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 20, 2006
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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)
30 Ivan Allen, Jr. Blvd., N.W.
Atlanta, Georgia 30308
(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 Florida 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 20, 2006, 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 2006 annual performance-based compensation 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 ("Savannah Electric") (together 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.
Performance Goals under the Omnibus Plan
Under the Omnibus Plan, annual performance-based compensation may be
paid to the executive officers of Southern Company and the subsidiary
registrants. Annual performance-based compensation is based on the attainment of
corporate performance goals and attainment of the respective business unit's
operational goals. On February 20, 2006, the Compensation Committee established
the corporate performance goals for fiscal year 2006, which include specific
targets for (i) Southern Company earnings per share (50 percent weighting) and
(ii) subsidiary companies' net income or return on equity (50 percent
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 annual performance-based
compensation. The amount will then be adjusted, up or down, based on the degree
of achievement of the respective business unit's operational goals. For fiscal
year 2006, the Compensation Committee also established these operational goal
categories, including (i) capital expenditures, (ii) transmission and
distribution system reliability, (iii) customer satisfaction, (iv) plant
availability, (v) safety, (vi) diversity and (vii) price.
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,
General Counsel and Secretary of Southern Company, and Charles D. McCrary,
Executive Vice President of Southern Company and President and Chief Executive
Officer of Alabama Power, are 100 percent, 75 percent, 75 percent, 60 percent
and 75 percent, respectively. Target annual performance-based compensation for
the other executive officers of Southern Company and the subsidiary registrants
ranges from 40 percent to 60 percent of base salary. Annual performance-based
compensation may range from zero percent of the target to 230 percent based on
actual corporate and individual performance.
No annual performance-based compensation will be paid if performance is
below a threshold level or if a minimum Southern Company net income level is not
reached. Also, no annual performance-based compensation will be paid if Southern
Company's net income is not sufficient to fund the common stock dividend at the
same level as the prior year. The Compensation Committee also capped the maximum
amount of the annual performance-based compensation 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 measurement period. On February 20, 2006, the Compensation
Committee (i) irrevocably authorized the payment of performance-based dividend
equivalents for the four-year performance measurement period ending on December
31, 2006 based on previously established performance criteria, and (ii)
established the performance criteria for performance-based dividend equivalents
payable for the four-year performance measurement period ending on December 31,
2009. For these performance measurement periods, dividend equivalents may range
from approximately 5 percent of Southern Company's common stock dividend paid
during the year if total stockholder return over a four-year measurement period,
compared to a group of other utility companies, is at the first position above
the 10th 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 applicable period is at or below the 10th percentile
or if Southern Company's net income is 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 each four-year
performance measurement period.
Base Salary Adjustments
On February 20, 2006, as part of its overall review of executive
compensation for fiscal year 2006, the Compensation Committee approved annual
base salary adjustments for the Chief Executive Officer and the four other most
highly compensated executive officers of Southern Company. To assist the
Committee in determining appropriate base salary adjustments for fiscal year
2006, 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 $1,039,300, $592,000, $586,000, $526,000 and $615,000 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, 2006.
Item 5.02 Departure of Directors or Principal Officers; Election of
Directors; Appointment of Principal Officers
On February 20, 2006, Southern Company's Board of Directors elected two new
members, Juanita P. Baranco and William G. Smith, Jr., effective February 22,
2006. Ms. Baranco is the Executive Vice President and Chief Operating Officer of
Baranco Automotive Group. Mr. Smith is the President and Chief Executive Officer
of Capital City Bank Group, Inc. and Chairman of the Board of Directors of
Capital City Bank.
Ms. Baranco was appointed to serve on the Audit Committee effective March
16, 2006 and Mr. Smith was appointed to serve on the Finance and Compensation
and Management Succession Committees effective February 22, 2006.
In connection with the election of Ms. Baranco and Mr. Smith, each of
Daniel P. Amos and Bruce S. Gordon resigned from their positions as members of
the Board of Directors, effective February 21, 2006.
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 24, 2006 THE SOUTHERN COMPANY
By /s/Patricia A. Robers
Patricia A. Roberts
Assistant 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