\n 11.05 GOVERNING LAW……………………………………………………………………..39
\n 11.06 SEVERABILITY………………………………………………………………………39
\n 11.07 AMENDMENT…………………………………………………………………………39
\n 11.08 TERMINATION……………………………………………………………………….39
\n 11.09 CONFLICT………………………………………………………………………….39
\n 11.10 COUNTERPARTS………………………………………………………………………40
\nSCHEDULE 1.22 HEALTH AND WELFARE PLANS……………………………………………………….42
\nSCHEDULE 1.23 HEALTH PLANS………………………………………………………………….43
\nSCHEDULE 1.43 POST-EMPLOYMENT PROGRAMS……………………………………………………….45
\nSCHEDULE 2.01 EMPLOYMENT LIABILITIES INDEMNIFICATION…………………………………………..46
\nSCHEDULE 2.01(a) BENEFITS AND LIABILITIES FOR SOUTHERN ENERGY RETIRED EMPLOYEES…………………..49
\nSCHEDULE 6.04(a) THIRD PARTY ASO CONTRACTS……………………………………………………52
\nSCHEDULE 6.04(b) GROUP INSURANCE POLICIES…………………………………………………….53
\nSCHEDULE 6.04(c) THIRD PARTY HMO CONTRACTS……………………………………………………54
\nSCHEDULE 7.04 STOCK PURCHASE PLAN……………………………………………………………55
\nSCHEDULE 7.05 SOUTHERN ENERGY OMNIBUS INCENTIVE COMPENSATION PLAN……………………………….56
\nSCHEDULE 8 FRINGE BENEFITS…………………………………………………………………..1
\nSCHEDULE 10.10(a) EMPLOYMENT LITIGATION – TRANSFERRED CLAIMS…………………………………….1
\nSCHEDULE 10.10(b) EMPLOYMENT LITIGATION – JOINTLY DEFEND CLAIMS………………………………….1
\n<\/c><\/s><\/table>\n iv
\n 6<\/p>\n
EMPLOYEE MATTERS AGREEMENT<\/p>\n
THIS EMPLOYEE MATTERS AGREEMENT (this “Agreement”) is entered into as
\nof September 1, 2000, between The Southern Company (“Southern”), a Delaware
\ncorporation and Southern Energy, Inc. (“Southern Energy”), a Delaware
\ncorporation. Capitalized terms used herein (other than the formal names of
\nSouthern Plans (as defined below) and related trusts of Southern) and not
\notherwise defined, shall have the respective meanings assigned to them in
\nArticle I hereof.<\/p>\n
WHEREAS, the Board of Directors of Southern has determined that it is
\nin the best interests of Southern and its shareholders to separate the
\nbusinesses of Southern and Southern Energy and to cause Southern Energy to offer
\nits stock for public trading; and<\/p>\n
WHEREAS, Southern currently contemplates that, within 12 months
\nfollowing such public offering, Southern will distribute to the holders of its
\ncommon stock, by means of a pro rata distribution, all of the shares of Southern
\nEnergy common stock then owned by Southern; and<\/p>\n
WHEREAS, in furtherance of the foregoing, Southern and Southern Energy
\nhave agreed to enter into this Agreement to allocate between them assets,
\nliabilities and responsibilities with respect to certain employee compensation,
\nbenefit plans and programs, and certain employment matters.<\/p>\n
NOW, THEREFORE, in consideration of the foregoing and the covenants and
\nagreements set forth below, the parties hereto agree as follows:<\/p>\n
ARTICLE I<\/p>\n
DEFINITIONS<\/p>\n
Wherever used in this Agreement, the following terms shall have the
\nmeanings indicated below, unless a different meaning is plainly required by the
\ncontext. The singular shall include the plural, unless the context indicates
\notherwise. Headings of sections are used for convenience of reference only, and
\nin case of conflict, the text of this Agreement, rather than such headings,
\nshall control:<\/p>\n
1.01 AFFILIATED COMPANY. “Affiliated Company” shall have the meaning
\nset forth in the Separation Agreement.<\/p>\n
1.02 AGREEMENT. “Agreement” means this Employee Matters Agreement,
\nincluding all the Addenda, Schedules and Exhibits hereto, and all amendments
\nmade hereto from time to time.<\/p>\n
7<\/p>\n
1.03 ANCILLARY AGREEMENTS. “Ancillary Agreements” means all of the
\nunderlying agreements, documents and instruments referred to, contemplated by,
\nor made a part of the Separation Agreement.<\/p>\n
1.04 ASO CONTRACTS. “ASO Contracts” is defined in Subsection 6.04(a)
\nand the Schedule 6.04(a).<\/p>\n
1.05 CHANGE IN CONTROL PROGRAMS. “Change in Control Programs,” when
\nimmediately preceded by “Southern,” means the Southern Executive Change in
\nControl Plan, the Southern Change in Control Plan and the individual change in
\ncontrol agreements entered into with executives of Southern. When immediately
\npreceded by “Southern Energy,” “Change in Control Programs” means the Southern
\nEnergy change in control plans to be established by Southern Energy pursuant to
\nSections 2.02 and 5.05 that correspond to the respective Southern Change in
\nControl Programs.<\/p>\n
1.06 COBRA. “COBRA” means the continuation coverage requirements for
\n“group health plans” under Title X of the Consolidated Omnibus Budget
\nReconciliation Act of 1985, as amended from time to time, and as codified in
\nCode Section 4980B and ERISA Sections 601 through 608.<\/p>\n
1.07 CODE. “Code” means the Internal Revenue Code of 1986, as amended
\nfrom time to time.<\/p>\n
1.08 DEFERRED COMPENSATION PLAN. “Deferred Compensation Plan,” when
\nimmediately preceded by “Southern,” means the Southern Deferred Compensation
\nPlan. When immediately preceded by “Southern Energy,” “Deferred Compensation
\nPlan” means the Southern Energy deferred compensation plan to be established by
\nSouthern Energy pursuant to Sections 2.02 and 5.02 that corresponds to the
\nSouthern Deferred Compensation Plan.<\/p>\n
1.09 DISTRIBUTION. “Distribution” means a pro rata distribution by
\nSouthern to the holders of its common stock of all the shares of Southern Energy
\ncommon stock owned by Southern, as the same is further described in the
\nSeparation Agreement.<\/p>\n
1.10 DISTRIBUTION DATE. “Distribution Date” means the date that the
\nDistribution is effective.<\/p>\n
1.11 DOL. “DOL” means the United States Department of Labor.<\/p>\n
1.12 ERISA. “ERISA” means the Employee Retirement Income Security Act
\nof 1974, as amended from time to time.<\/p>\n
1.13 ESOP. “ESOP,” when immediately preceded by “Southern,” means the
\nSouthern Employee Stock Ownership Plan, a defined contribution plan.<\/p>\n
2
\n 8<\/p>\n
1.14 ESP. “ESP,” when immediately preceded by “Southern,” means the
\nSouthern Employee Savings Plan, a defined contribution plan. When immediately
\npreceded by “Southern Energy,” “ESP” means the employee savings plan to be
\nestablished by Southern Energy pursuant to Sections 2.02 and 4.01 that
\ncorresponds to the Southern Employee Savings Plan.<\/p>\n
1.15 FLEXIBLE BENEFITS PLAN. “Flexible Benefits Plan,” when immediately
\npreceded by “Southern,” means the Southern Flexible Benefits Plan. When
\nimmediately preceded by “Southern Energy,” Flexible Benefits Plan means the
\nSouthern Energy flexible benefits plan to be established by Southern Energy
\npursuant to Sections 2.02 and Article VI that corresponds to the Southern
\nFlexible Benefits Plan.<\/p>\n
1.16 FMLA. “FMLA” means the Family and Medical Leave Act of 1993, as
\namended from time to time.<\/p>\n
1.17 FOREIGN PLAN. “Foreign Plan” means those Southern Energy Plans
\nmaintained by Southern Energy for the benefit of its non-expatriate employees
\noutside the U.S.<\/p>\n
1.18 FRINGE BENEFITS. “Fringe Benefits,” when immediately preceded by
\n“Southern,” means the Southern employee assistance program and other fringe
\nbenefits, plans, programs and arrangements sponsored and maintained by Southern
\n(as set forth in Article VIII and the Schedule attached thereto). When
\nimmediately preceded by “Southern Energy,” “Fringe Benefits” means the fringe
\nbenefits, plans, programs and arrangements established or to be established by
\nSouthern Energy pursuant to Section 2.02 and Article VIII that correspond to the
\nrespective Southern Fringe Benefits.<\/p>\n
1.19 GROUP STATUS CHANGE. “Group Status Change” means the earlier to
\noccur of: (a) the Distribution, or (b) Southern ceasing to own at least 80% of
\nthe combined voting power of all classes of stock entitled to vote or the total
\nvalue of all shares of all classes of stock of Southern Energy then outstanding.
\nSouthern’s ownership of outstanding Southern Energy stock shall be determined
\npursuant to Sections 414 and 1563 of the Code.<\/p>\n
1.19A GROUP STATUS CHANGE DATE. “Group Status Change Date” means the
\ndate on which the Group Status Change occurs, or such other date as Southern and
\nSouthern Energy shall mutually agree upon.<\/p>\n
1.20 GROUP INSURANCE POLICIES. “Group Insurance Policies” is defined in
\nSubsection 6.04(b) and the Schedule thereto.<\/p>\n
1.21 HCFA. “HCFA” means the United States Health Care Financing
\nAdministration.<\/p>\n
3
\n 9<\/p>\n
1.22 HEALTH AND WELFARE PLANS. “Health and Welfare Plans,” when
\nimmediately preceded by “Southern,” means the Southern Health Plans, the
\nSouthern Flexible Benefits Plan, and the health and welfare plans listed on
\nSchedule 1.22 established and maintained by Southern for the benefit of
\nemployees and retirees of the Southern Group, and such other welfare plans or
\nprograms as may apply to such employees and retirees as of the Group Status
\nChange Date. When immediately preceded by “Southern Energy,” “Health and Welfare
\nPlans” means the Southern Energy Health Plans, the Southern Energy Flexible
\nBenefits Plan, and the health and welfare plans to be established by Southern
\nEnergy pursuant to Section 2.02 and Article VI that correspond to the respective
\nSouthern Health and Welfare Plans.<\/p>\n
1.23 HEALTH PLANS. “Health Plans,” when immediately preceded by
\n“Southern,” means the Plans set forth on Schedule 1.23, and any similar or
\nsuccessor plans, programs or arrangements. When immediately preceded by
\n“Southern Energy,” “Health Plans” means the health plans, programs and
\narrangements to be established by Southern Energy pursuant to Section 2.02 and
\nArticle VI that correspond to the respective Southern Health Plans.<\/p>\n
1.24 HMO. “HMO” means a health maintenance organization that provides
\nbenefits under the Southern Health Plans or the Southern Energy Health Plans.<\/p>\n
1.25 HMO AGREEMENTS. “HMO Agreements” is defined in Subsection 6.04(c)
\nand Schedule 6.04(c).<\/p>\n
1.26 IPO. “IPO” means the initial public offering of Southern Energy
\ncommon stock pursuant to a registration statement on Form S-1 pursuant to the
\nSecurities Act of 1933, as amended.<\/p>\n
1.27 IPO CLOSING DATE. “IPO Closing Date” means the date of the closing
\nof the IPO, as further defined in the Separation Agreement.<\/p>\n
1.28 IPO REGISTRATION STATEMENT. “IPO Registration Statement” means the
\nregistration statement on Form S-1 pursuant to the Securities Act of 1933 as
\namended, to be filed with the SEC registering the shares of common stock of
\nSouthern Energy to be issued in the IPO, together with all amendments thereto.<\/p>\n
1.29 IRS. “IRS” means the United States Internal Revenue Service.<\/p>\n
1.30 LEAVE OF ABSENCE PROGRAMS. “Leave of Absence Programs,” when
\nimmediately preceded by “Southern,” means the personal, medical, military and
\nFMLA leave offered from time to time under the personnel policies and practices
\nof Southern. When immediately preceded by “Southern Energy,” “Leave of Absence
\nPrograms” means the leave of absence programs established and maintained by
\nSouthern Energy.<\/p>\n
4
\n 10<\/p>\n
1.31 LIABILITIES. “Liabilities” means all debts, liabilities,
\nguarantees, assurances, commitments, and obligations, whether fixed, contingent
\nor absolute, asserted or unasserted, matured or unmatured, liquidated or
\nunliquidated, accrued or not accrued, known or unknown, due or to become due,
\nwhenever or however arising (including, without limitation, whether arising out
\nof any Contract or tort based on negligence or strict liability) and whether or
\nnot the same would be required by generally accepted principles and accounting
\npolicies to be reflected in financial statements or disclosed in the notes
\nthereto. “Contract” means any contract, agreement, lease, license, sales order,
\npurchase order, instrument or other commitment that is binding on any Person or
\nany part of its property under applicable law.<\/p>\n
1.32 MASTER TRUST. “Master Trust,” when immediately preceded by
\n“Southern,” means the Southern Master Trust. When immediately preceded by
\n“Southern Energy,” “Master Trust” means the Southern Energy Master Trust
\ndescribed in Section 3.01.<\/p>\n
1.33 NON-QUALIFIED PLANS. “Non-Qualified Plans,” when immediately
\npreceded by “Southern,” means the Southern Supplemental Benefit Plan, the
\nSouthern SERP and the Southern Deferred Compensation Plan. When immediately
\npreceded by “Southern Energy,” “Non-Qualified Plans” means the deferred
\ncompensation, supplemental executive retirement and supplemental benefit plans,
\nprograms, or arrangements established or to be established by Southern Energy
\npursuant to Section 2.02 and Article V.<\/p>\n
1.34 OMNIBUS INCENTIVE COMPENSATION PLAN. “Omnibus Incentive
\nCompensation Plan” means the Southern Energy Omnibus Incentive Compensation Plan
\nas described in Section 7.05.<\/p>\n
1.35 OPTION. “Option,” when immediately preceded by “Southern,” means
\nan option to purchase Southern common stock pursuant to a Stock Plan. When
\nimmediately preceded by “Southern Energy,” “Option” means an option to purchase
\nSouthern Energy common stock pursuant to a plan providing such benefits to be
\nestablished by Southern Energy pursuant to Section 2.02 and Article VII.<\/p>\n
1.36 OUTSOURCE. “Outsource” is defined in Subsection 6.02(b).<\/p>\n
1.37 PARTICIPATING COMPANY. “Participating Company” means: (a)
\nSouthern; (b) any Person (other than an individual) that Southern has approved
\nfor participation in, has accepted participation in, and which is participating
\nin, a Plan sponsored by Southern; or (c) any Person (other than an individual)
\nwhich, by the terms of such Plan, participates in such Plan or any employees of
\nwhich, by the terms of such Plan, participate in or are covered by such Plan.<\/p>\n
1.38 PBGC. “PBGC” means the Pension Benefit Guaranty Corporation.<\/p>\n
5
\n 11<\/p>\n
1.39 PENSION PLAN. “Pension Plan,” when immediately preceded by
\n“Southern,” means the Southern Pension Plan, a defined benefit plan. When
\nimmediately preceded by “Southern Energy,” “Pension Plan” means the pension plan
\nto be established by Southern Energy pursuant to Section 2.02 and Article III
\nthat corresponds to the Southern Pension Plan.<\/p>\n
1.40 PERFORMANCE DIVIDEND PLAN. “Performance Dividend Plan,” when
\nimmediately preceded by “Southern,” means the Southern Performance Dividend
\nPlan. When immediately preceded by “Southern Energy,” “Performance Dividend
\nPlan” means the dividend plan, if any, established by Southern Energy pursuant
\nto Section 2.02 and Article VII that corresponds to the Southern Performance
\nDividend Plan.<\/p>\n
1.41 PERSON. “Person” means an individual, a partnership, a
\ncorporation, a limited liability company, an association, a joint stock company,
\na trust, a joint venture, an unincorporated organization, and a governmental
\nentity or any department, agency or political subdivision thereof.<\/p>\n
1.42 PLAN. “Plan,” means any plan, policy, program, payroll practice,
\narrangement, contract, trust, insurance policy, or any agreement or funding
\nvehicle providing compensation or benefits to employees, former employees or
\ndirectors of Southern or Southern Energy.<\/p>\n
1.43 POST-EMPLOYMENT PROGRAMS. “Post-Employment Programs,” when
\nimmediately preceded by “Southern,” means the Plans set forth on Schedule 1.43
\nthat permit certain retirees and former employees of the Southern Group and
\ntheir eligible spouses and dependents to continue to receive coverage and
\nbenefits under certain Southern Health and Welfare Plans for a designated period
\nof time. When immediately preceded by “Southern Energy,” “Post-Employment
\nPrograms” means such continuation programs to be established by Southern Energy
\npursuant to Sections 2.02 and Article VI that correspond to the Southern
\nPost-Employment Programs.<\/p>\n
1.44 PSP. “PSP,” when immediately preceded by “Southern,” means the
\nSouthern Performance Sharing Plan, a defined contribution plan. When immediately
\npreceded by “Southern Energy,” “PSP” means the performance sharing plan, if any,
\nto be established by Southern Energy pursuant to Sections 2.02 and 4.03 that
\ncorresponds to the Southern Performance Sharing Plan.<\/p>\n
1.45 QDRO. “QDRO” means a domestic relations order which qualifies
\nunder Code Section 414(p) and ERISA Section 206(d) and which creates or
\nrecognizes an alternate payee’s right to, or assigns to an alternate payee, all
\nor a portion of the benefits payable to a participant under any of the Southern
\nRetirement Plans.<\/p>\n
1.46 QMCSO. “QMCSO” means a medical child support order which qualifies
\nunder ERISA Section 609(a) and which creates or recognizes the existence of an
\nalternate<\/p>\n
6
\n 12<\/p>\n
recipient’s right to, or assigns to an alternate recipient the right to, receive
\nbenefits for which a participant or beneficiary is eligible under any of the
\nHealth Plans.<\/p>\n
1.47 RABBI TRUST. “Rabbi Trust,” when immediately preceded by
\n“Southern,” means the rabbi trust established for purposes of holding assets
\nunder the Southern Executive Deferred Compensation Trust. When immediately
\npreceded by “Southern Energy,” “Rabbi Trust” means the rabbi trust to be
\nestablished by Southern Energy pursuant to Section 5.06 that corresponds to the
\nSouthern Rabbi Trust.<\/p>\n
1.48 RATIO. “Ratio” means the ratio determined by dividing the Southern
\nEnergy Stock Value by the Southern Stock Value.<\/p>\n
1.49 RECORD DATE. “Record Date” means the close of business on the date
\nto be determined by the Board of Directors of Southern as the record date for
\ndetermining the stockholders of Southern entitled to receive shares of common
\nstock of Southern Energy in the Distribution.<\/p>\n
1.50 RETIREMENT PLANS. “Retirement Plans,” when immediately preceded by
\n“Southern,” means the Southern Pension Plan, the Southern ESP, the Southern ESOP
\nand the Southern PSP. When immediately preceded by “Southern Energy,”
\n“Retirement Plans” means all defined contribution and defined benefit plans
\nestablished or to be established by Southern Energy pursuant to Section 2.02,
\nand Articles III and IV that correspond to, or receive assets from, the
\nrespective Southern Retirement Plans.<\/p>\n
1.51 SEC. “SEC” means the United States Securities and Exchange
\nCommission.<\/p>\n
1.52 SEPARATION AGREEMENT. “Separation Agreement” means the Master
\nSeparation and Distribution Agreement dated as of September 1, 2000, of which
\nthis Agreement is an Exhibit.<\/p>\n
1.53 SERP. “SERP,” when immediately preceded by “Southern,” means the
\nSouthern Supplemental Executive Retirement Plan. When immediately preceded by
\n“Southern Energy,” “SERP” means the Southern Energy Supplemental Executive
\nRetirement Plan.<\/p>\n
1.54 SEVERANCE PLANS. “Severance Plans,” when immediately preceded by
\n“Southern,” means the severance pay plans established and maintained by
\nSouthern. When immediately preceded by “Southern Energy,” “Severance Plans”
\nmeans the severance pay plans established and maintained by Southern Energy.<\/p>\n
1.55 SHORT TERM INCENTIVE PLAN. “Short Term Incentive Plan” means the
\nSouthern Energy Short Term Incentive Plan described in Section 7.06.<\/p>\n
1.56 SOUTHERN. “Southern” means The Southern Company, a Delaware
\ncorporation. In all such instances in which Southern is referred to in this
\nAgreement, it<\/p>\n
7
\n 13<\/p>\n
shall also be deemed to include a reference to each member of the Southern
\nGroup, unless it specifically provides otherwise; Southern shall be solely
\nresponsible to Southern Energy for ensuring that each member of the Southern
\nGroup complies with the applicable terms of this Agreement.<\/p>\n
1.57 SOUTHERN EMPLOYEE. “Southern Employee” means an individual who, on
\nthe Group Status Change Date, is or was employed within the Southern Group and
\nis not a Southern Energy Employee.<\/p>\n
1.58 SOUTHERN ENERGY. “Southern Energy” means Southern Energy, Inc., a
\nDelaware corporation. In all such instances in which Southern Energy is referred
\nto in this Agreement, it shall also be deemed to include a reference to each
\nmember of the Southern Energy Group, unless it specifically provides otherwise;
\nSouthern Energy shall be solely responsible to Southern for ensuring that each
\nmember of the Southern Energy Group complies with the applicable terms of this
\nAgreement.<\/p>\n
1.59 SOUTHERN ENERGY EMPLOYEE. “Southern Energy Employee” means any
\nindividual who, as of the Group Status Change Date, is: (a) either actively
\nemployed by, or on a leave of absence from, the Southern Energy Group; (b) a
\nSouthern Energy Terminated Employee; (c) an alternate payee under a QDRO,
\nalternate recipient under a QMCSO, beneficiary, covered dependent, or qualified
\nbeneficiary (as such term is defined under COBRA), of an employee described in
\nSubsection (a) or (b) above; or (d) an employee or group of employees designated
\nby Southern and Southern Energy, by mutual agreement, as Southern Energy
\nEmployees; but not (e) a Southern Energy Retired Employee. An employee may be a
\nSouthern Energy Employee pursuant to this Section regardless of whether such
\nemployee is, as of the Group Status Change Date, alive, actively employed, on a
\ntemporary leave of absence from active employment, on layoff, terminated from
\nemployment, retired or on any other type of employment or post-employment status
\nrelative to a Southern Plan, and regardless of whether, as of the Group Status
\nChange Date, such employee is then receiving any benefits from a Southern Plan.<\/p>\n
1.60 SOUTHERN ENERGY GROUP. “Southern Energy Group” shall have the
\nmeaning set forth in the Separation Agreement.<\/p>\n
1.61 SOUTHERN ENERGY RETIRED EMPLOYEE. “Southern Energy Retired
\nEmployee” means any Southern Energy Employee who retired on or before the Group
\nStatus Change Date and who is identified as a Southern Energy Retired Employee
\nby mutual agreement between Southern Energy and Southern on or before the Group
\nStatus Change Date.<\/p>\n
1.62 SOUTHERN ENERGY STOCK VALUE. “Southern Energy Stock Value” means
\nthe opening per-share price of Southern Energy common stock as listed on the
\nNYSE or NASDAQ, as applicable, on the first trading day after the Distribution
\nDate.<\/p>\n
8
\n 14<\/p>\n
1.63 SOUTHERN ENERGY TERMINATED EMPLOYEE. “Southern Energy Terminated
\nEmployee” means any individual who is a former employee of the Southern Group
\nwho was terminated from the Southern Energy Group on or before the Distribution.
\nNotwithstanding the foregoing, “Southern Energy Terminated Employee” shall not,
\nunless otherwise expressly provided to the contrary in this Agreement, include:
\n(a) an individual who is a Southern Employee at the Group Status Change Date;
\n(b) an individual who is otherwise a Southern Energy Terminated Employee, but
\nwho is subsequently employed by the Southern Group on or prior to the Group
\nStatus Change Date; or (c) a Southern Energy Retired Employee.<\/p>\n
1.64 SOUTHERN ENERGY WCP CLAIMS. “Southern Energy WCP Claims” is
\ndefined in Subsection 6.07(a)(i).<\/p>\n
1.65 SOUTHERN GROUP. “Southern Group” shall have the meaning set forth
\nin the Separation Agreement.<\/p>\n
1.66 SOUTHERN STOCK VALUE. “Southern Stock Value” means the closing
\nper-share price of Southern common stock as listed on the NYSE on the last
\ntrading day before the Distribution Date.<\/p>\n
1.67 SOUTHERN TERMINATED EMPLOYEE. “Southern Terminated Employee” means
\nany individual who is a former employee of the Southern Group and who, on the
\nGroup Status Change Date, is not a Southern Energy Employee.<\/p>\n
1.68 SOUTHERN WCP. “Southern WCP” means the Southern Workers’
\nCompensation Program, comprised of the various arrangements established by a
\nmember of the Southern Group to comply with the workers’ compensation
\nrequirements of the states in which the Southern Group conducts business.<\/p>\n
1.69 STOCK PLAN. “Stock Plan,” when immediately preceded by “Southern,”
\nmeans the Southern Performance Stock Plan, pursuant to which employees and other
\nservice providers hold Options.<\/p>\n
1.70 STOCK PURCHASE PLAN. “Stock Purchase Plan” means the employee
\nstock purchase plan to be established by Southern Energy pursuant to Section
\n7.04.<\/p>\n
1.71 SUBSIDIARY. “Subsidiary” shall have the meaning set forth in the
\nSeparation Agreement.<\/p>\n
1.72 SUPPLEMENTAL BENEFIT PLAN. “Supplemental Benefit Plan,” when
\nimmediately preceded by “Southern,” means the Southern Supplemental Benefit
\nPlan. When immediately preceded by “Southern Energy,” “Supplemental Benefit
\nPlan” means the Southern Energy supplemental benefit plan to be established
\npursuant to Sections 2.02 and 5.01 that corresponds to the respective Southern
\nSupplemental Benefit Plan.<\/p>\n
9
\n 15<\/p>\n
1.73 TAX INDEMNIFICATION AGREEMENT. “Tax Indemnification Agreement”
\nmeans the Ancillary Agreement which is attached as an exhibit to the Separation
\nAgreement.<\/p>\n
1.74 UNION PLANS. “Union Plans,” when immediately preceded by “Southern
\nEnergy,” means all Plans maintained by Southern Energy exclusively for the
\nbenefit of certain of its bargaining unit employees.<\/p>\n
1.75 VALUE CREATION PLAN. “Value Creation Plan,” when immediately
\npreceded by “Southern Energy,” means the Southern Energy Value Creation Plan, as
\nmaintained by Southern Energy as of the date of the Agreement.<\/p>\n
ARTICLE II<\/p>\n
GENERAL PRINCIPLES<\/p>\n
2.01 ASSUMPTION OF SOUTHERN ENERGY LIABILITIES. Except as specified
\notherwise in this Agreement, or as mutually agreed upon by Southern Energy and
\nSouthern from time to time, Southern Energy hereby assumes and agrees to pay,
\nperform, fulfill and discharge, in accordance with their respective terms, all
\nof the following: (a) subject to Section 9.02 and to the indemnification
\nprovisions of Schedule 2.01, all Liabilities to or relating to Southern Energy
\nEmployees, in each case relating to, arising out of or resulting from employment
\nby the Southern Group before the Group Status Change Date, (including
\nLiabilities arising under or relating to Southern Plans and Southern Energy
\nPlans); (b) subject to Section 9.02 and to the indemnification provisions of
\nSchedule 2.01, all other Liabilities to or relating to Southern Energy
\nEmployees, to the extent relating to, arising out of or resulting from future,
\npresent or former employment with the Southern Energy Group (including
\nLiabilities arising under or relating to Southern Plans and Southern Energy
\nPlans); (c) subject to Section 9.02 and to the indemnification provisions of
\nSchedule 2.01, all Liabilities relating to, arising out of or resulting from any
\nother actual or alleged employment relationship with the Southern Energy Group;
\nand (d) subject to Section 9.02 and to the indemnification provisions of
\nSchedule 2.01, all other Liabilities relating to, arising out of or resulting
\nfrom obligations, liabilities and responsibilities expressly assumed or retained
\nby the Southern Energy Group or a Southern Energy Plan, pursuant to this
\nAgreement. Except as specified otherwise in this Agreement or as otherwise
\nmutually agreed upon by Southern and Southern Energy from time to time, Southern
\nshall transfer to Southern Energy amounts equal to trust assets and other
\nrelated assets as consistent with the applicable Plan transition that arises out
\nof or relates to Southern Energy’s interest in each Southern Plan. Except as
\nspecified otherwise in this Agreement or as otherwise mutually agreed upon by
\nSouthern and Southern Energy from time to time, Southern Energy, shall transfer
\nto Southern, when appropriate, amounts equal to trust assets and other assets,
\nas consistent with the applicable Southern Plans, that arise out of or relate to
\nSouthern Energy’s Liabilities for or relating to Southern Energy Retired
\nEmployees’ interests in Southern<\/p>\n
10
\n 16<\/p>\n
and\/or Southern Energy Plans or with respect to Southern Employees who
\npreviously accrued Liabilities under either Southern Energy Plans or Southern
\nPlans while an employee of Southern Energy. Notwithstanding the foregoing, the
\nLiabilities and\/or assets attributable to Southern Energy Retired Employees and
\ncertain Southern Energy Terminated Employees mutually agreed upon by Southern
\nEnergy and Southern shall be determined as provided in Schedule 2.01(a).<\/p>\n
2.02 ESTABLISHMENT OF SOUTHERN ENERGY PLANS.<\/p>\n
(a) Health and Welfare Plans. Except as specified
\n otherwise in this Agreement, effective as of the Group Status Change
\n Date or such other date(s) as Southern and Southern Energy may mutually
\n agree, Southern Energy shall adopt the Southern Energy Health and
\n Welfare Plans and Southern Energy Post-Employment Programs. The
\n foregoing Southern Energy Plans as in effect as of the Group Status
\n Change Date shall be comparable to the Southern Plans as in effect on
\n the Group Status Change Date.<\/p>\n
(b) Retirement Plans and Fringe Benefits. Except as
\n specified otherwise in this Agreement, effective as of the Group Status
\n Change Date or such other date(s) as Southern and Southern Energy may
\n mutually agree, Southern Energy shall adopt the Southern Energy
\n Retirement Plans and the Southern Energy Fringe Benefits. The foregoing
\n Southern Energy Plans as in effect as of the Group Status Change Date
\n shall be comparable to the Southern Plans as in effect on the Group
\n Status Change Date.<\/p>\n
(c) Equity and Other Compensation. Except as specified
\n otherwise in this Agreement, effective as of the IPO Closing Date or
\n such other date(s) as Southern and Southern Energy may mutually agree,
\n Southern Energy shall adopt such Plans as may be determined to be
\n appropriate, including, without limitation, the Southern Energy Omnibus
\n Incentive Compensation Plan and the Southern Energy Stock Purchase
\n Plan. Except as specified otherwise in this Agreement, effective as of
\n the Group Status Change Date or such other date(s) as Southern and
\n Southern Energy may mutually agree, Southern Energy shall adopt such
\n Plans as may be determined to be appropriate, including, without
\n limitation, the Southern Energy Deferred Compensation Plan, the
\n Southern Energy Supplemental Benefit Plan, the Southern Energy Change
\n in Control Programs and the Southern Energy Deferred Compensation
\n Trust. The foregoing Southern Energy Plans as in effect as of the Group
\n Status Change Date shall be comparable to the Southern Plans as in
\n effect on the Group Status Change Date.<\/p>\n
(d) Southern Energy Under No Obligation to Maintain
\n Plans. Except as specified otherwise in this Agreement, nothing in this
\n Agreement shall preclude Southern Energy, at any time from amending,
\n merging, modifying, terminating, eliminating, reducing, or otherwise
\n altering in any respect any Southern Energy Plan, any benefit under any
\n Southern Energy Plan or any trust, insurance policy or<\/p>\n
11
\n 17<\/p>\n
funding vehicle related to any Southern Energy Plan (to the extent
\n permitted by law).<\/p>\n
2.03 SOUTHERN ENERGY’S PARTICIPATION IN SOUTHERN PLANS.<\/p>\n
(a) Participation in Southern Plans.<\/p>\n
(i) Except as specified otherwise in this Agreement,
\n or as Southern and Southern Energy may mutually agree,
\n Southern Energy shall continue as a Participating Company in
\n the Southern Plans in effect as of the IPO Closing Date, to
\n the extent that Southern Energy has not yet established
\n comparable Plans. Effective as of any date on or after the IPO
\n Closing Date and before the Group Status Change Date, any
\n member of the Southern Energy Group not described in the
\n preceding sentence may, at its request and with the consent of
\n Southern and Southern Energy, become a Participating Company
\n in any or all of the Southern Plans, to the extent that
\n Southern Energy has not yet established a comparable Plan.<\/p>\n
(ii) On and after the Group Status Change Date,
\n Southern Energy Retired Employees shall continue to
\n participate in the Southern Plans for which they are eligible
\n as of the Group Status Change Date, including, but not limited
\n to, the Southern Post-Employment Programs, Southern Pension
\n Plan and any Southern Plan as provided in Article V.<\/p>\n
(b) Southern’s General Obligations as Plan Sponsor.<\/p>\n
(i) To the extent that Southern Energy is a
\n Participating Company in any Southern Plan(s), Southern shall
\n continue to administer, or cause to be administered, in
\n accordance with their terms and applicable law, such Southern
\n Plan(s), and shall have the sole and absolute discretion and
\n authority to interpret the Southern Plan(s), as set forth
\n therein. Southern shall not, without first consulting with
\n Southern Energy, amend any material feature of any Southern
\n Plan in which Southern Energy is a Participating Company,
\n except to the extent such amendment would not affect any
\n benefits of Southern Energy Employees under such Plan or as
\n may be necessary or appropriate to comply with applicable law.<\/p>\n
(ii) With regard to Southern Energy Retired Employees
\n participating in Southern Plans after the Group Status Change
\n Date, Southern shall continue to administer, or cause to be
\n administered, in accordance with their terms and applicable
\n law, such Southern Plans, and shall have sole and absolute
\n discretion and authority to interpret such Plans or amend such
\n plans, as set forth therein.<\/p>\n
12
\n 18<\/p>\n
(c) Southern Energy’s General Obligations as
\n Participating Company. Southern Energy shall perform with respect to
\n its participation in the Southern Plans, the duties of a Participating
\n Company as set forth in each such Plan or any procedures adopted
\n pursuant thereto, including (without limitation): (i) assisting in the
\n administration of claims, to the extent requested by the claims
\n administrator of the applicable Southern Plan; (ii) cooperating fully
\n with Southern Plan auditors, benefit personnel and benefit vendors;
\n (iii) preserving the confidentiality of all financial arrangements
\n Southern has or may have with any vendors, claims administrators,
\n trustees or any other entity or individual with whom Southern has
\n entered into an agreement relating to the Southern Plans; and (iv)
\n preserving the confidentiality of participant information (including,
\n without limitation, health information in relation to FMLA leaves) to
\n the extent not specified otherwise in this Agreement.<\/p>\n
(d) Termination of Participating Company Status. Except
\n as otherwise may be mutually agreed upon by Southern and Southern
\n Energy, effective as of the Group Status Change Date or such other date
\n as Southern Energy establishes a comparable Plan (as specified in
\n Section 2.02 or otherwise in this Agreement), Southern Energy shall
\n automatically cease to be a Participating Company in the corresponding
\n Southern Plan.<\/p>\n
2.04 TERMS OF PARTICIPATION BY SOUTHERN ENERGY EMPLOYEES IN SOUTHERN
\nENERGY PLANS.<\/p>\n
(a) Non-Duplication of Benefits. As of the Group Status
\n Change Date or such later date that applies to the particular Southern
\n Energy Plan established thereafter, the Southern Energy Plans shall be,
\n with respect to Southern Energy Employees, in all respects the
\n successors in interest to, and shall not provide benefits that
\n duplicate benefits provided by, the corresponding Southern Plans.
\n Southern and Southern Energy shall mutually agree, if necessary, on
\n methods and procedures, including amending the respective Plan
\n documents, to prevent Southern Energy Employees from receiving
\n duplicate benefits from the Southern Plans and the Southern Energy
\n Plans.<\/p>\n
(b) Service Credit. Except as specified otherwise in this
\n Agreement, with respect to Southern Energy Employees, each Southern
\n Energy Plan shall provide that all service, all compensation and all
\n other benefit-affecting determinations that, as of the Group Status
\n Change Date, were recognized under the corresponding Southern Plan
\n shall, as of the Group Status Change Date, receive full recognition and
\n credit and be taken into account under such Southern Energy Plan to the
\n same extent as if such items occurred under such Southern Energy Plan,
\n except to the extent that duplication of benefits would result. The
\n service crediting provisions shall be subject to any respectively
\n applicable “service bridging,” “break in<\/p>\n
13
\n 19<\/p>\n
service,” “employment date,” or “eligibility date” rules under the
\n Southern Energy Plans and the Southern Plans.<\/p>\n
2.05 FOREIGN PLANS. Southern Energy intends to maintain all Foreign
\nPlans in existence as of the IPO Closing Date up to and through the Group Status
\nChange Date.<\/p>\n
2.06 UNION PLANS. Southern and\/or Southern Energy shall continue to
\nmaintain all Union Plans in existence as of the IPO Closing Date up to and after
\nthe Group Status Change Date in accordance with the terms of those plans and
\nsubject to collective bargaining.<\/p>\n
ARTICLE III<\/p>\n
DEFINED BENEFIT PLAN<\/p>\n
3.01 ESTABLISHMENT OF MASTER PENSION PLAN TRUST. Southern Energy Master
\nTrust. Effective as of or before the Group Status Change Date, Southern Energy
\nshall establish, or cause to be established, a separate master trust which is
\nintended to be qualified under Code Section 401(a) and exempt from taxation
\nunder Code Section 501(a)(1) (the “Southern Energy Master Trust”), to hold the
\nassets of the Southern Energy Pension Plan, the Southern Energy Resources, Inc.
\nPension Plan for Bargaining Unit Employees and the Southern Energy Resources,
\nInc. Hourly Operations Pension Plan.<\/p>\n
3.02 ASSUMPTION OF PENSION PLAN.<\/p>\n
(a) Assumption of Liabilities by Southern Energy Pension
\n Plan. Effective as of the Group Status Change Date, all accrued
\n benefits of Southern Energy Employees under the Southern Pension Plan
\n will be transferred to the Southern Energy Pension Plan. The Southern
\n Energy Pension Plan shall assume and be solely responsible for all
\n Liabilities for or relating to the accrued benefits of the Southern
\n Energy Employees under the Southern Pension Plan as of the Group Status
\n Change Date.<\/p>\n
(b) Asset Allocation and Transfers.<\/p>\n
(i) As soon as reasonably practicable, but in any
\n case before the Group Status Change Date, Southern shall
\n engage actuaries and cause to be determined for the Southern
\n Pension Plan the amount of assets to be transferred from the
\n Southern Pension Plan to the Southern Energy Pension Plan.
\n Such amount shall be equal to the greater of (A) the amount
\n required under Code Section 414(l), or (B) the amount in the
\n sub-account within the Southern Master Trust that has been
\n separately maintained and accounted for on behalf of Southern
\n Energy Employees less the amount attributable to<\/p>\n
14
\n 20<\/p>\n
Southern Energy Retired Employees. The actuarial assumptions
\n that will be used to value the benefit Liabilities described
\n in the preceding sentence shall be consistent with the
\n actuarial assumptions used by Southern in prior valuations and
\n shall be mutually agreed to by Southern and Southern Energy
\n prior to the Group Status Change Date.<\/p>\n
(ii) The Southern Energy Pension Plan and the
\n Southern Energy Master Trust shall not receive a transfer of
\n any assets currently held in a Code Section 401(h) sub-account
\n within the Southern Master Trust.<\/p>\n
(iii) As soon as reasonably practicable, the amount
\n determined in Subsection 3.02(b)(i) above of the assets of the
\n Southern Pension Plan valued as of the Group Status Change
\n Date shall be transferred to the Southern Energy Pension Plan.<\/p>\n
3.03 NO DISTRIBUTIONS TO SOUTHERN ENERGY EMPLOYEES. The Southern
\nPension Plan and the Southern Energy Pension Plan shall provide that no
\ndistribution of retirement benefits shall be made to any Southern Energy
\nEmployee on account of the Southern Energy Group ceasing to be a Subsidiary of
\nthe Southern Group as of the Group Status Change Date.<\/p>\n
ARTICLE IV<\/p>\n
DEFINED CONTRIBUTION PLANS<\/p>\n
4.01 ESP. Effective as of the Group Status Change Date, Southern Energy
\nshall establish, or cause to be established, a trust, which is intended to be
\nqualified under Code Section 401(a), exempt from taxation under Code Section
\n501(a)(1), and forming the Southern Energy ESP. Such Southern Energy ESP shall
\nbe comparable to the Southern ESP. Upon the mutual agreement of Southern and
\nSouthern Energy, the Southern Energy ESP shall accept asset transfers from the
\nSouthern ESP, PSP and\/or ESOP. As soon as reasonably practicable after the Group
\nStatus Change Date, Southern Energy shall use its commercially reasonable best
\nefforts to enter into agreements to accomplish such asset transfer(s), to engage
\na trustee and recordkeeper and to transfer and maintain the necessary
\nparticipant records. Southern Energy and Southern each agree to use their
\ncommercially reasonable best efforts to accomplish any transfer of assets.<\/p>\n
4.02 ESOP. After the 1999 plan year contribution is made to the
\nSouthern ESOP, no further contributions will be made to accounts for Southern
\nEnergy Employees. After the Group Status Change Date, Southern Energy shall not
\nestablish a Plan comparable to the Southern ESOP, but may, at its discretion,
\nallow transfers of assets in the Southern ESOP to another tax qualified Plan
\nmaintained by Southern Energy.<\/p>\n
15
\n 21<\/p>\n
4.03 PSP. Effective as of the Group Status Change Date, Southern Energy
\nmay, at its discretion, establish, or cause to be established, a trust, which is
\nintended to be qualified under Code Section 401(a), exempt from taxation under
\nCode Section 501(a)(1), and forming the Southern Energy PSP. Such Southern
\nEnergy PSP, if established, shall be comparable to the Southern PSP. Upon the
\nmutual agreement of Southern and Southern Energy, the Southern Energy PSP shall
\naccept asset transfers from the Southern PSP. Notwithstanding the foregoing, it
\nis Southern Energy’s intent that no action will cause a Southern Energy employee
\nto lose his or her unvested right to an account balance in the Southern PSP.<\/p>\n
4.04 DISCRETIONARY PLAN DESIGN. Notwithstanding the foregoing,
\neffective as of the Group Status Change Date or such other date as mutually
\nagreed upon by Southern and Southern Energy, Southern Energy shall have the
\ndiscretion to consolidate the aforementioned Southern Energy defined
\ncontribution plans provided at least one such plan is established and that plan
\nis tax qualified.<\/p>\n
4.05 SOUTHERN ENERGY RETIRED EMPLOYEES. Notwithstanding the above,
\naccount balances of Southern Energy Retired Employees, if any, shall remain in
\nthe Southern ESP, ESOP and PSP after the Group Status Change Date.<\/p>\n
ARTICLE V<\/p>\n
NON-QUALIFIED AND OTHER PLANS<\/p>\n
5.01 SUPPLEMENTAL BENEFIT PLAN.<\/p>\n
(a) Establishment of Southern Energy Supplemental Benefit
\n Plan. Effective as of the Group Status Change Date, Southern Energy
\n shall establish the Southern Energy Supplemental Benefit Plan which
\n shall be comparable to the Southern Supplemental Benefit Plan. As of
\n the Group Status Change Date, Southern Energy shall assume all
\n Liabilities to or relating to the Southern Energy Employees under the
\n Southern Supplemental Benefit Plan. As of the Group Status Change Date,
\n Southern shall assume all Liabilities to or relating to Southern Energy
\n Retired Employees under the Southern Supplemental Benefit Plan.<\/p>\n
(b) Participation in Supplemental Benefit Plan. Effective
\n as of the Group Status Change Date, eligible Southern Energy Employees
\n determined in accordance with the requirements of ERISA shall only be
\n eligible to participate in the Southern Energy Supplemental Benefit
\n Plan.<\/p>\n
16
\n 22<\/p>\n
5.02 DEFERRED COMPENSATION PLAN.<\/p>\n
(a) Establishment of Southern Energy Deferred
\n Compensation Plan. Effective as of the Group Status Change Date,
\n Southern Energy shall establish the Southern Energy Deferred
\n Compensation Plan which shall be comparable to the Southern Deferred
\n Compensation Plan. As of the Group Status Change Date, Southern Energy
\n shall assume all Liabilities to or relating to the Southern Energy
\n Employees under the Southern Deferred Compensation Plan. As of the
\n Group Status Change Date, Southern shall assume all Liabilities to or
\n relating to Southern Energy Retired Employees under the Southern
\n Deferred Compensation Plan.<\/p>\n
(b) Participation in Deferred Compensation Plans.
\n Effective as of the Group Status Change Date, eligible Southern Energy
\n Employees determined in accordance with the requirements of ERISA shall
\n only be eligible to participate in the Southern Energy Deferred
\n Compensation Plan.<\/p>\n
5.03 SERP.<\/p>\n
(a) Southern Energy SERP.<\/p>\n
(i) Maintenance of the Southern Energy SERP. After
\n the Group Status Change Date, Southern Energy shall continue
\n to maintain the Southern Energy SERP, but Southern Energy
\n shall amend the plan to eliminate the transitional provisions
\n between the Southern SERP and the Southern Energy SERP. As of
\n the Group Status Change Date, Southern Energy shall assume all
\n Liabilities to or relating to the Southern Energy Employees
\n under the Southern SERP.<\/p>\n
(ii) Participation in the Southern Energy SERP.
\n Effective as of the Group Status Change Date, eligible
\n Southern Energy Employees determined in accordance with the
\n requirements of ERISA shall only be eligible to participate in
\n the Southern Energy SERP.<\/p>\n
(b) Southern SERP. Effective as of the Group Status
\n Change Date, Southern shall assume all Liabilities to or relating to
\n Southern Energy Retired Employees under the Southern Energy SERP and
\n thereafter Southern Energy Retired Employees shall participate in the
\n Southern SERP.<\/p>\n
(i) Maintenance of the Southern SERP. After the Group
\n Status Change Date, Southern shall continue to maintain the
\n Southern SERP, but Southern shall amend the plan to eliminate
\n the transitional provisions between the Southern SERP and the
\n Southern Energy SERP to address participation in the Southern
\n SERP by Southern Energy Retired Employees.<\/p>\n
17
\n 23<\/p>\n
5.04 SOUTHERN ENERGY DEFERRED INCENTIVE COMPENSATION PLAN. Maintenance
\nof the Southern Energy Deferred Incentive Compensation Plan. After the Group
\nStatus Change Date, Southern Energy shall continue to maintain the Southern
\nEnergy Deferred Incentive Compensation Plan with comparable features to the
\ncurrent Southern Energy Deferred Incentive Compensation Plan. No new
\nparticipants will be added to this Plan. After the IPO Closing Date, deferred
\namounts under the Southern Energy Deferred Incentive Compensation Plan shall be
\ndeemed to be invested in Southern Energy common stock.<\/p>\n
5.05 SOUTHERN ENERGY CHANGE IN CONTROL PROGRAMS. Establishment of the
\nSouthern Energy Change in Control Programs. Effective as of the Group Status
\nChange Date, Southern Energy shall establish the Southern Energy Change in
\nControl Programs subject to its Board of Director’s approval which shall be
\ncomparable to the Southern Change in Control Programs.<\/p>\n
5.06 SOUTHERN ENERGY RABBI TRUST. Adoption of the Southern Energy Rabbi
\nTrust. Effective as of the Group Status Change Date, Southern Energy shall adopt
\nthe Southern Energy Rabbi Trust which shall be spun off from the Southern Rabbi
\nTrust. Trust assets attributable to Southern Energy contributions shall be
\ntransferred to the Southern Energy Rabbi Trust.<\/p>\n
5.07 SEVERANCE PLAN. Southern Energy shall continue to maintain the
\nSouthern Energy Severance Plan after the Group Status Change Date. The Southern
\nEnergy Severance Plan shall provide that no Southern Energy Employee shall
\nbecome eligible for severance benefits on account of the Southern Energy Group
\nceasing to be a subsidiary of the Southern Group as of the Group Status Change
\nDate.<\/p>\n
ARTICLE VI<\/p>\n
HEALTH AND WELFARE PLANS<\/p>\n
6.01 ASSUMPTION OF HEALTH AND WELFARE PLAN LIABILITIES.<\/p>\n
(a) General – Health and Welfare Plans. Except as
\n provided in Subsection 6.01(b), each Southern Health and Welfare Plan
\n shall retain all Liabilities incurred through the Group Status Change
\n Date under such Southern Health and Welfare Plan, whether or not claims
\n are filed before the Group Status Change Date, by or on behalf of
\n Southern Energy Employees or their spouses or dependents. Southern
\n Energy shall indemnify such plan against the pre- Group Status Change
\n Date Liabilities by paying the current cost of coverage associated with
\n such Southern Energy Employee or his or her spouse or beneficiaries, to
\n the extent not already paid.<\/p>\n
18
\n 24<\/p>\n
(b) Substantially Similar Self-Insured Plans. Unless the
\n affected Southern Energy Employee elects continued coverage under a
\n Southern Health and Welfare Plan pursuant to Subsection 6.03(a)(i), any
\n Health and Welfare Plan self-insured by Southern and substantially
\n similar to any Southern Energy Health and Welfare Plan established as
\n of the Group Status Change Date, or such later date as agreed upon by
\n Southern and Southern Energy, shall cease to be responsible for
\n Liabilities to or relating to Southern Energy Employees under the
\n Southern Health and Welfare Plans as of such date and the corresponding
\n Southern Energy Health and Welfare Plans shall assume such Liabilities
\n as of that date.<\/p>\n
(c) Pending Treatments. Notwithstanding Subsection
\n 6.01(a) above, all treatments which have been pre-certified for or are
\n being provided to a Southern Energy Employee or his or her spouse or
\n dependents as of the Group Status Change Date shall be provided without
\n interruption under the appropriate Southern Health and Welfare Plan
\n until such treatment is concluded or discontinued pursuant to
\n applicable Plan rules and limitations provided the affected Southern
\n Energy Employee (or his or her spouse or dependents) elect to continue
\n coverage after the Group Status Change Date as provided in Subsection
\n 6.03(a)(i) below and timely pay the cost of coverage associated with
\n such election.<\/p>\n
6.02 CLAIMS FOR HEALTH AND WELFARE PLANS.<\/p>\n
(a) Administration of Southern Claims. Southern shall
\n administer claims incurred under the Southern Health and Welfare Plans
\n by Southern Energy Employees before the Group Status Change Date, but
\n only to the extent that Southern Energy has not, before the Group
\n Status Change Date, established and assumed administrative
\n responsibility for a comparable Plan. Southern also shall administer
\n claims incurred under the Southern Health and Welfare Plans by Southern
\n Energy Employees who elect continued coverage pursuant to Subsection
\n 6.03(a)(i) below. Any determination made or settlements entered into by
\n Southern with respect to such claims shall be final and binding.<\/p>\n
(b) Outsourcing of Claims by Southern. Southern shall
\n have the right to engage a third party administrator, vendor, or
\n insurance company to administer (“Outsource”) claims incurred under the
\n Southern Health and Welfare Plans, including claims incurred by
\n Southern Energy Employees before the Group Status Change Date, or after
\n the Group Status Change Date if the Southern Energy Employees elect
\n continued coverage pursuant to Section 6.03(a)(i) below. Southern may
\n determine the manner and extent of such Outsourcing, including the
\n selection of one or more third party administrators, vendors, or
\n insurance companies and the ability to transfer the liability for such
\n claims to one or more independent insurance companies. Southern has
\n Outsourced administration of many Southern Health and Welfare Plans, as
\n set forth in Section 6.04 and the Schedule thereto.<\/p>\n
19
\n 25<\/p>\n
(c) Outsourcing of Claims by Southern Energy. Southern
\n shall use its commercially reasonable best efforts for and on behalf of
\n Southern Energy to negotiate for Outsourcing arrangements with its
\n third party administrators, vendors, or insurance companies with
\n comparable features to each of Southern’s current Outsourcing
\n arrangements.<\/p>\n
6.03 TRANSITIONAL ARRANGEMENTS.<\/p>\n
(a) Continuance of Elections, Co-Payments and Maximum
\n Benefits.<\/p>\n
(i) As of the Group Status Change Date, Southern
\n Energy shall cause the Southern Energy Health and Welfare
\n Plans to maintain comparable coverage and contribution
\n elections made by Southern Energy Employees under the Southern
\n Health and Welfare Plans and apply such elections under the
\n Southern Energy Health and Welfare Plans for the remainder of
\n the period or periods for which such elections are by their
\n terms applicable. The transfer or other movement of employment
\n between Southern and Southern Energy at any time upon or
\n before the Group Status Change Date shall constitute neither a
\n “status change” under the Southern Health and Welfare Plans or
\n the Southern Energy Health and Welfare Plans nor a “qualifying
\n event,” as defined under COBRA. To facilitate continuity of
\n coverage following the transfer or other movement of
\n employment between Southern and Southern Energy on the Group
\n Status Change Date, however, Southern Energy Employees, their
\n spouses and dependents shall be offered continued coverage
\n under the Southern Health Plans which shall be substantially
\n similar to the coverage that would be provided if the Group
\n Status Change was a “qualifying event” under COBRA. Southern
\n shall extend such continued coverage to Southern Energy
\n Employees, their spouses and\/or dependents who elect coverage
\n provided the covered individual timely pays a premium equal to
\n the premium charged to qualified beneficiaries under COBRA for
\n such coverage (i.e., 102% of the cost of coverage).
\n Notwithstanding the foregoing, for purposes of this continued
\n coverage only, the term “Southern Health Plans” shall not
\n include the Southern Company Medical Reimbursement Plan.
\n Southern agrees that it will not consider coverage under the
\n Southern Energy Health Plans to be group health coverage that
\n will terminate continued coverage to a Southern Energy
\n Employee elected pursuant to this Subsection 6.03(a)(i).
\n Moreover, Southern agrees to amend its plan, or cause its plan
\n to be amended, to provide that such coverage shall be primary
\n to any coverage provided under the Southern Energy Health
\n Plans.<\/p>\n
(ii) On and after the Group Status Change Date,
\n Southern Energy shall cause the Southern Energy Health Plans
\n to recognize and give<\/p>\n
20
\n 26<\/p>\n
credit for (A) all amounts applied to deductibles,
\n out-of-pocket maximums, co-payments and other applicable
\n benefit coverage limits with respect to which such expenses
\n have been incurred by Southern Energy Employees under the
\n Southern Health Plans for the remainder of the calendar year
\n in which the Group Status Change Date occurs, and (B) all
\n benefits paid to Southern Energy Employees under the Southern
\n Health Plans for purposes of determining when such persons
\n have reached their lifetime maximum benefits under the
\n Southern Energy Health Plans. Notwithstanding the above,
\n Southern Energy’s obligations under this Subsection
\n 6.03(a)(ii) shall be limited by the market availability of
\n health insurance products or other arrangements satisfying the
\n criteria described above. Southern Energy shall use its
\n commercially reasonable best efforts to locate and engage the
\n services of a vendor whose policies or other arrangements meet
\n the requirements above.<\/p>\n
(b) HCFA Administration. As of the Group Status Change
\n Date, Southern Energy shall assume all Liabilities relating to, arising
\n out of or resulting from claims verified by Southern or Southern Energy
\n under the HCFA data match reports that relate to Southern Energy
\n Employees.<\/p>\n
(c) Transfer of Medical Reimbursement Accounts. Effective
\n as of or before the Group Status Change Date, Southern Energy shall
\n establish or cause to be established, a medical reimbursement plan
\n comparable to the Southern Company Medical Reimbursement Plan (the
\n “Southern MRP”). As soon as reasonably practicable on or after the
\n Group Status Change Date, Southern shall cause the account balances of
\n Southern Energy Employees under the Southern MRP, if any, to be
\n transferred to the Southern Energy medical reimbursement plan. The
\n elections of Southern Energy Employees made under the Southern MRP
\n shall apply to the Southern Energy medical reimbursement plan for the
\n remainder of the period for which such elections are by their terms
\n applicable. Southern Energy agrees that the account balances so
\n transferred will be available for health reimbursements to the Southern
\n Energy Employees pursuant to the terms of the Southern Energy medical
\n reimbursement plan.<\/p>\n
6.04 VENDOR AND INSURANCE ARRANGEMENTS. Southern shall use its
\ncommercially reasonable best efforts for and on behalf of Southern Energy to
\nnegotiate for, effective as of the Group Status Change Date: (a) third party ASO
\nContracts with comparable features and costs to the ASO Contracts entered into
\nby Southern, as set forth in Schedule 6.04(a) (the “ASO Contracts”); (b) Group
\nInsurance Policies with comparable features and costs to the Group Insurance
\nPolicies entered into by Southern, as set forth in Schedule 6.04(b) (the “Group
\nInsurance Policies”); (c) HMO Agreements with comparable features and costs to
\nthe HMO Agreements entered into by Southern, as set forth in Schedule 6.04(c)
\n(the “HMO Agreements”), and (d) competitive premium rates for all Southern
\nEnergy Health and Welfare Plans. In each case, Southern Energy shall, as of the
\nGroup Status Change Date, establish, adopt and\/or implement acceptable<\/p>\n
21
\n 27<\/p>\n
contracts, agreements or arrangements. In accordance with Section 9.03, Southern
\nshall on or before the Group Status Change Date provide upon the request of
\nSouthern Energy copies of such contracts or successor arrangements thereto
\nidentified in Schedules 6.04(a), (b) and (c).<\/p>\n
6.05 COBRA. Southern shall be responsible through the Group Status
\nChange Date, for compliance with the health care continuation coverage
\nrequirements of COBRA and the Southern Health and Welfare Plans with respect to
\nSouthern Energy Employees and qualified beneficiaries (as such term is defined
\nunder COBRA). Southern shall provide, or cause the notices to be provided, as
\nsoon as administratively practical, but in no event later than required under
\nCOBRA. Southern Energy shall be responsible for providing Southern or its agents
\nwith all necessary employee change notices and related information for covered
\ndependents, spouses, qualified beneficiaries (as such term is defined under
\nCOBRA), and alternate recipients pursuant to QMCSO, in accordance with
\napplicable Southern COBRA policies and procedures. As soon as administratively
\npracticable after the Group Status Change Date, Southern shall provide Southern
\nEnergy, through hard copy, electronic format or such other mechanism as is
\nappropriate under the circumstances, with a list of all qualified beneficiaries
\n(as such term is defined under COBRA) that relate to the Southern Energy Group
\nand the relevant information pertaining to their coverage elections. Effective
\nimmediately after the Group Status Change Date, Southern Energy shall be solely
\nresponsible for compliance with the health care continuation coverage
\nrequirements of COBRA for the Southern Energy Health and Welfare Plans for
\nSouthern Energy Employees and their qualified beneficiaries (as such term is
\ndefined under COBRA).<\/p>\n
6.06 LEAVE OF ABSENCE PROGRAMS AND FMLA.<\/p>\n
(a) Allocation of Responsibilities After Group Status
\n Change Date. Effective as of the Group Status Change Date, Southern
\n Energy shall continue to maintain its Leave of Absence Programs and
\n FMLA programs and shall continue to be responsible for administering
\n leaves of absence and complying with FMLA with respect to Southern
\n Energy Employees.<\/p>\n
(b) Disclosure. As soon as administratively practicable
\n after the Group Status Change Date, Southern shall provide to Southern
\n Energy copies of all records pertaining to the leaves of absence and
\n FMLA with respect to all Southern Energy Employees to the extent such
\n records have not been previously provided.<\/p>\n
6.07 SOUTHERN WORKERS’ COMPENSATION PROGRAM.<\/p>\n
(a) ADMINISTRATION OF CLAIMS.<\/p>\n
(i) Through the earlier of (A) the Distribution Date, or
\n (B) the first date on which Southern owns less than
\n 50% of Southern Energy’s outstanding common stock
\n (the “Insurance Transition Date”) or such other date
\n as<\/p>\n
22
\n 28<\/p>\n
Southern and Southern Energy may mutually agree,
\n Southern shall continue to be responsible for the
\n administration of all claims that (x) are, or have
\n been, incurred under the Southern WCP before the
\n Insurance Transition Date by Southern Energy
\n Employees (“Southern Energy WCP Claims”), and (y)
\n have been historically administered by Southern or
\n its third party administrator. However, Southern will
\n advise Southern Energy and secure approval for any
\n material changes to current policy or practice with
\n respect to the administration of Southern Energy WCP
\n claims.<\/p>\n
(ii) Effective as of the Insurance Transition Date or such
\n other date as Southern and Southern Energy may
\n mutually agree, Southern Energy shall be responsible
\n for the administration of all Southern Energy WCP
\n Claims.<\/p>\n
(iii) Each party shall fully cooperate with the other with
\n respect to the administration and reporting of
\n Southern Energy WCP Claims, the payment of Southern
\n Energy WCP Claims determined to be payable, and the
\n transfer of the administration of any Southern Energy
\n WCP Claims to the other party.<\/p>\n
(b) SELF-INSURANCE STATUS.<\/p>\n
Southern shall maintain and amend, as necessary, its
\n certificates of self-insurance or bonding arrangements with respect to
\n workers’ compensation and any other applicable policies to include
\n Southern Energy until the Insurance Transition Date, and Southern
\n Energy shall fully cooperate with Southern in obtaining such
\n amendments. Southern shall use its commercially reasonable best efforts
\n to obtain self-insurance status for workers’ compensation for Southern
\n Energy effective as of the Insurance Transition Date in those
\n jurisdictions in which Southern Energy conducts business, in which
\n Southern is self-insured, and where Southern and Southern Energy
\n mutually agree that such status is beneficial to Southern Energy.
\n Southern Energy hereby authorizes Southern to take all actions
\n necessary and appropriate on its behalf in order to obtain such self-
\n insurance status. All costs incurred by Southern in amending such
\n certificates, including without limitation filing fees, adjustments of
\n security and excess loss policies and amendments of safety programs,
\n shall be shared pro rata by Southern and Southern Energy.<\/p>\n
(c) INSURANCE POLICY.<\/p>\n
(i) Effective as of the Insurance Transition Date, in
\n all states other than those states where Southern Energy is to
\n be self-insured pursuant to Subsection 6.07(b) above, Southern
\n shall use its commercially reasonable best efforts to
\n negotiate for workers’ compensation insurance policies on
\n behalf of Southern Energy from the issuing insurance companies
\n (as set forth in the<\/p>\n
23
\n 29<\/p>\n
relevant portion of Schedule 6.04(b)) or different insurance
\n companies which are comparable to the policies previously
\n maintained by Southern; provided that the retention under such
\n Southern Energy policies shall be as determined by Southern
\n Energy.<\/p>\n
(ii) Southern shall use its commercially reasonable
\n best efforts to maintain the premium rates for all workers’
\n compensation insurance policies for both Southern and Southern
\n Energy in effect for periods through the Insurance Transition
\n Date to be based on the aggregate number of employees covered
\n under the workers’ compensation insurance policies of both
\n Southern and Southern Energy. Any premiums due under the
\n separate workers’ compensation insurance issued to Southern
\n Energy shall be payable by Southern Energy.<\/p>\n
ARTICLE VII<\/p>\n
EQUITY AND OTHER COMPENSATION<\/p>\n
7.01 SOUTHERN OPTIONS.<\/p>\n
(a) Option Assumption by Southern Energy.<\/p>\n
(i) All options held by Southern Energy
\n Employees issued under the Southern Executive Stock Plan and
\n Performance Stock Plan (the “Southern Stock Plans”) will be
\n canceled on the Distribution Date. The Southern Energy Omnibus
\n Incentive Compensation Plan shall provide for the replacement
\n of all canceled options as of the Distribution Date with
\n options for Southern Energy stock (“Replacement Options”) on
\n the same material terms and conditions as the Southern Stock
\n Plans, except with respect to the adjustment for number of
\n shares and prices referred to below, in a manner that will be
\n compliant with FASB Interpretation No. 44 in order to retain
\n the same aggregate intrinsic value.<\/p>\n
(1) The number of Replacement Options
\n for each affected Southern Energy Employee will be
\n determined by dividing the number of unexercised
\n Southern options on the date prior to the
\n Distribution Date that the New York Stock Exchange
\n declares the Southern stock “ex-dividend” (the
\n “Ex-Dividend Date”) by the ratio calculated as the
\n Fair Market Value of each share of Southern Energy
\n stock divided by the Fair Market Value of Southern
\n stock on the Ex-Dividend Date.<\/p>\n
(2) The Replacement Options exercise
\n prices shall be calculated by multiplying the
\n exercise prices of each grant of<\/p>\n
24
\n 30<\/p>\n
Southern options prior to the Ex-Dividend Date by the
\n ratio of Fair Market Value of Southern Energy stock
\n divided by the Fair Market Value of Southern stock on
\n the Ex-Dividend Date.<\/p>\n
(ii) All options held by Southern Employees and
\n Southern Energy Retired Employees issued under the Southern
\n Stock Plans shall be adjusted (“Adjusted Options”) in a manner
\n that will be compliant with FASB Interpretation No. 44 in
\n order to retain the same aggregate intrinsic value.<\/p>\n
(1) The number of Adjusted Options for
\n each affected Southern Employee and Southern Energy
\n Retired Employee will be determined by dividing the
\n number of unexercised Southern options on the
\n Ex-Dividend Date by the ratio calculated as the Fair
\n Market Value of each share of Southern stock on the
\n Ex-Dividend Date divided by the Fair Market Value of
\n Southern stock prior to the Ex-Dividend Date.<\/p>\n
(2) The Adjusted Option exercise prices
\n shall be determined by multiplying the exercise
\n prices of each grant of Southern options, prior to
\n the Ex-Dividend Date, by the ratio of Fair Market
\n Value of Southern stock on the Ex-Dividend Date
\n divided by the Fair Market Value of Southern stock
\n prior to the Ex-Dividend Date.<\/p>\n
The ratios used to calculate the
\n number of Replacement Options and Adjusted
\n Options and their respective option exercise
\n prices shall be rounded to four decimal
\n places. The number of Replacement Options
\n and Adjusted Options, as calculated above,
\n shall be rounded down to the nearest whole
\n number of shares. The exercise prices shall
\n be rounded to four decimal places.<\/p>\n
For purposes of this section, in
\n the case of the Southern Energy stock, Fair
\n Market Value is the closing sale price of
\n the Southern Energy stock on the Ex-Dividend
\n Date. In the case of the Southern stock, (i)
\n Fair Market Value prior to the Ex-Dividend
\n Date, is the closing sale price of Southern
\n stock on the day prior to the Ex-Dividend
\n Date and (ii) Fair Market Value on the
\n Ex-Dividend Date is the closing sale price
\n of Southern stock on the Ex-Dividend Date.<\/p>\n
(iii) In the event that Southern or Southern Energy desire
\n to cancel Southern options after the IPO but prior to the Distribution
\n Date and replace such canceled options with Southern Energy options,
\n the parties may amend this provision in accordance with Section 11.07
\n of this Agreement.<\/p>\n
25
\n 31<\/p>\n
(b) Certain Non-U.S. Optionees. Except as may otherwise
\n be agreed upon by Southern and Southern Energy, this Section 7.01 shall
\n govern the treatment of Southern Options held by non-U.S. Southern
\n Energy Employees. In the event it is determined that the local law of
\n any Non-U.S. Optionee requires a different treatment, Southern and
\n Southern Energy shall take such steps as is required to comply with
\n local law or may cash-out those Options that cannot reasonably be
\n conformed.<\/p>\n
7.02 SOUTHERN PERFORMANCE DIVIDEND PLAN. On or before the Distribution
\nDate, Southern Energy Employees shall cease to participate in the Southern
\nPerformance Dividend Plan, but Southern Energy Retired Employees shall continue
\nto participate after the Group Status Change Date. Accordingly, Southern Energy
\nshall not maintain a comparable plan after the Distribution Date. After such
\ntermination of participation in the Southern Performance Dividend Plan, Southern
\nEnergy may in its discretion grant awards under the Southern Energy Omnibus
\nIncentive Compensation Plan to eligible employees to take into account the lost
\nbenefit opportunity under the Southern Performance Dividend Plan.<\/p>\n
7.03 SOUTHERN ENERGY VALUE CREATION PLAN. On or before the IPO Closing
\nDate, Southern Energy shall terminate the Southern Energy Value Creation Plan
\nand make a final conversion of awards in accordance with the Southern Energy
\nValue Creation Plan’s terms as determined by the Compensation Committee of the
\nSouthern Board of Directors.<\/p>\n
7.04 STOCK PURCHASE PLAN. Effective on or before the IPO Closing Date,
\nSouthern Energy shall establish a Stock Purchase Plan for the benefit of
\nSouthern Energy Employees which shall be comparable to the plan set forth in
\nSchedule 7.04.<\/p>\n
7.05 SOUTHERN ENERGY OMNIBUS INCENTIVE COMPENSATION PLAN. Effective on
\nor before the IPO Closing Date, Southern and Southern Energy shall establish the
\nSouthern Energy Omnibus Incentive Compensation Plan for the benefit of Southern
\nEnergy Employees which shall be comparable to the plan set forth in Schedule
\n7.05. The Plan is intended to comply with Code Section 162(m).<\/p>\n
7.06 SOUTHERN ENERGY SHORT TERM INCENTIVE PLAN. Effective on or before
\nthe IPO Closing Date, Southern Energy shall terminate the Southern Energy Short
\nTerm Incentive Plan in accordance with its terms such that no awards shall be
\nmade on or after the IPO Closing Date. The final award shall be for the calendar
\nyear 2000 and shall be paid out by no later than March 15, 2001. Future short
\nterm incentive awards, if any, shall be provided through the Southern Energy
\nOmnibus Incentive Compensation Plan.<\/p>\n
7.07 SOUTHERN PERFORMANCE PAY PLAN (SHAREHOLDER APPROVED). Effective
\nDecember 31, 2000, Southern Energy shall cease participation in the Southern
\nPerformance Pay Plan (Shareholder Approved). The only Southern Energy employee
\nthat participates in the Southern Performance Pay Plan (Shareholder Approved)<\/p>\n
26
\n 32<\/p>\n
is the chief executive officer who does so rather than participate in the
\nSouthern Energy Short Term Incentive Plan for the 2000 performance period. The
\nfinal year 2000 award shall be paid out by no later than March 15, 2001.<\/p>\n
7.08 PERFORMANCE IMPROVEMENT PLAN RAMP DOWN. With respect to any
\nSouthern Energy Employee who transferred from Southern on or after January 1,
\n1997, Southern and Southern Energy shall share equally (i.e., 50% each) in the
\ncost at target of the Performance Improvement Plan (“PIP”) ramp down as
\ndetermined by the PIP Plan in effect December 31, 1999.<\/p>\n
ARTICLE VIII<\/p>\n
FRINGE AND OTHER BENEFITS<\/p>\n
8.01 EMPLOYEE ASSISTANCE PROGRAM. Southern shall use its commercially
\nreasonable best efforts for and on behalf of Southern Energy to negotiate for,
\neffective as of the Group Status Change Date, contracts and\/or arrangements with
\nSouthern’s vendors that contain comparable features to Southern’s contracts
\nand\/or arrangements providing for an employee assistance program. Prior to the
\nGroup Status Change Date, Southern Energy shall, unless Southern and Southern
\nEnergy otherwise agree, remain a participating Company in Southern’s employee
\nassistance program. Southern Energy shall enter into such acceptable contracts
\nand\/or arrangements as negotiated by Southern.<\/p>\n
8.02 EDUCATIONAL ASSISTANCE PROGRAM. Southern Energy shall continue to
\nprovide a Southern Energy educational assistance program to Southern Energy
\nEmployees prior to and after the Group Status Change Date.<\/p>\n
8.03 CREDIT UNION. Southern shall use its commercially reasonable best
\nefforts to make a credit union available to Southern Energy Employees on
\nsubstantially similar terms and conditions as are offered to employees of the
\nSouthern Group, through such date as Southern Energy and Southern mutually
\nagree.<\/p>\n
8.04 SOUTHERN-OWNED CARS. Southern and Southern Energy shall continue
\nany lease of Southern-owned cars in accordance with the terms of any lease in
\neffect as of the date of this Agreement up to the Group Status Change Date.
\nEffective for periods on and after the Group Status Change Date, Southern and
\nSouthern Energy shall use their commercially reasonable best efforts to
\ndetermine the terms and conditions pursuant to which Southern Energy shall be
\nentitled to lease Southern-owned cars including those cars under lease as of the
\nGroup Status Change Date.<\/p>\n
8.05 EXECUTIVE FINANCIAL PLANNING. Prior to the Group Status Change
\nDate, Southern Energy shall, unless Southern and Southern Energy otherwise
\nagree, remain a participating Company in Southern’s executive financial planning
\nprogram. Effective as of the Group Status Change Date, Southern Energy shall
\nprovide a Southern<\/p>\n
27
\n 33<\/p>\n
Energy executive financial planning program to eligible Southern Energy
\nEmployees which is comparable to the Southern executive financial planning
\nprogram. Southern shall use its commercially reasonable best efforts for and on
\nbehalf of Southern Energy to negotiate for contracts or arrangements with
\nSouthern’s vendors, effective as of the Group Status Change Date, that contain
\ncomparable features to Southern’s contracts and\/or arrangements providing for an
\nexecutive financial planning program.<\/p>\n
8.06 RELOCATION. Prior to the Group Status Change Date, Southern Energy
\nshall, unless Southern and Southern Energy otherwise agree, remain a
\nparticipating Company in Southern’s employee relocation program. Effective as of
\nthe Group Status Change Date or such other date as Southern Energy and Southern
\nmay mutually agree, Southern Energy shall provide a Southern Energy relocation
\nprogram to Southern Energy Employees which is comparable to the Southern
\nrelocation program. Southern shall use its commercially reasonable best efforts
\nfor and on behalf of Southern Energy to negotiate for contracts or arrangements
\nwith Southern’s vendors, effective as of the Group Status Change Date, that
\ncontain comparable features to Southern’s contracts and\/or arrangements
\nproviding for an employee relocation program.<\/p>\n
8.07 OTHER BENEFITS. To the extent that Southern maintains, sponsors or
\nprovides other fringe benefits for its employees not specifically identified on
\na schedule to this Agreement, then Southern shall, to the extent permitted by
\nlaw, continue to make such benefits available to Southern Energy Employees on
\nsubstantially similar terms and conditions as are offered to the employees of
\nthe Southern Group through the Group Status Change Date. Southern Energy and
\nSouthern agree to make commercially reasonable best efforts to mutually agree on
\nwhether, when, and on what terms any member of the Southern Energy Group shall
\nmaintain, sponsor or offer fringe benefits.<\/p>\n
ARTICLE IX<\/p>\n
9.01 TRANSITIONAL SERVICES AGREEMENT. On or about the date hereof,
\nSouthern and Southern Energy shall enter into the Transitional Services
\nAgreement covering the provisions of various services to be provided by Southern
\nto Southern Energy. The provisions of this Agreement shall be subject to the
\nprovisions of such Transitional Services Agreement.<\/p>\n
9.02 PAYMENT OF LIABILITIES, PLAN EXPENSES AND RELATED MATTERS.<\/p>\n
(a) Shared Costs. Southern Energy shall pay its share, as
\n determined by Southern in good faith, of any contributions
\n made to any trust maintained in connection with a Southern
\n Plan while Southern Energy is a Participating Company in that
\n Southern Plan.<\/p>\n
28
\n 34<\/p>\n
(b) Contributions to Trusts. With respect to Southern Plans to
\n which Southern Energy Employees make contributions, Southern
\n shall use reasonable procedures to determine Southern Energy
\n Liabilities associated with such Plans, taking into account
\n such contributions, settlements, refunds and similar payments.<\/p>\n
(c) Administrative Expenses Not Chargeable to a Trust. To the
\n extent not charged pursuant to Section 9.01 (including,
\n without limitation, an interim service level agreement as
\n contemplated by Section 9.01 herein and the Separation
\n Agreement), and to the extent not otherwise agreed to by
\n Southern and Southern Energy, and to the extent not chargeable
\n to a trust established in connection with a Southern Plan,
\n Southern Energy shall be responsible, through either direct
\n payment or reimbursement to Southern, for its allocable share
\n of expenses incurred by Southern in the administration of (i)
\n the Southern Plans while Southern Energy participates in such
\n Plans, and (ii) the Southern Energy Plans, to the extent
\n Southern administers such Plans. For this purpose, Southern
\n Energy’s allocable share of such expenses shall be calculated
\n in accordance with current practice in effect as of the date
\n of this Agreement.<\/p>\n
9.03 SHARING OF PARTICIPANT INFORMATION. Southern and Southern Energy
\nshall share, or cause to be shared, all participant information that is
\nnecessary or appropriate for the efficient and accurate administration of each
\nof the Southern Plans and the Southern Energy Plans during the respective
\nperiods applicable to such Plans as Southern Energy and Southern may mutually
\nagree. Southern and Southern Energy and their respective authorized agents
\nshall, subject to applicable laws of confidentiality and data protection, be
\ngiven reasonable and timely access to, and may make copies of, all information
\nrelating to the subjects of this Agreement in the custody of the other party or
\nits agents, to the extent necessary or appropriate for such administration.<\/p>\n
9.04 REPORTING AND DISCLOSURE COMMUNICATIONS TO PARTICIPANTS. While
\nSouthern Energy is a Participating Company in the Southern Plans, Southern shall
\ntake, or cause to be taken, all actions necessary or appropriate to facilitate
\nthe distribution of all Southern Plan-related communications and materials to
\nemployees, participants and beneficiaries, including (without limitation)
\nsummary plan descriptions and related summaries of material modification(s),
\nsummary annual reports, investment information, prospectuses, notices and
\nenrollment material for the Southern Plans. Southern Energy shall provide all
\ninformation needed by Southern to facilitate such Southern Plan-related
\ncommunications. Southern Energy shall take, or cause to be taken, all actions
\nnecessary or appropriate to facilitate the distribution of all Southern Energy
\nPlan-related communications and materials to employees, participants and
\nbeneficiaries. Southern Energy shall assist, and Southern Energy shall cause
\neach other applicable member of the Southern Energy Group to assist, Southern in
\ncomplying with all reporting and disclosure requirements of ERISA, including the
\npreparation of Form Series 5500 annual reports, for the Southern Plans, where
\napplicable.<\/p>\n
29
\n 35<\/p>\n
9.05 AUDITS REGARDING VENDOR CONTRACTS. From the period beginning as of
\nthe Group Status Change Date and ending on such date as Southern and Southern
\nEnergy may mutually agree, Southern and Southern Energy and their duly
\nauthorized representatives shall have the right to conduct joint audits with
\nrespect to any vendor contracts that relate to both the Southern Health and
\nWelfare Plans and the Southern Energy Health and Welfare Plans. The scope of
\nsuch audits shall remain consistent with the current practices and all documents
\nand other information currently made available for review shall continue to be
\nmade available. Southern and Southern Energy shall agree on the performance
\nstandards, audit methodology, auditing policy and quality measures, reporting
\nrequirements, and the manner in which costs incurred in connection with such
\naudits will be shared.<\/p>\n
9.06 BENEFICIARY DESIGNATIONS. Subject to Section 9.09, all beneficiary
\ndesignations made by Southern Energy Employees for the Southern Plans shall be
\ntransferred to and be in full force and effect under the corresponding Southern
\nEnergy Plans until such beneficiary designations are replaced or revoked by the
\nSouthern Energy Employees who made the beneficiary designations. All beneficiary
\ndesignations made by Southern Energy Retired Employees for the Southern Energy
\nPlans shall be transferred to and be in full force and effect under the
\ncorresponding Southern Plans until such beneficiary designations are replaced or
\nrevoked by the Southern Energy Retired Employees who made the beneficiary
\ndesignations.<\/p>\n
9.07 REQUESTS FOR IRS AND DOL OPINIONS. Southern and Southern Energy
\nshall make such applications to regulatory agencies, including the IRS and DOL,
\nas may be necessary or appropriate. Southern Energy and Southern shall cooperate
\nfully with one another on any issue relating to the transactions contemplated by
\nthis Agreement for which Southern and\/or Southern Energy elects to seek a
\ndetermination letter or private letter ruling from the IRS or an advisory
\nopinion from the DOL.<\/p>\n
9.08 FIDUCIARY MATTERS. Southern and Southern Energy each acknowledge
\nthat actions contemplated to be taken pursuant to this Agreement may be subject
\nto fiduciary duties or standards of conduct under ERISA or other applicable law,
\nand no party shall be deemed to be in violation of this Agreement if such party
\nfails to comply with any provisions hereof based upon such party’s good faith
\ndetermination that to do so would violate such a fiduciary duty or standard.<\/p>\n
9.09 CONSENT OF THIRD PARTIES. If any provision of this Agreement is
\ndependent on the consent of any third party (such as a vendor) and such consent
\nis withheld, Southern and Southern Energy shall use their commercially
\nreasonable best efforts to implement the applicable provisions of this
\nAgreement. If any provision of this Agreement cannot be implemented due to the
\nfailure of such third party to consent, Southern and Southern Energy shall
\nnegotiate in good faith to implement the provision in a mutually satisfactory
\nmanner.<\/p>\n
30
\n 36<\/p>\n
9.10 SOUTHERN INTRANET. Through March 31, 2002 or such other date as
\nSouthern Energy and Southern may mutually agree, Southern shall make its
\nintranet site available to Southern Energy Employees on substantially the same
\nterms as such intranet site is made available to Southern Employees. Southern
\nand Southern Energy shall use their commercially reasonable best efforts to
\nmutually agree on the appropriate methods for Southern Energy to establish its
\nown intranet site. Notwithstanding the foregoing, Southern Energy will cease to
\nhave access to PeopleNet which is offered through the Southern intranet
\neffective as of the Group Status Change Date.<\/p>\n
9.11 TAX COOPERATION. In connection with the interpretation and
\nadministration of this Agreement, Southern and Southern Energy shall take into
\naccount the agreements and policies established pursuant to the Separation
\nAgreement and the Tax Indemnification Agreement.<\/p>\n
9.12 PLAN RETURNS. Plan Returns shall be filed or caused to be filed by
\nSouthern or Southern Energy as the case may be in accordance with the principles
\nestablished in Section 2 of the Tax Indemnification Agreement. For purposes of
\nthis Section 9.12, “Plan Return” means any return, report, certificate, form or
\nsimilar statement or document required to be filed with a government agency with
\nrespect to an employee benefit plan governed by the Employee Retirement Income
\nSecurity Act of 1974, as amended, or a program governed by Section 6039D.<\/p>\n
ARTICLE X<\/p>\n
EMPLOYMENT-RELATED MATTERS<\/p>\n
10.01 TERMS OF SOUTHERN ENERGY EMPLOYMENT. Southern Energy Employees
\nshall be required to execute a new agreement regarding confidential information
\nand proprietary developments in a form approved by Southern Energy. In addition,
\nnothing in the Separation Agreement, this Agreement, or any Ancillary Agreement
\nshould be construed to change the at-will status of any of the employees of the
\nSouthern Group or the Southern Energy Group.<\/p>\n
10.02 HR DATA SUPPORT SYSTEMS. Southern shall provide human resources
\ndata support for Southern Energy Employees through March 31, 2002 or such other
\ndate as Southern and Southern Energy may mutually agree on substantially the
\nsame terms as are in effect as of the date of this Agreement.<\/p>\n
10.03 NON-SOLICITATION OF EMPLOYEES. Prior to the Group Status Change
\nDate through the earlier of (a) the Distribution Date, or (b) the first date on
\nwhich Southern owns less than 50% of Southern Energy’s outstanding common stock,
\nSouthern and Southern Energy each agree to notify and obtain authorization from
\nthe other before initiating contact with potential employment candidates from
\nthe other company. Moreover, no employee shall transfer from Southern to
\nSouthern Energy, or vice versa,<\/p>\n
31
\n 37<\/p>\n
without the approval of the employee’s employer. After notice of the proposed
\ntransfer is given respectively to the Vice President, Human Resources (or the
\nfunctional equivalent) at Southern and Southern Energy, such approval shall be
\ngranted by the Southern Energy Management Council or the Southern senior officer
\nresponsible for the area in which the employee at issue works, as appropriate.
\nIf such Council or officer refuses to permit contact with the potential
\nemployee, the requesting company may appeal to the Vice President, Human
\nResources (or the functional equivalent) of the employing company. Such Vice
\nPresident, Human Resources shall review the circumstances of denial and shall
\nhave discretionary authority to change the decision.<\/p>\n
10.04 EMPLOYMENT OF EMPLOYEES WITH U.S. WORK VISAS. Southern Energy
\nEmployees who, on the Group Status Change Date, are employed in the U.S.
\npursuant to a work or training visa which authorizes employment only by the
\nSouthern Group shall remain employed by the Southern Group until the visa is
\namended or a new visa is granted to authorize employment by the Southern Energy
\nGroup and, at that time, shall become an employee of the Southern Energy Group
\nwith substantially similar rights as all other Southern Energy Employees. During
\nthe period from the Group Status Change Date until the amended or new visa is
\nissued, such employee shall continue to participate in Southern Plans.<\/p>\n
10.05 CONFIDENTIALITY AND PROPRIETARY INFORMATION.<\/p>\n
(a) No provision of the Separation Agreement or any Ancillary
\n Agreement shall be deemed to release any individual for any
\n violation of the Southern non-competition guideline or any
\n agreement or policy pertaining to confidential or proprietary
\n information of any member of the Southern Group or Southern
\n Energy Group, or otherwise relieve any individual of his or
\n her obligations under such non-competition guideline,
\n agreement, or policy.<\/p>\n
(b) Employee Agreements. As used in this Section 10.05, “Employee
\n Agreement” means the confidentiality agreement, and
\n corresponding agreements in foreign countries, executed by
\n Southern or Southern Energy employees in connection with their
\n employment. Nothing in this Agreement, the Separation
\n Agreement or any other Ancillary Agreement shall be deemed to
\n supersede any provision regarding the conduct of employees
\n mandated by the Federal Energy Regulatory Commission or any
\n other applicable regulatory authority.<\/p>\n
(i) Survival of Southern Employee Agreement Obligations
\n and Southern’s Common Law Rights. The Southern
\n Employee Agreements of all Southern Energy Employees
\n and all former Southern employees transferred to
\n Southern Energy on or before the Group Status Change
\n Date shall remain in full force and effect according
\n to their terms; provided, however, that none of the
\n following acts committed by former Southern or
\n Southern Energy employees within the scope of<\/p>\n
32
\n 38<\/p>\n
their Southern Energy employment shall constitute a
\n breach of such Southern Employee Agreements: (i) the
\n use or disclosure of Confidential Information (as
\n that term is defined in the Southern Employee
\n Agreement) for or on behalf of Southern Energy, if
\n such disclosure is consistent with the license rights
\n granted to Southern Energy and restrictions imposed
\n on Southern Energy under the Separation Agreement,
\n any other Ancillary Agreement or any other agreement
\n between the parties, and (ii) the rendering of any
\n services, directly or indirectly, to Southern Energy
\n to the extent such services are consistent with the
\n assignment or license of rights granted to Southern
\n Energy and the restrictions imposed on Southern
\n Energy under the Separation Agreement, any other
\n Ancillary Agreement or any other agreement between
\n the parties. Further, Southern retains any rights it
\n has under statute or common law with respect to
\n actions by its former employees to the extent such
\n actions are inconsistent with the rights granted to
\n Southern Energy and restrictions imposed on Southern
\n Energy under the Separation Agreement, any other
\n Ancillary Agreement or any other agreement between
\n the parties.<\/p>\n
(ii) Survival of Southern Energy’s Employee Agreement
\n Obligations and Southern Energy’s Common Law Rights.
\n The Southern Energy Employee Agreements of all
\n Southern Employees and all former Southern Energy
\n employees transferred to Southern on or before the
\n Group Status Change Date shall remain in full force
\n and effect according to their terms; provided,
\n however, that none of the following acts committed by
\n former Southern Energy or Southern employees within
\n the scope of their Southern employment shall
\n constitute a breach of such Southern Energy Employee
\n Agreements: (i) the use or disclosure of Confidential
\n Information (as that term is defined in the Southern
\n Employee Agreement) for or on behalf of Southern, if
\n such disclosure is consistent with the license rights
\n granted to Southern and restrictions imposed on
\n Southern under the Separation Agreement, any other
\n Ancillary Agreement or any other agreement between
\n the parties, and (ii) the rendering of any services,
\n directly or indirectly, to Southern to the extent
\n such services are consistent with the assignment or
\n license of rights granted to Southern and the
\n restrictions imposed on Southern under the Separation
\n Agreement, any other Ancillary Agreement or any other
\n agreement between the parties. Further, Southern
\n Energy retains any rights it has under statute or
\n common law with respect to actions by its former
\n employees to the extent such actions are inconsistent
\n with the rights granted to Southern and restrictions
\n imposed on Southern under the Separation Agreement,
\n any other Ancillary Agreement or any other agreement
\n between the parties.<\/p>\n
(iii) Assignment, Cooperation for Compliance and
\n Enforcement.<\/p>\n
33
\n 39<\/p>\n
(A)(1) Southern retains all rights under the
\n Southern Employee Agreements of all former Southern
\n employees necessary to permit Southern to protect the
\n rights and interests of Southern, but hereby
\n transfers and assigns to Southern Energy its rights
\n under the Southern Employee Agreements of all former
\n Southern employees to the extent required to permit
\n Southern Energy to enjoin, restrain, recover damages
\n from or obtain specific performance of the Southern
\n Employee Agreements or obtain other remedies against
\n any employee who breaches his or her Southern
\n Employee Agreement, and to the extent necessary to
\n permit Southern Energy to protect its rights and
\n interests.<\/p>\n
(2) Southern and Southern Energy agree, at
\n their own respective cost and expense, to use their
\n reasonable efforts to cooperate as follows: (A)
\n Southern Energy shall advise Southern of: (1) any
\n violation(s) of the Southern Employee Agreement by
\n Southern Energy or former Southern employees, and (2)
\n any violation(s) of the Southern Energy Employee
\n Agreement which affect Southern’s rights; and (B)
\n Southern shall advise Southern Energy of any
\n violations of the Southern Employee Agreement by
\n current or former Southern employees which affect
\n Southern Energy’s rights; provided, however, that the
\n foregoing obligations shall only apply to violations
\n which become known to an attorney within the legal
\n department of the party obligated to provide notice
\n thereof.<\/p>\n
(3) Southern and Southern Energy each may
\n separately enforce the Southern Employee Agreements
\n of Southern Energy and former Southern employees to
\n the extent necessary to reasonably protect their
\n respective interests, provided, however, that (i)
\n Southern Energy shall not commence any litigation
\n relating thereto without first consulting with
\n Southern’s General Counsel or his or her designee and
\n (ii) Southern shall not commence any litigation
\n relating thereto against any former Southern employee
\n who is at the time a Southern Energy Employee without
\n first consulting with Southern Energy’s General
\n Counsel or his or her designee. If either party, in
\n seeking to enforce any Southern Employee Agreement,
\n notifies the other party that it requires, or
\n desires, the other party to join in such action, then
\n the other party shall do so. In addition, if either
\n party commences or becomes a party to any action to
\n enforce a Southern Employee Agreement of a Southern
\n Energy Employee or former Southern employee, the
\n other party shall, whether or not it becomes a party
\n to the action, cooperate with the other party by
\n making available its files and employees who have
\n information or knowledge relevant to the dispute,
\n subject to appropriate measures to protect the
\n confidentiality of any proprietary or confidential
\n information that may be disclosed in the course of
\n such cooperation or action and subject to any
\n relevant privacy laws and regulations. Any such
\n action shall be conducted at the expense of the party<\/p>\n
34
\n 40<\/p>\n
bringing the action and the parties shall agree on a
\n case by case basis on compensation, if any, of the
\n other party for the value of the time of such other
\n party’s employees as reasonably required in
\n connection with the action.<\/p>\n
(B)(1) Southern Energy retains all rights
\n under the Southern Energy Employee Agreements of all
\n former Southern Energy employees necessary to permit
\n Southern Energy to protect the rights and interests
\n of Southern Energy, but hereby transfers and assigns
\n to Southern its rights under the Southern Energy
\n Employee Agreements of all former Southern Energy
\n employees to the extent required to permit Southern
\n to enjoin, restrain, recover damages from or obtain
\n specific performance of the Southern Energy Employee
\n Agreements or obtain other remedies against any
\n employee who breaches his or her Southern Energy
\n Employee Agreement, and to the extent necessary to
\n permit Southern to protect its rights and interests.<\/p>\n
(2) Southern and Southern Energy agree, at
\n their own respective cost and expense, to use their
\n reasonable efforts to cooperate as follows: (A)
\n Southern shall advise Southern Energy of: (1) any
\n violation(s) of the Southern Energy Employee
\n Agreement by Southern or former Southern Energy
\n employees, and (2) any violation(s) of the Southern
\n Employee Agreement which affect Southern Energy’s
\n rights; and (B) Southern Energy shall advise Southern
\n of any violations of the Southern Energy Employee
\n Agreement by current or former Southern Energy
\n employees which affect Southern’s rights; provided,
\n however, that the foregoing obligations shall only
\n apply to violations which become known to an attorney
\n within the legal department of the party obligated to
\n provide notice thereof.<\/p>\n
(3) Southern and Southern Energy each may
\n separately enforce the Southern Employee Agreements
\n of Southern and former Southern Energy employees to
\n the extent necessary to reasonably protect their
\n respective interests, provided, however, that (i)
\n Southern shall not commence any litigation relating
\n thereto without first consulting with Southern
\n Energy’s General Counsel or his or her designee and
\n (ii) Southern Energy shall not commence any
\n litigation relating thereto against any former
\n Southern Energy employee who is at the time a
\n Southern Employee without first consulting with
\n Southern’s General Counsel or his or her designee. If
\n either party, in seeking to enforce any Southern
\n Energy Employee Agreement, notifies the other party
\n that it requires, or desires, the other party to join
\n in such action, then the other party shall do so. In
\n addition, if either party commences or becomes a
\n party to any action to enforce a Southern Energy
\n Employee Agreement of a Southern Employee or former
\n Southern Energy employee, the other party shall,
\n whether or not it becomes a party to the action,
\n cooperate with the other party by making available
\n its files and<\/p>\n
35
\n 41<\/p>\n
employees who have information or knowledge relevant to the
\n dispute, subject to appropriate measures to protect the
\n confidentiality of any proprietary or confidential information
\n that may be disclosed in the course of such cooperation or
\n action and subject to any relevant privacy laws and
\n regulations. Any such action shall be conducted at the expense
\n of the party bringing the action and the parties shall agree
\n on a case by case basis on compensation, if any, of the other
\n party for the value of the time of such other party’s
\n employees as reasonably required in connection with the
\n action.<\/p>\n
(C) Southern and Southern Energy understand and
\n acknowledge that matters relating to the making, performance,
\n enforcement, assignment and termination of employee agreements
\n are typically governed by the laws and regulations of the
\n national, federal, state or local governmental unit where an
\n employee resides, or where an employee’s services are
\n rendered, and that such laws and regulations may supersede or
\n limit the applicability or enforceability of this Section
\n 10.05. In such circumstances, Southern and Southern Energy
\n agree to take action with respect to the employee agreements
\n that best accomplishes the parties’ objectives as set forth in
\n this Section 10.05 and that is consistent with applicable law.<\/p>\n
10.06 ACCRUED PAYROLL, BONUSES, PROFIT SHARING AND COMMISSIONS.
\nSouthern Energy shall be responsible for all Liabilities relating to, arising
\nout of, or attributable to payroll, bonuses, profit sharing and commissions
\naccrued by employees of Southern Energy through the Group Status Change Date.
\nSouthern and Southern Energy shall agree on the manner and method of payment for
\nall accrued payroll, bonuses, profit sharing and commissions agreed to on behalf
\nof employees who have been employed by Southern Energy on or before the Group
\nStatus Change Date. Notwithstanding the foregoing, Southern shall not be
\nresponsible for providing payroll services for new employees of Southern Energy
\nacquired through a corporate transaction after the date of this Agreement or for
\nany pension payroll attributable to the Southern Pension Plan. Effective no
\nlater than the last day of the sixth month after the Group Status Change Date,
\nSouthern Energy shall establish its own payroll system for Southern Energy
\nEmployees. For Southern Energy Employees, this responsibility shall include
\nhistorical research and reporting of historical payroll information to employees
\nand any third parties.<\/p>\n
10.07 PAYROLL AND WITHHOLDING.<\/p>\n
(a) Income Reporting, Withholding. Southern shall perform in
\n the same manner as in effect on the date of this Agreement the income
\n reporting and withholding function under Southern Energy’s employer
\n identification number for Southern Energy Employees and other service
\n providers, commencing with service periods beginning on or after the
\n Group Status Change Date and ending no later than the last day of the
\n sixth month following the Group Status Change Date.<\/p>\n
36
\n 42<\/p>\n
Southern Energy shall hold Southern harmless with respect to any
\n Liabilities arising after the Group Status Change Date as a result of
\n the provisions of such income reporting and withholding function as set
\n forth in the Transitional Services Schedule concerning payroll matters.<\/p>\n
(b) Delivery of, and Access to, Documents and Other
\n Information. Concurrently with the Group Status Change Date, Southern
\n shall develop and implement a plan to cause to be delivered to Southern
\n Energy, the employee information set forth on all Forms W-4 executed by
\n Southern Employees designated as Southern Energy Employees as of the
\n Group Status Change Date. Southern shall make reasonably available to
\n Southern Energy all forms, documents or information, no matter in what
\n format stored, relating to compensation or payments made to any
\n employee or service provider of Southern Energy. Such information may
\n include, but is not limited to, information concerning employee payroll
\n deductions, payroll adjustments, records of time worked, tax records
\n (e.g., Forms W-2, W-4, 940 and 941), and information concerning
\n garnishment of wages or other payments. The intended result of this
\n plan will be that all forms will reside at Southern Energy by the
\n earlier of six months following the Group Status Change Date or the
\n assumption of payroll processing responsibilities by Southern Energy.<\/p>\n
(c) Consistency of Tax Positions; Duplication. Southern and
\n Southern Energy shall individually and collectively make commercially
\n reasonable best efforts to avoid unnecessarily duplicated federal,
\n state or local payroll taxes, insurance or workers’ compensation
\n contributions, or unemployment contributions arising on or after the
\n Group Status Change Date. Southern and Southern Energy shall take
\n consistent reporting and withholding positions with respect to any such
\n taxes or contributions.<\/p>\n
10.08 PERSONNEL RECORDS. For the period beginning on the Agreement Date
\nand ending six months following the Group Status Change Date (and for such
\nadditional period as Southern and Southern Energy may mutually agree), Southern
\nshall make reasonably available to Southern Energy, subject to applicable laws
\non confidentiality and data protection, all current and historic forms,
\ndocuments or information, no matter in what format stored, relating to personnel
\nand medical records processed by Southern. Such forms, documents or information
\nmay include, but is not limited to: (a) information regarding a Southern Energy
\nEmployee’s ranking or promotions; (b) the existence and nature of garnishment
\norders or other judicial or administrative actions or orders affecting an
\nemployee’s or service provider’s compensation; and (c) performance evaluations.<\/p>\n
10.09 NON-TERMINATION OF EMPLOYMENT; NO THIRD-PARTY BENEFICIARIES. No
\nprovision of this Agreement, the Separation Agreement, or any Ancillary
\nAgreement shall be construed to create any right, or accelerate entitlement, to
\nany compensation or benefit whatsoever on the part of any Southern Energy
\nEmployee or other future, present or former employee of Southern or Southern
\nEnergy under any<\/p>\n
37
\n 43<\/p>\n
Southern Plan or Southern Energy Plan or otherwise. Without limiting the
\ngenerality of the foregoing: (a) neither the Distribution nor the termination of
\nthe Participating Company status of Southern Energy or any member of the
\nSouthern Energy Group shall cause any employee to be deemed to have incurred a
\ntermination of employment; and (b) no transfer of employment between Southern
\nand Southern Energy before the Group Status Change Date shall be deemed a
\ntermination of employment for any purpose hereunder.<\/p>\n
10.10 EMPLOYMENT LITIGATION.<\/p>\n
(a) Claims to be Transferred to Southern Energy. Southern
\n Energy shall continue to be legally responsible for and continue the
\n defense of claims identified in Schedule 10.10(a). Southern Energy
\n hereby indemnifies, defends and holds harmless Southern against these
\n claims.<\/p>\n
(b) Claims to be Jointly Defended by Southern and
\n Southern Energy. Southern and Southern Energy shall jointly defend the
\n claims identified in Schedule 10.10(b); provided, however, that
\n Southern Energy or Southern shall indemnify and hold harmless the other
\n against any judgments in accordance with Schedule 2.01.<\/p>\n
(c) Unscheduled Claims. Southern Energy and Southern
\n shall have responsibility for all Employment liabilities in accordance
\n with Schedule 2.01.<\/p>\n
ARTICLE XI<\/p>\n
GENERAL PROVISIONS<\/p>\n
11.01 EFFECT IF GROUP STATUS CHANGE DATE DOES NOT OCCUR.
\n Subject to Section 11.08, if the Group Status Change Date does not
\n occur, then all actions and events that are, under this Agreement, to
\n be taken or occur effective as of the Group Status Change Date, or
\n otherwise in connection with the Group Status Change Date, shall not be
\n taken or occur except to the extent specifically agreed by Southern
\n Energy and Southern.<\/p>\n
11.02 RELATIONSHIP OF PARTIES. Nothing in this Agreement
\n shall be deemed or construed by the parties or any third party as
\n creating the relationship of principal and agent, partnership or joint
\n venture between the parties, the understanding and agreement being that
\n no provision contained herein, and no act of the parties, shall be
\n deemed to create any relationship between the parties other than the
\n relationship set forth herein. This Agreement shall be binding upon and
\n inure solely to the benefit of and be enforceable by each party and its
\n respective successors and permitted assigns. Nothing in this Agreement,
\n express or implied, is intended to or shall confer upon any other
\n person any right, benefit or remedy of any nature whatsoever under or
\n by reason of this Agreement.<\/p>\n
38
\n 44<\/p>\n
11.03 AFFILIATED COMPANIES. Each of Southern and Southern
\n Energy shall cause to be performed, and hereby guarantee the
\n performance of, any and all actions of the Southern Group or the
\n Southern Energy Group, respectively.<\/p>\n
11.04 INCORPORATION OF SEPARATION AGREEMENT PROVISIONS. The
\n provisions of Article V and Article VI (other than Section 6.03) of the
\n Separation Agreement are hereby incorporated herein by reference, and
\n unless otherwise expressly specified herein, such provisions shall
\n apply as if fully set forth herein (references in this Section to an
\n “Article” or “Section” shall mean Articles or Sections of the
\n Separation Agreement, and, except as expressly set forth herein,
\n references in the material incorporated herein by reference shall be
\n references to the Separation Agreement).<\/p>\n
11.05 GOVERNING LAW. To the extent not preempted by
\n applicable federal law, this Agreement shall be governed by, construed
\n and interpreted in accordance with the laws of the State of Georgia,
\n irrespective of the choice of law principles of the State of Georgia,
\n as to all matters, including matters of validity, construction, effect,
\n performance and remedies.<\/p>\n
11.06 SEVERABILITY. If any term or other provision of this
\n Agreement is determined to be invalid, illegal or incapable of being
\n enforced by any rule of law or public policy, all other conditions and
\n provisions of this Agreement shall nevertheless remain in full force
\n and effect so long as the economic or legal substance of the
\n transactions contemplated hereby is not affected in any manner
\n materially adverse to either party. Upon such determination that any
\n term or other provision is invalid, illegal or incapable of being
\n enforced, the parties hereto shall negotiate in good faith to modify
\n this Agreement so as to effect the original intent of the parties as
\n closely as possible and in an acceptable manner to the end that
\n transactions contemplated hereby are fulfilled to the fullest possible
\n extent.<\/p>\n
11.07 AMENDMENT. After the IPO Closing Date, Southern
\n Energy and Southern may mutually agree in writing to amend the
\n provisions of this Agreement at any time or times, either prospectively
\n or retroactively.<\/p>\n
11.08 TERMINATION. This Agreement may be terminated and the
\n Distribution abandoned at any time prior to the IPO Closing Date by
\n Southern in its sole discretion. This Agreement may be terminated at
\n any time after the IPO Closing Date and before the Change of Control
\n Date (as defined in the Separation Agreement) by mutual consent of
\n Southern and Southern Energy. In the event of termination pursuant to
\n this Section, no party shall have any liability of any kind under this
\n Agreement to the other party.<\/p>\n
11.09 CONFLICT. In the event of any conflict between the
\n provisions of this Agreement and the Separation Agreement, any
\n Ancillary Agreement, or Plan,<\/p>\n
39
\n 45<\/p>\n
the provisions of this Agreement shall control. In the event of any
\n conflict between the provisions of this Agreement and any Local
\n Agreement, the provisions of the Local Agreement shall control.<\/p>\n
11.10 COUNTERPARTS. This Agreement may be executed in two
\n or more counterparts each of which shall be deemed to be an original,
\n but all of which together shall constitute but one and the same
\n Agreement.<\/p>\n
40
\n 46<\/p>\n
IN WITNESS WHEREOF, each of the parties have caused this Employee
\nMatters Agreement to be executed on its behalf by its officers thereunto duly
\nauthorized on the day and year first above written.<\/p>\n
THE SOUTHERN COMPANY<\/p>\n
By:
\n ———————————————-
\n Name: H. Allen Franklin
\n Title: President and Chief Operating Officer<\/p>\n
SOUTHERN ENERGY, INC.<\/p>\n
By:
\n ———————————————-
\n Name: S. Marce Fuller
\n Title: President and Chief Executive Officer<\/p>\n
[SIGNATURE PAGE TO EMPLOYEE MATTERS AGREEMENT]<\/p>\n
41
\n 47<\/p>\n
SCHEDULE 1.22<\/p>\n
HEALTH AND WELFARE PLANS<\/p>\n
SEE SCHEDULE 1.23 FOR HEALTH PLANS<\/p>\n
\n\nNON-HEALTHCARE PLAN VENDOR INSURED STATUS
\n——————- —— ————–
\n
\nTax Saver AON Self (TPA)
\n (except Medical Reimbursement)<\/p>\nGroup Life Insurance MetLife Fully Insured<\/p>\n
Dependent Life Insurance MetLife Fully Insured<\/p>\n
Retiree Life Insurance MetLife Fully Insured<\/p>\n
Accident & Sickness Insurance Protective Fully Insured<\/p>\n
Long Term Disability Insurance Provident Fully Insured<\/p>\n
Total Income Protection Insurance Provident Fully Insured
\n (individual plans)<\/p>\n
Business Travel Insurance Provident Fully Insured<\/p>\n
Accidental Death & Dismemberment CNA Fully Insured<\/p>\n
Legal Care Signature Legal Fully Insured
\n (individual plans)<\/p>\n
Personal Lines MetPay Fully Insured
\n (individual plans)<\/p>\n
Long Term Care John Hancock Fully Insured
\n (individual plans)
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n
42
\n 48<\/p>\n
SCHEDULE 1.23<\/p>\n
HEALTH PLANS<\/p>\n
\n\nHEALTHCARE PLAN VENDOR INSURED STATUS
\n————— —— ————–
\n
\nKaiser HMO (GA) Kaiser Self Insured<\/p>\nAetna USHC HMO (GA) Aetna USHC Self Insured<\/p>\n
Aetna USHC HMO (DC) Aetna USHC Self Insured<\/p>\n
BCBS of GA. Catastrophic Blue Cross of Georgia Self Insured<\/p>\n
Blue Choice PPO Blue Cross of Georgia Self Insured<\/p>\n
Blue Choice HMO Blue Cross of Georgia Self Insured<\/p>\n
Blue Choice POS Blue Cross of Georgia Self Insured<\/p>\n
BCBS of AL PMD Blue Cross of Alabama Self Insured<\/p>\n
BCBS of AL Catastrophic Blue Cross of Alabama Self Insured<\/p>\n
BCBS of AL POS Blue Cross of Alabama Self Insured<\/p>\n
Health Partners HMO Health Partners (Alabama) Fully Insured<\/p>\n
United Healthcare HMO United Healthcare (Alabama) Fully Insured<\/p>\n
BCBS of FL Catastrophic Blue Cross of Florida Self Insured<\/p>\n
BCBS of FL PPC Blue Cross of Florida Self Insured<\/p>\n
BCBS of FL Care Manager Blue Cross of Florida Self Insured<\/p>\n
BCBS of FL Health Options Blue Cross of Florida Self Insured<\/p>\n
BCBS of MS Comprehensive Blue Cross of Mississippi Self Insured
\nBlue Indemnity<\/p>\n
BCBS of MS Primary Care Blue Cross of Mississippi Self Insured
\nHealth<\/p>\n
Vision Insurance Superior Vision Fully Insured
\n (individual plans)
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n
43
\n 49<\/p>\n
\n
\nCIGNA International CIGNA Fully Insured<\/p>\nDental (HMO) CIGNA Fully Insured<\/p>\n
Dental (Indemnity) Protective Fully Insured<\/p>\n
Dental (Preventive) Protective Fully Insured<\/p>\n
Employee Assistance Program Value Options Self Insured<\/p>\n
Retiree Group Health Various Self or Fully Insured
\n based on plan<\/p>\n
Medical Reimbursement Aon Self Insured (TPA)
\n<\/c><\/c><\/s><\/table>\n
44
\n 50<\/p>\n
SCHEDULE 1.43<\/p>\n
POST-EMPLOYMENT PROGRAMS<\/p>\n
\n\nPOST-EMPLOYMENT PROGRAMS VENDOR INSURED STATUS
\n
\nRetiree Group Medical Various Self or Fully insured
\n based on plan<\/p>\nRetiree Life MetLife Fully Insured<\/p>\n
Accidental Death & Dismemberment CNA Fully Insured<\/p>\n
Employee Assistance Program Value Options Self Insured<\/p>\n
Discount Vision Superior individual plans<\/p>\n
Legal Care Signature Legal individual plans<\/p>\n
Long Term Care John Hancock individual plans
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n
45
\n 51<\/p>\n
SCHEDULE 2.01<\/p>\n
EMPLOYMENT LIABILITIES INDEMNIFICATION<\/p>\n
Section 1 Indemnification by Southern Energy. Except as otherwise
\nprovided in this Agreement or Section 3 of this Schedule, Southern Energy shall,
\nfor itself and as agent for each member of the Southern Energy Group, indemnify,
\ndefend (or, where applicable, pay the defense costs for) and hold harmless the
\nSouthern Indemnitees from and against any and all Employment Liabilities that
\nany third party seeks to impose upon the Southern Indemnitees, or which are
\nimposed upon the Southern Indemnitees, if and to the extent such Employment
\nLiabilities relate to, arise out of or result from any of the following items
\n(without duplication):<\/p>\n
(i) any acts or omission or alleged acts or omissions by or
\n on behalf of any member or person employed by a member of the Southern
\n Energy Group in the conduct of the Southern Energy Business;<\/p>\n
(ii) any claim by an officer of the Southern Energy Group
\n (who is an officer as of the IPO Closing Date) against any member or
\n employee of the Southern Group; and<\/p>\n
(iii) any breach by Southern Energy or any member or person
\n employed by a member of the Southern Energy Group of this Agreement,
\n the Separation Agreement or any other Ancillary Agreement.<\/p>\n
In the event that any member of the Southern Energy Group makes a
\npayment to the Southern Indemnitees hereunder, and any of the Southern
\nIndemnitees subsequently diminishes the Employment Liability on account of which
\nsuch payment was made, either directly or through a third-party recovery,
\nSouthern will promptly repay (or will procure a Southern Indemnitee to promptly
\nrepay) such member of the Southern Energy Group the amount by which the payment
\nmade by such member of the Southern Energy Group exceeds the actual cost of the
\nassociated indemnified Employment Liability.<\/p>\n
Section 2. Indemnification by Southern. Except as otherwise provided in
\nthis Agreement or Section 3 of this Schedule, Southern shall, for itself and as
\nagent for each member of the Southern Group, indemnify, defend (or, where
\napplicable, pay the defense costs for) and hold harmless the Southern Energy
\nIndemnitees from and against any and all Employment Liabilities that any third
\nparty seeks to impose upon the Southern Energy Indemnitees, or which are imposed
\nupon the Southern Energy Indemnitees, if and to the extent such Employment
\nLiabilities relate to, arise out of or result from any of the following items
\n(without duplication):<\/p>\n
(i) any acts or omissions or alleged acts or omissions by
\n or on behalf of any member or person employed by a member of the
\n Southern Group in the conduct of the Southern Business;<\/p>\n
46
\n 52<\/p>\n
(ii) any claim by an officer of the Southern Group against
\n any member or employee of the Southern Energy Group (who is an officer
\n as of the IPO Closing Date); and<\/p>\n
(iii) any breach by Southern or any member or person
\n employed by a member of the Southern Group of this Agreement, the
\n Separation Agreement or any other Ancillary Agreement.<\/p>\n
In the event that any member of the Southern Group makes a payment to
\nthe Southern Energy Indemnitees hereunder, and any of the Southern Energy
\nIndemnitees subsequently diminishes the Employment Liability on account of which
\nsuch payment was made, either directly or through a third-party recovery,
\nSouthern Energy will promptly repay (or will procure a Southern Energy
\nIndemnitee to promptly repay) such member of the Southern Group the amount by
\nwhich the payment made by such member of the Southern Group exceeds the actual
\ncost of the indemnified Employment Liability.<\/p>\n
Section 3. Exceptions.<\/p>\n
In accordance with the current practice in effect as of the execution
\nof the Agreement, with respect to claims for benefits or compensation, if an
\nunderlying act or omission as contemplated in Section 1 or 2 of this Schedule
\noccurs and such act or omission constitutes the principal basis for such a
\nclaim, then Section 1 or 2 shall apply, as applicable, to establish
\nindemnification obligations. If, however, no specific act or omission occurs
\nthat is attributable to Southern or Southern Energy and the principal underlying
\nbasis for a claim for benefits or compensation involves plan administration or
\nother similar systemic type activities related to maintenance of plans,
\nnotwithstanding Sections 1 and 2, in accordance with the current practice in
\neffect as of the execution of the Agreement, Southern Energy and Southern shall
\nbe responsible for their pro rata allocated share of costs to defend such claim.<\/p>\n
Section 4 Relationship to Indemnification and Insurance Matters
\nAgreement.<\/p>\n
(i) Unless expressly modified in this Schedule, all other
\n provisions of Article I of the Indemnification and Insurance Matters
\n Agreement will apply to an indemnifiable claim.<\/p>\n
(ii) Any claim which is not an Employment Liability will
\n only be subject to the provisions of the Indemnification and Insurance
\n Matters Agreement.<\/p>\n
Section 5. Definitions<\/p>\n
(i) “Employment Liabilities” means all claims, causes of
\n action, demands, liabilities, debts or damages (known or unknown)
\n related to all<\/p>\n
47
\n 53<\/p>\n
employment matters addressed in this Agreement, including but not
\n limited to claims arising under the Employee Retirement Income Security
\n Act (“ERISA”), the Internal Revenue Code, claims for breach of
\n contract, breach of fiduciary duty, promissory estoppel, equitable
\n estoppel; claims for violation of any other federal or state statute or
\n regulation or local ordinance; claims for lost or unpaid wages or other
\n employee benefits; claims under the Americans with Disabilities Act
\n (“ADA”); claims under the Family and Medical Leave Act (“FMLA”); claims
\n under Title VII of the Civil Rights Act of 1964, as amended; and claims
\n under state law for intentional infliction of emotional distress, pain,
\n suffering or anxiety, negligence, outrageous conduct, invasion of
\n privacy, harassment, assault, battery, defamation, slander, libel,
\n wrongful or constructive discharge or any other actions arising in tort
\n or contract.<\/p>\n
(ii) All other defined terms in this Schedule shall have
\n the meaning set forth in the Indemnification and Insurance Matters
\n Agreement.<\/p>\n
48
\n 54<\/p>\n
SCHEDULE 2.01(a)<\/p>\n
BENEFITS AND LIABILITIES FOR SOUTHERN ENERGY RETIRED
\n EMPLOYEES AND CERTAIN SOUTHERN ENERGY TERMINATED
\n EMPLOYEES<\/p>\n
At the Group Status Change Date, the following will occur:<\/p>\n
1. Benefits for a designated list of Southern Energy Retired Employees(1)
\n and certain Southern Energy Terminated Employees mutually agreed upon by
\n Southern Energy and Southern determined as of the Group Status Change
\n Date will become the responsibility of Southern(2).<\/p>\n
Retiree medical benefits
\n Retiree life benefits
\n Southern Pension Plan benefits
\n Southern Supplemental Benefit Plan benefits
\n Southern SERP benefits
\n Southern Energy SERP benefits
\n Southern Deferred Compensation Plan benefits
\n Specified benefits in individual contracts (including commitments made
\n under the Value Creation Plan)<\/p>\n
2. Assets related to Southern Energy Retired Employees’ Southern Pension
\n Plan benefits will be transferred from Southern Energy’s account within
\n the Southern Pension Plan trust to another designated account as of the
\n Group Status Change Date.<\/p>\n
The asset transfer amount will use the existing methodology for
\n transferring benefit obligations and assets between accounts within the
\n Southern Pension Plan trust. The asset transfer amount will be determined
\n using the following formula:<\/p>\n
Market value of Southern Energy’s Southern Pension Plan asset
\n account
\n times: (PBO for Southern Energy Retired Employees)\/
\n (PBO for all Southern Energy participants)<\/p>\n
equals: Asset Transfer Amount<\/p>\n
PBO = Projected benefit obligations as determined for
\n Southern’s FAS 87 accounting purposes as of the date of
\n transfer.<\/p>\n
49
\n 55<\/p>\n
Benefits = PBO will be based on benefits payable by Southern Pension
\n Plan.<\/p>\n
3. Southern Energy will become fully responsible for the Southern
\n Supplemental Benefit Plan and SERP benefits for all Southern Energy
\n Employees as of the Group Status Change Date. Southern Energy will also
\n retain responsibility for certain Liabilities set forth in individual
\n contracts entered into with certain Southern Energy Terminated Employees
\n mutually agreed upon by Southern Energy and Southern. Specifically, the
\n other Southern Subsidiaries will be relieved of any responsibilities to
\n provide a portion of the transferred employees’ ultimate Supplemental
\n Benefit Plan and\/or SERP benefits due to periods of service the Southern
\n Energy Employees worked for those other Subsidiaries.<\/p>\n
4. Southern will be fully responsible for the Southern Supplemental Benefit
\n Plan and SERP benefits for all Southern Employees and Southern Energy
\n Retired Employees as of the Group Status Change Date. Specifically,
\n Southern Energy will be relieved of any responsibilities to provide a
\n portion of the Southern Employees’ and Southern Energy Retired Employees’
\n ultimate Supplemental Benefit Plan and SERP benefits due to periods of
\n service the employees worked for Southern Energy.<\/p>\n
5. Southern Energy will remunerate Southern for the excess of (A) over (B)
\n below:<\/p>\n
A. Actuarial present value of the benefit responsibilities shifted to
\n Southern pursuant to items 1 and 4 above, OVER<\/p>\n
B. The sum of:<\/p>\n
Assets to be transferred from Southern Energy’s account within the
\n Southern Pension Plan account pursuant to item 2 above.<\/p>\n
Actuarial present value of the benefit responsibilities shifted to
\n Southern Energy pursuant to item 3 above.<\/p>\n
While not anticipated, if (B) is larger than (A), then Southern will
\n remunerate Southern Energy for the excess of (B) over (A).<\/p>\n
BASIS FOR ACTUARIAL PRESENT VALUES<\/p>\n
The actuarial present values referred to in item 5 above will be computed using
\nthe following basis or some other basis that is mutually acceptable to Southern
\nEnergy and Southern:<\/p>\n
– Data as of the Group Status Change Date.<\/p>\n
50
\n 56<\/p>\n
– For account-type benefits, the account balance as of the Group Status
\n Change Date will be deemed the actuarial present value.<\/p>\n
– For all other benefits, the present values will be computed using
\n standard actuarial techniques and the ongoing plan actuarial
\n assumptions(3). The assumptions will be those used to determine pension
\n and retiree medical\/life benefit obligations required by the Statement
\n of Financial Accounting Standards Number 132 (“FAS 132”) for the prior
\n year’s financial statements. If the assumptions used by Southern and
\n Southern Energy for these purposes differ, then present values will be
\n the average of the results obtained by independently computing the
\n present values using each set of assumptions.<\/p>\n
6. With respect to certain Southern Energy Terminated Employees mutually
\n agreed upon by Southern Energy and Southern, the parties may mutually
\n agree to assign certain Liabilities and have such Liabilities processed
\n in accordance with Paragraph 5 above.<\/p>\n
——————<\/p>\n
(1) Currently anticipated to be all non-union retirees, but may be limited
\n to a select list that will be agreed to by both sides prior to the
\n Group Status Change Date.<\/p>\n
(2) For purposes of this document, Southern excludes Southern Energy.<\/p>\n
(3) Using ongoing assumptions means that when determining the present
\n values of Southern Supplemental\/SERP benefits as of the Group Status
\n Change Date for active employees the following will be anticipated by
\n the actuarial assumptions–continued service to retirement,
\n termination, death, or disability; pay increases; and unknown bonus
\n payments at target levels.<\/p>\n
51
\n 57<\/p>\n
SCHEDULE 6.04(a)<\/p>\n
THIRD PARTY ASO CONTRACTS<\/p>\n
\n\n PLAN VENDOR SERVICES
\n
\nESP Merrill Lynch Recordkeeping<\/p>\nESOP Merrill Lynch Recordkeeping<\/p>\n
PSP Merrill Lynch Recordkeeping<\/p>\n
Supplemental Benefit Plan Merrill Lynch Recordkeeping<\/p>\n
Deferred Compensation Merrill Lynch Recordkeeping<\/p>\n
Health & Welfare Plans\/ Hewitt Associates Recordkeeping\/
\nPension\/SERP benefit delivery\/
\n actuarial<\/p>\n
Tax Saver Aon Recordkeeping<\/p>\n
Pension Chase Manhattan Trustee<\/p>\n
ESP Merrill Lynch Trustee<\/p>\n
ESOP Merrill Lynch Trustee<\/p>\n
PSP Merrill Lynch Trustee
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n
52
\n 58<\/p>\n
SCHEDULE 6.04(b)<\/p>\n
GROUP INSURANCE POLICIES<\/p>\n
\n\nPLAN INSURER
\n
\nHealth Partners HMO Health Partners (Alabama)<\/p>\nUnited Healthcare HMO United Healthcare (Alabama)<\/p>\n
Group Life MetLife<\/p>\n
Dependent Life MetLife<\/p>\n
Retiree Life MetLife<\/p>\n
Accident & Sickness Protective<\/p>\n
Long Term Disability Provident<\/p>\n
Total Income Protection Provident<\/p>\n
Business Travel Provident<\/p>\n
Dental (Indemnity) Protective<\/p>\n
Dental (Preventive) Protective<\/p>\n
Accidental Death & Dismemberment CNA<\/p>\n
Legal Care Signature Legal<\/p>\n
Vision Superior Vision<\/p>\n
Personal Lines MetPay<\/p>\n
Long Term Care John Hancock<\/p>\n
Dental (HMO) CIGNA<\/p>\n
CIGNA International CIGNA
\n<\/c><\/s><\/caption>\n<\/table>\n
53
\n 59<\/p>\n
SCHEDULE 6.04(c)<\/p>\n
THIRD PARTY HMO CONTRACTS<\/p>\n
\n\n CONTRACT VENDOR
\n
\n Kaiser HMO (GA) Kaiser<\/p>\n Aetna USHC HMO (GA) Aetna USHC<\/p>\n
Aetna USHC HMO (DC) Aetna USHC<\/p>\n
Blue Choice HMO Blue Cross of Georgia<\/p>\n
Health Partners HMO Health Partners (Alabama)<\/p>\n
United Healthcare HMO United Healthcare (Alabama)
\n<\/c><\/s><\/caption>\n<\/table>\n
54
\n 60<\/p>\n
SCHEDULE 7.04<\/p>\n
STOCK PURCHASE PLAN<\/p>\n
See Exhibit 10.9 to the IPO Registration Statement.<\/p>\n
55
\n 61<\/p>\n
SCHEDULE 7.05<\/p>\n
SOUTHERN ENERGY OMNIBUS INCENTIVE COMPENSATION PLAN<\/p>\n
See Exhibit 10.10 to the IPO Registration Statement.<\/p>\n
56
\n 62<\/p>\n
SCHEDULE 8<\/p>\n
FRINGE BENEFITS<\/p>\n
Employee Assistance<\/p>\n
Credit Union<\/p>\n
Southern-owned Cars<\/p>\n
Executive Financial Planning<\/p>\n
Relocation<\/p>\n
63<\/p>\n
SCHEDULE 10.10(a)<\/p>\n
EMPLOYMENT LITIGATION<\/p>\n
TRANSFERRED CLAIMS<\/p>\n
None<\/p>\n
64<\/p>\n
SCHEDULE 10.10(b)<\/p>\n
EMPLOYMENT LITIGATION<\/p>\n
JOINTLY DEFEND CLAIMS<\/p>\n
None<\/p>\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":[9622,9628],"class_list":["post-43392","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-planning","corporate_contracts_types-planning__separation"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43392","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=43392"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43392"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43392"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43392"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}