Exhibit 10(a)70
SOUTHERN COMPANY
PERFORMANCE DIVIDEND PLAN
AMENDED AND RESTATED
TROUTMAN SANDERS LLP
NationsBank Plaza
600 Peachtree Street, N.E., Suite 5200
Atlanta, Georgia 30308
(404) 885-3000
Effective January 1, 1999
SOUTHERN COMPANY
PERFORMANCE DIVIDEND PLAN
Purposes
The purposes of the Southern Company Performance Dividend Plan are to
provide a financial incentive which will focus the efforts of certain key
employees on areas which will have a direct and significant influence on
corporate performance and to provide the potential for levels of compensation
which will enhance the Employing Companies' abilities to attract, retain and
motivate such key employees. In order to achieve these objectives, the Plan will
be based upon corporate performance as measured by total shareholder return or
such other performance measure which the Committee may determine under the terms
of the Plan.
ARTICLE I
Definitions
For purposes of the Plan, the following terms shall have the following
meanings unless a different meaning is plainly required by the context:
1.1 "Annual Dividend" shall mean the aggregate, annual dividend
declared by Southern Company on Common Stock for the Plan Year in which an Award
is made.
1.2 "Award" shall mean the awards granted pursuant to Article IV
hereof.
1.3 "Beneficial Ownership" shall mean beneficial ownership within the
meaning of Rule 13d-3 promulgated under the Exchange Act.
1.4 "Board of Directors" shall mean the Board of Directors of Southern
Company Services, Inc.
1.5 "Business Combination" shall mean a reorganization, merger or
consolidation of Southern Company or sale or other disposition of all or
substantially all of the assets of Southern Company.
1.6 "Committee" shall mean the Compensation Committee of the Board of
Directors of Southern Company.
1.7 "Common Stock" shall mean the common stock of Southern Company.
1.8 "Computation Period" shall mean a four-year period commencing the
first day of January of each year, provided, however, that the Computation
Period for the first three years beginning in the year of the effective date of
the Plan shall be one year, two years and three years, respectively, beginning
January 1, 1997.
1.9 "Consummation" shall mean the completion of the final act necessary
to complete a transaction as a matter of law, including, but not limited to, any
required approvals by the corporation's shareholders and board of directors, the
transfer of legal and beneficial title to securities or assets and the final
approval of the transaction by any applicable domestic or foreign governments or
agencies.
1.10 "Control" shall mean, in the case of a corporation, Beneficial
Ownership of more than 50% of the combined voting power of the corporation's
Voting Securities, or in the case of any other entity, Beneficial Ownership of
more than 50% of such entity's voting equity interests.
1.11 "Employing Company" shall mean those affiliates or subsidiaries of
the Southern Company (direct or indirect) which have one or more employees to
whom the Board of Directors or any committee thereof has granted an option under
the Southern Company Performance Stock Plan provided that such affiliate or
subsidiary adopts the Plan.
1.12 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
1.13 "Group" shall mean group within the meaning of Section 14(d) of
the Exchange Act.
1.14 "Incumbent Board" shall mean those individuals who constitute the
Southern Board as of the Effective Date plus any individual who shall become a
director subsequent to such date whose election or nomination for election by
Southern Company's shareholders was approved by a vote of at least 75% of the
directors then comprising the Incumbent Board. Notwithstanding the foregoing, no
individual who shall become a director of the Southern Board subsequent to the
Effective Date whose initial assumption of office occurs as a result of an
actual or threatened election contest (within the meaning of Rule 14a-11 of the
Regulations promulgated under the Exchange Act) with respect to the election or
removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Southern Board shall be a
member of the Incumbent Board.
1.15 "Key Employee" shall mean any person who is or was employed by an
Employing Company who has been granted Stock Options.
1.16 "Participant" shall mean a Key Employee who satisfies the criteria
set forth in Article III.
1.17 "Payment Date" shall mean the date the check evidencing an Award
is endorsed by an authorized person of an Employing Company.
1.18 "Peer Group Common Stock" shall mean the common stock of the Peer
Group Companies.
1.19 "Peer Group Companies" shall mean those Companies designated by
Goldman Sachs as the 80 Utility Peer Group Companies as published quarterly and
as composed from time to time. In the event that Goldman Sachs no longer
publishes the 80 Utility Peer Group Companies, the Committee shall choose such
other and similar list of national peer group companies as published by a
similarly nationally recognized firm.
1.20 "Performance Based" shall mean compensation which qualifies as
"performance based" within the meaning of Code Section 162(m)(4)(c) and the
regulations thereunder.
1.21 "Permanent Disability" shall mean such permanent disability as
defined in The Southern Company Pension Plan.
1.22 "Person" shall mean any individual, entity or group within the
meaning of Section 13(d)(3) or 14(d)(2) of Exchange Act.
1.23 "Phantom Stock" shall mean phantom shares of Common Stock as
defined by The Southern Company Deferred Compensation Plan.
1.24 "Plan" shall mean the Southern Company Performance Dividend Plan.
1.25 "Plan Termination" shall mean the termination of the Plan by
Southern Company or an Employing Company following a Southern Change in Control
unless an equitable arrangement (embodied in an ongoing substitute or
replacement plan) has been made with respect to the Plan in connection with the
Southern Change in Control. For purposes of this Plan, an ongoing substitute or
alternative plan shall be considered an "equitable arrangement" if a nationally
recognized compensation consulting firm chosen by the Committee opines in
writing that the post-Southern Change in Control plan is an equitable substitute
or replacement of the Plan, and that such substitute or alternative plan
provides substantially similar target opportunities and a substantially similar
level of performance difficulty.
1.26 "Plan Year" shall mean the calendar year.
1.27 "Retirement" shall mean the termination of employment with an
Employing Company under the terms of The Southern Company Pension Plan or such
other retirement or early retirement plan or arrangement which the Committee
shall adopt and make available to a Participant.
1.28 "Southern Board" shall mean the Board of Directors of The Southern
Company.
1.29 "Southern Change in Control" shall mean any of the following:
(i) The Consummation of an acquisition by any Person of
Beneficial Ownership of 20% or more of Southern Company's Voting
Securities; provided, however, that for purposes of this subsection
(i), the following acquisitions of Southern's Voting Securities shall
not constitute a Change in Control:
(A) any acquisition directly from Southern Company;
(B) any acquisition by Southern Company;
(C) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by Southern or any
corporation controlled by Southern Company;
(D) any acquisition by a qualified pension plan or
publicly held mutual fund;
(E) any acquisition by an Employee or Group composed
exclusively of Employees; or
(F) any Business Combination which would not
otherwise constitute a change in control because of the
application of clauses (A), (B) and (C) of Section 1.29(iii).
(ii) A change in the composition of the Southern Board whereby
individuals who constitute the Incumbent Board cease for any reason to
constitute at least a majority of the Southern Board; or
(iii) Consummation of a Business Combination, unless,
following such Business Combination, all of the following three
conditions are met:
(A) all or substantially all of the individuals and
entities who held Beneficial Ownership, respectively, of
Southern Company's Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly,
65% or more of the combined voting power of the Voting
Securities of the corporation surviving or resulting from such
Business Combination, (including, without limitation, a
corporation which as a result of such transaction holds
Beneficial Ownership of all or substantially all of Southern
Company's Voting Securities or all or substantially all of
Southern Company's assets) (such surviving or resulting
corporation to be referred to as "Surviving Company"), in
substantially the same proportions as their ownership,
immediately prior to such Business Combination, of Southern
Company's Voting Securities;
(B) no Person (excluding any corporation resulting
from such Business Combination, qualified pension plan,
publicly held mutual fund, Group composed exclusively of
Employees or employee benefit plan (or related trust) of
Southern Company, its subsidiaries or Surviving Company) holds
Beneficial Ownership, directly or indirectly, of 20% or more
of the combined voting power of the then outstanding Voting
Securities of Surviving Company except to the extent that such
ownership existed prior to the Business Combination; and
(C) at least a majority of the members of the board
of directors of Surviving Company were members of the
Incumbent Board at the earlier of the date of execution of the
initial agreement, or of the action of the Southern Board,
providing for such Business Combination.
1.30 "Southern Company" shall mean The Southern Company.
1.31 "Subsidiary Change in Control" shall mean the following:
(i) The Consummation of an acquisition by any Person of
Beneficial Ownership of 50% or more of the combined voting power of the
then outstanding Voting Securities of a Subsidiary Change in Control
Company; provided, however, that for purposes of this Subsection 1.31,
any acquisition by an Employee, or Group composed entirely of
Employees, any qualified pension plan, publicly held mutual fund or any
employee benefit plan (or related trust) sponsored or maintained by
Southern Company or any corporation Controlled by Southern Company
shall not constitute a Change in Control;
(ii) Consummation of a reorganization, merger or consolidation
of a Subsidiary Change in Control Company (an "Employing Company
Business Combination"), in each case, unless, following such Employing
Company Business Combination, Southern Company Controls the corporation
surviving or resulting from such Employing Company Business
Combination; or
(iii) Consummation of the sale or other disposition of all or
substantially all of the assets of a Subsidiary Change in Control
Company to an entity which Southern Company does not Control.
1.32 "Subsidiary Change in Control Company" shall mean an Employing
Company which has been authorized to and has adopted the Southern Company change
in control program.
1.33 "Southern Termination" shall mean the following:
(a) The Consummation of a reorganization, merger or
consolidation of Southern Company under circumstances where either (i)
Southern Company is not the surviving corporation or (ii) Southern
Company's Voting Securities are no longer publicly traded;
(b) The Consummation of a sale or other disposition of all or
substantially all of Southern Company's assets; or
(c) The Consummation of an acquisition by any Person of
Beneficial Ownership of all of Southern Company's Voting Securities
such that Southern Company's Voting Securities are no longer publicly
traded.
1.34 "Subsidiary Employee" shall mean an Employee of a Subsidiary
Change in Control Company which has undergone a Subsidiary Change in Control.
1.35 "Stock Option" shall mean those options to acquire Common Stock
awarded to Participants pursuant to the Southern Company Performance Stock Plan.
1.36 "Termination for Cause" or "Cause" shall mean the termination of a
Participant's employment by an Employing Company under any of the following
circumstances:
(a) The Participant willfully neglects or refuses to discharge
his or her duties to the Employing Company as an employee or refuses to
comply with any lawful or reasonable instructions given to him or her
by the Employing Company without reasonable excuse; or
(b) The Participant is guilty of gross misconduct. For
purposes of this Plan, the following acts shall constitute gross
misconduct:
(i) any act involving fraud or dishonesty or breach
of appropriate regulations of competent authorities;
(ii) the carrying out of any activity or the making
of any statement which would prejudice and/or reduce the good
name and standing of Southern Company or an Employing Company
or would bring Southern Company or an Employing Company into
contempt, ridicule or would reasonably shock or offend any
community in which Southern Company or an Employing Company is
located;
(iii) attendance at work in a state of intoxication
or otherwise being found in possession at his or her workplace
of any prohibited drug or substance, possession of which would
amount to a criminal offense;
(iv) assault or other act of violence against any
employee or other person during the course of the
Participant's employment; and
(v) conviction of any felony or misdemeanor involving
moral turpitude.
1.37 "Total Shareholder Return" or "TSR' shall mean the total amount an
investor would receive by investing $100 per quarter in Common Stock or in Peer
Group Common Stock, as the case may be, as determined by measuring the total
dividends which would have been paid on such Common Stock or Peer Group Common
Stock by reinvesting such dividends on a quarterly basis in additional shares of
Common Stock or Peer Group Common Stock as the case may be and the total gain or
loss on such Common Stock or Peer Group Common Stock as if such stock had been
sold at the closing price on the last day of the respective Computation Period.
1.38 "Voting Securities" shall mean the outstanding voting securities
of a corporation entitling the holder thereof to vote generally in the election
of such corporation's directors.
Where the context requires, words in the masculine gender shall include
the feminine and neuter genders, words in the singular shall include the plural,
and words in the plural shall include the singular.
ARTICLE II
Plan Administration
2.1 The Plan shall be administered by the Committee. The Committee is
authorized to establish such rules and to appoint such agents as it deems
appropriate for the proper administration of the Plan, and to make such
determinations and to take such steps in connection with the Plan or the
benefits provided hereunder as it deems necessary or advisable.
2.2 Plan Interpretation. The Committee shall have the exclusive
authority to interpret the Plan. The decision of the Committee with respect to
any question arising as to the grant of an Award to a Participant in the Plan,
the amount, term, form, and time of payment of Awards under the Plan, or any
other matter concerning the Plan shall be final, conclusive, and binding on both
Southern Company and the Participants.
ARTICLE III
Participants
3.1 Participation in the Plan shall be limited to Key Employees of the
Employing Companies, or in the case of death, their estates or beneficiaries,
holding Stock Options as of the last day of any Computation Period.
3.2 Any Participant who terminates his or her employment with an
Employing Company and who is not immediately re-employed with an affiliate of an
Employing Company prior to the Payment Date of any Award due under this Plan for
reasons other than death, Permanent Disability, or Retirement shall forfeit any
Award due under this Plan. If a Participant terminates his or her employment by
reason of death, Permanent Disability or Retirement, such Participant or his or
her estate or representative shall continue to be eligible to receive Awards
with respect to any Stock Options which remain outstanding in accordance with
their terms.
3.3 Notwithstanding any other provision of this Plan, no Participant
whose employment is terminated by an Employing Company for Cause shall be
eligible to receive an Award under this Plan.
3.4 Notwithstanding any other provision of this Plan, the maximum Award
for any Plan Year payable to any Participant with respect to Stock Options
awarded during such Plan Year shall be six million dollars ($6,000,000).
3.5 In the case of an individual who becomes a Participant subsequent
to January 1, 1997, such Participant shall participate in each Computation
Period which ends not less than two (2) years after becoming a Participant. A
new four-year measuring period shall begin each year in order to recognize the
need to link objectives over longer periods of time, to recognize changes in the
operating environment, and to encourage Participants to make long-term
decisions.
ARTICLE IV
Performance Dividend Award
4.1 Each Participant shall receive an Award on the last day of each
Computation Period which shall be based upon the number of vested and unvested,
outstanding Stock Options held by the Participant on the last day of such
Computation Period multiplied by the Annual Dividend multiplied by the Payout
Percentage determined in accordance with the following schedule:
Percentile of Southern TSR Payout Percentage
Versus Peer Group TSR
90th and above 100%
70th 75%
50th 50%
30th 25%
Below 30th 0%
The Payout Percentage for performance levels falling between the percentiles
listed above shall be interpolated on a straight line basis for any given Plan
Year. The Committee may increase the Payout Percentage by up to a factor of two
(2) with respect to such Participants and under such circumstances as the
Committee in its discretion shall deem appropriate.
4.2 The Payout Percentage set forth herein shall be based on Southern
Company's Total Shareholder Return during a Computation Period as compared to
the Total Shareholder Return ranking of the Peer Group Companies for such
Computation Period. The Total Shareholder Return of the Peer Group Companies
shall be determined annually by an independent certified public accountant and
shall be properly adjusted and annualized by such accountant so that the Peer
Group Companies' Total Shareholder Return may be accurately compared to that of
Southern Company.
4.3 Notwithstanding the above provisions, an Award shall not be granted
for any Computation Period ending with the Plan Year in which the current
earnings of Southern Company are less than the amount necessary to fund
dividends on its Common Stock at the rate such dividends were paid for the
immediately preceding Plan Year.
4.4 Awards shall be paid in cash on or before the 15th day of the third
month following the last day of the Computation Period or, with respect to those
Participants who are otherwise eligible to participate in the Southern Company
Deferred Compensation Plan, may be deferred by exercising an option to do so no
later than 12 months before any amount would otherwise be distributed pursuant
to this Section 4.4. If an election is made to defer the receipt of the amount
of any Award, such amount shall be deemed to be invested in Phantom Stock.
Dividend equivalents earned on such Phantom Stock shall be automatically
invested in additional shares of Phantom Stock.
ARTICLE V
Change in Control and Southern Termination
5.1 Southern Change in Control. Notwithstanding any other provision of
this Plan to the contrary, in the event of a Plan Termination within two (2)
years following a Southern Change in Control, each Participant who is an
employee of his Employing Company on the date of such Plan Termination shall be
entitled to receive within thirty (30) days of the Plan Termination, cash for
each Award held as of such date, based on actual performance under Section 4.1
hereof determined as of the date of the Plan Termination, and the Annual
Dividend declared prior to the date of the Plan Termination.
5.2 Subsidiary Change in Control. Notwithstanding any other provision
of this Plan to the contrary, in the event of a Subsidiary Change in Control,
each Subsidiary Employee on the date of such Change in Control whose employment
is not transferred upon such Subsidiary Change in Control, to another Employing
Company shall be entitled to receive within thirty (30) days of the Subsidiary
Change in Control, cash for each Award held as of such date, based on actual
performance under Section 4.1 hereof determined as of the date on which the
Subsidiary Change in Control shall have occurred, and the Annual Dividend
declared prior to the date of the Subsidiary Change in Control.
5.3 Southern Termination. Notwithstanding any other provision of this
Plan to the contrary, in the event of a Southern Termination, each Participant
who is an employee of his Employing Company on the date of such Southern
Termination shall be entitled to receive within thirty (30) days of the Southern
Termination, cash for each Award held as of such date, based on actual
performance under Section 4.1 hereof determined as of the date on which the
Southern Termination shall have occurred, and the Annual Dividend declared prior
to the date of the Southern Termination.
ARTICLE VI
Miscellaneous Provisions
6.1 Neither the Participant, his or her beneficiary, nor his or her
personal representative shall have any rights to commute, sell, assign, transfer
or otherwise convey the right to receive any payments hereunder, which payments
and the rights thereto are expressly declared to be nonassignable and
nontransferable. Any attempt to assign or transfer the right to payments under
this Plan shall be void and have no effect.
6.2 An Employing Company shall neither reserve nor otherwise set aside
funds for the payments of any Awards under this Plan.
6.3 Except for the provisions of Article V, which may not be amended,
modified or terminated following a Southern Change in Control, a Subsidiary
Change in Control or a Southern Termination, the Plan may be amended, modified,
or terminated by the Board of Directors in its sole discretion at any time and
from time to time; provided, however, that no such amendment, modification, or
termination shall impair any rights to payments which have accrued under the
Plan prior to such amendment, modification, or termination.
6.4 It is expressly understood and agreed that Awards made in
accordance with the Plan are in addition to any other benefits or compensation
to which a Participant may be entitled or for which he or she may be eligible,
whether funded or unfunded, by reason of his or her employment with an Employing
Company.
6.5 There shall be deducted from the payment of each Award under the
Plan the amount of any tax required by any governmental authority to be withheld
and paid over by an Employing Company to such governmental authority for the
account of the person entitled to such distribution.
6.6 Any Awards paid to a Participant while employed by an Employing
Company shall not be considered in the calculation of the Participant's benefits
under any other employee welfare or pension benefit plan maintained by an
Employing Company, unless otherwise specifically provided therein.
6.7 This Plan, and all rights under it, shall be governed by and
construed in accordance with the laws of the State of Georgia.
6.8 Pooling Accounting. Notwithstanding anything to the contrary
herein, if, but for any provision of this Plan, a Change in Control transaction
would otherwise be accounted for as a pooling-of-interests under APB No. 16
("Pooling Accounting") (after giving effect to any and all other facts and
circumstances affecting whether such Change in Control transaction would use
Pooling Accounting), such provision or provisions of this Plan which would
otherwise cause the Change in Control transaction to be ineligible for Pooling
Accounting shall automatically be void and ineffective in such a manner and to
the extent that by eliminating such provision or provisions of this Plan,
Pooling Accounting would be required for such Change in Control transaction and
Pooling Accounting is in fact used for such Change in Control transaction.
IN WITNESS WHEREOF, Southern Company Services, Inc., through its duly
authorized officers, hereby adopts the Southern Company Performance Dividend
Plan this _____ day of ______________ 1999 to be effective January 1, 1999.
SOUTHERN COMPANY SERVICES, INC.
By:
Christopher C. Womack
Senior Vice President, Human Resources
Attest:
By:
Its: