DEFERRED COMPENSATION PLAN FOR
DIRECTORS OF THE SOUTHERN COMPANY
Amended and Restated Effective February 19, 2001
SECTION 1
Definitions
1.1 "Beneficial Ownership" means beneficial ownership within the meaning of
Rule 13d-3 promulgated under the Exchange Act.
1.2 "Board" or "Board of Directors" means the Board of Directors of the
Company.
1.3 "Business Combination" means a reorganization, merger or consolidation
or sale of Southern, or a sale of all or substantially all of
Southern's assets.
1.4 "Cash Compensation" means the annual retainer fees and meeting fees
payable to a Director in cash.
1.5 "Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute.
1.6 "Committee" means the Governance Committee of the Board, or such other
committee as may be designated by the Board to be responsible for
administering the Plan.
1.7 "Common Stock" means the common stock of Southern, including any shares
into which it may be split, subdivided, or combined.
1.8 "Company" means The Southern Company or any successor thereto.
1.9 "Compensation Payment Date" means the date on which compensation,
including cash retainer, meeting fees, and Stock Retainer, is payable
to a Director or compensation which would otherwise be payable to a
Director if an election to defer such compensation had not been made.
1.10 "Consummation" means 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.
1.11 "Deferred Cash Trust" means the Deferred Cash Compensation Trust for
Directors of The Southern Company and its Subsidiaries.
1.12 "Deferred Compensation Account" means the Prime Rate Investment
Account, the Phantom Stock Investment Account, the Deferred Stock
Account and/or the Stock dividend investment account.
1.13 "Deferred Pension Election" means the election by a Director under
Section 5.3 in connection with the deferral of receipt of the
Director's Pension Benefit until termination from the Board.
1.14 "Deferred Stock Account" means the bookkeeping account established
under Section 6.3 on behalf of a Director and includes shares of Common
Stock credited thereto to reflect the reinvestment of dividends
pursuant to Section 6.3(a)(iii).
1.15 "Deferred Stock Trust" means the Deferred Stock Trust for Directors of
The Southern Company and its Subsidiaries.
1.16 "Director" means a member of the Board.
1.17 "Distribution Election" means the designation by a Director of the
manner of distribution of the amounts and quantities held in the
Director's Deferred Compensation Accounts upon the director's
termination from the Board pursuant to Section 5.4.
1.18 "Effective Date" means January 1, 2000.
1.19 "Employee" means an employee of Southern or any of its subsidiaries
that are "employing companies" as defined in the Southern Company
Deferred Compensation Plan as amended and restated January 1, 2000, and
as may be amended from time to time.
1.20 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
1.21 "Group" has the meaning set forth in Section 14(d) of the Exchange Act.
1.22 "Incumbent Board" means those individuals who constitute the Southern
board of directors as of October 19, 1998, plus any individual who
shall become a director subsequent to such date whose election or
nomination for election by Southern'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 of directors subsequent to October 19,
1998, 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 of directors shall be a member of
the Incumbent Board.
1.23 "Market Value" means the average of the high and low prices of the
Common Stock, as published in the Wall Street Journal in its report of
New York Stock Exchange composite transactions, on the date such Market
Value is to be determined, as specified herein (or the average of the
high and low sale prices on the trading day immediately preceding such
date if the Common Stock is not traded on the New York Stock Exchange
on such date).
1.24 "Participant" means a Director or former Director who has an unpaid
Deferred Compensation Account balance under the Plan.
1.25 "Participating Companies" means those companies that are affiliated
with the Company whose boards of directors have authorized the
establishment of trust(s) for the funding of their respective
directors' Deferred Compensation Accounts under their respective
Deferred Compensation Plans for Directors, including the Company.
1.26 "Pension Benefit" means the U.S. dollar amount of the
actuarially-determined present value of benefits based on a Director's
expected service at the required retirement date under The Southern
Company Outside Directors Pension Plan, as calculated as of the
Termination Date, plus accrued earnings on such amount calculated as if
invested at the Prime Interest Rate from the Termination Date, until
such amount is invested in Deferred Compensation Accounts pursuant to
the provisions of Section 5.3.
1.27 "Pension Benefit Investment Date" means the date to be determined by
the Committee, as of which the Director's Pension Benefit will be
credited to a Deferred Compensation Account in accordance with the
director's Deferred Pension Election under Section 5.3.
1.28 "Phantom Stock Investment Account" means the bookkeeping account
established pursuant to Section 6.2 in which a Director may elect to
defer Cash Compensation or make investments, and includes amounts
credited thereto to reflect the reinvestment of dividends.
1.29 "Plan" means the Deferred Compensation Plan for Directors of The
Southern Company as from time to time in effect.
1.30 "Plan Period" means the period designated in Section 4.
1.31 "Person" means any individual, entity or group within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act.
1.32 "Preliminary Change in Control" means the occurrence of any of the
following as determined by the Southern Committee:
(a) The Company has entered into a written agreement, such as, but
not limited to, a letter of intent, which, if Consummated,
would result in a Southern Change in Control;
(b) The Company or any Person publicly announces an intention to
take or to consider taking actions which, if Consummated,
would result in a Southern Change in Control under
circumstances where the Consummation of the announced action
or intended action is legally and financially possible;
(c) Any Person becomes the Beneficial Owner of fifteen percent
(15%) or more of the Common Stock; or
(d) The Board has declared that a Preliminary Change in Control
has occurred.
1.33 "Prime Interest Rate" means the prime rate of interest as published in
the Wall Street Journal.
1.34 "Prime Rate Investment Account" means the bookkeeping account
established pursuant to Section 6.1 in which a Director may elect to
defer Cash Compensation or make investments, the investment return on
which is computed at the Prime Interest Rate.
1.35 "Southern" means The Southern Company.
1.36 "Southern Change in Control" means any of the following:
(a) The Consummation of an acquisition by any Person of Beneficial
Ownership of 20% or more of Southern's Voting Securities;
provided, however, that for purposes of this subsection (a),
the following acquisitions of Southern's Voting Securities
shall not constitute a Change in Control:
(i) any acquisition directly from Southern,
(ii) any acquisition by Southern,
(iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by Southern or
any corporation controlled by Southern,
(iv) any acquisition by a qualified pension plan or
publicly held mutual fund,
(v) any acquisition by an Employee or Group composed
exclusively of Employees, or
(vi) any Business Combination which would not otherwise
constitute a Change in Control because of the
application of clauses (i), (ii) and (iii) of Section
1.36(c);
(b) A change in the composition of Southern's board of directors
whereby individuals who constitute the Incumbent Board cease
for any reason to constitute at least a majority of Southern's
board of directors; or
(c) Consummation of a Business Combination, unless, following such
Business Combination, all of the following three conditions
are met:
(i) all or substantially all of the individuals and
entities who held Beneficial Ownership, respectively,
of Southern'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's Voting Securities or all or
substantially all of Southern'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's Voting
Securities;
(ii) no Person (excluding any corporation resulting from
such Business Combination, any qualified pension
plan, publicly held mutual fund, Group composed
exclusively of employees or employee benefit plan (or
related trust) of Southern, 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
(iii) at least a majority of the members of the Board were
members of the Incumbent Board at the earlier of the
date of execution of the initial agreement, or of the
action of the Board, providing for such Business
Combination.
1.37 "Southern Committee" means Chairman the Board, Chief Financial Officer
of the Company, General Counsel of the Company, and the Chairman of the
"Administrative Committee", as defined in Section 3.1 of the Southern
Company Deferred Compensation Plan, as restated and amended effective
January 1, 2000.
1.38 "Stock Dividend Investment Account" means the bookkeeping account(s)
established pursuant to section 6.4 on behalf of a Director that is
credited with shares of stock, other than Common Stock, paid as a
dividend on shares of Common Stock.
1.39 "Stock Retainer" means the portion of the Board retainer fee that the
Board has determined to credit to a Director's Deferred Stock Account.
Such amount may be denominated in dollars and/or shares of Common
Stock.
1.40 "Termination Date" means January 1, 1997, the date as of which The
Southern Company Outside Directors Pension Plan was effectively
terminated.
1.41 "Transferred Amount" means an amount (a) equal to the value of a
Director's accounts under the applicable deferred compensation plan for
directors of Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, or Savannah Electric and Power
Company and (b) which has been transferred to the Plan in connection
with the Director's transfer from the board of directors of Alabama
Power Company, Georgia Power Company, Gulf Power Company, Mississippi
Power Company, or Savannah Electric and Power Company to the Board.
1.42 "Trust Administrator" means the individual or committee that is
established in the Deferred Stock Trust and the Deferred Cash Trust, to
administer such trusts on behalf of the Participating Companies.
1.43 "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 gender, words in the singular shall include the plural, and words in
the plural shall include the singular.
SECTION 2
Purpose
The Plan provides a method of deferring payment to a Director of his
compensation until a date following the termination of his membership on the
Board.
SECTION 3
Eligibility
An individual who serves as a Director and is not otherwise actively employed by
the Company or any of its subsidiaries or affiliates is eligible to participate
in the Plan.
SECTION 4
Plan Periods
Except as pertains to a Director's initial Plan Period, all Plan Periods shall
be on a calendar year basis. The initial Plan Period applicable to any person
elected to the Board who was not a Director on the preceding December 31, shall
begin on the first day of such Director's membership on the Board. The initial
Plan Period under this amended and restated plan shall begin January 1, 2000.
Except as otherwise provided herein, the terms of the Plan in effect prior to
the effective date of this Plan shall continue to be applicable to deferrals
made pursuant to the Plan prior to January 1, 2000.
SECTION 5
Elections
5.1 Cash Compensation
(a) Prior to the beginning of a Plan Period, a Director may direct
that payment of all or any portion of Cash Compensation that
otherwise would be paid to the Director for the Plan Period,
be deferred in amounts as designated by the Director, and
credited to (i) a Prime Rate Investment Account, (ii) a
Phantom Stock Investment Account, or (iii) a Deferred Stock
Account. Upon the Director's termination from the Board of
Directors, such deferred compensation and accumulated
investment return held in the Director's Deferred Compensation
Accounts shall be distributed to the Director in accordance
with the Director's Distribution Election and the provisions
of Section 7.
(b) An election to defer Cash Compensation is irrevocable. Such an
election shall continue from Plan Period to Plan Period unless
the Director changes his election to defer Cash Compensation
payable in a future Plan Period prior to the beginning of such
future Plan Period.
(c) Cash Compensation deferred under this Section 5.1 shall be
invested in Deferred Compensation Accounts as directed by the
Director on the Compensation Payment Date.
5.2 Stock Retainer
Director compensation designated as Stock Retainer shall be credited to
the Director's Deferred Stock Account as of the Compensation Payment
Date. Upon the Director's termination from the Board of Directors, such
compensation and accumulated investment return held in the Director's
Deferred Stock Account shall be distributed to the Director in
accordance with the Director's Distribution Election and the provisions
of Section 7.
5.3 Deferred Pension Election
Any Director, who had a Pension Benefit as of the Termination Date,
made a single one-time election, to credit all of his Pension Benefit
into a Deferred Compensation Account. The Pension Benefit was credited
on the Pension Benefit Investment Date, at the election of the
Director, to (i) a Prime Rate Investment Account, (ii) a Phantom Stock
Investment Account, or (iii) a Deferred Stock Account. Upon the
Director's termination from the Board, such Pension Benefit and
accumulated investment return held in the Director's Deferred
Compensation Accounts shall be distributed to the Director in
accordance with Section 5.4(b) and the provisions of Section 7.
5.4 Distribution Election
(a) Except as set forth in Sections 5.4(b) and (c), prior to the
initial establishment of a Deferred Compensation Account for a
Director, the Director must elect that upon termination from
the Board of Directors the values and quantities held in the
Directors Deferred Compensation Accounts be distributed to the
Director, pursuant to the provisions of Section 7, in a single
lump sum or in a series of annual installments not to exceed
ten (10). The time for the commencement of distributions shall
not be later than the first day of the month coinciding with
or next following the second anniversary of termination of
Board membership.
(b) Any Director who made a Deferred Pension Election in
accordance with Section 5.3 made a Distribution Election at
the time the Deferred Pension Election was made, attributable
to the Pension Benefit and any accumulated investment return.
(c) In the event a Director terminates from the Board with
Deferred Compensation Accounts established under Section 6.5,
the Transferred Amounts and accumulated investment return held
in the Accounts shall be distributed to the Director in
accordance with the Director's distribution election in effect
under the applicable deferred compensation plan for directors
of Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, or Savannah Electric and
Power Company on the date the Director transferred to the
Board, and the provisions of Section 7, unless such election
is changed pursuant to Section 5.4(d).
(d) Distribution Elections made under Sections 5.4 (a), (b), and
(c) are irrevocable except that a Director may amend any of
the Distribution Elections then in effect not prior to the
390th day or later than the 360th day prior to his termination
of Board membership.
5.5 Beneficiary Designation
A Director or former Director may designate a beneficiary to receive
distributions from the Plan in accordance with the provisions of
Section 7 upon the death of the director. The beneficiary designation
may be changed by a Director or former Director at any time, and
without the consent of the prior beneficiary.
5.6 Form of Election
All elections pursuant to the provisions of this Section 5 of the Plan
shall be made in writing to the Secretary of the Company on a form or
forms available upon request of the Secretary.
SECTION 6
Accounts
6.1 Prime Rate Investment Account
A Prime Rate Investment Account shall be established for each Director
electing deferral or investment of Cash Compensation at the Prime
Interest Rate. The amount directed by the Director to such account
shall be credited to it as of the Pension Benefit Investment Date or
Compensation Payment Date, as applicable, and credited thereafter with
interest computed using the Prime Interest Rate. Interest shall be
computed from the date such compensation is credited to the account and
compounded quarterly at the end of each calendar quarter. The Prime
Interest Rate in effect on the first day of a calendar quarter shall be
deemed the Prime Interest Rate in effect for that entire quarter.
Interest shall accrue and compound on any balance until the amount
credited to the account is fully distributed.
6.2 Phantom Stock Investment Account
The Phantom Stock Investment Account established for each Director
electing deferral of Cash Compensation for investment at the Common
Stock investment rate shall be credited with the number of shares
(including fractional shares rounded to the nearest ten-thousandth) of
Common Stock which could have been purchased on the Pension Benefit
Investment Date or the Compensation Payment Date, as applicable, as
determined by dividing the applicable compensation by the Market Value
on such date. On the date of the payment of dividends on the Common
Stock, the Director's Phantom Stock Investment Account shall be
credited with additional shares (including fractional shares rounded to
the nearest ten-thousandth) of Common Stock, as follows:
(a) In the case of cash dividends, such additional shares as would
have been purchased as of the Common Stock dividend record
date as if the credited shares had been outstanding on such
date and dividends reinvested thereon under the Southern
Investment Plan;
(b) In the case of dividends payable in property other than cash
or Common Stock, such additional shares as could be purchased
at the Market Value as of the date of payment with the fair
market value of the property which would have been payable if
the credited shares had been outstanding; and
(c) In the case of dividends payable in Common Stock, such
additional shares as would have been payable on the credited
shares as if they had been outstanding.
6.3 Deferred Stock Account
(a) A Director's Deferred Stock Account will be credited:
(i) with the number of shares of Common Stock (rounded to
the nearest ten thousandth of a share) determined by
dividing the sum of the amount of Cash Compensation
subject to deferral or investment in the Deferred
Stock Account and the Stock Retainer (that is
denominated in dollars), by the average price paid by
the Trustee of the Deferred Stock Trust for shares of
Common Stock with respect to the Pension Benefit
Investment Date or the Compensation Payment Date, as
applicable, as reported by the Trustee, or, if the
Trustee shall not at such time purchase any shares of
Common Stock, by the Market Value on such date;
(ii) as of the date on which Stock Retainer (that is
denominated in shares of Common Stock) is paid, with
the number of shares of Common Stock payable to the
Director as his Stock Retainer; and
(iii) as of each date on which dividends are paid on the
Common Stock, with the number of shares of Common
Stock (rounded to the nearest ten thousandth of a
share) determined by multiplying the number of shares
of Common Stock credited in the Director's Deferred
Stock Account on the dividend record date, by the
dividend rate per share of Common Stock, and dividing
the product by the price per share of Common Stock
attributable to the reinvestment of dividends on the
shares of Common Stock held in the Deferred Stock
Trust on the applicable dividend payment date or, if
the Trustee of the Deferred Stock Trust has not
reinvested in shares of Common Stock on the
applicable dividend reinvestment date, the product
shall be divided by the Market Value on the dividend
payment date.
(b) If Southern enters into transactions involving stock splits,
stock dividends, reverse splits or any other recapitalization
transactions, the number of shares of Common Stock credited to
a Director's Deferred Stock Account will be adjusted (rounded
to the nearest ten thousandth of a share) so that the
Director's Deferred Stock Account reflects the same equity
percentage interest in Southern after the recapitalization as
was the case before such transaction.
(c) If at least a majority of Southern's stock is sold or
exchanged by its shareholders pursuant to an integrated plan
for cash or property (including stock of another corporation)
or if substantially all of the assets of Southern are disposed
of and, as a consequence thereof, cash or property is
distributed to Southern's shareholders, each Director's
Deferred Stock Account will, to the extent not already so
credited under this Section 6.3, be (i) credited with the
amount of cash or property receivable by a Southern
shareholder directly holding the same number of shares of
Common Stock as is credited to such Director's Deferred Stock
Account and (ii) debited by that number of shares of Common
Stock surrendered by such equivalent Southern shareholder.
(d) Each Director who has a Deferred Stock Account also shall be
entitled to provide directions to the Trust Administrator to
similarly direct the Trustee of the Deferred Stock Trust to
vote, on any matter presented for a vote to the shareholders
of Southern, that number of shares of Common Stock held by the
Deferred Stock Trust equivalent to the number of shares of
Common Stock credited to the Director's Deferred Stock
Account. Such Trust Administrator shall arrange for
distribution to all Directors in a timely manner of all
communications directed generally to the Southern shareholders
as to which their votes are solicited.
6.4 Stock Dividend Investment Account
(a) A Director's Stock Dividend Investment Account will be
credited as of the date on which a dividend is paid to the
Company's common stockholders in stock other than Common Stock
with the number of shares of the other corporation's stock
receivable by a Southern stockholder directly holding the same
number of shares of Common Stock as is credited to such
Director's Deferred Stock Account.
(b) Each Director who has a Stock Dividend Investment Account also
shall be entitled to provide directions to the Trust
Administrator to similarly direct the Trustee of the Deferred
Stock Trust to vote on any matter presented for a vote to the
applicable corporation's shareholders, that number of shares
of the applicable corporation's common stock held by the
Deferred Stock Trust equivalent to the number of shares
credited to the Director's Stock Dividend Investment Account.
The Trust Administrator shall arrange for distribution to all
Directors in a timely manner of all communications directed
generally to the applicable corporation's shareholders as to
which their votes are solicited.
6.5 Transferred Amounts
(a) As soon as administratively practicable, the Company shall
establish for a Director transferring to the Board from
Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, or Savannah Electric and
Power Company, such Deferred Compensation Accounts as are
necessary to implement Section 6.5 (b).
(b) Any Transferred Amounts will be credited to the Deferred
Compensation Account(s) established that are comparable to the
deferred compensation accounts to which such amounts were
credited under the applicable deferred compensation plan for
directors of Alabama Power Company, Georgia Power Company,
Gulf Power Company, Mississippi Power Company, or Savannah
Electric and Power Company, as soon as administratively
practicable following the date the Transferred Amounts are
transferred to the Plan. Thereafter, the Transferred Amounts
shall be credited with investment returns as applicable under
this Section 6 of the Plan.
SECTION 7
Distributions
7.1 Upon the termination of a Director's membership on the Board the amount
credited to a Director's Deferred Compensation Accounts will be paid to
the Director or his beneficiary, as applicable, in the following
manner:
(a) the amount credited to a Director's Prime Rate Investment
Account and Phantom Stock Investment Account shall be paid in
cash;
(b) the amount credited to a Deferred Stock Account shall, except
as otherwise provided in Section 6.3 and Section 9.5, or to
the extent the Company is otherwise, in the reasonable
judgment of the Committee, precluded from doing so, be paid in
shares of Common Stock (with any fractional share interest
therein paid in cash to the extent of the then Market Value
thereof); and
(c) the amount credited to a Stock Dividend Investment Account
shall, except as otherwise provided in section 9.5, be paid
from the assets in the Deferred Stock Trust in shares of the
applicable corporation, however if there is not a sufficient
number of shares held in the Trust, the remainder shall be
paid in cash based upon the average of the high and low price
of the stock as reported in the Wall Street Journal on the
business day immediately proceeding the distribution date.
Such payments shall be from the general assets of the Company
(including the Deferred Cash Trust and the Deferred Stock Trust) in
accordance with this Section 7.
Notwithstanding the foregoing, in the event the Company enters into an
agreement described in Section 7.3 with respect to a Director prior to
the termination of the Director, the Company shall have no obligation
to make distributions to the Director under this Section 7.1 in
connection with such Director's termination of membership on the Board.
7.2 Unless other arrangements are specified by the Committee on a uniform
and nondiscriminatory basis, deferred amounts shall be paid in the form
of (i) a lump sum payment, or (ii) in approximately equal annual
installments, as elected by the Director pursuant to the provisions of
Section 5.4; provided, however, that payments shall be made only in a
single lump sum if payment commences due to termination for cause. Such
payments shall be made (or shall commence) as soon as practicable
following the termination of Board membership or, if so elected in the
Distribution Election, up to twenty-four (24) months following such
termination.
In the event a Director elected to receive the balance of his Deferred
Compensation Accounts in a lump sum, distribution shall be made on the
first day of the month selected by the Director on his Distribution
Election, or as soon as reasonably possible thereafter. If the Director
elected to receive annual installments, the first payment shall be made
on the first day of the month selected by a Director, or as soon as
reasonably possible thereafter, and shall be equal to the balance in
the Director's Deferred Compensation Accounts on such date divided by
the number of annual installment payments. Each subsequent annual
payment shall be an amount equal to the balance in the Director's
Deferred Compensation Accounts on the date of payment divided by the
number of remaining annual payments and shall be paid on the
anniversary of the preceding date of payment. The Market Value of any
shares of Common Stock credited to a Director's Phantom Stock
Investment Account shall be determined as of the twenty-fifth (25th)
day of the month immediately preceding the date of any lump sum or
installment distribution.
Upon the death of a Director, or a former Director prior to the payment
of all amounts credited to the Director's Deferred Compensation
Accounts, the unpaid balance shall be paid in the sole discretion of
the Committee (i) in a lump sum to the designated beneficiary of such
Director or former Director within thirty (30) days of the date of
death (or as soon as reasonably possible thereafter) or (ii) in
accordance with the Distribution Election made by such Director or
former Director. In the event a beneficiary designation has not been
made, or the designated beneficiary is deceased or cannot be located,
payment shall be made to the estate of the Director or former Director.
The Market Value of any shares of Common Stock credited to a Director's
Phantom Stock Investment Account shall be determined as of the
twenty-fifth (25th) day of the month immediately preceding the date of
any lump sum or installment distribution.
7.3 If the Company enters into a written agreement with a subsidiary,
affiliate or former affiliate of the Company under which the
subsidiary, affiliate or former affiliate assumes liability for a
Director's benefits accrued under the Plan in connection with, but
prior to, such Director's termination of membership on the Board and
election to the board of directors of such subsidiary, affiliate or
former affiliate of the Company, the value of the Director's benefits
which have accrued under the Plan as of the date the Director
terminates from the Board shall be transferred from the Company to the
subsidiary, affiliate or former affiliate of the Company, and the
Company shall have no further obligation to make any distributions to
the Director under Section 7.1 or any other section herein.
SECTION 8
Change in Control and Other Special Provisions
8.1 Notwithstanding any other terms of the Plan to the contrary, following
a Southern Change in Control, the provisions of this Section 8 shall
become operative and apply to the payment of benefits under the Plan
with respect to any Director who is a Participant on such date.
8.2 The Deferred Cash Trust and the Deferred Stock Trust (collectively
"Trusts") have been established to hold assets of the Participating
Companies under certain circumstances as a reserve for the discharge of
the Company's obligations under the Plan. In the event of a Preliminary
Change in Control of the Company, the Company shall be obligated to
immediately contribute such amounts to the Trusts as may be necessary
to fully fund all benefits payable under the Plan in accordance with
the procedures set forth in Section 8.3 hereof. In addition, in order
to provide the added protections for certain individuals in accordance
with Paragraph 7(b) of the Deferred Cash Trust and Paragraph 7(c) of
the Deferred Stock Trust, the Company may fund the Trusts prior to a
Preliminary Change in Control of the Company in accordance with the
terms of the Trusts. All assets held in the Trusts remain subject only
to the claims of the Participating Companies' general creditors whose
claims against the Participating Companies are not satisfied because of
the Participating Companies' bankruptcy or insolvency (as those terms
are defined in the Trusts). No Participant has any preferred claim on,
or beneficial ownership interest in, any assets of the Trusts before
the assets are paid to the Participant and all rights created under the
Trusts, as under the Plan, are unsecured contractual claims of the
Participant against the Company.
8.3 As soon as practicable following a Preliminary Change in Control of the
Company, the Company shall contribute to each Trust an amount based
upon the funding strategy adopted by the Trust Administrator with the
assistance of an appointed actuary necessary to fulfill the Company's
obligations pursuant to this Section 8. In the event of a dispute over
such actuary's determination with respect to either or both Trusts, the
Company and any complaining Participant(s) shall refer such dispute to
an independent, third party actuarial consultant, chosen by the Company
and such Participant. If the Company and the Participant cannot agree
on an independent, third party actuarial consultant, the actuarial
consultant shall be chosen by lot from an equal number of actuaries
submitted by the Company and the applicable Trustee. Any such referral
shall only occur once in total and the determination by the third-party
actuarial consultant shall be final and binding upon both parties. The
Company shall be responsible for all of the fees and expenses of the
independent actuarial consultant.
8.4 In the event of a Southern Change in Control, notwithstanding anything
to the contrary in the Plan, upon termination as a Director, that
amount in the Deferred Compensation Plan Account(s) of a Participant
who was a Director determined as of the date of such Change in Control
shall be paid out in a lump sum if such Participant makes an election
pursuant to procedures established by the Trust Administrator, in its
sole and absolute discretion. If no such election is made, the Director
shall receive payment of his Accounts solely in accordance with Section
7.
SECTION 9
General Provisions
9.1 In the event that the Company shall decide to establish an advance
accrual reserve on its books against the future expense of payments
from any Deferred Compensation Accounts, such reserve shall not under
any circumstances be deemed to be an asset of this Plan but, at all
times, shall remain a part of the general assets of the Company,
subject to claims of the Company's creditors.
9.2 A person entitled to any amount under this Plan shall be a general
unsecured creditor of the Company with respect to such amount.
Furthermore, a person entitled to a payment or distribution with
respect to a Deferred Compensation Account shall have a claim upon the
Company only to the extent of the balance in his Deferred Compensation
Accounts.
The Company will pay all commissions, fees, and expenses that may be incurred in
operating the Plan.
9.4 The Company will pay its prorated share of all commissions, fees, and
expenses that may be incurred in operating any trust(s) established
under the Plan (including the Deferred Stock Trust and the Deferred
Cash Trust).
9.5 Notwithstanding any other provision of this Plan: (i) elections under
this Plan may only be made by Directors while they are directors of the
Company; (with the exception of the designation of beneficiaries) and
(ii) distributions otherwise payable to a Director in the form of
Common Stock or other corporation's stock shall be delayed and/or
instead paid in cash in an amount equal to the fair market value
thereof if such payment in stock would violate any federal or State
securities laws (including Section 16(b) of the Securities Exchange Act
of 1934, as amended) and/or rules and regulations promulgated
thereunder.
9.6 Directors, their legal representatives and their beneficiaries shall
have no right to anticipate, alienate, sell, assign, transfer, pledge
or encumber their interests in the Plan, nor shall such interests be
subject to attachment, garnishment, levy or execution by or on behalf
of creditors of the Directors or of their beneficiaries.
SECTION 10
Administration
Subject to the express provisions of the Plan, the Committee shall have the
exclusive right to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it and to make all other determinations necessary or
advisable for the administration of the Plan. The decisions, actions and records
of the Committee shall be conclusive and binding upon the Company and all
persons having or claiming to have any right or interest in or under the Plan.
The Committee may delegate to such officers, employees, or departments of the
Company or Southern, such authority, duties, and responsibilities of the
Committee as it, in its sole discretion, considers necessary or appropriate for
the proper and efficient operation of the Plan, including, without limitation,
(i) interpretation of the Plan, (ii) approval and payment of claims, and (iii)
establishment of procedures for administration of the Plan.
SECTION 11
Amendment, Termination and Effective Date
11.1 Amendment of the Plan
Except for the provisions of Section 8, which may not be amended
following a Southern Change in Control, and subject to the provisions
of Section 11.3, the Plan may be wholly or partially amended or
otherwise modified at any time by written action of the Board.
11.2 Termination of the Plan
Subject to the provisions of Section 11.3 herein, the Plan may be
terminated at any time by written action of the Board.
11.3 No Impairment of Benefits
Notwithstanding the provisions of Sections 11.1 and 11.2 herein, no
amendment to or termination of the Plan shall impair any rights to
benefits that have accrued hereunder.
11.4 Governing Law
This Plan shall be construed in accordance with and governed by the
laws of the State of Georgia.
IN WITNESS WHEREOF, the Plan, as amended and restated effective
February 19, 2001, has been executed pursuant to resolutions of the Board of
Directors of the Company, this ____ day of _______________, 2001.
THE SOUTHERN COMPANY
By: ________________________
Attest:
By: ___________________________