File No. 70-__________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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:
W. L. Westbrook 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
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INFORMATION REQUIRED
Item 1. Description of Proposed Transactions
1.1 The Southern Company ("Southern"), a registered holding company under
the Public Utility Holding Company Act of 1935 (the "Act"), proposes, from time
to time through February 17, 2007, to grant Incentive Stock Options,
Nonqualified Stock Options, Stock Appreciation Rights and Restricted Stock, and
to issue shares of its common stock, par value $5.00 per share ("Common Stock"),
pursuant to the Southern Company Performance Stock Plan (the "Plan"), as
described herein.
The Board of Directors of Southern has adopted the Plan, subject to
stockholder approval. The purpose of the Plan is to maximize the long-term
success of Southern, to ensure a balanced emphasis on both current and long-term
performance, to enhance Plan participants' identification with stockholders'
interests, and to facilitate the attraction and retention of key individuals
with outstanding ability.
The Plan will be administered by the Compensation & Management Succession
Committee of the Board of Directors of Southern (the "Committee"). The Committee
consists of three or more 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 not more frequently than once each
calendar year, in its discretion, Incentive Stock Options and Nonqualified Stock
Options (collectively, "Stock Options"), Stock Appreciation Rights, and/or
Restricted Stock 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
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determined that the approximate number of Participants under the Plan initially
will be 250, but may be changed at the Committee's discretion.
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. It cannot be less than the fair market value of the Common
Stock on the date of the grant. Nonqualified Stock Options may not be exercised
more than 10 years after the date granted.
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 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
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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" of from one through 10 years for each Restricted Stock
award made. The Participant will be entitled to dividends paid on the Restricted
Stock and will have the right to vote such shares.
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.
A total of 40,000,000 shares of Common Stock is available for grants by the
Committee under the Plan. At this time, the Committee is expected initially to
grant Nonqualified Stock Options only; however, the other types of awards
provided for in the Plan may be granted in the future. Under the Plan, the
maximum number of shares of Common Stock which may be the subject of any award
to a Participant during any calendar year is 1,000,000 shares.
The Board of Directors of Southern may terminate or amend the Plan at any
time; provided, however, without stockholder approval, the Board of Directors
may not increase the total number of shares of Common Stock available for grants
under the Plan.
The Plan will terminate February 17, 2007, 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 28, 1997, 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
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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 $30,000.
Approval of the Plan requires the affirmative vote of the holders of a
majority of the shares of Common Stock represented in person or by proxy at
the annual meeting.
Item 2. Fees, Commissions and Expenses
The estimated fees and expenses paid or incurred, or to be paid or
incurred, directly or indirectly, in connection with the proposed transactions
(including costs associated with the solicitation of proxies) are as follows:
Printing..............................................$ 75,000
Postage and Mailing.....................................487,000
Services of Southern Company
Services, Inc. (includes
transfer agent and tabulation
expenses)..............................................95,000
Legal Fees...............................................12,000
Miscellaneous......................................... 8,000
Total..................................................$677,000
Item 3. Applicable Statutory Provisions
Sections 6(a), 7 and 12(e) of the Act and Rules 23, 24, 62 and 65 are
applicable to the proposed transactions.
Item 4. Regulatory Approval
No state commission and no federal commission (other than the Securities
and Exchange Commission) has jurisdiction over the proposed transactions.
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Item 5. Procedure
In order to give Southern sufficient time for the preparation and mailing
of the proxy solicitation material to its stockholders prior to the annual
meeting to be held on May 28, 1997, Southern hereby requests that the Commission
issue an order as soon as practicable, pursuant to Rule 62(d) under the Act,
permitting the solicitation of proxies proposed herein. Southern further hereby
requests that the Commission issue its order with respect to the Plan on or
before May 6, 1997.
Southern hereby waives a recommended decision by a hearing officer or other
responsible officer of the Commission, consents that the Division of Investment
Management may assist in the preparation of the Commission's decision and/or
order in this matter, unless such Division opposes the transactions proposed
herein, and requests that there be no 30-day waiting period between the issuance
of the Commission's order and the date on which it is to become effective.
Southern hereby requests that it be permitted to file certificates of
notification on a quarterly basis, within 45 days after the end of each
calendar quarter.
<TABLE>
<CAPTION>
Item 6. Exhibits and Financial Statements
(a) Exhibits.
<S> <C>
A-1 - Draft of Southern Company Performance Stock Plan.
A-2 - Composite Certificate of Incorporation of Southern reflecting all amendments to
date. (Designated in Registration No. 33-3546 as Exhibit 4(a), in Certificate of
Notification, File No. 70-7341, as Exhibit A and in Certificate of Notification,
File No. 70-8181, as Exhibit A.)
A-3 - By-Laws of Southern as amended effective October 21, 1991, and presently in
effect. (Designated in Form U-1, File No. 70-8181, as Exhibit A-2.)
B - None.
C - None.
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D - None.
E - None.
F - Opinion of Troutman Sanders LLP.
G-1 - Draft of notice of annual meeting of stockholders.
G-2 - Draft of statement relating to the Plan to be
included in the proxy statement for the annual
meeting.
G-3 - Draft of form of proxy for the annual meeting.
H - Form of Notice and Order permitting the solicitation of proxies.
</TABLE>
Exhibits heretofore filed with the Securities and Exchange Commission and
designated as set forth above are hereby incorporated herein by reference and
made a part hereof with the same effect as if filed herewith.
(b) Financial Statements.
Financial statements are omitted since they are not deemed relevant
or necessary for a proper disposition of the proposed transactions by the
Commission.
Item 7. Information as to Environmental Effects
(a) In light of the nature of the proposed transactions as described
in Item 1 hereof, the Commission's action in this matter will not constitute any
major federal action significantly affecting the quality of the human
environment.
(b) No other federal agency has prepared or is preparing an
environmental impact statement with regard to the proposed transactions.
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SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, the undersigned company has duly caused this statement to be signed on its
behalf by the undersigned thereunto duly authorized.
Dated: March 31, 1997 THE SOUTHERN COMPANY
By: /s/ Tommy Chisholm
Tommy Chisholm
Secretary
7
DRAFT
March 28, 1997
SOUTHERN COMPANY PERFORMANCE STOCK PLAN
EFFECTIVE FEBRUARY 18, 1997
TROUTMAN SANDERS LLP
NationsBank Plaza
600 Peachtree Street, N.E., Suite 5200
Atlanta, Georgia 30308
(404) 885-3000
<PAGE>
SOUTHERN COMPANY STOCK PLAN
Purposes
This Southern Company Performance Stock Plan is intended to maximize
the long-term success of Southern Company, ensure a balanced emphasis on both
current and long-term performance, enhance Participants' identification with
shareholders' interests, and facilitate the attraction and retention of key
individuals with outstanding ability.
ARTICLE I
1.1 Definitions. Whenever used in the Plan, the following
terms shall have the meaning set forth below:
-----------
(a) "Award" shall mean, individually and collectively, any
Option, Stock Appreciation Right, or Restricted Stock granted under the
Plan.
(b) "Award Document" shall mean the written document
evidencing the grant of an Award and setting forth the terms and
conditions thereof.
(c) "Base Value" shall mean the Fair Market Value
of a Stock Appreciation Right on the date of its grant.
(d) "Board" or "Board of Directors" shall mean the Board
of Directors of the Company.
(e) "Code" shall mean the Internal Revenue Code of 1986,
as amended.
(f) "Committee" shall mean the Compensation Committee of the
Board of Directors of the Company composed solely of not less than
three (3) Nonemployee Directors and, to the extent necessary for any
Award intended to qualify as performance based compensation under
Section 162(m) of the Code to so qualify, each member of the Committee
shall be an Outside Director.
(g) "Common Stock" shall mean the Common Stock of the
Company.
(h) "Company" shall mean The Southern Company or any
successor thereto.
(i) "Covered Employee" shall mean a Participant who is as of
the last day of the Company's fiscal year in which the Participant
shall be required to recognize taxable income with respect to an Award,
a "covered employee" within the meaning of Code section 162(m)(3) and
the regulations thereunder.
(j) "Director" shall mean any person who is currently
a member of the Board of Directors of the Company or an Employing
Company.
(k) "Disability" shall mean total and permanent
disability as determined by the Social Security Administration.
(l) "Effective Date" shall mean the date the Plan is adopted
by the Board of Directors of the Company, subject to approval by the
shareholders of the Company at a meeting held within twelve (12) months
following the date of adoption by the Board of Directors.
(m) "Employee" shall mean any person who is currently
employed by an Employing Company.
(n) "Employing Company" shall mean any affiliate or subsidiary
(direct or indirect) of the Company, which the Board of Directors may
from time to time determine to bring under the Plan and which may adopt
the Plan, and any successor of any of them.
The Employing Companies as of January 1, 1997 are:
Alabama Power Company
Georgia Power Company
Gulf Power Company
Mississippi Power Company
Savannah Electric and Power Company
Southern Communications, Inc.
Southern Company Services, Inc.
Southern Energy, Inc.
Southern Nuclear Operating Company
Southern Development and Investment Group, Inc.
(o) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(p) "Fair Market Value" shall mean the average of the high and
low prices at which a share of Common Stock shall have been traded on
the date of grant or the exercise of an Award, or on the next preceding
trading day if such date was not a trading date, as reported on the New
York Stock Exchange-Composite Transactions Listing, or as otherwise
determined by the Committee. In no event shall the Fair Market Value
equal less than the par value of the Common Stock.
(q) "Incentive Stock Option" shall mean a stock option
satisfying the requirements of Section 422 of the Code granted pursuant
to Section 4.1(b) and designated by the Committee as an Incentive Stock
Option.
(r) "Nonemployee Director" shall mean a Director of the
Company who is a "nonemployee director" within the meaning of Rule
16b-3 promulgated under the Exchange Act.
(s) "Nonqualified Stock Option" shall mean an Option, other
than an Incentive Stock Option, granted pursuant to Section 4.1(c).
(t) "Option" shall mean, individually and collectively, an
Incentive Stock Option or a Nonqualified Stock Option to purchase
Common Stock.
(u) "Optionee" shall mean a person to whom an Option has
been granted under the Plan.
(v) "Option Price" shall mean the price per share of Common
Stock set by the grant of an Option, but in no event less than the Fair
Market Value of the Common Stock on the date of grant.
(w) "Outside Director" shall mean a Director of the Company
who is an "outside director" within the meaning of Section 162(m) of
the Code and the regulations promulgated thereunder.
(x) "Participant" shall mean any Director or Employee
who satisfies the criteria set forth in Article III.
(y) "Performance-Based" shall mean compensation which
qualifies as "performance-based" within the meaning of Code section
162(m)(4)(c) and the regulations thereunder.
(z) "Restricted Stock" shall mean an Award granted
pursuant to Section 4.1(e).
(aa) "Retirement" shall mean the termination of service or
employment by a Participant on or after age 65 or as otherwise
determined by the Committee in its sole discretion.
(bb) "Separation Date" shall mean, as determined by the
Committee, the date on which a Participant's service or employment with
the Company or Employing Company terminates for reasons other than his
transfer of service or employment to the Company or another Employing
Company. Whether any leave of absence shall constitute termination of
service or employment for the purposes of the Plan shall be determined
in each case by the Committee in its sole discretion.
(cc) "Stock Appreciation Right" or "SAR" shall mean a right to
any appreciation in value of shares of Common Stock granted pursuant to
Section 4.1(d).
1.2 Construction. Where the context requires, words in the masculine
gender shall include the feminine and neuter genders, words in the singular
shall include the plural, and words in the plural shall include the singular.
1.3 Term. The Plan shall remain in effect for ten (10) years from the
Effective Date or until terminated by the Board of Directors, whichever occurs
first.
ARTICLE II
2.1 Plan Administration. The Plan shall be administered by the
Committee. The Committee is authorized to establish such rules, to appoint such
agents and to delegate such authority as it deems appropriate for the proper
administration of the Plan, including, but not limited to, the delegation of
authority to such person or persons to exercise the discretion provided in
Section 5.1 hereof to determine whether a Participant may exercise an Award
subsequent to termination of employment, and to make such determinations and to
take such steps in connection with the Plan or the benefits provided hereunder
as it deems necessary or advisable.
2.2 Plan Interpretation. The Committee shall have the exclusive
authority to interpret the Plan. The decision of the Committee with respect to
any question arising as to the grant of an Award to a Participant in the Plan,
the amount, term, form, and time of payment of Awards under the Plan, or any
other matter concerning the Plan shall be final, conclusive, and binding on both
the Company and the Participants.
ARTICLE III
3.1 Eligibility. The Participants in the Plan shall be limited to
Directors and to those Employees, as determined by the Committee, who have a
significant impact on the long-term performance and success of the Company.
Subject to the terms of the Plan, the Committee shall identify individuals
eligible to become Participants in the Plan, select from time to time the
Participants to whom Awards shall be granted and shall determine the number of
Awards to be granted.
ARTICLE IV
4.1 Awards.
(a) General. Beginning February 18, 1997 and thereafter not
more frequently than once each calendar year, the Committee shall
determine the forms and amounts of Awards for Participants, provided
that in no event shall any Award be granted until the shareholders of
the Company have approved the Plan. All Awards shall be subject to the
terms and conditions of the Plan and to such other terms and conditions
consistent with the Plan as the Committee deems appropriate. Awards
under the Plan need not be uniform and Awards under two (2) or more
paragraphs may be combined in one Award Document. Any combination of
Awards may be granted at one time and on more than one occasion to the
same Participant. Such Awards may take the following forms, in the
Committee's sole discretion:
(b) Incentive Stock Options. These shall be stock options
within the meaning of Section 422 of the Code to purchase Common Stock.
In addition to other restrictions contained in the Plan, an Incentive
Stock Option (1) shall not be exercised more than ten (10) years after
the date it is granted, (2) shall not have an Option Price less than
the Fair Market Value of Common Stock on the date the Incentive Stock
Option is granted, (3) shall otherwise comply with Section 422 of the
Code, (4) shall be granted only to Employees and (5) shall be
designated as an "Incentive Stock Option" by the Committee. The
aggregate Fair Market Value of Common Stock determined at the time of
each grant for which any Optionee may vest in Incentive Stock Options
under this Plan for any calendar year shall not exceed $100,000.
(c) Nonqualified Stock Options. These shall be stock options
to purchase Common Stock which are not designated by the Committee as
"Incentive Stock Options." At the time of the grant, the Committee
shall determine the Option exercise period, the Option Price, and such
other conditions or restrictions on the exercise of the Nonqualified
Stock Option as the Committee deems appropriate. In addition to other
restrictions contained in the Plan, a Nonqualified Stock Option (1)
shall not be exercised more than ten (10) years after the date it is
granted, and (2) shall not have an Option Price less than 100% of the
Fair Market Value of Common Stock on the date the Nonqualified Stock
Option is granted.
(d) Stock Appreciation Rights. These shall be rights that on
exercise entitle the holder to receive the excess of (1) the Fair
Market Value of Common Stock on the date of exercise over (2) its Base
Value multiplied by (3) the number of SAR's exercised. Such rights
shall be satisfied in cash, stock, or a combination thereof, as
determined by the Committee. Stock Appreciation rights granted under
the Plan may be granted in the sole discretion of the Committee in
conjunction with an Incentive Stock Option or Nonqualified Stock Option
under the Plan. The Committee may impose such conditions or
restrictions on the exercise of SAR's as it deems appropriate and may
terminate, amend, or suspend such SAR's at any time. SAR's granted
under this Plan shall not be exercised more than ten (10) years after
the date of grant.
(e) Restricted Stock. Restricted Stock shall be shares of
Common Stock held by the Company for the benefit of a Participant
without payment of consideration, except as otherwise may be determined
by the Committee in its discretion, with restrictions or conditions
upon the Participant's right to retain, transfer or sell such shares.
The following provisions shall be applicable to Restricted Stock
Awards:
(1) Stock Power. Each certificate for
Restricted Stock shall be registered in the
name of the Participant and shall be deposited by him with
the Company, together with a stock
power endorsed in blank.
(2) Restriction Period. At the time of making a
Restricted Stock Award, the Committee shall establish the
"Restriction Period" applicable thereto. Such Restriction
Period may be up to ten (10) years as determined by the
Committee. The Committee may provide for the annual lapse of
restrictions with respect to a specified percentage of the
Restricted Stock, provided the Participant satisfies all
eligibility requirements at such time.
(3) Dividends. The Participant shall be entitled to
receive dividends during the Restriction Period and shall have
the right to vote such Common Stock and all other
shareholder's rights except the following:
(i) the Participant shall not be entitled
to delivery of the stock certificate
during the Restriction Period,
(ii) the Company shall retain custody
of the Common Stock during the
Restriction Period, and
(iii) a breach of a restriction or a breach
of the terms and conditions established by the
Committee with respect to the Restricted Stock shall
cause a forfeiture of the Restricted Stock.
4.2 Award Document. After the Committee determines the form and amount
of a Participant's Award, it shall cause the Company to prepare an Award
Document to be delivered to the Participant setting forth the form and amount of
the Award and any conditions and restrictions on the Award imposed by the Plan
and the Committee.
4.3 Exercise and Payment. The exercise of an Option shall be made only
by a written notice delivered in person or by mail to the Secretary of the
Company at the Company's principal executive office, specifying the number of
shares of Common Stock to be purchased and accompanied by payment therefore and
otherwise in accordance with the Award Document pursuant to which the Option was
granted. The purchase price for any shares of Common Stock purchased pursuant to
the exercise of an Option shall be paid, as determined by the Committee in its
discretion and set forth in the Award Document at the time of grant, in either
of the following forms (or any combination thereof): (i) cash or (ii) the
transfer of shares of Common Stock with a Fair Market Value equal to the
aggregate exercise price of the Option to the Company upon such terms and
conditions as determined by the Committee. In addition, Options may be exercised
through a registered broker-dealer pursuant to such cashless exercise procedures
(other than the withholding of shares of Common Stock that would otherwise be
acquired upon the exercise of such Option) which are, from time to time, deemed
acceptable by the Committee, and the Committee may authorize that the purchase
price payable upon exercise of an Option may be paid by having shares of Common
Stock withheld that otherwise would be acquired upon such exercise. Any shares
of Common Stock transferred to the Company (or withheld upon exercise) as
payment of the purchase price under an Option shall be valued at their Fair
Market Value on the day preceding the date of exercise of such Option. The
Optionee shall deliver the Award Document evidencing the Option to the Secretary
of the Company who shall endorse thereon a notation of such exercise and return
such Award Document to the Optionee. No fractional shares of Common Stock (or
cash in lieu thereof) shall be issued upon exercise of an Option and the number
of shares of Common Stock that may be purchased upon exercise shall be rounded
to the nearest number of whole shares of Common Stock.
ARTICLE V
5.1 Termination of Service or Employment. A Participant whose service
as a Director or employment terminates for reasons other than Retirement,
Disability, or death shall, in the discretion of the Committee, have no right to
receive any benefit or payment for existing Awards under the Plan. Any
outstanding Award shall terminate on the Participant's Separation Date;
provided, however, that the Committee or its designee, in its or his sole
discretion, may permit the exercise of any outstanding Award after the
Participant's Separation Date, at such time and in such manner as the Committee
or such designee may determine, but in no event in the case of Incentive Stock
Options shall such exercise be beyond the earlier of (a) three (3) months from
the Participant's Separation Date or (b) the expiration date of the Award, to
the extent exercisable on such Participant's Separation Date.
5.2 Death of a Participant. Unless otherwise provided in the Award
Document, in the event of the death of a Participant prior to the exercise of
all Incentive Stock Options, Nonqualified Stock Options, and Stock Appreciation
Rights granted to such Participant, the administrator of the deceased
Participant's estate, the executor under his will, or the person or persons to
whom the Options or SAR's shall have been validly transferred by such executor
or administrator pursuant to the will or laws of intestate succession shall have
the right, within thirty-six (36) months from the date of such Participant's
death, but not beyond the expiration date of the Options or SAR's, to exercise
such Options or SAR's to the extent exercisable on such Participant's Separation
Date.
5.3 Retirement.
(a) Incentive Stock Options. In the event of the termination
of a Participant's employment as result of his Retirement prior to the
exercise of all Incentive Stock Options granted to the Participant,
such Participant shall have the right, within three (3) months of his
Separation Date, but not beyond the expiration date of such Options, to
exercise such Incentive Stock Options to the extent exercisable on his
Separation Date.
(b) Nonqualified Stock Options and SARs. Unless otherwise
provided in the Award Document, in the event of the termination of a
Participant's employment as a result of his Retirement prior to the
exercise of all Nonqualified Stock Options or Stock Appreciation Rights
granted to the Participant, such Participant shall have the right,
within thirty-six (36) months of his Separation Date, but not beyond
the expiration date of such Nonqualified Stock Options or SAR's, to
exercise such Nonqualified Stock Options or SAR's to the extent
exercisable on his Separation Date.
5.4 Disability.
(a) Incentive Stock Options. In the event of the termination
of a Participant's employment due to Disability prior to the exercise
of all Incentive Stock Options granted to the Participant, such
Participant or his legal representative shall have the right, within
twelve (12) months of his Separation Date, but not beyond the
expiration date of such Incentive Stock Options, to exercise such
Incentive Stock Options to the extent exercisable on his Separation
Date.
(b) Nonqualified Stock Options and SARs. Unless otherwise
provided in the Award Document, in the event of the termination of a
Participant's employment due to Disability prior to the exercise of all
Nonqualified Stock Options and Stock Appreciation Rights granted to the
Participant, such Participant or his legal representative shall have
the right, within thirty-six (36) months of his Separation Date, but
not beyond the expiration date of such Nonqualified Stock Options or
SAR's, to exercise such Nonqualified Stock Options or SAR's to the
extent exercisable on his Separation Date.
ARTICLE VI
6.1 Limitation of Shares of Common Stock Available under the Plan.
(a) Share Limit. The total number of shares of Common Stock
available to be granted by the Committee as Awards to the Participants
under the Plan shall not exceed 40,000,000 shares. Upon a change in
capitalization, the maximum number of shares of Common Stock referred
to in the preceding sentence shall be adjusted in number and kind
pursuant to Section 7.1 hereof.
(b) Share Reduction. The total number of shares
available under Section 6.1(a) shall be
reduced from time to time in the manner specified:
(1) Incentive Stock Options and
Nonqualified Stock Options. The grant of an
Incentive Stock Option and Nonqualified Stock Option shall
reduce the available shares by the
number of shares subject to such Option.
(2) Stock Appreciation Rights. The grant of Stock
Appreciation Rights shall reduce the available shares by the
number of SAR's granted; provided, however, if SAR's are
granted in conjunction with an Option and the exercise of such
Option would cancel the SAR's and vice versa, then the grant
of the SAR's will only reduce the amount available by the
excess, if any, of the number of SAR's granted over the number
of shares subject to the related Option.
(3) Restricted Stock. The grant of
Restricted Stock shall reduce the available
shares by the number of shares of Restricted Stock granted.
(c) Share Increase. The total number of shares
available under Section 6.1(a) shall be
increased from time to time in the manner specified:
(1) Incentive Stock Options and Nonqualified Stock
Options. The lapse or cancellation of an Incentive Stock
Option or Nonqualified Stock Option shall increase the
available shares by the number of shares released from such
Option; provided, however, in the event the cancellation of an
Option is due to the exercise of SAR's related to such Option,
the cancellation of such Option shall only increase the amount
available by the excess, if any, of the number of shares
released from such Option over the number of SAR's exercised.
(2) Stock Appreciation Rights. The lapse or
cancellation of Stock Appreciation Rights shall increase the
available shares by the number of SAR's which lapse or are
canceled; provided, however, in the event the cancellation of
such SAR's is due to the exercise of an Option related to such
SAR's, the cancellation of such SAR's shall only increase the
available shares by the excess, if any, of the number of SAR's
canceled over the number of shares delivered on the exercise
of such Option.
(3) Restricted Shares. The reversion of Restricted
Stock to the Company due to the breach or occurrence of a
restriction or failure to satisfy a condition on such shares
shall increase the available shares by the number of shares of
Restricted Stock reverted.
6.2 Maximum Shares to Participant. The maximum number of
shares of Common Stock which may be the subject of any Award
to a Participant during any calendar year during the term of the Plan shall
be 1,000,000.
ARTICLE VII
7.1 Adjustment Upon Changes in Capitalization. The total number of
shares of Common Stock available for Awards under the Plan or allocable to any
individual Participant, the number of shares of Common Stock subject to
outstanding Options, the exercise price for such Options, the number of
outstanding SAR's, the Base Value of such SAR's and the Award limit set forth in
subsection 6.2 shall be appropriately adjusted by the Committee in the event of
any increase or decrease in the number of outstanding shares of Common Stock
resulting from any change in the Company's capital structure, including but not
limited to any stock dividend, subdivision or combination of shares, or
reclassification.
7.2 Merger, Consolidation or Tender Offer. In the event of a merger or
consolidation of the Company or a tender offer for shares of Common Stock, the
Committee may make such adjustments with respect to Awards under the Plan and
take such other action as it deems necessary or appropriate to reflect, or in
anticipation of, such merger, consolidation, or tender offer, including without
limitation the substitution of new Awards, the termination or adjustment of
outstanding Awards, the acceleration of Awards, or the removal of limitations or
restrictions on outstanding Awards.
ARTICLE VIII
8.1 Withholding Taxes. The Company or the Employing Company, as the
case may be, of the Participant shall deduct from all payments and distributions
in cash under the Plan any taxes required to be withheld for federal, state, or
local governments. In the event distributions are made in shares of Common
Stock, the Company shall retain the value of sufficient shares to equal the
amount of the tax required to be withheld in respect of such distributions.
8.2 Service or Employment. The establishment of the Plan and Awards
hereunder shall not be construed as conferring on any Participant any right to
continued service or employment, and the service or employment of any
Participant may be terminated without regard to the effect which such action
might have upon him or her as a Participant.
8.3 Non-Alienation of Benefits. Unless otherwise provided in the
Participant's Award Document with respect to Awards other than Incentive Stock
Options, and other than as specifically provided with regard to the death of a
Participant, no benefit under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or
charge, excluding the use of Options under this Plan as collateral in exercising
such Options. Any attempt to do so shall be null and void. No such benefits
shall, prior to receipt thereof by the Participant, be in any manner liable for
or subject to the debts, contracts, liabilities, engagement, or torts of the
Participant.
8.4 Non-Alienation of Election or Exercise Rights. Unless otherwise
provided in the Participant's Award Document with respect to Awards other than
Incentive Stock Options, no election as to benefits or exercise of Options,
Stock Appreciation Rights, or other rights may be made during a Participant's
lifetime by anyone other than the Participant.
8.5 Amendment, Modification, and Termination of the Plan. The Board of
Directors, at any time, may terminate and in any respect amend or modify the
Plan; provided, however, that no such action by the Board of Directors, without
approval of the Company's shareholders, may increase the total number of shares
of Common Stock available under the Plan; and further provided that, except as
provided in Section 7.2, no amendment, modification, or termination of the Plan
shall in any manner adversely affect the rights of any Participant under the
Plan without the consent of such Participant.
8.6 Indemnification. Each person who is or shall have been a member of
the Committee or of the Board of Directors shall be indemnified and held
harmless by the Company against and from any loss, cost, liability, or expense
that may be imposed upon or reasonably incurred by him in connection with or
resulting from any claim, action, suit, or proceeding to which he may be a party
or in which he may be involved by reason of any action or failure to act under
the Plan and against and from any and all amounts paid by him in satisfaction of
judgment in any such action, suit, or proceeding against him. Such person shall
give the Company an opportunity, at its own expense, to handle and defend the
same before he undertakes to handle and defend it on his own behalf. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company's
Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them harmless.
8.7 Reliance on Reports. Each member of the Committee and each member
of the Board of Directors shall be fully justified in relying or acting in good
faith upon any report made by the independent public accountants of the Company
and any Employing Company and upon any other information furnished in connection
with the Plan by any person or persons other than himself. In no event shall any
person who is or shall have been a member of the Committee or the Board of
Directors be liable for any determination made or other action taken or any
omission to act in reliance upon any such report or information or for any
action taken, including the furnishing of information, or failure to act, if in
good faith.
8.8 Governing Law. To the extent that federal law shall not be held to
have preempted local law, this Plan shall be governed by the laws of the State
of Delaware. If any provision of the Plan shall be held invalid or
unenforceable, the remaining provisions hereof shall continue in full force and
effect.
IN WITNESS WHEREOF, the Company has caused the Southern Company
Performance Stock Plan to be executed by its duly authorized officers pursuant
to resolutions of the Board of Directors as of the 18th day of February 1997, to
be effective February 18, 1997.
SOUTHERN COMPANY
By:___________________________________
A. William Dahlberg
President
Attest:
By:____________________________
Tommy Chisholm
Secretary
[CORPORATE SEAL]
Exhibit F
Troutman Sanders LLP
Atlanta, Georgia
March 31, 1997
Securities and Exchange Commission
Washington, D.C.
Re: Statement on Form U-1 of
The Southern Company (the "Company")
Ladies and Gentlemen:
We are familiar with the statement on Form U-1 referred to above
relating to (i) the Southern Company Performance Stock Plan (the "Plan") and
(ii) the solicitation of proxies from the Company's stockholders in connection
with the Plan, and we are familiar with the proceedings relating thereto.
We are of the opinion that the Company is a validly organized and duly
existing corporation under the laws of the State of Delaware and that, upon the
issuance of your order or orders permitting such statement on Form U-1 to become
effective, upon the adoption of an appropriate resolution by the stockholders of
the Company, upon compliance with the Securities Act of 1933, as amended, and
with such State securities or "blue sky" laws as may be applicable, and upon the
proposed transactions being consummated in accordance with such statement on
Form U-1 and such order or orders and in accordance with the Plan:
(a) all State laws applicable to the proposed transactions will
have been complied with;
(b) the common stock, par value $5.00 per share, of the Company
proposed to be issued pursuant to the Plan will be fully paid and nonassessable
and the holders of such common stock will be entitled to the rights and
privileges appertaining thereto set forth in the Certificate of Incorporation of
the Company, as amended; and
(c) the consummation of the proposed transactions will not violate the
legal rights of the holders of any securities issued by the Company or any
associate company thereof.
We hereby consent to the filing of this opinion as an exhibit to the
above-mentioned statement on Form U-1.
Very truly yours,
/s/ Troutman Sanders LLP
CONFIDENTIAL DRAFT 3/27/97 3:12 PM
[GRAPHIC OMITTED]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS -- May 28, 1997
Dear Stockholder:
The Annual Meeting of Stockholders of THE SOUTHERN COMPANY will be held at
the Hyatt Regency Atlanta, 265 Peachtree Street, Atlanta, Georgia on Wednesday,
May 28, 1997, at 10:00 a.m. (EDT), for the following purposes:
(1) Electing 14 members of the board of directors;
(2) Approving amendments to the Southern Company Executive Productivity
Improvement Plan;
(3) Approving the Southern Company Performance Stock Plan;
(4) Approving the Southern Company Performance Dividend Plan; and
(5) Transacting such other business as may properly come before the meeting or
any adjournments thereof.
Your vote is important. Please use the toll-free telephone number on the
enclosed proxy card or mark, date, sign, and promptly return the enclosed form
of proxy in the enclosed postage-paid envelope. If you attend the annual
meeting, you may revoke this proxy by voting in person.
Only stockholders of record at the close of business on March 31, 1997,
are entitled to vote at the meeting.
By Order of the Board of Directors,
Tommy Chisholm
Secretary
Atlanta, Georgia
April 17, 1997
CONFIDENTIAL DRAFT 3/27/97 3:12 PM
3. PROPOSAL TO APPROVE THE COMPANY'S PERFORMANCE STOCK PLAN
The Southern Company Executive Stock Plan (the "former plan") adopted by
the board of directors on December 7, 1987, and approved by the stockholders on
May 25, 1988, expires in 1997. The Southern Company Performance Stock Plan (the
"Plan") was adopted by the board of directors on February 17, 1997, subject to
stockholder approval.
The purpose of the Plan is to maximize the long-term success of the
Company, to ensure a balanced emphasis on both current and long-term
performance, to enhance Plan participants' identification with stockholders'
interests, and to facilitate the attraction and retention of key individuals
with outstanding ability.
The Plan is administered by the Compensation & Management Succession
Committee of the board of directors of the Company (the "committee"). The
committee consists of three or more directors of the Company who are not
employees of the Company or its subsidiaries. The committee has exclusive
authority to interpret the Plan.
The Plan permits the committee to grant not more frequently than once each
calendar year, in its discretion, Incentive Stock Options and Nonqualified Stock
Options (collectively, "Stock Options"), Stock Appreciation Rights, and
Restricted Stock to directors of the Company and those employees who have a
significant impact on the long-term performance and success of the Company. The
committee has determined that the approximate number of participants under the
Plan initially will be 250, but may be changed at the committee's discretion.
Nonqualified Stock Options entitle the participant to purchase up to the
number of shares of the Company's common stock ("Common Stock") specified in the
grant at a specified price (the "Option Price"). The Option Price, which cannot
be lower than the fair market value of the Common Stock on the grant date, is
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. 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 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 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 Options and 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 the Company 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" of from one through 10 years for each
Restricted Stock award made. The participant will be entitled to dividends paid
on the Restricted Stock and will have the right to vote such shares.
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 the Company of shares of Common Stock previously
acquired by the participant.
A total of 40 million shares of Common Stock is available for grants under
the Plan. The committee anticipates only granting Nonqualified Stock Options
under the Plan at this time, however, the other types of awards provided for in
the Plan may be granted in the future. Under the Plan, the maximum number of
shares of Common Stock which may be the subject of any award to a participant
during any calendar year is 1,000,000 shares. On March 28, 1997, the closing
price per share of Common Stock reported on the New York Stock Exchange
Composite Tape was $______.
The board of directors may terminate or amend the Plan at any time;
provided, however, without stockholder approval, the board may not increase the
total number of shares of Common Stock available for grants under the Plan.
The Plan will terminate February 17, 2007, unless terminated sooner by the
board of directors.
Federal Income Tax Consequences of Stock Options Granted under the Plan
The following is a summary of some of the more significant Federal income
tax consequences under present law of the granting and exercise of Stock Options
under the Plan.
No taxable income is realized by a participant upon the grant of a Stock
Option, and no deduction is then available to the Company. Upon exercise of a
Stock Option, the excess of the fair market value of the shares of Common Stock
on the date of exercise over the exercise price will be taxable to the
participant as ordinary income and, subject to any limitation imposed by Section
162(m) of the Internal Revenue Code (the "Code"), deductible by the Company. The
board is seeking stockholder approval of the Plan partly in order to qualify all
compensation to be paid under the Plan for full income tax deductibility under
Section 162(m) of the Code. Section 162(m) of the Code generally limits tax
deductibility of certain compensation paid to each of the Company's five most
highly compensated executive officers to $1,000,000, per officer, unless the
compensation is paid under a performance plan, meeting certain criteria under
the Code, that has been approved by its stockholders.
If a participant disposes of any shares of Common Stock received upon the
exercise of any Stock Option granted under the Plan, such participant will
realize a capital gain or loss equal to the difference between the amount
realized on disposition and the value of such shares at the time the Stock
Option was exercised. The gain or loss will be either long-term or short-term,
depending on the holding period measured from the date of exercise. The Company
will not be entitled to any further deduction at that time.
The Company is required to withhold and remit to the Internal Revenue
Service income taxes on all compensation which is taxable as ordinary income.
Upon exercise of Stock Options, as a condition of such exercise, a Participant
must pay or arrange for payment to the Company of cash representing the
appropriate withholding taxes generated by the exercise.
The following table sets forth the estimated number and dollar value of
Nonqualified Stock Options that could be granted under the Plan in 1997 to the
individuals and groups indicated:
<TABLE>
<CAPTION>
Stock Plan
Name and Position Number of Options Dollar Value ($)
----------------- ----------------- ----------------
<S> <C> <C>
A. W. Dahlberg, Chairman, President & CEO, The Southern Company.......... 133,142 (1)
T. G. Boren, President, Southern Energy ................................. 18,560 (1)
P. J. DeNicola, President, Southern Company Services..................... 29,040 (1)
H. A. Franklin, President, Georgia Power Company ........................ 35,807 (1)
E. B. Harris, President, Alabama Power Company .......................... 34,929 (1)
Executive officers as a group ........................................... 324,763 (1)
Non-executive directors as a group ...................................... 0 0
Non-executive officer employees ......................................... 39,969 (1)
</TABLE>
(1) The actual value a Participant may realize, if any, will depend on the
excess of the fair market value of the Common Stock over the Option Price on the
date exercised. The average of the high and low price of the Common Stock on
March 28, 1997, was $____.
The vote needed to approve the Plan is a majority of the shares of the
Company's stock represented at the meeting and entitled to vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL No. 3.
DRAFT
[GRAPHIC OMITTED]
PROXY FORM PROXY FORM
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS MAY 28, 1997
The undersigned hereby appoints A. W. DAHLBERG and W. L. WESTBROOK, or either 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 Hyatt Regency, 265 Peachtree Street,
Atlanta, Georgia at 10:00 a.m. (EDT), and any adjournments thereof, on all
matters legally coming before the meeting including, without limitation, the
proposals listed on the reverse side hereof.
THIS PROXY WILL BE VOTED AS SPECIFIED BY THE UNDERSIGNED. IF NO CHOICE IS
SPECIFIED, THE PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR DIRECTOR
LISTED ON THE REVERSE SIDE, AND FOR ITEMS 2, 3, AND 4.
Please date, sign exactly as your name appears on the form and mail the proxy
promptly. When signing as an attorney, executor, administrator, trustee or
guardian, please give your full title as such. If shares are held jointly, both
owners must sign.
Continued and to be voted and signed on reverse.
UNLESS OTHERWISE SPECIFIED BELOW, THIS PROXY WILL BE VOTED "FOR" ALL ITEMS.
(1) ELECTION OF DIRECTORS: J. C. Adams, A. D. Correll, A. W. Dahlberg,
P. J. DeNicola, J. Edwards, H. A. Franklin, B. S. Gordon, L. G. Hardman, III,
E. B. Harris, W. A. Parker, Jr., W. J. Rushton, III, G. M. Shatto,
G. J. St. Pe, H. Stockham.
<TABLE>
<CAPTION>
(INSTRUCTIONS: To withhold authority to vote for any
individual nominee, write that nominee's name in the
space provided below.)
<S> <C> <C>
( )FOR ( )WITHHOLD
all nominees, listed authority to vote for all ___________________________________________
above (except as nominees listed above.
marked to the con-
trary to the right.
</TABLE>
THE DIRECTORS RECOMMEND A VOTE "FOR" ITEMS 2-4.
(2) Approval of amendments to the Company's Executive Productivity
Improvement Plan.
FOR AGAINST ABSTAIN
( ) ( ) ( )
(3) Approval of the Company's Performance Stock Plan.
FOR AGAINST ABSTAIN
( ) ( ) ( )
(4) Approval of the Company's Performance Dividend Plan.
FOR AGAINST ABSTAIN
( ) ( ) ( )
Mark here if attending annual meeting. ( )
Signature(s)
Date , 1997
Exhibit H
The Southern Company (70-____)
Notice of Issuance and Sale of Common Stock; Order Authorizing
Proxy Solicitation
The Southern Company ("Southern"), 270 Peachtree Street, N.W., Atlanta,
Georgia 30303, a registered holding company, has filed a declaration pursuant to
Sections 6(a), 7 and 12(e) of the Act and Rules 62 and 65 thereunder.
Southern proposes, from time to time through February 17, 2007, to
grant Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation
Rights and Restricted Stock (collectively, "Awards"), and to issue shares of its
common stock, par value $5.00 per share, pursuant to the Southern Company
Performance Stock Plan ("Plan"). A total of 40,000,000 shares of common stock is
available for grants by the Compensation Management Succession Committee
("Committee") of the Board of Directors of Southern pursuant to the Plan. The
Plan permits the Committee to grant, in its discretion, 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.
Southern has filed its proxy solicitation material relating to the Plan
and requests that the effectiveness of its declaration with respect to the
solicitation of proxies for voting by its shareholders on the proposal to
approve the Plan be permitted to become effective as provided in Rule 62.
Southern proposes to mail the notice of meeting, proxy statement and proxy to
its shareholders for the meeting on May 28, 1997.
It appearing to the Commission that Southern's declaration regarding
the proposed solicitation of proxies should be permitted to become effective
forthwith, pursuant to Rule 62:
IT IS ORDERED, that the declaration regarding the proposed solicitation
of proxies be, and it hereby is, permitted to become effective forthwith,
pursuant to Rule 62 and subject to the terms and conditions prescribed in Rule
24 under the Act.
For the Commission, by the Division of Investment Management, pursuant
to delegated authority.
