{"id":38589,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/change-in-control-agreement-the-southern-co-southern-energy.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"change-in-control-agreement-the-southern-co-southern-energy","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/change-in-control-agreement-the-southern-co-southern-energy.html","title":{"rendered":"Change in Control Agreement &#8211; The Southern Co., Southern Energy Inc., Southern Energy Resources Inc. and Richard J. Pershing"},"content":{"rendered":"<pre>                              AMENDED AND RESTATED\n                           CHANGE IN CONTROL AGREEMENT\n\n         THIS AMENDED AND  RESTATED  CHANGE IN CONTROL  AGREEMENT  (\"Agreement\")\nmade and entered into by and between The Southern Company (\"Southern\"), Southern\nEnergy,  Inc. (\"SEI\"),  Southern Energy Resources,  Inc. (the \"Company\") and Mr.\nRichard J. Pershing (\"Mr.  Pershing\")  (hereinafter  collectively referred to as\nthe \"Parties\") is effective as of the date of execution of this Agreement unless\notherwise provided herein.\n\n                              W I T N E S S E T H:\n\n         WHEREAS,  Mr.Pershing is the Executive  Vice  President of the \nCompany which serves as the employer with respect to assets held by SEI;\n\n         WHEREAS,  the  Parties  entered  into a  Change  in  Control  Agreement\neffective  December  10,  1998 (the  \"Original  Agreement\")  to  provide  to Mr.\nPershing  certain  severance  benefits under certain  circumstances  following a\nchange in control (as defined herein) of Southern or the Company;\n\n         WHEREAS,  the parties  subsequently  entered into a Change in Control\nAgreement,  effective  December 10, 1998 and executed June 21, 1999,  \nwhich  superseded  the Original  Agreement  (the \"Second  Agreement\")  to \nclarify benefits under this Agreement related to the Southern Energy Resources,\nInc. Deferred Incentive Compensation Plan;\n\n         WHEREAS,  pursuant to Section 6(d) of the Second Agreement, the Parties\nmay amend the Second Agreement by written agreement;\n\n         WHEREAS,  the  Parties  wish to enter into this  Amended  and  Restated\nChange in Control Agreement  pursuant to the provisions of such Section 6(d), to\n(i) change  certain  references  from normal market bonus to target bonus,  (ii)\nincorporate by reference the definition of \"change in control\" as provided under\nthe Change in Control Benefit Plan Determination  Policy adopted by the board of\ndirectors of SEI, (iii) reflect SEI's guarantee of benefits under the Agreement,\n(iv) reference an Omnibus  Incentive  Compensation  Plan which may be adopted by\nSEI  in  the  future,   and  (v)  certain  other  technical  and   miscellaneous\nmodifications;\n\n         NOW, THEREFORE, in consideration of the premises, and the agreements of\nthe  parties  set  forth  in  this  Agreement,   and  other  good  and  valuable\nconsideration, the receipt and sufficiency of which are hereby acknowledged, the\nparties hereby agree as follows:\n\n           1.  Definitions. For purposes of this Agreement, the following terms \n       shall have the following meanings:\n\n                  (a)  \"Annual  Compensation\"  shall mean Mr.  Pershing's  \n             highest  annual base salary rate for the twelve (12) month period \n             immediately preceding the date of the Change in Control plus \n             target bonus.\n\n                  (b) \"Board\" shall mean the board of directors of the Company.\n\n                  (c) \"Change in  Control\"  shall have the  meaning of such \n             term as set forth in the Change in Control Benefit Plan \n             Determination  Policy, as approved by the board of directors  \n             of SEI, as such  Policy may be amended  from time to time in\n             accordance with the provisions therein.  However,  any \n             amendment to the Policy  which causes the  definition  of \n             \"Change in Control\" to be more restrictive  than such \n             definition in effect on the Effective Date shall\n             not be taken  into  account  for  purposes  of this  \n             Agreement,  unless approved by the board of directors of SEI or a \n             compensation  committee thereof and agreed to in writing by Mr. \n             Pershing.\n\n                  (d) \"COBRA  Coverage\"  shall mean any  continuation  coverage\n             to which Mr. Pershing or his dependents may be entitled pursuant \n             to Code Section 4980B.\n                  \n                  (e) \"Code\" shall mean the Internal Revenue Code of 1986, as \n             amended.\n\n                  (f) \"Company\" shall mean Southern Energy Resources, Inc., its\n             successors and assigns.\n \n                  (g) \"DIC  Plan\"  shall  mean  the  Southern  Energy  \n             Resources,   Inc.  Deferred   Incentive Compensation Plan or \n             replacement thereto, as such plans may be amended from time \n             to time.\n\n                  (h) \"Effective  Date\" shall mean the date of execution \n             of this Agreement,  unless  otherwise\n             provided herein.\n\n                  (i)  \"Employee  Outplacement  Program\"  shall mean the \n             program established  by the  Company  from  time to time  for  \n             the  purpose  of assisting  participants  covered  by the  plan  \n             in  finding  employment outside of the Company which provides \n             for the following services:\n                           \n                       (i)  self-assessment,   career   decision  and  goal\n                  setting; \n \n                      (ii) job market  research  and job sources;\n\n                     (iii)  networking  and  interviewing   skills; \n  \n                      (iv)  planning  and  implementation  strategy;  \n                  \n                       (v)  resume writing,  job hunting methods and salary \n                  negotiation; and \n\n                      (vi)  office support and job search resources.\n\n                  (j) \"Exchange Act\" shall mean the Securities Exchange Act of \n             1934, as amended.\n\n                  (k) \"Good  Reason\"  shall mean,  without  Mr.  Pershing's  \n             express  written  consent,  after written  notice to the Board,  \n             and after a thirty (30) day  opportunity for  the  Board  to  \n             cure,  the  continuing  occurrence  of  any of the following \n             events:\n                      (i) Inconsistent Duties. A meaningful and detrimental  \n                  alteration in Mr. Pershing's position  or in the nature or \n                  status of his  responsibilities  from  those in effect  \n                  immediately prior to the Change in Control;\n                           \n                     (ii) Reduced Salary. A reduction of five percent (5%)\n                  or more by the  Company  in either of the  following: \n \n                         (i) Mr. Pershing's  annual base  salary rate as in \n                      effect  immediately prior to the  Change in  Control  \n                      (except  for a less than ten percent  (10%),   \n                      across-the-board  annual  base  salary  rate\n                      reduction  similarly  affecting at least  ninety-five  \n                      percent (95%) of the Executive Employees of the Company);\n                      or \n                        (ii) the sum of Mr.  Pershing's  annual  base  salary  \n                      rate plus target bonus under the  Company's  Short Term \n                      Plan (except for a less than ten percent (10%),  \n                      across-the-board  reduction of annual base salary  \n                      rate plus target  bonus under the Short Term Plan \n                      similarly  affecting at least ninety-five percent \n                      (95%) of the Executive Employees of the Company);\n                           \n                     (iii) Pension and Compensation Plans. The failure by\n                  the Company to continue in effect any pension or  compensation\n                  plan or agreement in which Mr.  Pershing  participates or is a\n                  party  as of  the  date  of  the  Change  in  Control  or  the\n                  elimination of Mr. Pershing's  participation therein,  (except\n                  for  across-the-board  plan changes or terminations  similarly\n                  affecting at least ninety-five  percent (95%) of the Executive\n                  Employees  of the  Company);  For  purposes of this  Paragraph\n                  1.(k),  a \"pension plan or  agreement\"  shall mean any written\n                  arrangement  executed by an authorized  officer of the Company\n                  which   provides  for   payments   upon   retirement;   and  a\n                  \"compensation  plan or  arrangement\"  shall  mean any  written\n                  arrangement  executed by an authorized  officer of the Company\n                  which  provides for periodic,  non-discretionary  compensatory\n                  payments in the nature of bonuses.\n \n                     (iv)  Relocation.  A change  in Mr.  Pershing's  work\n                  location  to a  location  more than  fifty (50) miles from the\n                  office where Mr. Pershing is located at the time of the Change\n                  in Control, unless such new work location is within fifty (50)\n                  miles from Mr. Pershing's  principal place of residence at the\n                  time of the Change in Control. The acceptance,  if any, by Mr.\n                  Pershing of employment by the Company at a work location which\n                  is outside the fifty mile  radius set forth in this  Paragraph\n                  1.(k)(iv)  shall  not be a waiver of Mr.  Pershing's  right to\n                  refuse subsequent  transfer by the Company to a location which\n                  is more than fifty (50)  miles from Mr.  Pershing's  principal\n                  place of residence  at the time of the Change in Control,  and\n                  such  subsequent  unconsented  transfer shall be \"Good Reason\"\n                  under this Agreement; or\n\n                      (v)  Benefits  and  Perquisites.  The  taking  of any\n                  action by the  Company  which  would  directly  or  indirectly\n                  materially  reduce the benefits  enjoyed by Mr. Pershing under\n                  the Company's retirement, life insurance,  medical, health and\n                  accident,  disability,  deferred compensation or savings plans\n                  in which Mr. Pershing was  participating  immediately prior to\n                  the  Change in  Control;  or the  failure  by the  Company  to\n                  provide Mr.  Pershing with the number of paid vacation days to\n                  which  Mr.  Pershing  is  entitled  on the  basis  of years of\n                  service  with the  Company in  accordance  with the  Company's\n                  normal  vacation  policy  in effect  immediately  prior to the\n                  Change  in  Control  (except  for  across-the-board   plan  or\n                  vacation  policy  changes  or  plan   terminations   similarly\n                  affecting at least ninety-five  percent (95%) of the Executive\n                  Employees of the Company).\n\n                      (vi) For purposes of this Paragraph 1.(k), the term \n                  \"Executive  Employee\" shall mean employees of the Company \n                  whose annual base salary is $130,000 or more.\n                  \n                 (l) \"Group  Health Plan\" shall mean the group health plan  \n             covering  Mr.  Pershing,  as such plan may be amended from time to \n             time.\n                 \n                 (m) \"Group Life  Insurance  Plan\" shall mean the group life \n             insurance  program  covering Mr.Pershing, as such plan may be \n             amended from time to time.\n\n                 (n) \"Month of Service\"  shall mean any calendar  month during \n             which Mr.  Pershing has worked at least one (1) hour or was on \n             approved  leave of absence while in the employ of the Company or \n             any affiliate or subsidiary of Southern.\n\n                 (o) \"Pension  Plan\" shall mean The Southern  Company  Pension\n             Plan, as such plan may be amended from time to time.\n\n                 (p) \"Performance  Dividend  Plan\"  shall  mean  the  Southern\n         Company Performance  Dividend Plan or any replacement  thereto, as such\n         plans may be amended from time to time.\n\n                 (q) \"Performance  Stock Plan\" shall mean the Southern Company\n         Performance Stock Plan or any replacement thereto, as such plans may be\n         amended from time to time.\n\n                 (r) \"Southern\" shall mean The Southern Company, its successors\n         and assigns.\n\n                 (s) \"Southern Board\" shall mean the board of directors of \n         Southern.\n\n                 (t) \"SEI\" shall mean Southern Energy, Inc., its successors and\n         assigns.\n\n                 (u) \"Southern  Subsidiary\"  shall  mean  any  corporation  or\n         other  entity  Controlled  by Southern.\n\n                 (v) \"Termination  for  Cause\"  or  \"Cause\"  shall  mean the  \n         termination  of Mr.  Pershing's employment by the Company upon the \n         occurrence of any of the following:\n\n                     (i) The willful and continued failure by Mr. Pershing\n                  substantially  to perform his duties  with the Company  (other\n                  than any such  failure  resulting  from Mr.  Pershing's  Total\n                  Disability  or from  Mr.  Pershing's  retirement  or any  such\n                  actual or anticipated  failure  resulting from  termination by\n                  Mr.  Pershing  for Good  Reason)  after a written  demand  for\n                  substantial  performance  is  delivered to him by the Southern\n                  Board,  which  demand  specifically  identifies  the manner in\n                  which   the   Southern   Board   believes   that  he  has  not\n                  substantially performed his duties; or\n\n                    (ii) The willful  engaging by Mr. Pershing in conduct\n                  that is demonstrably and materially  injurious to the Company,\n                  monetarily or otherwise,  including, but not limited to any of\n                  the following:\n                                    \n                         (A) any  willful act  involving  fraud or  dishonesty \n                     in the course of Mr. Pershing's employment by the Company;\n                                    \n                         (B) the willful carrying out of any activity\n                     or the making of any statement which would materially\n                     prejudice or impair the good name and standing of the\n                     Company,  SEI, Southern or any Southern Subsidiary or\n                     would bring the Company,  SEI,  Southern or any other\n                     Southern Subsidiary into contempt,  ridicule or would\n                     reasonably shock or offend any community in which the\n                     Company, SEI, Southern or such Southern Subsidiary is\n                     located;\n\n                         (C)  attendance  at  work  in  a  state  of\n                     intoxication  or otherwise  being found in possession\n                     at his workplace of any prohibited drug or substance,\n                     possession  of  which  would  amount  to  a  criminal\n                     offense;\n\n                         (D) violation of the  Company's  policies on\n                     drug and alcohol usage, fitness for duty requirements\n                     or similar policies as may exist from time to time as\n                     adopted by the Company's safety officer;\n\n                         (E) assault or other act of violence  against any \n                     person  during the course of employment; or\n\n                         (F) indictment of any felony or any misdemeanor \n                     involving moral turpitude.\n\n                  No act or failure to act by Mr.  Pershing  shall be deemed  \n         \"willful\"  unless done, or omitted to be done,  by Mr.  Pershing  not \n         in good  faith and  without  reasonable belief  that his action or  \n         omission  was in the best  interest  of the Company.\n\n                  Notwithstanding  the  foregoing,  Mr.  Pershing  shall  not be\n         deemed to have been  terminated  for Cause unless and until there shall\n         have been  delivered to him a copy of a resolution  duly adopted by the\n         affirmative  vote  of not  less  than  three  quarters  of  the  entire\n         membership  of the Southern  Board at a meeting of the  Southern  Board\n         called  and held for  such  purpose  (after  reasonable  notice  to Mr.\n         Pershing and an opportunity for him, together with counsel, to be heard\n         before the Southern Board),  finding that, in the good faith opinion of\n         the Southern Board,  Mr. Pershing was guilty of conduct set forth above\n         in  clause  (i) or (ii) of this  Paragraph  1.(v)  and  specifying  the\n         particulars thereof in detail.\n\n             (w)  \"Termination  Date\"  shall  mean the  date on  which  Mr.\n         Pershing's  employment  with  the  Company  is  terminated;   provided,\n         however,  that  solely for  purposes of  Paragraph  2.(c)  hereof,  the\n         Termination Date shall be the effective date of his retirement pursuant\n         to the terms of the Pension Plan.\n\n             (x) \"Total  Disability\"  shall mean Mr.  Pershing's total  \n         disability  within the meaning of the Pension Plan.\n\n             (y) \"Value  Creation  Plan\" shall mean the Southern  Energy  \n         Resources,  Inc. Value Creation Plan, or any replacement thereto, \n         as such plans may be amended from time to time.\n\n             (z) \"Waiver and Release\" shall mean the Waiver and Release \n         attached hereto as Exhibit A.\n\n            (aa) \"Year of Service\"  shall mean Mr.  Pershing's  Months of \n         Service  divided by twelve (12) rounded to the nearest whole year,  \n         rounding up if the remaining number of months is seven (7) or greater \n         and  rounding  down if the  remaining number of months is less than \n         seven (7). If Mr. Pershing has a break in his  service  with the  \n         Company,  he will  receive  credit  under  this\n         Agreement  for service  prior to the break in service only if the break\n         in service is less than five years.\n        \n         2. Severance Benefits.\n                  \n            (a)  Eligibility.   Except  as  otherwise   provided  in  this\n         Paragraph  2.(a),  if  Mr.   Pershing's   employment  is  involuntarily\n         terminated  by the  Company  at any time  during  the two  year  period\n         following a Change in Control for reasons  other than Cause,  or if Mr.\n         Pershing  voluntarily  terminates his  employment  with the Company for\n         Good Reason at any time  during the two year period  following a Change\n         in Control,  Mr.  Pershing  shall be  entitled to receive the  benefits\n         described in this Agreement upon the Company's  receipt of an effective\n         Waiver and Release.  Notwithstanding  anything to the contrary  herein,\n         Mr.  Pershing  shall not be  eligible  to receive  benefits  under this\n         Agreement if Mr. Pershing:\n\n                 (i)   voluntarily  terminates  his  employment  with the  \n            Company for other than Good Reason;\n\n                (ii)  has his employment terminated by the Company for Cause;\n\n               (iii)  accepts  the  transfer  of his  employment  to\n            Southern, any  Southern  Subsidiary  or  any  employer  that\n            succeeds  to all or  substantially  all of the  assets of SEI,\n            Southern or any Southern Subsidiary;\n\n                (iv)  refuses an offer of continued  employment  with\n            the Company,  any Southern  Subsidiary,  or any employer  that\n            succeeds  to all or  substantially  all of the  assets of SEI,\n            Southern, or any Southern Subsidiary under circumstances where\n            such  refusal  would not amount to Good  Reason for  voluntary\n            termination of employment; or\n\n                 (v)  elects  to  receive  the  benefits  of any other\n            voluntary or involuntary severance or separation program, plan\n            or  agreement  maintained  by the  Company in lieu of benefits\n            under this Agreement;  provided  however,  that the receipt of\n            benefits  under the terms of any  retention  plan or agreement\n            shall  not  be  deemed  to be  the  receipt  of  severance  or\n            separation benefits for purposes of this Agreement.\n\n           (b) Severance Benefits.  If Mr. Pershing meets the eligibility\n         requirements of Paragraph 2.(a) hereof,  he shall be entitled to a cash\n         severance  benefit  in an  amount  equal  to  three  times  his  Annual\n         Compensation (the \"Severance Amount\").  If any portion of the Severance\n         Amount  constitutes  an  \"excess  parachute  payment\"  (as such term is\n         defined  under Code Section 280G  (\"Excess  Parachute  Payment\")),  the\n         Company shall pay to Mr.  Pershing an additional  amount  calculated by\n         determining the amount of tax under Code Section 4999 that he otherwise\n         would have paid on any Excess  Parachute  Payment  with  respect to the\n         Change in Control and dividing  such amount by a decimal  determined by\n         adding  the tax rate  under  Code  Section  4999  (\"Excise  Tax\"),  the\n         hospital  insurance  tax under  Code  Section  3101(b)  (\"HI  Tax\") and\n         federal and state  income tax  measured at the highest  marginal  rates\n         (\"Income Tax\") and subtracting such result from the number one (1) (the\n         \"280G  Gross-up\");  provided,  however,  that no 280G Gross-up shall be\n         paid unless the Severance Amount plus all other \"parachute payments\" to\n         Mr.  Pershing  under  Code  Section  280G  exceeds  three (3) times Mr.\n         Pershing's  \"base  amount\" (as such term is defined  under Code Section\n         280G (\"Base Amount\")) by ten percent (10%) or more;  provided  further,\n         that if no 280G Gross-up is paid, the Severance  Amount shall be capped\n         at  three  (3)  times  Mr.  Pershing's  Base  Amount,  less  all  other\n         \"parachute  payments\" (as such term is defined under Code Section 280G)\n         received by Mr. Pershing, less one dollar (the \"Capped Amount\"), if the\n         Capped Amount, reduced by HI Tax and Income Tax, exceeds what otherwise\n         would have been the Severance Amount, reduced by HI Tax, Income Tax and\n         Excise Tax.\n\n                 For purposes of this Paragraph 2.(b), whether any amount would\n         constitute an Excess  Parachute  Payment and any other  calculations of\n         tax,  e.g.,  Excise Tax, HI Tax,  Income Tax,  etc., or other  amounts,\n         e.g., Base Amount,  Capped Amount, etc., shall be determined by the tax\n         department of the independent  public  accounting firm then responsible\n         for preparing  Southern's  consolidated  federal income tax return, and\n         such calculations or  determinations  shall be binding upon the parties\n         hereto.\n\n            (c)  Welfare  Benefits.  If Mr.  Pershing  meets the  eligibility  \n         requirements  of Paragraph  2.(a)  hereof and is not  otherwise  \n         eligible  to receive  retiree  medical  and life  insurance  benefits\n         provided to certain  retirees  pursuant to the terms of the Pension  \n         Plan,  the Group  Health Plan and the Group Life Insurance Plan, \n         he shall be entitled to the benefits set forth in this Paragraph 2.(c).\n              \n               (i)  Mr. Pershing shall be eligible to participate for\n             a period not to exceed five (5) years in the  Company's  Group\n             Health  Plan,  upon  payment  of both  the  Company's  and his\n             monthly  premium  under  such  plan,  for a period  of six (6)\n             months for each of Mr.  Pershing's  Years of  Service.  If Mr.\n             Pershing elects to receive this extended medical coverage,  he\n             shall  also be  entitled  to elect  coverage  under  the Group\n             Health Plan for his dependents who were  participating  in the\n             Group Health Plan on Mr. Pershing's  Termination Date (and for\n             such other dependents as may be entitled to coverage under the\n             provisions   of   the   Health   Insurance   Portability   and\n             Accountability Act of 1996) for the duration of Mr. Pershing's\n             extended medical coverage under this Paragraph 2.(c)(i) to the\n             extent such dependents remain eligible for dependent  coverage\n             under the terms of the Group Health Plan.\n                                    \n                    (A) The extended medical  coverage  afforded\n                  to Mr. Pershing  pursuant to Paragraph  2.(c)(i),  as\n                  well as the  premiums  to be paid by Mr.  Pershing in\n                  connection  with such coverage shall be determined in\n                  accordance  with the terms of the Group  Health  Plan\n                  and shall be subject to any  changes in the terms and\n                  conditions  of the Group  Health  Plan as well as any\n                  future  increases in premiums  under the Group Health\n                  Plan.  The  premiums  to be paid by Mr.  Pershing  in\n                  connection  with this extended  coverage shall be due\n                  on the first day of each  month;  provided,  however,\n                  that if he fails  to pay his  premium  within  thirty\n                  (30) days of its due  date,  such  extended  coverage\n                  shall be terminated.\n\n                    (B) Any Group Health Plan coverage  provided\n                  under  Paragraph  2.(c)(i) shall be a part of and not\n                  in addition to any COBRA Coverage which Mr.  Pershing\n                  or his  dependent  may  elect.  In the event that Mr.\n                  Pershing  or his  dependent  becomes  eligible  to be\n                  covered, by virtue of re-employment or otherwise,  by\n                  any  employer-sponsored   group  health  plan  or  is\n                  eligible for coverage under any  government-sponsored\n                  health plan during the above period,  coverage  under\n                  the  Company's  Group  Health Plan  available  to Mr.\n                  Pershing or his dependent by virtue of the provisions\n                  of Paragraph 2.(c)\n\n                      (i) shall terminate,  except as may\n                  otherwise  be  required  by  law,  and  shall  not be\n                  renewed.  \n\n                     (ii)  Mr.  Pershing  shall be  entitled  to\n                  receive cash in an amount equal to the Company's  and Mr.  \n                  Pershing's  cost of premiums for three (3) years of coverage \n                  under the Group  Health Plan and Group Life Insurance  \n                  Plan in accordance  with the terms of such plans as\n                  of the date of the Change in Control.\n\n                  (d) Incentive Plans. If Mr. Pershing meets the eligibility \n               requirements of Paragraph 2.(a) hereof he shall be entitled to\n               the following benefits under the Company's incentive plans:\n\n                      (i) Stock Option Plan.\n                          (A) Any of Mr. Pershing's  Options and Stock\n                      Appreciation  Rights under the Performance Stock Plan\n                      (the defined terms of which are  incorporated in this\n                      Paragraph    2.(d)(i)   by   reference)   which   are\n                      outstanding as of the Termination  Date and which are\n                      not then  exercisable and vested,  shall become fully\n                      exercisable  and  vested  to the full  extent  of the\n                      original grant; provided, that in the case of a Stock\n                      Appreciation  Right,  if Mr.  Pershing  is subject to\n                      Section   16(b)  of  the  Exchange  Act,  such  Stock\n                      Appreciation  Right shall not become fully vested and\n                      exercisable  at such time if such action would result\n                      in liability to Mr.  Pershing  under Section 16(b) of\n                      the Exchange  Act,  provided  further,  that any such\n                      actions not taken as a result of the rules of Section\n                      16(b) of the  Exchange  Act shall be  effective as of\n                      the first  date that  such  activity  would no longer\n                      result  in  liability  under  Section  16(b)  of  the\n                      Exchange Act.\n\n                        (B) The restrictions and deferral\n                      limitations  applicable  to  any  of  Mr.  Pershing's\n                      Restricted  Stock as of the  Termination  Date  shall\n                      lapse, and such Restricted Stock shall become free of\n                      all  restrictions  and  limitations  and become fully\n                      vested  and  transferable  to the full  extent of the\n                      original grant.\n\n                        (C) The restrictions and deferral\n                      limitations  and other  conditions  applicable to any\n                      other   Awards  held  by  Mr.   Pershing   under  the\n                      Performance  Stock  Plan as of the  Termination  Date\n                      shall lapse,  and such other Awards shall become free\n                      of all  restrictions,  limitations  or conditions and\n                      become  fully  vested  and  transferable  to the full\n                      extent of the original grant.\n\n                      (ii) Performance Dividend Plan. Provided Mr. Pershing\n                  is not  entitled to benefits  under the  Performance  Dividend\n                  Plan  (the  defined  terms of which are  incorporated  in this\n                  Paragraph 2.(d)(ii) by reference), if the Performance Dividend\n                  Plan is in place through Mr.  Pershing's  Termination Date and\n                  to the extent Mr. Pershing is entitled to participate therein,\n                  Mr.  Pershing shall be entitled to receive cash for each Award\n                  held by Mr. Pershing on his Termination  Date, based on actual\n                  performance under Section 4.1 of the Performance Dividend Plan\n                  determined as of the most recently  completed calendar quarter\n                  of the Performance  Period in which the Termination Date shall\n                  have occurred,  and the Annual Dividend  declared prior to the\n                  Termination Date.\n\n                      (iii) Value  Creation  Plan.  Any of Mr.  Pershing's\n                  Appreciation Rights or Indexed Rights under the Value Creation\n                  Plan  (the  defined  terms of which are  incorporated  in this\n                  Paragraph 2.(d)(iii) by reference) which are outstanding as of\n                  the  Termination  Date and which are not then  exercisable and\n                  vested, shall become fully exercisable and fully vested to the\n                  full extent of the original grant. Notwithstanding anything in\n                  the Value  Creation  Plan to the  contrary,  Share  Value with\n                  respect to any  Appreciation  Rights or Indexed Rights held by\n                  Mr. Pershing  following his Termination  Date shall be no less\n                  than the Share  Value as of the date of the  Change in Control\n                  of  Southern  or  SEI,  as  the  case  may  be.  In  addition,\n                  notwithstanding   any  provision  in  this  Agreement  to  the\n                  contrary,  Mr.  Pershing's rights and benefits under the terms\n                  of the Value Creation Plan will not be prejudiced by execution\n                  of this Agreement.\n\n                     (iv) Other Short Term Incentive Plans. The provisions\n                  of this Paragraph  2.(d)(iv)  shall apply if and to the extent\n                  that Mr.  Pershing is a  participant  in any other \"short term\n                  compensation  plan\" not  otherwise  previously  referred to in\n                  this Paragraph  2.(d).  Provided Mr. Pershing is not otherwise\n                  entitled  to  a  plan  payout  under  any  change  of  control\n                  provisions  of such  plans,  if the \"short  term  compensation\n                  plan\" is in place as of the Termination Date and to the extent\n                  Mr. Pershing is entitled to participate  therein, Mr. Pershing\n                  shall  receive  cash in an amount equal to his award under the\n                  Company's   \"short  term   incentive   plan\"  for  the  annual\n                  performance  period in which the  Termination  Date shall have\n                  occurred,  at Mr.  Pershing's  target  performance  level  and\n                  prorated by the number of months  which have passed  since the\n                  beginning   of  the  annual   performance   period  until  his\n                  Termination Date. For purposes of this Paragraph 2.(d)(iv) the\n                  term \"short term incentive  compensation  plan\" shall mean any\n                  incentive  compensation plan or arrangement adopted in writing\n                  by  the  Company   which   provides   for  annual,   recurring\n                  compensatory   bonuses  based  upon  articulated   performance\n                  criteria.\n\n                    (v) DIC Plan.  Provided Mr. Pershing is not entitled\n                  to benefits under Article V of the DIC Plan (the defined terms\n                  of which are  incorporated  into  this  Paragraph  2(d)(v)  by\n                  reference), if the DIC Plan is in place through Mr. Pershing's\n                  Termination  Date  and to the  extent  that  Mr.  Pershing  is\n                  entitled to participate  therein, any of Mr. Pershing's Awards\n                  as of the  Termination  Date which are not then  vested  shall\n                  become  fully  vested and Mr.  Pershing  shall be  entitled to\n                  receive cash in the amount equal to Mr. Pershing's  Account as\n                  of his Termination Date.  Notwithstanding  anything in the DIC\n                  Plan to the  contrary,  the  investment  return on the  Awards\n                  determined in accordance  with Section 3.1 of the DIC Plan for\n                  any Plan Year  following a Change in Control  shall be no less\n                  than the  investment  return  determined  in  accordance  with\n                  Section  3.1 of the DIC Plan as of the date of such  Change in\n                  Control with respect to those Accounts  which are  outstanding\n                  as of the date of such Change in Control.\n\n                    (vi) Omnibus  Incentive  Compensation  Plan.  In  the  \n                  event  of an  initial  public offering of SEI and the \n                  adoption of the Southern  Energy,  Inc.  Omnibus  Incentive  \n                  Compensation Plan (the \"Omnibus Plan\"),  Mr.  Pershing's  \n                  right to receive  incentive  compensation  under the\n                  Omnibus  Plan in the event of a \"change in  control,\"  \n                  as defined  therein,  shall be governed by the terms of such \n                  Omnibus Plan and the award(s) granted thereunder.\n\n             (e) Payment of  Benefits.  Any  amounts  due under this  \n         Agreement  shall be paid in one (1) lump sum payment as soon as \n         administratively  practicable following the later  of:  (i) Mr.  \n         Pershing's  Termination  Date,  or (ii)  upon  Mr. Pershing's  tender \n         of an effective Waiver and Release to the Company in\n         the  form of  Exhibit  A  attached  hereto  and the  expiration  of any\n         applicable revocation period for such waiver. In the event of a dispute\n         with respect to liability  or amount of any benefit due  hereunder,  an\n         effective  Waiver and  Release  shall be  tendered at the time of final\n         resolution of any such dispute when payment is tendered by the Company.\n         Effective  May 10,  2000,  if the  Company  fails  or  refuses  to make\n         payments under the Agreement, Mr. Pershing may have the right to obtain\n         payment  by SEI  pursuant  to the  terms  of the  \"Guarantee  Agreement\n         Concerning  Southern Energy  Resources,  Inc.  Compensation and Benefit\n         Arrangements\" entered into by the Company and SEI. Mr. Pershing's right\n         to payment is not increased as a result of this SEI  Guarantee.  He has\n         the same right to payment  from SEI as he would have from the  Company.\n         Any demand to enforce this SEI Guarantee  should be made in writing and\n         should  reasonably  and  briefly  specify the manner and the amount the\n         Company has failed to pay. Such writing  given by personal  delivery or\n         mail shall be  effective  upon actual  receipt.  Any  writing  given by\n         telegram  or  telecopier  shall be  effective  upon  actual  receipt if\n         received during SEI's normal business hours, or at the beginning of the\n         next business day after  receipt,  if not received  during SEI's normal\n         business  hours.  All  arrivals  by  telegram  or  telecopier  shall be\n         confirmed  promptly after  transmission in writing by certified mail or\n         personal delivery.\n\n             (f)  Benefits  in the  Event  of  Death.  In the  event of Mr.\n         Pershing's  death  prior to the  payment of all  amounts due under this\n         Agreement,  Mr.  Pershing's  estate shall be entitled to receive as due\n         any  amounts not yet paid under this  Agreement  upon the tender by the\n         executor  or  administrator  of the estate of an  effective  Waiver and\n         Release.\n\n             (g) Legal Fees. In the event of a dispute between Mr. Pershing\n         and the  Company  with  regard to any  amounts  due  hereunder,  if any\n         material  issue in such dispute is finally  resolved in Mr.  Pershing's\n         favor,  the Company shall reimburse Mr.  Pershing's legal fees incurred\n         with  respect to all issues in such  dispute in an amount not to exceed\n         fifty thousand dollars ($50,000).\n\n             (h) Employee  Outplacement  Services.  Mr.  Pershing shall be \n         eligible to participate in the Employee  Outplacement  Program,  \n         which  program shall not be less than six (6) months  duration  \n         measured from Mr. Pershing's Termination Date.\n\n             (i) Non-qualified  Retirement and Deferred Compensation Plans.\n         The Parties agree that subsequent to a Change in Control, any claims by\n         Mr.  Pershing for  benefits  under any of the  Company's  non-qualified\n         retirement  or deferred  compensation  plans shall be resolved  through\n         binding  arbitration  in accordance  with the provisions and procedures\n         set  forth in  Paragraph  5 hereof  and if any  material  issue in such\n         dispute is finally resolved in Mr.  Pershing's favor, the Company shall\n         reimburse Mr. Pershing's legal fees in the manner provided in Paragraph\n         2.(g) hereof.\n        \n         3. Transfer of Employment.  In the event that Mr. Pershing's employment\nby the Company is  terminated  during the two year period  following a Change in\nControl and Mr. Pershing accepts employment by Southern,  a Southern Subsidiary,\nor any employer that succeeds to all or substantially  all of the assets of SEI,\nSouthern or any Southern Subsidiary,  the Company shall assign this Agreement to\nSouthern, such Southern Subsidiary, or successor employer, Southern shall accept\nsuch  assignment  or cause such  Southern  Subsidiary  or successor  employer to\naccept such  assignment,  and such  assignee  shall become the \"Company\" for all\npurposes hereunder.\n\n         4. No Mitigation.  If Mr.  Pershing is otherwise  eligible to receive  \nbenefits under Paragraph 2 of this Agreement,  he shall have no duty or \nobligation to seek other  employment  following his Termination Date and,\nexcept as otherwise  provided in Paragraph  2.(a)(iii)  hereof, the amounts \ndue Mr. Pershing hereunder shall not be reduced or suspended if Mr. Pershing \naccepts such subsequent employment.\n\n         5. Arbitration.\n            (a)  Any  dispute,  controversy  or  claim  arising  out of or\n         relating to the Company's  obligations to pay severance  benefits under\n         this Agreement,  or the breach  thereof,  shall be settled and resolved\n         solely by  arbitration in accordance  with the  Commercial  Arbitration\n         Rules  of  the  American  Arbitration  Association  (\"AAA\")  except  as\n         otherwise  provided  herein.  The  arbitration  shall  be the  sole and\n         exclusive forum for resolution of any such claim for severance benefits\n         and the arbitrators'  award shall be final and binding.  The provisions\n         of this  Paragraph 5 are not  intended to apply to any other  disputes,\n         claims or  controversies  arising out of or relating to Mr.  Pershing's\n         employment by the Company or the termination thereof.\n\n            (b) Arbitration  shall be  initiated by serving a written  notice \n         of demand for  arbitration to Mr. Pershing, in the case of the Company,\n         or to the Southern Board, in the case of Mr. Pershing.\n\n            (c) The  arbitration  shall be held in Atlanta,  Georgia.  The\n         arbitrators shall apply the law of the State of Georgia,  to the extent\n         not preempted by federal law, excluding any law which would require the\n         application of the law of another state.\n\n            (d) The parties shall appoint  arbitrators within fifteen (15)\n         business  days  following  service of the demand for  arbitration.  The\n         number of arbitrators shall be three. One arbitrator shall be appointed\n         by Mr. Pershing,  one arbitrator shall be appointed by the Company, and\n         the two arbitrators  shall appoint a third.  If the arbitrators  cannot\n         agree on a third arbitrator  within thirty (30) business days after the\n         service  of  demand  for  arbitration,  the third  arbitrator  shall be\n         selected by the AAA.\n\n            (e) The arbitration  filing fee shall be paid by Mr. Pershing.\n         All other costs of arbitration  shall be borne equally by Mr.  Pershing\n         and the Company,  provided,  however,  that the Company shall reimburse\n         such fees and costs in the event any material  issue in such dispute is\n         finally resolved in Mr. Pershing's favor and Mr. Pershing is reimbursed\n         legal fees under Paragraph 2.(g) hereof.\n\n            (f) The parties  agree that they will  faithfully  observe the\n         rules that govern any arbitration  between them, they will abide by and\n         perform any award rendered by the arbitrators in any such  arbitration,\n         including  any award of  injunctive  relief,  and a judgment of a court\n         having jurisdiction may be entered upon an award.\n\n            (g) The  parties  agree that  nothing in this  Paragraph  5 is\n         intended to preclude  any court  having  jurisdiction  from issuing and\n         enforcing  in any lawful  manner  such  temporary  restraining  orders,\n         preliminary injunctions, and other interim measures of relief as may be\n         necessary to prevent harm to a party's interests or as otherwise may be\n         appropriate pending the conclusion of arbitration  proceedings pursuant\n         to this Agreement regardless of whether an arbitration proceeding under\n         this  Paragraph 5 has begun.  The parties  further  agree that  nothing\n         herein  shall  prevent any court from  entering  and  enforcing  in any\n         lawful manner such judgments for permanent  equitable  relief as may be\n         necessary to prevent harm to a party's interests or as otherwise may be\n         appropriate  following the issuance of arbitral awards pursuant to this\n         Agreement.\n\n        6.  Miscellaneous.\n            (a) Funding of Benefits.  Unless the Board,  in its discretion\n         shall determine  otherwise,  the benefits payable to Mr. Pershing under\n         this  Agreement  shall not be funded in any manner and shall be paid by\n         the Company out of its general assets,  which assets are subject to the\n         claims of the Company's creditors.\n\n            (b) Withholding.  There  shall be  deducted  from the  payment \n         of any benefit due under this Agreement  the amount of any tax  \n         required by any  governmental  authority to be withheld and paid \n         over by the Company to such governmental authority for the account \n         of Mr. Pershing.\n\n            (c) Assignment.  Mr. Pershing shall have no rights to sell, \n         assign,  transfer,  encumber, or otherwise  convey the right to \n         receive the payment of any benefit  due  hereunder,  which  payment \n         and the rights  thereto are  expressly  declared to be  nonassignable \n         and  nontransferable.  Any attempt to do so shall be null and void \n         and of no effect.\n\n            (d) Amendment  and  Termination.  The  Agreement  may be  \n         amended  or  terminated  only by a writing executed by the parties.\n\n            (e)  Construction.   This  Agreement  shall  be  construed  in\n         accordance  with and  governed by the laws of the State of Georgia,  to\n         the extent not preempted by federal law,  disregarding any provision of\n         law which would require the application of the law of another state.\n\n            (f)  Pooling  Accounting.   Notwithstanding  anything  to  the\n         contrary herein, if, but for any provision of this Agreement,  a Change\n         in  Control   transaction   would  otherwise  be  accounted  for  as  a\n         pooling-of-interests  under APB  No.16  (\"Pooling  Accounting\")  (after\n         giving  effect to any and all other facts and  circumstances  affecting\n         whether   such  Change  in  Control   transaction   would  use  Pooling\n         Accounting,),  such  provision or  provisions of this  Agreement  which\n         would  otherwise  cause  the  Change  in  Control   transaction  to  be\n         ineligible for Pooling Accounting shall be void and ineffective in such\n         a manner  and to the  extent  that by  eliminating  such  provision  or\n         provisions of this Agreement,  Pooling Accounting would be required for\n         such Change in Control transaction.\n\n\n\n\n\n         IN WITNESS WHEREOF,  the parties hereto have executed this \nAgreement this ____ day of  __________________, 2000.\n                                                            \n                                    THE SOUTHERN COMPANY\n\n\n                           By:      ____________________________________\n\n\n                                    SOUTHERN ENERGY RESOURCES, INC.\n\n\n                           By:      ____________________________________\n\n\n                                    SOUTHERN ENERGY, INC.\n\n\n                           By:      ____________________________________\n\n\n                                    MR. PERSHING\n\n\n                                    -----------------------------\n                                    Richard J. Pershing\n\n\n\n\n\n\nRJP\n26\n\n\n                                    Exhibit A\n\n                           CHANGE IN CONTROL AGREEMENT\n\n                               Waiver and Release\n\n\n         The  attached  Waiver  and  Release  is to be given to Mr.  Richard  J.\nPershing upon the occurrence of an event that triggers eligibility for severance\nbenefits under the Change in Control  Agreement,  as described in Paragraph 2(a)\nof such agreement.\n\n\n\n\n\n                          CHANGE IN CONTROL AGREEMENT\n\n                               Waiver and Release\n\n         I, Richard J.  Pershing,  understand  that I am entitled to receive the\nseverance  benefits  described  in Section 2 of the Change in Control  Agreement\n(the \"Agreement\") if I execute this Waiver and Release (\"Waiver\").  I understand\nthat the benefits I will receive  under the  Agreement  are in excess of those I\nwould have received  from The Southern  Company and Southern  Energy  Resources,\nInc. (collectively, the \"Company\") if I had not elected to sign this Waiver.\n\n         I recognize that I may have a claim against the Company under the Civil\nRights Act of 1964 and 1991,  the Age  Discrimination  in  Employment  Act,  the\nRehabilitation  Act of 1973, the Energy  Reorganization Act of 1974, as amended,\nthe Americans with Disabilities Act or other federal, state and local laws.\n\n         In exchange for the benefits I elect to receive,  I hereby  irrevocably\nwaive and release all claims,  of any kind whatsoever,  whether known or unknown\nin connection with any claim which I ever had, may have, or now have against The\nSouthern  Company,  Alabama Power  Company,  Georgia Power  Company,  Gulf Power\nCompany,  Mississippi  Power  Company,  Savannah  Electric  and  Power  Company,\nSouthern Communication Services, Inc., Southern Company Services, Inc., Southern\nEnergy  Resources,  Inc.,  Southern  Company Energy  Solutions,  Inc.,  Southern\nNuclear Operating Company, Inc. and other direct or indirect subsidiaries of The\nSouthern  Company  and their  past,  present  and  future  officers,  directors,\nemployees,  agents and  attorneys.  Nothing in this Waiver shall be construed to\nrelease  claims or causes of action under the Age  Discrimination  in Employment\nAct or the Energy  Reorganization  Act of 1974,  as amended,  which arise out of\nevents occurring after the execution date of this Waiver.\n\n         In further  exchange for the benefits I elect to receive,  I understand\nand agree that I will respect the  proprietary  and  confidential  nature of any\ninformation  I have obtained in the course of my service with the Company or any\nsubsidiary or affiliate of The Southern Company. However, nothing in this Waiver\nshall prohibit me from engaging in protected  activities under applicable law or\nfrom communicating,  either voluntary or otherwise, with any governmental agency\nconcerning any potential violation of the law.\n\n         In signing this Waiver, I am not releasing claims to benefits that I am\nalready entitled to under any workers' compensation laws or under any retirement\nplan or welfare  benefit  plan  within the  meaning of the  Employee  Retirement\nIncome Security Act of 1974, as amended, which is sponsored by or adopted by the\nCompany and\/or any of its direct or indirect subsidiaries; however, I understand\nand  acknowledge  that  nothing  herein is intended to or shall be  construed to\nrequire the Company to  institute or continue in effect any  particular  plan or\nbenefit  sponsored by the Company and the Company  hereby  reserves the right to\namend or terminate any of its benefit  programs at any time in  accordance  with\nthe procedures set forth in such plans.\n\n         In signing  this  Waiver,  I realize  that I am waiving and  releasing,\namong other things,  any claims to benefits under any and all bonus,  severance,\nworkforce reduction, early retirement,  outplacement,  or any other similar type\nplan sponsored by the Company.\n\n         I have been  encouraged  and  advised in writing  to seek  advice  from\nanyone of my choosing  regarding  this Waiver,  including  my  attorney,  and my\naccountant or tax advisor.  Prior to signing this Waiver,  I have been given the\nopportunity and sufficient time to seek such advice,  and I fully understand the\nmeaning and contents of this Waiver.\n\n         I understand  that I may take up to  twenty-one  (21)  calendar days to\nconsider  whether  or not I desire  to enter  this  Waiver.  I was not  coerced,\nthreatened  or otherwise  forced to sign this  Waiver.  I have made my choice to\nsign this Waiver voluntarily and of my own free will.\n\n         I understand that I may revoke this Waiver at any time during the seven\n(7) calendar day period after I sign and deliver this Waiver to the Company.  If\nI revoke  this  Waiver,  I must do so in writing  delivered  to the  Company.  I\nunderstand  that this Waiver is not effective until the expiration of this seven\n(7) calendar day  revocation  period.  I understand  that upon the expiration of\nsuch seven (7) calendar day revocation period this entire Waiver will be binding\nupon me and will be irrevocable.\n\n         I  understand  that by signing  this Waiver I am giving up rights I may\nhave.\n\n         IN WITNESS  WHEREOF,  the undersigned  hereby executes this Waiver \nthis ____ day of  ____________________, in the year _____.\n\n\n                                                  Richard J. Pershing\n\nSworn to and subscribed to me this\n____ day of ____________, _____.\n\n\nNotary Public\n\nMy Commission Expires:\n\n\n(Notary Seal)\n\n         Acknowledged and Accepted by the Company, as defined in the Waiver.\n\nBy:                                         \n         -----------------------------------\nDate:                                       \n         -----------------------------------\n\n\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8237,8872],"corporate_contracts_industries":[9534],"corporate_contracts_types":[9539,9551],"class_list":["post-38589","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-mirant-corp","corporate_contracts_companies-southern-co","corporate_contracts_industries-utilities__electric","corporate_contracts_types-compensation","corporate_contracts_types-compensation__severance"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/38589","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=38589"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=38589"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=38589"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=38589"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}