SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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
(Name and addresses of agents for service)
The Commission is requested to mail signed copies of all orders, notices and
communications to the above agent for service and to:
Thomas A. Fanning
Executive Vice President, Treasurer
and
Chief Financial Officer
The Southern Company
270 Peachtree Street, N.W.
Atlanta, Georgia 30303
Walter M. Beale, Jr., Esq. John D. McLanahan, Esq.
Balch & Bingham LLP Troutman Sanders LLP
1901 Sixth Avenue North 600 Peachtree Street, N.E.
Suite 2600 Suite 5200
Birmingham, Alabama 35203-2628 Atlanta, Georgia 30308-2216
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, as amended (the "Act"),
proposes, from time to time through May 26, 2014, to issue shares of its common
stock, par value $5.00 per share ("Common Stock"), pursuant to the Outside
Directors Stock Plan for Directors of The Southern Company and Certain of its
Subsidiaries (the "Plan"), as described herein. The Plan is a consolidation of
the Outside Directors Stock Plan for The Southern Company ("Southern Stock
Plan") and the Outside Directors Stock Plan for Subsidiaries of The Southern
Company ("Subsidiaries Stock Plan").
The Board of Directors of Southern has adopted the Plan, subject to
stockholder approval. The purpose of the Plan is to provide a mechanism for
non-employee directors to automatically increase their ownership of Common Stock
and thereby further align their interest with those of Southern's stockholders.
The Plan will be administered by Southern's Governance Committee (the
"Committee"). The Committee will have exclusive authority to interpret the Plan.
The Plan provides for a portion of the retainer fee for non-employee
directors of Southern and any subsidiary of Southern which the Board of
Directors of Southern determines to bring under the Plan and which shall adopt
the Plan (the "Subsidiaries") to be paid in unrestricted shares of Common Stock
and permits each non-employee director to elect to have all or a portion of the
remainder of the director fee to be paid in shares of Common Stock instead of
cash. Southern expects that the initial Subsidiaries will be Alabama Power
Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company
and Savannah Electric and Power Company and that the approximate number of
participants under the Plan will initially be 50. The portion of the director
fee paid in Common Stock to Southern's non-employee directors pursuant to the
Plan will automatically be deferred in accordance with the terms of the deferred
compensation plan maintained by Southern. The non-employee directors of each
Subsidiary may elect to have the portion of the director fee paid in Common
Stock pursuant to the Plan to be deferred in accordance with the terms of the
deferred compensation plan maintained by such Subsidiary for its directors.
1,000,000 shares of Common Stock and the unissued shares of Common
Stock previously authorized and registered for issuance under the Southern Stock
Plan and the Subsidiaries Stock Plan (approximately 1,700,000 shares) will be
available for payment to the participants under the Plan.
The Board of Directors of Southern may terminate or amend the Plan at
any time except that without shareholder approval no amendment may be made which
would, absent such shareholder approval, disqualify the Plan for coverage under
Rule 16b-3, as promulgated by the Commission under the Securities and Exchange
Act of 1934, as amended.
The Plan will terminate on May 26, 2014, 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 26, 2004, 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 $10,000.
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:
Cost of Proxy Solicitation including Printing,
Postage and Mailing and Tabulation....................... $850,000
Services of Southern Company Services, Inc................. 20,000
Legal Fees 25,000
Miscellaneous.............................................. 15,000
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Total...................................................... $910,000
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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.
Rule 53 Analysis: The proposed transactions are subject to Rule 53,
which provides that, in determining whether to approve the issue or sale of a
security for purposes of financing the acquisition of an exempt wholesale
generator ("EWG") or foreign utility company ("FUCO"), the Commission shall not
make certain adverse findings if the conditions set forth in Rule 53(a)(1)
through (a)(4) are met, and are not otherwise made inapplicable by reason of the
existence of any of the circumstances described in Rule 53(b).
Southern currently meets all of the conditions of Rule 53(a), except
for clause (1). At December 31, 2003, Southern's "aggregate investment," as
defined in Rule 53(a)(1), in EWGs and FUCOs was approximately $304 billion, or
approximately 5.83% of Southern's "consolidated retained earnings," also as
defined in Rule 53(a)(1), as of December 31, 2003 ($5.213 billion).1 With
respect to Rule 53(a)(1), however, the Commission has determined that Southern's
financing of investments in EWGs and FUCOs in an amount greater than the amount
that would otherwise be allowed by Rule 53(a)(1) would not have either of the
adverse effects set forth in Rule 53(c). See The Southern Company, HCAR No.
16501, dated April 1, 1996 (the "Rule 53(c) Order"); and HCAR No. 26646, dated
January 15, 1997 (order denying request for consideration and motion to stay).
In addition, Southern has complied and will continue to comply with the
record-keeping requirements of Rule 53(a)(2), the limitation under Rule 53(a)(3)
on the use of operating company personnel to render services to EWGs and FUCOs
and the requirements of Rule 53(a)(4) concerning the submission of copies of
certain filings under the Act to retail rate regulatory commissions. Further,
none of the circumstances described in Rule 53(b) has occurred. Finally, Rule
53(c) is, by its terms, inapplicable since the requirements of paragraphs 53(a)
and 53(b) are satisfied.
Item 4. Regulatory Approval
The proposed transactions are not subject to the jurisdiction of any
state commission or of any federal commission other than the Commission.
____________________________________
1 Although Southern owns all of the equity in four indirect
subsidiaries (EPZ Lease, Inc., Dutch Gas Lease, Inc., GMAOG Lease, Inc. and NUON
Lease, Inc.), Southern has no direct or indirect investment or any aggregate
investment within the meaning of Rule 53 in these FUCOs, including any direct or
indirect guarantees or credit positions related to any capital or financing
leases. (See Southern's Application on Form U-1, File No. 70-9727, for further
information.) Southern has executed limited keep-well commitments whereby
Southern would be required to make capital contributions to SE Finance Capital
Corp. II, SE Finance Capital Corp. or SE Finance Company, Inc. in the event of a
shortfall in the scheduled debt service resulting from certain changes in the
payments due from Southern under the Southern Company Income Tax Allocation
Agreement. The maximum potential capital contribution required under these
commitments is the unamortized balance of the related loans, which totaled
approximately $380 million as of December 31, 2003.
Item 5. Procedure
In order to give Southern sufficient time for the preparation and
mailing of the proxy solicitation materials to its stockholders prior to the
annual meeting to be held on May 26, 2004, 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 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.
Item 6. Exhibits and Financial Statements
(a) Exhibits.
A-1 - Draft of Outside Directors Stock Plan for The
Southern Company and its Subsidiaries.
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 February
17, 2003, and presently in effect. (Designated in
Southern's Form 10-Q for the quarter ended June 30,
2003, File No. 1-3526, as Exhibit 3(a)(1)).
B - None.
C - None.
D - None.
E - None.
F - Opinion of Balch & Bingham 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.
Exhibits heretofore filed with the 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.
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 17, 2004 THE SOUTHERN COMPANY
By: /s/Tommy Chisholm
Tommy Chisholm
Secretary