SOUTHERN COMPANY
PERFORMANCE PAY PLAN
Amended and Restated
Troutman Sanders LLP
Bank of America Plaza, Suite 5200
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Effective January 1, 2001
SOUTHERN COMPANY
PERFORMANCE PAY PLAN
Amended and Restated
Purposes
The purposes of the Amended and Restated Performance Pay Plan are to
focus the attention and efforts of employees on goals which have a direct and
significant influence on individual, Business Unit and corporate performance; to
improve the correlation between pay and performance for the achievement of
individual, Business Unit, and corporate goals; and to provide the potential for
levels of compensation that will enhance the ability of the Business Units to
attract, retain, and motivate employees. In order to achieve these objectives,
the Performance Pay Plan is intended to pay additional compensation to eligible
employees based upon individual, Business Unit and corporate performance. Such
compensation shall be paid out of the general assets of Southern Company. No
benefits under the Performance Pay Plan shall be deferred under this Plan or
held in trust for the benefit of eligible employees. The Performance Pay Plan is
not intended to be an employee benefit plan or any other plan subject to
regulation by the Employee Retirement Income Security Act of 1974, as amended.
The Performance Pay Plan was established effective January 1, 1989. It
has subsequently been amended and restated effective January 1, 1991, January 1,
1993, January 1, 1996, and January 1, 2000. The Board of Directors of Southern
Company Services, Inc. now desires to amend and restate the Performance Pay Plan
to provide for a pro-rated Award upon the termination of the employment of a
Participant under a career transition plan adopted by an Employing Company. The
effective date of this amendment and restatement (the "Restatement Effective
Date") of the Performance Pay Plan shall be January 1, 2001.
ARTICLE I
Definitions
For purposes of the Performance Pay Plan, the following terms shall
have the following meanings, unless a different meaning is plainly required by
the context:
1.1 "Annual Salary" shall mean base salary or wages paid to an Employee
before deductions for taxes, social security, etc., including all amounts
contributed on an Employee's behalf by a Business Unit to the Southern Company
Flexible Benefits Plan, any amounts contributed on an Employee's behalf by any
Business Unit to the Southern Company Employee Savings Plan as Elective Employer
Contributions, as said term is defined in Section 4.1 therein, pursuant to an
Employee's exercise of any deferral option made in accordance with Section
401(k) of the Internal Revenue Code, and amounts contributed on an Employee's
behalf to the Southern Company Deferred Compensation Plan, but excluding all
awards under the Southern Company Performance Pay Plan, the Southern Company
Performance Pay Plan (Shareholder Approved), and the Southern Company Executive
Productivity Improvement Plan, overtime pay, shift differential and substitution
pay. Annual Salary of an Employee shall be determined as of the last day of the
Performance Period, except that the Annual Salary of an employee who terminates
before the last day of the Performance Period shall be determined as of his date
of termination. The Annual Salary of an Employee who commences service during a
Performance Period and the Annual Salary of an Employee who terminates his
employment for one of the reasons set forth in Section 2.1(c)(i)-(iv) and (e)
shall be prorated based upon his date of commencement or termination of service
with his Business Unit in accordance with the provisions of the Plan. With
respect to Covered Employees, "Annual Salary" shall be defined in the Covered
Employee Plan established by a Business Unit for the benefit of Covered
Employees.
1.2 "Board of Directors" shall mean the Board of Directors of Southern
Company Services, Inc.
1.3 "Business Unit" shall mean an Employing Company or an
organizational unit established by the CEO (which may consist of a portion of
one Employing Company or portions of more than one Employing Company) and
designated from time to time to be eligible to participate under the Plan. A
Business Unit shall not consist of any portion of a Non-Adopting Company. In the
event more than one Business Unit covers the same Employee, the CEO shall assign
the Employee to a particular Business Unit for purposes of determining the
amount of an Incentive Pay Award for a Performance Period.
1.4 "Business Unit Component" shall mean the weight given to the
Business Unit Goal in the determination of the Incentive Pay Award as
established by the CEO for a Performance Period and as set forth on a schedule
adopted by the CEO and provided to the Plan Administrator.
1.5 "Business Unit Goal" shall mean the goal or goals that are
established by the CEO for each Performance Period for each Business Unit and as
set forth on a Schedule adopted by the CEO and provided to the Plan
Administrator.
1.6 "Business Unit Goal Performance Percentage" shall mean the
percentage of the Business Unit Goal attained during a Performance Period.
1.7 "CEO" shall mean the Chief Executive Officer of Southern Company.
1.8 "Change in Control Benefit Plan Determination Policy" shall mean
the change in control benefit plan determination policy, as approved by the
Board of Directors, as it may be amended from time to time in accordance with
the provisions therein.
1.9 "Committee" shall mean the Compensation Committee of the Southern
Board.
1.10 "Covered Employee" shall mean an employee of a Business Unit who
is covered by a collective bargaining agreement between the Business Unit and a
union or other employee representative and who participates in a Covered
Employee Plan.
1.11 "Covered Employee Plan" shall mean a performance based plan
established for the benefit of Covered Employees by a Business Unit pursuant to
a collective bargaining agreement and is maintained in conjunction with this
Performance Pay Plan. The Covered Employee Plan may or may not mirror the
provisions of the Plan.
1.12 "Effective Date" shall mean January 1, 1989. The "Restatement
Effective Date" shall mean January 1, 2001.
1.13 "Employee" shall mean each active full-time and regular part-time
employee of a Business Unit who is receiving Annual Salary, regardless of their
classification as an exempt or non-exempt employee. The term "Employee" shall
not include any person who is a temporary employee, cooperative employee, a
contractor of a Business Unit or an employee covered by a collective bargaining
agreement except that such a collective bargaining employee may be eligible to
participate in a Covered Employee Plan as a Covered Employee pursuant to an
agreement between his Business Unit and his collective bargaining
representative. In addition, the term "Employee" shall not include any employee
who is eligible to participate in any incentive compensation program maintained
by his Business Unit that specifically provides that an eligible employee under
such program shall not be entitled to also receive Incentive Pay Awards under
this Plan.
1.14 "Employing Companies" shall mean Southern Company Services, Inc.,
or any affiliate or subsidiary (direct or indirect) of Southern Company, which
the Board of Directors may from time to time determine to be eligible to
participate under the Plan and which shall adopt the Plan, and any successor of
any such affiliate or subsidiary. The Employing Companies as of the Restatement
Effective Date are as follows: Alabama Power Company, Georgia Power Company,
Gulf Power Company, Mississippi Power Company, Savannah Electric and Power
Company, Southern Company Services, Inc., Southern Nuclear Operating Company,
Inc., Southern Company Energy Solutions, Inc. and Southern Communications
Services, Inc.
1.15 "Incentive Pay Award" shall mean the amount awarded to a
Participant in accordance with Article III hereof.
1.16 "Non-Adopting Company" shall mean any subsidiary or affiliate of
Southern Company which is not an Employing Company.
1.17 "Participant" shall mean all Employees and Covered Employees who
satisfy the criteria set forth in Article II.
1.18 "Performance Period" shall mean each 12-month period commencing on
the first day of January and ending on the last day of December next following.
1.19 "Plan" shall mean the Southern Company Performance Pay Plan, as
described herein or as from time to time amended.
1.20 "Plan Administrator" shall mean the Benefits Department of
Southern Company Services, Inc.
1.21 "Short Term Goals Adjustment" shall mean the percentage determined
by the CEO based upon the intermediate goals that have been established and set
forth on a Schedule adopted by the CEO and provided to the Plan Administrator
and used to adjust the calculation of the Incentive Pay Award as provided in
Section 3.1.
1.22 "Southern Board" shall mean the Board of Directors of Southern
Company.
1.23 "Southern Company" shall mean The Southern Company.
1.24 "Southern Company Component" shall mean the weight given to the
Southern Goal as established by the CEO and as set forth on a schedule adopted
by the CEO and provided to the Plan Administrator.
1.25 "Southern Goal" shall mean the goal or goals established by the
CEO and as set forth on a schedule adopted by the CEO and provided to the Plan
Administrator.
1.26 "Southern Goal Performance Percentage" shall mean the percentage
of the Southern Goal attained during the Performance Period.
1.27 "Top Performer" shall mean an Employee whose exceptional
performance qualifies him to receive an additional amount of Incentive Pay
Award. It is in the sole discretion of the head of the Business Unit to
determine who is to be designated a Top Performer.
1.28 "Top Performer Pool" shall mean the pool of funds established by
the CEO for the payment of additional Incentive Pay to Top Performers.
Where the context requires, words in the masculine gender include the
feminine and neuter genders and words in the singular include the plural and
words in the plural include the singular.
ARTICLE II
Participation
2.1 Employees. All Employees of a Business Unit shall be eligible to
participate in the Plan and receive Incentive Pay Awards.
(a) Employees who commence service with a Business Unit after
January 1 and before December 15 of a Performance Period shall be
eligible to receive Incentive Pay Awards in the same proportion as the
ratio of the number of months employed during a Performance Period
bears to the total number of months in a Performance Period. The
following shall apply for purposes of calculating the number of months
of employment with a Business Unit under this Section 2.1:
(i) Employees whose effective date of employment is
on or before the fourteenth (14th) day of a month shall be
considered Employees as of the first day of such month; and
(ii) Employees whose effective date of employment is
on or after the fifteenth (15th) day of a month shall not be
considered Employees until the first day of the next
succeeding month.
(b) Employees whose effective date of employment is on or
after December 15 of a Performance Period shall not be eligible to
participate until the next succeeding Performance Period.
(c) Employees whose employment with a Business Unit is
terminated during a Performance Period for one of the following reasons
shall be eligible to receive an Incentive Pay Award for such
Performance Period on a pro-rata basis:
(i) retirement,
(ii) total disability (as determined by the Social
Security Administration),
(iii) death, or
(iv) termination of employment, but only in the event
the Participant shall transfer to or be reemployed by a
Non-Adopting Company, or any successor thereto, during such
Performance Period.
(v) termination of employment under a career
transition plan adopted by an Employing Company.
(d) The pro-rata amount of an Incentive Pay Award shall be
determined for the Performance Period in which a termination described
in Section 2.1(c) occurs by a fraction which is the number of months of
employment with a Business Unit during the Performance Period, divided
by the total number of months in the Performance Period. The following
shall apply for purposes of calculating the number of months of
employment with a Business Unit under this Section 2.(1)(d) for an
Employee whose service is terminated for one of the reasons described
in Section 2.1(c):
(i) The month in which the Employee's service
terminates shall not be considered if such terminating event
occurs on or before the fourteenth (14th) day of the month;
and
(ii) The month in which the Employee's service
terminates shall be considered if such terminating event
occurs on or after the fifteenth (15th) day of the month.
(e) An Employee who terminates participation in the Plan
because the requirements of Section 1.5 of the Plan are not met (i.e.
the Employee's Business Unit no longer participates in the Plan) shall
be eligible to receive an Incentive Pay Award for such Performance
Period on a pro-rata basis determined under Section 2.1(d) of the Plan
by substituting the concept of termination of service with termination
from participation in the Plan.
(f) The pro-rated amount of an Incentive Pay Award determined
under Section 2.1(c)-(e) above shall be paid at the same time as all
other Incentive Pay Awards under the Plan.
(g) An Employee whose employment with a Business Unit is
terminated during a Performance Period for any reason other the reasons
described in Section 2.1(c) shall not be eligible to receive an
Incentive Pay Award for such Performance Period.
2.2 Collective Bargaining Agreement. Notwithstanding any other
provision of the Plan, all Participants covered by a collective bargaining
agreement shall become ineligible for Incentive Pay Awards under a Covered
Employee Plan for and after any Performance Period in which such collective
bargaining agreement expires or is terminated for any reason.
2.3 Covered Employees. All Covered Employees of a Business Unit who are
covered under a Covered Employee Plan shall not be eligible to receive Incentive
Pay Awards under the Plan, but shall be eligible to receive Incentive Pay Awards
in accordance with the terms of such Covered Employee Plan.
2.4 Employee Transfers. If an Employee transfers from one Business Unit
("transferor Business Unit") to another Business Unit ("transferee Business
Unit") during a Performance Period, the transferee Business Unit goals shall be
used in calculating such Employee's Incentive Pay Award and the transferee
Business Unit shall pay such Employee's Incentive Pay Award for the entire
Performance Period.
ARTICLE III
Incentive Pay Award Opportunities
3.1 Determination of Incentive Pay Award. The Incentive Pay Award shall
be determined for each Employee by first determining the Employee's Target Award
Opportunity as established by the CEO and as set forth on a schedule adopted by
the CEO and forwarded to the Plan Administrator), which is based upon the
Employee's Grade Level Value on December 31st of the Performance Period, and
then multiplying the applicable Target Award Opportunity by the Participant's
Annual Salary and then by the Total Goal Performance Percentage. The Total Goal
Performance Percentage shall be determined in accordance with the following
formula:
Determination of Total Goal Performance Percentage
(Southern Company Component x Southern Goal Performance Percentage) +
(Business Unit Component x Business Unit Goal Performance Percentage) =
(Initial Financial Goal Performance) x (Short Term Goals Adjustment) =
Total Goal Performance Percentage
The Incentive Pay Award may then be adjusted downward by a percentage to be
determined by the head of the Employer's Business Unit based upon individual
performance. Alternatively, the Incentive Pay Award may be adjusted upward to
include an additional dollar amount if the Employee is designated a Top
Performer. Each head of a Business Unit shall determine in his sole and absolute
discretion who is a Top Performer and the amount of the additional Incentive Pay
Award. Incentive Pay Awards may be awarded to Top Performers even though no
Incentive Pay Award would be paid under the formula portion of the Plan. The
total amount awarded to all Top Performers shall not exceed the amount of the
Top Performer Pool.
No Covered Employee shall be eligible for an Incentive Pay Award
(including a Top Performer adjustment) under the Plan. The Covered Employee
shall only receive an Incentive Pay Award under a Covered Employee Plan under
which the Covered Employee is eligible to participate.
3.2 Transition PIP Awards During Transition Performance Periods. In
order to insure that an Employee receives an Incentive Pay Award that takes into
account what he would have also received under the Southern Company Productivity
Improvement Plan for the period January 1, 2000 through December 31, 2002, the
following transition rules apply:
(a) Definitions. For purposes of this Section 3.2, the
following terms shall have the following meanings, unless a different
meaning is plainly required by the context:
(i) "Adjusted PIP Award" shall mean an amount
calculated as follows: (1) multiply an Eligible Employee's
Grade Value (as defined under the PIP) as of December 31, 1999
by the Eligible Employee's Award Opportunity (as determined
under the PIP) as of December 31, 1999; then (2) multiply the
product of (1) by seventy-five percent (75%); and then (3)
multiply the product of (2) by 1.70.
(ii) "Eligible Employee" shall mean a Participant who
was eligible to receive an award under the PIP on December 31,
1999 and who is employed on the last day of the applicable
Transition Performance Period. Eligible Employee shall also
mean a Participant who was eligible to receive an award under
the Executive Productivity Improvement Plan on December 31,
1999, who is not eligible to participate in the Performance
Pay Plan (Shareholder Approved) on the last day of the
applicable Transition Performance Period and who is employed
on the last day of the applicable Transition Performance
Period.
(iii) "PPP Equivalent" shall mean an amount
calculated as follows: (1) multiply an Eligible Employee's
Annual Salary for the Transition Performance Period by the
Eligible Employee's Award Opportunity (as determined under the
Adjusted PIP Award); then (2) multiply the product of (1) by
seventy-five percent (75%); and then (3) multiply the product
of (2) by the Eligible Employee's Total Goal Performance
Percentage determined in Section 3.1.
(iv) "Productivity Improvement Plan" or "PIP" shall
mean (1) the Southern Company Productivity Improvement Plan,
amended and restated January 1, 1998, and terminated effective
December 31, 1999 and, (2) for purposes of determining the
Transition PIP Award for Eligible Employees who were eligible
to receive an award under the Southern Company Executive
Productivity Improvement Plan on December 31, 1999, the
Southern Company Executive Productivity Improvement Plan, as
of December 18, 1999.
(v) "Transition Performance Period" shall mean the
Performance Period from January 1, 2000 through December 31,
2000 ("2000 Transition Period") and the Performance Period
from January 1, 2001 through December 31, 2001 ("2001
Transition Period").
(vi) "Transition PIP Award" shall mean the additional
amount of incentive pay awarded under this Section 3.2 and
calculated pursuant to Section 3.2(c) below.
(b) The Company shall pay the Transition PIP Award to an
Eligible Employee if a positive amount results from applying the
calculation in accordance with Section 3.2(c).
(c) The Transition PIP Award shall be determined by comparing
the Adjusted PIP Award to the PPP Equivalent. If the Adjusted PIP Award
is greater than the PPP Equivalent, then the Transition PIP Award shall
equal the difference between the Adjusted PIP Award and the PPP
Equivalent. If the Adjusted PIP Award is less than the PPP Equivalent,
then no Transition PIP Award shall be paid for the applicable
Transition Performance Period.
(d) In the event an Eligible Employee terminates his
employment with a Business Unit at any time after December 31, 1999,
but before January 1, 2003, because of his retirement, total disability
(as determined by the Social Security Administration) or death, then
the Transition PIP Award for the Performance Period in which
retirement, total disability or death occurs shall equal the Adjusted
PIP Award (without subtracting the PPP Equivalent). The Transition PIP
Award under this Section 3.2(d) shall be available in the next
Transition Performance Period. For an Eligible Employee who terminates
his employment during the 2001 Transition Period because of his
retirement, total disability or death, such Eligible Employee shall
receive a Transition PIP Award (calculated as provided under this
subsection) for an additional period from January 1, 2002 through
December 31, 2002. For purposes of this Plan, the date of disability or
retirement shall be the last day of active service by the Eligible
Employee and shall not mean any date subsequent to such last date of
active service which is deemed to be a retirement or disability date
under the terms of any pension, severance, retirement or disability
plan or arrangement.
(e) In the event an Eligible Employee terminates his
employment during a Transition Performance Period for any reason other
than because of his retirement, total disability or death, he shall not
receive a Transition PIP Award for such Transition Performance Period
or any subsequent Transition Performance Period, if any.
(f) In the event an Eligible Employee is demoted to a Grade
Level 6 or below at any time during the 2000 Transition Period, the
Eligible Employee shall not receive a Transition PIP Award for the 2001
Transition Period.
(g) In the event of a transfer of an Eligible Employee to a
Non-Adopting Company, no Transition PIP Award will be paid.
(h) In the event of a transfer of an Employee from a
Non-Adopting Company to a Business Unit, a prorated Transition PIP
Award shall be paid to the Employee for the Transition Performance
Period in which the Employee transfers and any subsequent Transition
Performance Period provided such Employee was employed with the
Non-Adopting Company on December 31, 1999, is currently eligible to
participate in the Plan and is employed with the Business Unit on the
last day of the applicable Transition Performance Period. The
Transition PIP Award shall be prorated in the same manner as provided
under the provisions of Section 2.1(a) of the Plan based upon the
Employee's date of hire with the Business Unit. For purposes of this
provision, Southern Energy Resources, Inc. shall remain a Non-Adopting
Company through December 31, 2001 even if it no longer meets the
definition of Non-Adopting Company under the Plan.
(i) The Plan Administrator shall be solely responsible for
calculating each Participant's Transition PIP Award and distributing
such Transition PIP Award at the same time and in the same manner as
the Incentive Pay Awards.
3.3 Non-Covered Employee Participants.
(a) The Incentive Pay Award shall be calculated by the Plan
Administrator, based upon the formula set forth in Section 3.1 (and Section 3.2
if applicable in accordance with its terms) and the determinations of the head
of the Business Unit as to any adjustments for individual performance and for
Top Performers. Such determinations for individual performance and Top
Performers shall be provided to the Plan Administrator in a timely manner.
(b) The Plan Administrator shall be solely responsible for calculating
each Participant's Incentive Pay Award and distributing such Incentive Pay
Award.
(c) The Plan Administrator shall endeavor to pay the Incentive Pay
Awards for a Performance Period to the Participants not later than two and
one-half (2 1/2) months following the close of the preceding Performance Period,
or such shorter or longer period of time following the close of the preceding
Performance Period as may be required under the Internal Revenue Code to
preserve the timely accrual of the federal income tax deduction for Incentive
Pay Awards paid with respect to such Performance Period.
(d) The Incentive Pay Award payment shall be made in cash or its
functional equivalent and the receipt of such payment may not be deferred under
this Plan at the option of the Employee. In the event of an Employee's death
prior to the payment of any Incentive Pay Award payable to the Employee, such
amount shall be paid to the estate of the Employee.
3.4 Covered Employee Participants.
(a) The Incentive Pay Awards for Covered Employee Participants shall be
calculated in accordance with the terms of such Covered Employee Plan.
(b) The Plan Administrator shall be solely responsible for calculating
and distributing each Participant's Incentive Pay Award in accordance with the
terms of the Covered Employee Plan in which the Covered Employee Participant
participates.
3.5 Extraordinary Item Exception. If requested by a Business Unit, at
the sole discretion of the CEO and the Committee, the Southern Goal Performance
or Business Unit Goal Performance determination for a Performance Period may be
calculated without regard to a particular term or occurrence ("Extraordinary
Item") incurred by Southern Company or any Business Unit, provided such
determination is made prior to the close of the Performance Period. If the CEO
and the Committee approve an Extraordinary Item, it shall be identified in a
schedule adopted by the CEO and provided to the Plan Administrator, and, in
addition, such schedule shall contain an explanation as to how such
Extraordinary Item shall impact the determination of the attainment of the
applicable goal.
3.6 Forfeiture upon Termination for Cause.
Notwithstanding anything to the contrary in this Plan, any Participant
whose employment is terminated for Cause shall forfeit any and all Incentive Pay
Awards and Transition PIP Awards (if any) that have not been paid to him as of
his date of termination. For purposes of the preceding sentence "Cause" shall
mean the termination of a Participant's employment by a Business Unit under any
of the following circumstances:
(a) The Participant willfully neglects or refuses to discharge
his or her duties to the Business Unit as an employee or refuses to
comply with any lawful or reasonable instructions given to him or her
by the Business Unit without reasonable excuse;
(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.
The head of the Business Unit to which the Participant has been
assigned, and the Senior Vice President of Human Resources for Southern Company
Services, Inc., shall determine whether a Participant has been terminated for
"Cause."
3.7 Determination of Incentive Pay Awards. The factors required to
determine Incentive Pay Awards shall be fixed in all events by the end of each
Performance Period.
3.8 Insufficient Earnings. Notwithstanding any other provision of the
Plan to the contrary, an Incentive Pay Award and a Transition PIP Award, if any,
shall not be granted, awarded or paid for any Performance Period ending with the
calendar year in which the current earnings of Southern Company are less than
the amount necessary to fund the dividends on Southern's common stock at the
rate such dividends were paid for the immediately preceding calendar year.
3.9 No Duplication. A Participant shall not receive more than one
Incentive Pay Award for a Performance Period under the Plan or any similar plan.
3.10 Schedules. Any schedule to the Plan adopted by the CEO that is
applicable to a Performance Period shall remain in effect for any subsequent
Performance Period in the event the CEO has not adopted a schedule for such
subsequent Performance Period.
ARTICLE IV
Change in Control
The provisions of the Change in Control Benefit Plan Determination
Policy are incorporated herein by reference to determine the occurrence of a
change in control of Southern Company or an Employing Company and the benefits
to be provided hereunder in the event of such a change in control. Any
modifications to the Change in Control Benefit Plan Determination Policy are
likewise incorporated herein.
ARTICLE V
Administration of Plan
5.1 Employment of Agents. The Plan Administrator shall be responsible
for the daily administration of the Plan and may appoint other persons or
entities to perform or assist in the performance of any of its fiduciary duties,
subject to its review and approval. The Plan Administrator shall have the right
to remove any such appointee from his position without cause or notice. Any
person, group of persons, or entity may serve in more than one fiduciary
capacity.
5.2 Record Keeping and Reporting.
(a) The Plan Administrator shall maintain permanent records and
accounts of Participants and shall be responsible for all receipts,
disbursements, transfers and other transactions concerning the Plan. Such
accounts, books, and records relating thereto shall be open to inspection and
audit by the boards of directors of the Employing Companies and any persons
designated thereby at all reasonable times.
(b) The Plan Administrator shall undertake the preparation and filing
of all documents and forms required by any governmental agency. The Plan
Administrator shall keep all such books of account records, and other data as
may be necessary for proper administration of the Plan.
5.3 Responsibilities in General. The Plan Administrator shall
administer the Plan in accordance with its terms and shall have all powers
necessary to carry out the provisions of the Plan as more particularly set forth
herein. The Plan Administrator shall interpret the Plan and shall determine all
questions concerning eligibility, administration, interpretation, and
application of the Plan, and all such determinations shall be conclusive and
binding on all Participants and interested persons. The Plan Administrator shall
adopt such procedures and guidelines as it deems necessary or desirable in order
to discharge its duties hereunder.
5.4 Indemnification. The Business Units shall indemnify the Plan
Administrator against any and all claims, losses, damages, expenses, and
liability arising from its actions or omissions, except when the same are
finally adjudicated to be due to gross negligence or willful misconduct. The
Business Units may purchase at their own expense sufficient liability insurance
for the Plan Administrator to cover any and all claims, losses, damages, and
expenses arising from any action or omission in connection with the execution of
the duties as the Plan Administrator.
5.5 Service of Process. The Plan Administrator shall be the appointed
agent for the service of process.
ARTICLE VI
Miscellaneous Provisions
6.1 No Right of Assignment or Alienation. Neither the Participant nor
his 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 of this
Plan shall be void and have no effect.
6.2 No Trust Requirement. Unless the Board of Directors shall in its
discretion determine otherwise, the Business Units shall neither reserve nor
otherwise set aside funds for the payments of Incentive Pay Awards under the
Plan.
6.3 Amendment and Termination of Plan. Except for the provisions of
Article IV hereof, which may not be amended following a "Southern Change in
Control," "Subsidiary Change in Control" or a "Southern Termination" (as such
terms are defined in the Change in Control Benefit Plan Determination Policy),
the Board of Directors may terminate the Plan at any time or may from time to
time amend the Plan; provided, however, that no amendment shall impair any
rights to payments which have been earned under the Plan prior to the
termination or amendment. Any amendment or termination of the Plan shall apply,
in the Board of Directors' sole discretion, with respect to all Employees
participating in the Plan, irrespective of whether any such amendment or
termination has been collectively bargained.
6.4 Incentive Pay Award as Compensation.
(a) Incentive Pay 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 may be eligible, whether funded or unfunded, by reason
of his employment with the Business Unit.
(b) There shall be deducted from each Incentive Pay Award to a
Participant the amount of any tax required to be withheld by any governmental
authority and paid over by the Business Unit to such governmental authority.
6.5 Coordination with Benefit Plans. Any Incentive Pay Awards paid to a
Participant while employed by a Business Unit shall not be considered in the
calculation of the Participant's benefits under any employee welfare or pension
benefit plan maintained by an Business Unit, unless otherwise specifically
provided therein.
6.6 Plan Not a Contract. The Plan shall not be deemed to constitute a
contract between a Business Unit and any Employee or Covered Employee, nor shall
anything herein contained be deemed to give any Employee or Covered Employee any
right to be retained in the employ of a Business Unit or interfere with the
right of the Business Unit to discharge any Employee or Covered Employee at any
time and to treat him without regard to the effect which such treatment might
have upon him as a Participant.
6.7 Choice of Law. This Plan shall be governed by and construed in
accordance with the laws of the State of Georgia except for the application of
any law which would require the use of the laws of another state.
IN WITNESS WHEREOF, Southern Company Services, Inc., through its
officers duly authorized, hereby amends and restates Southern Company
Performance Pay Plan this _____ day of , 2001, to be effective January 1, 2001.
SOUTHERN COMPANY SERVICES, INC.
By: _____________________________
Its: _____________________________
Attest:
By: ____________________________________________
Its:
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[Form Schedule]
SOUTHERN COMPANY
PERFORMANCE PAY PLAN
Amended and Restated
Effective January 1, 2001
SHORT TERM GOALS FOR [INSERT YEAR]
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BIG 2000 Goals APC GPC GULF MPC SAV SNC
- --- ----------- --- --- ---- --- --- ---
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I o
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II o
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IV o
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IX o
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[Form Schedule]
SOUTHERN COMPANY
PERFORMANCE PAY PLAN
Amended and Restated
Effective January 1, 2001
INCENTIVE PAY AWARD FACTORS FOR [INSERT YEAR]
- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
Target Award
Opportunity
Percentage of Southern Company
Annual Salary Southern Company Goal Performance Business Unit Business Unit
Component Component Performance
Grade Level Percentage
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President/CEO
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15
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14
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13
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12
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11
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10
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9
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8
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7
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6
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1-5
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Nonexempt
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[Form Schedule]
SOUTHERN COMPANY
PERFORMANCE PAY PLAN
Amended and Restated
Effective January 1, 2001
BUSINESS UNIT NET INCOME FOR [INSERT YEAR]
Southern
Year Alabama Georgia Gulf Mississippi Savannah Nuclear SCS SOCO
---- ------- ------- ---- ----------- -------- ------- --- ----
---- ---- ----- ----- ----- ----- ----- ----- -----
[Form Schedule]
SOUTHERN COMPANY
PERFORMANCE PAY PLAN
Amended and Restated
Effective January 1, 2001
SOUTHERN COMPANY GOAL FOR [INSERT YEAR]
Year Earnings Per Share
--- --- %
[Form Schedule]
SOUTHERN COMPANY
PERFORMANCE PAY PLAN
Amended and Restated
Effective January 1, 2001
EXTRAORDINARY ITEMS FOR [INSERT YEAR]