Exhibit 10(a)2
OUTSIDE DIRECTORS STOCK PLAN FOR
THE SOUTHERN COMPANY AND ITS SUBSIDIARIES
Effective May 26, 2004
OUTSIDE DIRECTORS STOCK PLAN FOR
THE SOUTHERN COMPANY AND ITS SUBSIDIARIES
Preamble
Prior to the Effective Date (defined herein) of this Outside Directors
Stock Plan for The Southern Company and Its Subsidiaries (the "Plan"), Directors
(defined herein) participated in The Southern Company Outside Directors Stock
Plan ("Southern Stock Plan") and the Outside Directors Stock Plan for
Subsidiaries of the Southern Company ("Subsidiaries Stock Plan"). The purpose of
this Plan is to update the stock compensation provisions to be in compliance
with New York Stock Exchange rules and to merge the Southern Stock Plan and the
Subsidiaries Stock Plan into this successor Plan in order to consolidate the
statement of these compensation related obligations to Directors. Grants of
stock to Directors prior to the Effective Date are governed by the terms of the
Southern Stock Plan and the Subsidiaries Stock Plan, as applicable.
The Company has reserved 1,000,000 (one million) authorized and
registered shares of Stock (defined herein) that may be granted to Directors
under the terms of this Plan. Additionally, any unissued shares of Stock
previously authorized and registered for issuance under the Southern Stock Plan
and Subsidiaries Stock Plan as of May 26, 2004 shall be transferred to the Plan,
added to the reserved Stock and available for issuance to Participants under the
Plan. This Plan shall expire on the tenth (10th) anniversary of the Effective
Date.
ARTICLE I - PURPOSE AND ADOPTION OF PLAN
1.1 Adoption. The Southern Company hereby adopts the Outside Directors
Stock Plan for The Southern Company and Its Subsidiaries, effective May 26, 2004
subject to (a) the approval of the adoption by the Board of Directors of The
Southern Company of the Outside Directors Stock Plan for The Southern Company
and Its Subsidiaries by the shareholders of the Company at the annual meeting
thereof to be held on May 26, 2004, and (b) the Company's receipt of the
requisite approval of the issuance of the Stock pursuant to the Plan by the
Securities and Exchange Commission under the Public Utility Holding Company Act
of 1935, as amended, and the rules thereunder.
1.2 Purpose. The Plan is designed to more closely align the interests
of Directors with the interests of the shareholders of the Company through
ownership of Stock.
ARTICLE II - DEFINITIONS
2.1 "Affiliated Employer" shall mean any corporation which is a member
of the controlled group of corporations of which the Company is the common
parent corporation.
2.2 "Board of Directors" shall mean either the Southern Board or a
System Company Board, as applicable to a Director.
2.3 "Commission" shall mean the Securities and Exchange Commission.
2.4 "Company" shall mean The Southern Company.
2.5 "Director" shall mean any person who is not an active employee of
the Company or a System Company and who either serves on the Southern Board or a
System Company Board.
2.6 "Effective Date" shall mean May 26, 2004.
2.7 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
2.8 "Market Value" shall mean the following:
(a) With respect to Stock that is issued by the Company, the average of
the high and low prices of the Stock, as published in the Wall Street Journal in
its report of New York Stock Exchange composite transactions, on the date one
day prior to the date of distribution as set forth in Section 4.3(a) of the Plan
(or the average of the high and low sale prices on the trading day immediately
preceding such determination date if the Stock is not traded on the date one day
prior to the date of distribution).
(b) With respect to Stock that is purchased on the open market, the
actual purchase price paid for such Stock on the date of purchase. 2.9
"Participant" shall mean each Director who meets the requirements of Section 3.1
of the Plan.
2.10 "Plan" shall mean the Outside Directors Stock Plan for The
Southern Company and Its Subsidiaries, as amended from time to time.
2.11 "Plan Administrator" shall mean the Governance Committee of the
Southern Board.
2.12 "Plan Year" shall mean the calendar year.
2.13 "Retainer Fee" shall mean the annual rate of the fees paid to a
Director as determined by the Board of Directors from time-to-time, but
excluding reimbursements for expenses and any fees or compensation for (a)
attendance at the meetings of the Board of Directors or any committee, (b)
service on a committee, and (c) service at the request of the Board of Directors
or a committee.
2.14 "Stock" shall mean the Company's common stock, par value $5.00 per
share.
2.15 "Southern Board" shall mean the Board of Directors of The Southern
Company.
2.16 "System Company" shall mean any Affiliated Employer of the Company
which the Southern Board may from time to time determine to bring under the Plan
and which shall adopt the Plan, and any successor of any of them. The System
Companies that have adopted the Plan are listed in Schedule A, attached hereto,
as such Schedule may be amended from time to time.
2.17 "System Company Board" shall mean the Board of Directors of a
System Company.
The masculine pronoun shall be construed to include the feminine
pronoun and the singular shall include the plural, where the context so
requires.
ARTICLE III - ELIGIBILITY
3.1 Eligibility Requirements.
(a) Except as provided in Subsections (b) and (c) below, each Director
shall become a Participant in the Plan on the first date such Director serves on
the Board of Directors.
(b) For purposes of the 2004 Plan Year, a Director who is serving on a
Board of Directors as of the Effective Date shall become a Participant in the
Plan on the Effective Date, subject to (1) approval of the Plan by the
shareholders of the Company at the annual meeting thereof to be held on May 26,
2004, and (2) the Company's receipt of the requisite approval of the Plan by the
Commission under the Public Utility Holding Company Act of 1935, as amended, and
the rules thereunder.
ARTICLE IV - FORM AND TIME OF BENEFIT DISTRIBUTIONS
4.1 Stock Grant. Each Participant shall receive a portion of his annual
Retainer Fee in Stock, with the remainder of such annual Retainer Fee and
meeting attendance fees to be payable, in increments elected by the Director in
accordance with Section 4.2 below, in cash or in Stock. The portion of the
annual Retainer Fee required to be paid in Stock pursuant to this Section 4.1
may be denominated as dollars and/or shares and shall be stated in Schedule B,
attached hereto, as such Schedule shall be amended from time to time.
4.2 Election to Determine Percentage or Amount of Compensation to be
Paid in Stock. Each Participant shall have an opportunity to elect to have the
non-Stock portion of his Retainer Fee paid in cash or Stock of the Company, or a
combination thereof. Each Participant also shall have an opportunity to elect to
have a portion of his meeting attendance fees payable in Stock. Such elections
shall be made at the time specified by the Plan Administrator on a form provided
to the Participant by the Plan Administrator. Nothing contained in this Section
4.2 shall be interpreted in such a manner as would disqualify the Plan from
treatment as a "formula plan" under Rule 16b-3, as promulgated by the Commission
under the Exchange Act, as that rule may be amended from time to time.
4.3 Amount and Date of Payment for Stock Compensation.
(a) For any Plan Year in which a Director is a Participant for the full
Plan Year, any Stock compensation due a Participant pursuant to Sections 4.1 and
4.2 above shall be payable on a quarterly basis. The amount of Stock to be
distributed to a Participant shall initially be determined by first dividing the
Participant's required and elected dollar amount of Stock compensation by four
(4) and then dividing such quarterly quotient by the Market Value of the Stock.
Subsequent distributions shall be based on such quarterly quotient divided by
the Market Value of the Stock.
(b) Notwithstanding the foregoing, for purposes of the 2004 Plan Year,
for Participants who are serving as Directors as of the Effective Date, no Stock
distributions shall be made under the Plan prior to receipt of the requisite
approval described in Section 1.1; provided, however, that once the requisite
approval of the Plan is received, the Stock distribution shall be made on the
first quarterly date following such approval in accordance with Article IV.
4.4 Deferral of Retainer. The portion of the Retainer Fee required to
be paid in Stock pursuant to Section 4.1 shall be deferred in accordance with
the terms of the deferred compensation plan maintained by the Company or
Subsidiary Company for its Directors. Directors also shall have the option to
defer in such plan pursuant to its terms that portion of the Retainer Fee not
required to be paid in Stock and meeting attendance fees.
4.5 Death Benefits. No grants of Stock shall be made to any beneficiary
of a Participant following a Participant's death.
ARTICLE V - ADMINISTRATION OF PLAN
5.1 Administrator. The general administration of the Plan shall be the
responsibility of the Plan Administrator.
5.2 Powers. 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 more particularly set forth herein. It shall interpret
the Plan and shall have the discretion to determine all questions arising in the
administration, interpretation and application of the Plan, including any
ambiguities contained herein or any questions of fact. Any such determination by
it shall be conclusive and binding on all persons. It may adopt such regulations
as it deems desirable for the conduct of its affairs. It may appoint such
accountants, counsel, actuaries, specialists and other persons as it deems
necessary or desirable in connection with the administration of this Plan, and
shall be the agent for the service of process.
5.3 Duties of the Plan Administrator.
(a) The Plan Administrator is responsible for the daily administration
of the Plan. It may appoint other persons or entities to perform any of its
fiduciary functions. The Plan Administrator and any such appointee may employ
advisors and other persons necessary or convenient to help it carry out its
duties, including its fiduciary duties. The Plan Administrator shall have the
right to remove any such appointee from his position. Any person, group of
persons or entity may serve in more than one fiduciary capacity.
(b) The Plan Administrator shall maintain accurate and detailed records
and accounts of Participants and of their rights under the Plan and of all
receipts, disbursements, transfers and other transactions concerning the Plan.
Such accounts, books and records relating thereto shall be open at all
reasonable times to inspection and audit by persons designated by the Board of
Directors.
(c) The Plan Administrator shall take all steps necessary to ensure
that the Plan complies with the law at all times. These steps shall include such
items as the preparation and filing of all documents and forms required by any
governmental agency; maintaining of adequate Participants' records; recording
and transmission of all notices required to be given to Participants; the
receipt and dissemination, if required, of all reports and information received
relating to the Plan; securing of such fidelity bonds as may be required by law;
and doing such other acts necessary for the proper administration of the Plan.
The Plan Administrator shall keep a record of all of its proceedings and acts,
and shall keep all such books of account, records and other data as may be
necessary for proper administration of the Plan.
5.4 Indemnification. The System Companies and the Company shall
indemnify the Plan Administrator against any and all claims, losses, damages,
expenses and liability arising from any action or failure to act, except when
the same is finally judicially determined to be due to gross negligence or
willful misconduct. The System Companies and the Company 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
failure to act in connection with the execution of the duties as Plan
Administrator.
ARTICLE VI - MISCELLANEOUS
6.1 Assignment. Neither the Participant nor his legal representative
shall have any rights to sell, assign, transfer or otherwise convey the right to
receive the payment of any benefit due hereunder, which payment and the right
thereto are expressly declared to be nonassignable and nontransferable. Any
attempt to assign or transfer the right to payment under the Plan shall be null
and void and of no effect.
6.2 Amendment and Termination. The Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time by the
Southern Board or by the Governance Committee with the approval of the Southern
Board, upon execution of a duly authorized written document; provided, however,
that, without the approval of the shareholders of the Company entitled to vote
thereon, no amendment may be made which would, absent such shareholder approval,
disqualify the Plan for coverage under Rule 16b-3, as promulgated by the
Commission under the Exchange Act, as that rule may be amended from time to
time; and provided further that the Plan may not be amended more than once every
six (6) months unless such amendment is made in order to comply with changes to
either the Internal Revenue Code of 1986, as amended, or the Employee Retirement
Income Security Act of 1974, as amended, and the rules thereunder.
Notwithstanding the foregoing, no such amendment or termination shall impair any
rights to payments to which a Participant may be entitled prior to the effective
date of such amendment or termination.
6.3 No Guarantee of Continued or Future Service on a Board of
Directors. Participation hereunder shall not be construed as creating a right in
any Director to continued service or future service on the Board of Directors.
Participation hereunder does not constitute an employment contract between any
Director and any System Company or the Company as the case may be.
6.4 Construction. This Plan shall be construed in accordance with and
governed by the laws of the State of Georgia, to the extent such laws are not
otherwise superseded by the laws of the United States.
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IN WITNESS WHEREOF, the Southern Board, through its duly authorized
officers, has adopted this Outside Directors Stock Plan for The Southern Company
and Its Subsidiaries this 16th day of February, 2004, to be effective as
provided herein.
THE SOUTHERN COMPANY:
(CORPORATE SEAL)
By: /s/Tommy Chisholm
Its: Secretary and Assistant Treasurer
Attest:
By: /s/Patricia L. Roberts
Its: Assistant Secretary
OUTSIDE DIRECTORS STOCK PLAN FOR
THE SOUTHERN COMPANY AND ITS SUBSIDIARIES
SCHEDULE A
The System Companies as of May 26, 2004 are:
Southern Company
Alabama Power Company
Georgia Power Company
Gulf Power Company
Mississippi Power Company
Savannah Electric and Power Company
OUTSIDE DIRECTORS STOCK PLAN FOR
THE SOUTHERN COMPANY AND ITS SUBSIDIARIES
SCHEDULE B
As of __________
The portion of a Participant's Retainer Fee required to be distributed in common
stock of The Southern Company shall be determined in accordance with the
following schedule:
Company Dollar Amount of Required
Stock Distribution
Southern Company
o Pre-1997 Appointed Directors $10,000.00
o Post-1996 Appointed Directors $19,000.00
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Company Shares Distributed
Southern Company 250 shares per quarter
Alabama Power Company 130 shares per quarter
Georgia Power Company 130 shares per quarter
Gulf Power Company 85 shares per quarter
Mississippi Power Company 85 shares per quarter
Savannah Electric and Power Company 85 shares per quarter