Exhibit 10.1

 

 

 
 
SOUTHERN COMPANY

 
 
OMNIBUS INCENTIVE COMPENSATION PLAN

 
 
FORM OF TERMS

 
 
PERFORMANCE SHARE AWARD  

 

A Performance Share Award is subject to the following terms and conditions:
 
 
 1.
Award:  A target number of units (which are referred to as “Performance Shares”
or “Performance Share Awards”) are awarded by the Compensation and Management
Succession Committee (the “Committee”) of The Southern Company (the “Company”)
board of directors which provides an opportunity to earn over a Performance
Period of three years if certain performance goal measures are met.  Performance
Share Awards are  governed by the 2006 Southern Company Omnibus Incentive
Compensation Plan, as amended from time to time (the “Plan”).  

 
 2.
Terms and Conditions:  The Performance Share Program Design Details (the “Design
Details”), an administrative document adopted by the Committee which is set
forth at https://hrdirect.southernco.com, contains additional provisions that
apply to Performance Share Awards.  Additionally, Performance Share Awards are
subject to all of the terms and conditions set forth in the Plan and any other
administrative documents adopted by the Committee.  If there is any
inconsistency between the key terms here in and the terms of the Plan or any
administrative document adopted by the Committee, the Plan’s terms and the
administrative document’s terms will supersede and replace the conflicting terms
of these Key Terms.

 
 3.
Number of Target Performance Shares:  A target number of Performance Shares
awarded to a participant shall be determined by the Committee.  At the end of
the Performance Period, participants shall receive Southern Company common stock
up to 200% of the target Performance Shares or as little as no Performance
Shares, depending upon actual performance compared to the performance goal
measures established by the Committee.

 
 4.
Performance Period:  The period during which the performance goal measures apply
(the “Performance Period”) shall be determined by the Committee at the time
awards are made to participants.

 
 5.
Performance Goal Measures:  The performance goal measures will be established by
the Committee early in the first year of the Performance Period.   Performance
is based on total shareholder return (“TSR”) and is measured against a group of
industry peers for the Performance Period.  The Committee determines the extent
to which the performance goal measures have been met and certifies the results
after the end of the Performance Period.

 

 
 

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Once TSR is calculated and compared to the TSR of the industry peers, the scale
below determines the percent of target that is paid.  Payout for performance
between points is interpolated on a straight-line basis.  200% is the maximum
payout percentage.

Southern Company’s Percentile Ranking in 3-Year TSR vs. Peers
Percent of Target Earned 
90th or above
200%
70th
150%
50th
100%
30th
50th
10th or below
0%

 
 6.
Vesting:  Performance Shares do notvest until the last day of the Performance
Period.   A participant must be employed on the vesting date  to receive any
payment (except in cases of death or retirement in which case the participant’s
award will be prorated based on the months of actual employment during the
performance period- see the Design Details for additional
information).  Termination for cause (as defined and determined by the
Committee) creates an exception to the vesting rule.  Such a termination for
cause results in the immediate forfeiture of any unpaid Performance Shares, even
if vested.

 
 7.
Form and Timing of Payout: Performance Share Awards will be paid in unrestricted
common stock of the Company (“Common Stock”) on or about March 1 following the
end of the Performance Period (but in no event later than March 15 immediately
following the end of the Performance Period).  The value of the shares
transferred to a participant for purposes of tax calculations will be determined
based on the market price at that time.  If the payout date is on a day the NYSE
is closed, then the market price on the next following business day will be
used.  The Performance Share Award payout is subject to withholding taxes and
thus the actual number of shares of Common Stock a participant may receive will
be reduced by the number of shares Common Stock reflecting the amount of
withholding taxes.

 
 8.
Transferability and Share Ownership:  Performance Shares are not transferable in
any manner.  Performance Shares have no voting rights and no dividends are paid
on them.  A participant is not considered to own any shares of Common Stock
based on the Performance Share Award until after performance is measured after
the end of the Performance Period and the Performance Shares are converted into
shares of Common Stock and issued to a participant. .

 
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