Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
In connection with a periodic review of its compensation plans and programs, on
Summaries of the BPP and the Severance Plan are included under the caption
"Potential Payments Upon Termination or Change in Control" on pages 90 to 95 of
the Company's definitive proxy statement filed with the
Changes to the BPP
The Amended BPP updates the definitions for change-in-control events and the treatment of equity compensation awards under certain change-in-control events, as follows:
•The Amended BPP eliminates the "Company Does Not Survive Merger" category of change-in-control events and modifies the "Company Change in Control I" category of change-in-control events to add the following additional triggering events: approval by the Company's stockholders of a complete liquidation or dissolution of the Company and a sale or other disposition of substantially all of the assets of the Company. Events that previously would have been included in the "Company Does Not Survive Merger" category will now be included in the "Company Change in Control I" category.
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•The Amended BPP provides that for grants of equity compensation awards on or
after
•In the event of a Company Change in Control I, if a replacement award is provided to continue, replace or assume the award, the award will continue in effect in accordance with its terms;
•In the event of a Company Change in Control I, if a replacement award is not
provided to continue, replace or assume the award, the award will fully vest and
become exercisable, with performance-based awards vesting at the greater of (1)
the target level and (2) the projected actual level of performance for the full
performance period as of the date of the Company Change in Control I, as
reasonably determined by the
•In the event of a Subsidiary Change in Control, unless the employment of a participant employed by the subsidiary undergoing the Subsidiary Change in Control is transferred to the Company or a remaining subsidiary of the Company, the participant's outstanding awards will fully vest and become exercisable, with performance-based awards vesting at the target level.
Changes to the Severance Plan
•The Amended Severance Plan updates the (1) benefits payable to participants upon a qualifying termination of employment within two years after a change in control and (2) definitions for change-in-control events, as follows: The Severance Plan provides that the benefits payable to participants upon a qualifying termination of employment within two years after a change in control include a cash severance benefit equal to two times (or three times for the Chief Executive Officer of the Company) the sum of the participant's annual base salary plus the participant's target short-term cash incentive award ("Annual Incentive Award"), and a pro-rated payout of the participant's target Annual Incentive Award for the year of
2
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termination. The Amended Severance Plan provides that the Annual Incentive Award amount used in both the cash severance calculation and the pro-rated Annual Incentive Award calculation will be the greater of the participant's target Annual Incentive Award and the average of the participant's actual Annual Incentive Award payouts for the three fiscal years preceding the year of the qualifying termination.
•The Amended Severance Plan updates the definition of change in control to be consistent with the definitions of "Company Change in Control I" and "Subsidiary Change in Control" under the Amended BPP.
•The Amended Severance Plan provides that, upon a qualifying termination of employment within two years after a change in control, Performance Share Units will vest at the greater of (1) the target level and (2) the projected actual level of performance for the full performance period as of the date of the change of control, as reasonably determined by the Compensation Committee.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
10.1 A mended and Restated So uthern Company Change In Control Benefits Protection Plan , effective August 15, 2022. 10.2 S outhern Company Senior Executive C hange in Control Severance Plan , A mended and Restated, effective August 15, 2022 . 3
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