UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(A) of the
Securities Exchange Act Of 1934
Filed by the Registrant x | Filed by a Party other than the Registrant o |
Check the appropriate box:
o | Preliminary Proxy Statement |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e) (2)) |
x | Definitive Proxy Statement |
o | Definitive Additional Materials |
o | Soliciting Materials Pursuant to Rule 14a-12 |
THE SOUTHERN COMPANY
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
x | No fee required. |
o | Fee computed on table below per Exchange Act Rules 14a-6(i) (1) and 0-11. |
| (1) | Title of each class of securities to which transaction applies: |
| (2) | Aggregate number of securities to which transaction applies: |
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
| (4) | Proposed maximum aggregate value of transaction: |
| (5) | Total fee paid: |
o | Fee paid previously with preliminary materials. |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
| (1) | Amount Previously Paid: |
| (2) | Form, Schedule or Registration Statement No.: |
| (3) | Filing Party: |
| (4) | Date Filed: |
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(5) | Consider and vote on a stockholder proposal if presented at the meeting as described in Item No. 5 of the Proxy Statement; and |
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Q: | How do I give voting instructions? | |
A: | You may attend the meeting and give instructions in person or give instructions by the Internet, by telephone or by mail. Information for giving instructions is on the proxy form. The Proxies, named on the enclosed proxy form, will vote all properly executed proxies that are delivered pursuant to this solicitation and not subsequently revoked in accordance with the instructions given by you. | |
Q: | Can I change my vote? | |
A: | Yes, you may revoke your proxy by submitting a subsequent proxy or by written request received by the Company’s corporate secretary before the meeting. | |
Q: | Who can vote? |
A: | All stockholders of record on the record date of March 31, 2008. On that date, there were 767,624,255 shares of Southern Company common stock (“Common Stock”) outstanding and entitled to vote. |
Q: | How much does each share count? | |
A: | Each share counts as one vote, except votes for Directors may be cumulative. Abstentions that are marked on the proxy form are included for the purpose of determining a quorum, but shares that a broker fails to vote are not counted toward a quorum. Neither is counted for or against the matters being considered. | |
Q: | What does it mean if I get more than one proxy form? | |
A: | You will receive a proxy form for each account that you have. Please vote proxies for all accounts to ensure that all your shares are voted. If you wish to consolidate multiple registered accounts, please contact Stockholder Services at(800) 554-7626. | |
Q: | Can the Company’s Proxy Statement and Annual Report be accessed from the Internet? | |
A: | Yes. You can access the Company’s website at www.southerncompany.com to view these documents. | |
Q: | Does the Company offer electronic delivery of proxy materials? | |
A: | Yes. Most stockholders can elect to receive ane-mail that will provide electronic links to the Annual Report and Proxy Statement. Opting to receive your proxy materials on-line will save us the cost of producing and mailing documents and also will give you an electronic link to the proxy voting site. |
You may sign up for electronic delivery when you vote your proxy via the Internet or: | ||
n Go to our investor web site at http://investor.southerncompany.com/; | ||
n Click on the word “Enroll” for Electronic Delivery of Proxy Materials; and | ||
n Follow the directions provided to complete your enrollment. |
Once you enroll for electronic delivery, you will receive proxy materials electronically as long as your account remains active or until you cancel your enrollment. If you consent to electronic access, you will be responsible for your usual Internet-related charges (e.g., on-line fees and telephone charges) in connection with electronic viewing and printing of proxy materials and annual reports. The Company will continue to distribute printed materials to stockholders who do not consent to access these materials electronically. |
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Q: | What is “householding”? | |
A: | Certain beneficial owners of the Company’s common stock, sharing a single address, may receive only one copy of the Proxy Statement and Annual Report unless the broker, bank or nominee has received contrary instructions from any beneficial owner at that address. This practice — known as householding — is designed to reduce printing and mailing costs. If a beneficial owner does not wish to participate in householding, he or she may contact Stockholder Services at(800) 554-7626 or at 30 Ivan Allen Jr. Boulevard NW, Atlanta, Georgia 30308 and ask to receive a Proxy Statement or Annual Report. As noted earlier, beneficial owners may view the Proxy Statement and Annual Report on the Internet. | |
Q: | When are stockholder proposals due for the 2009 Annual Meeting of Stockholders? | |
A: | The deadline for the receipt of stockholder proposals to be considered for inclusion in the Company’s proxy materials for the 2009 Annual Meeting of Stockholders is December 15, 2008. Proposals must be submitted in writing to Patricia L. Roberts, Assistant Corporate Secretary, Southern Company, 30 Ivan Allen Jr. Boulevard NW, Atlanta, Georgia 30308. Additionally, the proxy solicited by the Board of Directors for next year’s meeting will confer discretionary authority to vote on any stockholder proposal presented at that meeting that is not included in the Company’s proxy materials unless the Company is provided written notice of such proposal no later than February 28, 2009. | |
Q: | Who pays the expense of soliciting proxies? | |
A: | The Company pays the cost of soliciting proxies. The officers or other employees of the Company or its subsidiaries may solicit proxies to have a larger representation at the meeting. The Company has retained Laurel Hill Advisory Group to assist with the solicitation of proxies for a fee not to exceed $10,000, plus reimbursement of out-of-pocket expenses. |
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n | Code of Ethics | |
n | Political Contributions Policy and Report |
n | By-laws of the Company |
n | Executive Stock Ownership Guidelines | |
n | Board Committee Charters | |
n | Board of Directors — Background and Experience | |
n | Management Council — Background and Experience | |
n | SEC filings | |
n | Composition of Board Committees | |
n | Link for online communication with Board of Directors |
n | The Director was employed by the Company or whose immediate family member was an executive officer of the Company. |
n | The Director received, or whose immediate family member received, during any 12 month period direct compensation from the Company of more than $100,000, other than director and committee fees. (Compensation received by an immediate family member for services as a non-executive employee of the Company need not be considered.) |
n | The Director was affiliated with or employed by, or whose immediate family member was affiliated or employed in a professional capacity by, a present or former external auditor of the Company. | |
n | The Director was employed, or whose immediate family member was employed, as an executive officer of a company where any member of the Company’s present executives serve on that company’s compensation committee. |
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n | A company for which the Director currently serves as an executive officer or an employee or whose immediate family member currently serves as an executive officer that makes payments to or receives payments from the Company for property or services in an amount which in any single fiscal year exceeds the greater of $1,000,000 or two percent of that company’s consolidated gross revenues. |
Annual retainers: | ||
n | $70,000 of which $30,000 was deferred in Common Stock until Board membership ends | |
n | $10,000 if serving as chair of a standing Board committee with the exception that the chair of the Audit Committee received $25,000 |
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Equity grants: |
n | 1,000 additional shares of Common Stock in quarterly grants of 250 shares, deferred until Board membership ends |
Meeting fees: | ||
n | $2,500 for participation in a meeting of the Board | |
n | $2,000 for participation in a meeting of a committee of the Board other than a meeting of the Audit Committee | |
n | $4,000 for attendance in person at a meeting of the Audit Committee | |
n | $2,000 for participation by telephone in a meeting of the Audit Committee |
n | $2,000 for each day of a visit to a plant or office of the Company and for any other business meeting at which the Director participated as a representative of the Company |
Annual retainers: | ||
n | $85,000 cash retainer | |
n | $12,500 if serving as a chair of a committee of the Board |
n | $12,500 if serving as the Presiding Director of the Board |
Equity grant: | ||
n | $90,000 in deferred Common Stock units until Board membership ends | |
Meeting fees: | ||
n | Meeting fees are not paid for participation in the initial eight meetings of the Board in a calendar year. If more than eight meetings of the Board are held in a calendar year, $2,500 will be paid for participation in each meeting of the Board beginning with the ninth meeting. | |
n | Meeting fees are no longer paid for participation in a meeting of a committee of the Board. |
• | in Common Stock units which earn dividends as if invested in Common Stock and are distributed in shares of Common Stock upon leaving the Board |
• | at prime interest which is paid in cash upon leaving the Board |
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Change in | ||||||||||||||||||||||||||||
Pension Value | ||||||||||||||||||||||||||||
Fees | and | |||||||||||||||||||||||||||
Earned | Non-Equity | Nonqualified | ||||||||||||||||||||||||||
or Paid | Stock | Option | Incentive Plan | Deferred | All Other | |||||||||||||||||||||||
in Cash | Awards | Awards | Compensation | Compensation | Compensation | |||||||||||||||||||||||
Name | ($)(1) | ($)(2)(3) | ($) | ($) | Earnings ($) | ($)(4) | Total ($) | |||||||||||||||||||||
Juanita Powell Baranco | 92,500 | 66,643 | — | — | — | — | 159,143 | |||||||||||||||||||||
Dorrit J. Bern | 106,500 | 66,643 | — | — | — | — | 173,143 | |||||||||||||||||||||
Francis S. Blake | 81,000 | 66,643 | — | — | — | — | 147,643 | |||||||||||||||||||||
Jon A. Boscia(5) | — | — | — | — | — | — | — | |||||||||||||||||||||
Thomas F. Chapman | 108,500 | 66,643 | — | — | — | — | 175,143 | |||||||||||||||||||||
H. William Habermeyer, Jr.(6) | 71,666 | 55,559 | — | — | — | — | 127,225 | |||||||||||||||||||||
Warren A. Hood, Jr.(7) | 19,800 | — | — | — | — | 391 | 20,191 | |||||||||||||||||||||
Donald M. James | 93,500 | 66,643 | — | — | — | — | 160,143 | |||||||||||||||||||||
Zack T. Pate(8) | 76,334 | 14,889 | — | — | — | 8,061 | 99,284 | |||||||||||||||||||||
J. Neal Purcell | 117,500 | 66,643 | — | — | — | — | 184,143 | |||||||||||||||||||||
William G. Smith, Jr. | 96,500 | 66,643 | — | — | — | — | 163,143 | |||||||||||||||||||||
Gerald J. St. Pé | 108,500 | 66,643 | — | — | — | 114 | 175,257 | |||||||||||||||||||||
(1) | Includes amounts voluntarily deferred in the Director Deferred Compensation Plan. | |
(2) | Includes fair market value of equity grants on grant dates and retainer compensation required to be deferred in the Director Deferred Compensation Plan. All such stock awards are vested immediately upon grant. | |
(3) | The aggregate number of Common Stock units held at year-end in the Director Deferred Compensation Plan for each person is provided in the Stock Ownership Table under the column Deferred Stock Units. | |
(4) | Consists of tax“gross-ups” for an award given to Dr. Pate upon his retirement from the Board and reimbursement for taxes associated with spousal air travel. | |
(5) | Mr. Boscia was elected a Director of the Company effective December 7, 2007. No compensation was paid to Mr. Boscia during 2007. | |
(6) | Mr. Habermeyer was elected a Director of the Company effective March 1, 2007. | |
(7) | Mr. Hood was elected a Director of the Company effective December 7, 2007. Mr. Hood’s compensation includes compensation earned in 2007 as a Director of Mississippi Power Company, a wholly-owned subsidiary of the Company. Mr. Hood resigned as a Director of Mississippi Power Company effective December 6, 2007. | |
(8) | Dr. Pate retired as a Director of the Company on May 23, 2007. |
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Committee Charters |
Audit Committee: | ||
n | Members are Mr. Smith,(Chair), Ms. Bern, Mr. Blake and Mr. Hood(1) |
n | Met 10 times in 2007 |
n | Oversees the Company’s financial reporting, audit processes, internal controls and legal, regulatory and ethical compliance; appoints the Company’s independent registered public accounting firm, approves its services and fees and establishes and reviews the scope and timing of its audits; reviews and discusses the Company’s financial statements with management and the independent registered public accounting firm, including critical accounting policies and practices, material alternative financial treatments within generally accepted accounting principles, proposed adjustments, control recommendations, significant management judgments and accounting estimates, new accounting policies, changes in accounting principles, any disagreements with management and other material written communications between the internal auditorsand/or the independent registered public accounting firm and management; and recommends the filing of the Company’s annual financial statements with the SEC. |
Compensation and Management Succession Committee: | ||
n | Members are Mr. Purcell,(Chair), Mr. Boscia, Mr. Habermeyer and Mr. James(1) | |
n | Met eight times in 2007 | |
n | Evaluates performance of executive officers and establishes their compensation, administers executive compensation plans and reviews management succession plans. Annually reviews a tally sheet of all components of the Chief Executive Officer’s compensation and takes actions required of it under the Pension Plan for Employees of the Company. |
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• | Considering compensation for the named executive officers in the context of all of the components of total compensation. |
• | Considering annual adjustments to pay over the course of two meetings and requiring more than one meeting to make other important decisions. |
• | Receiving meeting materials several days in advance of meetings. |
• | Having regular executive sessions of Committee members only. |
• | Having direct access to outside compensation consultants. |
• | Conducting a performance/payout analysis versus peer companies for the annual incentive program to provide a check on the Company’s goal-setting process. |
Finance Committee: | ||
n | Members are Mr. James, (Chair), Mr. Boscia and Mr. Purcell(1) | |
n | Met eight times in 2007 | |
n | Reviews the Company’s financial matters, recommends actions such as dividend philosophy to the Board and approves certain capital expenditures |
Governance Committee: | ||
n | Members are Ms. Baranco, (Chair), Mr. Chapman and Mr. St. Pé(1) |
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n | Met eight times in 2007 | |
n | Oversees the composition of the Board and its committees, determines non-employee Directors’ compensation, maintains the Company’s Corporate Governance Guidelines and coordinates the performance evaluations of the Board and its committees. |
Nuclear/Operations Committee:(1) | ||
n | Members are Mr. Habermeyer, (Chair), Ms. Baranco and Mr. St. Pé(2) | |
n | Oversees significant information, activities and events relative to significant operations of the Company including nuclear and other generation facilities, transmission and distribution, fuel and information technology initiatives. | |
n | Attended seven meetings in 2007 |
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Shares Beneficially Owned Include: | ||||||||||||||||
Shares | ||||||||||||||||
Individuals | ||||||||||||||||
Shares | Have Rights to | |||||||||||||||
Beneficially | Deferred Stock | Acquire within | Shares Held by | |||||||||||||
Directors, Nominees and Executive Officers | Owned(1) | Units(2) | 60 days(3) | Family Members(4) | ||||||||||||
Juanita Powell Baranco | 9,542 | 9,062 | ||||||||||||||
Dorrit J. Bern | 41,804 | 40,304 | ||||||||||||||
Francis S. Blake | 16,760 | 16,560 | ||||||||||||||
Jon A. Boscia | 4,000 | |||||||||||||||
Thomas F. Chapman | 27,013 | 27,013 | ||||||||||||||
Thomas A. Fanning | 287,834 | 283,095 | ||||||||||||||
Michael D. Garrett | 168,476 | 168,550 | ||||||||||||||
H. William Habermeyer, Jr. | 1,551 | 1,551 | ||||||||||||||
G. Edison Holland, Jr. | 262,498 | 256,348 | ||||||||||||||
Warren A. Hood, Jr. | 3,525 | 3,525 | ||||||||||||||
Donald M. James | 40,956 | 38,956 | ||||||||||||||
Charles D. McCrary | 263,133 | 258,108 | ||||||||||||||
J. Neal Purcell | 28,127 | 21,903 | 224 | |||||||||||||
David M. Ratcliffe | 1,539,731 | 1,522,922 | ||||||||||||||
William G. Smith, Jr. | 12,360 | 8,723 | ||||||||||||||
Gerald J. St. Pé | 94,587 | 41,049 | 8,537 | |||||||||||||
Directors, Nominees and Executive Officers as a Group (21 people) | 3,732,711 | 208,646 | 3,358,830 | 8,776 | ||||||||||||
(1) | “Beneficial ownership” means the sole or shared power to vote, or to direct the voting of, a security, or investment power with respect to a security, or any combination thereof. |
(2) | Indicates the number of Deferred Stock Units held under the Director Deferred Compensation Plan. |
(3) | Indicates shares of Company common stock that certain executive officers have the right to acquire within 60 days. Shares indicated are included in the Shares Beneficially Owned column. |
(4) | Each Director disclaims any interest in shares held by family members. Shares indicated are included in the Shares Beneficially Owned column. |
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Juanita Powell Baranco Age: Director since: Board committees: Principal occupation: Other directorships: | 58 2006 Governance (chair), Nuclear/Operations Executive vice president and chief operating officer of Baranco Automotive Group, automobile sales Cox Radio Incorporated | |||
Dorrit J. Bern Age: Director since: Board committees: Principal occupation: Other directorships: | 57 1999 Audit Chairman of the board, president and chief executive officer of Charming Shoppes, Inc., multi-channel apparel, home, food and retail Charming Shoppes, Inc., OfficeMax, Inc. | |||
Francis S. Blake Age: Director since: Board committees: Principal occupation: Recent business experience: Other directorships: | 58 2004 Audit Chairman of the board and chief executive officer of The Home Depot, home improvement Served as U.S. Deputy Secretary of Energy from May 2001 to April 2002 and as executive vice president of The Home Depot until January 2007 when he assumed his current position The Home Depot, Inc. | |||
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Jon A. Boscia Age: Director since: Board committees: Principal occupation: Recent business experience: Other directorships: | 55 2007 Compensation and Management Succession, Finance President and chief executive officer of Boardroom Advisors, LLC, governance consulting Served as chairman of the board and chief executive officer of Lincoln Financial Group, insurance, institutional investments, comprehensive financial planning and advisory services, until his retirement in 2007. None | |||
Thomas F. Chapman Age: Director since: Board committees: Principal occupation: Recent business experience: Other directorships: | 64 2000, Presiding Director since May 23, 2007 Governance Retired chairman of the board and chief executive officer of Equifax, Inc., information services, data analytics, transaction processing and consumer financial products Served as chairman of the board and chief executive officer of Equifax, Inc. until his retirement in 2005 None | |||
H. William Habermeyer, Jr. Age: Director since: Board committees: Principal occupation: Recent business experience: Other directorships: | 65 2007 Nuclear/Operations (chair), Compensation and Management Succession Retired president and chief executive officer of Progress Energy Florida, Inc., electric utility Served as president and chief executive officer of Progress Energy Florida, Inc. until his retirement in 2006 Raymond James Financial Services, Inc., USEC Inc. | |||
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Warren A. Hood, Jr. Age: Director since: Board committees: Principal occupation: Other directorships: | 56 2007 Audit Chairman of the board and chief executive officer of Hood Companies, Inc., packaging and construction products BancorpSouth Bank, Hood Companies, Inc. | |||
Donald M. James Age: Director since: Board committees: Principal occupation: Other directorships: | 59 1999 Finance (chair), Compensation and Management Succession Chairman of the board and chief executive officer of Vulcan Materials Company, construction materials Vulcan Materials Company, Wachovia Corporation | |||
J. Neal Purcell Age: Director since: Board committees: Principal occupation: Recent business experience: Other directorships: | 66 2003 Compensation and Management Succession (chair), Finance Retired vice-chairman, audit operations, of KPMG, public accounting Served as KPMG’s vice-chairman in charge of National Audit Practice Operations from October 1998 until his retirement in 2002 Kaiser Permanente Healthcare and Hospitals, Synovus Financial Corporation | |||
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David M. Ratcliffe Age: Director since: Principal occupation: Recent business experience: Other directorships: | 59 2003 Chairman of the board, president and chief executive officer of the Company Served as president and chief executive officer of Georgia Power Company from May 1999 until January 2004 and as chairman and chief executive officer of Georgia Power Company from January 2004 until April 2004. He served as executive vice president of the Company from May 1999 until April 2004, and as president of the Company from April 2004 until July 2004, when he assumed his current position CSX Corporation, Southern system companies — Alabama Power Company, Georgia Power Company and Southern Power Company | |||
William G. Smith, Jr. Age: Director since: Board committees: Principal occupation: Other directorships: | 54 2006 Audit (chair) Chairman of the board, president and chief executive officer of Capital City Bank Group, Inc. Capital City Bank Group, Inc. | |||
Gerald J. St. Pé Age: Director since: Board committees: Principal occupation: Recent business experience: Other directorships: | 68 1995 Governance, Nuclear/Operations Former president of Ingalls Shipbuilding and retired executive vice president of Litton Industries Served as chief operating officer of Northrop-Grumman Ship Systems from August 1999 to November 2001 Merchants and Marine Bank, McLand Disposal, Signal International | |||
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Background of This Item |
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Amendments |
• | The By-laws will be amended to remove provisions about cumulative voting for directors in uncontested elections and |
• | The plurality voting provisions in the By-laws will be replaced with provisions requiring that, in order to be elected in an uncontested election, a nominee for director must receive the affirmative vote of a majority of the votes cast at a meeting of stockholders, provided that, in contested elections, the affirmative vote of a plurality of the votes cast will be required to elect a director. |
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Background of This Item |
Amendment |
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Dorrit J. Bern
Francis S. Blake
Warren A. Hood, Jr.
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2007 | 2006 | |||||||
(In thousands) | ||||||||
Audit Fees(a) | $ | 12,525 | $ | 12,994 | ||||
Audit-Related Fees(b) | 913 | 673 | ||||||
Tax Fees(c) | 0 | 90 | ||||||
All Other Fees | 0 | 0 | ||||||
Total | $ | 13,438 | $ | 13,757 | ||||
(a) | Includes services performed in connection with financing transactions | |
(b) | Includes benefit plan and other non-statutory audit services and accounting consultations in both 2007 and 2006 | |
(c) | Includes review services in connection with the consolidated federal tax return and tax compliance licensing and training costs |
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• | Our actual earnings per share (“EPS”) and business unit performance, which includes return on equity (“ROE”) or net income, compared to target performance levels established early in the year, determine the ultimate annual incentive program payouts. |
• | Common Stock price changes result in higher or lower ultimate values of stock options. |
• | Our dividend payout and total shareholder return compared to those of our industry peers lead to higher or lower payouts under the Performance Dividend Program (“performance dividends”). |
Intended Role and What the Element | ||||
Pay Element | Rewards | Why We Use the Element | ||
Base Salary | Base salary is pay for competence in the executive role, with a focus on scope of responsibilities. | • Market practice. • Provides a threshold level of cash compensation for job performance. | ||
Annual Incentive | The Company’s annual incentive program rewards achievement of operational, EPS and business unit financial goals. | • Market practice. • Focuses attention on achievement of short-term goals that ultimately works to fulfill our mission to customers and leads to increased stockholder value in the long term. | ||
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Intended Role and What the Element | ||||
Pay Element | Rewards | Why We Use the Element | ||
Long-Term Incentive: Stock Options | Stock options reward price increases in the Common Stock over the market price on date of grant, over a 10-year term. | • Market practice. • Performance-based compensation. • Aligns executives’ interests with those of stockholders. | ||
Long-Term Incentive: Performance Dividends | Performance dividends provide cash compensation dependent on the number of stock options held at year end, the Company’s dividends paid during the year and four-year total shareholder return versus industry peers. | • Market practice. • Performance-based compensation. • Enhances the value of stock options and focuses executives on maintaining a significant dividend yield for stockholders. • Aligns executives’ interests with stockholders’ interests since payouts are dependent on the returns realized by our stockholders versus those of our industry peers. | ||
Retirement Benefits | • The Southern Company Deferred Compensation Plan provides the opportunity to defer to future years up to 50% of base salary and all or part of annual incentives or performance dividends in either a prime interest rate or Common Stock account. • Executives participate in employee benefit plans available to all employees of the Company, including a 401(k) savings plan and the funded Southern Company Pension Plan (“Pension Plan”). • The Supplemental Benefit Plan counts pay, including deferred salary, ineligible to be counted under the Pension Plan and the 401(k) plan due to Internal Revenue Service rules. • The Supplemental Executive Retirement Plan counts annual incentive pay above 15% of base salary for pension purposes. • Additional years of service agreements provide enhanced retirement benefits as if a participant had worked additional years at the Company. | • Market practice. • Permitting compensation deferral is a cost-effective method of providing additional cash flow to the Company while enhancing the retirement savings of executives. • The purpose of these supplemental plans is to eliminate the effect of tax limitations on the payment of retirement benefits. • Additional years of service enhancements are provided on an as-needed basis to attract and retain executives who were employed by the Company earlier in their careers. • Represents an important component of competitive market-based compensation in our peer group and generally. | ||
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Intended Role and What the Element | ||||
Pay Element | Rewards | Why We Use the Element | ||
Perquisites and Other Personal Benefits | • Personal financial planning maximizes the perceived value of our executive compensation program to executives and allows executives to focus on Company operations. • Home security systems lower our risk of harm to executives. • Club memberships are provided primarily for business use. | • Perquisites benefit both the Company and executives, at low cost to the Company. | ||
Post-Termination Pay | • Change-in-control agreements provide severance pay, accelerated vesting and payment of short- and long-term incentive awards upon a change in control of the Company coupled with involuntary termination not for “Cause” or a voluntary termination for “Good Reason.” | • Market practice. • Providing protections to executives upon a change in control minimizes disruption during a pending or anticipated change in control. • Payment and vesting occur only upon the occurrence of both an actual change in control and loss of the executive’s position. | ||
Allegheny Energy, Inc. Alliant Energy Corporation Ameren Corporation American Electric Power Company, Inc. CenterPoint Energy, Inc. CMS Energy Corporation Consolidated Edison, Inc. Constellation Energy Group, Inc. Dominion Resources Inc. DTE Energy Company | Duke Energy Corporation Edison International Energy East Corporation Entergy Corporation Exelon Corporation FirstEnergy Corp. FPL Group, Inc. Great Plains Energy Incorporated Hawaiian Electric Industries, Inc. KeySpan Corporation | NiSource Inc. Northeast Utilities NSTAR OGE Energy Corp. Pepco Holdings, Inc. PG&E Corporation Pinnacle West Capital Corporation PNM Resources, Inc. PPL Corporation Progress Energy, Inc. | Public Service Enterprise Group Incorporated Puget Energy, Inc. SCANA Corporation Sempra Energy Sierra Pacific Resources TECO Energy, Inc. TXU Corp. Vectren Corporation Wisconsin Energy Corporation WPS Resources Corporation Xcel Energy Inc. | |||
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Total Target | ||||||||||||||||
Annual | Long-Term | Compensation | ||||||||||||||
Name | Salary | Incentive | Incentive | Opportunity | ||||||||||||
D. M. Ratcliffe | $ | 1,075,700 | $ | 1,075,700 | $ | 4,579,700 | $ | 6,731,100 | ||||||||
T. A. Fanning | $ | 616,000 | $ | 463,000 | $ | 845,000 | $ | 1,924,000 | ||||||||
M. D. Garrett | $ | 621,000 | $ | 465,750 | $ | 854,000 | $ | 1,940,750 | ||||||||
C. D. McCrary | $ | 634,000 | $ | 475,500 | $ | 871,000 | $ | 1,980,500 | ||||||||
G. E. Holland, Jr. | $ | 542,000 | $ | 325,200 | $ | 643,000 | $ | 1,510,200 | ||||||||
• | As discussed above, the Compensation Committee targets total target compensation opportunities for senior executives as a group at market. Therefore, some executives may be paid somewhat above and others somewhat below market. This practice allows for minor differentiation based on time in the position, scope of responsibilities and individual performance. The differences in the total pay opportunities for each named executive officer are based almost exclusively on the differences indicated by the market data for persons holding similar positions. However, in setting the total target compensation opportunities for Messrs. Garrett and McCrary in 2007, the Compensation Committee recognized that Mr. McCrary has been in his position considerably longer than Mr. Garrett and that while the market data may distinguish between their two positions based on the size of the business units they lead, the Company’s CEO and the Compensation Committee consider their positions equivalent in terms of scope of responsibility. They lead the Company’s two largest business units. The average total target compensation opportunities for the named executive officers for 2007 were four percent above the market data described above. However, because of the use of market data from a large number of peer companies for positions that are not identical in terms of scope of responsibility from company to company, we do not consider this difference material and we continue to believe that our compensation program is market-appropriate. |
• | In 2007, the Compensation Committee engaged an additional executive compensation consulting firm, Towers Perrin, to conduct a broad assessment of the Company’s executive compensation program. Benchmarking data as well as actual levels of payouts made at our peer companies was reviewed. The consulting firm was directed to review the level of total target pay opportunities, the weight of each primary pay component and the annual and long-term incentive goal metrics. Based on the findings from this review, the Company and the Compensation Committee continue to believe that our executive compensation program provides the appropriate level and mix of compensation for the senior management of the Company, including the named executive officers. |
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• | In 2004, the Compensation Committee received from its executive compensation consulting firm a detailed comparison of our executive benefits program to the benefits of a group of other large utilities and general industry companies. The results indicated that the Company’s executive benefits program was slightly below market. The Compensation Committee plans to have this study updated in 2008. |
• | Continued industry-leading reliability and customer satisfaction, while maintaining our low retail prices relative to the national average; and |
• | Meeting increased energy demand with the best economic and environmental choices. |
• | EPS Growth — A continuation of growing EPS an average of five percent per year from a base, excluding earnings from synthetic fuel investments, established in 2002. The target goal shown below is five percent greater than the goal established for 2006. |
• | ROE in the top quartile of comparable electric utilities. |
• | Dividend Growth. |
• | Long-term total shareholder return. |
• | Financial Integrity — An attractive risk-adjusted return, sound financial policy and a stable “A” credit rating. |
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• | Operational goals for 2007 were safety, customer service, plant availability, transmission and distribution system reliability and inclusion. Each of these operational goals is explained in more detail under “Goal Details” below. The result of all operational goals is averaged and multiplied by the bonus impact of the EPS and business unit financial goals. The amount for each goal can range from 0.90 to 1.10, or 0.00 if a threshold performance level is not achieved as more fully described below. The level of achievement for each operational goal is determined and the results are averaged. Each of our business units has operational goals. For Messrs. Garrett and McCrary, the payout is adjusted up or down based on the operational goal results for Georgia Power Company and Alabama Power Company, respectively. For Messrs. Ratcliffe, Fanning and Holland, it is calculated using the corporate-wide weighted average of the operational goal results. |
• | EPS is weighted at 50% of the financial goals. EPS is defined as earnings from continuing operations divided by average shares outstanding during the year, excluding earnings from synthetic fuel investments. The EPS performance measure is applicable to all participants in the Performance Pay Program, including the named executive officers. |
• | Business unit financial performance is weighted at 50% of the financial goals. For our traditional utility operating companies (Alabama Power Company, Georgia Power Company, Gulf Power Company and Mississippi Power Company), the business unit financial performance goal is ROE, which is defined as the operating company’s net income divided by average equity for the year. For our other business units, we establish financial performance measures that are tailored to each business unit. |
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Level of | Customer | |||||||||||||
Performance | Service | Reliability | Availability | Safety | Inclusion | |||||||||
Maximum (1.10) | Top quartile for each customer segment | Improve historical performance | 2.00 | % | 1.00 | Significant improvement | ||||||||
Target (1.00) | Top quartile overall | Maintain historical performance | 2.75 | % | 1.50 | Improve | ||||||||
Threshold (0.90) | 3rd quartile | Below historical performance | 3.75 | % | 2.00 | Below expectations | ||||||||
0 Trigger | 4th quartile | Significant issues | 6.00 | % | >2.00 | Significant issues | ||||||||
Payout Below | ||||||||||||||||||||
Payout Factor at | Threshold for | |||||||||||||||||||
EPS Excluding | Highest Level of | Operational | ||||||||||||||||||
Level of | Synthetic Fuel | Payout | Operational Goal | Goal | ||||||||||||||||
Performance | Investment Earnings | ROE | Factor | Achievement | Achievement | |||||||||||||||
Maximum | $2.265 | 14.25 | % | 2.00 | 2.20 | 0.00 | ||||||||||||||
Target | $2.155 | 13.50 | % | 1.00 | 1.10 | 0.00 | ||||||||||||||
Threshold | $2.08 | 10.50 | % | 0.25 | 0.275 | 0.00 | ||||||||||||||
Below threshold | <$2.08 | <10.50 | % | 0.00 | 0.00 | 0.00 | ||||||||||||||
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EPS, | ||||||||||||||||||||||||||
Excluding | Business Unit | |||||||||||||||||||||||||
Operational | Synthetic | EPS Goal | Financial | Total Weighted | Total | |||||||||||||||||||||
Goal | Fuel | Performance | Performance | Financial | Payout | |||||||||||||||||||||
Multiplier | Investment | Factor | Business Unit | Factor | Performance | Factor | ||||||||||||||||||||
Name | (A) | Earnings | (50% Weight) | Financial Performance | (50% Weight) | Factor (B) | (A x B) | |||||||||||||||||||
D. M. Ratcliffe | 1.08 | $ | 2.21 | 1.69 | Corporate average | 1.25 | 1.47 | 1.59 | ||||||||||||||||||
T. A. Fanning | 1.08 | $ | 2.21 | 1.69 | Corporate average | 1.25 | 1.47 | 1.59 | ||||||||||||||||||
M. D. Garrett | 1.08 | $ | 2.21 | 1.69 | 13.50% ROE | 1.00 | 1.34 | 1.45 | ||||||||||||||||||
C. D. McCrary | 1.09 | $ | 2.21 | 1.69 | 13.73% ROE | 1.31 | 1.50 | 1.63 | ||||||||||||||||||
G. E. Holland, Jr. | 1.08 | $ | 2.21 | 1.69 | Corporate average | 1.25 | 1.47 | 1.59 | ||||||||||||||||||
Target Annual | Actual Annual | |||||||
Name | Incentive Opportunity | Incentive Payout | ||||||
D. M. Ratcliffe | $ | 1,075,700 | $ | 1,710,336 | ||||
T. A. Fanning | $ | 463,000 | $ | 733,923 | ||||
M. D. Garrett | $ | 465,750 | $ | 675,223 | ||||
C. D. McCrary | $ | 475,500 | $ | 774,728 | ||||
G. E. Holland, Jr. | $ | 325,200 | $ | 516,633 | ||||
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Number of Stock | ||||||||||||||||||||
Options Granted | ||||||||||||||||||||
(Guideline | ||||||||||||||||||||
Guideline | Average Daily | Amount/Average | ||||||||||||||||||
Name | Guideline% | Salary | Amount | Stock Price | Daily Stock Price) | |||||||||||||||
D. M. Ratcliffe | 1,703% of Salary | $ | 1,075,700 | $ | 18,318,667 | $ | 34.06 | 537,835 | ||||||||||||
T. A. Fanning | 550% of Salary | $ | 616,000 | $ | 3,388,000 | $ | 34.06 | 99,382 | ||||||||||||
M. D. Garrett | 550% of Salary | $ | 621,000 | $ | 3,415,500 | $ | 34.06 | 100,261 | ||||||||||||
C. D. McCrary | 550% of Salary | $ | 634,000 | $ | 3,487,000 | $ | 34.06 | 102,333 | ||||||||||||
G. E. Holland, Jr. | 475% of Salary | $ | 542,000 | $ | 2,574,500 | $ | 34.06 | 75,523 | ||||||||||||
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Allegheny Energy, Inc. | FirstEnergy Corporation | Public Service Enterprise Group | ||
Alliant Energy Corporation | FPL Group, Inc. | Incorporated | ||
Ameren Corporation | NiSource Inc. | Puget Energy, Inc. | ||
American Electric Power Company, Inc. | Northeast Utilities | SCANA Corporation | ||
Avista Corporation | NorthWestern Corporation | Sempra Energy | ||
Consolidated Edison, Inc. | NSTAR | Sierra Pacific Resources | ||
DTE Energy Company | OGE Energy Corp. | Westar Energy, Inc. | ||
Energy East Corporation | Pepco Holdings, Inc. | Wisconsin Energy Corporation | ||
Entergy Corporation | Pinnacle West Capital Corporation | Xcel Energy Inc. | ||
Exelon Corporation | Progress Energy, Inc. | |||
Payout (% of Full | ||||
Performance vs. Peer Group | Year’s Dividend Paid) | |||
90th percentile or higher | 100 | % | ||
50th percentile (Target) | 50 | % | ||
10th percentile or lower | 0 | % | ||
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Allegheny Energy, Inc. | Edison International | Progress Energy, Inc. | ||
Alliant Energy Corporation | Energy East Corporation | Puget Energy, Inc. | ||
Ameren Corporation | Entergy Corporation | SCANA Corporation | ||
American Electric Power Company, Inc. | Exelon Corporation | Sempra Energy | ||
Aquila, Inc. | FPL Group, Inc. | Sierra Pacific Resources | ||
Avista Corporation | Hawaiian Electric Industries, Inc. | TECO Energy, Inc. | ||
CenterPoint Energy, Inc. | NiSource Inc. | UIL Holdings Corporation | ||
CMS Energy Corporation | Northeast Utilities | Unisource Energy Corporation | ||
Consolidated Edison, Inc. | NSTAR | Vectren Corporation | ||
DPL Inc. | Pepco Holdings, Inc. | Westar Energy, Inc. | ||
DTE Energy Company | PG&E Corporation | Wisconsin Energy Corporation | ||
Duke Energy Corporation | Pinnacle West Capital Corporation | Xcel Energy Inc. | ||
Payout (% of Full | ||||
Performance vs. Peer Group | Year’s Dividend Paid) | |||
90th percentile or higher | 100 | % | ||
50th percentile (Target) | 50 | % | ||
10th percentile or lower | 0 | % | ||
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Multiple of Salary without | Multiple of Salary Counting | |||
Name | Counting Stock Options | 1/3 of Vested Options | ||
D. M. Ratcliffe | 5 Times | 10 Times | ||
T. A Fanning | 3 Times | 6 Times | ||
M. D. Garrett | 3 Times | 6 Times | ||
C. D. McCrary | 3 Times | 6 Times | ||
G. E. Holland, Jr. | 3 Times | 6 Times | ||
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Change in | ||||||||||||||||||||||||||||||||||||
Pension Value | ||||||||||||||||||||||||||||||||||||
and | ||||||||||||||||||||||||||||||||||||
Non-Equity | Nonqualified | |||||||||||||||||||||||||||||||||||
Incentive | Deferred | |||||||||||||||||||||||||||||||||||
Stock | Option | Plan | Compensation | All Other | ||||||||||||||||||||||||||||||||
Name and Principal | Salary | Bonus | Awards | Awards | Compensation | Earnings | Compensation | Total | ||||||||||||||||||||||||||||
Position | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||||||||||||||||||
David M. Ratcliffe | 2007 | 1,068,268 | — | — | 2,215,880 | 2,901,883 | 4,683,305 | 88,585 | 10,957,921 | |||||||||||||||||||||||||||
Chairman, President & CEO | 2006 | 1,028,471 | — | — | 2,152,767 | 2,563,680 | 2,036,219 | 73,127 | 7,854,264 | |||||||||||||||||||||||||||
Thomas A. Fanning | 2007 | 610,624 | — | — | 520,341 | 954,988 | 814,123 | 43,658 | 2,943,734 | |||||||||||||||||||||||||||
Executive Vice President & COO | 2006 | 583,011 | — | — | 551,320 | 939,527 | 357,950 | 43,041 | 2,474,849 | |||||||||||||||||||||||||||
Michael D. Garrett | 2007 | 613,731 | — | — | 413,075 | 828,844 | 2,259,654 | 47,440 | 4,162,744 | |||||||||||||||||||||||||||
President, Georgia Power Company | 2006 | 575,100 | 29,288 | — | 391,843 | 967,002 | 880,636 | 47,183 | 2,891,052 | |||||||||||||||||||||||||||
Charles D. McCrary | 2007 | 629,961 | — | — | 421,612 | 983,174 | 1,156,038 | 58,132 | 3,248,917 | |||||||||||||||||||||||||||
President, Alabama Power Company | 2006 | 609,407 | — | — | 411,589 | 900,736 | 203,672 | 55,606 | 2,181,010 | |||||||||||||||||||||||||||
G. Edison Holland, Jr. | 2007 | 538,329 | — | — | 311,155 | 708,668 | 854,238 | 45,736 | 2,458,126 | |||||||||||||||||||||||||||
Executive Vice President & General Counsel | 2006 | 522,709 | — | — | 303,755 | 806,198 | 256,730 | 41,564 | 1,930,956 | |||||||||||||||||||||||||||
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Amount Expensed | ||||
Grant Date | in 2007 | |||
2004 | 8,342 | |||
2005 | 29,728 | |||
2006 | 72,817 | |||
2007 | 409,454 | |||
Total | 520,341 | |||
Annual | Performance | |||||||||||
Incentive | Dividends | Total | ||||||||||
Name | ($) | ($) | ($) | |||||||||
D. M. Ratcliffe | 1,710,336 | 1,191,547 | 2,901,883 | |||||||||
T. A. Fanning | 733,923 | 221,065 | 954,988 | |||||||||
M. D. Garrett | 675,223 | 153,621 | 828,844 | |||||||||
C. D. McCrary | 774,728 | 208,446 | 983,174 | |||||||||
G. E. Holland, Jr. | 516,633 | 192,035 | 708,668 | |||||||||
• | Discount rate was increased to 6.3% as of September 30, 2007 from 6.0% as of September 30, 2006. | |
• | Unpaid incentives have been assumed to be 135% of target levels as of September 30, 2007; payments at 130% of target levels was assumed as of September 30, 2006. |
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One-Time | ||||||||||||||||||||
Shorter | Change in | Code Section | ||||||||||||||||||
Discount | Additional | FAS 87 | 409A-Related | Total of | ||||||||||||||||
Period | Pay/Service | Assumptions | Changes | All Factors | ||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($) | |||||||||||||||
D. M. Ratcliffe | 578,827 | 1,768,585 | −490,491 | 2,789,380 | 4,646,301 | |||||||||||||||
T. A. Fanning | 123,533 | 327,880 | −159,249 | 517,406 | 809,570 | |||||||||||||||
M. D. Garrett | 280,789 | 972,390 | −257,341 | 1,254,990 | 2,250,828 | |||||||||||||||
C. D. McCrary | 223,761 | 257,316 | −207,212 | 876,634 | 1,150,499 | |||||||||||||||
G. E. Holland, Jr. | 133,504 | 260,252 | −136,496 | 579,031 | 836,291 | |||||||||||||||
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Above-Market | ||||||||||||||||
Change in | Earnings on Deferred | |||||||||||||||
Pension Value | Compensation | Total | ||||||||||||||
Name | Year | ($) | ($) | ($) | ||||||||||||
D. M. Ratcliffe | 2007 | 4,646,301 | 37,004 | 4,683,305 | ||||||||||||
2006 | 2,002,835 | 33,384 | 2,036,219 | |||||||||||||
T. A. Fanning | 2007 | 809,570 | 4,553 | 814,123 | ||||||||||||
2006 | 353,902 | 4,048 | 357,950 | |||||||||||||
M. D. Garrett | 2007 | 2,250,828 | 8,826 | 2,259,654 | ||||||||||||
2006 | 872,674 | 7,962 | 880,636 | |||||||||||||
C. D. McCrary | 2007 | 1,150,499 | 5,539 | 1,156,038 | ||||||||||||
2006 | 198,676 | 4,996 | 203,672 | |||||||||||||
G. E. Holland, Jr. | 2007 | 836,291 | 17,947 | 854,238 | ||||||||||||
2006 | 240,600 | 16,130 | 256,730 | |||||||||||||
Tax | ||||||||||||||||||||
Perquisites | Reimbursements | ESP | SBP | Total | ||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($) | |||||||||||||||
D. M. Ratcliffe | 19,118 | 14,986 | 10,834 | 43,647 | 88,585 | |||||||||||||||
T. A. Fanning | 7,434 | 5,510 | 11,047 | 19,667 | 43,658 | |||||||||||||||
M. D. Garrett | 8,842 | 7,298 | 11,475 | 19,825 | 47,440 | |||||||||||||||
C. D. McCrary | 14,535 | 13,020 | 9,924 | 20,653 | 58,132 | |||||||||||||||
G. E. Holland, Jr. | 9,546 | 9,243 | 10,967 | 15,980 | 45,736 | |||||||||||||||
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All Other | ||||||||||||||||||||||||||||||||
Option | Grant Date | |||||||||||||||||||||||||||||||
Awards: | Fair | |||||||||||||||||||||||||||||||
Number of | Value of | |||||||||||||||||||||||||||||||
Securities | Exercise or | Stock and | ||||||||||||||||||||||||||||||
Underlying | Base Price of | Option | ||||||||||||||||||||||||||||||
Grant | Threshold | Target | Maximum | Options | Option Awards | Awards | ||||||||||||||||||||||||||
Name | Date | $ | ($) | ($) | (#) | ($/Sh) | ($) | |||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | |||||||||||||||||||||||||
D. M. Ratcliffe | 2/19/2007 | PPP | 242,029 | 1,075,683 | 2,366,503 | 537,835 | 36.42 | 2,215,880 | ||||||||||||||||||||||||
2/19/2007 | PDP | 163,838 | 1,638,377 | 3,276,754 | ||||||||||||||||||||||||||||
T. A. Fanning | 2/19/2007 | PPP | 103,857 | 461,587 | 1,015,491 | 99,382 | 36.42 | 409,454 | ||||||||||||||||||||||||
2/19/2007 | PDP | 30,396 | 303,964 | 607,928 | ||||||||||||||||||||||||||||
M. D. Garrett | 2/19/2007 | PPP | 104,776 | 465,671 | 1,024,476 | 100,261 | 36.42 | 413,075 | ||||||||||||||||||||||||
2/19/2007 | PDP | 21,123 | 211,228 | 422,456 | ||||||||||||||||||||||||||||
C. D. McCrary | 2/19/2007 | PPP | 106,941 | 475,293 | 1,045,645 | 102,333 | 36.42 | 421,612 | ||||||||||||||||||||||||
2/19/2007 | PDP | 28,661 | 286,613 | 573,225 | ||||||||||||||||||||||||||||
G. E. Holland, Jr. | 2/19/2007 | PPP | 73,109 | 324,927 | 714,839 | 75,523 | 36.42 | 311,155 | ||||||||||||||||||||||||
2/19/2007 | PDP | 26,405 | 264,047 | 528,095 | ||||||||||||||||||||||||||||
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Stock Options | Performance Dividend | Performance Dividend | Performance Dividend | |||||||||||||
Held as of | Per Option | Per Option | Per Option Paid at | |||||||||||||
December 31, | Paid at Threshold | Paid at Target | Maximum | |||||||||||||
2007 | Performance | Performance | Performance | |||||||||||||
Name | (#) | ($) | ($) | ($) | ||||||||||||
D. M. Ratcliffe | 2,054,391 | 0.07975 | 0.7975 | 1.595 | ||||||||||||
T. A. Fanning | 381,146 | 0.07975 | 0.7975 | 1.595 | ||||||||||||
M. D. Garrett | 264,863 | 0.07975 | 0.7975 | 1.595 | ||||||||||||
C. D. McCrary | 359,389 | 0.07975 | 0.7975 | 1.595 | ||||||||||||
G. E. Holland, Jr. | 331,094 | 0.07975 | 0.7975 | 1.595 | ||||||||||||
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Stock Awards | ||||||||||||||||||||||
Equity | ||||||||||||||||||||||
Incentive | ||||||||||||||||||||||
Plan | ||||||||||||||||||||||
Option Awards | Equity | Awards: | ||||||||||||||||||||
Equity | Incentive | Market or | ||||||||||||||||||||
Incentive | Plan | Payout Value | ||||||||||||||||||||
Plan | Market | Awards: | of Unearned | |||||||||||||||||||
Awards: | Number of | Value | Number of | Shares, | ||||||||||||||||||
Number of | Number of | Number of | Shares or | of Shares | Unearned | Units | ||||||||||||||||
Securities | Securities | Securities | Units of | or Units | Shares, | or Other | ||||||||||||||||
Underlying | Underlying | Underlying | Stock | of Stock | Units or | Rights | ||||||||||||||||
Unexercised | Unexercised | Unexercised | Option | That | That Have | Other Rights | That Have | |||||||||||||||
Options | Options | Unearned | Exercise | Option | Have Not | Not | That Have | Not | ||||||||||||||
Exercisable | Unexercisable | Options | Price | Expiration | Vested | Vested | Not Vested | Vested | ||||||||||||||
Name | (#) | (#) | (#) | ($) | Date | (#) | ($) | (#) | ($) | |||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||||
D. M. Ratcliffe | 92,521 | 0 | — | 25.26 | 02/15/2012 | — | — | — | — | |||||||||||||
82,265 | 0 | 29.50 | 02/13/2014 | |||||||||||||||||||
273,031 | 0 | 29.315 | 08/02/2014 | |||||||||||||||||||
366,667 | 183,333 | 32.70 | 02/18/2015 | |||||||||||||||||||
172,913 | 345,826 | 33.81 | 02/20/2016 | |||||||||||||||||||
0 | 537,835 | 36.42 | 02/19/2017 | |||||||||||||||||||
T. A. Fanning | 42,314 | 0 | — | 27.975 | 02/14/2013 | — | — | — | — | |||||||||||||
63,215 | 0 | 29.50 | 02/13/2014 | |||||||||||||||||||
53,895 | 26,948 | 32.70 | 02/18/2015 | |||||||||||||||||||
31,798 | 63,594 | 33.81 | 02/20/2016 | |||||||||||||||||||
0 | 99,382 | 36.42 | 02/19/2017 | |||||||||||||||||||
M. D. Garrett | 17,806 | 0 | — | 29.50 | 02/13/2014 | — | — | — | — | |||||||||||||
26,188 | 26,188 | 32.70 | 02/18/2015 | |||||||||||||||||||
31,474 | 62,946 | 33.81 | 02/20/2016 | |||||||||||||||||||
0 | 100,261 | 36.42 | 02/19/2017 | |||||||||||||||||||
C. D. McCrary | 71,424 | 0 | — | 29.50 | 02/13/2014 | — | — | — | — | |||||||||||||
57,636 | 28,818 | 32.70 | 02/18/2015 | |||||||||||||||||||
33,060 | 66,118 | 33.81 | 02/20/2016 | |||||||||||||||||||
0 | 102,333 | 36.42 | 02/19/2017 | |||||||||||||||||||
G. E. Holland, Jr. | 48,992 | 0 | — | 27.975 | 02/14/2013 | — | — | — | — | |||||||||||||
58,072 | 0 | 29.50 | 02/13/2014 | |||||||||||||||||||
50,209 | 25,104 | 32.70 | 02/18/2015 | |||||||||||||||||||
24,398 | 48,796 | 33.81 | 02/20/2016 | |||||||||||||||||||
0 | 75,523 | 36.42 | 02/19/2017 | |||||||||||||||||||
Expiration Date | Date Fully Vested | |
February 18, 2015 | February 18, 2008 | |
February 20, 2016 | February 20, 2009 | |
February 19, 2017 | February 19, 2010 | |
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Option Awards | Stock Awards | |||||||||||
Number of Shares | Number of Shares | |||||||||||
Acquired on | Value Realized on | Acquired on | Value Realized on | |||||||||
Exercise | Exercise | Vesting | Vesting | |||||||||
Name | (#) | ($) | (#) | ($) | ||||||||
(a) | (b) | (c) | (d) | (e) | ||||||||
D. M. Ratcliffe | 83,780 | 881,785 | 0 | 0 | ||||||||
T. A. Fanning | 31,926 | 352,785 | 0 | 0 | ||||||||
M. D. Garrett | 98,116 | 782,764 | 0 | 0 | ||||||||
C. D. McCrary | 151,625 | 1,736,758 | 0 | 0 | ||||||||
G. E. Holland, Jr. | 54,624 | 698,679 | 0 | 0 | ||||||||
Number of | Present Value of | Payments | ||||||||||
Years Credited | Accumulated | During | ||||||||||
Service | Benefit | Last Fiscal Year | ||||||||||
Name | Plan Name | (#) | ($) | ($) | ||||||||
(a) | (b) | (c) | (d) | (e) | ||||||||
D. M. Ratcliffe | Pension Plan | 35.75 | 864,119 | — | ||||||||
Supplemental Benefit Plan (Pension-Related) | 35.75 | 10,247,552 | — | |||||||||
Supplemental Executive Retirement Plan | 35.75 | 3,181,744 | — | |||||||||
Supplemental Pension Agreement | 0.00 | 0 | ||||||||||
T. A. Fanning | Pension Plan | 25.92 | 377,260 | — | ||||||||
Supplemental Benefit Plan (Pension-Related) | 25.92 | 1,875,824 | — | |||||||||
Supplemental Executive Retirement Plan | 25.92 | 615,370 | — | |||||||||
Supplemental Pension Agreement | 0.00 | 0 | ||||||||||
M. D. Garrett | Pension Plan | 38.67 | 888,676 | — | ||||||||
Supplemental Benefit Plan (Pension-Related) | 38.67 | 4,545,023 | — | |||||||||
Supplemental Executive Retirement Plan | 38.67 | 1,496,956 | — | |||||||||
Supplemental Pension Agreement | 0.00 | 0 | ||||||||||
C. D. McCrary | Pension Plan | 32.92 | 659,324 | — | ||||||||
Supplemental Benefit Plan (Pension-Related) | 32.92 | 3,194,145 | — | |||||||||
Supplemental Executive Retirement Plan | 32.92 | 1,026,375 | — | |||||||||
Supplemental Pension Agreement | 0.00 | 0 | ||||||||||
G. E. Holland, Jr. | Pension Plan | 14.67 | 273,463 | — | ||||||||
Supplemental Benefit Plan (Pension-Related) | 14.67 | 1,020,878 | — | |||||||||
Supplemental Executive Retirement Plan | 14.67 | 332,839 | — | |||||||||
Supplemental Pension Agreement | 12.25 | 1,434,192 | ||||||||||
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• | Discount rate — 6.3% as of September 30, 2007 |
• | Retirement date — Normal retirement age (65 for all named executive officers) |
• | Mortality after normal retirement — RP2000 Combined Healthy mortality rate table |
• | Mortality, withdrawal, disability and retirement rates prior to normal retirement — None |
• | Form of payment for Pension Benefits: |
• | Unmarried retirees: 100% elect a single life annuity | |
• | Married retirees: 20% elect a single life annuity; 40% elect a joint and 50% survivor annuity; and 40% elect a joint and 100% survivor annuity | |
• | Percent married at retirement — 80% of males and 70% of females |
• | Spouse ages — Wives two years younger than their husbands |
• | Incentives earned but unpaid as of the measurement date — 130% of target percentages times base rate of pay for year incentive is earned |
• | Installment determination — 5.3% discount rate for single sum calculation and 7.3% prime interest rate on unpaid balances during installment payment period. |
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Executive | Registrant | Aggregate | ||||||||||||||||||
Contributions | Contributions | Aggregate Earnings | Withdrawals/ | Aggregate Balance | ||||||||||||||||
in Last FY | in Last FY | in Last FY | Distributions | at Last FYE | ||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($) | |||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | |||||||||||||||
D. M. Ratcliffe | 0 | 43,647 | 774,971 | 0 | 9,232,125 | |||||||||||||||
T. A. Fanning | 140,929 | 19,667 | 82,603 | 0 | 956,753 | |||||||||||||||
M. D. Garrett | 0 | 19,825 | 97,708 | 0 | 1,231,703 | |||||||||||||||
C. D. McCrary | 0 | 20,653 | 88,949 | 0 | 1,082,275 | |||||||||||||||
G. E. Holland, Jr. | 0 | 15,980 | 184,642 | 0 | 2,344,766 | |||||||||||||||
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Employer Contributions | ||||||||||||
Amounts Deferred under | under the SBP | |||||||||||
the DCP Prior to 2007 | Prior to 2007 and | |||||||||||
and Reported in Prior | Reported in Prior Years’ | |||||||||||
Years’ Proxy Statements | Proxy Statements | Total | ||||||||||
Name | ($) | ($) | ($) | |||||||||
D. M. Ratcliffe | 5,381,881 | 203,141 | 5,585,022 | |||||||||
T. A. Fanning | 631,969 | 62,496 | 694,465 | |||||||||
M. D. Garrett | 0 | 50,171 | 50,171 | |||||||||
C. D. McCrary | 489,924 | 130,461 | 620,385 | |||||||||
G. E. Holland, Jr. | 298,508 | 46,536 | 345,044 | |||||||||
• | Retirement or Retirement Eligible — Termination of a named executive officer who is at least 50 years old and has at least 10 years of credited service. |
• | Resignation — Voluntary termination of a named executive officer who is not retirement eligible. |
• | Lay Off — Involuntary termination of a named executive officer not for cause, who is not retirement eligible. |
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• | Involuntary Termination — Involuntary termination of a named executive officer for cause. Cause includes individual performance below minimum performance standards and misconduct, such as violation of the Company’s Drug and Alcohol Policy. |
• | Death or Disability — Termination of a named executive officer due to death or disability. |
• | Southern Change in Control I — Acquisition by another entity of 20% or more of Common Stock, or following a merger with another entity the Company’s stockholders own 65% or less of the entity surviving the merger. |
• | Southern Change in Control II — Acquisition by another entity of 35% or more of Common Stock, or following a merger with another entity the Company’s stockholders own less than 50% of the entity surviving the merger. |
• | Southern Termination — A merger or other event and the Company is not the surviving company or Common Stock is no longer publicly traded. |
• | Subsidiary Change in Control — Acquisition by another entity, other than another subsidiary of the Company, of 50% or more of the stock of a subsidiary of the Company, a merger with another entity and the subsidiary is not the surviving company or the sale of substantially all the assets of the subsidiary. |
• | InvoluntaryChange-in-Control Termination or VoluntaryChange-in-Control Termination for Good Reason — Employment is terminated within two years of a change in control, other than for cause, or the employee voluntarily terminates for Good Reason. Good Reason for voluntary termination within two years of a change in control is generally satisfied when there is a material reduction in salary, incentive compensation opportunity or benefits, relocation of over 50 miles or a diminution in duties and responsibilities. |
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Lay Off | ||||||||||
(Involuntary | Involuntary | |||||||||
Termination | Death or | Termination | ||||||||
Program | Retirement/Retirement Eligible | Not For Cause) | Resignation | Disability | (For Cause) | |||||
Pension Benefit Plans | Benefits payable as described in the notes following the Pension Benefits Table. | Benefits payable as described in the notes following the Pension Benefits Table. | Same as Lay Off. | Benefits payable as described in the notes following the Pension Benefits Table. | Same as for retirement and resignation, as the case may be. | |||||
Annual Incentive Program | Pro-rated if terminate before 12/31. | Pro-rated if terminate before 12/31. | Forfeit. | Pro-rated if terminate before 12/31. | Forfeit. | |||||
Performance Dividend Program | Paid year of retirement plus two additional years. | Forfeit. | Forfeit. | Payable until options expire or exercised. | Forfeit. | |||||
Stock Options | Vest; expire earlier of original expiration date or five years. | Vested options expire in 90 days; unvested are forfeited. | Vested options expire in 90 days; unvested are forfeited. | Vest; expire earlier of original expiration or three years. | Forfeit. | |||||
Financial Planning Perquisite | Continues for one year. | Terminates. | Terminates. | Continues for one year. | Terminates. | |||||
Supplemental Benefit Plan — non-pension related | Payable per prior elections (lump sum or up to 20 annual installments). | Same as Retirement. | Same as Retirement. | Same as the Deferred Compensation Plan. | Same as Retirement. | |||||
Deferred Compensation Plan | Payable per prior elections (lump sum or up to 10 annual installments). | Same as Retirement. | Same as Retirement. | Payable to beneficiary or disabled participant per prior elections; amounts deferred prior to 2005 can be paid as a lump sum per plan administration committee’s discretion. | Same as Retirement. | |||||
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Involuntary | ||||||||
Change-in- | ||||||||
Control-Related | ||||||||
Termination or | ||||||||
Voluntary | ||||||||
Southern | Change-in- | |||||||
Termination or | Control-Related | |||||||
Southern Change | Southern Change | Subsidiary Change | Termination | |||||
Program | in Control I | in Control II | in Control | for Good Reason | ||||
Nonqualified Pension Benefits | All SERP-related benefits vest if participants vested in Pension Plan; otherwise, no impact. Benefits vest for all participants and single sum value of benefits earned to change-in-control date paid following termination or retirement. | Same as Southern Change in Control II. | Based on type of change-in-control event. | |||||
Annual Incentive Program | No plan termination – is paid at greater of target or actual performance. If plan terminated within two years of change in control, pro-rated at target performance level. | Same as Southern Change in Control I. | Pro-rated at target performance level. | If not otherwise eligible for payment, if the annual incentive program still in effect, pro-rated at target performance level. | ||||
Performance Dividend Program | No plan termination – is paid at greater of target or actual performance. If plan terminated within two years of change in control, pro-rated at greater of target or actual performance level. | Same as Southern Change in Control I. | Pro-rated at greater of actual or target performance level. | If not otherwise eligible for payment, if the performance dividend program is still in effect, greater of actual or target performance level for year of severance only. | ||||
Stock Options | Not affected by change-in-control events because Common Stock is still publicly traded. | Not affected bychange-in-control events because Common Stock is still publicly traded. | Vest and convert to surviving company’s securities; Southern Termination; if cannot convert, pay spread in cash; if participant is an employee of a subsidiary, stock options vest upon a Subsidiary Change in Control. | Vest. | ||||
Deferred Compensation Plan | Not affected by change-in-control events. | Not affected bychange-in-control events. | Not affected by change-in-control events. | Not affected by change-in-control events. | ||||
SBP | Not affected by change-in-control events. | Not affected bychange-in-control events. | Not affected by change-in-control events. | Not affected by change-in-control events. | ||||
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Involuntary | ||||||||
Change-in- | ||||||||
Control-Related | ||||||||
Termination or | ||||||||
Voluntary | ||||||||
Southern | Change-in- | |||||||
Termination or | Control-Related | |||||||
Southern Change | Southern Change | Subsidiary Change | Termination | |||||
Program | in Control I | in Control II | in Control | for Good Reason | ||||
Severance Benefits | Not applicable. | Not applicable. | Not applicable. | Three times base salary plus target annual incentive program amount plus tax gross up if severance amounts exceed Code Section 280G “excess parachute payment” by 10% or more. | ||||
Health Benefits | Not applicable. | Not applicable. | Not applicable. | Up to five years participation in group health plan plus payment of three years’ premium amounts. | ||||
Outplacement Services | Not applicable. | Not applicable. | Not applicable. | Six months. | ||||
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Resignation or | Death | |||||||||||||
Involuntary Retirement | (payments | |||||||||||||
Retirement | (monthly payments) | to a spouse) | ||||||||||||
Name | ($) | ($) | ($) | |||||||||||
D. M. Ratcliffe | Pension Plan | 8,200 | All plans treated as | 4,671 | ||||||||||
Supplemental Benefit Plan | 1,341,367 | retiring | 1,341,367 | |||||||||||
Supplemental Executive Retirement Plan | 416,413 | 416,413 | ||||||||||||
T. A. Fanning | Pension Plan | 3,694 | All plans treated as | 3,413 | ||||||||||
Supplemental Benefit Plan | 289,876 | retiring | 289,876 | |||||||||||
Supplemental Executive Retirement Plan | 95,062 | 95,062 | ||||||||||||
M. D. Garrett | Pension Plan | 8,545 | All plans treated as | 5,080 | ||||||||||
Supplemental Benefit Plan | 613,775 | retiring | 613,775 | |||||||||||
Supplemental Executive Retirement Plan | 202,091 | 202,091 | ||||||||||||
C. D. McCrary | Pension Plan | 6,494 | All plans treated as | 4,304 | ||||||||||
Supplemental Benefit Plan | 458,841 | retiring | 458,841 | |||||||||||
Supplemental Executive Retirement Plan | 147,384 | 147,384 | ||||||||||||
G. E. Holland, Jr. | Pension Plan | 2,719 | All plans treated as | 1,912 | ||||||||||
Supplemental Benefit Plan | 150,872 | retiring | 150,872 | |||||||||||
Supplemental Executive Retirement Plan | 49,116 | 49,116 | ||||||||||||
Supplemental Pension Agreement | 210,691 | 210,691 | ||||||||||||
Supplemental | Supplemental | Supplemental | ||||||||||||||
Benefit Plan | Executive | Pension | ||||||||||||||
(Pension-Related) | Retirement Plan | Agreement | Total | |||||||||||||
Name | ($) | ($) | ($) | ($) | ||||||||||||
D. M. Ratcliffe | 13,413,665 | 4,164,129 | 0 | 17,577,794 | ||||||||||||
T. A. Fanning | 2,898,761 | 950,621 | 0 | 3,849,382 | ||||||||||||
M. D. Garrett | 6,137,748 | 2,020,914 | 0 | 8,158,662 | ||||||||||||
C. D. McCrary | 4,588,413 | 1,473,839 | 0 | 6,062,252 | ||||||||||||
G. E. Holland, Jr. | 1,508,718 | 419,158 | 2,106,910 | 4,034,786 | ||||||||||||
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Additional | ||||
Performance | ||||
Dividends | ||||
Name | ($) | |||
D. M. Ratcliffe | 446,830 | |||
T. A. Fanning | 82,899 | |||
M. D. Garrett | 57,608 | |||
C. D. McCrary | 78,167 | |||
G. E. Holland, Jr. | 72,013 | |||
Total Number of | Total Payable in Cash | |||||||||||
Number of | Options Following | under a Southern | ||||||||||
Options with | Accelerated Vesting | Termination without | ||||||||||
Accelerated | under a Southern | Conversion of Stock | ||||||||||
Name | Vesting (#) | Termination (#) | Options ($) | |||||||||
D. M. Ratcliffe | 1,066,994 | 2,054,391 | 11,728,333 | |||||||||
T. A. Fanning | 189,924 | 381,146 | 2,232,569 | |||||||||
M. D. Garrett | 189,395 | 264,863 | 1,181,623 | |||||||||
C. D. McCrary | 197,269 | 359,389 | 1,912,094 | |||||||||
G. E. Holland, Jr. | 149,423 | 331,094 | 2,058,245 | |||||||||
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Severance Amount | ||||
Name | ($) | |||
D. M. Ratcliffe | 6,452,100 | |||
T. A. Fanning | 3,237,000 | |||
M. D. Garrett | 3,260,250 | |||
C. D. McCrary | 3,327,050 | |||
G. E. Holland, Jr. | 2,601,600 | |||
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FOR AUDIT AND NON-AUDIT SERVICES
A. | Southern Company (including its subsidiaries) will not engage the independent auditor to perform any services that are prohibited by the Sarbanes-Oxley Act of 2002. It shall further be the policy of the Company not to retain the independent auditor for non-audit services unless there is a compelling reason to do so and such retention is otherwise pre-approved consistent with this policy. Non-audit services that are prohibited include: |
1. | Bookkeeping and other services related to the preparation of accounting records or financial statements of the Company or its subsidiaries. | |
2. | Financial information systems design and implementation. | |
3. | Appraisal or valuation services, fairness opinions, orcontribution-in-kind reports. | |
4. | Actuarial services. | |
5. | Internal audit outsourcing services. | |
6. | Management functions or human resources. | |
7. | Broker or dealer, investment adviser, or investment banking services. | |
8. | Legal services or expert services unrelated to financial statement audits. | |
9. | Any other service that the Public Company Accounting Oversight Board determines, by regulation, is impermissible. |
B. | Effective January 1, 2003, officers of the Company (including its subsidiaries) may not engage the independent auditor to perform any personal services, such as personal financial planning or personal income tax services. |
C. | All audit services (including providing comfort letters and consents in connection with securities issuances) and permissible non-audit services provided by the independent auditor must be pre-approved by the Southern Company Audit Committee. |
D. | Under this Policy, the Audit Committee’s approval of the independent auditor’s annual arrangements letter shall constitute pre-approval for all services covered in the letter. |
E. | By adopting this Policy, the Audit Committee hereby pre-approves the engagement of the independent auditor to provide services related to the issuance of comfort letters and consents required for securities sales by the Company and its subsidiaries and services related to consultation on routine accounting and tax matters. The actual amounts expended for such services each calendar quarter shall be reported to the Committee at a subsequent Committee meeting. |
F. | The Audit Committee also delegates to its Chairman the authority to grant pre-approvals for the engagement of the independent auditor to provide any permissible service up to a limit of $50,000 per engagement. Any engagements pre-approved by the Chairman shall be presented to the full Committee at its next scheduled regular meeting. |
G. | The Southern Company Comptroller shall establish processes and procedures to carry out this Policy. |
December 9, 2002
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Admission Ticket (Not Transferable)
2008 Annual Meeting of Stockholders 10 a.m. ET, May 28, 2008
The Lodge Conference Center at Callaway Gardens Highway 18 Pine Mountain, GA 31822 | |
Please present this Admission Ticket in order to gain admittance to the meeting. |
Ticket admits only the stockholder(s) listed on reverse side and is not transferable. |
Directions to Meeting Site:
From Atlanta, GA - Take I-85 south to I-185 (exit 21), then Exit 34, Georgia Highway 18. Take Georgia Highway 18 east to Callaway.
From Birmingham, AL - Take U.S. Highway 280 east to Opelika, AL, then I-85 north to Georgia Highway 18 (Exit 2). Take Georgia Highway 18 east to Callaway.
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FORM OF PROXY AND TRUSTEE VOTING INSTRUCTION FORM
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FORM OF PROXY AND TRUSTEE VOTING INSTRUCTION FORM | |
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS AND ESP TRUSTEES |
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If a stockholder of record, the undersigned hereby appoints D. M. Ratcliffe, W. P. Bowers and G. E. Holland, Jr. or any of them, Proxies with full power of substitution in each, to vote all shares the undersigned is entitled to vote at the Annual Meeting of Stockholders of The Southern Company, to be held at The Lodge Conference Center at Callaway Gardens in Pine Mountain, Georgia, on May 28, 2008, at 10:00 a.m., ET, and any adjournments thereof, on all matters properly coming before the meeting, including, without limitation, the items listed on the reverse side of this form.
If a beneficial owner holding shares through the Employee Savings Plan (“ESP”), the undersigned directs the Trustee of the Plan to vote all shares the undersigned is entitled to vote at the Annual Meeting of Stockholders, and any adjournments thereof, on all matters properly coming before the meeting, including, without limitation, the items listed on the reverse side of this form.
This Form of Proxy/Trustee Voting Instruction Form is solicited jointly by the Board of Directors of The Southern Company and the Trustee of the Employee Savings Plan pursuant to a separate Notice of Annual Meeting and Proxy Statement. If not voted electronically, this form should be mailed in the enclosed envelope to the Company’s proxy tabulator at 51 Mercedes Way, Edgewood, NY 11717. The deadline for receipt of Trustee Voting Instruction Forms for ESP is 5:00 p.m. on Monday, May 26, 2008. The deadline for receipt of shares of record voted through the Form of Proxy is 9:00 a.m. on Wednesday, May 28, 2008. The deadline for receipt of instructions provided electronically is 11:59 p.m. on Tuesday, May 27, 2008.
The proxy tabulator will report separately to the Proxies named above and to the Trustee as to proxies received and voting instructions provided, respectively.
THIS FORM OF PROXY/TRUSTEE VOTING INSTRUCTION FORM WILL BE VOTED AS SPECIFIED BY THE UNDERSIGNED. IF NO CHOICE IS INDICATED, THE SHARES WILL BE VOTED AS THE BOARD OF DIRECTORS RECOMMENDS.
Continued and to be voted and signed on reverse side.
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C/O PROXY SERVICES P. O. BOX 9112 FARMINGDALE, NY 11735
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| Please consider furnishing your voting instructions electronically by Internet or phone. Processing paper forms is more than twice as expensive as electronic instructions.
If you vote by Internet or phone, please do not mail this form.
VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by The Southern Company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL Mark, sign and date this form and return it in the postage-paid envelope we have provided or return it to The Southern Company, c/o Broadridge, 51 Mercedes Way, Edgewood, NY, 11717.
THANK YOU
VIEW ANNUAL REPORT AND PROXY STATEMENT ON THE INTERNET www.southerncompany.com
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
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| STHCO1 KEEP THIS PORTION FOR YOUR RECORDS | |||
-------------------------------------------------------------------------------------------------------------------------------------------------------------- DETACH AND RETURN THIS PORTION ONLY THIS FORM OF PROXY/TRUSTEE VOTING INSTRUCTION FORM IS VALID ONLY WHEN SIGNED AND DATED. |
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THE SOUTHERN COMPANY |
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The Board of Directors recommends a vote FOR Items 1, 2, 3 and 4 and AGAINST Item 5. | ||||||||||
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1. ELECTION OF DIRECTORS: | ||||||||||
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01) J. P. Baranco | 02) D. J. Bern | 03) F. S. Blake | For All | Withhold All | For All Except | To withhold authority to vote, mark “For All Except” and write the nominee’s number on the line below | ||||
04) J. A. Boscia | 05) T. F. Chapman | 06) H. W. Habermeyer, Jr. | ( ) | ( ) | ( ) |
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07) W. A. Hood, Jr | 08) D. M. James | 09) J. N. Purcell |
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10) D. M. Ratcliffe | 11) W. G. Smith, Jr. | 12) G. J. St Pé |
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| For | Against | Abstain |
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2. RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2008 | ( ) | ( ) | ( ) |
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3. AMENDMENT OF COMPANY’S BY-LAWS REGARDING MAJORITY VOTING AND CUMULATIVE VOTING | ( ) | ( ) | ( ) |
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4. AMENDMENT OF COMPANY’S CERTIFICATE OF INCORPORATION REGARDING CUMULATIVE VOTING | ( ) | ( ) | ( ) |
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5. STOCKHOLDER PROPOSAL ON ENVIRONMENTAL REPORT | ( ) | ( ) | ( ) |
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UNLESS OTHERWISE SPECIFIED ABOVE, THE SHARES WILL BE VOTED “FOR” ITEMS 1, 2, 3 and 4 and “AGAINST” ITEM 5.
NOTE: The last instruction received either paper or electronic, prior to the deadline will be the instruction included in the final tabulation. | ||
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Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date | ||