Exhibit 10(a)62
AMENDMENT AND RESTATEMENT OF
THE SOUTHERN COMPANY
EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN
EFFECTIVE JANUARY 1, 1995
THE SOUTHERN COMPANY
EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN
Amended and Restated
Effective January 1, 1995
ARTICLE DESCRIPTION PAGE
ARTICLE I Definitions............................................ 2
ARTICLE II Participants........................................... 4
ARTICLE III Corporate Financial Performance Award.................. 6
ARTICLE IV Miscellaneous Provisions............................... 7
THE 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.
The amendment and restatement shall be effective as of January 1, 1995.
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 the wages paid to a Participant without
including overtime and before deduction of taxes, FICA, etc.
1.2 "Award" shall mean the award opportunity multiplied by the
performance unit value determined under Section 3.2 of the Plan.
1.3 "Award Opportunity" shall mean the target award opportunity
determined under Section 3.1 of the Plan.
1.4 "Board of Directors" shall mean the Board of Directors of
Southern Company Services, Inc.
1.5 "Chief Executive Officer" shall mean the individual designated as
such by the Board of Directors of an Employing Company and of The Southern
Company.
1.6 "Committee" or "Compensation Committee" shall mean the
Compensation Committee of the Board of Directors of The Southern
Company or the Employing Company.
1.7 "Common Stock" shall mean the common stock of The
Southern Company.
1.8 "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.
1.9 "Employing Company" shall mean Southern Company Services, Inc., or
any affiliate or subsidiary (direct or indirect) of The 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.
1.10 "Executive Employee" shall mean any person who is currently
employed by an Employing Company who is an "officer" as that term is defined in
Regulation 16a-1 promulgated by the Securities Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended, excluding however any principal
financial officer, principal accounting officer or controller unless the person
holding such position otherwise meets the definition of "officer" set forth in
such Regulation.
- 2 -
1.11 "Grade Level" shall mean the evaluation assigned under
the job evaluation system.
1.12 "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.
1.13 "Participant" shall mean an Executive Employee who
satisfies the criteria referred to in Article II at the beginning
of a Computation Period.
1.14 "Payment Date" shall mean the date the check evidencing the Award
is endorsed by an authorized person of an Employing Company.
1.15 "Peer Group Companies" shall mean the Companies set forth on
Exhibit C attached hereto. Such Exhibit may be revised from time to time by the
Committee to reflect mergers, acquisitions, reorganizations, etc. of peer group
members.
1.16 "Plan" shall mean The Southern Company Executive Productivity
Improvement Plan, as described herein or as from time to time amended.
1.17 "Prior Plan" shall mean the Plan as amended and restated
effective January 1, 1994.
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.
- 3 -
ARTICLE II
Participants
2.1 Participation in the Plan shall be limited to Executive
Employees of the Employing Companies.
2.2 Any Participant who vacates an eligible Grade Level prior to the
close of a Computation Period and who is not immediately reemployed with an
affiliate of an Employing Company shall forfeit any Award for any Computation
Periods that have not closed as of the date the Participant vacates such
eligible Grade Level.
2.3 Any Participant who terminates his employment with the Company and
who is not immediately reemployed with an affiliate of an Employing Company
prior to the Payment Date of any Award due under this Plan for reasons other
than death, disability, or retirement shall forfeit any Award due under this
Plan. If a Participant terminates his employment for reason of death, disability
or retirement, such Participant shall be eligible to receive an Award for the
Computation Period ending in the year of such death, disability or retirement.
2.4 Notwithstanding any other provision of this Plan, no employee whose
employment is terminated for cause, as that term is defined by the Committee,
shall be eligible to receive an Award under this Plan.
2.5 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 first 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.
2.6 Notwithstanding any other provision of this Plan, the maximum Award
for any Computation Period payable to any Participant shall be one million five
hundred thousand dollars ($1,500,000).
2.7 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.
- 4 -
2.8 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. A new
four-year measuring period begins each year in order to recognize the need to
link objectives over longer periods of time, to recognize changes in the
operating environment, and to encourage Participants to make long-term
decisions.
- 5 -
ARTICLE III
Corporate Financial Performance Award
3.1 The Award Opportunity for each Participant shall be based upon his
Grade Level(s) and shall range from sixty-five percent (65%) to ten percent
(10%) of the Grade Level Value held by the Participant at the beginning of any
Computation Period. The Award Opportunity for each Grade Level held by a
Participant shall be determined in accordance with the chart set forth in
Exhibit A herein.
3.2 Each Award Opportunity shall be multiplied by the value of the
performance unit factor set forth in Exhibit B herein, which is based on The
Southern Company's average return on common equity ranking during a Computation
Period as compared to the average return on common equity ranking of the Peer
Group Companies to determine a Participant's Award. The return on common equity
of the 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
Peer Group Company return on common equity may be accurately compared to that of
The Southern Company.
3.3 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 The 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.
3.4 In the discretion of the Compensation Committee of the Board of
Directors, the Award for one or more Computation Period(s) may be calculated
without regard to any extraordinary item of income incurred by The Southern
Company or any Employing Company, provided such determination is made prior to
the close of the Computation Period.
3.5 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.
- 6 -
ARTICLE IV
Miscellaneous Provisions
4.1 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.
4.2 The Employing Company shall not reserve or otherwise set aside
funds for the payments of Awards deferred in accordance with the Prior Plan.
4.3 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.
4.4 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.
4.5 There shall be deducted from the payment of each Award under the
Plan the amount of any tax required by any governmental authority to be withheld
and paid over by the Employing Company to such governmental authority for the
account of the person entitled to such distribution.
4.6 Any Awards paid to a Participant while employed by an Employing
Company shall not be considered in the calculation of the Participant's benefits
under any other employee welfare or pension benefit plan maintained by an
Employing Company, unless otherwise specifically provided therein.
4.7 This Plan, and all its rights under it, shall be governed by and
construed in accordance with the laws of the State of Georgia.
- 7 -
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 ____________________, 1995, to be
effective January 1, 1995.
SOUTHERN COMPANY SERVICES, INC.
By:
----------------------------------------------------
Its:
----------------------------------------------------
Attest:
By:
---------------------------------------------------------
Its:
-------------------------------------------------------
[CORPORATE SEAL]
- 8 -
EXPLANATORY NOTES
Under Section 3.2 the average ROCE for a Computation Period will be determined
by a) calculating the average ROCE for each year in the Computation Period, b)
adding the average ROCE calculations for all years in the Computation Period;
and c) dividing the total by the number of years in the Computation Period.
THE SOUTHERN COMPANY
EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN
EXHIBIT A
Grade Target Award Opportunity
1/1/95 4/1/95
President/CEO 65%
President/CEO 50%
29/30 (15) 50%
27/28 (14) 45%
25/26 (13) 40%
25/24 (12) 35%
21/22 (11) 30%
19/20 (10) 25%
17/18 (9) 20%
15/16 (8) 15%
13/14 (7) 10%
THE SOUTHERN COMPANY
EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN
EXHIBIT B
AWARD PERCENTAGE SCHEDULE
alue of Performance Ranking Against
Unit ($) Comparison Group
$2.00 Above position 1
$1.80 1
$1.60 2
$1.40 3
$1.20 4
$1.00 4.5
$0.90 5
$0.80 6
$0.70 7
$0.60 8
$0.50 8.5
$0.00 Below 8.5
THE SOUTHERN COMPANY
EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN
EXHIBIT C
The Peer Group Companies are as follows:
TECO Energy, Inc.
Carolina Power & Light Company
SCANA
Central Louisiana Electric Company, Inc.
Duke Power Company
Potomac Electric Power Company
American Electric Power Company, Inc.
Dominion Resources, Inc.
Allegheny Power Systems, Inc.
Florida Progress
Delmarva Power & Light Company
Baltimore Gas and Electric Company
Entergy, Inc.
FPL Group
Kentucky Utilities Energy Corporation
Central and South West Corporation
The Southern Company
AMENDMENT AND RESTATEMENT OF
THE SOUTHERN COMPANY
EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN
EFFECTIVE JANUARY 1, 1995
THE SOUTHERN COMPANY
EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN
Amended and Restated
Effective January 1, 1995
ARTICLE DESCRIPTION PAGE
ARTICLE I Definitions............................................ 2
ARTICLE II Participants........................................... 4
ARTICLE III Corporate Financial Performance Award.................. 6
ARTICLE IV Miscellaneous Provisions............................... 7
THE 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.
The amendment and restatement shall be effective as of January 1, 1995.
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 the wages paid to a Participant without
including overtime and before deduction of taxes, FICA, etc.
1.2 "Award" shall mean the award opportunity multiplied by the
performance unit value determined under Section 3.2 of the Plan.
1.3 "Award Opportunity" shall mean the target award opportunity
determined under Section 3.1 of the Plan.
1.4 "Board of Directors" shall mean the Board of Directors of
Southern Company Services, Inc.
1.5 "Chief Executive Officer" shall mean the individual designated as
such by the Board of Directors of an Employing Company and of The Southern
Company.
1.6 "Committee" or "Compensation Committee" shall mean the
Compensation Committee of the Board of Directors of The Southern
Company or the Employing Company.
1.7 "Common Stock" shall mean the common stock of The
Southern Company.
1.8 "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.
1.9 "Employing Company" shall mean Southern Company Services, Inc., or
any affiliate or subsidiary (direct or indirect) of The 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.
1.10 "Executive Employee" shall mean any person who is currently
employed by an Employing Company who is an "officer" as that term is defined in
Regulation 16a-1 promulgated by the Securities Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended, excluding however any principal
financial officer, principal accounting officer or controller unless the person
holding such position otherwise meets the definition of "officer" set forth in
such Regulation.
- 2 -
1.11 "Grade Level" shall mean the evaluation assigned under
the job evaluation system.
1.12 "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.
1.13 "Participant" shall mean an Executive Employee who
satisfies the criteria referred to in Article II at the beginning
of a Computation Period.
1.14 "Payment Date" shall mean the date the check evidencing the Award
is endorsed by an authorized person of an Employing Company.
1.15 "Peer Group Companies" shall mean the Companies set forth on
Exhibit C attached hereto. Such Exhibit may be revised from time to time by the
Committee to reflect mergers, acquisitions, reorganizations, etc. of peer group
members.
1.16 "Plan" shall mean The Southern Company Executive Productivity
Improvement Plan, as described herein or as from time to time amended.
1.17 "Prior Plan" shall mean the Plan as amended and restated
effective January 1, 1994.
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.
- 3 -
ARTICLE II
Participants
2.1 Participation in the Plan shall be limited to Executive
Employees of the Employing Companies.
2.2 Any Participant who vacates an eligible Grade Level prior to the
close of a Computation Period and who is not immediately reemployed with an
affiliate of an Employing Company shall forfeit any Award for any Computation
Periods that have not closed as of the date the Participant vacates such
eligible Grade Level.
2.3 Any Participant who terminates his employment with the Company and
who is not immediately reemployed with an affiliate of an Employing Company
prior to the Payment Date of any Award due under this Plan for reasons other
than death, disability, or retirement shall forfeit any Award due under this
Plan. If a Participant terminates his employment for reason of death, disability
or retirement, such Participant shall be eligible to receive an Award for the
Computation Period ending in the year of such death, disability or retirement.
2.4 Notwithstanding any other provision of this Plan, no employee whose
employment is terminated for cause, as that term is defined by the Committee,
shall be eligible to receive an Award under this Plan.
2.5 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 first 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.
2.6 Notwithstanding any other provision of this Plan, the maximum Award
for any Computation Period payable to any Participant shall be one million five
hundred thousand dollars ($1,500,000).
2.7 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.
- 4 -
2.8 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. A new
four-year measuring period begins each year in order to recognize the need to
link objectives over longer periods of time, to recognize changes in the
operating environment, and to encourage Participants to make long-term
decisions.
- 5 -
ARTICLE III
Corporate Financial Performance Award
3.1 The Award Opportunity for each Participant shall be based upon his
Grade Level(s) and shall range from sixty-five percent (65%) to ten percent
(10%) of the Grade Level Value held by the Participant at the beginning of any
Computation Period. The Award Opportunity for each Grade Level held by a
Participant shall be determined in accordance with the chart set forth in
Exhibit A herein.
3.2 Each Award Opportunity shall be multiplied by the value of the
performance unit factor set forth in Exhibit B herein, which is based on The
Southern Company's average return on common equity ranking during a Computation
Period as compared to the average return on common equity ranking of the Peer
Group Companies to determine a Participant's Award. The return on common equity
of the 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
Peer Group Company return on common equity may be accurately compared to that of
The Southern Company.
3.3 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 The 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.
3.4 In the discretion of the Compensation Committee of the Board of
Directors, the Award for one or more Computation Period(s) may be calculated
without regard to any extraordinary item of income incurred by The Southern
Company or any Employing Company, provided such determination is made prior to
the close of the Computation Period.
3.5 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.
- 6 -
ARTICLE IV
Miscellaneous Provisions
4.1 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.
4.2 The Employing Company shall not reserve or otherwise set aside
funds for the payments of Awards deferred in accordance with the Prior Plan.
4.3 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.
4.4 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.
4.5 There shall be deducted from the payment of each Award under the
Plan the amount of any tax required by any governmental authority to be withheld
and paid over by the Employing Company to such governmental authority for the
account of the person entitled to such distribution.
4.6 Any Awards paid to a Participant while employed by an Employing
Company shall not be considered in the calculation of the Participant's benefits
under any other employee welfare or pension benefit plan maintained by an
Employing Company, unless otherwise specifically provided therein.
4.7 This Plan, and all its rights under it, shall be governed by and
construed in accordance with the laws of the State of Georgia.
- 7 -
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 ____________________, 1995, to be
effective January 1, 1995.
SOUTHERN COMPANY SERVICES, INC.
By:
----------------------------------------------------
Its:
----------------------------------------------------
Attest:
By:
---------------------------------------------------------
Its:
-------------------------------------------------------
[CORPORATE SEAL]
- 8 -
EXPLANATORY NOTES
Under Section 3.2 the average ROCE for a Computation Period will be determined
by a) calculating the average ROCE for each year in the Computation Period, b)
adding the average ROCE calculations for all years in the Computation Period;
and c) dividing the total by the number of years in the Computation Period.
THE SOUTHERN COMPANY
EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN
EXHIBIT A
Grade Target Award Opportunity
1/1/95 4/1/95
President/CEO 65%
President/CEO 50%
29/30 (15) 50%
27/28 (14) 45%
25/26 (13) 40%
25/24 (12) 35%
21/22 (11) 30%
19/20 (10) 25%
17/18 (9) 20%
15/16 (8) 15%
13/14 (7) 10%
THE SOUTHERN COMPANY
EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN
EXHIBIT B
AWARD PERCENTAGE SCHEDULE
alue of Performance Ranking Against
Unit ($) Comparison Group
$2.00 Above position 1
$1.80 1
$1.60 2
$1.40 3
$1.20 4
$1.00 4.5
$0.90 5
$0.80 6
$0.70 7
$0.60 8
$0.50 8.5
$0.00 Below 8.5
THE SOUTHERN COMPANY
EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN
EXHIBIT C
The Peer Group Companies are as follows:
TECO Energy, Inc.
Carolina Power & Light Company
SCANA
Central Louisiana Electric Company, Inc.
Duke Power Company
Potomac Electric Power Company
American Electric Power Company, Inc.
Dominion Resources, Inc.
Allegheny Power Systems, Inc.
Florida Progress
Delmarva Power & Light Company
Baltimore Gas and Electric Company
Entergy, Inc.
FPL Group
Kentucky Utilities Energy Corporation
Central and South West Corporation
The Southern Company