EXHIBIT 10(a)80
DEFERRED COMPENSATION AGREEMENT
THIS DEFERRED COMPENSATION AGREEMENT ("Agreement") made and entered
into by and between The Southern Company ("Southern"), Georgia Power Company
(the "Company") and Xxxxx Xxxxx Xxxxxxxx ("Xx. Xxxxxxxx").
W I T N E S S E T H:
WHEREAS, Xx. Xxxxxxxx is the Chief Executive Officer of the Company;
WHEREAS, the Company and Southern wish to encourage Xx. Xxxxxxxx to
increase the profitability of the Company and to provide Xx. Xxxxxxxx an
interest in the Company's overall profitability;
NOW, THEREFORE, in consideration of the premises, and the agreements of
the parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. General Nature of Award. Subject to the terms and conditions of this
Agreement, the Company shall establish and maintain on behalf of Xx. Xxxxxxxx an
account on the Company's books and records (the "Account") which, if Xx.
Xxxxxxxx continues to be an employee of the Company, or any affiliate or
subsidiary of Southern (as set forth in Paragraph 15 hereof), shall entitle Xx.
Xxxxxxxx to receive on the fifth anniversary date of the effective date of this
Agreement (such five year period to be referred to as the "Performance Period")
an amount equal to the then Market Value (as defined below) of the equivalent of
Five Hundred Thousand Dollars ($500,000) of Market Value of Southern's common
stock deemed to have been purchased as of the effective date of this Agreement,
including reinvested dividends thereon, increased, if certain profitability
goals are met, by estimated income tax expenses.
2. Investment.
(a) As of the date hereof, the Company shall credit to Xx. Xxxxxxxx'x
Account that number of deemed shares (including fractional shares) of Southern's
common stock ("Common Stock") as shall equal $500,000 in Market Value (as
defined herein) determined as of the effective date of this Agreement (such
hypothetical shares to be referred to herein as the "Phantom Stock"). For
purposes of this Agreement, "Market Value" shall mean the average closing price
of the Common Stock as reported by the New York Stock Exchange for the ten
trading days immediately preceding the respective valuation date.
(b) As of the day of each calendar quarter in which occurs the payment
of dividends on Common Stock, there shall be credited to Xx. Xxxxxxxx'x Account
such additional shares of Phantom Stock (including fractional shares) as could
have been purchased at the Market Value on such day as follows:
(i) In the case of cash dividends, such additional shares of
Phantom Stock as could have been purchased with the dividends payable
on the number of shares of Phantom Stock credited to the Account
immediately prior to the dividend;
(ii) In the case of dividends payable in property other than
cash or Common Stock, such additional shares of Phantom Stock as could
have been purchased with the fair market value of the property which
would have been payable as dividends on the number of shares of Phantom
Stock credited to the Account immediately prior to the dividend; or
(iii) In the case of dividends payable in Common Stock, such
additional shares of Phantom Stock as would have been payable on the
number of shares of Phantom Stock credited to the Account immediately
prior to the dividend. (c) In the event that the number of outstanding
shares of Common Stock is changed through merger, consolidation,
reorganization, recapitalization, reincorporation, stock split, stock dividend
(in excess of 2%) or other change in the capital structure of Southern without
consideration, or upon the occurrence of any other extraordinary corporate event
involving the Common Stock causing a reduction in the value of the Common Stock,
such as a corporate spin off or split up, the number of shares of Common Stock
credited to the Account shall be proportionately adjusted by the Company so as
to preserve the value of the Account immediately prior to such event.
3. Vesting of Account. The Market Value of Xx. Xxxxxxxx'x Account shall
vest on the fifth anniversary of the effective date of this Agreement (the
"Vesting Date"), provided Xx. Xxxxxxxx is then an employee of the Company,
Southern, or an affiliate or subsidiary of Southern.
4. Valuation of Account. The value of Xx. Xxxxxxxx'x Account on any
date shall be based on the Market Value on such date multiplied by the number of
shares of Phantom Stock then credited to the Account, provided, however, that if
the annual profitability goals established for the Company and for Xx. Xxxxxxxx
by the Chief Executive Officer of Southern have been equaled or exceeded for
each fiscal year of the Company during the Performance Period as set forth on
Exhibit A, and as annually documented on Exhibit B of this Agreement, (the
"Profitability Goals"), the value of the Account shall be increased upon payout
to cover Xx. Xxxxxxxx'x federal and state income tax expense as reasonably
estimated by the Company for the year of payout (the "Tax Gross-up"). Failure to
meet the Profitability Goals for any year of the Performance Period shall result
in the forfeiture of the Tax Gross-up, provided, however, that Southern's Chief
Executive Officer may, in his sole discretion, determine after the close of the
Performance Period, that as a result of overall Company profitability and
individual performance during the entire Performance Period, that all or a
portion of the value of the Tax Gross-up shall nevertheless be paid. For
purposes of this Paragraph 4, in the event that Xx. Xxxxxxxx shall become
Southern's Chief Executive Officer, the goals and determinations hereunder shall
be made by the Compensation Committee of Southern's Board of Directors.
5. Payment of Account Balance. Provided that Xx. Xxxxxxxx is then an
employee of the Company, Southern, or an affiliate or subsidiary of Southern,
and, with respect to the Tax Gross-up amount, has also achieved the
Profitability Goals, the Company shall pay to Xx. Xxxxxxxx the value of his
Account, and, if applicable, the Tax Gross-up amount, in cash within ten (10)
days of the Vesting Date.
6. Election to Defer. By written election filed with Southern's Vice
President, Human Resources no less than thirteen (13) months prior to the
Vesting Date, Xx. Xxxxxxxx may defer all or a portion of the amount to be
received under this Agreement by having such amount contributed on his account
to The Southern Company Deferred Compensation Plan, in accordance with the terms
and conditions of such Plan.
7. Death, Permanent Disability, Termination Without Cause or
Termination for Good Reason. In the event of Xx. Xxxxxxxx'x termination of
employment with the Company prior to the payout of the value of the Account for
reasons of death, permanent disability, termination by the Company without
Cause, or termination by Xx. Xxxxxxxx for Good Reason following a Change in
Control, the Company shall pay to Xx. Xxxxxxxx, or his estate in the event of
death, the value of the Account determined as of the date of such termination,
plus, if the Profitability Goals have been met as of such date, the Tax Gross-up
amount. For purposes of this Section 7, the terms Cause, Change in Control, and
Good Reason shall have the meaning set forth in that certain Change in Control
Agreement, dated _________________, 1999, as amended from time to time, between
Southern, the Company and Xx. Xxxxxxxx (the "Change in Control Agreement"), the
defined terms of which are incorporated in this Section 7 by reference thereto.
8. Assignability. Neither Xx. Xxxxxxxx, his estate, his beneficiaries,
nor his legal 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
Agreement shall be void and have no effect.
9. Unsecured General Creditor. The Company shall neither reserve nor
specifically set aside funds for the payment of its obligations under this
Agreement, and such obligations shall be paid solely from the general assets of
the Company. Notwithstanding that Xx. Xxxxxxxx may be entitled to receive the
value of his Account under the terms and conditions of this Agreement, the
assets from which such amount may be paid shall at all times be subject to the
claims of the Company's creditors.
10. Amendment; Modification; Termination. Except as otherwise provided
herein, this Agreement may be amended, modified, or terminated only by a writing
executed by the parties hereto.
11. No Effect On Other Arrangements. It is expressly understood and
agreed that the payments made in accordance with this Agreement are in addition
to any other benefits or compensation to which Xx. Xxxxxxxx may be entitled or
for which he may be eligible, whether funded or unfunded, by reason of his
employment with the Company.
12. Tax Withholding. There shall be deducted from each payment under
this Agreement the amount of any tax required by any governmental authority to
be withheld and paid over by the Company to such governmental authority for the
account of Xx. Xxxxxxxx.
13. Compensation. Any compensation contributed on behalf of Xx.
Xxxxxxxx under this Agreement shall not be considered "compensation," as the
term is defined in The Southern Company Employee Savings Plan, The Southern
Company Employee Stock Ownership Plan, or The Southern Company Pension Plan.
Distributions from Xx. Xxxxxxxx'x Account shall not be considered wages,
salaries or compensation under any other employee benefit plan.
14. No Guarantee of Employment. No provision of this Agreement shall be
construed to affect in any manner the existing rights of the Company to suspend,
terminate, alter, modify, whether or not for Cause, the employment relationship
of Xx. Xxxxxxxx and the Company.
15. Transfer of Employment to Southern or a Southern Subsidiary of
Affiliate. In the event that Xx. Xxxxxxxx'x employment by the Company is
terminated during the Performance Period and Xx. Xxxxxxxx shall become
immediately re-employed by Southern or a subsidiary or an affiliate of Southern,
the Company shall assign this Agreement to Southern or such subsidiary or
affiliate, Southern shall accept such assignment or cause such affiliate or
subsidiary to accept such assignment, such assignee shall become the "Company"
for all purposes hereunder and the profitability goals set forth on Exhibit A
hereof shall be amended to appropriately reflect the performance of such
assignee. In the event of such assignment, the expense of this Agreement shall
be shared pro rata by the Company and any such assignee based upon the number of
months during the Performance Period Xx. Xxxxxxxx was employed by each.
16. Southern Company Change in Control Agreement. The benefits provided
for herein are intended to be in addition to any benefits to which Xx. Xxxxxxxx
may otherwise be entitled under the terms of the Change in Control Agreement.
17. Governing Law. This Agreement, and all its rights under it, shall
be governed by and construed in accordance with the laws of the State of
Georgia.
IN WITNESS WHEREOF, this Agreement has been executed by the parties
first listed above, effective this 27th day of February, 1998.
THE SOUTHERN COMPANY
By: ______________________________
GEORGIA POWER COMPANY
By:
Xx. XXXXXXXX
Xxxxx Xxxxx Xxxxxxxx
Attest:
By:
Exhibit A
Deferred Compensation Agreement
Schedule of Profitability Goals
For Performance Period
The Company shall achieve a rate of return which is equal to or above
the median of the Xxxxxxx Sachs comparator group of 77 utility companies for
each of the Company's fiscal years included in the Performance Period, excluding
extraordinary events occurring during any such fiscal years subject to the
approval of the Chief Executive Officer of The Southern Company. Achievement of
the goals shall be assessed annually by the Chief Executive Officer of The
Southern Company and documented in Exhibit B of this Agreement.
Exhibit B
Deferred Compensation Agreement
Annual Documentation of Profitability Goals
For Performance Period
