Exhibit 10(a)22
FIRST
AMENDMENT TO
THE
SOUTHERN COMPANY
SENIOR
EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN
WHEREAS, the Southern Company
Executive Change in Control Severance Plan (“Plan”) was originally established
by Southern Company Services, Inc. on December 7, 1998 and was most recently
amended and restated on December 31, 2008 to provide certain benefits to
eligible employees that may be terminated from employment following a change in
control as contemplated therein; and
WHEREAS, the Company, through
its Board of Directors, is authorized to amend the Plan in accordance with the
requirements of Section 6.5 of the Plan; and
WHEREAS, the Company desires
to amend the Plan to change the severance benefits paid under the Plan, to
eliminate certain tax gross-up provisions, and to grandfather participants in
the Plan as of October 18, 2009.
NOW, THEREFORE, the Plan is
hereby amended in the following particulars effective as of October 19, 2009,
subject to the provisions of Section 6.5 of the Plan:
1.
Section 2.18 of the Plan shall be
replaced in its entirety with the following new provision:
2.18 “Employee”
shall mean those employees of Southern, the Company or any other Southern
Subsidiary identified in either Subsection (a) or (b) of this Section 2.18,
except as otherwise provided in Subsection (c) hereof.
(a) Chief
Executive Officer of Southern and the senior officers of Southern, the Company
or any other Southern Subsidiary who report directly to the Chief Executive
Officer of Southern.
(b) Any
employee of Southern, the Company or any other Southern Subsidiary that the
Compensation Committee has designated as eligible to participate in the Plan
based upon the recommendation of the Chief Executive Officer of
Southern.
(c) Notwithstanding
Subsections (a) and (b) above, no employee shall participate in the Plan if
either of the following circumstances apply: (1) the Compensation
Committee has designated the employee as ineligible to participate in the Plan
based upon the recommendation of the Chief Executive Officer of Southern; or (2)
if, prior to a Change in Control, the employee has entered into a change in
control agreement with his Employing Company.
(d) The
Compensation Committee may deem one or more Employees of a particular Southern
Subsidiary to be employed by another Employing Company for purposes of this
Plan. Such action shall be in writing and shall cause an Employee to
be entitled to benefits under this Plan in the event of a Change in Control of
his deemed Employing Company, not his Employing
Company. Notwithstanding the above, no Employee shall participate in
the Plan if, prior to a Change in Control, the Employee is entitled to, and
elects to receive benefits under any other change in control severance plan,
agreement or arrangement.
(e) An
Employee shall immediately cease to be an Employee who is eligible to
participate in the Plan if he no longer holds one of the named positions set
forth in Subsection (a) of this Section 2.18 unless the Compensation Committee
has designated (upon the recommendation of the Chief Executive Officer of
Southern) the Employee is eligible to participate in the Plan under Subsection
(b) hereof.
2.
Section 3.2(b) of the Plan shall be
replaced in its entirety with the following new provision:
(b) Severance
Benefit. (i) Except as otherwise provided in Sections
3.2(b)(ii) or 3.2(b)(iii) hereof, Participants shall be paid in cash an amount
equal to two times the Participant’s Annual
Compensation. Notwithstanding the above, Participants who have the
job title of Chief Executive Officer, Chief Operating Officer and Chief
Financial Officer of Southern shall be paid in cash an amount equal to three
times the Participant’s Annual Compensation. (Such amounts described
above are referred to as the “Severance Amount”.)
(ii) If
any portion of the Severance Amount constitutes an “excess parachute payment”
(as such term is defined under Code Section 280G (“Excess Parachute Payment”)),
then the Severance Amount shall be capped so that the Severance Amount, when
combined with all other “parachute payments” (as such term is defined under Code
Section 280G) received by the Participant (the “Total Parachute Payments”),
equals three (3) times the Participant’s base amount (as such term is defined
under Code Section 280G (the “Base Amount”)), less one dollar (the “Capped
Amount”), but only if the Capped Amount, reduced by the hospital insurance tax
under Code Section 3101(b) (“HI Tax”) and federal and state income tax measured
at the highest marginal rates (“Income Tax”), exceeds the uncapped Total
Parachute Payments, reduced by HI Tax, Income Tax and the tax rate under Code
Section 4999 (“Excise Tax”).
For purposes of this Section
3.2(b)(ii), whether any amount would constitute an Excess Parachute Payment and
any other calculations of tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or
other amounts, e.g., Total Parachute Payments, Base Amount, Capped Amount, etc.,
shall be determined by a nationally recognized firm specializing in federal
income taxes as selected by the Compensation Committee, and such calculations or
determinations shall be binding upon the Participants, Southern and the
Employing Company.
(iii) Section
3.2(b)(i) and (ii) above shall not apply to any Employee covered by this Plan on
October 18, 2009 for so long as the Employee remains in the job title held on
such date or the Employee is promoted or otherwise transferred after October 18,
2009 into another job title covered by this Plan (the “Grandfathered
Employee”). For Grandfathered Employees, the following provisions
shall apply: Participants shall be paid in cash an amount equal to three times
the Participant’s Annual Compensation (the “Severance Amount”). If any portion
of the Severance Amount constitutes an “excess parachute payment” (as such term
is defined under Code Section 280G (“Excess Parachute Payment”)), the Employing
Company shall pay to the Participant an additional amount calculated by
determining the amount of tax under Code Section 4999 that he otherwise would
have paid on any Excess Parachute Payment with respect to the Change in Control
and dividing such amount by a decimal determined by adding the tax rate under
Code Section 4999 (“Excise Tax”), the hospital insurance tax under Code Section
3101(b) (“HI Tax”) and federal and state income tax measured at the highest
marginal rates (“Income Tax”) and subtracting such result from the number one
(1) (the “280G Gross-up”); provided, however, that no 280G Gross-up shall be
paid unless the Severance Amount plus all other “parachute payments” to the
Participant under Code Section 280G exceeds three (3) times the Participant’s
“base amount” (as such term is defined under Code Section 280G (“Base Amount”))
by ten percent (10%) or more; provided further, that if no 280G Gross-up is
paid, the Severance Amount shall be capped at three (3) times the Participant’s
Base Amount, less all other “parachute payments” (as such term is defined under
Code Section 280G) received by the Participant, less one dollar (the “Capped
Amount”), if the Capped Amount, reduced by HI Tax and Income Tax, exceeds what
otherwise would have been the Severance Amount, reduced by HI Tax, Income Tax
and Excise Tax.
For purposes of this Section
3.2(b)(iii), whether any amount would constitute an Excess Parachute Payment and
any other calculations of tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or
other amounts, e.g., Base Amount, Capped Amount, etc., shall be determined by a
nationally recognized firm specializing in federal income taxes as selected by
the Compensation Committee, and such calculations or determinations shall be
binding upon the Participants, Southern and the Employing Company.
3.
All other provisions of the Plan not
inconsistent with the above changes shall remain in effect.
IN WITNESS WHEREOF, this First
Amendment has been executed on this 22nd day of February, 2010, by a duly
authorized officer of Southern Company Services, Inc. pursuant to resolutions of
the Board of Directors of the Company adopted on October 19, 2009.
SOUTHERN COMPANY SERVICES,
INC.
By: /s/Patricia
L. Roberts
Patricia L. Roberts
Vice President
ATTEST:
By: /s/C.
C.
Hudgins
Its: Assistant
Secretary