EXHIBIT 10(a)60
SOUTHERN COMPANY
EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN
AMENDED AND RESTATED
TROUTMAN SANDERS LLP
NationsBank Plaza
600 Peachtree Street, N.E., Suite 5200
Atlanta, Georgia 30308
(404) 885-3000
Effective January 1, 1999
SOUTHERN COMPANY
EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN
Purposes
The purposes of the Southern Company Executive Productivity Improvement
Plan (the "Plan") are to provide a financial incentive which will focus the
efforts of certain executives on areas that will have a direct and significant
influence on corporate performance and to provide the potential for levels of
compensation that will enhance the Employing Companies' abilities to attract,
retain and motivate such executives. In order to achieve these objectives, the
Plan will be based upon corporate performance.
This Amendment and Restatement shall be effective as of January 1,
1999.
ARTICLE I
Definitions
For purposes of the Plan, the following terms shall have the following
meanings unless a different meaning is plainly required by the context:
1.1 "Annual Salary" shall mean base salary or wages paid to a
Participant before deductions for taxes, social security, etc., including all
amounts contributed by an Employing Company to The Southern Electric System
Flexible Benefits Plan or The Southern Company Flexible Benefits Plan on behalf
of a Participant, amounts contributed by any Employing Company to The Southern
Company Employee Savings Plan as Elective Employer Contributions, as said term
is defined in Section 4.1 therein, pursuant to the Participant's exercise of his
deferral option made in accordance with Section 401(k) of the Internal Revenue
Code, and amounts contributed to the Southern Company Deferred Compensation
Plan, but excluding all awards under the Southern Company Performance Pay Plan
and the Southern Company Executive Productivity Improvement Plan, overtime pay,
shift differential and substitution pay. For Computation Periods beginning on or
before January 1, 1998, Annual Salary shall be the Participant's Annual Salary
as of the first day of the Computation Period. For Computation Periods beginning
January 1, 1999 and thereafter, Annual Salary shall be the weighted average
Annual Salary determined as of the last day of each of the four years within the
Computation Period.
1.2 "Average ROE" shall mean the mathematical result obtained by (a)
calculating the return on equity for each year in the Computation Period, (b)
adding the return on equity calculations for all years in the Computation
Period; and (c) dividing the total by the number of years in the Computation
Period.
1.3 "Award" shall mean the Award Opportunity or Award Units multiplied
by the Performance Unit Value determined under Sections 3.2 and 3.4 of the Plan.
1.4 "Award Opportunity" shall mean the award opportunity determined
under Section 3.1 of the Plan.
1.5 "Award Unit" shall mean the unit opportunity determined under
Section 3.3 of the Plan.
1.6 "Beneficial Ownership" shall mean beneficial ownership within the
meaning of Rule 13d-3 promulgated under the Exchange Act.
1.7 "Board of Directors" shall mean the Board of Directors of Southern
Company Services, Inc.
1.8 "Business Combination" shall mean a reorganization, merger or
consolidation or sale of Southern Company or a sale of all or substantially all
of Southern Company's assets.
1.9 "Chief Executive Officer" shall mean the individual designated as
such by the Board of Directors of an Employing Company and of Southern Company.
1.10 "Committee" or "Compensation Committee" shall mean the
Compensation Committee of the Board of Directors of Southern Company or the
Employing Company.
1.11 "Common Stock" shall mean the common stock of Southern Company.
1.12 "Computation Period" shall mean a four-year period commencing on
the first day of the initial year of participation and thereafter it shall mean
a four-year period commencing the first day of January each year made up of the
ROE Computation Period and the TSR Computation Period, if any, respectively.
1.13 "Consummation" shall mean the completion of the final act
necessary to complete a transaction as a matter of law, including, but not
limited to, any required approvals by the corporation's shareholders and board
of directors, the transfer of legal and beneficial title to securities or assets
and the final approval of the transaction by any applicable domestic or foreign
governments or agencies.
1.14 "Control" shall mean, in the case of a corporation, Beneficial
Ownership of more than 50% of the combined voting power of the corporation's
Voting Securities, or in the case of any other entity, Beneficial Ownership of
more than 50% of such entity's voting equity interests.
1.15 "Employing Company" shall mean Southern Company Services, Inc., or
any other affiliate or subsidiary (direct or indirect) of Southern Company,
which the Board of Directors may from time to time determine to bring under the
Plan and which shall adopt the Plan, and any successor of any of them.
1.16 "Executive Employee" shall mean any person who is currently
employed by an Employing Company who is a "covered employee" as that term is
defined in Section 162(m) of the Internal Revenue Code (the "Code") who is
designated as an Executive Employee by the Compensation Committee and such other
persons employed by an Employing Company as the Compensation Committee in its
discretion shall designate.
1.17 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
1.18 "Grade Level" shall mean the evaluation assigned under the job
evaluation system. For Computation Periods beginning on or before January 1,
1998, Grade Level shall be the Participant's Grade Level as of the first day of
the Computation Period. For Computation Periods beginning January 1, 1999 and
thereafter, Grade Level shall be the weighted average Grade Level determined as
of the last day of each of the four years within the Computation Period.
1.19 "Grade Level Value" shall mean the assigned dollar value within
the Annual Salary range for a Grade Level in a Computation Period, upon which
awards are based.
1.20 "Group" shall have the meaning set forth in Section 14(d) of the
Exchange Act.
1.21 "Incumbent Board" shall mean those individuals who constitute the
Southern Board as of the Effective Date plus any individual who shall become a
director subsequent to such date whose election or nomination for election by
Southern Company's shareholders was approved by a vote of at least 75% of the
directors then comprising the Incumbent Board. Notwithstanding the foregoing, no
individual who shall become a director of the Southern Board subsequent to the
Effective Date whose initial assumption of office occurs as a result of an
actual or threatened election contest (within the meaning of Rule 14a-11 of the
Regulations promulgated under the Exchange Act) with respect to the election or
removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Southern Board shall be a
member of the Incumbent Board.
1.22 "Non-Adopting Employer" shall mean any subsidiary or affiliate of
Southern Company which is not an Employing Company.
1.23 "Participant" shall mean an Executive Employee who satisfies the
criteria referred to in Article II at the beginning of a Computation Period.
1.24 "Payment Date" shall mean the date the check evidencing the Award
is endorsed by an authorized person of an Employing Company.
1.25 "Percentage of Total Award" shall have the meaning ascribed in
Exhibits B and E hereof.
1.26 "Plan" shall mean the Southern Company Executive Productivity
Improvement Plan, as described herein or as may be amended from time to time.
1.27 "Plan Termination" shall mean the termination of the Plan by
Southern Company or an Employing Company following a Southern Change in Control
unless an equitable arrangement (embodied in an ongoing substitute or
replacement plan) has been made with respect to the Plan in connection with the
Southern Change in Control. For purposes of this Plan, an ongoing substitute or
alternative plan shall be considered an "equitable arrangement" if a nationally
recognized compensation consulting firm chosen by the Committee opines in
writing that, on aggregate, the post-Southern Change in Control plan is an
equitable substitute or replacement of the pre-Southern Change in Control Plan,
and that such substitute or alternative plan provides substantially similar
target opportunities and a substantially similar level of performance
difficulty.
1.28 "Prior Plan" shall mean the Plan as amended and restated effective
January 1, 1995.
1.29 "Southern Board" shall mean the board of directors of Southern
Company.
1.30 "Southern Change in Control" shall mean any of the following:
(a) The acquisition by any Person of Beneficial Ownership of
20% or more of Southern Company's Voting Securities; provided, however,
that for purposes of this subsection (a), the following acquisitions of
Southern Company's Voting Securities shall not constitute a Change in
Control:
(i) any acquisition directly from Southern Company;
(ii) any acquisition by Southern Company;
(iii) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by Southern Company
or any corporation Controlled by Southern Company;
(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 1.30(c);
(b) A change in the composition of the Southern Board whereby
individuals who constitute the Incumbent Board cease for any reason to
constitute at least a majority of the Southern Board; or
(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 Company's Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly,
65% or more of the combined voting power of the Voting
Securities of the corporation surviving or resulting from such
Business Combination, (including, without limitation, a
corporation which as a result of such transaction holds
Beneficial Ownership of all or substantially all of Southern
Company's Voting Securities or all or substantially all of
Southern Company's assets) (such surviving or resulting
corporation to be referred to as "Surviving Company"), in
substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the
Southern Company'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 Company, its subsidiaries or Surviving Company) holds
Beneficial Ownership, directly or indirectly, of 20% or more
of the combined voting power of the then outstanding Voting
Securities of Surviving Company except to the extent that such
ownership existed prior to the Business Combination; and
(iii) at least a majority of the members of the board
of directors of Surviving Company were members of the
Incumbent Board at the earlier of the date of execution of the
initial agreement, or of the action of the Southern Board,
providing for such Business Combination.
1.31 "Southern Company" shall mean The Southern Company.
1.32 "Southern Termination" shall mean the following:
(a) The consummation of a reorganization, merger or
consolidation of Southern Company under circumstances where either (i)
Southern Company is not the surviving corporation or (ii) Southern
Company's Voting Securities are no longer publicly traded;
(b) The sale or other disposition of all or substantially all
of Southern Company's assets; or
(c) The acquisition by any Person of Beneficial Ownership of
all of Southern Company's Voting Securities such that Southern
Company's Voting Securities are no longer publicly traded;
in each case under circumstances where the Surviving Company of the
company acquiring Southern Company's assets or Voting Securities dies
not adopt an "equitable arrangement" (as defined in Section 1.27
hereof) in the form of a replacement plan.
1.33 "Subsidiary Change in Control" shall mean the following:
(a) The Consummation of an acquisition by any Person of
Beneficial Ownership of 50% or more of the combined voting power of the
then outstanding Voting Securities of an Employing Company; provided,
however, that for purposes of this Section 1.33, any acquisition by an
Employee, or Group composed entirely of Employees, any qualified
pension plan, any publicly held mutual fund or any employee benefit
plan (or related trust) sponsored or maintained by Southern Company or
any corporation Controlled by Southern Company shall not constitute a
Change in Control;
(b) Consummation of a reorganization, merger or consolidation
of an Employing Company (an "Employing Company Business Combination"),
in each case, unless, following such Employing Company Business
Combination, Southern Company Controls the corporation surviving or
resulting from such Employing Company Business Combination; or
(c) Consummation of the sale or other disposition of all or
substantially all of the assets of an Employing Company to an entity
which Southern Company does not Control.
1.34 "Subsidiary Employee" shall mean an Executive Employee of an
Employing Company which has undergone a Subsidiary Change in Control.
1.35 "ROE Computation Period" shall have the meaning ascribed in
Section 3.1 hereof.
1.36 "ROE Peer Group Companies" shall mean the companies set forth on
Exhibit C attached hereto and as may be revised from time to time by the
Committee to reflect mergers, acquisitions, reorganizations, etc. of such
companies.
1.37 "Termination for Cause" or "Cause" shall mean the termination of a
Participant's employment by an Employing Company under any of the following
circumstances:
(a) The Participant willfully neglects or refuses to discharge
his or her duties to the Employing Company as an employee or refuses to
comply with any lawful and reasonable instructions given to him or her
by the Employing Company 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 or impair the good name
and standing of the Company or any Employing Company or would
bring the Company or any Employing Company into contempt,
ridicule or would reasonably shock or offend any community in
which the Company or any Employing Company is located;
(iii) attendance at work in a state of intoxication
or otherwise being found in possession at his or her workplace
of any prohibited drug or substance, possession of which would
amount to a criminal offense;
(iv) assault or other act of violence against any
employee or other person during the course of the
Participant's employment; and
(v) conviction of any felony or misdemeanor involving
moral turpitude.
1.38 "Total Shareholder Return" or "TSR" shall mean the total amount an
investor would receive by investing $100 per quarter in Common Stock or in TSR
Peer Group Common Stock, as the case may be, as determined by measuring the
total dividends which would have been paid on such Common Stock or TSR Peer
Group Common Stock by reinvesting such dividends on a quarterly basis in
additional shares of Common Stock or TSR Peer Group Common Stock, as the case
may be, and the total gain or loss on such Common Stock or Peer Group Common
Stock as if such stock had been sold at the closing price on the last day of the
respective Computation Period.
1.39 "TSR Computation Period" shall have the meaning ascribed in
Section 3.3 hereof.
1.40 "TSR Peer Group Common Stock" shall mean the common stock of the
Peer Group Companies.
1.41 "TSR Peer Group Companies" shall mean those Companies designated
by Goldman Sachs in its "Selected Electric Utility Industry Report" as the
approximately 80 Utility Peer Group Companies as published quarterly and as
composed from time to time. In the event that Goldman Sachs no longer publishes
the 80 Utility Peer Group Companies, the Committee shall choose such other and
similar list of national peer group companies as published by a similarly
nationally recognized firm.
1.42 "Value of Performance Unit" shall have the meaning ascribed in
Exhibits B and E attached hereto.
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 and neuter genders, words in the singular shall include the plural,
and words in the plural shall include the singular.
ARTICLE II
Participants
2.1 Participation. Participation in the Plan shall be limited to
Executive Employees of the Employing Companies.
2.2 Reduction in Grade Level. Any Participant who ceases to be an
Executive Employee prior to the close of a Computation Period shall receive an
Award for the Computation Period ending on December 31st of the year in which
such Participant ceased to be an Executive Employee and shall forfeit any Award
for any other Computation Periods that have not closed as of the date the
Participant ceases to be an Executive Employee.
2.3 Termination of Employment. If a Participant's employment is
terminated by reason of death, disability or retirement, such Participant or his
or her estate shall be eligible to receive an Award for the Computation Period
ending in the year of such death, disability or retirement unless such death,
disability or retirement shall have occurred on January 1 in which case the
Participant or his or her estate shall only be entitled to an Award for the
Computation Period ending December 31 of the previous year. Any Participant who
terminates employment for any other reason shall receive only any unpaid Award
for a completed Computation Period and shall not be eligible to receive an Award
for the Computation Period ending in the year of such termination of employment.
2.4 Transfer to Non-Adopting Employer. Notwithstanding the provisions
of Section 2.3 above, in the case of an individual transferring from an
Employing Company to a Non-Adopting Employer any Award paid for any Computation
Period not yet closed as of the date of a Participant's transfer shall be paid
to the Participant by the Employing Company from which the Participant is
transferring on the following basis:
(i) 100% of the Award for the Computation Period ending in the
year of transfer;
(ii) 75% of the Award for the Computation Period ending in the
first year following the year of transfer;
(iii) 50% of the Award for the Computation Period ending in
the second year following the year of transfer; and
(iv) 25% of the Award for the Computation Period ending in the
third year following the year of transfer.
Such transferring Participant shall receive no award for any Computation Period
which has not begun on the date of the Participant's transfer or if such
Participant shall no longer be in an eligible Grade Level after such transfer.
Any Awards payable under this Section 2.4 shall be based on the Grade
Level at the time of transfer.
2.5 Transfer from Non-Adopting Employer. In the case of an individual
transferring from a Non-Adopting Employer to an Employing Company whose Grade
Level and length of service at the Non-Adopting Employer would have caused the
Employee to have been a Participant in the Plan if the Non-Adopting Employer
were an Employing Company and whose Grade Level after the transfer would enable
the Employee to participate in the Plan, such individual shall be deemed to have
been employed by an Employing Company while employed with the Non-Adopting
Employer and shall, for any Computation Period ending after such transfer, be
deemed a Participant in the Plan as if the Non-Adopting Employer was an
Employing Company.
Any Awards payable under this Section 2.5 shall be based on the Grade
Levels at the Employing Company.
2.6 Termination for Cause. Notwithstanding any other provision of this
Plan, a Participant whose employment is Terminated for Cause shall forfeit any
and all unpaid Awards under this Plan.
2.7 Promotion. The administration of Awards for Participants who are
promoted or transferred from one Grade Level included in the Plan to another
Grade Level included in the Plan shall be based on the Participant's Grade Level
Value on the last day of the Computation Period for which an Award is being
granted. For the Computation Periods ending December 31, 1995, December 31,
1996, December 31, 1997 and December 31, 1998 a Participant's Grade Level Value
for determining Awards shall be the Participant's Grade Level Value on January
1, 1995.
2.8 Maximum Award. Notwithstanding any other provision of this Plan,
the maximum Award for any Computation Period payable to any Participant shall be
two million dollars ($2,000,000).
2.9 1995 Participants. Any individual who initially becomes a
Participant in the Plan as of January 1, 1995 shall be considered to have been
participating in the Plan as of January 1, 1993 for purposes of determining
benefits payable for any Computation Period that began or begins on or after
January 1, 1993 and such Participant will therefore be eligible for an Award
equal to seventy-five percent (75%) of the Award Opportunity for the Computation
Period ending December 31, 1995.
2.10 Post-1995 Participants. In the case of an individual who becomes a
Participant subsequent to January 1, 1995, said Participant will participate in
each Computation Period which ends not less than two (2) years after becoming a
Participant.
ARTICLE III
Corporate Financial Performance Award
3.1 ROE Computation Period. For Computation Period years beginning
before January 1, 1997 (the "ROE Computation Period"), the Award Opportunity for
each Participant shall be based upon either his Grade Level Value (as determined
based on his Grade Level at the beginning of such period) or, in the Committee's
discretion, upon his Annual Salary at the beginning of such period and in either
case shall range from fifteen percent (15%) to sixty-five percent (65%) of such
Grade Level Value or Annual Salary, as applicable. The Award Opportunity for
each Grade Level or Annual Salary shall be determined in accordance with the
chart set forth in Exhibit A hereof.
3.2 ROE Ranking. Each Award Opportunity granted in the ROE Computation
Period shall be multiplied by the Value of Performance Unit factor and the
Percentage of Total Award factor set forth in Exhibit B hereof, which is based
on Southern Company's Average ROE ranking during the ROE Computation Period as
compared to the Average ROE ranking of the ROE Peer Group Companies to determine
a Participant's Award. The return on common equity of the ROE Peer Group
Companies shall be determined annually by an independent certified public
accountant based on generally accepted accounting principles and shall be
properly adjusted and annualized by such accountant so that each ROE Peer Group
Company return on common equity may be accurately compared to that of Southern
Company.
3.3 TSR Computation Period. For Computation Period years beginning on
or after January 1, 1997 (the "TSR Computation Period"), the Award Units for
each Participant shall be based upon either his Grade Level Value or, in the
Committee's discretion, upon his Annual Salary and, in either case shall range
from fifteen percent (15%) to sixty-five percent (65%) of such Grade Level Value
or Annual Salary, as applicable. The Award Units for each Grade Level or Annual
Salary shall be determined in accordance with the charts set forth in Exhibit D
hereof.
3.4 TSR Ranking. Each Award Unit granted in the TSR Computation Period
shall be multiplied by the Value of Performance Unit factor and the Percentage
of Total Award factor set forth in Exhibit E hereof which is based on Total
Shareholder Return of Southern Company as compared to the Total Shareholder
Return for the TSR Peer Group Companies. The Total Shareholder Return of
Southern Company and the TSR Peer Group Companies shall be determined annually
by an independent certified public accountant and shall be properly adjusted and
amortized by such accountant so that each TSR Peer Group Company's total
shareholder return may be accurately compared to that of Southern Company.
3.5 Insufficient Earnings. Notwithstanding the above provisions, an
Award will not be granted for any Computation 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 its Common Stock at the rate such dividends
were paid for the immediately preceding calendar year.
3.6 Extraordinary Income. In the exercise of negative discretion, the
Compensation Committee may calculate the Award for one or more Computation
Period(s) without regard to any extraordinary income item (but not loss)
otherwise recorded by Southern Company or any Employing Company, provided such
determination that an item of income is extraordinary is made by the Committee
prior to the close of the Computation Period.
3.7 Payment. The Awards to the Participants will be paid in cash as
soon as is practicable after all evaluations are completed. An Award payment may
not be deferred under this Plan. In the event an Award was deferred under the
Prior Plan, such deferral shall be governed by the terms of the Prior Plan.
ARTICLE IV
Change in Control
4.1 Southern Change in Control. Notwithstanding any other provision of
this Plan to the contrary, in the event of a Plan Termination within the two (2)
year period following a Southern Change in Control, each Participant who is an
Executive Employee on the date of the Plan Termination shall be entitled to
receive within thirty (30) days of the Plan Termination, cash in an amount equal
to his Award Opportunity or Award Units, as the case may be, for the Computation
Period in which the Plan Termination shall have occurred, at a target Value of
Performance Unit of $1.00, prorated for each Computation Period by the number of
months which have passed since the beginning of the Computation Period until the
date of the Plan Termination.
4.2 Subsidiary Change in Control. Notwithstanding any other provision
of this Plan to the contrary, in the event of a Subsidiary Change in Control,
each Subsidiary Employee on the date of such Change in Control whose employment
is not transferred upon such Subsidiary Change in Control to another Employing
Company shall be entitled to receive within thirty (30) days of the Subsidiary
Change in Control, cash in an amount equal to his Award Opportunity, or Award
Units, as the case may be, for the Computation Period in which the Subsidiary
Change in Control shall have occurred, at a target Value of Performance Unit of
$1.00, prorated for each Computation Period by the number of months which have
passed since the beginning of the Computation Period until the date of the
Subsidiary Change in Control.
4.3 Southern Termination. Notwithstanding any other provision of this
Plan to the contrary, in the event of a Southern Termination, if the Plan or an
equitable replacement thereto (as described in Section 1.27 hereof) remains
effective on December 31st of the Plan Year in which the Southern Change in
Control shall have occurred, the Plan or Replacement Plan shall operate with
respect to the Performance Period then ended in accordance with its terms, but
in no event shall the Value of Performance Unit under the Plan or similar factor
under a replacement plan for such Performance Period be less than $1.00 or
target performance, respectively.
ARTICLE V
Miscellaneous Provisions
5.1 No Assignment. Neither the Participant, his beneficiary, 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.
5.2 No Reserve. The Employing Company shall not reserve or otherwise
set aside funds for the payments of Awards deferred in accordance with the Prior
Plan.
5.3 Plan Amendment. Except for the provisions of Article IV hereof, which may
not be amended, modified or terminated following a Southern Change in Control,
Subsidiary Change in Control or a Southern Termination, the Plan may be amended,
modified, or terminated by the Board of Directors in its sole discretion at any
time and from time to time; provided, however, that no such amendment,
modification, or termination shall impair any rights to payments which have been
deferred under the Prior Plan prior to such amendment, modification, or
termination.
5.4 Additional Benefits. It is expressly understood and agreed that the
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
Employing Company.
5.5 Withholding. There shall be deducted from the payment of each Award
under the Plan the amount of any tax required by any governmental authority to
be withheld and paid over by the Employing Company to such governmental
authority for the account of the person entitled to such distribution.
5.6 Effect On Other Benefits. Any Awards paid to a Participant while
employed by an Employing Company shall not be considered in the calculation of
the Participant's benefits under any other employee welfare or pension benefit
plan maintained by an Employing Company, unless otherwise specifically provided
therein.
5.7 Governing Law. This Plan, and all its rights under it, shall be
governed by and construed in accordance with the laws of the State of Georgia.
5.8 Pooling Accounting. Notwithstanding anything to the contrary
herein, if, but for any provision of this Plan, a Change in Control transaction
would otherwise be accounted for as a pooling-of-interests under APB No.16
("Pooling Accounting") (after giving effect to any and all other facts and
circumstances affecting whether such Change in Control transaction would use
Pooling Accounting,), such provision or provisions of this Plan which would
otherwise cause the Change in Control transaction to be ineligible for Pooling
Accounting shall be void and ineffective in such a manner and to the extent that
by eliminating such provision or provisions of this Plan, Pooling Accounting
would be required for such Change in Control transaction.
IN WITNESS WHEREOF, Southern Company Services, Inc., through its duly
authorized officers, hereby amends and restates the Southern Company Executive
Productivity Improvement Plan this ____ day of , 1999 to be effective January 1,
1999.
SOUTHERN COMPANY SERVICES, INC.
By: ______________________________
Christopher C. Womack
Senior Vice President, Human Resources
Attest:
By: ________________________
Tommy Chisholm
Secretary
[CORPORATE SEAL]
SOUTHERN COMPANY
EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN
EXHIBIT A
Award Opportunity
Grade Level Value Award Opportunity
Percentage of Grade Level Value
or Annual Salary
President/CEO 50/65%
15 50%
14 45%
13 40%
12 35%
11 30%
10 25%
9 25%
8 20%
7 15%
SOUTHERN COMPANY
EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN
EXHIBIT B
AWARD PERCENTAGE SCHEDULE
Position Ranking
Value of
Performance Unit 12 - 14 15 - 17 18 - 20
$ Companies Companies Companies
- --------- --------- ---------
$2.00 Top Top Top
1.80 1.0 1.0 1.0
1.60 2.0 2.0 2.0
1.40 2.5 3.0 3.0
1.20 3.0 4.0 4.0
1.00 4.0 4.5 5.0
.90 4.5 5.0 6.0
.80 5.0 6.0 7.0
.70 6.0 7.0 8.0
.60 6.5 8.0 9.0
.50 7.0 8.5 10.0
0 Below 7.0 Below 8.5 Below 10
Percentage Of Total Award Factor
Computation Period Ending Factor
December 31, 1997 75%
December 31, 1998 50%
December 31, 1999 25%
Thereafter 0%
SOUTHERN COMPANY
EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN
EXHIBIT C
ROE Peer Group Companies
Allegheny Energy, Inc. Kansas City Power & Light Company
Alliant Energy Corporation Keyspan Energy Corporation
Ameren Corporation LG&E Energy Corporation
American Electric Power Company MDU Resources
Baltimore Gas & Electric Company MidAmerican Energy Holdings Co.
BEC Energy Minnesota Power Company
Carolina Power & Light Company Montana Power Company
Central & South West Corporation Nevada Power Co.
CILCORP. Inc. New Century Energies, Inc.
Cinergy Corporation New England Electric System
Cleco Corporation Niagara Mohawk Power Corp.
Conectiv CIV NIPSCO Industries, Inc.
CMS Energy Corporation Northeast Utilities Co.
Commonwealth Energy System Northern States Power Co.
Consolidated Edison, Inc. OGE Energy Corp.
Dominion Resources, Inc. Orange & Rockland Utilities, Inc.
DPL, Inc. PG&E Corp.
DQE, Inc. PacifiCorp
DTE Energy Company PECO Energy Co.
Duke Energy Corporation Pinnacle West Capital Corp.
Eastern Utilities Associates Potomac Electric Power Co.
Edison International PP&L Resources, Inc.
Energy East Corporation Public Service Co. of New Mexico
Entergy Corporation Public Service Enterprise Group, Inc.
FirstEnergy Corporation Puget Sound Energy, Inc.
Florida Progress Corporation Rochester Gas & Electric Corp.
FPL Group, Inc. SCANA Corp.
GPU, Inc. Sierra Pacific Resources
Hawaiian Electric Industries, Inc. SIGCORP, Inc.
Houston Industries, Inc. TECO Energy, Inc.
IDACORP, Inc. Texas Utilities Company
Illinova Corporation Unicom Corp.
Interstate Energy Corporation Unisource Energy Corp.
IPALCO Enterprises, Inc. United Illuminating Company
Washington Water Power Co. UtiliCorp. United, Inc.
Western Resources, Inc. Wisconsin Energy Corp.
WPS Resources Corp.
SOUTHERN COMPANY
EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN
EXHIBIT D
Award Units
Grade Level Value Award Units
Percentage of Grade Level Value
or Annual Salary
President/CEO 50/65%
15 50%
14 45%
13 40%
12 35%
11 30%
10 25%
9 25%
8 20%
7 15%
SOUTHERN COMPANY
EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN
EXHIBIT E
Performance Unit Factor*
Value of Unit Percentile of Southern TSR
vs.
Investor Utility
$ 2.00 90th and above
$ 1.50 70th
$1.00 50th
$ .50 30th
$ .00 Below 30th
*The Value of Unit for performance levels falling between the percentiles listed
above shall be interpolated on a straight line basis for any given calendar
year.
Percentage Of Total Award Factor
Computation Period Ending Factor
December 31, 1997 25%
December 31, 1998 50%
December 31, 1999 75%
Thereafter 100%