File No. 70-9869
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
to
FORM U-1
APPLICATION OR DECLARATION
under
The Public Utility Holding Company Act of 1935
THE SOUTHERN COMPANY
270 Peachtree Street, N.W.
Atlanta, Georgia 30303
(Name of company or companies filing this statement
and addresses of principal executive offices)
THE SOUTHERN COMPANY
(Name of top registered holding company parent of each
applicant or declarant)
Tommy Chisholm, Secretary
The Southern Company
270 Peachtree Street, N.W.
Atlanta, Georgia 30303
(Names and addresses of agents for service)
The Commission is requested to mail signed copies of all orders, notices and
communications to:
Gale E. Klappa John D. McLanahan, Esq.
Financial Vice President Troutman Sanders LLP
The Southern Company 600 Peachtree Street, N.E.
270 Peachtree Street, N.W. Suite 5200
Atlanta, Georgia 30303 Atlanta, Georgia 30308-2216
7
INFORMATION REQUIRED
Item 1. Description of Proposed Transactions
The information previously set forth in Item 1 in this proceeding is
hereby deleted and replaced with the following:
1.1 The Southern Company ("Southern"), a registered holding company
under the Public Utility Holding Company Act of 1935, as amended (the "Act"),
proposes, from time to time through May 22, 2011, to grant Incentive Stock
Options, Nonqualified Stock Options, Stock Appreciation Rights, Restricted
Stock, Restricted Stock Units, Performance Shares, Performance Units and Cash
Based Awards and to issue shares of its common stock, par value $5.00 per share
("Common Stock"), pursuant to the Southern Company Omnibus Incentive
Compensation Plan (the "Plan"), as described herein. Thirty million shares of
Common Stock are available for grants under the Plan. Additional shares of
Common Stock will be transferred from the Southern Company Performance Stock
Plan to this Plan and will also be available for grants by the Committee under
the Plan.
The Board of Directors of Southern has adopted the Plan, subject to
stockholder approval. The purpose of the Plan is to optimize the profitability
and growth of Southern through annual and long-term incentives that are
consistent with Southern's goal and that link the personal interest of
participants to those of Southern's stockholders, to provide participants with
an incentive for excellence in individual performance, to promote teamwork among
participants and to provide flexibility to Southern in its ability to motivate,
attract and retain key individuals with outstanding ability.
The Plan will be administered by a Committee appointed by the Board of
Directors of Southern (the "Committee"). The composition of the Committee must
comply with Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"). Currently, the Committee consists of two directors of
Southern who are not employees of Southern or its subsidiaries. The Committee
will have exclusive authority to interpret the Plan.
The Plan permits the Committee to grant, in its discretion, Incentive
Stock Options and Nonqualified Stock Options (collectively, "Stock Options"),
Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance
Shares, Performance Units and/or Cash Based Awards to directors of Southern or
certain of its subsidiaries and those employees, as determined by the Committee,
who have a significant impact on the long-term performance and success of
Southern. The Committee has determined that the approximate number of
participants under the Plan initially will be 24,000, but may be changed at the
Committee's discretion. Each award made under the Plan will be evidenced by an
award agreement.
Nonqualified Stock Options entitle the participant to purchase up to
the number of shares of Common Stock specified in the grant at a specified price
(the "Option Price"). The Option Price will be set by the Committee at the time
a grant is made. The period during which the Nonqualified Stock Options may be
exercised will be set by the Committee at the time a grant is made.
Stock Options designated by the Committee as Incentive Stock Options
are intended to comply with Section 422 of the Internal Revenue Code. They will
be granted only to employees and entitle the participant to purchase the
specified number of shares of Common Stock at the Option Price not more than 10
years from the date of the grant. The aggregate fair market value of Common
Stock determined at the time of each grant for which any participant may vest in
Incentive Stock Options under the Plan for any calendar year shall not exceed
$100,000.
Stock Options must be paid in full when exercised by the participant.
The Committee, in its discretion, may permit the Option Price to be paid in
whole or in part through the transfer to Southern of shares of Common Stock
previously acquired by the participant.
Stock Appreciation Rights are rights that, when exercised, entitle the
participant to the appreciation in value of the number of shares of Common Stock
specified in the grant, from the date granted to the date exercised. The
exercised Stock Appreciation Right may be paid in cash and/or Common Stock, as
determined by the Committee. Stock Appreciation Rights may be granted in the
sole discretion of the Committee in conjunction with an Incentive Stock Option
or Nonqualified Stock Option. Stock Appreciation Rights may not be exercised
more than 10 years after the date granted.
Restricted Stock awards are grants of shares of Common Stock that are
held by Southern for the benefit of the participant without payment of
consideration by the participant. There are restrictions or conditions on the
participant's right to transfer or sell such shares. The Committee will
establish a "Restriction Period" for each Restricted Stock award made. Subject
to the terms of an award agreement, the participant may be entitled to dividends
paid on the Restricted Stock and may have the right to vote such shares.
Restricted Stock Units are awards that entitle the participant to the
value of shares of Common Stock at the end of a designated restriction period.
Except for voting rights, Restricted Stock Units may have all of the
characteristics of Restricted Stock, as described above. Restricted Stock Units
may be paid out in cash or shares.
Performance Units, Performance Shares and Cash-Based Awards
(collectively "Performance Awards") are awards that entitle the participant to a
level of compensation based on the achievement of pre-established performance
goals over a designated performance period. Performance Units shall have an
initial value determined by the Committee. The value of a Performance Share will
be the fair market value of Common Stock on the grant date. A Cash-Based Award
will have the value determined by the Committee. At the beginning of the
performance period the Committee will determine the number of Performance Units
or Performance Shares awarded or the target value of Cash-Based Awards; the
performance period; and the performance goals. At the end of the performance
period, the Committee will determine the degree of achievement of the
performance goals which will determine the level of payout. The Committee may
set performance goals using any combination of the following criteria:
1. Earnings per share
2. Net income or net operating income (before or after
taxes and before or after extraordinary items)
3. Return measures (including, but no limited to, return
on assets, equity, or sales)
4. Cash flow return on investments which equals net cash
flows divided by owners equity
5. Earnings before or after taxes
6. Gross revenues
7. Gross margins
8. Share price (including, but not limited to, growth
measures and total shareholder return)
9. Economic Value Added, which equal net income or net
operating income minus a charge for use of capital
10. Operating margins
11. Market shares
12. Revenue growth
13. Capacity utilization
14. Increase in customer base
15. Environmental health and safety
16. Diversity
17. Quality
Performance Awards may be paid in cash or shares of Common Stock or a
combination thereof in the Committee's discretion.
The maximum aggregate number of shares of Common Stock that may be
granted in the form of Stock Options, pursuant to any award granted in any one
fiscal year to any one single participant, shall be 5,000,000 shares.
The maximum aggregate number of shares of Common Stock that may be
granted in the form of Stock Appreciation Rights, pursuant to any award granted
in any one fiscal year to any one participant, shall be 5,000,000 shares.
The maximum aggregate number of shares of Common Stock that may be
granted with respect to awards of Restricted Stock granted in any one fiscal
year to any one participant shall be 1,000,000 shares.
The maximum amount payable (determined at the end of the applicable
restriction period) in any one fiscal year to any one participant for Restricted
Stock Units is the higher of $10,000,000 or 1,000,000 shares of Common Stock.
The maximum amount payable (determined as of the end of the applicable
performance period) with respect to an award of Performance Shares granted in
any one fiscal year to any one participant shall be equal to the larger of
$10,000,000 or 1,000,000 shares.
The maximum amount payable (determined as of the end of the applicable
performance period) with respect to Performance Units or Cash-Based Awards
awarded in any one fiscal year to any one participant shall be $10,000,000.
If a change in control occurs all Stock Options, Stock Appreciation
Rights, Restricted Stock and Restricted Stock Units will vest immediately and if
the Plan is not continued or replaced with a comparable plan, pro-rata payments
of all Performance Awards at not less than target-level performance will be
paid.
The Board of Directors of Southern may terminate or amend the Plan at
any time except after a change in control.
The Plan will terminate May 22, 2011, unless terminated sooner by the
Board of Directors. 1.2 Southern further proposes to submit the Plan for
consideration and action by its stockholders at the annual meeting of such
stockholders to be held on May 23, 2001, and in connection therewith, to solicit
proxies from its stockholders. The material to be used in connection with such
solicitation in respect of the Plan will be substantially as set forth in
Exhibits G-1, G-2 and G-3 hereto. In addition, in the event that Southern
considers it desirable to do so, it may employ professional proxy solicitors to
assist in the solicitation of proxies and pay their expenses and compensation
for such assistance which, it is estimated, will not exceed $30,000.
Approval of the Plan requires the affirmative vote of the holders of a
majority of the shares of Common Stock represented in person or by proxy at the
annual meeting.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned company has duly caused this amendment to be signed on
its behalf by the undersigned thereunto duly authorized.
Dated: April 3, 2001 THE SOUTHERN COMPANY
By: /s/Tommy Chisholm
Tommy Chisholm
Secretary