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) August 10, 1998
ALABAMA POWER COMPANY
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(Exact name of registrant as specified in its charter)
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Alabama 1-3164 63-0004250
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(State or other jurisdiction (Commission File (IRS Employer Identification
of incorporation) Number) No.)
600 North 18th Street, Birmingham, Alabama 35291
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (205) 257-1000
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N/A
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(Former name or former address, if changed since last report.)
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Item 5. Other Events.
On August 10, 1998, Alabama Power Company (the "Company")
entered into a Purchase Agreement covering the issue and sale by the Company of
1,520,000 shares of 5.83% Class A Preferred Stock, Par Value $1 Per Share
(Stated Capital $25 Per Share) and 6,480,000 shares of 5.20% Class A Preferred
Stock, Par Value $1 Per Share (Stated Capital $25 Per Share). Said Class A
Preferred Stock was registered under the Securities Act of 1933, as amended,
pursuant to the shelf registration statement (Registration Statement No.
33-61845) of the Company.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
1 Purchase Agreement, dated August 10, 1998, among the Company
and Lehman Brothers Inc. as the Underwriter.
4.4 Amendment to Charter of the Company dated August 14, 1998,
which includes resolutions of the Board of Directors of the
Company establishing the new Stock.
12.1 Computation of ratio of earnings to fixed charges.
12.2 Computation of ratio of earnings to fixed charges plus
preferred dividend requirements (pre-income tax basis).
8 Opinion of Balch & Bingham LLP re Tax Matters.
15.1 Letter re unaudited interim financial information.
23.1 Consent of Balch & Bingham LLP.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Date: August 18, 1998 ALABAMA POWER COMPANY
By /s/ Wayne Boston
Wayne Boston
Assistant Secretary
EXHIBIT 1
8,000,000 Shares of Class A Preferred Stock
Par Value $1 Per Share
($25 Stated Capital Per Share)
ALABAMA POWER COMPANY
PURCHASE AGREEMENT
August 10, 1998
Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285
Ladies and Gentlemen:
Alabama Power Company, an Alabama corporation (the "Company"),
confirms its agreement (the "Agreement") with you (the "Underwriter"), with
respect to the sale by the Company and the purchase by the Underwriter of the
shares of Class A Preferred Stock, par value $1 per share, stated capital $25
per share, of the Company (the "Preferred Stock") to be issued as two series in
the respective amounts and having the respective terms set forth in Schedule I.
The Company understands that the Underwriter proposes to make
a public offering of the Preferred Stock as soon as the Underwriter deems
advisable after this Agreement has been executed and delivered.
SECTION 1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to the Underwriter as follows:
(a) A registration statement on Form S-3 (File No. 33-61845), in
respect of the Preferred Stock and certain other securities has been
prepared and filed in accordance with the provisions of the Securities
Act of 1933, as amended (the "1933 Act"), with the Securities and
Exchange Commission (the "Commission"); such registration statement, as
amended, and any post-effective amendment thereto, each in the form
heretofore delivered or to be delivered to the Underwriter, has been
declared effective by the Commission in such form (except that copies
of the registration statement, as amended, and any post-effective
amendment delivered to the Underwriter need not include exhibits but
shall include all documents incorporated by reference therein); and no
stop order suspending the effectiveness of such registration statement
has been issued and no proceeding for that purpose has been initiated
or, to the best knowledge of the Company, threatened by the Commission
(any preliminary prospectus, as supplemented by a preliminary
prospectus supplement, included in such registration statement or filed
with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the 1933 Act, being hereinafter
called a "Preliminary Prospectus"); such registration statement, as it
became effective, including the exhibits thereto and all documents
incorporated by reference therein pursuant to Item 12 of Form S-3 at
the time such registration statement became effective, being
hereinafter called the "Registration Statement"; the prospectus
relating to the Preferred Stock, in the form in which it was included
in the Registration Statement at the time it became effective, being
hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the 1933 Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any reference
to any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus or Prospectus, as the
case may be, under the Securities Exchange Act of 1934, as amended (the
"1934 Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section
13(a) or 15(d) of the 1934 Act after the effective date of the
Registration Statement that is incorporated by reference in the
Registration Statement; and the Prospectus as amended or supplemented
in final form by a prospectus supplement relating to the Preferred
Stock which is filed with the Commission, pursuant to Rule 424(b) under
the 1933 Act in accordance with Section 3(g) hereof, including any
documents incorporated by reference therein as of the date of such
filing, being hereinafter called the "Final Supplemented Prospectus".
(b) The documents incorporated by reference in the Registration
Statement or Prospectus, when they were filed with the Commission,
complied in all material respects with the applicable provisions of the
1934 Act and the rules and regulations of the Commission thereunder,
and as of such time of filing, when read together with the Prospectus,
none of such documents contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, when such
documents are filed with the Commission, will comply in all material
respects with the applicable provisions of the 1934 Act and the rules
and regulations of the Commission thereunder and, when read together
with the Prospectus as it otherwise may be amended or supplemented,
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the Company makes no
warranty or representation to the Underwriter with respect to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Underwriter
expressly for use in the Final Supplemented Prospectus.
(c) The Registration Statement and the Prospectus comply, and the Final
Supplemented Prospectus and any further amendments or supplements to
the Registration Statement or the Prospectus, when any such
post-effective amendments are declared effective or supplements are
filed with the Commission, as the case may be, will comply, in all
material respects with the applicable provisions of the 1933 Act, the
1934 Act, the 1939 Act (hereinafter defined) and the General Rules and
Regulations of the Commission thereunder and do not and will not, (i)
as of the date of filing with the Commission of the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1997 as to
the Registration Statement and any amendment thereto, and (ii) as of
the applicable filing date as to the Final Supplemented Prospectus and
any Prospectus as further amended or supplemented, contain an untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that
the Company makes no warranties or representations with respect to
statements or omissions made in the Registration Statement or the Final
Supplemented Prospectus in reliance upon and in conformity with
information furnished in writing to the Company by the Underwriter
expressly for use therein.
(d) With respect to the Registration Statement, the conditions for use
of Form S-3, as set forth in the General Instructions thereof, have
been satisfied.
(e) Since the respective dates as of which information is given in the
Registration Statement and the Final Supplemented Prospectus, except as
otherwise stated therein, there has been no material adverse change in
the business, properties or financial condition of the Company.
(f) The Company is a corporation duly organized and existing under the
laws of the State of Alabama and has due corporate authority to carry
on the public utility business in which it is engaged and to own and
operate the properties used by it in such business, to enter into and
perform its obligations under this Agreement and to issue and sell the
Preferred Stock to the Underwriter.
(g) This Agreement has been duly authorized, executed and delivered by the
Company.
(h) The issuance and delivery of the Preferred Stock has been duly
authorized by the Company and, on the Closing Date, the Preferred Stock
will have been duly executed by the Company and, when issued and
delivered against payment therefor as described in the Final
Supplemented Prospectus, will be validly issued and fully paid and
non-assessable and will conform in all material respects to all
statements relating thereto in the Final Supplemented Prospectus.
(i) The execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the transactions
contemplated herein and compliance by the Company with its obligations
hereunder shall have been duly authorized by all necessary corporate
action on the part of the Company and does not and will not result in
any violation of the charter or bylaws of the Company, and does not and
will not conflict with, or result in a breach of any of the terms or
provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or
assets of the Company under (A) any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which the
Company is a party or by which it may be bound or to which any of its
properties may be subject (except for conflicts, breaches or defaults
which would not, individually or in the aggregate, be materially
adverse to the Company or materially adverse to the transactions
contemplated by this Agreement), or (B) any existing applicable law,
rule, regulation, judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, or any
regulatory body or administrative agency or other governmental body
having jurisdiction over the Company, or any of its properties.
(j) No authorization, approval, consent or order of any court or
governmental authority or agency is necessary in connection with the
issuance and sale by the Company of the Preferred Stock or the
transactions by the Company contemplated in this Agreement, except (A)
such as may be required under the 1933 Act or the rules and regulations
thereunder; (B) such as may be required under the Public Utility
Holding Company Act of 1935, as amended (the "1935 Act"); (C) the
approval of the Alabama Public Service Commission (the "Alabama
Commission"); and (D) such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws.
SECTION 2. SALE AND DELIVERY TO UNDERWRITER; CLOSING.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, (i) the
Company agrees to sell to the Underwriter, and the Underwriter, agrees to
purchase from the Company, 8,000,000 shares of Preferred Stock at a price per
share equal to $25 per share of Preferred Stock and (ii) the Company agrees to
pay the Underwriter as compensation hereunder, a commission equal to $0.50 per
share of Preferred Stock.
(b) Payment for and delivery of certificates for the Preferred
Stock shall be made at the offices of Dewey Ballantine LLP, 1301 Avenue of the
Americas, New York, New York 10019 at 10:00 A.M., New York time, on August 19,
1998 or such other time, place or date as shall be agreed upon by the
Underwriter and the Company (such time and date of payment and delivery being
herein called the "Closing Date"). Payment shall be made to the Company by wire
transfer in federal funds at the Closing Date against delivery of certificates
for the shares of Preferred Stock to the Underwriter.
The certificate(s) for the shares of Preferred Stock will be
made available for examination by the Underwriter not later than 12:00 Noon, New
York time, on the last business day prior to the Closing Date.
On the Closing Date, the Company will pay the commission
payable to the Underwriter pursuant to paragraph (a) of this Section 2 by wire
transfer in federal funds against receipt therefor by the Underwriter.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with the
Underwriter as follows:
(a) The Company, on or prior to the Closing Date, will deliver to the
Underwriter conformed copies of the Registration Statement as
originally filed and of all amendments thereto, heretofore or hereafter
made, including any post-effective amendment (in each case including
all exhibits filed therewith, and including unsigned copies of each
consent and certificate included therein or filed as an exhibit
thereto, except exhibits incorporated by reference, unless specifically
requested). As soon as the Company is advised thereof, it will advise
the Underwriter orally of the issuance of any stop order under the 1933
Act with respect to the Registration Statement, or the institution of
any proceedings therefor, of which the Company shall have received
notice, and will use its best efforts to prevent the issuance of any
such stop order and to secure the prompt removal thereof, if issued.
The Company will deliver to the Underwriter conformed copies of the
Registration Statement, the Prospectus and the Final Supplemented
Prospectus and of all supplements and amendments thereto (in each case
without exhibits) and, from time to time, as many copies of the
Prospectus and the Final Supplemented Prospectus as the Underwriter may
reasonably request for the purposes contemplated by the 1933 Act or the
1934 Act.
(b) The Company will furnish the Underwriter with copies of each
amendment and supplement to the Final Supplemented Prospectus relating
to the offering of the Preferred Stock in such quantities as the
Underwriter may from time to time reasonably request. If, during the
period (not exceeding nine months) when the delivery of a prospectus
shall be required by law in connection with the sale of any Preferred
Stock by the Underwriter or a dealer, any event relating to or
affecting the Company, or of which the Company shall be advised in
writing by the Underwriter, shall occur, which in the opinion of the
Company or of Underwriter's counsel should be set forth in a supplement
to or an amendment of the Final Supplemented Prospectus in order to
make the Final Supplemented Prospectus not misleading in the light of
the circumstances when it is delivered, or if for any other reason it
shall be necessary during such period to amend or supplement the Final
Supplemented Prospectus or to file under the 1934 Act any document
incorporated by reference in the Preliminary Prospectus or Prospectus
in order to comply with the 1933 Act or the 1934 Act, the Company
forthwith will (i) notify the Underwriter to suspend solicitation of
purchases of the Preferred Stock and (ii) at its expense, make any such
filing or prepare and furnish to the Underwriter a reasonable number of
copies of a supplement or supplements or an amendment or amendments to
the Final Supplemented Prospectus which will supplement or amend the
Final Supplemented Prospectus so that, as supplemented or amended, it
will not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances when the Final Supplemented
Prospectus is delivered, not misleading or which will effect any other
necessary compliance. In case the Underwriter is required to deliver a
prospectus in connection with the sale of any Preferred Stock after the
expiration of the period specified in the preceding sentence, the
Company, upon the request of the Underwriter, will furnish to the
Underwriter, at the expense of the Underwriter, a reasonable quantity
of a supplemented or amended prospectus, or supplements or amendments
to the Final Supplemented Prospectus, complying with Section 10(a) of
the 1933 Act. During the period specified in the second sentence of
this subsection, the Company will continue to prepare and file with the
Commission on a timely basis all documents or amendments required under
the 1934 Act and the rules and regulations thereunder; provided, that
the Company shall not file such documents or amendments without also
furnishing copies thereof prior to such filing to the Underwriter and
Dewey Ballantine LLP.
(c) The Company will endeavor, in cooperation with the Underwriter, to
qualify the Preferred Stock for offering and sale under the applicable
securities laws of such states and the other jurisdictions of the
United States as the Underwriter may designate; provided, however, that
the Company shall not be obligated to qualify as a foreign corporation
in any jurisdiction in which it is not so qualified or to file a
consent to service of process or to file annual reports or to comply
with any other requirements in connection with such qualification
deemed by the Company to be unduly burdensome.
(d) The Company will make generally available to its security holders
as soon as practicable but not later than 45 days after the close of
the period covered thereby, an earnings statement of the Company (in
form complying with the provisions of Rule 158 of the rules and
regulations under the 1933 Act) covering a twelve-month period
beginning not later than the first day of the Company's fiscal quarter
next following the "effective date" (as defined in Rule 158) of the
Registration Statement.
(e) The Company will use its best efforts to effect the listing of the
Preferred Stock on the New York Stock Exchange.
(f) During a period of 15 days from the date of this Agreement, the
Company will not, without the Underwriter's prior written consent,
directly or indirectly, sell, offer to sell, grant any option for the
sale of, or otherwise dispose of, any share of Preferred Stock or any
security convertible into or exchangeable into or exercisable for
preferred stock of the Company or any securities substantially similar
to the Preferred Stock (except for the Preferred Stock issued pursuant
to this Agreement).
(g) As soon as practicable after the date of this Agreement, and in any
event within the time prescribed by Rule 424 under the 1933 Act, to
file the Final Supplemented Prospectus with the Commission and to
advise the Underwriter of such filing and to confirm such advice in
writing.
(h) The Company will file in the office of the Secretary of the State
of Alabama a charter amendment creating the Preferred Stock.
SECTION 4. PAYMENT OF EXPENSES. Except to the extent otherwise
provided in Section 12 hereof, the Company will pay all expenses incidental to
the performance of its obligations under this Agreement, including but not
limited to, the expenses of (i) the printing and filing of the Registration
Statement as originally filed and of each amendment thereto, (ii) the
preparation, issuance and delivery of the certificate(s) for the shares of
Preferred Stock to the Underwriter, (iii) the fees and disbursements of the
Company's counsel and accountants, (iv) the qualification of the Preferred Stock
under securities laws in accordance with the provisions of Section 3(c) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriter in connection therewith and in connection with the preparation
of any blue sky survey (such fees and disbursements of counsel shall not exceed
$3,500), (v) the printing and delivery to the Underwriter of copies of the
Registration Statement as originally filed and of each amendment thereto and of
the Prospectus, the Final Supplemented Prospectus, and any amendments or
supplements thereto, (vi) the printing and delivery to the Underwriter of copies
of any blue sky survey, (vii) the fee of the National Association of Securities
Dealers, Inc. in connection with its review of the offering contemplated by this
Agreement, if applicable, (viii) the fees and expenses incurred in connection
with the listing of the Preferred Stock on the New York Stock Exchange, (ix) the
cost and charges of any transfer agent or registrar, and (x) the cost of
qualifying the Preferred Stock with The Depository Trust Company.
Except as otherwise provided in Section 9 hereof, the
Underwriter shall pay all other expenses incurred by it in connection with its
offering of the Preferred Stock including fees and disbursements of its counsel,
Dewey Ballantine LLP.
SECTION 5. CONDITIONS OF THE UNDERWRITER'S OBLIGA-TIONS. The obligations of
the Underwriter to purchase and pay for the shares of Preferred Stock
are subject to the following conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect on the Closing Date and no proceedings for
that purpose shall be pending before, or to the knowledge of the
Company threatened by, the Commission on such date. If filing of the
Final Supplemented Prospectus, or any supplement thereto, is required
pursuant to Rule 424, the Final Supplemented Prospectus, and any such
supplement, shall have been filed in the manner and within the time
period required by Rule 424.
(b) Any required orders of the Alabama Commission and the Commission
permitting the transactions contemplated hereby substantially in
accordance with the terms and conditions hereof shall be in full force
and effect and shall contain no provision unacceptable to the
Underwriter or the Company (but all provisions of such order or orders
heretofore entered, copies of which have heretofore been delivered to
the Underwriter, are deemed acceptable to the Underwriter and the
Company and all provisions of such order or orders hereafter entered
shall be deemed acceptable to the Underwriter and the Company unless
within 24 hours after receiving a copy of any such order any party to
this Agreement shall give notice to the other parties to the effect
that such order contains an unacceptable provision).
(c) On the Closing Date the Underwriter shall have received:
(1) The opinion, dated the Closing Date, of Balch & Bingham
LLP, general counsel for the Company, substantially in the form
attached hereto as Schedule II-A.
(2) The opinion, dated the Closing Date, of Troutman Sanders
LLP, counsel for the Company, substantially in the form attached hereto
as Schedule II-B.
(3) The opinion, dated as of the Closing Date, of Dewey
Ballantine LLP, counsel for the Underwriter, substantially in the form
attached hereto as Schedule III.
(4) At the Closing Date, there shall not have been, since the
date hereof or since the respective dates as of which information is
given in the Registration Statement and the Final Supplemented
Prospectus, any material adverse change in the business, properties or
financial condition of the Company, whether or not arising in the
ordinary course of business, and the Underwriter shall have received a
certificate of the President or any Vice President of the Company, and
dated as of the Closing Date, to the effect that (i) there has been no
such material adverse change, (ii) the representations and warranties
in Section 1 hereof are true and correct with the same force and effect
as though expressly made at and as of the Closing Date, (iii) the
Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied on or prior to the Closing
Date, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been initiated or, to the knowledge of the Company,
threatened by the Commission.
(5) On the Closing Date, the Underwriter shall have received
from Arthur Andersen LLP a letter dated the Closing Date to the effect
that: (A) they are independent public accountants with respect to the
Company within the meaning of the 1933 Act and the rules and
regulations under the 1933 Act; (B) in their opinion, the financial
statements audited by them and incorporated by reference in the
Prospectus comply as to form in all material respects with the
applicable accounting requirements of the 1934 Act and the rules and
regulations under the 1934 Act; and (C) on the basis of certain limited
procedures performed through a specified date not more than five
business days prior to the date of such letter, namely (i) reading the
minute books of the Company; (ii) performing the procedures specified
by the American Institute of Certified Public Accountants ("AICPA") for
a review of interim financial information as described in Statement on
Auditing Standards No. 71, "Interim Financial Information", on the
unaudited financial statements, if any, of the Company incorporated in
the Prospectus and of the latest available unaudited financial
statements of the Company, if any, as of any calendar quarter
subsequent to the date of those incorporated in the Prospectus; and
(iii) making inquiries of certain officials of the Company who have
responsibility for financial and accounting matters regarding such
unaudited financial statements or any specified unaudited amounts
derived therefrom (it being understood that the foregoing procedures do
not constitute an audit performed in accordance with generally accepted
auditing standards and they would not necessarily reveal matters of
significance with respect to the comments made in such letter, and
accordingly that Arthur Andersen LLP make no representations as to the
sufficiency of such procedures for the Underwriter's purposes), nothing
came to their attention that caused them to believe that: (1) any
material modifications should be made to the unaudited condensed
financial statements, if any incorporated in the Prospectus, for them
to be in conformity with generally accepted accounting principles; (2)
such unaudited condensed financial statements do not comply as to form
in all material respects with the applicable accounting requirements of
the 1934 Act as it applies to Form 10-Q and the related published rules
and regulations thereunder; (3) the unaudited amounts for Operating
Revenues, Income Before Interest Charges and Net Income After Dividends
on Preferred Stock and the unaudited Ratios of Earnings to Fixed
Charges and Earnings to Fixed Charges Plus Preferred Dividends
Requirements (Pre-Income Tax Basis) set forth in the Prospectus do not
agree with the amounts set forth in or derived from the unaudited
financial statements for the same period or were not determined on a
basis substantially consistent with that of the corresponding audited
amounts or ratios included or incorporated by reference in the
Registration Statement; (4) as of a specified date not more than five
business days prior to the date of delivery of such letter, there has
been any change in the capital stock or long-term debt of the Company
or any decrease in net assets as compared with amounts shown in the
latest audited balance sheet incorporated in the Prospectus, except in
each case for changes or decreases which (i) the Prospectus discloses
have occurred or may occur, (ii) are occasioned by the declaration of
dividends, (iii) are occasioned by draw-downs under existing pollution
control financing arrangements, (iv) are occasioned by draw-downs and
regularly scheduled payments of capitalized lease obligations, (v) are
occasioned by the purchase or redemption of bonds or stock to satisfy
mandatory or optional redemption provisions relating thereto, or (vi)
are disclosed in such letter; and (5) the unaudited amounts for
Operating Revenues, Income Before Interest Charges and Net Income After
Dividends Preferred Stock and the unaudited Ratios of Earnings to Fixed
Charges Plus Preferred Dividend Requirements (Pre-Income Tax Basis) for
the latest calendar quarter subsequent to those set forth in (3) above,
which if available shall be set forth in such letter, do not agree with
the amounts set forth in or derived from the unaudited financial
statements for the same period or were not determined on a basis
substantially consistent with that of the corresponding audited amounts
or ratios included or incorporated by reference in the Prospectus.
(6) On the Closing Date, counsel for the Underwriter shall
have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Preferred Stock as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company
in connection with the issuance and sale of the Preferred Stock as
herein contemplated shall be satisfactory in form and substance to the
Underwriter and Dewey Ballantine LLP, counsel for the Underwriter.
(7) On the Closing Date, the Preferred Stock shall have been
approved for listing on the New York Stock Exchange upon notice of
issuance.
(8) That no amendment or supplement to the Registration
Statement or the Final Supplemented Prospectus filed subsequent to the
date of this Agreement (including any filing made by the Company
pursuant to Section 13 or 14 of the 1934 Act) shall be unsatisfactory
in form to Dewey Ballantine LLP or shall contain information (other
than with respect to an amendment or supplement relating solely to the
activity of the Underwriter) which, in the reasonable judgment of the
Underwriter, shall materially impair the marketability of the Preferred
Stock.
(9) The Company shall have performed its obligations when and
as provided under this Agreement.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Underwriter by notice to the Company at any time prior to the Closing
Date, and such termination shall be without liability of any party to any other
party except as provided in Sections 4, 7 and 9(b) hereof.
SECTION 6. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company shall be subject to the
conditions set forth in the first sentence of Section 5(a) and in Section 5(b).
In case such conditions shall not have been fulfilled, this Agreement may be
terminated by the Company by mailing or delivering written notice thereof to the
Underwriter. Any such termination shall be without liability of any party to any
other party except as otherwise provided in Sections 4, 7 and 9(b) hereof.
SECTION 7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the
Underwriter and each person, if any, who controls the Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against
any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the 1933 Act, 1934 Act or
otherwise, and to reimburse the Underwriter and such controlling person or
persons, if any, for any legal or other expenses incurred by them in connection
with defending any actions, insofar as such losses, claims, damages, liabilities
or actions arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement, the Prospectus, or the Final Supplemented Prospectus or,
if the Company shall furnish to the Underwriter any amendments or any
supplements thereto, or shall make any filings pursuant to Section 13 or 14 of
the 1934 Act which are incorporated therein by reference, in any Preliminary
Prospectus, the Registration Statement, the Prospectus, or the Final
Supplemented Prospectus as so amended or supplemented, or arise out of or are
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
actions arise out of or are based upon any such untrue statement or alleged
untrue statement or omission or alleged omission which was made in such
Registration Statement, Preliminary Prospectus, Prospectus, or the Final
Supplemented Prospectus in reliance upon and in conformity with information
furnished in writing to the Company by the Underwriter for use therein and
except that this indemnity with respect to the Preliminary Prospectus, the
Prospectus, or the Final Supplemented Prospectus, if the Company shall have
furnished any amendment or supplement thereto, shall not inure to the benefit of
the Underwriter (or of any person controlling the Underwriter) on account of any
losses, claims, damages, liabilities or actions arising from the sale of the
Preferred Stock to any person if a copy of the Preliminary Prospectus, the
Prospectus, or the Final Supplemented Prospectus (exclusive of documents
incorporated therein by reference pursuant to Item 12 of Form S-3), as the same
may then be amended or supplemented, shall not have been sent or given by or on
behalf of the Underwriter to such person with or prior to the written
confirmation of the sale involved and the untrue statement or alleged untrue
statement or omission or alleged omission was corrected in the Preliminary
Prospectus, the Prospectus, or the Final Supplemented Prospectus as supplemented
or amended at the time of such confirmation. The Underwriter agrees, within ten
days after the receipt by it of notice of the commencement of any action in
respect of which indemnity may be sought by it, or by any person controlling it,
from the Company on account of its agreement contained in this Section 7, to
notify the Company in writing of the commencement thereof but the omission of
the Underwriter so to notify the Company of any such action shall not release
the Company from any liability which it may have to the Underwriter or to such
controlling person otherwise than on account of the indemnity agreement
contained in this Section 7. In case any such action shall be brought against
the Underwriter or any such person controlling the Underwriter and the
Underwriter shall notify the Company of the commencement thereof as above
provided, the Company shall be entitled to participate in (and, to the extent
that it shall wish, including the selection of counsel, to direct) the defense
thereof, at its own expense. In case the Company elects to direct such defense
and select such counsel, the Underwriter or any controlling person shall have
the right to employ its own counsel, but, in any such case, the fees and
expenses of such counsel shall be at the expense of the Underwriter or
controlling person unless the employment of such counsel has been authorized in
writing by the Company in connection with defending such action. No indemnifying
party shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification may be sought hereunder (whether or not the indemnified party is
an actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (ii) does not
include any statement as to, or an admission of, fault, culpability or a failure
to act, by or on behalf of any indemnified party. In no event shall any
indemnifying party have any liability or responsibility in respect of the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim effected without its prior
written consent.
(b) The Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors and such of its officers
who have signed the Registration Statement and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act or Section 20(a) of
the 1934 Act to the same extent and upon the same terms as the indemnity
agreement of the Company set forth in Section 7(a) hereof, but only with respect
to alleged untrue statements or omissions made in the Registration Statement,
the Preliminary Prospectus, the Prospectus, or the Final Supplemented
Prospectus, or such documents as amended or supplemented, in reliance upon and
in conformity with information furnished in writing to the Company by the
Underwriter for use therein.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of the Company
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Underwriter or
controlling person, or by, or on behalf of the Company and shall survive
delivery of the Preferred Stock to the Underwriter.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Underwriter may terminate this Agreement, by notice to
the Company, at any time at or prior to the Closing Date if (i) trading in
securities on the New York Stock Exchange shall have been generally suspended,
(ii) minimum or maximum ranges for prices shall have been generally established
on the New York Stock Exchange by the Commission or by the New York Stock
Exchange, (iii) a general banking moratorium shall have been declared by federal
or New York State authorities, or (iv) there shall have occurred any outbreak or
escalation of major hostilities in which the United States is involved, any
declaration of war by the United States Congress or any other substantial
national or international calamity or emergency affecting the United States, in
any such case provided for in clauses (i) through (iv) with the result that, in
the reasonable judgement of the Underwriter, the marketability of the Preferred
Stock shall have been materially impaired.
(b) If this Agreement shall be terminated by the Underwriter
pursuant to subsection (a) above or because of any failure or refusal on the
part of the Company to comply with the terms or to fulfill any of the conditions
of this Agreement, or if for any reason the Company shall be unable to perform
its obligations under this Agreement, then in any such case, the Company will
reimburse the Underwriter for the reasonable fees and disbursements of Dewey
Ballantine LLP and for the out of pocket expenses (in an amount not exceeding
$10,000) reasonably incurred by the Underwriter in making preparations for the
purchase, sale and delivery of the shares of Preferred Stock and, upon such
reimbursement, the Company shall be absolved from any further liability
hereunder, except as provided in Sections 4 and 7.
SECTION 10. NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to Lehman Brothers Inc., 3 World Financial Center,
New York, New York 10285, Attention: Managing Director, Utilities Investment
Banking; notices to the Company shall be delivered to 600 North 18th Street,
Birmingham, Alabama 35291, Attention: Corporate Secretary, with a copy to
Southern Company Services, Inc., 270 Peachtree Street, N.W., Atlanta, Georgia
30303, Attention: Charles N. Eldred.
SECTION 11. PARTIES. This Agreement shall inure to the benefit
of and be binding upon the Underwriter, the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriter and the Company and their respective successors and the controlling
persons and officers and directors referred to in Section 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriter and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Preferred Stock from the Underwriter shall be
deemed to be a successor by reason merely of such purchase.
SECTION 12. COMPANY EXPENSES. The Underwriter agrees to
reimburse the Company for expenses incurred in connection with the issuance and
sale of the Preferred Stock in an amount not to exceed $300,000. Such expenses
may include, among other things, filing fees, counsel fees, trustees fees and
printing costs. The Company will provide to the Underwriter a statement of such
expenses prior to the Closing Date and the amount of such expenses shall be paid
by wire transfer in federal funds at the Closing.
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed in said State. Except as
otherwise set forth herein, specified times of day refer to New York City time.
SECTION 14. COUNTERPARTS. This Agreement may be executed by
any one or more of the parties hereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriter and the Company in accordance with its terms.
Very truly yours,
ALABAMA POWER COMPANY
By: ________________________________
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written
LEHMAN BROTHERS INC.
By:__________________________
Title:
<PAGE>
SCHEDULE I
1,520,000 Shares
5.83% Class A Preferred Stock Cumulative
Par Value $1 Per Share
(Stated Capital $25 Per Share)
6,480,000 Shares
5.20% Class A Preferred Stock Cumulative
Par Value $1 Per Share
(Stated Capital $25 Per Share)
<PAGE>
Schedule II-A
[Letterhead of Balch & Bingham LLP]
___________ __, 199_
Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285
ALABAMA POWER COMPANY
_________ Shares of Class A Preferred Stock
Dear Sirs:
We have acted as general counsel to Alabama Power Company (the
"Company") in connection with the purchase by you of ____________ Shares of
Class A Preferred Stock of the Company (the "Preferred Stock") pursuant to the
terms of a Purchase Agreement dated _______, 1998 (the "Purchase Agreement"),
between the Company and you as the underwriter named therein (the
"Underwriter"). This opinion is being delivered to you pursuant to Section
5(c)(1) thereof.
All capitalized terms not otherwise defined herein shall have
the meanings set forth in the Purchase Agreement.
In rendering the opinions expressed below, we have examined
the registration statement on Form S-3 (No. 33-61845) pertaining to the
Preferred Stock (the "Registration Statement") filed under the Securities Act of
1933, as amended (the "Act"), and the prospectus dated _________, 199__ as
supplemented by a final prospectus supplement dated __________, 199_ (the "Final
Supplemented Prospectus"), which pursuant to Form S-3 incorporates by reference
the Annual Report on Form 10-K of the Company for the fiscal year ended
__________________, 199_, the Quarterly Reports on Form 10-Q of the Company for
the quarters ended _____________ and the Current Reports on Form 8-K of the
Company dated _____________(the "Exchange Act Documents"), each as filed under
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the
certificates representing the Preferred Stock, of which we have examined a
specimen), and we have made such other and further investigations as we deemed
necessary to express the opinions hereinafter set forth.
We are of the opinion, relying as to matters of New York law
upon the opinion dated the date hereof rendered to you by Dewey Ballantine LLP,
that:
1. The Company has been duly organized and is validly existing and in
good standing as a corporation under the laws of the State of Alabama and has
due corporate authority to carry on the public utility business in which it is
engaged and to own and operate the properties used by it in such business and to
enter into and perform its obligations under the Purchase Agreement.
2. The execution, delivery and performance by the Company of the
Purchase Agreement have been duly authorized by all necessary corporate action,
and the Purchase Agreement has been duly executed and delivered by the Company.
3. All orders, consents, or other authorizations or approvals of the
Alabama Public Service Commission and the Commission legally required for the
issuance and sale of the Preferred Stock have been obtained; such orders are
sufficient for the issuance and the sale of the Preferred Stock; the issuance
and the sale of the Preferred Stock conform in all material respects with the
terms of such orders; and no other order, consent or other authorization or
approval of any Alabama or United States governmental body (other than in
connection or in compliance with the provisions of the securities or "blue sky"
laws of any jurisdiction, as to which we express no opinion) is legally required
for the issuance and sale of the Preferred Stock in accordance with the terms of
the Purchase Agreement.
4. The Preferred Stock has been duly authorized by the Company and,
upon payment and delivery in accordance with the Purchase Agreement, will be
validly issued, fully paid and nonassessable.
5. The statements made in the Final Supplemented Prospectus under the
captions "Description of New Stock" and "Certain Terms of the New Stock"
constitute accurate summaries of the terms of the articles of incorporation of
the Company and the Preferred Stock in all material respects.
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement,
the Final Supplemented Prospectus or the Exchange Act Documents and take no
responsibility therefor, except as and to the extent set forth in paragraph 5
above and in the Final Supplemented Prospectus in the second paragraph under the
caption "Experts". In the course of the preparation by the Company of the
Registration Statement, the Final Supplemented Prospectus and the Exchange Act
Documents, we participated in conferences with certain officers and employees of
the Company, with other counsel for the Company and with representatives of
Arthur Andersen LLP. Based upon our examination of the Registration Statement,
the Final Supplemented Prospectus and the Exchange Act Documents, our
investigations made in connection with the preparation of the Registration
Statement, the Final Supplemented Prospectus and the Exchange Act Documents and
our participation in the conferences referred to above, (i) we are of the
opinion that the Registration Statement, as of its effective date, and the Final
Supplemented Prospectus, as of __________, complied as to form in all material
respects with the requirements of the Act and the applicable rules and
regulations of the Commission thereunder and that the Exchange Act Documents, as
of their respective dates of filing with the Commission, complied as to form in
all material respects with the relevant requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, except that in
each case we express no opinion as to the financial statements or other
financial or statistical data contained or incorporated by reference in the
Registration Statement, the Final Supplemented Prospectus or the Exchange Act
Documents, and (ii) nothing came to our attention which gives us reason to
believe that the Registration Statement, as of the date of filing with the
Commission of the Annual Report on Form 10-K of the Company for the fiscal year
ended December 31, 1997 (including the Exchange Act Documents on file with the
Commission as of such date), contained any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading, or that the Final
Supplemented Prospectus (including the Exchange Act Documents) contains any
untrue statement therein of a material fact or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that in each
case we express no opinion or belief with respect to the financial statements or
other financial or statistical data contained or incorporated by reference in
the Registration Statement, the Final Supplemented Prospectus or the Exchange
Act Documents.
We are members of the State Bar of Alabama and we do not
express any opinion herein concerning any law other than the law of such State
and the federal law of the United States and, to the extent set forth herein,
the law of the State of New York.
This opinion is rendered to you in connection with the
above-described transaction. This opinion may not be relied upon by you for any
other purpose, or relied upon by or furnished to any other person without our
prior written consent, except that Troutman Sanders LLP and Dewey Ballantine LLP
may rely on this opinion in giving their opinions pursuant to Section 5(c) of
the Purchase Agreement insofar as such opinion relates to matters of Alabama
law.
Yours very truly,
BALCH & BINGHAM LLP
<PAGE>
Schedule II-B
[Letterhead of TROUTMAN SANDERS LLP]
__________ __, 199_
Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285
ALABAMA POWER COMPANY
__________ Shares of Class A Preferred Stock
Dear Sirs:
We have acted as counsel to Alabama Power Company (the
"Company") in connection with the purchase by you of _______ Shares of Class A
Preferred Stock of the Company (the "Preferred Stock") pursuant to the terms of
a Purchase Agreement dated ________, 1998 (the "Purchase Agreement"), between
the Company and the you as the underwriter named therein (the "Underwriter").
This opinion is being delivered to you pursuant to Section 5(c)(2) thereof.
All capitalized terms not otherwise defined herein shall have
the meanings set forth in the Purchase Agreement.
In rendering the opinions expressed below, we have examined
the registration statement on Form S-3 (No. 33-61845) pertaining to the
Preferred Stock (the "Registration Statement") filed under the Securities Act of
1933, as amended (the "Act"), and the prospectus dated _________, 1998 as
supplemented by a final prospectus supplement dated __________, 199_ (the "Final
Supplemented Prospectus"), which pursuant to Form S-3 incorporates by reference
the Annual Report on Form 10-K of the Company for the fiscal year ended
_____________, 199_, the Quarterly Reports on Form 10-Q of the Company for the
quarters ended ____________ and the Current Reports on Form 8-K of the Company
dated _________ (the "Exchange Act Documents"), each as filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the
certificates representing the Preferred Stock, of which we have examined a
specimen), and we have made such other and further investigations as we deemed
necessary to express the opinions hereinafter set forth. In such examination, we
have assumed the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified
or photostatic copies, and the authenticity of the originals of such latter
documents.
Based upon the foregoing, and subject to the qualifications
and limitations stated herein, we are of the opinion, relying as to matters of
Alabama law upon the opinion dated the date hereof rendered to you by Balch &
Bingham LLP and relying as to matters of New York law upon the opinion dated the
date hereof rendered to you by Dewey Ballantine LLP, that:
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Alabama and has due
corporate authority to carry on the public utility business in which it is
engaged, to own and operate the properties used by it in such business and to
enter into and perform its obligations under the Agreements.
2. The execution, delivery and performance by the Company of the
Purchase Agreement have been duly authorized by all necessary corporate action,
and the Purchase Agreement has been duly executed and delivered by the Company.
3. All orders, consents or other authorizations or approvals of the
Alabama Public Service Commission and the Commission legally required for the
issuance and sale of the Preferred Stock have been obtained; such orders are
sufficient for the issuance and sale of the Preferred Stock; the issuance and
sale of the Preferred Stock conform in all material respects with the terms of
such orders; and no other order, consent or other authorization or approval of
any Alabama or United States governmental body (other than in connection or in
compliance with the provisions of the securities or "blue sky" laws of any
jurisdiction, as to which we express no opinion) is legally required for the
issuance and sale of the Preferred Stock in accordance with the terms of the
Purchase Agreement.
4. The Preferred Stock has been duly authorized by the Company and,
upon payment and delivery in accordance with the Purchase Agreement, will be
validly issued, fully paid and nonassessable.
5. The statements made in the Final Supplemental Prospectus under the
captions "Description of New Stock" and "Certain Terms of the New Stock"
constitute accurate summaries of the terms of the articles of incorporation of
the Company and the Preferred Stock in all material respects.
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement,
the Final Supplemented Prospectus or the Exchange Act Documents and take no
responsibility therefor, except as and to the extent set forth in paragraph 5
above. In the course of the preparation by the Company of the Registration
Statement, the Final Supplemented Prospectus and the Exchange Act Documents, we
participated in conferences with certain officers and employees of the Company,
with other counsel for the Company, with representatives of Arthur Andersen LLP
and with your counsel. Based upon our examination of the Registration Statement,
the Final Supplemented Prospectus and the Exchange Act Documents, our
investigations made in connection with the preparation of the Registration
Statement, the Final Supplemented Prospectus and the Exchange Act Documents and
our participation in the conferences referred to above, (i) we are of the
opinion that the Registration Statement, as of its effective date, and the Final
Supplemented Prospectus, as of _______________, complied as to form in all
material respects with the requirements of the Act and the applicable rules and
regulations of the Commission thereunder and that the Exchange Act Documents, as
of their respective dates of filing with the Commission, complied as to form in
all material respects with the relevant requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, except that in
each case we express no opinion as to the financial statements or other
financial or statistical data contained or incorporated by reference in the
Registration Statement, the Final Supplemented Prospectus or the Exchange Act
Documents, and (ii) nothing came to our attention which gives us reason to
believe that the Registration Statement, as of the date of filing with the
Commission of the Annual Report on Form 10-K of the Company for the fiscal year
ended December 31, 1997 (including the Exchange Act Documents on file with the
Commission as of such date), contained any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading, or that the Final
Supplemented Prospectus (including the Exchange Act Documents) contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that in each case we express no
opinion or belief with respect to the financial statements or other financial or
statistical data contained or incorporated by reference in the Registration
Statement, the Final Supplemented Prospectus or the Exchange Act Documents.
We are members of the State Bar of Georgia and we do not
express any opinion herein concerning any law other than the law of the State of
Georgia and the federal law of the United States and, to the extent set forth
herein, the laws of the States of Alabama and New York.
This opinion is rendered to you in connection with the
above-described transaction. This opinion may not be relied upon by you for any
other purpose, or relied upon by or furnished to any other person without our
prior written consent.
Yours very truly,
TROUTMAN SANDERS LLP
<PAGE>
Schedule III
[Letterhead of DEWEY BALLANTINE LLP]
__________ __, 199_
Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285
ALABAMA POWER COMPANY
__________ Shares of Class A Preferred Stock
Ladies and Gentlemen:
We have represented you in connection with the purchase by you
of ______ Shares of Class A Preferred Stock of the Company (the "Preferred
Stock") pursuant to the terms of a Purchase Agreement dated ________________,
1998 (the "Purchase Agreement"), between the Company and you as the underwriter
named therein (the "Underwriter"). This opinion is being delivered to you
pursuant to Section 5(c)(3) thereof.
All capitalized terms not otherwise defined herein shall have
the meanings set forth in the Purchase Agreement.
In rendering the opinions expressed below, we have examined
the registration statement on Form S-3 (No. 33-61845) pertaining to the
Preferred Stock (the "Registration Statement"), filed under the Securities Act
of 1933, as amended (the "Act"), and the prospectus dated __________, 199_, as
supplemented by a final prospectus supplement dated _________, which pursuant to
Form S-3 incorporates by reference the Annual Report on Form 10-K of the Company
for the fiscal year ended ________________, 199_, the Quarterly Reports on Form
10-Q of the Company for the quarters ended _________ the Current Reports on Form
8-K of the Company, dated __________ (the "Exchange Act Documents"), each as
filed under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the
certificates representing the Preferred Stock, of which we have examined a
specimen), and we have made such other and further investigations as we deemed
necessary to express the opinions hereinafter set forth. In such examination, we
have assumed the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified
or photostatic copies, and the authenticity of the originals of such latter
documents.
Based upon the foregoing, and subject to the qualifications
and limitations stated herein, we are of the opinion, relying as aforesaid and
as to all matters covered hereby which are governed by or dependent upon the
laws of the State of Alabama upon the opinion of Balch & Bingham LLP dated the
date hereof and addressed to you, that:
1. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Alabama and has due corporate authority to carry on the public utility business
in which it is engaged and to own and operate the properties used by it in such
business and to enter into and perform its obligations under the Purchase
Agreement.
2. The execution, delivery and performance by the Company of
the Purchase Agreement have been duly authorized by all necessary corporate
action, and the Purchase Agreement has been duly executed and delivered by the
Company.
3. All orders, consents, or other authorizations or approvals
of the Alabama Public Service Commission and the Commission legally required for
the issuance and sale of the Preferred Stock have been obtained; such orders are
sufficient for the issuance and sale of the Preferred Stock; the issuance and
sale of the Preferred Stock conform in all material respects with the terms of
such orders; and no other order, consent or other authorization or approval of
any Alabama or United States governmental body (other than in connection or in
compliance with the provisions of the securities or "blue sky" laws of any
jurisdiction, as to which we express no opinion) is legally required for the
issuance and sale of the Preferred Stock in accordance with the terms of the
Purchase Agreement.
4. The Preferred Stock has been duly authorized by the Company
and, upon payment and delivery in accordance with the Purchase Agreement, will
be validly issued, fully paid and nonassessable.
5. The statements made in the Final Supplemented Prospectus
under the captions "Description of New Stock" and "Certain Terms of the New
Stock" constitute accurate summaries of the terms of the articles of
incorporation of the Company and Preferred Stock in all material respects.
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement,
the Final Supplemented Prospectus or the Exchange Act Documents and take no
responsibility therefor, except as and to the extent set forth in paragraphs 4
and 5 above. In the course of the preparation by the Company of the Registration
Statement, the Final Supplemented Prospectus and the Exchange Act Documents, we
participated in conferences with certain officers and employees of the Company,
with representatives of Arthur Andersen LLP and with counsel to the Company.
Based upon our examination of the Registration Statement, the Final Supplemented
Prospectus and the Exchange Act Documents, our investigations made in connection
with the preparation of the Registration Statement and the Final Supplemented
Prospectus and our participation in the conferences referred to above, (i) we
are of the opinion that the Registration Statement, as of its effective date,
and the Final Supplemented Prospectus, as of ___________, complied as to form in
all material respects with the requirements of the Act and the applicable rules
and regulations of the Commission thereunder and that the Exchange Act
Documents, as of their respective dates of filing with the Commission, complied
as to form in all material respects with the relevant requirements of the
Exchange Act and the applicable rules and regulations of the Commission
thereunder, except that in each case we express no opinion as to the financial
statements or other financial or statistical data contained or incorporated by
reference in the Registration Statement, the Final Supplemented Prospectus or
the Exchange Act Documents, and (ii) nothing came to our attention which gives
us reason to believe that the Registration Statement, as of the date of filing
with the Commission of the Annual Report on Form 10-K of the Company for the
fiscal year ended December 31, 1997 (including the Exchange Act Documents on
file with the Commission as of such date), contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading, or
that the Final Supplemented Prospectus (including the Exchange Act Documents)
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that in each
case we express no opinion or belief with respect to the financial statements or
other financial or statistical data contained or incorporated by reference in
the Registration Statement, the Final Supplemented Prospectus or the Exchange
Act Documents.
We are members of the State Bar of New York and we do not
express any opinion herein concerning any law other than the law of the State of
New York and the federal law of the United States, and to the extent set forth
herein, the law of the State of Alabama.
This opinion is rendered solely to you in connection with the
above matter. This opinion may not be relied upon by you for any other purpose
or relied upon by or furnished to any other person without our prior written
consent except that Balch & Bingham LLP and Troutman Sanders LLP may rely on
this opinion in giving their opinions pursuant to Section 5(c) of the Purchase
Agreement, insofar as such opinions relate to matters of New York law.
Very truly yours,
DEWEY BALLANTINE LLP
Exhibit 4.4
ARTICLES OF AMENDMENT
to the
ARTICLES OF INCORPORATION
of
ALABAMA POWER COMPANY
Pursuant to, and with the effect provided in, Section 10-2B-6.02 of the
Code of Alabama, 1975, as amended (the "Code"), the undersigned company adopts
the following Articles of Amendment to its Articles of Incorporation:
FIRST: The name of the company is "Alabama Power Company" (the "Company").
SECOND: The following resolutions amending the Company's Articles of
Incorporation, as amended, providing for, among other things, the
issuance and sale of not more than 8,000,000 shares of Class A
Preferred Stock ($25 Stated Capital Per Share) in one or more series
and establishing each series of the new stock, was duly adopted in the
manner provided by the Code by the Company's Board of Directors at a
meeting held on July 24, 1998, shareholder approval therefor not being
required:
RESOLVED, That the relative rights and preferences of
8,000,000 of the authorized but unissued shares of undesignated Class A
Preferred Stock (stated capital $25 per share) (the "new stock") are
hereby authorized to be issued in one or more series, and that in those
respects in which the shares thereof may vary from the shares of other
series of Class A Preferred Stock which may now or hereafter be
authorized or created, shall be as follows:
(1) The officers of the Company be and hereby are authorized
to determine the dividend rate or rates of the new stock, not
to exceed 6.0% of the stated capital per annum, accruing from
the date of original issue and the dividend payment dates
shall be the first days of January, April, July and October in
each year commencing on the next applicable dividend payment
date following the date of issuance of the new stock;
(2) No shares of the new stock shall be redeemed prior to ten
years from the first day of the month in which the new stock
is issued and the price at which shares may be redeemed
thereafter shall be $25 per share, plus accrued dividends to
the date of redemption;
<PAGE>
(3) The amount payable in the event of liquidation shall be
$25 per share, plus accrued dividends;
(4) The shares of such class shall not be, by their terms,
convertible or exchangeable;
(5) The shares of such class shall not be, by their terms,
entitled to the benefit of any sinking fund; and
(6) Upon the issuance of shares of the new stock, there shall
be transferred from the Premium on Capital Stock Account to
the Preferred Stock Account an amount equal to $24 per share,
and thereafter the stated capital of each share of the new
stock shall be $25 per share.
THIRD: The undersigned officers of the Company pursuant to the
authority granted them by the Company's Board of Directors at a meeting held on
July 24, 1998 hereby establish and designate, on behalf of the Company, two new
series of Class A Preferred Stock comprising 1,520,000 shares of 5.83% Class A
Preferred Stock (the "5.83% Class A Preferred Stock") and 6,480,000 shares of
5.20% Class A Preferred Stock (the "5.20% Class A Preferred Stock"). Dividends
shall be payable upon the 5.83% Class A Preferred Stock at a rate of 5.83% of
the stated capital per annum. Subject to the provisions in Exhibit A hereto,
dividends shall be payable on the 5.20% Class A Preferred Stock at a rate of
5.20% of the stated capital per annum.
IN WITNESS WHEREOF, the undersigned officers of the Company, do hereby
set their hand and the seal of the Company on the day of August, 1998.
William B. Hutchins, III
Vice President
Alabama Power Company
Patsy B. Southerland
Assistant Secretary
Alabama Power Company
This Instrument was prepared by:
Monica Warmbrod
Balch & Bingham LLP
1901 Sixth Avenue North, Suite 2600
Birmingham, Alabama 35203
<PAGE>
Exhibit A
If, prior to 18 months after the date of the original issuance of the
5.20% Class A Preferred Stock, one or more amendments to the Internal Revenue
Code of 1986, as amended (the "Code"), are enacted that reduce the percentage of
the dividends-received deduction for certain corporations (currently 70%) as
specified in Section 243(a)(1) of the Code or any successor provision (the
"Dividends-Received Percentage"), certain adjustments may be made in respect of
the dividends payable by the Company on the 5.20% Class A Preferred Stock, and
Post Declaration Date Dividends and Retroactive Dividends (as such terms are
defined below) may become payable on the 5.20% Class A Preferred Stock, as
described below.
The amount of each dividend payable (if declared) per share of 5.20%
Class A Preferred Stock for dividend payments made on or after the effective
date of such change in the Code will be adjusted by multiplying the amount of
the dividend payable described above (before adjustment) by the following
fraction (the "DRD Formula"), and rounding the result to the nearest cent (with
one-half cent rounded up):
1-.35(1-70)
1-.35(1-DRP)
For the purposes of the DRD Formula, "DRP" means the Dividends-Received
Percentage (expressed as a decimal) applicable to the dividend in question;
provided, however, that if the Dividends-Received Percentage applicable to the
dividend in question shall be less than 50%, then the DRP shall equal .50. No
amendment to the Code, other than a change in the percentage of the
dividends-received deduction set forth in Section 243(a)(1) of the Code or any
successor provision thereto, will give rise to an adjustment. Notwithstanding
the foregoing provisions, if, with respect to any such amendment, the Company
receives either an unqualified opinion of nationally recognized independent tax
counsel selected by the Company or a private letter ruling or similar form of
authorization from the Internal Revenue Service ("IRS") to the effect that such
amendment does not apply to a dividend payable on the 5.20% Class A Preferred
Stock, then such amendment will not result in the adjustment provided for
pursuant to the DRD Formula with respect to such dividend. The opinion
referenced in the previous sentence shall be based upon the legislation amending
or establishing the DRP or upon a published pronouncement of the IRS addressing
such legislation.
Notwithstanding the foregoing, if any such amendment to the Code is
enacted after the dividend payable on a Dividend Payment Date has been declared,
the amount of the dividend payable on such Dividend Payment Date will not be
increased; instead, additional dividends (the "Post Declaration Date Dividends")
equal to the excess, if any, of (x) the product of the dividend paid by the
Company on such Dividend Payment Date and the DRD Formula (where the DRP used in
the DRD Formula would be equal to the greater of the Dividend-Received
Percentage applicable to the dividend in question and .50) over (y) the dividend
paid by the Company on such Dividend Payment Date, will be payable (if declared)
to holders of 5.20% Class A Preferred Stock on the record date applicable to the
next succeeding Dividend Payment Date or, if the 5.20% Class A Preferred Stock
is called for redemption prior to such record date, to holders of 5.20% Class A
Preferred Stock on the applicable redemption date, as the case may be, in
addition to any other amounts payable on such date. Notwithstanding the
foregoing provisions, if, with respect to any such amendment, the Company
receives either an unqualified opinion of nationally recognized independent tax
counsel selected by the Company or a private letter ruling or similar form of
authorization from the IRS to the effect that such amendment does not apply to a
dividend so payable on the 5.20% Class A Preferred Stock, then such amendment
will not result in the payment of Post Declaration Date Dividends. The opinion
referenced in the previous sentence shall be based upon the legislation amending
or establishing the DRP or upon a published pronouncement of the IRS addressing
such legislation.
If any such amendment to the Code is enacted and the reduction in the
Dividends-Received Percentage retroactively applies to a Dividend Payment Date
as to which the Company previously paid dividends on the 5.20% Class A Preferred
Stock (each, an "Affected Dividend Payment Date"), the Company will pay (if
declared) additional dividends (the "Retroactive Dividends") to holders of 5.20%
Class A Preferred Stock on the record date applicable to the next succeeding
Dividend Payment Date (or, if such amendment is enacted after the dividend
payable on such Dividend Payment Date has been declared, to holders of 5.20%
Class A Preferred Stock on the record date following the date of enactment) or,
if the 5.20% Class A Preferred Stock is called for redemption prior to such
record date, to holders of 5.20% Class A Preferred Stock on the applicable
redemption date, as the case may be, in an amount equal to the excess of (x) the
product of the dividend paid by the Company on each Affected Dividend Payment
Date and the DRD Formula (where the DRP used in the DRD Formula would be equal
to the greater of the Dividends-Received Percentage and .50 applied to each
Affected Dividend Payment Date) over (y) the sum of the dividends paid by the
Company on each Affected Dividend Payment Date. The Company will only make one
payment of Retroactive Dividends for any such amendment. Notwithstanding the
foregoing provisions, if, with respect to any such amendment, the Company
receives either an unqualified opinion of nationally recognized independent tax
counsel selected by the Company or a private letter ruling or similar form of
authorization from the IRS to the effect that such amendment does not apply to a
dividend payable on an Affected Dividend Payment Date for the 5.20% Class A
Preferred Stock, then such amendment will not result in the payment of
Retroactive Dividends with respect to such Affected Dividend Payment Date. The
opinion referenced in the previous sentence shall be based upon the legislation
amending or establishing the DRP or upon a published pronouncement of the IRS
addressing such legislation.
Notwithstanding the foregoing, no adjustment in the dividends payable
by the Company shall be made, and no Post Declaration Date Dividends or
Retroactive Dividends shall be payable by the Company, in respect of the
enactment of any amendment to the Code 18 months or more after the date of
original issuance of the 5.20% Class A Preferred Stock that reduces the
Dividends-Received Percentage.
In the event that the amount of dividends payable per share of the
5.20% Class A Preferred Stock is adjusted pursuant to the DRD Formula and/or
Post Declaration Date Dividends or Retroactive Dividends are to be paid, the
Company will give notice of each such adjustment and, if applicable, any Post
Declaration Date Dividends and Retroactive Dividends to the holders of 5.20%
Class A Preferred Stock.
Unless the context otherwise requires, references to dividends on the
5.20% Class A Preferred Stock in the Company's Articles of Incorporation, as
amended, shall mean dividends as adjusted by the DRD Formula.
<TABLE>
<CAPTION>
Exhibit 12.1
ALABAMA POWER COMPANY
Computation of ratio of earnings to fixed charges for the
the five years ended December 31, 1997
and the twelve months ended June 30, 1998
<S> <C> <C>
Twelve
Months
Ended
Year ended December 31, June 30,
=========================================================================
1993 1994 1995 1996 1997 1998
==== ==== ==== ==== ==== ====
-----------------------------------------Thousands of Dollars------------
EARNINGS AS DEFINED IN ITEM 503 OF REGULATION S-K:
Income Before Interest Charges $ 608,050 $594,669 $628,304 $627,627 $645,449 $725,694
Federal and state income taxes 167,021 242,569 186,856 191,167 222,956 261,354
Deferred income taxes, net 34,467 (32,536) 32,047 16,715 (12,879) (24,174)
Deferred investment tax credits (2,106) (4) (75) - - -
AFUDC - Debt funds 3,016 3,590 7,109 6,517 4,855 3,972
------------- --------- -------- -------- ------- ---------
Earnings as defined $ 810,448 $ 808,288 $854,241 $842,026 $860,381 $966,846
============== ========= ======== ======== ======== ========
FIXED CHARGES AS DEFINED IN ITEM 503 OF REGULATION S-K:
Interest on long-term debt $186,779 $ 180,182 $183,199 $171,689 $169,536 $178,672
Interest on interim obligations 3,760 5,939 16,917 20,617 22,787 19,262
Amort of debt disc, premium and expense, net 8,999 9,655 20,270 9,520 9,657 34,739
Other interest charges 35,475 19,909 27,064 34,227 57,799 70,661
------------- --------- ------- ------- ------- -------
Fixed charges as defined $ 235,013 $ 215,685 $247,450 $236,053 $259,779 $303,334
============== ========= ========= ======== ======== ========
RATIO OF EARNINGS TO FIXED CHARGES 3.45 3.75 3.45 3.57 3.31 3.19
==== ==== ==== ==== ==== ====
Note: The above figures have been adjusted to give effect to Alabama Power Company's 50% ownership of Southern
Electric Generating Company.
</TABLE>
Exhibit 12.2
ALABAMA POWER COMPANY
Computation of ratio of earnings to fixed charges plus preferred
dividend requirements for the five years ended December 31, 1997
and the twelve months ended June 30, 1998
<TABLE>
<CAPTION>
<S> <C> <C>
Twelve
Months
Ended
June 30,
=====================================================================
1993 1994 1995 1996 1997 1998
---------------------------------------Thousands of Dollars-----------
EARNINGS AS DEFINED IN ITEM 503 OF REGULATION S-K:
Income Before Interest Charges $608,050 $ 594,669 $628,304 $627,627 $ 645,449 $725,694
Federal and state income taxes 167,021 242,569 186,856 191,167 222,956 261,354
Deferred income taxes, net 34,467 (32,536) 32,047 16,715 (12,879) (24,174)
Deferred investment tax credits (2,106) (4) (75) - - -
AFUDC - Debt funds 3,016 3,590 7,109 6,517 4,855 3,972
-------- --------- -------- ------- ---------- ---------
Earnings as defined $810,448 $ 808,288 $854,241 $842,026 $ 860,381 $ 966,846
======== ========= ======== ======== ========== =========
FIXED CHARGES AS DEFINED IN ITEM 503 OF REGULATION S-K:
Interest on long-term debt $186,779 $ 180,182 $183,199 $171,689 $ 169,536 $ 178,672
Interest on interim obligations 3,760 5,939 16,917 20,617 22,787 19,262
Amort of debt disc, premium and expense, net 8,999 9,655 20,270 9,520 9,657 34,739
Other interest charges 35,475 19,909 27,064 34,227 57,799 70,661
-------- --------- ------- ---------- ---------- ----------
Fixed charges as defined 235,013 215,685 247,450 236,053 259,779 303,334
Tax deductible preferred dividends 1,830 1,605 1,605 1,605 1,589 1,405
-------- --------- ------- ---------- ---------- ----------
236,843 217,290 249,055 237,658 261,368 304,739
-------- --------- ------- ---------- ---------- ----------
Non-tax deductible preferred dividends 27,729 24,630 25,464 24,997 12,997 9,140
Ratio of net income before taxes to net income x 1.530 x 1.549 x 1.564 x 1.522 x 1.538 x 1.556
-------- --------- -------- --------- ---------- ----------
Pref dividend requirements before income taxes 42,425 38,152 39,826 38,045 19,989 14,222
-------- --------- --------- --------- ---------- ----------
Fixed charges plus pref dividend requirements $279,268 $ 255,442 $288,881 $275,703 $ 281,357 $ 318,961
======== ========= ======== ========= ========== =========
RATIO OF EARNINGS TO FIXED CHARGES PLUS
PREFERRED DIVIDEND REQUIREMENTS 2.90 3.16 2.96 3.05 3.06 3.03
Note: The above figures have been adjusted to give effect to Alabama
Power Company's 50% ownership of Southern
Electric Generating Company.
</TABLE>
Exhibit 8
August 17, 1998
Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291
RE: Registration Statement on Form S-3 (File No. 33-61845) 5.83% Class A
Preferred Stock, Cumulative, Par Value $1 Per Share (Stated Capital
$25 Per Share)
Ladies and Gentlemen:
This will confirm that we have advised Alabama Power Company (the
"Company") with respect to certain federal income tax consequences associated
with ownership of the proposed 5.83% Class A Preferred Stock Cumulative, Par
Value $1 Per Share (Stated Capital $25 Per Share) (the "5.83% Preferred"). Such
advice was a part of the basis for the summary of certain federal income tax
consequences appearing under the caption "Certain Terms of the new Stock -
Federal Income Tax Effect on Dividends" in the Prospectus Supplement dated
August 10, 1998 (the "Prospectus Supplement") to the prospectus dated August 23,
1995 included in the referenced registration statement. While such summary does
not discuss all possible federal income tax consequences of ownership of the
5.83% Preferred, it is, in our opinion, accurate in all material respects. We
point out that we are not "experts" with respect to any statement under that
caption.
<PAGE>
Alabama Power Company
August 17, 1998
Page 2
We hereby consent to the filing of this letter as an exhibit to the
Company's Current Report on Form 8-k dated August 10, 1998, which is deemed to
be incorporated by reference in the above-referenced registration statement.
Very truly yours,
EXHIBIT 15.1
August 14, 1998
Alabama Power Company
600 North 18th Street
Birmingham, AL 35291
Ladies and Gentlemen:
We are aware that Alabama Power Company has incorporated by reference in the
Company's previously filed Registration Statement File No. 33-61845 its
quarterly reports on Form 10-Q for the quarters ended March 31, 1998 and June
30, 1998, which include our reports on Alabama Power Company dated May 6, 1998
and August 7, 1998, respectively, covering the unaudited interim financial
information contained therein. Pursuant to Regulation C of the Securities Act of
1933 (the "Act"), such reports are not considered a part of the Registration
Statement prepared or certified by our firm or a report prepared or certified by
our firm within the meaning of Sections 7 and 11 of the Act.
Very truly yours,
Exhibit 23
August 17, 1998
Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291
Ladies and Gentlemen:
We hereby consent to the reference to our firm under the caption
"Experts" in the Prospectus Supplement of Alabama Power Company (the "Company")
dated August 10, 1998, relating to 1,520,000 shares of 5.83% Class A Preferred
Stock (Stated Capital $25 Per Share) and 6,480,000 Shares of 5.20% Class A
Preferred Stock (Stated Capital $25 Per Share), and to the filing hereof with
the Securities and Exchange Commission as an exhibit to the Company's Current
Report on Form 8-K dated August 10, 1998.
Very truly yours,
