SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 21, 2005
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Commission Registrant, State of Incorporation, I.R.S. Employer
File Number Address and Telephone Number Identification No.
1-3526 The Southern Company 58-0690070
(A Delaware Corporation)
270 Peachtree Street, N.W.
Atlanta, Georgia 30303
(404) 506-5000
1-3164 Alabama Power Company 63-0004250
(An Alabama Corporation)
600 North 18th Street
Birmingham, Alabama 35291
(205) 257-1000
1-6468 Georgia Power Company 58-0257110
(A Georgia Corporation)
241 Ralph McGill Boulevard, N.E.
Atlanta, Georgia 30308
(404) 506-6526
0-2429 Gulf Power Company 59-0276810
(A Maine Corporation)
One Energy Place
Pensacola, Florida 32520
(850) 444-6111
001-11229 Mississippi Power Company 64-0205820
(A Mississippi Corporation)
2992 West Beach
Gulfport, Mississippi 39501
(228) 864-1211
1-5072 Savannah Electric and Power Company 58-0418070
(A Georgia Corporation)
600 East Bay Street
Savannah, Georgia 31401
(912) 644-7171
The addresses of the registrants have not changed since the last report.
This combined Form 8-K is filed separately by six registrants: The Southern
Company, Alabama Power Company, Georgia Power Company, Gulf Power Company,
Mississippi Power Company and Savannah Electric and Power Company. Information
contained herein relating to each registrant is filed by each registrant solely
on its own behalf. Each registrant makes no representation as to information
relating to the other registrants.
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry Into a Material Definitive Agreement
On February 21, 2005, the Compensation and Management Succession
Committee of the Board of Directors (the "Compensation Committee") of The
Southern Company ("Southern Company") established the performance criteria for
fiscal year 2005 annual performance bonuses and future performance-based
dividend equivalent awards under the Southern Company Omnibus Incentive
Compensation Plan (the "Omnibus Plan"). These criteria are applicable to all
participants in the Omnibus Plan, which include executive officers of Southern
Company and its subsidiaries, including Alabama Power Company ("Alabama Power"),
Georgia Power Company ("Georgia Power"), Gulf Power Company ("Gulf Power"),
Mississippi Power Company ("Mississippi Power") and Savannah Electric and Power
Company (together with Alabama Power, Georgia Power, Gulf Power and Mississippi
Power, the "subsidiary registrants"). The Compensation Committee also approved
annual base salary adjustments for Southern Company executive officers and
approved the parameters for annual base salary adjustments for executive
officers of the subsidiary registrants. In addition, upon the recommendation of
the Governance Committee of the Southern Company Board of Directors (the
"Governance Committee"), the Board of Directors of Southern Company (the "Board
of Directors") also approved an adjustment to the compensation program for
non-employee directors of Southern Company.
Performance Goals under the Omnibus Plan
Under the Omnibus Plan, annual performance bonuses may be paid to the
executive officers of Southern Company and the subsidiary registrants. Annual
performance bonuses are based on the attainment of corporate performance goals
and attainment of the respective business unit's adjusting goals. On February
21, 2005, the Compensation Committee established the corporate performance goals
for fiscal year 2005, which include specific targets for (i) Southern Company
earnings per share (50% weighting) and (ii) subsidiary companies' net income or
return on equity (50% weighting).
With respect to each corporate performance goal, the Compensation
Committee established a target performance level. Performance above or below the
targets will result in proportionately higher or lower bonus payments. The bonus
amount will then be adjusted, up or down, based on the degree of achievement of
the respective business unit's adjusting goals. For fiscal year 2005, the
Compensation Committee established adjusting goals for capital expenditures,
reliability, customer satisfaction, plant availability, safety and diversity.
A target percentage of base pay was established for each executive
officer based on his or her position level for target-level performance. The
target percentage of base pay established for David M. Ratcliffe, President and
Chief Executive Officer of Southern Company, Thomas A. Fanning, Executive Vice
President, Chief Financial Officer and Treasurer of Southern Company, Michael D.
Garrett, Executive Vice President of Southern Company and President and Chief
Executive Officer of Georgia Power, G. Edison Holland, Executive Vice President
and General Counsel of Southern Company, and Charles D. McCrary, Executive Vice
President of Southern Company and President and Chief Executive Officer of
Alabama Power, are 100%, 70%, 75%, 60% and 75%, respectively. Target bonuses for
the other executive officers of Southern Company and the subsidiary registrants
range from 40% to 60% of base salary. Annual performance bonuses may range from
zero percent of the target to 230 percent based on actual corporate and
individual performance.
No bonuses will be paid if performance is below a threshold level or if
a minimum earnings level is not reached. Also, no bonuses will be paid if
Southern Company's current earnings are not sufficient to fund Southern
Company's common stock dividend at the same level as the prior year. The
Compensation Committee also capped the maximum amount of the annual performance
bonus for each Southern Company executive officer at 0.6 percent of Southern
Company's net income.
Under the Omnibus Plan, executive officers of Southern Company and the
subsidiary registrants also may receive performance-based dividend equivalents
on most stock options held at the end of a fiscal year. Payments of
performance-based dividend equivalents are based on total stockholder return
over a four-year period. On February 21, 2005, the Compensation Committee
established the performance criteria for performance-based dividend equivalents
payable for the four-year performance period ending on December 31, 2008. For
this performance period, dividend equivalents may range from 25 percent of
Southern Company's common stock dividend paid during the year if total
stockholder return over a four-year period, compared to a group of other utility
companies, is at the 30th percentile to 100 percent of the dividend paid if
total stockholder return reaches the 90th percentile. No dividend equivalents
are paid if total stockholder return over the period is below the 30th
percentile or if Southern Company's earnings are not sufficient to fund the
current common stock dividend. The Compensation Committee also capped the
maximum amount of the performance dividend equivalents for each Southern Company
executive officer at 0.6 percent of Southern Company's average net income over
the four-year performance period.
Base Salary Adjustments
On February 21, 2005, as part of its overall review of executive
compensation for fiscal year 2005, the Compensation Committee approved annual
base salary adjustments for the Chief Executive Officer and the four other most
highly compensated executive officers of the Southern Company. To assist the
Committee in determining appropriate base salary adjustments for fiscal year
2005, the Committee retained an independent executive compensation consultant
who provided information on total executive compensation paid at other large
companies in the electric and gas utility industries. The current annual base
salaries (as adjusted) of Messrs. Ratcliffe, Fanning, Garrett, Holland and
McCrary are $985,100, $547,943, $532,500, $510,458 and $585,968, respectively.
In addition, the Compensation Committee approved the annual base salary
adjustments for other executive officers of Southern Company and the parameters
for establishing the annual base salary adjustments for the executive officers
of the subsidiary registrants. In accordance with these parameters, the Chief
Executive Officer of Southern Company and the Chief Executive Officer of each
subsidiary registrant, as appropriate, will approve annual base salary
adjustments for executive officers of the subsidiary registrants.
All base salary adjustments will be effective March 1, 2005.
Southern Company Non-Employee Director Compensation
The Governance Committee periodically reviews the compensation paid to
Southern Company's non-employee directors. On February 21, 2005, the Governance
Committee recommended to the Board of Directors and the Board of Directors
approved an adjustment to the annual retainers paid for service as Chair of a
Board committee. Effective March 1, 2005, the annual retainer for service as
Chair of the Audit Committee will be $25,000 and the annual retainer for service
as Chair of any other Board committee will be $10,000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, each of the registrants has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Date: February 25, 2005 THE SOUTHERN COMPANY
By /s/Tommy Chisholm
Tommy Chisholm
Secretary
ALABAMA POWER COMPANY
GEORGIA POWER COMPANY
GULF POWER COMPANY
MISSISSIPPI POWER COMPANY
SAVANNAH ELECTRIC AND POWER COMPANY
By /s/Wayne Boston
Wayne Boston
Assistant Secretary