18. Governing Law. This Agreement, and all its rights under it, shall
be governed by and construed in accordance with the laws of the State of
Georgia.
IN WITNESS WHEREOF, this Agreement has been executed by the parties
first listed above on the date first listed above, to be effective as of the
Effective Date.
SOUTHERN ENERGY RESOURCES, INC.
By: ______________________________
EMPLOYEE
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[Name of Employee]
Attest:
By:
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Employment Retention Agreement - Southern Energy Resources LLC
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