SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM U-1
APPLICATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
AGL RESOURCES INC.
ATLANTA GAS LIGHT COMPANY
303 Peachtree Street, N.E.
Atlanta, Georgia 30308
(Name of company or companies filing this statement and
address of principal executive offices)
AGL RESOURCES INC.
ATLANTA GAS LIGHT COMPANY
c/o James S. Thomas, Jr., Esq.
ATLANTA GAS LIGHT COMPANY
303 Peachtree Street, N.E.
Atlanta, Georgia 30308
Telephone: (404) 584-4000
(Names and addresses of agents for service)
Copies to:
James M. Cotter, Esq. Michael P. Graney, Esq.
Simpson Thacher & Bartlett Mark S. Tibberts, Esq.
425 Lexington Avenue Simpson Thacher & Bartlett
New York, New York 10017 1 Riverside Plaza, 9th Floor
Telephone: (212) 455-2000 Columbus, Ohio 43215
Telephone: (614) 461-7799
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Introduction
Pursuant to Sections 9(a)(2) and 10 of the Public Utility Holding
Company Act of 1935 (the "1935 Act"), AGL Resources Inc., a Georgia corporation
("Holding Company"), hereby applies for the approval of the Securities and
Exchange Commission (the "Commission") to acquire, through a merger of Holding
Company's wholly-owned subsidiary AGL Merger Co., a Georgia corporation
("Merger-Sub"), with Atlanta Gas Light Company, also a Georgia corporation
("AGL"): (i) all of the outstanding shares of common stock of AGL; and (ii)
indirectly all of the outstanding shares of common stock of Chattanooga Gas
Company, a Tennessee corporation and a wholly-owned subsidiary of AGL
("Chattanooga"). In addition, Holding Company hereby applies pursuant to
Section 3(a)(1) of the 1935 Act for an order exempting Holding Company, and
each of its subsidiary companies as such, from all provisions of the 1935 Act
(except for Section 9(a)(2) thereof); and AGL hereby applies, pursuant to
Section 3(a)(2) of the 1935 Act, for an order exempting AGL, and each of its
subsidiary companies as such, from all provisions of the 1935 Act (except for
Section 9(a)(2) thereof).
Item 1. Description of Proposed Transaction.
A. Parties
Both AGL and Chattanooga are "gas utility companies" as defined under
Section 2(a)(4) of the 1935 Act. AGL supplies natural gas distribution and
transportation service to the public in central, northwest, northeast and
southeast Georgia, with the majority of its customers located in the
metropolitan Atlanta area. In providing this service, AGL is subject to
regulation by the Georgia Public Service Commission ("GPSC") under Title 46 of
the Official Code of Georgia, Annotated. Chattanooga supplies natural gas
service to customers in Chattanooga and Cleveland, Tennessee, and surrounding
portions of Hamilton County and Bradley County. In providing this service,
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Chattanooga is subject to regulation by the Tennessee Public Service Commission
("TPSC") under Title 65 of the Tennessee Code Annotated.
By virtue of its ownership of Chattanooga, AGL is a "holding company"
for the purposes of the 1935 Act. However, pursuant to Section 3(a)(2) of the
1935 Act and Rule 2 thereunder, AGL is not regulated as a "holding company" and
is exempt from all of the 1935 Act's provisions, except Section
9(a)(2).<F1>
AGL also has a number of subsidiaries that are not "public utility
companies" for purposes of the 1935 Act. These include: (i) Georgia Gas
Service Company, a Georgia corporation that provides liquified petroleum gas
service to customers in Georgia and Alabama; (ii) Georgia Gas Company, a
Georgia corporation with working interests in gas production activities; (iii)
Georgia Energy Company, a Georgia corporation that provides natural gas vehicle
conversion services; and (iv) Trustees' Investments, Inc., a Georgia
corporation in the business of real estate development. The operations of
AGL's subsidiaries that are not "public utility companies" contributed $881,000
to AGL's aggregate after-tax net income in fiscal year 1995.
AGL's current corporate structure is as follows:
CURRENT CORPORATE STRUCTURE
[Graph omitted from electronic filing. The omitted graph represents
a tree diagram of the current corporate structure, with Atlanta Gas Light
Company as the parent of the following companies: (i) AGL Investments, Inc.,
(ii) Georgia Gas Service Company, (iii) Georgia Gas Company, (iv) Georgia
Energy Company, (v) Trustees Investments, Inc., (vi) Georgia Engine Sales &
Service Company (inactive), (vii) Georgia Natural Gas Company (inactive),
(viii) AGL Energy Services, Inc., (ix) Peachtree Pipeline Company (inactive),
(x) Chattanooga Gas Company, and (xi) AGL Resources Inc. (with its wholly-owned
subsidiary, AGL Merger Co.).]
<PAGE>
Holding Company and Merger-Sub were incorporated in Georgia on
November 27, 1995 for the purpose of carrying out the proposed transactions
described in this application. Holding Company is a direct, wholly-owned
subsidiary of AGL, and Merger-Sub is a direct, wholly-owned subsidiary of
Holding Company. Neither Holding Company nor Merger-Sub owns any utility
assets or currently is a "holding company" for the purposes of the 1935 Act.
B. The Proposed Restructuring
AGL proposes to form a holding company structure pursuant to an
Agreement and Plan of Merger to be entered into among AGL, Holding Company and
Merger-Sub (the "Plan of Merger"), a copy of which is filed as Exhibit B-1
hereto. Under the terms of the Plan of Merger, a newly formed subsidiary of
Holding Company, Merger-Sub, would be merged (the "Merger") with and into AGL,
and each outstanding share of common stock of Merger-Sub would be converted
into one share of common stock, par value $5 per share, of AGL (collectively,
the "AGL Stock"). In addition, pursuant to the Merger, each outstanding share
of AGL Stock would be converted into one share of common stock, par value $5
per share, of Holding Company. Upon consummation of the Merger, each person
that would own AGL Stock immediately prior to the Merger would own a
corresponding number of the outstanding shares of common stock of Holding
Company, and Holding Company would own all of the outstanding AGL Stock.
Subsequent to the Merger, AGL would transfer to Holding Company,
by stock dividend or otherwise, the common stock of all of its subsidiaries
other than Chattanooga, with the result that all such subsidiaries (with the
exception of AGL Energy Services, Inc., which would be a direct subsidiary
of Holding Company) would become subsidiaries of a separate wholly-owned
subsidiary of Holding Company. AGL would continue to own all of the
outstanding common stock of Chattanooga. The corporate structure, immediately
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after the consummation of all of the above transactions (such transactions,
including the Merger, collectively, the "Restructuring"), would be as follows:
PROPOSED HOLDING COMPANY STRUCTURE
[Graph omitted from electronic filing. The omitted graph represents
a tree diagram of the post-merger corporate structure, with AGL Resources Inc.
as the parent of the following companies: (i) AGL Investments, Inc. (with its
wholly-owned subsidiaries, Georgia Gas Service Company, Georgia Gas Company,
Georgia Energy Company and Trustees Investments, Inc.), (ii) Atlanta Gas Light
Company (with its wholly-owned subsidiary, Chattanooga Gas Company) and (iii)
AGL Energy Services, Inc.]
Prior to the Restructuring, Holding Company would apply to have its
common stock listed on the New York Stock Exchange, Inc. (the "NYSE"). It is
anticipated that the common stock of Holding Company would be listed and traded
on such stock exchange upon consummation of the Restructuring, whereupon
Holding Company would be required to file reports with the Commission pursuant
to Section 13(a) of the Securities Exchange Act of 1934, as amended (the "1934
Act"). The AGL Stock would cease to be listed on the NYSE following the
Restructuring.
The consummation of the Merger pursuant to the Plan of Merger is
subject to various conditions. These conditions include "all of the regulatory
approvals and exemptions necessary, appropriate or desirable to be obtained
prior to effectuating the Merger and the Restructuring," which include the
approval of the Commission under Section 9(a)(2) of the 1935 Act, the granting
by the Commission of exemptions under Sections 3(a)(1) and 3(a)(2) of the 1935
Act as requested in this application, and the approval of the GPSC. The Plan
of Merger also is subject to approval by the affirmative vote of a majority of
the outstanding shares of AGL Stock at AGL's 1996 annual meeting of
shareholders to be held in early 1996.
<PAGE>
Holding Company will be filing with the Commission, concurrently with
its filing of this application, a Registration Statement on Form S-4 (the
"Registration Statement") under the Securities Act of 1933, as amended. The
Prospectus and Proxy Statement contained in the Registration Statement, a copy
of which is filed herewith as Exhibit C-1, is being filed for the purpose of
(i) registering the shares of common stock of Holding Company to be issued in
exchange for the AGL Stock pursuant to the Merger and (ii) complying with the
requirements of the 1934 Act in connection with the solicitation of proxies of
AGL's common shareholders.
C. Purpose and Anticipated Effects of the Restructuring
1. Purpose
The principal purpose of the Restructuring is to establish a more
appropriate corporate structure to operate more efficiently in the evolving
energy marketplace. The holding company structure that AGL would adopt as a
result of the Restructuring should result in greater financial, managerial and
organizational flexibility, placing AGL in a better position to adapt to the
changing gas utility industry and to meet and take advantage of future
challenges and opportunities, particularly in unregulated businesses. This
flexibility would, in turn, permit more easily the establishment of a broad
base of income generation from related unregulated business activities that
should enhance the overall strength of AGL's enterprises. At the same time,
the holding company structure would provide a mechanism for protecting the
utility business and utility customers of AGL and Chattanooga from the risks
involved in non-utility ventures.
2. Anticipated Effects
The Restructuring would have no effect, adverse or otherwise, upon
the gas utility operations of AGL and Chattanooga. The Restructuring would
cause no real change in ownership or management of AGL or Chattanooga and would
<PAGE>
not result in a transfer or acquisition of any utility asset. Moreover, AGL's
natural gas distribution and transportation business is expected to constitute
the predominant part of Holding Company's earning power for the foreseeable
future.
Even though their utility operations would not be affected, a number
of benefits would accrue to AGL and Chattanooga and their customers and
shareholders as a result of the Restructuring. AGL's adoption of a holding
company corporate structure would: (i) allow AGL's affiliates more easily to
participate in non-utility businesses and to compete with non-regulated
companies in providing energy-related services; (ii) permit the use of
financing techniques that are more directly suited to the particular
requirements, characteristics and risks of unregulated operations without
affecting the capital structure or creditworthiness of AGL; (iii) increase
financial flexibility by allowing the design and implementation of
capitalization ratios appropriate for the capital and business requirements of
each subsidiary; (iv) by separating the operations of regulated and unregulated
businesses, provide a better structure for regulators to assure that there is
no cross-subsidization of costs or transfer of business risk from unregulated
to regulated lines of business; and (v) provide legal protection against the
imposition of liability on regulated utilities for the results of unregulated
business activities.
Because of these benefits, the holding company structure is a highly
desirable form of conducting regulated and unregulated businesses within the
same corporate group. In addition, a holding company structure is preferred by
the investment community because it is easier to analyze and value the
individual lines of business of an organization with such a structure.
The Restructuring would have no material effect on the rights of
holders of AGL Stock, with the exception that, after the Restructuring, the
articles of incorporation and by-laws of Holding Company would contain certain
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anti-takeover provisions which are not presently contained in AGL's articles of
incorporation or by-laws.<F2>
Each class of preferred stock of AGL (collectively, the "AGL
Preferred Stock") and all indebtedness of AGL will remain securities and
obligations of AGL following the Restructuring. Consequently, the holders of
AGL's debt securities and the AGL Preferred Stock would not be affected by the
Restructuring. No stockholder or holder of debt securities of Chattanooga
would be affected by the Restructuring. Chattanooga currently has no
outstanding preferred stock or publicly-held indebtedness.
D. Additional Information
No associate company or affiliate of Holding Company or AGL, or any
affiliate of any associate company of Holding Company or AGL, has any direct or
indirect material interest in the proposed transaction except as stated herein.
For further information, reference is made to the financial
statements and other information in Exhibits G-1 through G-5 hereto.
Item 2. Fees, Commissions and Expenses.
The estimated fees, commissions and expenses paid or incurred, or to
be paid or incurred, directly or indirectly, in connection with the
Restructuring, by the applicants or any associate company of either applicant,
will be set forth in Exhibit I-1 hereto, to be filed by amendment.
Item 3. Applicable Statutory Provisions.
Sections 9(a)(2) and 10 of the 1935 Act are applicable to the
Restructuring. The Restructuring would result in Holding Company's owning,
directly or indirectly, all of the outstanding voting securities of two "public
utility companies", AGL and Chattanooga; and Section 9(a)(2) of the 1935 Act
requires Commission approval before any person may acquire, directly or
<PAGE>
indirectly, more than 5% of the outstanding voting securities of more than one
"public utility company".<F3> The standards for approval of a transaction
under Section 9(a)(2) of the 1935 Act are set forth in Section 10(b) and (c) of
the 1935 Act.
Sections 3(a)(1) and 3(a)(2) of the 1935 Act are also applicable.
Upon effectuation of the Restructuring, Holding Company would become a "holding
company" for purposes of the 1935 Act because of its direct and indirect
ownership of all of the voting securities of AGL and Chattanooga, respectively,
both of which are "public utility companies" under the 1935 Act. In addition,
AGL would continue to be a "holding company" because of its continued ownership
of all of Chattanooga's voting securities. Consequently, in order to avoid
registered holding company status under the 1935 Act, in this application
Holding Company has requested that the Commission, by order, grant it an
exemption pursuant to Section 3(a)(1) of the 1935 Act; and AGL has requested
that the Commission, by order, grant it an exemption under Section 3(a)(2) of
the 1935 Act.<F4>
For the reasons explained below, the Commission should grant approval
of the Restructuring pursuant to Section 9(a)(2) of the 1935 Act based upon the
transaction's compliance with the applicable standards of Section 10(b) and (c)
thereunder. In addition, for the reasons described below, the Commission
should by order: (i) grant Holding Company an exemption pursuant to Section
3(a)(1) of the 1935 Act from all of the provisions of the 1935 Act (except for
Section 9(a)(2) thereof); and (ii) grant AGL an exemption from all of the
provisions of the 1935 Act (except for Section 9(a)(2) thereof).
A. Approval of the Restructuring under Section 9(a)(2)
As noted above, the standards to obtain approval under Section
9(a)(2) of the 1935 Act are contained at Section 10(b) and (c) thereunder. For
<PAGE>
the reasons explained below, the Restructuring should be found to meet these
standards.
1. Section 10(b)
Section 10(b) of the 1935 Act requires the Commission to approve the
Restructuring pursuant to Section 9(a)(2) unless the Commission finds that:
(1) such acquisition will tend towards interlocking relations or the
concentration of control of public utility companies, of a kind
or to an extent detrimental to the public interest or the
interest of investors or consumers;
(2) in case of the acquisition of securities or utility assets, the
consideration, including all fees, commissions, and other
remuneration, to whomsoever paid, to be given, directly or
indirectly, in connection with such acquisition is not
reasonable or does not bear a fair relation to the sums invested
in or the earning capacity of the utility assets to be acquired
or the utility assets underlying the securities to be acquired;
or
(3) such acquisition will unduly complicate the capital structure of
the holding company system of the applicant or will be
detrimental to the public interest or the interest of investors
or consumers or the proper functioning of such holding company
system.
AGL and Holding Company respectfully submit that no adverse finding should be
made under any of these paragraphs.
a. Detrimental "Interlocking Relations" or "Concentration of
Control"
The Restructuring merely involves the formation of a holding company
over AGL and its subsidiaries. No "public utility company" other than AGL and
Chattanooga would be involved in the Restructuring. In addition, the
relationship between AGL and Chattanooga would not be changed as a result of
the Restructuring, and both AGL and Chattanooga would continue their utility
operations in essentially the same manner as prior to the Restructuring.
Consequently, the Restructuring should not, within the meaning of Section
10(b)(1), be deemed to "tend towards interlocking relations . . . of public
<PAGE>
utility companies, of a kind or to an extent detrimental to the public interest
or the interest of investors or consumers."
For the same reasons, the Restructuring should not, within the
meaning of Section 10(b)(1), be deemed to tend toward any "concentration of
control of public utility companies" that might be detrimental to the public
interest, consumers, or investors. The Restructuring would not involve the
acquisition of any utility assets not already owned, directly or indirectly, by
AGL and "will therefore have no effect on the concentration of control of
public utility companies." Wisconsin Energy Corp., Holding Co. Act Release No.
24267, 37 SEC Docket 296, 300 (1986).
b. Fairness of Consideration and Fees
Section 10(b)(2) of the 1935 Act requires the Commission to determine
whether the consideration in connection with a proposed acquisition of
securities is reasonable and bears a fair relation to the investment in and
earning capacity of the utility assets underlying the securities being
acquired. As discussed above, the Restructuring would involve the merger of
AGL with a subsidiary of the newly formed Holding Company, the result of which
would effectively convert each share of AGL Stock into a share of Holding
Company common stock. Because the proportion of each shareholder's ownership
will be unchanged, the consideration is fair and reasonable. See Wisconsin
Energy Corp., 37 SEC Docket at 300.
As stated in Item 2. above, an estimate of the fees and expenses to
be paid in connection with the Restructuring will be filed as Exhibit I-1 by
amendment hereto. Such fees and expenses will be reasonable and customary for
a transaction of this kind and will not be material when measured against AGL's
consolidated book value or the earning capacity of its assets.
<PAGE>
c. Complication of Capital Structure
Section 10(b)(3) of the 1935 Act requires the Commission to determine
if the transaction will unduly complicate the capital structure of the holding
company, or will be detrimental to the public, investors or consumers. No such
effect would result from the Restructuring.
The Restructuring would not involve the creation of any ownership
interests other than those necessary to maintain the basic corporate
relationships of the holding company system to be established. Pursuant to the
Restructuring, Holding Company would acquire all of the common stock of AGL.
No minority common stock interest in AGL would remain, and the existing debt
and senior equity securities of AGL would be unaffected. Moreover, control of
the system would remain in the hands of the existing holders of AGL Stock, who
would become the common shareholders of Holding Company. Consequently, as the
Commission has found in similar circumstances, the Restructuring would not
result in any complexity of capital structure contrary to Section 10(b)(3).
See, e.g., CIPSCO, Inc., Holding Co. Act Release No. 25152, 47 SEC Docket 174,
178 (1990); Wisconsin Energy Corp., 37 SEC Docket at 300.
2. Section 10(c)
The relevant provisions of Section 10(c) of the 1935 Act state that
the Commission shall not approve:
(1) an acquisition of securities or utility assets, or of any other
interest, which is . . . detrimental to the carrying out of the provisions
of Section 11; or
(2) the acquisition of securities or utility assets of a public-
utility or holding company unless the Commission finds that such
acquisition will serve the public interest by tending towards the
economical and the efficient development of an integrated public utility
system.
AGL and Holding Company respectfully submit that an adverse decision should not
be made under either of these paragraphs.
<PAGE>
a. Significant Benefits
Section 10(c)(1) prohibits an acquisition of securities which is
"detrimental to the carrying out of the provisions of Section 11." For the
purposes of the Commission's review of a proposed holding company formation,
the relevant provision of Section 11 is Section 11(b)(2), which requires the
Commission to find that "the corporate structure . . . of any company in the
holding company system does not unduly or unnecessarily complicate the
structure . . . of such holding company system." "The Commission has construed
this requirement, in the context of the formation of a new holding company
over an existing public utility, to mean that the structural change must
result in significant benefits to the holding company system." CIPSCO Inc.,
47 SEC Docket at 178.
As discussed above in paragraph C.2. of Item 1, the holding company
structure resulting from the proposed reorganization would yield significant
benefits. In short, it would among other things: (i) facilitate the
enterprise's participation in unregulated businesses; (ii) better insulate
AGL's and Chattanooga's utility ratepayers from the risks and costs
associated with business activities of unregulated subsidiaries; (iii)
enhance managerial accountability for separate business activities;
and (iv) permit the use of financing techniques that are more directly
suited to the particular requirements, characteristics and risks of
unregulated and non-utility operations without affecting the capital
structure or creditworthiness of AGL or Chattanooga. In cases
involving similar corporate reorganizations, the Commission has held
that the existence of these kinds of potential benefits satisfies
the statutory standard of Section 10(c)(1). See, e.g., CIPSCO, Inc.,
47 SEC Docket at 178-79.
b. Economies and Efficiencies of an Integrated System
Section 10(c)(2) of the 1935 Act requires that a transaction serve
the public interest by tending towards the economical and efficient development
<PAGE>
of an integrated public utility system. As explained below, the Restructuring
would result in the economical and efficient development of AGL's and
Chattanooga's existing integrated system.
(1) Economies and Efficiencies
In addition to the benefits referred to above in paragraph A.2.a. of
this Item, a number of economies and efficiencies would result from the holding
company structure. As the Commission has found in analogous cases, a holding
company structure permits adjustments of a utility's capital ratios to
appropriate levels through dividends to, or equity investments from, the
holding company. See, e.g., WPL Holdings, Inc., Holding Co. Act Release No.
25377, 49 SEC Docket 1255, 1257 (1991). This ability to adjust the components
of AGL's capital structure would also increase general financial flexibility,
allowing AGL to take advantage of more attractive financing opportunities that
might not otherwise be available. See CIPSCO Inc., 47 SEC Docket at 179.
The flexibility associated with a balanced capital structure permits
the issuance of various types of securities under any conditions and thus
increases the potential for cost reduction. As the Commission has noted in
similar circumstances, "(l)ower-cost financing can enhance efficient utility
operations and benefit ratepayers and senior security holders." KU Energy
Corp., Holding Co. Act Release No. 25409, 50 SEC Docket 294, 296 (1991).
The Restructuring should also help to broaden the holding company
system's financial base and its investment appeal by reducing the system's
dependence on its utility operations. This diversity should also increase
financing alternatives and efficiencies, since financing may be tailored to the
specific needs and circumstances of the individual utility and non-utility
businesses.
The holding company structure would also tend to insulate AGL's and
Chattanooga's customers and AGL's security holders from the risks of
<PAGE>
unregulated businesses by allowing the enterprise to pursue such businesses
through newly created subsidiaries of Holding Company. This reduced risk
exposure should enable AGL to raise new preferred and debt capital at a lower
cost than might be possible if unregulated businesses were direct subsidiaries
of AGL. As the Commission has stated in similar circumstances, "(t)he
insulation of the utility businesses . . . from any risks of diversification
and the resulting lower costs should tend toward more efficient and economical
operation of the utility businesses . . . ." CIPSCO, Inc., 47 SEC Docket at
180.
The Commission has noted in analogous cases that these kinds of
financial and organizational advantages satisfy Section 10(c)(2). See WPL
Holdings, Inc., 49 SEC Docket at 1257-58. Moreover, a Commission finding
of "efficiencies and economies" may be based "on the potential for
economies presented by the acquisition even where these are not precisely
quantifiable." American Elec. Power Co., 46 SEC 1299, 1322 (1978). In this
case, the Restructuring promises to provide significant financial and
organizational advantages, and the resulting substantial potential economies
and efficiencies should be found to meet the standard of Section 10(c)(2).
(2) Integrated Public Utility System
The Commission has held that the economical and efficient development
of an existing integrated system satisfies the requirements of Section 10(c)(2)
of the 1935 Act. See WPL Holdings, Inc., 49 SEC Docket at 1257. The gas
utility system of AGL and Chattanooga is presently "integrated" within the
meaning of Section 2(a)(29) of the 1935 Act and would remain so after the
Restructuring. Consequently, no adverse finding under Section 10(c)(2) should
be made.
<PAGE>
3. Section 10(f)
Section 10(f) provides that
The Commission shall not approve any acquisition . . . under
this section unless it appears to the satisfaction of the
Commission that such State laws as may apply in respect of such
acquisition have been complied with, except where the Commission
finds that compliance with such State laws would be detrimental
to the carrying out of the provisions of section 11 . . . .
The Restructuring is conditioned on full compliance with the laws of
Georgia. AGL has filed an application with the GPSC, a copy of which is filed
as Exhibit D-1 hereto, and a copy of the GPSC's determination will be filed as
Exhibit D-2 by amendment hereto. Finally, the Restructuring will be
consummated in compliance with other applicable Georgia laws.
B. The Exemptions under Sections 3(a)(1) and 3(a)(2)
Following the Restructuring, neither Holding Company nor AGL intends
to register as a holding company under the 1935 Act. As demonstrated below,
Holding Company respectfully submits that it should be granted, by Commission
order, an exemption under Section 3(a)(1) of the 1935 Act and AGL should be
granted, by Commission order, and thereby retain, an exemption under Section
3(a)(2) of the 1935 Act.
1. Section 3(a)(1): Holding Company's Exemption
Section 3(a)(1) of the 1935 Act makes available an exemption from all
of the provisions of the 1935 Act (except for Section 9(a)(2) thereof) to a
"holding company" if:
such holding company, and every subsidiary company thereof
which is a public-utility company from which such holding
company derives, directly or indirectly, any material part
of its income, are predominately intrastate in character
and carry on their business substantially in a single State
in which such holding company and every such subsidiary
company thereof are organized.
Holding Company believes that, following the Restructuring, Holding Company
would satisfy such requirements. Both Holding Company and AGL would be
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organized and carry on their business in the state of Georgia, and the
operations of the out-of-state utility subsidiary, Chattanooga, should not be
considered to represent a "material part" of Holding Company's income.
Chattanooga would represent only a small part of Holding Company's
operations. As indicated on Exhibit G-4 hereto, Chattanooga accounted for the
following percentages of AGL's consolidated utility assets, revenues and
pre-tax operating income over the last three fiscal years:
FY 1993 FY 1994 FY 1995 <F5>
Total Assets 6.2% 6.4% 6.9%
(excluding non-utility
property)
Operating Revenues 6.0% 6.2% 6.2%
Pre-tax Operating 6.0% 5.9% 11.2% <F6>
Income
The Commission's prior orders provide guidance as to what is
considered "material" for purposes of Section 3(a)(1). The Commission held
that the revenue of a subsidiary that produced 3.3% of the revenue of the
consolidated holding company system was not material in Commonwealth Edison
Co., Holding Co. Act Release No. 8331, 28 SEC 172, 173 (1948), while the
Commission held that the income of a subsidiary that produced 10.31% of the
consolidated holding company system's income was material in Wisconsin Elec.
Power Co., Holding Co. Act Release No. 8741, 28 SEC 906 (1948). The income and
revenue of Chattanooga will be significantly below the percentage found
material in Wisconsin Elec. Power and should not be found to constitute a
material part of Holding Company's consolidated income or revenue.
Consequently, Holding Company should be found to meet the objective
requirements of Section 3(a)(1).
Section 3(a) of the 1935 Act provides that, if an applicant satisfies
the objective requirements for an exemption, the applicant shall be granted the
<PAGE>
exemption, "unless and except insofar as [the Commission] finds the exemption
detrimental to the public interest or the interest of investors or consumers."
In assessing whether a proposed exemption is "detrimental", the Commission has
focused upon the presence of state regulation, establishing that federal
intervention is unnecessary when state control is adequate. See, e.g., KU
Energy Corp., 50 SEC Docket at 299-300; CIPSCO Inc., 47 SEC Docket at
180-81.<F7>
The Commission should here find that sufficient safeguards exist
under state law to ensure that no potential adverse consequences would occur as
a result of the Restructuring. As discussed above, the Restructuring has been
submitted for approval to the GPSC, which will review the Restructuring
pursuant to its jurisdiction under Georgia law; and the Commission has relied
upon the public policy decisions of state public utility commissions when
granting approval of restructuring transactions. See, e.g., KU Energy Corp.,
50 SEC Docket at 299-300; CIPSCO Inc., 47 SEC Docket at 180-81. In addition,
as discussed above, both AGL and Chattanooga would continue to be regulated
under the state utility laws of Georgia and Tennessee, respectively, and the
GPSC and TPSC have the authority to insure that the unregulated affiliates of
AGL and Chattanooga would not become detrimental to the operations of such
utilities. For example, pursuant to such laws, the GPSC and TPSC may disallow,
for ratemaking purposes, any excessive costs shifted to the utility from non-
regulated companies or the value of any property improperly acquired by the
utility.
2. Section 3(a)(2): AGL's Exemption
Section 3(a)(2) of the 1935 Act provides an exemption from all of the
provisions of the 1935 Act (except for Section 9(a)(2) thereof) to a "holding
company" if:
<PAGE>
such holding company is predominately a public-utility
company whose operations as such do not extend beyond the
State in which it is organized and States contiguous
thereto.
The Commission has generally held that a holding company is "predominately a
public-utility company" as long as the gross revenues of its utility
subsidiaries are not more than approximately 25% of the gross revenues of the
holding company. See Wisconsin Energy Corp., 37 SEC Docket at 296.
AGL meets the requirements for this exemption. Chattanooga's gross
revenues are below 25% of AGL's gross revenues, as shown in the chart in the
preceding section (paragraph B.1. of this Item); and AGL's utility operations
are exclusively conducted in the state in which it is organized,
Georgia.<F8> In addition, as discussed above, based upon state utility
regulation of AGL and Chattanooga, Holding Company respectfully submits that
the Commission should not find that the granting of this exemption would be
detrimental to the public interest.
Item 4. Regulatory Approval.
The Restructuring will require the approval of the GPSC. A copy of
the Application to the GPSC is filed as Exhibit D-1 hereto, and a copy of the
GPSC's determination pursuant thereto will be filed as Exhibit D-2 by amendment
hereto. No other state or Federal commission has jurisdiction over the
Restructuring.
Item 5. Procedure.
Both Holding Company and AGL respectfully request the Commission to
issue and publish promptly the requisite notice under Rule 23 with respect to
the filing of this application, to provide for the filing of comments in a time
frame that permits the Commission to enter an order granting and permitting
this application to become effective on or before January 29, 1996, before
<PAGE>
AGL's 1996 Annual Meeting of Shareholders. A form of notice suitable for
publication in the Federal Register is attached hereto as Exhibit H-1.
Holding Company and AGL do not believe that there should be a
recommended decision by a hearing officer or any other responsible officer of
the Commission or that there should be a 30-day waiting period between the
issuance of the Commission's order and the date on which it is to become
effective. Holding Company and AGL request that the Commission's order become
effective immediately upon the entry thereof. Holding Company and AGL both
consent to the Division of Investment Management assisting in the preparation
of the Commission's decision or order in this matter, unless such Division
opposes this application.
Item 6. Exhibits and Financial Statements.
Financial statements of Holding Company are not included because it
has no assets and has not engaged in any business operations. Pro forma
financial statements of AGL and Chattanooga are not included because the
Restructuring will have no effect on the financial statements of such
companies.
<TABLE>
<CAPTION>
NO. DESCRIPTION METHOD OF FILING
<S> <C> <C>
A-1 Articles of Incorporation of Holding Company Filed herewith
A-2 Form of Bylaws of Holding Company Filed herewith
A-3 Charter of AGL (as amended through February 20, Incorporated herein by reference to Exhibit
1990) 3(a), Registration Statement No. 33-52752
A-4 Articles of Amendment to the Articles of Incorporated herein by reference to Exhibit
Incorporation (Charter) of AGL (filed on October 3(b) to AGL's Form 10-K Report for the fiscal
9, 1992, with the Secretary of State of the State year ended September 30, 1992
of Georgia)
A-5 Articles of Correction to the Charter of AGL Incorporated herein by reference to Exhibit
(filed on October 16, 1992, with the Secretary of 3(c) to AGL's Form 10-K Report for the fiscal
State of the State of Georgia) year ended September 30, 1992
A-6 Articles of Amendment to the Articles of Incorporated herein by reference to Exhibit 3
Incorporation (Charter) of AGL (filed on February to AGL's Form 10-Q Report for the quarter
22, 1993, with the Secretary of State of the State ended March 31, 1993
of Georgia)
A-7 By-Laws of AGL (as amended through February 2, Incorporated herein by reference to Exhibit
1990) 4.2 to AGL's Form 10-Q Report for the quarter
ended March 31, 1990
B-1 Form of Plan of Merger Filed herewith
C-1 Form S-4 Registration Statement of AGL Resources Incorporated herein by reference to the Form
Inc. S-4 Registration Statement of AGL Resources
Inc. filed concurrently herewith
C-2 Prospectus and Proxy Statement Included in the Form S-4 Registration
Statement incorporated by reference as
Exhibit C-1
<PAGE>
D-1 Application to the GPSC, dated November 27, 1995 Filed herewith
D-2 Determination of the GPSC To be filed by amendment
E-1 Map showing combined service area of AGL and Filed herewith
Chattanooga
F-1 Preliminary opinion of counsel To be filed by amendment
F-2 "Past-tense" opinion of counsel To be filed by amendment
G-1 Consolidated Balance Sheet of AGL as of September Incorporated by reference to AGL's Annual
30, 1994 and Consolidated Statements of Common Report for the fiscal year ended September
Stock Equity, Income and Cash Flows for the three 30, 1994
fiscal years ended September 30, 1994
G-2 Consolidated Balance Sheet of AGL (unaudited) as Filed herewith
of September 30, 1995 and Consolidated Statements
of Income and Cash Flows of AGL (unaudited) for
the fiscal year ended September 30, 1995.
G-3 Statement of Operating Revenues, Pre-tax Operating Filed herewith
Income and Total Assets (excluding non-utility
property) of AGL (consolidated) and Chattanooga
(unaudited) for the three fiscal years ended
September 30, 1995
G-4 Form U-3A-2, "Statement of Holding Company Incorporated herein by reference to
Claiming Exemption under Rule U-3A-2 from the the Form U-3A-2 dated February 28,
Provisions of the Public Utility Holding Company 1995 filed by AGL (File No. 69-348)
Act of 1935," dated February 28, 1995, filed by
AGL (File No. 69-348)
G-5 Consolidated Balance Sheet of Chattanooga To be filed by amendment
(unaudited) as of September 30, 1995 and
Consolidated Statements of Common Stock Equity,
Income and Cash Flows of Chattanooga (unaudited)
for the three fiscal years ended September 30,
1995; Consolidated Statement of Common Stock
Equity of AGL (unaudited) for the fiscal year
ended September 30, 1995
H-1 Form of Notice Filed herewith
I-1 Fees, Commissions and Expenses To be filed by amendment</TABLE>
<PAGE>
Item 7. Information as to Environmental Effects.
Holding Company and AGL do not believe that the Restructuring
would involve a "major federal action" nor would it "significantly affect the
quality of the human environment" as those terms are used in Section 102(2)(c)
of the National Environmental Policy Act. The only federal actions related to
the Restructuring pertain to the Commission's declaration of the effectiveness
of the Registration Statement and the Commission's approval of this application
and granting of the exemptions requested herein. The Restructuring would not
result in changes in the operations of AGL or Chattanooga that would have any
impact on the environment. No Federal agency has prepared or is preparing
an environmental impact statement with respect to the Restructuring.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned companies have duly caused this statement
to be signed on its behalf by the undersigned thereunto duly authorized.
AGL Resources Inc.
Date: November 27, 1995 By: /s/ David R. Jones
David R. Jones, President and
Chief Executive Officer
(Signature and printed name
and title of signing officer)
Atlanta Gas Light Company
Date: November 27, 1995 By: /s/ David R. Jones
David R. Jones, President and
Chief Executive Officer
(Signature and printed name
and title of signing officer)
<PAGE>
____________________
[FN]
<F1> Section 3(a)(2) makes available an exemption to any holding company
predominantly a public utility company whose operations as such do not
extend beyond its state of organization and states contiguous thereto;
while Rule 2 permits a holding company to claim this exemption by the
annual filing of Form U-3A-2 under the 1935 Act annually prior to March 1
of each year. A copy of AGL's Form U-3A-2 for 1995 is filed as Exhibit G-
4 hereto.
<F2> The principal differences between the rights of the holders of common
shares of Holding Company and the rights of the holders of AGL Stock would
be that: (i) the board of directors of Holding Company will be classified
into three classes of directors; (ii) the consent of holders of 100% of
common shares of Holding Company (compared to 50% of AGL's common shares)
will be necessary in order for the such shareholders to call a special
meeting of the shareholders of Holding Company; (iii) any vacancies on
Holding Company's board of directors may only be filled pursuant to a
resolution of Holding Company's board of directors; (iv) Holding Company's
board of directors pursuant to Holding Company's articles of incorporation
will be permitted to consider various constituencies in addition to
Holding Company's common shareholders in determining what is believed to
be in the best interests of Holding Company; (v) Holding Company will be
authorized to issue significantly more shares of common stock than AGL;
and (vi) Holding Company's common shareholders will not have any
preemptive rights with respect to future issuances of Holding Company
common stock. In addition, the board of directors of Holding Company is
considering the adoption of a shareholders rights plan following the
effective time of the Merger. With the exception of these differences,
the rights of the holders of common shares of Holding Company would not be
materially different from the rights of the holders of AGL Stock.
<F3> The Commission's Staff has, however, supported creation of an exemption
from this approval requirement for internal corporate restructurings. In
a recent report concerning the 1935 Act, the Commission's Division of
Investment Management recommended that the Commission "consider ways to
exempt from sections 9(a) and 10 transactions that involve only
reorganization of existing utility assets". Division of Investment
Management, The Regulation of Public Utility Holding Companies at p. 76
(June 1995).
<F4> AGL currently holds an exemption pursuant to Section 3(a)(2) of the 1935
Act and Rule 2 thereunder.
<F5> AGL's fiscal year ends on September 30.
<F6> Chattanooga's pre-tax operating income represented 11.2% of AGL's
consolidated pre-tax operating income in FY 1995 because of certain
nonrecurring restructuring charges. Absent these nonrecurring
charges, Chattanooga's pre-tax operating income in FY 1995 would
have been 6.5% of AGL's consolidated pre-tax operating income.
<F7> Furthermore, the Commission Staff has stated its support for greater
flexibility in the administration of existing exemptions in consultation
and cooperation with state regulators. See Division of Investment
<PAGE>
Management, The Regulation of Public Utility Holding Companies, supra, at
119-20.
<F8> Moreover, AGL currently holds an exemption under Section 3(a)(2) of the
1935 Act pursuant to a filing under Rule 2 thereunder. The Restructuring
would not alter AGL's qualifications for such exemption.
<PAGE>
EXHIBIT INDEX
NO. DESCRIPTION DESIGNATIONS (IF ANY)
A-1 Articles of Incorporation of
Holding Company
A-2 Form of Bylaws of Holding
Company
B-1 Form of Plan of Merger
D-1 Application to the GPSC, dated
November 27, 1995
E-1 Map showing combined service P
area of AGL and Chattanooga
G-2 Consolidated Balance Sheet of
AGL (unaudited) as of September
30, 1995 and Consolidated
Statements of Income and Cash
Flows of AGL (unaudited) for the
fiscal year ended September 30,
1995.
G-3 Statement of Operating Revenues,
Pre-tax Operating Income and
Total Assets (excluding non-
utility property) of AGL
(consolidated) and Chattanooga
(unaudited) for the three fiscal
years ended September 30, 1995
H-1 Form of Notice
EXHIBIT A-1
ARTICLES OF INCORPORATION
OF
AGL RESOURCES INC.
I.
CORPORATE NAME
The name of the Corporation is: AGL Resources Inc. (hereinafter, the
"Corporation").
II.
AUTHORIZED SHARES
Section 2.01. Common Stock: The Corporation shall have authority to
issue not more than Seven Hundred Fifty Million (750,000,000) shares of Common
Stock, par value $5.00 per share (the "Common Stock"), which shall have
unlimited voting rights and be entitled to receive the net assets of the
Corporation upon dissolution.
Section 2.02. Preferred Stock: The Corporation shall have authority to
issue Ten Million (10,000,000) shares of Preferred Stock, with or without par
value, which may be of one or more series, with such voting power, preferences,
designations, rights, qualifications, limitations, or restrictions, and subject
to application dependent upon determination of facts ascertainable outside the
Articles of Incorporation, as the Board of Directors may from time to time
determine in the resolution and statement filed with the Secretary of State of
Georgia as an amendment to these Articles of Incorporation.
III.
INITIAL REGISTERED OFFICE AND AGENT
The street address and county of the initial registered office of the
Corporation, which is also the mailing address of the initial principal office
of the Corporation, is 303 Peachtree Street, Suite 400, Atlanta, Fulton
County, Georgia 30308. The initial registered agent at such office shall be
James S. Thomas.
<PAGE>
IV.
INCORPORATOR
The name and address of the incorporator is as follows:
Catherine Smith
c/o Long, Aldridge & Norman
303 Peachtree Street
Suite 5300
Atlanta, Georgia 30308
V.
DIRECTORS
Section 5.01. Size of Board: The business of the Corporation shall be
managed by or under the authority of a Board of Directors of not less than five
(5) nor more than fifteen (15) Directors, as may from time to time be fixed
solely by the Board of Directors.
Section 5.02. Classification of Directors: The Board of Directors shall
be divided into three classes as nearly equal in number as possible, with the
term of office of one class expiring each year. Except as provided in Section
5.04 below, at the first annual meeting of shareholders, the Directors shall be
divided into three classes, as nearly equal in size as may be, with the
Directors of one class to be elected to hold office for a term expiring at the
third annual meeting following the election and until their successors shall
have been duly elected and qualified; with the Directors of the second class
to be elected to serve for a term expiring at the second annual meeting
following the election and until their successors shall have been duly elected
and qualified; and the Directors of the third class to be elected to serve for
a term expiring at the first annual meeting following the election and until
their successors shall have been duly elected and qualified. Thereafter,
Directors shall be elected for terms of three years, and until their successors
have been duly elected and qualified. During the intervals between annual
meetings of shareholders, any vacancy occurring in the Board of Directors
caused by resignation, removal, death or other incapacity, and any newly
created Directorships resulting from an increase in the number of Directors,
shall be filled by a majority vote of the Directors then in office, whether or
not a quorum. Directors may be elected by Shareholders only at an annual
meeting of Shareholders. Each Director chosen to fill a vacancy shall hold
office for the unexpired term in respect of which such vacancy occurred. Each
Director chosen to fill a newly created Directorship shall hold office until
the next election of the class for which such Director shall have been chosen.
When the number of Directors is changed, any newly created Directorships or any
decrease in Directorships shall be so apportioned among the classes as to make
all classes as nearly equal in number as possible.
Section 5.03. Vacancies: If a vacancy occurs on the Board of Directors,
including a vacancy resulting from an increase in the number of Directors or
removal of a Director by Shareholders, the vacancy may be filled exclusively by
the Board of Directors, or, if the Directors remaining in office constitute
fewer than a quorum of the Board, by the affirmative vote of a majority of all
Directors remaining in office.
<PAGE>
Section 5.04. Initial Board: The initial Board of Directors of the
Corporation shall consist of four members, and the name, address and initial
term of office of each member is set forth below:
The following Director shall hold office until the first Annual
Meeting of the Shareholders:
Thomas H. Benson, 303 Peachtree Street, N.E., Suite 400, Atlanta,
Georgia 30308.
The following Director shall hold office until the second Annual
Meeting of Shareholders:
Robert L. Goocher, 303 Peachtree Street, N.E., Suite 400, Atlanta,
Georgia 30308.
The following Directors shall hold office until the third Annual
Meeting of Shareholders:
David R. Jones, 303 Peachtree Street, N.E., Suite 400, Atlanta,
Georgia 30308;
Charles W. Bass, 303 Peachtree Street, N.E., Suite 400, Atlanta,
Georgia 30308.
VI.
CONSIDERATIONS AVAILABLE TO THE BOARD OF DIRECTORS
In discharging the duties of their respective positions and in determining
what is believed to be in the best interests of the Corporation, the Board of
Directors, committees of the Board of Directors, and individual Directors, in
addition to considering the effects of any action on the Corporation or its
shareholders, may consider the interests of the employees, customers, suppliers
and creditors of the Corporation and its subsidiaries, the communities in which
offices or other establishments of the Corporation and its subsidiaries are
located, and all other factors the Directors consider pertinent.
VII.
LIMITATIONS ON DIRECTOR LIABILITY
No Director of the Corporation shall be personally liable to the
Corporation or its shareholders for monetary damages for breach of duty of care
or other duty as a Director, except for liability (1) for any appropriation, in
violation of his duties, of any business opportunity of the Corporation; (2)
for acts or omissions which involve intentional misconduct or a knowing
violation of the law; (3) for the types of liability set forth in Section
14-2-832 of the Georgia Business Corporation Code (the "Code"); or (4) for any
transaction from which the Director received an improper personal benefit. If
the Code is amended after the effective date of this Article to authorize
corporate action further limiting the personal liability of Directors, then the
liability of a Director of the Corporation shall be limited to the fullest
extent permitted by the Code, as so amended. Any repeal or modification of
the foregoing paragraph by the shareholders of the Corporation shall not
<PAGE>
adversely affect any right or protection of a Director of the Corporation
existing at the time of such repeal or modification.
VIII.
REPURCHASED SHARES
Shares of stock of the Corporation acquired by the Corporation shall
constitute treasury shares, unless the Board of Directors by resolution
otherwise provides.
IX.
INDEMNIFICATION OF DIRECTORS
Section 9.01. Right to Indemnification: Each person who was or is made a
party or is threatened to be made a party to or is otherwise involved in any
threatened, pending or completed action, suit or proceeding, whether civil,
derivative, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact he or she, or a person of whom he or she
is a legal representative, is or was a Director, shall be indemnified and held
harmless by the Corporation to the fullest extent authorized by the Code , as
the same exists or may hereafter be amended (but in the case of any such
amendment, only to the extent that such amendment permits the Corporation to
provide broader indemnification rights than the Code permitted the Corporation
to provide prior to such amendment), against all expenses, liability and loss
(including attorneys' fees, judgements, fines, ERISA excise taxes or penalties,
and amounts paid or to be paid in settlement) actually and reasonably incurred
or suffered by such Director in connection with any such proceeding. Such
indemnification shall continue as to a Director who has ceased to be a Director
and shall inure to the benefit of the Director's heirs, executors and
administrators. Except with respect to proceedings to enforce rights to
indemnification by a Director, the Corporation shall indemnify any such
Director in connection with a proceeding (or part thereof) initiated by such
Director only if such proceeding (or part thereof) was authorized by the Board
of Directors of the Corporation. The right to indemnification conferred in
this Article shall be a contract right.
Section 9.02. Advance for Expenses: The Corporation shall pay for or
reimburse the actual and reasonable expenses incurred by a Director who is a
party to a proceeding in advance of final disposition of the proceeding if the
Director furnishes the Corporation: (1) a written affirmation of his or her
good faith belief that his or her conduct does not constitute behavior of the
kind set forth in Code Section 14-2-856(b); and (2) a written undertaking,
executed personally or on his or her behalf, to repay any advances if it is
ultimately determined that he or she is not entitled to indemnification for
such expenses under this Article or otherwise. The undertaking must be an
unlimited general obligation of the Director but need not be secured and may be
accepted without reference to Director's financial ability to make repayment.
Section 9.03. Enforcement: The rights to indemnification provided by
this Article shall apply to all proceedings described in Section 9.01 of this
Article, regardless of whether any provision of this Article has been amended
or repealed subsequent to such acts or omissions. If a claim for
indemnification under this Article is not paid in full by the Corporation
<PAGE>
within 60 days after a written claim has been received by the Corporation,
except in the case of a claim for an advancement of expenses, in which case the
applicable period shall be 20 days, the Director may apply for indemnification
or advancement of expenses to a court of competent jurisdiction pursuant to
Code Section 14-2-854. If successful in whole or in part in any such suit, or
in a suit brought by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the Director also shall be entitled to
be paid the expenses of prosecuting or defending such suit. For purposes of
this Article, references to the "Corporation" shall include, in addition to
this Corporation, any merging or consolidating Corporation (including any
merging or consolidation Corporation of a merging or consolidating Corporation)
absorbed in a merger or consolidation with this Corporation, so that any person
who is or was a Director of such merging or consolidating Corporation or who is
or was serving at the request of such merging or consolidating Corporation as a
Director, officer, employee or agent of another Corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position under this
Article with respect to this Corporation as he would if he had served this
Corporation in the same capacity.
X.
SPECIAL MEETINGS OF SHAREHOLDERS
At any time in the interval between annual meetings of shareholders,
special meetings of the shareholders may be called by the Chairman of the Board
of Directors, the President, the Board of Directors or the Executive Committee
by vote at a meeting, by a majority of the Directors in writing without a
meeting, or by the holders of not less than 100% of the shares of Common Stock
then outstanding and entitled to vote.
XI.
SHAREHOLDERS' RIGHT TO DISSENT
Section 11.01. Dissenters' Rights: A record shareholder of the
Corporation is entitled to dissent from, and to obtain payment of the fair
value of his shares in the event of the occurrence of any of the events
described in Section 13.01(3) of these Articles of Incorporation with an
"Interested Shareholder" as defined in Section 11.02 of these articles unless
the transaction is approved by the Board of Directors in the manner described
in Section 13.05 of these Articles of Incorporation.
Section 11.02. "Interested Shareholder". For purposes of this Article,
an "Interested Shareholder" shall mean any person, other than the corporation
or its subsidiaries, that:
(1) Is the beneficial owner of 10 percent or more of the voting
power of the outstanding voting shares of the corporation; or
(2) Is a person that directly, or indirectly through one or more
intermediaries, controls or is controlled by or is under common control
with the corporation and, at any time within the two-year period
immediately prior to the date in question, was the beneficial owner of 10
percent or more of the voting power of the then outstanding voting shares
of the corporation (an "Affiliate").
<PAGE>
For the purpose of determining whether a person is an interested
shareholder, the number of voting shares deemed to be outstanding shall not
include any unissued voting shares which may be issuable pursuant to any
agreement, arrangement, or understanding,
Section 11.03. "Record Shareholder." For purposes of this Article a
"record shareholder" shall mean any person in whose name shares are registered
in the records of the Corporation or the beneficial owner of shares to the
extent of the rights granted by a nominee certificate on file with the
Corporation.
XII.
AMENDMENT OF BYLAWS
Section 12.01. Amendment of Bylaws: No action shall be taken by the
shareholders with respect to altering, amending or repealing the Bylaws of the
Corporation, unless such action has been recommended by the Board of Directors,
except by the affirmative vote of the holders of at least two-thirds (66-2/3%)
of all of the outstanding shares entitled to vote. Such affirmative vote shall
be in addition to any shareholder vote that would be required without reference
to this Article.
Section 12.02. Amendment of Article XII: The affirmative vote of
shareholders required to alter, amend or repeal this Article, or to alter,
amend or repeal any other provision of the Articles of Incorporation of the
Corporation in any respect which would or might have the effect, directly or
indirectly, of modifying, permitting any action inconsistent with, or
permitting circumvention of, this Article shall be at least two-thirds (66-
2/3%) of all of the outstanding shares entitled to vote, excluding from the
number of shares deemed to be outstanding shares for purposes of such vote to
amend, alter or repeal this Article, all shares beneficially owned by an
"Interested Shareholder" as that term is defined in Section 11.02 of these
Articles of Incorporation; provided, however, that if such proposed alteration,
amendment or repeal is approved by a majority of the "Continuing Directors" as
that term is defined in Section 13.01(5) of these Articles of Incorporation,
provided at the time of such approval the Continuing Directors constitute at
least a majority of the Board of Directors, then such proposed alternation,
amendment or repeal shall require for approval only such affirmative vote as is
required by law and by any other provision of these Articles of Incorporation
or the Bylaws. The two-thirds (66-2/3%) affirmative vote provided for herein
shall be in addition to any shareholder vote that would be required without
reference to this Article.
XIII.
BUSINESS COMBINATIONS WITH RELATED PERSONS
Section 13.01. Definitions.
The following definitions shall apply for purposes of this Article XIII:
(1) Affiliate. An "Affiliate" of, or Person "affiliated with," a
specified Person, is a Person that directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
<PAGE>
specified Person. The term "control" (including the terms "controlling,"
"controlled by" and "under common control with") means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities,
by contract, or otherwise and the beneficial ownership of shares representing
ten percent (10%) or more of the votes entitled to be cast by the Corporation's
voting shares shall create an irrebuttable presumption of control.
(2) Associate. The term "Associate," when used to indicate a
relationship with any Person, means (a) any Person (other than this Company or
a subsidiary of this Company) of which such Person is an officer, director or
partner or is the Beneficial Owner of ten percent (10%) or more of any class of
equity securities, (b) any trust or other estate in which such Person has a
beneficial interest of ten percent (10%) or more or as to which such Person
serves as a trustee or in a similar fiduciary capacity, and (c) any relative or
spouse of such Person, or any relative of such spouse who has the same home as
such Person.
(3) Beneficial Owner. A Person shall be considered to be the "Beneficial
Owner" of any equity securities of this Company;
(a) which such Person or any of such Person's Affiliates or
Associates owns, directly or indirectly;
(b) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has (i) the right to acquire, whether
such right is exercisable immediately or only after the passage of time,
agreement, arrangement, or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options or otherwise; or
(ii) the right to vote pursuant to any agreement, arrangement, or
understanding;
(c) which are owned, directly or indirectly, by any other Person
with which such Person or any of its Affiliates or Associates has any
agreement, arrangement, or understanding for the purpose of acquiring,
holding, voting, or disposing of equity securities of this Company.
(4) Business Combination. The term "Business Combination" shall mean:
(a) a merger or consolidation of this Company or any Subsidiary with
or into any other Person, or of such other Person with or into this
Company or any Subsidiary, or
(b) any sale, exchange, lease, mortgage, pledge, transfer or other
disposition, in one transaction or a series of transactions, of the assets
of this Company or any Subsidiary having an aggregate book value as of the
end of the Company's most recently ended fiscal quarter of ten percent
(10%) or more of the net assets of the Company to any other Person, or
(c) any sale, exchange, lease, mortgage, pledge, transfer or other
disposition for value by any other Person of any assets to this Company or
any Subsidiary in exchange for Outstanding Shares, or outstanding shares
of any Subsidiary, where the result of such transaction is that such other
Person is the Beneficial Owner of a majority of the Outstanding Shares, or
(d) the liquidation or dissolution of the Company or any Subsidiary
proposed by or on behalf of a Related Person, or
<PAGE>
(e) any share exchange in which the shares of Common Stock of the
Company or of any Subsidiary having an aggregate book value as of the end
of the Company's most recently ended fiscal quarter of ten percent (10%)
or more of the net assets of the Company are exchanged for shares, other
securities, cash or other property, or
(f) any amendment of these Articles of Incorporation which would
effect a reclassification of any securities of this Company, (including a
reverse stock split or the equivalent thereof) or any merger of the
Company with any of its Subsidiaries, which has the effect, directly or
indirectly, of increasing the proportionate share of any class of the
Outstanding Shares of the Company or any Subsidiary beneficially owned by
a Related Person.
(5) Continuing Director. The term "Continuing Director" shall mean any
member of the Board of Directors who is not a Related Person or an Affiliate
or Associate of a Related Person or of any such Affiliate or Associate, or a
representative of a Related Person or of any such Affiliate or Associate, and
was a Director of the Company prior to the time a Related Person became such,
and any successor to such Continuing Director who is not an Affiliate or
Associate of a Related Person and was recommended by a majority of the
Continuing Directors then on the Board of Directors, provided that at the time
of such recommendation, Continuing Directors comprise a majority of the Board.
If there is no Related Person, all members of the Board of Directors shall be
deemed to be "Continuing Directors."
(6) Date of Determination. The term "Date of Determination" shall mean
(a) the date on which a binding agreement (except for the fulfillment of
conditions precedent, including, without limitation, votes of shareholders to
approve such transaction) is entered into by this Company, as authorized by the
Board of Directors, and another Person providing for any Business Combination,
or (b) if such an agreement as referred to in item (a) above is amended so as
to make it less favorable to this Company or its shareholders, the date on
which such amendment is entered into by the Company, as authorized by the Board
of Directors, or (c) in cases where neither items (a) nor (b) shall be
applicable, the record date for the determination of shareholders of this
Company entitled to notice of and to vote upon the transaction in question.
The Board of Directors shall have the power and duty to determine pursuant to
the foregoing the Date of Determination as to any transaction for purposes of
this Article XIII. Any such determination made by the Board of Directors in
good faith shall be conclusive and binding for all purposes of Article XIII.
(7) Fair Market Value. The term "Fair Market Value" shall mean, as of
any date: (a) in the case of stock, either (i) the median of the averages of
the daily high and low sale prices during the 30-day period immediately
preceding such date of a share of such stock on the Composite Tape for New York
Stock Exchange-Listed Stocks, or, if such stock is not quoted on the Composite
Tape, on the New York Stock Exchange, or, if such stock is not listed on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934 on which such stock is listed; or (ii) if
such stock is not listed on any such exchange, the median of the averages of
the daily closing bid and closing asked quotations on the National Association
of Securities Dealers Automated Quotations System ("NASDAQ") (or any successor
system then in use), or the median of the averages of the daily high and low
sales prices on the NASDAQ National Market System, if applicable, for such
stock during the 30-day period preceding such date, or if no such quotations
<PAGE>
are then available, the fair market value as determined in good faith by a
majority of the Continuing Directors; and (b) in the case of property other
than cash or stock, the fair market value of such property on such date as
determined in good faith by a majority of the Continuing Directors.
(8) Outstanding Shares. The term "Outstanding Shares" shall mean any
issued shares of capital stock of the Company with the right generally to vote
for the election of Directors, but shall not include any shares (prior to
issue) which may be issuable pursuant to any agreement or upon exercise of
conversion rights, warrants, options or otherwise.
(9) Person. The term "Person" shall mean any individual, partnership,
corporation, group or other entity (other than the Company, any Subsidiary of
the Company or a trustee holding stock for the benefit of employees of the
Company or its Subsidiaries, or any one of them, pursuant to one or more
employee benefit plans or arrangements). When two or more Persons act as a
partnership, limited partnership, syndicate, association or other group for the
purposes of acquiring, holding, voting or disposing of the Outstanding Shares,
such partnership, syndicate, association, or group shall be deemed a "Person."
(10) Related Person. The term "Related Person" shall mean any Person
which, together with the Affiliates and Associates of such Person, is the
Beneficial Owner as of the Date of Determination or immediately prior to the
consummation of a Business Combination, or both, of at least that number of
shares of stock of the Company equal to twenty percent (20%) of all of the
Outstanding Shares, but does not include any one or a group of more than one
Continuing Director. The term "Related Person" shall include the Affiliates
and Associates of such Related Person.
(11) Subsidiary. The term "Subsidiary" shall mean any corporation of
which a majority of any class of equity security is owned, directly or
indirectly, by the Company.
Section 13.02. Determination of Application of Article XIII.
The Board of Directors shall have the power and the duty to determine for
the purposes of Article XIII on the basis of the information known to the
Board of Directors, any fact determinable under Article XIII and the
applicability of all definitions to transactions contemplated by Article XIII,
including but not limited to the following:
(1) the number of shares of stock of the Company owned by a Person,
and
(2) whether a Person is an Affiliate or Associate of another, and
(3) the fair market value, to be determined pursuant to the
definition of "Fair Market Value" contained in Section 13.01, of
consideration other than cash received or to be received for Outstanding
Shares.
Any such determination shall be conclusive and binding for all purposes of
Article XIII, provided that such determination is approved by a majority of the
Continuing Directors then in office.
<PAGE>
Section 13.03. Voting Requirements for Business Combinations with Related
Persons.
Except as set forth in Sections 13.04 and 13.05 of this Article XIII, if
as of the Date of Determination with respect to any Business Combination, any
Person that is a party to such Business Combination is a Related Person, the
affirmative vote or consent of the holders of at least seventy-five percent
(75%) of all Outstanding Shares shall be required to approve such Business
Combination. Such affirmative vote shall be required notwithstanding the fact
that no vote maybe required, or that a lesser percentage may be specified, by
law or in any agreement with any national securities exchange or otherwise, and
shall be in addition to any shareholder vote which would be required without
reference to this Article XIII.
Section 13.04. Nonapplicability of Special Voting Requirements.
The provisions of Section 13.03 shall not apply if all of the following
conditions shall have been met, provided, however, that nothing contained in
this Article XIII shall be construed to relieve any Related Person from any
fiduciary obligation imposed by law:
(1) The consideration to be received by the Company or per share by
holders of Outstanding Shares shall be in cash or in the same form as the
consideration given by the Related Person in acquiring Outstanding Shares
at any time during the period commencing on the date of the first
acquisition by such Related Person of any Outstanding Shares and ending on
and including the date upon which the Related Person became a Related
Person. If the Related Person paid for Outstanding Shares with varying
forms of consideration, the form of consideration to be received by the
Company or per share by holders of Outstanding Shares shall be either cash
or the form of consideration used to acquire the largest number of
Outstanding Shares acquired by the Related Person during such two-year
period.
(2) The Fair Market Value of the consideration received in such
Business Combination by the Company (analyzed on a per share basis) or per
share by holders of Outstanding Shares is not less than the highest per
share price (including brokerage commissions, transfer taxes and
soliciting dealers' fees) paid by such Related Person in acquiring any of
its holdings of Outstanding Shares.
(3) The ratio of:
(a) the Fair Market Value of the consideration to be received in
such Business Combination by the Company (analyzed on a per share
basis) or per share by holders of Outstanding Shares to
(b) the per share market price of Outstanding Shares immediately
prior to the announcement of the Business Combination is at least as
great as the ratio of
(c) the highest per share price (including brokerage
commissions, transfer taxes and soliciting dealers' fees) which such
Related Person has paid for any of the Outstanding Shares acquired by
it prior to the Date of Determination, to
<PAGE>
(d) the per share market price of Outstanding Shares immediately
prior to the initial acquisition by such Related Person of any
Outstanding Shares.
(4) If the Related Person is a corporation, the Fair Market Value of
the consideration to be received in such Business Combination by the
Company (analyzed on a per share basis) or per share by holders of
Outstanding Shares shall be not less than the earnings per share of
Outstanding Shares during the four full consecutive fiscal quarters
immediately preceding the Date of Determination for solicitation of votes
on such Business Combination multiplied by the then price/earnings
multiple (if any) of such Related Person as customarily computed and
reported in the financial community;
(5) The Fair Market Value of consideration to be received in such
Business Combination by the Company (analyzed on a per share basis) or per
share by holders of Outstanding Shares shall be not less than the sum of:
(a) the higher of (i) the highest gross per share price paid or
agreed to be paid by the Related Person to acquire any of the
Outstanding Shares of the Company beneficially owned by such Related
Person or (ii) the highest per share market price for such
Outstanding Shares since the Related Person became a Related Person,
plus
(b) an amount equal to the highest price/earnings multiple of
the Company, as customarily computed and reported in the financial
community, attained by the Company during the five fiscal years
immediately preceding the Date of Determination multiplied by the
aggregate amount, if any, by which 10% of such higher per share price
determined under (a) above exceeds the smallest quarterly common
stock dividend per share (annualized) paid in cash since the date on
which such Related Person became a Related Person;
(6) The Fair Market Value of the consideration to be received in
such Business Combination by the Company (analyzed on a per share basis)
or per share by holders of Outstanding Shares shall not be less than the
per share book value of Outstanding Shares at the end of the most recent
fiscal year preceding the Date of Determination, calculated in accordance
with generally accepted accounting methods;
(7) After such Related Person has become a Related Person and prior
to the consummation of such Business Combination: (a) except as approved
by two-thirds of the Continuing Directors, there shall have been no
failure to declare and pay at the regular date therefor any dividends
(whether or not cumulative) on any outstanding Preferred Stock of the
Company; and (b) there shall have been (i) no reduction in the annual
dividend from that most recently paid on Outstanding Shares (except as
necessary to reflect any subdivision of the Outstanding Shares through
stock dividend, stock split, or otherwise), except as approved by
two-thirds of the Continuing Directors, and (ii) an increase in such
annual dividend as necessary to reflect any reclassification (including a
reverse stock split), recapitalization, reorganization or any similar
transaction which has the effect of reducing the number of Outstanding
Shares, unless the failure so to increase such annual dividend is approved
by two-thirds of the Continuing Directors;
<PAGE>
(8) After such Related Person has become a Related Person, such
Related Person shall not have received the benefit, directly or indirectly
(except proportionately as a shareholder of the Company) of any loans,
advances, guarantees, pledges or other financial assistance or any tax
credits or other tax advantages provided by the Company, whether in
anticipation of or in connection with such Business Combination or
otherwise.
Section 13.05. Approval by Continuing Directors.
Approval by Continuing Directors. The provisions of Sections 13.03 and
13.04 shall not be applicable to any particular Business Combination or other
event covered thereby, and such Business Combination or other event covered
thereby shall require only such affirmative vote as is required by law and by
any other provision of these Articles of Incorporation, if both of the
following conditions with respect to such Business Combination or other event
shall have been satisfied: (1) the Business Combination or other event shall
have been approved by two-thirds of the Continuing Directors; and (2) at the
time of such approval, Continuing Directors comprised at least a majority of
the Board of Directors.
Section 13.06. Amendment
The affirmative vote of shareholders required to alter, amend or repeal
this Article XIII, or to alter, amend, or repeal any other provision of the
Articles of Incorporation of the Company in any respect which would or might
have the effect, directly or indirectly, of modifying, permitting any action
inconsistent with, or permitting circumvention of, this Article XIII
(including, but not limited to, any amendment of the Articles of Incorporation
which would effect a reclassification of any securities of this Company which
has the effect, directly or indirectly, of increasing the proportionate share
of Outstanding Shares, or outstanding shares of any Subsidiary, beneficially
owned by a Related Person), shall be at least seventy-five percent (75%) of all
of the Outstanding Shares; provided, however, that if such proposed alteration,
amendment or repeal is approved by two-thirds of the Continuing Directors and
at the time of such approval Continuing Directors comprise at least a majority
of the Board of Directors, then such proposed alteration, amendment or repeal
shall require for approval only such affirmative vote as is required by law and
by any other provision of these Articles of Incorporation. The 75% affirmative
vote provided for above shall be in addition to any shareholder vote which
would be required without reference to this Article XIII.
IN WITNESS WHEREOF, the undersigned incorporator has executed these
Articles of Incorporation as of the ____ day of November, 1995.
___________________________________
EXHIBIT A-2
BYLAWS OF
AGL RESOURCES INC.
ARTICLE I
SHAREHOLDERS
SECTION 1.1. Annual Meetings. The annual meeting of the
Shareholders of the Corporation shall be held each year for the purposes of
electing Directors and of transacting such other business as properly may be
brought before the meeting. To be properly brought before the meeting,
business must be brought before the meeting (i) by or at the direction of the
Board of Directors or (ii) by any Shareholder of the Corporation entitled to
vote at the meeting who complies with the procedures set forth in Sections 1.2
through 1.2.2 of this Article; provided, in each case, that such business
proposed to be conducted is, under the law, an appropriate subject for
Shareholder action.
SECTION 1.2. Notice of Business to Be Brought Before Annual
Meetings. For business to be brought before an annual meeting by a
Shareholder, the Shareholder must have given timely notice thereof in writing
to the Secretary of the Corporation. To be timely, in the case of an annual
meeting of Shareholders, a Shareholder's notice must be delivered to or mailed
and received at the principal executive offices of the Corporation, in
accordance with Securities and Exchange Commission Rule 14a-8(a)(3)(i), not
less than 120 calendar days prior to the date of the Corporation's proxy
statement released to Shareholders in connection with the previous year's
annual meeting of Shareholders, except that if no annual meeting of
Shareholders was held in the previous year or if the date of the annual meeting
of Shareholders has been changed by more than 30 calendar days from the date
contemplated at the time of the previous year's proxy statement, the notice
shall be received at the principal executive offices of the Corporation not
less than the later of (a) 150 calendar days prior to the date of the
contemplated annual meeting or (b) the date which is 10 calendar days after the
date of the first public announcement or other notification to the Shareholders
of the date of the contemplated annual meeting.
SECTION 1.2.1. Notice of Business to Be Brought Before Special
Meetings. In the case of special meetings of Shareholders, held pursuant to
Section 1.3 of this Article, a Shareholder's notice must be delivered to or
mailed and received at the principal executive offices of the Corporation, in
accordance with Securities and Exchange Commission Rule 14a-8(a)(3)(i), not
less than 120 calendar days prior to the date of the special meeting.
SECTION 1.2.2. Contents of Notice. A Shareholder's notice to
the Secretary shall set forth as to each matter such Shareholder proposes to
bring before the annual meeting (i) a brief description of the business desired
to be brought before the annual meeting and the reasons for conducting such
business at the annual meting, (ii) the name and address, as they appear on the
Corporation's books, of the Shareholder proposing such business, (iii) the
class and number of shares of the Corporation which are beneficially owned by
such Shareholder, (iv) the dates upon which the Shareholder acquired such
shares, (v) documentary support for any claim of beneficial ownership, (vi) any
material interest of such Shareholder in such business and (vii) a statement in
support of the matter and any other information required by said Rule 14a-8 and
<PAGE>
(viii) as to each person whom the Shareholder proposes to nominate for election
or reelection as director all information relating to such person that is
required to be disclosed in solicitations of proxies for election of Directors
in an election contest, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended, and Rule
14a-1 thereunder (including such person's written consent to being named in the
proxy statement as a nominee and to serving as a director if elected).
SECTION 1.2.3. Determination of Validity of Notice. The
chairman of an annual meeting may, if the facts warrant, determine and declare
to the meeting that business was not properly brought before the meeting in
accordance with the provisions of Sections 1.2 through 1.2.2 of this Article,
and, if he should so determine, he shall so declare to the meeting and any such
business so determined to be not properly brought before the meeting shall not
be transacted, or in the case of persons so nominated, not be eligible for
election.
SECTION 1.3. Special Meetings. The Corporation shall hold a special
meeting of Shareholders on call of the Board of Directors or the Executive
Committee, the Chairman of the Board of Directors, the President, or, upon
delivery to the Corporation's Secretary of a signed and dated written request
setting out the purpose or purposes for the meeting, on call of the holders of
100% of the votes entitled to be cast on any issue proposed to be considered at
the proposed special meeting. Only business within the purpose or purposes
described in the notice of special meeting required by Section 1.5 below may be
conducted at a special meeting of the Shareholders.
SECTION 1.4. Date, Time and Place of Meetings. Annual meetings of
the Shareholders shall be held on such date and at such time and place, within
or without the State of Georgia, as may be fixed by the Board of Directors.
Special meetings of Shareholders shall be held on such date and at such time
and place, within or without the State of Georgia, as may be fixed from time to
time by the Board of Directors. The date, time and place of all meetings shall
be stated in the notice of the meeting or in a duly executed waiver of notice
thereof. If no designation is made, the place of the meeting shall be the
principal business office of the Corporation.
SECTION 1.5. Notice of Meetings. The Secretary or an Assistant
Secretary shall deliver, either personally or by first-class mail, a written
notice of the place, day, and time of all meetings of the Shareholders not less
than ten (10) nor more than sixty (60) days before the meeting date to each
Shareholder of record entitled to vote at such meeting. Written notice is
effective when mailed, if mailed with first-class postage prepaid and correctly
addressed to the Shareholder's address shown in the Corporation's current
record of Shareholders. It shall not be necessary that notice of an annual
meeting include a description of the purpose or purposes for which the meeting
is called. In the case of a special meeting, the purpose or purposes for which
the meeting is called shall be included in the notice of the special meeting.
If an annual or special Shareholders' meeting is adjourned to a different date,
time, or place, notice of the new date, time, or place need not be given if the
new date, time, or place is announced a the meeting before adjournment.
However, if a new record date for the adjourned meeting is or must be fixed
under Section 1.9 herein, notice of the adjourned meeting must be given to
persons who are Shareholders as of the new record date.
SECTION 1.6. Record Date. The Board of Directors, in order to
determine the Shareholders entitled to notice of or to vote at any meeting of
<PAGE>
the Shareholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or to receive payment of any dividend or
other distribution or allotment of any rights, or to exercise any rights in
respect of any change, conversion or exchange of stock, or for the purpose of
any other lawful action, shall fix in advance a record date that may not be
more than seventy (70) days before the meeting or action requiring a
determination of Shareholders. Only such Shareholders as shall be Shareholders
of record on the date fixed shall be entitled to such notice of or to vote at
such meeting or any adjournment thereof, or to receive payment of any such
dividend or other distribution or allotment of any rights, or to exercise any
such rights in respect of stock, or to take any such other lawful action, as
the case may be, notwithstanding any transfer of any stock on the books of the
Corporation after any such record date fixed as aforesaid. The record date
shall apply to any adjournment of the meeting except that the Board of
Directors shall fix a new record date for the adjourned meeting if the meeting
is adjourned to a date more than 120 days after the date fixed for the original
meeting.
SECTION 1.7. Shareholders' List for Meeting. After fixing a record
date for a meeting, the Corporation shall prepare an alphabetical list of the
names of all Shareholders who are entitled to notice of the Shareholders'
meeting. The list shall be arranged by voting group (and within each voting
group by class or series of shares) and show the address of and number of
shares held by each Shareholder. The Corporation shall make the Shareholders'
list available for inspection by any Shareholder, his agent, or his attorney at
the time and place of the meeting.
SECTION 1.8. Quorum. Subject to any express provision of law or the
Articles of Incorporation, a majority of the votes entitled to be cast by all
shares voting together as a group shall constitute a quorum for the transaction
of business at all meetings of the Shareholders. Whenever a class of shares or
series of shares is entitled to vote as a separate voting group on a matter, a
majority of the votes entitled to be cast by each voting group so entitled
shall constitute a quorum for purposes of action on any matter requiring such
separate voting. Once a share is represented, either in person or by proxy,
for any purpose at a meeting other than solely to object to holding a meeting
or transacting business at the meeting, it is deemed present for quorum
purposes for the remainder of the meeting and for any adjournment of that
meeting unless a new record date is set for the adjourned meeting.
SECTION 1.9. Adjournment of Meetings. The holders of a majority of
the voting shares represented at a meeting, or the Chairman of the Board or the
President, whether or not a quorum is present, shall have the power to adjourn
the meeting from time to time, without notice other than announcement at the
meeting. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified. If after the adjournment a new record date
is fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each Shareholder of record entitled to vote at the adjourned meeting.
SECTION 1.10. Vote Required. When a quorum exists, action on a
matter (other than the election of Directors) by a voting group is approved if
the votes cast within the voting group favoring the action exceed the votes
cast opposing the action, unless the Articles of Incorporation, a bylaw
authorized by the Articles of Incorporation or express provision of law
requires a greater number of affirmative votes. Unless otherwise provided in
the Articles of Incorporation, Directors are elected by a plurality of the
<PAGE>
votes cast by the shares entitled to vote in the election at a meeting at which
a quorum is present. Shareholders do not have the right to cumulate their
votes unless the Articles of Incorporation so provide.
SECTION 1.11. Voting Entitlement of Shares. Unless otherwise
provided in the Articles of Incorporation, each Shareholder, at every meeting
of the Shareholders, shall be entitled to cast one vote, either in person or by
written proxy, for each share standing in his or her name on the books of the
Corporation as of the record date. A Shareholder may vote his shares in person
or by proxy. An appointment of proxy is effective when received by the
Secretary of the Corporation or other officer or agent authorized to tabulate
votes and is valid for eleven (11) months unless a longer period is expressly
provided in the appointment of proxy form. An appointment of proxy is
revocable by the Shareholder unless the appointment form conspicuously states
that it is irrevocable and the appointment is coupled with an interest.
ARTICLE II
Board of Directors
SECTION 2.1. General Powers. Subject to the Articles of
Incorporation, and Bylaws approved by the Shareholders, all corporate powers
shall be exercised by or under the authority of, and the business and affairs
of the Corporation managed under the direction of, the Board of Directors.
SECTION 2.2. Number and Tenure. The Board of Directors shall
consist of at least five (5) members and not more than fifteen (15) members,
the exact number of Directors to be fixed from time to time by resolution of
the Board of Directors of the Corporation. No decrease in the number or
minimum number of Directors, through amendment of the Articles of Incorporation
or of the bylaws or otherwise, shall have the effect of shortening the term of
any incumbent director. The Board of Directors shall be divided into three
classes as nearly equal in number a possible, with the term of office of one
class expiring each year. At the first annual meeting of shareholders, the
Directors shall be divided into three classes, as nearly equal in size as may
be, with the Directors of one class to be elected to hold office for a term
expiring at the third annual meeting following the election and until their
successors shall have been duly elected and qualified; with the Directors of
the second class to be elected to serve for a term expiring at the second
annual meeting following the election and until their successors shall have
been duly elected and qualified; and the Directors of the third class to be
elected to serve for a term expiring at the first annual meeting following the
election and until their successors shall have been duly elected and qualified.
Thereafter, Directors shall be elected for terms of three years, and until
their successors have been duly elected and qualified or until there is a
decrease in the number of Directors.
SECTION 2.3. Qualifications of Directors. Directors shall be
natural persons who have attained the age of 18 years who shall own at least
100 shares of the Common Stock of the Company but need not be residents of the
State of Georgia.
SECTION 2.3.1. Re-election After Termination of Principal
Employment. If any Director ceases to hold the position in his or her
principal employment profession, trade or calling that he or she held at the
beginning of the current term for which he or she was elected a Director, such
<PAGE>
person shall not be eligible for re-election to the Board of Directors after
the expiration of such current term unless the Board of Directors decides that
such person should be eligible for re-election.
SECTION 2.3.2. Terminating Events; Honorary Directors. Any
Director who either (a) attains his or her seventieth (70th) birthday or (b)
retires from or discontinues his or her employment with the Corporation,
whichever first occurs, shall thereafter, upon completion of the term for which
he or she was elected a Director, cease to be an active Director; provided,
however, anyone who, upon his or her retirement is Chairman of the Board or
President of the Company may, notwithstanding the above provisions of this
Section, continue to serve as an active Director until he attains his
seventieth (70th) birthday, and thereafter until completion of the term for
which he or she was elected a Director.
SECTION 2.3.3. Honorary Directors. Upon appointment by the
Board of Directors, a Director who ceases to be an active Director because of
age or retirement, or any other person who shall be so elected by the Board of
Directors, shall become an Honorary Director for such term or terms as the
Board of Directors may determine, but subject to removal from the position of
Honorary Director at any time at the pleasure of the Board. Except for the
regular November meeting of the Board of Directors, Honorary Directors will not
be expected to attend meetings of the Board unless specially invited. The
expenses of Honorary Directors in attending such November meeting or any other
meeting of the Board of Directors to which they are specially invited will be
reimbursed by the Company but they will not receive fees for attending such
meetings. Honorary Directors may participate in an advisory capacity in all
discussions and deliberations of the Board of Directors but shall have no vote
at the meetings which they attend in accordance with the foregoing provisions.
An Honorary Director shall not be included in any calculation of the number of
active Directors authorized and serving under Section 2.2.
SECTION 2.4. Vacancies. Unless the Articles of Incorporation
provide otherwise, if a vacancy occurs on the Board of Directors, including a
vacancy resulting from an increase in the number of Directors, the vacancy may
be filled only by the Board of Directors, or, if the Directors remaining in
office constitute fewer than a quorum of the Board, by the affirmative vote of
a majority of all Directors remaining in office. If the vacant office was held
by a director elected by a voting group of Shareholders, only the remaining
Directors elected by that voting group are entitled to vote to fill the
vacancy.
SECTION 2.5. Meetings. The Board of Directors shall meet annually,
without notice, immediately following and at the same place as the annual
meeting of Shareholders. Regular meetings of the Board of Directors or any
committee may be held between annual meetings without notice at such time and
at such place, within or without the State of Georgia, as from time to time
shall be determined by the Board or committee, as the case may be. A majority
of the Board of Directors, the Chairman of the Board, the President or the
Executive Committee may call a special meeting of the Directors at any time by
giving each director two (2) days notice. Such notice may be given orally or
in writing. If given in writing it is effective when received or five days
after its deposit in the mail if mailed with first-class postage pre-paid and
correctly addressed. Unless otherwise provided in the Articles of
Incorporation these Bylaws or by law, neither the business to be transacted at,
nor the purpose of, any regular or special meeting need be specified in the
notice or any waiver of notice.
<PAGE>
SECTION 2.6. Quorum and Voting. At all meetings of the Board of
Directors or any committee thereof, a majority of the number of Directors
prescribed, or if no number is prescribed, the number in office immediately
before the meeting begins, shall constitute a quorum for the transaction of
business. The affirmative vote of a majority of the Directors present at any
meeting at which there is a quorum at the time of such act shall be the act of
the Board or of the committee, except as might be otherwise specifically
provided by statute or by the Articles of Incorporation or bylaws. In the
absence of a quorum, the Directors present by majority vote may adjourn the
meeting from time to time without notice other than by verbal announcement at
the meeting until a quorum shall attend. At any such adjourned meeting at
which a quorum shall be present, any business may be transacted which might
have been transacted at the meeting as originally notified.
SECTIONS 2.7. Action Without Meeting. Unless the Articles of
Incorporation or bylaws provide otherwise, any action required or permitted to
be taken at any meeting of the Board of Directors or any committee thereof may
be taken without a meeting if the action is taken by all members of the Board
or committee, as the case may be. The action must be evidenced by one or more
written consents describing the action taken, signed by each director, and
filed with the minutes of the proceedings of the Board or committee or filed
with the corporate records.
SECTIONS 2.8. Remote Participation in a Meeting. Unless otherwise
restricted by the Articles of Incorporation or the bylaws, any meeting of the
Board of Directors may be conducted by the use of any means of communication by
which all Directors participating may simultaneously hear each other during the
meeting. A director participating in a meeting by this means is deemed to be
present in person at the meeting.
SECTION 2.9. Compensation of Directors. The Board of Directors may
fix the compensation of the Directors for their services as Directors.
Compensation shall be fixed from time to time by a resolution of the Board of
Directors, and may be on the basis of an annual sum or a fixed sum for
attendance at each regular or special meeting and every adjournment thereof, or
a combination of these methods. Members may be reimbursed for all reasonable
traveling expenses incurred in attending meetings. No provision of these
bylaws shall be construed to preclude any director from serving the Corporation
in any other capacity and receiving compensation therefor.
SECTION 2.10. Removal of Directors by Shareholders. Subject to the
requirements of Georgia Business Corporation Code Section 14-2 808 (the "Code")
for the removal of Directors elected by cumulative voting, voting group or
staggered terms, any one or more Directors may be removed from office, only
with cause, at any meeting of Shareholders with respect to which notice of such
purpose has been given, by the affirmative vote of the holder or holders of a
majority of the outstanding shares of the Corporation.
SECTION 2.11. Nomination of Directors. Only persons who are
nominated in accordance with the following procedures shall be eligible for
election as Directors. Nominations of persons for election to the Board of
Directors of the Corporation may be made at a meeting of Shareholders (i) by
the Board of Directors or at the direction of the Board by any nominating
committee or person appointed by the Board or (ii) by any Shareholder of the
Corporation entitled to vote for the election of Directors at the meeting who
complies with the notice procedures set forth in Sections 1.2 through 1.2.2. of
these Bylaws. Such nominations, other than those made by or at the direction
<PAGE>
of the Board of Directors, shall be made pursuant to timely notice in writing
to the Secretary of the Corporation. Such notice to the Secretary shall set
forth the information required in Section 1.2.2 of these Bylaws. The
Corporation may require any proposed nominee to furnish such other information
as reasonably may be required by the Corporation to determine the eligibility
of such proposed nominee to serve as a director of the Corporation. The
chairman of the meeting may, if the facts warrant, determine and declare to the
meeting that a nomination was not made in accordance with the foregoing
procedures, and if he should so determine, he shall so declare to the meeting
and the defective nomination shall be disregarded.
SECTION 2.12. Indemnification. The indemnification authorized in
the Articles of Incorporation shall be subject to the following provisions and
procedures:
SECTION 2.12.1. Determination of Eligibility for
Indemnification. In the case of actions brought by or in the right of the
corporation, a Director's right to indemnification as authorized in the
Articles of Incorporation shall be determined:
(1) If there are two or more directors not at the time parties to
the proceeding ("Disinterested Directors"), by the board of directors by a
majority vote of all the Disinterested Directors (a majority of whom shall
for such purpose constitute a quorum), or by a majority of the members of
a committee of two or more Disinterested Directors appointed by such a
vote;
(2) By special legal counsel:
(A) Selected in the manner prescribed in paragraph (1) of this
subsection;
or
(B) If there are fewer than two Disinterested Directors, the
board of directors (in which selection directors who do not qualify
as Disinterested Directors may participate); or
(3) By the Shareholders, but shares owned by or voted under the
control of a director who at the time does not qualify as a
disinterested director may not be voted on the determination.
SECTION 2.12.2. Rights Not Exclusive. The rights to
indemnification and advance of expenses granted in the Articles of
Incorporation and in these Bylaws are not exclusive, and do not limit the
Corporation's power to pay or reimburse expenses to which a Director may be
entitled, whether by agreement vote of shareholders or Disinterested Directors
or otherwise, both as to action in his official capacity and as to action in
another capacity while holding office, and do not limit the Corporation's power
to pay or reimburse expenses incurred by a Director in connection with his
appearance as a witness in a proceeding at a time when he has not been made a
named defendant or respondent to the proceeding.
SECTION 2.12.3. Insurance. The Corporation and its officers
shall have the power to purchase and maintain insurance on behalf of an
individual who is or was a director, officer, employee or agent of the
Corporation or who, while a director, officer, employee, or agent of the
<PAGE>
Corporation, is or was serving as a director, officer, partner, trustee
employee, or agent of another foreign or domestic corporation, partnership,
joint venture, trust, employee benefit plan, or other enterprise against
liability asserted against or incurred by him in that capacity or arising from
his status as a director, officer, employee or agent, whether or not the
Corporation would have the power to indemnify him against the same liability
under the provisions of these Bylaws.
SECTION 2.12.4. Reports to Shareholders. If the Corporation
indemnifies or advances expenses to a Director, otherwise than by action of the
shareholders or by an insurance carrier pursuant to insurance maintained by the
Corporation shall report the indemnification or advance in writing to the
shareholders with or before the notice of the next annual shareholders'
meeting.
ARTICLE III
COMMITTEES
SECTION 3.1. Committees. The Board of Directors may, by resolution,
designate from among its members one or more committees, each committee to
consist of one or more Directors, except that committees appointed to take
action with respect to indemnification of Directors, Directors' conflicting
interest transactions or derivative proceedings shall consist of two or more
Directors qualified to serve pursuant to the Georgia Business Corporation Code.
Any such committee, to the extent specified by the Board of Directors, Articles
of Incorporation or bylaws, shall have and may exercise all of the authority of
the Board of Directors in the management of the business affairs of the
Corporation, except that it may not (1) approve or propose to Shareholders
action that the Georgia Business Corporation Code requires to be approved by
Shareholders, (2) fill vacancies on the Board of Directors or any of its
committees, (3) amend the Articles of Incorporation, (4) adopt, amend, or
repeal bylaws or (5) approve a plan of merger not requiring Shareholder
approval. All action by any committee shall be reported to the Board of
Directors at its meeting next succeeding such action, and shall be subject to
revision and alteration by the Board of Directors, except that no rights or
third person shall be affected by any such revision or alteration. Vacancies
in any committee shall be filled by the Board of Directors.
SECTION 3.2. Meetings of Committees. Regular meetings of any
Committee shall be held at such places within or without the State of Georgia
and at such times as the Committee by vote may from time to time determine and
if so determined no notice thereof need be given. Special meetings of any
Committee may be held at any time or place, either within or without the State
of Georgia, whenever called by the Chairman of the Board of Directors, the
President, the Board of Directors or the Committee by vote at a meeting, or by
two members of any Committee in writing without a meeting, notice thereof being
given to each member of the such Committee at least one day before the meeting,
by delivering the same to him personally or by sending the same to him by
telephone, telegraph, facsimile transmission or, in the alternative, upon two
days notice by mailing the same to him at his last known mailing address
according to the records of the Corporation. It shall not be requisite to the
validity of any meeting of any Committee that notice thereof shall have been
given to any member of such Committee who attends or to any member of such
Committee who, in writing executed and filed with the records of the meeting
either before or after the holding thereof, waives such notice. All regular
<PAGE>
and special meetings of Committees shall be general meetings open for the
transaction of any business within its powers without special notice of such
business, except in cases in which special notice is required by law, by the
Articles of Incorporation, by these By-Laws or by the call of such meeting.
SECTION 3.3. Quorum of Committee. At all meetings of any Committee
a majority of the total number of its members shall constitute a quorum for the
transaction of business. Except in cases in which it is by law, by the
Articles of Incorporation, by these By-Laws, or by resolution of the Board of
Directors otherwise provided, a majority of such quorum shall decide any
questions that may come before the meeting. In the absence of a quorum, the
members of the Committee present by majority vote may adjourn the meeting from
time to time without notice other than by verbal announcement at the meeting,
until a quorum shall attend.
SECTION 3.4. Compensation of Committee Members. The Board of
Directors may fix the compensation of the Directors for their services as
members of committees of the Board of Directors. Compensation shall be fixed
from time to time by a resolution of the Board of Directors and may be on the
basis of an annual sum or a fixed sum for attendance at each regular or special
meeting and every adjournment thereof, or a combination of these methods.
Members of committees shall be reimbursed for all reasonable traveling expenses
incurred in attending meetings. No provision of these bylaws shall be
construed to preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor.
SECTION 3.5. Executive Committee. The Board of Directors, by
resolution adopted by a majority of the whole Board of Directors, may designate
an Executive Committee of three or more Directors, which designation shall
include the Chairman of the Board of Directors and the President. Each
Director of the Corporation who is not designated as a member of the Executive
Committee is hereby designated as an alternate member of the Executive
Committee, who may act in the place and stead of any absent member or members
at any meeting of such Executive Committee in the event (a) a quorum of the
Executive Committee is not present, and (b) the Chairman of the Board or, in
his absence, the President, appoints such alternate member to act for that
meeting as a member of the Executive Committee; and such alternate member shall
serve only at the meeting for which such appointment is made, but shall have at
that meeting all the powers of a regular member of the Executive Committee.
During the Intervals between the meetings of the Board of Directors, the
Executive Committee shall have and may exercise all of the authority of the
Board of Directors in the management of the business affairs of the Corporation
to the extent authorized by the resolution providing for such Executive
Committee or by subsequent resolution adopted by a majority of the whole Board
of Directors, except that it may not (1) approve or propose to Shareholders
action that the Georgia Business Corporation Code requires to be approved by
Shareholders, (2) fill vacancies on the Board of Directors or any of its
committees, (3) amend the Articles of Incorporation, (4) adopt, amend, or
repeal bylaws or (5) approve a plan of merger not requiring Shareholder
approval.
SECTION 3.5.1. Honorary Members of Executive Committee. Upon
appointment by the Board of Directors, a Director who ceases to be an active
Director because of age or retirement, and who at the time has been a member of
the Executive Committee for twelve or more years, shall become an Honorary
Member of the Executive Committee for such term or terms as the Board of
Directors may determine, but subject to removal from the position of Honorary
<PAGE>
Member of the Executive Committee at any time at the pleasure of the Board.
Honorary Members of the Executive Committee shall receive the customary fees
for attending regular meetings, and may participate in an advisory capacity in
all discussions and deliberations of the Executive Committee, but shall have no
vote at the meetings which they attend in accordance with the foregoing
provisions. An Honorary Member shall not be included in any calculation of the
number of active Directors authorized and serving under Section 3.5.
SECTION 3.6. Audit Committee. The Board of Directors, by resolution
adopted by a majority of the whole Board of Directors, may designate an Audit
Committee of four (4) or more Directors. The members of the Audit Committee
shall serve at the pleasure of the Board of Directors or until their successors
shall be duly designated. Each Director of the Corporation who is not
designated as a member of the Audit Committee is hereby designated as an
alternate member of the Audit Committee, who may act in the place and stead of
any absent member or members at any meeting of such Audit Committee in the
event (a) a quorum of the Audit Committee is not present, and (b) the Chairman
of the Board or, in his absence, the President, appoints such alternate member
to act for that meeting as a member of the Audit Committee; and such alternate
member shall serve only at the meeting as a member of the Audit Committee; and
such alternate member shall serve only at the meeting for which such
appointment is made, but shall have at that meeting all the powers of a regular
member of the Audit Committee. The Audit Committee shall consider the choice
of the independent public accountants for the Corporation, shall review the
planned scope of the audit and the results of their examinations of the
financial statements of the Corporation, their opinions thereon and their
recommendations with respect to accounting, internal controls and other
matters, shall convey information to and from the Board of Directors and its
independent public accountants and auditors, shall be available for discussions
of internal auditing problems and procedures, and shall make their report to
the Board of Directors or the Executive Committee, or to both. The Audit
Committee shall keep full and fair accounts of its transactions. All action by
the Audit Committee shall be reported to the Board of Directors at its meeting
next succeeding such action, and shall be subject to revision and alteration by
the Board of Directors; provided that no rights of third persons shall be
affected by any such revision or alteration. Vacancies in the Audit Committee
shall be filed by the Board of Directors.
SECTION 3.7. Nominating and Compensation Committee. The Board of
Directors, by resolution adopted by a majority of the whole Board of Directors,
may designate a Nominating and Compensation Committee of four (4) or more
Directors. The members of the Nominating and Compensation Committee shall
serve at the pleasure of the Board of Directors or until their successors shall
be duly designated. Each Director of the Corporation who is not designated as
a member of the Nominating and Compensation Committee is hereby designated as
an alternate member of the Nominating and Compensation Committee, who may act
in the place and stead of any absent member or members at any meeting of such
Nominating and Compensation Committee in the event (a) a quorum of the
Nominating and Compensation Committee is not present, and (b) the Chairman of
the Board or, in his absence, the President, appoints such alternate member to
act for that meeting as a member of the Nominating and Compensation Committee;
and such alternate member shall serve only at the meeting for which such
appointment is made, but shall have at that meeting all the powers of a regular
member of the Nominating and Compensation Committee. The Nominating and
Compensation Committee shall review the performance of the senior officers of
the Corporation and will recommend to the Board of Directors the appropriate
compensation level for these and the other officers of the Corporation; they
<PAGE>
shall review and recommend to the Board of Directors any changes in the various
benefit programs of the Corporation; and shall review the level of fees paid
and the manner in which fees are paid to members of the Corporation's Board of
Directors and shall make recommendations for adjustments as appropriate. The
Nominating and Compensation Committee shall also identify and recommend to the
Board of Directors the nominees for the Board. The Nominating and Compensation
Committee shall keep full and fair accounts of its transactions. All action by
the Nominating and Compensation Committee shall be reported to the Board of
Directors at its meeting next succeeding such action, and shall be subject to
revision and alternation by the Board of Directors; provided that no rights of
third persons shall be affected by any such revision or alteration. Vacancies
in the Nominating and Compensation Committee shall be filled by the Board of
Directors.
SECTION 3.8. Long Range Planning Committee. The Board of Directors,
by resolution adopted by a majority of the whole Board of Directors, may
designate a Long Range Planning Committee of four (4) or more Directors. The
members of the Long Range Planning Committee shall serve at the pleasure of the
Board of Directors or until their successors shall be duly designated. Each
Director of the Corporation who is not designated as a member of the Long Range
Planning Committee is hereby designated as an alternate member of the Long
Range Planning Committee, who may act in the place and stead of any absent
member or members at any meeting of such Long Range Planning Committee in the
event (a) a quorum of the Long Range Planning Committee is not present, and (b)
the Chairman of the Board or, in his absence, the President, appoints such
alternate member to act for that meeting as a member of the Nominating and
Compensation Committee; and such alternate member shall serve only at the
meeting for which such appointment is made, but shall have at that meeting all
the powers of a regular member of the Long Range Planning Committee. The Long
Range Planning Committee shall review plans for the growth and financial
stability of the Corporation. In carrying out these duties, the Long Range
Planning Committee shall make periodic reviews of the annual budget of the
Corporation, all financing plans, the Corporation's Employee Pension Plan
(including investments of its funds) and investments in non-utility operations.
The results of said reviews shall be reported to the Board of Directors. The
Long Range Planning Committee shall keep full and fair accounts of its
transactions. All action by the Long Range Planning Committee shall be
reported to the Board of Directors at its meeting next succeeding such action,
and shall be subject to revision and alteration by the Board of Directors;
provided that no rights of third persons shall be affected by any such revision
or alteration. Vacancies in the Long Range Planning Committee shall be filled
by the Board of Directors.
ARTICLE IV
NOTICES
SECTION 4.1. Notice. Whenever, under the provisions of the Articles
of Incorporation or of these bylaws or by law, notice is required to be given
to any director or Shareholder, it shall not be construed to require personal
notice, but such notice may be given in writing, by mail, or by telegram, telex
or facsimile transmission and such notice shall be deemed to be effective when
received, or when delivered, properly addressed, to the addressee's last known
principal place of business or residence, or five days after the same shall be
deposited in the United States mail if mailed with first-class postage prepaid
and correctly addressed or on the date shown on the return receipt, if sent by
<PAGE>
registered or certified mail, and the receipt is signed by or on behalf of the
addressee. Notice to any director or Shareholder may also be oral if oral
notice is reasonable under the circumstances. If these forms of personal
notice are impractical, notice may be communicated by a newspaper of general
circulation in the area where published, or by radio, television, or other form
of public broadcast communication.
SECTION 4.2. Waiver of Notice. Whenever any notice is required to
be given under provisions of the Articles of Incorporation or of these bylaws
or by law, a waiver thereof, signed by the person entitled to notice and
delivered to the Corporation for inclusion in the minutes or filing with the
corporate records, whether before or after the time stated therein, shall be
deemed equivalent to notice. Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting and of all objections to the
place or time of the meeting or the manner in which it has been called or
convened, except when the person attends a meeting for the express purpose of
stating, at the beginning of the meeting, any such objection and, in the case
of a director, does not thereafter vote for or assent to action take at the
meeting. Neither the business to be transacted at nor the purpose of any
regular or special meeting of the Shareholders, Directors or a committee of
Directors need be specified in any written waiver of notice; provided, however,
that any waiver of notice of a meeting of Shareholders required with respect to
a plan of merger or a plan of consolidation shall be effective only upon
compliance with Section 14-2-706(c) of the Code or successor provisions.
ARTICLE V
OFFICERS
SECTION 5.1. Appointment. The Board of Directors at its first
meeting following the annual meeting of Shareholders shall elect such officers
as it shall deem necessary, including a Chairman of the Board, a President, a
Secretary, a Treasurer, one or more Vice Presidents (one or more of whom may be
designated Executive Vice President or Senior Vice President), Assistant Vice
Presidents, Assistant Secretaries and Assistant Treasurers, who shall exercise
such powers and perform such duties as shall be determined from time to time by
the Board of Directors. Each such officer shall hold office until the
corresponding meeting of the Board of Directors in the next year and until his
successor shall have been duly elected and qualified or until he shall have
resigned or shall have been removed n the manner provided in Section 5.2 of
this Article V. Any number of offices may be held by the same person unless
the Articles of Incorporation or these bylaws otherwise provide. The
appointment of an officer does not itself create contract rights.
SECTION 5.2. Resignation and Removal of Officers. An officer may
resign at any time by delivering notice to the Corporation and such resignation
is effective when the notice is delivered unless the notice specifies a later
effective date. The Board of Directors or (except in the case of an officer
elected by the Board of Directors) the Executive Committee or an officer upon
whom such power of removal may have been conferred may remove any officer at
any time with or without cause.
SECTION 5.3. Vacancies. Any vacancy in office resulting from any
cause may be filled by the Board of Directors at any regular or special
meeting.
<PAGE>
SECTION 5.4. Powers and Duties. Each officer has the authority and
shall perform the duties set forth below or, to the extent consistent with
these bylaws, the duties prescribed by the Board of Directors or by direction
of an officer authorized by the Board of Directors to prescribe the duties of
other officers.
SECTION 5.4.1. Chairman of the Board of Directors. The
Chairman of the Board of Directors may be chosen from among the Directors of
the Corporation and need not be an Executive Officer or employee of the
Corporation. The Chairman shall preside at all meetings of the Shareholders,
the Board of Directors, and the Executive Committee. He shall have the usual
powers and duties incident to the office of the chairman of the board of
directors of a corporation and such other powers and duties as from time to
time may be assigned to him by the Board of Directors.
SECTION 5.4.2. Chief Executive Officer. The Board of Directors
may designate as the Chief Executive Officer of the Corporation the President
or any other officer of the Corporation including the Chairman if the Chairman
is a full-time officer and employee of the Company. The Chief Executive
Officer of the Corporation shall have general and active management
responsibility for the business of the Corporation and shall see that all
orders and resolutions of the Board of Directors are carried into effect.
Except where by law the signature of the President is required, the Chief
Executive Officer shall have the same powers as the President to sign all
authorized certificates, contracts, bonds, deeds, mortgages and other
instruments. He shall have the usual powers and duties incident to the
position of chief executive officer of a corporation and such other powers and
duties as from time to time may be assigned by the Board of Directors. The
Board of Directors may, or if it does not, the Chief Executive Officer may,
from time to time designate an Executive Officer of the Corporation to assume
and perform the duties and powers of the Chief Executive Officer during the
absence or disability of the Chief Executive Officer.
SECTION 5.4.3. President. The President shall be responsible
for the general supervision of the affairs of the Corporation and general and
active management of the financial affairs of the Corporation. He or she shall
have the power to make and execute certificates, contracts, bonds, deeds,
mortgages and other instruments on behalf of the Corporation, except in cases
in which the signing thereof shall have been expressly delegated to some other
officer or agent of the Corporation and to delegate such power to others. He
or she also shall have such powers and perform such duties as are specifically
imposed on him by law and as may be assigned to him by the Board of Directors.
In the event there is no Chairman of the Board, the President shall also have
all the power and authority that the Chairman is given in these By-Laws or
otherwise. During the absence or disability of the Chairman of the Board, the
President shall preside at all meetings of the Shareholders, the Board of
Directors and the Executive Committee. He shall have the usual powers and
duties incident to the office of a president of a corporation and such other
powers and duties as from time to time may be assigned to him by the Board of
Directors. If the Board of Directors designates the President as the Chief
Executive Officer of the Corporation, the President shall also have the powers
and duties of the Chief Executive Officer.
SECTION 5.4.4. Vice Presidents. The Executive Vice Presidents
shall be senior in authority among the Vice Presidents. During the absence or
disability of the President, the Board of Directors shall designate which of
the Executive Vice Presidents shall exercise all the powers and discharge all
<PAGE>
of the duties of the President, provided, however, that if he is not a Director
he shall not preside at any meetings of the Board of Directors or the Executive
Committee. The Vice Presidents, shall perform such duties as vice presidents
customarily perform and shall perform such other duties and shall exercise such
other powers as the President or the Board of Directors may from time to time
designate.
SECTION 5.4.5. Secretary. The Secretary shall attend all
meetings of the Shareholders and all meetings of the Board of Directors and
shall record all votes and minutes of all proceedings in books to be kept for
that purpose, and shall perform like duties for the standing committees when
required. He or she shall have custody of the corporate seal of the
Corporation, shall have the authority to affix the same to any instrument the
execution of which on behalf of the Corporation under its seal is duly
authorized and shall attest to the same by his signature whenever required.
The Board of Directors may give general authority to any other officer to affix
the seal of the Corporation and to attest to the same by his signature. The
Secretary shall give, or cause to be given, any notice required to be given of
any meetings of the Shareholders, the Board of Directors and of the standing
committees when required. The Secretary shall cause to be kept such books and
records as the Board of Directors, the Chairman of the Board or the President
may require and shall cause to be prepared, recorded, transferred, issued,
sealed and canceled certificates of stock as required by the transactions of
the Corporation and its Shareholders. The Secretary shall attend to such
correspondence and shall perform such other duties as may be incident to the
office of a Secretary of a Corporation or as may be assigned to him by the
Board of Directors, the Chairman of the Board or the President.
SECTION 5.4.6. Treasurer. The Treasurer shall be charged with
the management of financial affairs of the Corporation and shall have charge of
and be responsible for all funds, securities, receipts and disbursements of the
Corporation, and shall deposit or cause to be deposited, in the name of the
Corporation, all moneys or their valuable effects in such banks, trust
companies, or other depositaries as shall from time to time be selected by the
Board of Directors. He shall render to the President and to the Board of
Directors, whenever requested, an account of the financial condition of the
Corporation. In general, he or she shall perform such duties as treasurers
usually perform and shall perform such other duties and shall exercise such
other powers as the Board of Directors, the Chairman of the Board or the
President may from time to time designate and shall render to the Chairman of
the Board, the President and to the Board of Directors, whenever requested, an
account of the financial condition of the Corporation.]
SECTION 5.4.7. Controller. The Controller shall have charge of
and be responsible for preparation of financial and management reports,
budgeting, rate material, property accounting, taxes and such other duties as
are commonly incident to the office of Controller. The Controller shall have
such power and duties as from time to time may be properly delegated by the
President and such other powers and duties as may from time to time be assigned
by the Board of Directors.
SECTION 5.4.8. Assistant Vice President, Assistant Secretary
and Assistant Treasurer. One or more Assistant Vice Presidents, Assistant
Secretaries and Assistant Treasurers, in the absence or disability of any Vice
President, the Secretary or the Treasurer, respectively, shall perform the
duties and exercise the powers of those offices, and, in general, they shall
perform such other duties as shall be assigned to them by the Board of
<PAGE>
Directors or by the person appointing them. Specifically the Assistant
Secretaries may affix the corporate seal to all necessary documents and attest
the signature of any officer of the Corporation.
SECTION 5.4.9. Subordinate Officers. The Board of Directors
may elect such subordinate officers as it may deem desirable. Each such
officer shall hold office for such period, have such authority and perform such
duties as the Board of Directors may prescribe. The Board of Directors may
from time to time authorize any officer to appoint and remove subordinate
officers and prescribe the powers and duties thereof. The Board of Directors
may from time to time authorize the Chairman of the Board of Directors or the
President to appoint any employee or officer of the Corporation (except the
President, the Secretary or an Assistant Secretary elected by the Board of
Directors) as an Assistant Secretary of the Corporation, to prescribe the
powers, term, duties and salary, if any, of such Assistant Secretary, and to
remove any Assistant Secretary thus appointed.
SECTION 5.5. Officers Holding Two or More Offices. Any two of the
above mentioned offices, except those of President and Secretary or Assistant
Secretary, may be held by the same person, but no officer shall execute,
acknowledge or verify any instrument in more than one capacity if such
instrument be required by statute, by the Articles of Incorporation or by these
By-Laws to be executed, acknowledged or verified by any two or more officers.
SECTION 5.6. Compensation. The Board of Directors shall have power
to fix the compensation of all officers of the Corporation. It may authorize
any officer, upon whom the power of appointing subordinate officers may have
been conferred, to fix the compensation of such subordinate officers.
ARTICLE VI
CAPITAL STOCK
SECTION 6.1. Share Certificates. Unless the Articles of
Incorporation or these bylaws provide otherwise, the Board of Directors may
authorize the issue of some or all of the shares of any or all of its classes
or series with or without certificates. Unless the Georgia Business
Corporation Code provides otherwise, there shall be no differences in the
rights and obligations of Shareholders based on whether or not their shares are
represented by certificates.
In the event that the Board of Directors authorizes shares with
certificates, each certificate representing shares of stock of the Corporation
shall be in such form as shall be approved by the Board of Directors and shall
set forth upon the face thereof the name of the Corporation and that it is
organized under the laws of the State of Georgia, the name of the person to
whom the certificate is issued, and the number and class of shares and the
designation of the series, if any, the certificate represents. The Board of
Directors may designate any one or more officers to sign each share
certificate, either manually or by facsimile. In the absence of such
designation, each share certificate must be signed by the President or a Vice
President and the Secretary or an Assistant Secretary. If the person who
signed a share certificate, either manually or in facsimile, no longer holds
office when the certificate is issued, the certificate is nevertheless valid.
<PAGE>
SECTION 6.2. Record of Shareholders. The Corporation or an agent
designated by the Board of Directors shall maintain a record of the
Corporation's Shareholders in a form that permits preparation of a list of
names and addresses of all Shareholders, in alphabetical order by class or
shares showing the number and class of shares held by each Shareholder. The
Corporation shall be entitled to treat the person in whose name shares are
registered in the records of the Corporation as the owner thereof for all
purposes unless it accepts for its records a nominee certificate naming a
beneficial owner of shares other than the record owner, and shall not otherwise
be bound to recognize any equitable or other claim to or interest in such
shares except as may be provided by law.
SECTION 6.3. Lost Certificates. In the event that a share
certificate is lost, stolen, mutilated or destroyed, the Board of Directors may
direct that a new certificate be issued in place of such certificate. When
authorizing the issue of a new certificate, the Board of Directors may require
such proof of loss as it may deem appropriate as a condition precedent to the
issuance thereof, including a requirement that the owner of such lost, stolen
or destroyed certificate, or his legal representative, advertise the same in
such manner as the Board shall require and/or that he give the Corporation a
bond in such sum as the Board may direct as indemnity against any claim that
may be made against the Corporation with respect to the certificate alleged to
have been lost, stolen or destroyed.
SECTION 6.4. Transfers of Shares. Transfers of shares of the
capital stock of the Corporation shall be made only upon the books of the
Corporation by the registered holder thereof, or by his duly authorized
attorney, or with a transfer clerk or transfer agent appointed as provided in
Section 6.5 hereof, and, in the case of a share represented by certificate, on
surrender of the certificate or certificates for such shares properly endorsed
and the payment of all taxes thereon. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, to vote as such owner, and for all other
purposes, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by law.
SECTION 6.5. Transfer Agents and Registrars. The Board of Directors
may establish such other regulations as it deems appropriate governing the
issue, transfer, conversion and registration of stock certificates, including
appointment of transfer agents, clerks or registrars.
ARTICLE VII
GENERAL PROVISIONS
SECTION 7.1. Indemnification of Officers, Employees and Agents. The
Corporation shall indemnify any Officer who was or is made a party to or is
otherwise involved in any threatened, pending or completed action, suit or
proceeding, whether civil, derivative, criminal, administrative or
investigative (hereinafter, a "proceeding") to the same extent as it is
obligated to indemnify any Director of the Corporation, but without being
subject to the same procedural conditions imposed for the indemnification of
Directors. The Corporation may indemnify and advance expenses to an employee
<PAGE>
or agent who is not a director or officer to the extent permitted by the
Articles of Incorporation, the bylaws or by law.
SECTION 7.2. Seal. The Corporation may have a seal, which shall be
in such form as the Board of Directors may from time to time determine. In the
event that the use of the seal is at any time inconvenient, the signature of an
officer of the Corporation, followed by the word "Seal" enclosed in
parenthesis, shall be deemed the seal of the Corporation.
SECTION 7.3. Voting Shares in Other Corporations. In the absence of
other arrangements by the Board of Directors, shares of stock issued by another
Corporation and owned or controlled by the Corporation, whether in a fiduciary
capacity or otherwise, may be voted by the President or any Vice President, in
the absence of action by the President, in the same order as they preside in
the absence of the President, or in the absence of action by the President or
any Vice President, by any other officer of the Corporation, and such person
may execute the aforementioned powers by executing proxies and written waivers
and consents on behalf of the Corporation.
SECTION 7.4. Amendment of Bylaws. These bylaws may be amended or
repealed and new bylaws may be adopted by the Board of Directors at any regular
or special meeting of the Board of Directors unless the Articles of
Incorporation or the Georgia Business Corporation Code reserve this power
exclusively to the Shareholders in whole or in part or the Shareholders, in
amending or repealing the particular bylaw, provide expressly that the Board of
Directors may not amend or repeal that bylaw. Unless the Shareholders have
fixed a greater quorum or voting requirement, these bylaws also may be altered,
amended or repealed and new bylaws may be adopted, unless such action has been
recommended by the Board of Directors, by an affirmative vote of the holders of
at least two-thirds of all outstanding shares entitled to vote.
SECTION 7.5. Execution of Bonds, Debentures, Evidences of
Indebtedness, Checks, drafts and other Obligations and Orders for Payment. The
signatures of any officer or officers of the Corporation executing a corporate
bond, debenture or other debt security of the Corporation or attesting the
corporate seal thereon, or upon any interest coupons annexed to any such
corporate bond, debenture or other debt security of the Corporation, and the
corporate seal affixed to any such bond, debenture or other debt security of
the Corporation, may be facsimiles, engraved or printed, provided that such
bond, debenture or other debt security of the Corporation is authenticated or
countersigned with the manual signature of an authorized officer of the
corporate trustee designated by the indenture or other agreement under which
said security is issued by a transfer agent, or registered by a registrar,
other than the Corporation itself, or an employee of the Corporation. If the
person who signed such, bond, debenture or other debt security of the
Corporation, either manually or in facsimile, no longer holds office when the
certificate is issued, the certificate is nevertheless valid.
SECTION 7.6. Business Combinations. All of the requirements of
Sections 14-2-1131 to 1133, inclusive, of the Code, as now in effect and as
hereafter from time to time amended, shall be applicable to this Corporation
and to any business combination approved or recommended by the Board of
Directors.
<PAGE>
ARTICLE VIII
EMERGENCY BYLAWS
SECTION 8.1. Emergency Bylaws. This Article shall be operative
during any emergency resulting from some catastrophic event that prevents a
quorum of the Board of Directors or any committee thereof from being readily
assembled (an "emergency"), notwithstanding any different or conflicting
provisions set forth elsewhere in these bylaws or in the Articles of
Incorporation. To the extent not inconsistent with the provisions of this
Article, the bylaws set forth elsewhere herein and the provisions of the
Articles of Incorporation shall remain in effect during such emergency, and
upon termination of such emergency, the provisions of this Article shall cease
to be operative.
SECTION 8.2. Meetings. During any emergency, a meeting of the Board
of Directors or any committee thereof may be called by any director, or by the
President, any Vice President, the Secretary or the Treasurer (the "Designated
Officers") of the Corporation. Notice of the time and place of the meeting
shall be given by any available means of communication by the person calling
the meeting to such of the Directors and/or designated officers as may be
feasible to reach. Such notice shall be given at such time in advance of the
meeting as, in the judgment of the person calling the meeting, circumstances
permit.
SECTION 8.3. Quorum. At any meeting of the Board of Directors or
any committee thereof called in accordance with this Article, the presence or
participation of two Directors, one director and a designated officer, or two
designated officers shall constitute a quorum for the transaction of business.
SECTION 8.4. Bylaws. At any meeting called in accordance with this
Article, the Board of Directors or committee thereof, as the case may be, may
modify, amend or add to the provisions of this Article so as to make any
provision that may be practical or necessary for the circumstance of the
emergency.
SECTION 8.5. Liability. Corporate action taken in good faith in
accordance with the emergency bylaws may not be used to impose liability on a
director, officer, employee or agent of the Corporation.
SECTION 8.6. Repeal or Change. The provisions of this Article shall
be subject to repeal or change by further action of the Board of Directors or
by action of Shareholders, but no such repeal or change shall modify the
provisions of the immediately preceding section of this Article with regard to
action taken prior to the time of such repeal or change.
EXHIBIT B-1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER ("Agreement") dated as of _______________,
199_ by and among Atlanta Gas Light Company, a Georgia corporation ("AGL"), AGL
Resources Inc., a Georgia corporation ("Holdings"), and AGL Merger Co., a
Georgia corporation ("Merger Sub").
WITNESSETH:
WHEREAS, AGL has an authorized capitalization consisting of 100,000,000
shares of Common Stock, $5 par value (the "AGL Common Stock"), of which
____________ shares are issued and outstanding and 11,480,000 shares of
Preferred Stock, of which __________ shares (consisting of shares of 7 separate
series) are issued and outstanding (the "AGL Preferred Stock"); and
WHEREAS, Merger Sub has an authorized capitalization consisting of
__________ shares of Common Stock, $_____ par value (the "Merger Sub Common
Stock"), of which __________ shares have been issued and are outstanding and
owned beneficially and of record by Holdings; and
WHEREAS, Holdings has an authorized capitalization consisting of
750,000,000 shares of Common Stock, $5 par value (the "Holdings Common Stock"),
and 10,000,000 shares of Preferred Stock, with or without par value (the
"Holdings Preferred Stock"); and
WHEREAS, the Boards of Directors of the respective parties hereto deem it
advisable to merge Merger Sub with and into AGL (the "Merger") in accordance
with the Georgia Business Corporation Code and this Agreement whereby the
shares of AGL Common Stock will be converted into shares of Holdings Common
Stock.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties and agreements herein contained, the parties hereto agree that
Merger Sub shall be merged with and into AGL which shall be the corporation
surviving such merger and that the terms and conditions of such merger, the
mode of carrying it into effect, and the manner of converting and exchanging
shares shall be as follows:
ARTICLE I
The Merger
(a) Subject to and in accordance with the provisions of this Agreement,
Articles of Merger as set forth in Exhibit I hereto (the "Articles") shall be
executed and acknowledged by each of AGL and Merger Sub and thereafter
delivered to the Department of State of the State of Georgia for filing, as
provided in Section 14-2-1105 of the Georgia Business Corporation Code, upon
which filing with the Department of State and its issuance of a Certificate of
Merger, the Merger shall become effective (the "Effective Time"). At the
Effective Time, the separate existence of Merger Sub shall cease and Merger Sub
shall be merged with and into AGL (Merger Sub and AGL being sometimes referred
to herein as the "Constituent Corporations" and AGL, the corporation designated
in the Articles as the surviving corporation, being sometimes referred to
herein as the "Surviving Corporation").
<PAGE>
(b) Prior to and after the Effective Time, Holdings, AGL and Merger Sub,
respectively, shall take all such action as may be necessary or appropriate in
order to effectuate the Merger. In this connection, Holdings shall issue
shares of Holdings Common Stock which the holders of AGL Common Stock shall be
entitled to receive as provided in Article II hereof. In the event that at any
time after the Effective Time any further action is necessary or desirable to
carry out the purposes of this Agreement and to vest the Surviving Corporation
with all rights, privileges, approvals, immunities and franchises and all
property, real, personal and mixed, of either of the Constituent Corporations,
the officers and directors of each of the Constituent Corporations as of the
Effective Time shall take all such further action.
ARTICLE II
Terms of Conversion and Exchange of Shares
At the Effective Time:
(a) Each share of AGL Common Stock issued immediately prior to the
Effective Time shall thereupon, and without surrender of stock certificates or
any other action on the part of the holder thereof, be changed and converted
into one share of Holdings Common Stock, which shall thereupon be issued, fully
paid and nonassessable; such shares of AGL Common Stock to be converted shall
be deemed to include any shares then held in its treasury, and such converted
treasury shares shall, immediately following the Effective Time, be deemed to
be held in Holdings' treasury;
(b) The shares of AGL Preferred Stock issued and outstanding immediately
prior to the Effective Time shall not be converted or otherwise affected by the
Merger, and each such share shall continue to be issued and outstanding and to
be one fully paid and nonassessable share of the particular series of AGL
Preferred Stock of the Surviving Corporation; and
(c) Each share of Merger Sub Common Stock issued and outstanding
immediately prior to the Effective Time shall be converted into one share of
common stock of the Surviving Corporation.
ARTICLE III
Stock Options
At the Effective Time, each outstanding option to purchase shares of AGL
Common Stock will be assumed by Holdings. Each such option will be exercisable
in accordance with its existing terms for the same number of shares of Holdings
Common Stock as the number of shares of AGL Common Stock subject to such
option.
ARTICLE IV
Articles of Incorporation and Bylaws
From and after the Effective Time, and until thereafter amended as
provided by the Restated Articles of Incorporation of AGL and by law, the
Restated Articles of Incorporation of AGL as in effect immediately prior to the
<PAGE>
Effective Time shall be and continue to be the Restated Articles of
Incorporation of the Surviving Corporation. From and after the Effective Time,
and until thereafter amended as provided by the Restated Articles of
Incorporation and Bylaws of AGL and by law, the Bylaws of AGL as in effect
immediately prior to the Effective Time shall be and continue to be the Bylaws
of the Surviving Corporation.
ARTICLE V
Directors and Officers
The persons who are Directors and officers of AGL immediately prior to the
Effective Time shall continue as Directors and officers, respectively, of the
Surviving Corporation and shall continue to hold office as provided in the
Bylaws of the Surviving Corporation. If, at or following the Effective Time, a
vacancy shall exist in the Board of Directors or in the position of any officer
of the Surviving Corporation, such vacancy may be filled in the manner provided
in the Bylaws of the Surviving Corporation.
ARTICLE VI
Stock Certificates
Following the Effective Time, each holder of an outstanding certificate or
certificates theretofore representing shares of AGL Common Stock may, but shall
not be required to, surrender the same to Holdings for cancellation or
transfer, and each such holder or transferee will be entitled to receive
certificates representing the same number of shares of Holdings Common Stock as
the shares of AGL Common Stock previously represented by the stock certificates
surrendered. Until so surrendered or presented for transfer, each outstanding
certificate which, prior to the Effective Time, represented AGL Common Stock
shall be deemed and treated for all corporate purposes to represent the
ownership of the same number of shares of Holdings Common Stock as though such
surrender or transfer and exchange had taken place. The stock transfer books
for the AGL Common Stock shall be deemed to be closed at the Effective Time and
no transfer of outstanding shares of AGL Common Stock outstanding prior to the
Effective Time shall thereafter be made on such books. Following the Effective
Time, the holders of certificates representing AGL Common Stock outstanding
immediately before the Effective Time shall cease to have any rights with
respect to the stock of the Surviving Corporation and their sole rights shall
be with respect to the Holdings Common Stock to which their shares of AGL
Common Stock shall have been converted in the Merger.
ARTICLE VII
Conditions of the Merger
Consummation of the Merger is subject to the satisfaction of the following
conditions:
(a) The Merger shall have received the approval of the holders of capital
stock of each of the Constituent Corporations as required by their Articles of
Incorporation and the Georgia Business Corporation Code.
<PAGE>
(b) There shall have been obtained an opinion or opinions of counsel
satisfactory to the Board of Directors of AGL with respect to the tax
consequences of the Merger and other transactions incident thereto.
(c) There shall have been obtained all of the regulatory approvals and
exemptions necessary, appropriate or desirable to be obtained prior to
effectuating the Merger and the Restructuring (as defined), as such approvals
and exemptions are described in the Proxy Statement related to AGL's 1996
Annual Meeting of Shareholders.
(d) The Holdings Common Stock to be issued and to be reserved for
issuance pursuant to the Merger shall have been approved for listing, upon
official notice of issuance, by the New York Stock Exchange.
(e) The Articles shall have been filed with the Department of State of
the State of Georgia.
ARTICLE VIII
Termination
At any time prior to the filing of the Articles with the Department of
State the Merger may be terminated by the Board of Directors of any corporation
a party hereto notwithstanding approval of the Merger by the stockholders of
all or any of the corporations parties hereto.
ARTICLE IX
Assumption of Obligations Under AGL Stock Plans
Holdings shall take all required corporate action to assume the
obligations of AGL under the following AGL plans: (i) the Retirement Savings
Plus Plan, (ii) the Leveraged Employee Stock Ownership Plan, (iii) the Long-
Term Stock Incentive Plan of 1990, (iv) the Nonqualified Savings Plan, (v) a
dividend reinvestment and stock purchase plan and (vi) the Non-Employee
Directors Equity Compensation Plan.
ARTICLE X
Cancellation of AGL's Holdings Common Stock
Immediately after the Effective Time, each share of Holdings Common Stock
held by AGL immediately prior to the Effective Time shall be cancelled.
<PAGE>
ARTICLE XI
Miscellaneous
This Agreement may be executed in counterparts, each of which when so
executed shall be deemed to be an original, and such counterparts shall
together constitute but one and the same instrument.
IN WITNESS WHEREOF, AGL, Merger Sub and Holdings, pursuant to approval and
authorization duly given by resolutions adopted by their respective Boards of
Directors, have each caused this Agreement and Plan of Merger to be executed by
its Chairman of the Board, President and Chief Executive Officer or one of its
Vice Presidents and its corporate seal to be affixed hereto and attested by its
Secretary.
ATLANTA GAS LIGHT COMPANY,
a Georgia corporation
________________________________________
[SEAL] By:
Title:
ATTEST:
_____________________________________
By:
Title:
AGL RESOURCES INC.,
a Georgia corporation
_____________________________________________
[SEAL] By:
Title:
ATTEST:
______________________________________
By:
Title:
AGL MERGER CO.,
a Georgia corporation
___________________________________________
[SEAL] By:
Title:
ATTEST:
__________________________________________
By:
Title:
EXHIBIT D-1
STATE OF GEORGIA
BEFORE THE GEORGIA PUBLIC SERVICE COMMISSION
In Re: :
: DOCKET NO. ____________
APPLICATION OF ATLANTA GAS :
LIGHT COMPANY FOR APPROVAL :
OF CORPORATE RESTRUCTURING :
PLAN :
Pursuant to O.C.G.A. Section 46-2-20(a), ATLANTA GAS LIGHT COMPANY
("Applicant" or "Company") respectfully applies to this Honorable Commission
for approval of its Plan of Corporate Restructuring ("Plan") and in support
therefore shows the following:
1.
Applicant is a corporation organized under the laws of the State of
Georgia, incorporated by an Act of the Georgia General Assembly approved on
February 16, 1856 (Georgia Laws 1855-56, p. 420), as amended by a subsequent
Act of the General Assembly approved on October 14, 1889 (Georgia Laws 1888-89,
p. 1398) and further amended by orders of the Superior Court of Fulton County,
Georgia, or by the issuance of certificates of amendment by the Secretary of
State of the State of Georgia.
2.
Applicant has heretofore filed with this Commission a copy of its Charter
and all amendments thereto, descriptions of its properties and statements of
its earnings and expenses, capital stock, bonds, and other obligations
outstanding, all of which by reference are incorporated herein and made a part
of this Application.
<PAGE>
3.
Applicant and its wholly-owned subsidiary, Chattanooga Gas Company
("Chattanooga"), are predominantly engaged in the distribution and
transportation of natural gas, and related undertakings, to customers in
central, northwest, northeast and southeast Georgia and the Chattanooga,
Tennessee area. Through its non-utility subsidiaries, Georgia Gas Company,
Georgia Gas Service Company, Georgia Energy Company, AGL Energy Services, Inc.,
and Trustees Investments, Inc., Applicant is also engaged in certain related
unregulated businesses.
4.
Applicant provides natural gas service to more than 1.3 million customers,
consisting of more than 1.2 million residential, 93,000 commercial and 2,250
industrial customers. These customers are located in 229 Georgia communities,
including almost 950,000 customers in the Atlanta metropolitan area, as well as
customers in the service areas of Athens, Augusta, Brunswick, Macon, Rome,
Savannah and Valdosta, Georgia. During its fiscal year 1995, Applicant sold or
transported 245.2 million dekatherms of natural gas.
5.
All of the natural gas distribution and transportation services rendered
by Applicant in Georgia are provided pursuant to distribution and pipeline
certificates of public convenience and necessity issued by this Commission.
6.
Applicant has duly filed with this Commission all annual and other reports
required of it by the rules, regulations and orders of this Commission and
reference to those filings is hereby made for details concerning the Company's
capital structure, assets and operations. Attached, marked Exhibit "A", is a
<PAGE>
schedule reflecting the balance sheet (unaudited) of the Company as of
September 30, 1995, showing the Company's assets, capitalization and
liabilities as of that date. Attached, marked Exhibit "B", is a copy of the
Company's income statement (unaudited) as of September 30, 1995.
7.
This Commission has jurisdiction over this Application pursuant to the
provisions of O.C.G.A. Section 46-2-20(a) which provides that the Commission
has general supervision of all gas companies providing service in this state.
8.
Over the course of the past decade, the natural gas industry has undergone
dramatic restructuring and reorganization, principally as a result of
legislative and regulatory changes at the federal level. In 1992, the Federal
Energy Regulatory Commission ("FERC") issued Order 636 that, among other
things, mandated the unbundling of interstate pipeline sales service and
established certain open access transportation regulations. Order 636 was
implemented on the pipeline systems that served Applicant in the fall of 1993.
The unbundling of pipeline sales service requires local distribution companies,
such as Applicant and its wholly-owned subsidiary, Chattanooga, to contract
directly and separately for wellhead gas supply, underground storage and firm
transportation services. The Energy Policy Act, enacted in 1992, and the
apparent erosion of the proscriptions embodied in the Public Utility Holding
Company Act of 1935 ("Holding Company Act") also have contributed to the state
of flux in the natural gas industry. In addition, decisions by FERC
authorizing large industrial customers to by-pass local distribution company
systems, along with the growth and development of independent marketers and
brokers, as well as intense competition for the range of energy consumers by
electric suppliers and other alternate sources of energy, all have resulted in
<PAGE>
a regulatory and market environment which is radically different than that
which prevailed as recently as the outset of the decade of the 1990s. That new
environment presents novel challenges for the Company in its historical core
business pursuits, which challenges must be addressed creatively in its role as
a regulated utility, while at the same time presents significant new
opportunities in emerging business enterprises which, while related to that
core business, are non-utility in nature.
9.
These regulatory and market changes and the related challenges and
opportunities described above have required the Company to assess
comprehensively its business strategies and structures for continuing to
provide its historic regulated utility services in the most efficient and
competitive fashion for Georgia consumers while also providing greater
financial, managerial and organizational flexibility to adapt to and take
advantage of the changing energy business in emerging non-utility ventures.
That flexibility would permit the establishment of a broader base of income
generation from unregulated businesses which would enhance the strength of
Applicant's existing utility business.
10.
As a result of that assessment, for the reasons stated above and those set
forth in more detail below, Applicant has concluded that its should reorganize
the structure of its business in order to respond timely, effectively and
prudently to the business challenges and opportunities. Accordingly, the
Applicant proposes the Plan to implement a new holding company structure
pursuant to an Agreement and Plan of Merger, a copy of which is attached hereto
marked as Exhibit "C". On November 27, 1995 Applicant organized AGL Resources
Inc. ("Resources"), under the Georgia Business Corporation Code in order to
<PAGE>
establish the corporate framework which will facilitate the contemplated
holding company restructuring. A copy of the Articles of Incorporation of
Resources is attached hereto marked as Exhibit "D". Under the terms of the
Plan, a newly formed corporate subsidiary of Resources, AGL Merger Co.
("Mergerco"), will be merged with and into Applicant and each of the
outstanding shares of common stock of Mergerco will be converted into one share
of common stock of Applicant, as the surviving corporation of the merger and
each outstanding share of common stock of Applicant will be converted into one
Resources common share. Upon consummation of the restructuring, each person
who owned common shares in the Applicant immediately prior to the restructuring
will own a corresponding number of the outstanding Resources common shares and
Resources will own all of the outstanding common shares of Applicant. Each
class of preferred stock of the Applicant and all indebtedness of the Applicant
will remain securities and obligations of the Applicant following the
restructuring.
11.
The corporate structure of the Applicant immediately prior to the
consummation of the restructuring is as follows:
[Graph omitted from electronic filing. The omitted graph represents
a tree diagram of the current corporate structure, with Atlanta Gas Light
Company as the parent of the following companies: (i) AGL Investments, Inc.,
(ii) Georgia Gas Service Company, (iii) Georgia Gas Company, (iv) Georgia
Energy Company, (v) Trustees Investments, Inc., (vi) Georgia Engine Sales &
Service Company (inactive), (vii) Georgia Natural Gas Company (inactive),
(viii) AGL Energy Services, Inc., (ix) Peachtree Pipeline Company (inactive),
(x) Chattanooga Gas Company, and (xi) AGL Resources Inc. (with its wholly-owned
subsidiary, AGL Merger Co.).]
12.
The corporate structure immediately following consummation of the proposed
corporate restructuring will be as follows:
[Graph omitted from electronic filing. The omitted graph represents a
tree diagram of the post-merger corporate structure, with AGL Resources Inc.
as the parent of the following companies: (i) AGL Investments, Inc. (with its
wholly-owned subsidiaries, Georgia Gas Service Company, Georgia Gas Company,
Georgia Energy Company and Trustees Investments, Inc.), (ii) Atlanta Gas
Light Company (with its wholly-owned subsidiary, Chattanooga Gas Company)
and (iii) AGL Energy Services, Inc.]
13.
Following consummation of the corporate restructuring pursuant to the
Plan, the business of Atlanta Gas Light Company will continue, under the
ownership of Resources, in all material respects, as it is conducted currently.
The Applicant will continue to own and operate the same facilities and assets
that are presently employed in providing natural gas service to the public.
The operations, rates, and terms of service of the Applicant will remain
subject to the jurisdiction of this Commission, pursuant to the provisions of
Title 46 of the Official Code of Georgia Annotated. Chattanooga will remain as
a wholly-owned subsidiary of Applicant. Subsequent to the consummation of the
initial corporate restructuring, the current non-utility operating subsidiaries
of the Applicant (with the exception of AGL Energy Services, Inc., which will
be a subsidiary of Resources) will be transferred to a separate wholly-owned
subsidiary of Resources.
14.
Following extensive analysis and consideration, the Applicant has
concluded that the benefits of the holding company structure contemplated by
the proposed corporate restructuring, as set forth in the Plan, for the
customers and the shareholders of the Applicant are compelling. The new
structure will remove the potential for diversion caused by non-utility
ventures, thereby permitting a singular focus by Company management on the
provision of quality, efficient, cost effective service in a new, more
complicated environment. Moreover, it is anticipated that consummation of the
contemplated corporate restructuring will permit more efficient and, in some
respects, more simplified regulation of the utility operations of the Applicant
by this Commission. The holding company structure will more clearly separate
the operations of the public utility business from any unregulated enterprise.
As a result, the necessary work to separate non-utility from utility investment
and expenses will be simplified for purposes of regulatory review, as well as
for purposes of assessment of business risks. The holding company structure
also will enable Resources to engage in non-utility business pursuits in a
manner comparable to its unregulated competitors. The new corporate structure
will permit the use of financing techniques which are more directly suited to
<PAGE>
the particular requirements, characteristics and risks of non-utility
operations, without affecting the capital structure, creditworthiness, or
funding of the operating utility. That structure will permit the holding
company to respond to non-utility opportunities in a time frame and in a
business context that is not possible in a regulated framework. The holding
company structure is preferred by the investment community because it
facilitates more efficient analysis of the varying individual lines of
businesses. Moreover, the holding company structure provides legal protection
against the imposition of liability on utility operations for the results of
unregulated business activities.
15.
Following the proposed corporate restructuring, it is contemplated that
Resources will pursue, through wholly-owned subsidiaries other than Applicant
certain new business enterprises which will not be subject to regulation by
this Commission. The present non-utility operations of existing subsidiaries
of Applicant, as well as other future non-utility business opportunities will
be pursued in that framework. For the reasons stated above, this corporate
structure is more suited for engaging in emerging energy related businesses,
while maintaining the level of service and commitment to the traditional
utility business of Applicant, than is the present structure.
16.
The proposed corporate restructuring will have no adverse effect on the
service provided by Applicant to its customers or the rates charged for those
services. Consistent with the framework outlined above, the Applicant will
thoroughly separate present and future non-utility and utility operations, as
well as related investment, to assure that no cross-subsidy, transfer of costs
or transfer of risks from the non-utility enterprises to the utility occur.
<PAGE>
All dealings between Resources and the Applicant will take place on an arms-
length, ordinary course of business basis. The holding company structure
proposed in this filing will in no way impair the Commission's ability to
discharge its duties under the law to protect the public interest in the
operations of Applicant. To the contrary, by providing the maximum separation
of utility and non-utility lines of business and ensuring the appropriate
allocation of risks, the holding company structure should enhance the
Commission's ability to fulfill its regulatory responsibilities.
17.
The holding company structure is a well-established form of organization
for companies conducting multiple lines of business. It is a common form of
organization for unregulated companies and for those regulated companies, such
as telephone utilities and water utilities, which are not subject to the
Holding Company Act. In addition, it is utilized by many electric and gas
companies which are involved in unregulated activities. This Commission is
experienced in regulating the operations of public utility subsidiaries of
holding companies. Georgia Power Company and Southern Bell Telephone and
Telegraph Company are public utility operating subsidiaries of the Southern
Company and BellSouth, respectively. Prior to the acquisition of Savannah
Electric and Power Company by the Southern Company, this Commission approved a
corporate restructuring whereby that operating utility became a subsidiary of
Savannah Energy Resources Company, concluding that such a reorganization was in
the public interest.
18.
In light of the federal regulatory and market changes described herein and
in light of the legislative and regulatory changes in the Holding Company Act
which are presently being considered at the SEC and in Congress, numerous gas
<PAGE>
public utility companies around the country which are considered to be peer
companies of Applicant by the investment community have already undertaken
corporate holding company restructurings similar to that proposed herein.
19.
The corporate restructuring pursuant to the Plan will not result in any
real change in the beneficial ownership of the Applicant as the existing common
stockholders of the Applicant will become the common stockholders of Resources.
Applicant will not be issuing stock or entering into any long-term debt in
connection with the proposed corporate restructuring. Furthermore, the rights
of the holders of Applicant's common stock, with the exception that, after
restructuring, the Articles of Incorporation and the Bylaws of Resources will
contain certain anti-takeover provisions which are not presently contained in
the Charter of the Applicant, will, in all material respects, remain the same.
20.
The Plan, in addition to being subject to the approval of this Commission,
must be approved by the holders of the common shares of the Applicant, as well
as approved by the SEC. A draft of the Registration Statement that will be
transmitted to the holders of common stock of Applicant, which reflects in
detail the terms of the Plan, and has been filed with the SEC, is attached
hereto marked as Exhibit "E".
21.
Applicant is currently exempt from registration and regulation as a
holding company under the Holding Company Act (15 U.S.C. Section 79, et. seq.)
pursuant to Section 3(a)(2) of the Holding Company Act and Rule 2 thereunder.
This exemption applies despite the fact that Chattanooga is a wholly-owned
subsidiary of Applicant, because Applicant is predominantly a public utility
<PAGE>
company whose operations as such do not extend beyond its state of organization
and the states contiguous thereto. Following consummation of the Plan, it is
anticipated that Applicant will retain its exemption and that Resources will
also be exempt from registration and regulation as a holding company under the
Holding Company Act. Resources' exemption, it is expected, will be pursuant to
Section 3(a)(1), which is available where, among other requirements, the
holding company's utility operations will be predominantly intrastate in
character. The Application filed with the SEC seeking approval of the
restructuring Plan and seeking an order granting the exemptions is attached
hereto marked as Exhibit "F".
22.
Following consummation of the corporate restructuring proposed herein,
this Commission will retain the same jurisdiction it now possesses under
Georgia law over Atlanta Gas Light Company. The operations of Resources and
the operations of the non-utility subsidiaries of Resources will not be subject
to regulation by the Commission.
WHEREFORE, for the reasons set forth hereinabove, Atlanta Gas Light
Company respectfully requests that this Commission, pursuant to the authority
conferred on it by O.C.G.A. Section 46-2-20(a), enter an order which:
a) approves the Plan of Restructuring described in this Application and
the attachments hereto as well as the implementation of such plan;
and
b) recognizes that the Commission's jurisdiction will continue over
Atlanta Gas Light Company following consummation of the Plan of
Restructuring; and
<PAGE>
c) provides such other authority and approvals as the Commission deems
necessary in order to consummate and implement the Plan of
Restructuring.
_________________________
Albert G. Norman, Jr.
_________________________
Gordon D. Giffin
_________________________
L. Craig Dowdy
For Long, Aldridge & Norman
Attorneys for Atlanta Gas Light
Company
One Peachtree Center
Suite 5300
303 Peachtree Street
Atlanta, Georgia 30308
(404) 527-4000
<PAGE>
CERTIFICATE OF SERVICE
I, Gordon D. Giffin, an attorney of record for Atlanta Gas Light Company,
hereby certify that I have this day served the foregoing Application for
Approval of Corporate Restructuring Plan upon the Consumers' Utility Counsel,
by depositing copies of the same in the United States Mails, stamped and
addressed as follows:
Consumers' Utility Counsel
84 Peachtree Street, N.W.
Suite 201
Atlanta, Georgia 30303-2318
This _____ day of November, 1995.
_____________________________
Gordon D. Giffin
EXHIBIT G-2
ATLANTA GAS LIGHT COMPANY
Consolidated Income Statements
For the Twelve Months Ended September 30, 1995 (Unaudited) and 1994
(Millions)
9/30/95 9/30/94
--------------- ---------------
Operating revenues $1,063.0 $1,199.9
Cost of gas 571.8 736.8
------- -------
Operating income 76.9 107.6
------- -------
Other income
Allowance for funds used during
construction-equity 0.2 0.2
Other income and dedications-net 1.9 5.0
Income Taxes (0.7) (2.0)
------- -------
1.4 3.2
Total ------- -------
Income before interest charges 78.3 110.8
Interest charges ------- -------
Interest on long-term debt 42.7 43.2
Allowance for funds used during
construction-debt (0.3) (0.2)
Other interest 5.1 4.6
------- -------
Total 47.5 47.6
------- -------
Net income 30.8 63.2
Dividends on preferred stock 4.4 4.5
------- -------
Earnings applicable to common stock $26.4 $58.7
------- -------
<PAGE>
ATLANTA GAS LIGHT COMPANY
Consolidated Income Statements
For the Twelve Months Ended September 30, 1995 (Unaudited)
(Millions)
Operating revenues $1,063.0
Cost of gas 571.8
-------
Operating Margin 491.2
-------
Other Operating Expenses 213.5
Restructuring Costs 70.3
Maintenance 30.4
Depreciation of plant other than
transportation equipment 58.5
Income taxes 16.0
Taxes other than income taxes 25.6
-------
Total other operating expenses 414.3
-------
Operating income 76.9
-------
Other income
Allowance for funds used during construction-equity 0.2
Other income deductions-net 1.9
Income Taxes (0.7)
-------
Total 1.4
-------
Income before interest charges 78.3
-------
Interest charges
Interest on long-term debt 42.7
Allowance for funds used during construction-debt (0.3)
Other interest 5.1
-------
Total 47.5
-------
Net Income 30.8
Dividends on preferred stock 4.4
-------
Earnings applicable to common stock $26.4
-------
<PAGE>
ATLANTA GAS LIGHT COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1995 (UNAUDITED) AND 1994
(MILLIONS)
SEPTEMBER SEPTEMBER
1995 1994
-------------- -------------
Balance Sheet
- --------------
Assets
Property
Utility plant $1,969.8 $1,881.4
Less accumulated depreciation 583.3 553.6
Less contributions in aid of
construction 49.9 48.2
------- -------
Utility plant-net 1,336.6 1,279.6
------- -------
Non-utility property and investments 46.3 17.8
------- -------
Current assets
Cash 3.7 3.3
Temporary cash investments --- ---
Receivables-net 69.3 79.3
Inventories
Natural gas stored underground 111.2 144.5
Liquefied natural gas 14.3 17.8
Liquefied petroleum gas 1.8 3.6
Materials and supplies 7.8 9.1
Merchandise 1.0 4.4
Other 10.9 9.1
------- -------
Total current assets 220.0 271.1
------- -------
Deferred debits
Unrecovered environmental response costs 34.9 30.5
Unrecovered integrated resource plan costs 9.9 11.4
Prepaid pension costs 7.1
Unrecovered postretirement benefits costs 7.2 3.6
Unamortized cost to repurchase long-term
debt 4.9 6.3
Other 14.8 15.5
------- -------
Total deferred debits 71.7 74.4
------- -------
Total $1,674.6 $1,642.9
---------- ----------
---------- ----------
Capitalization and liabilities
Capitalization
Common stock $137.3 $127.1
Premium on capital stock 297.7 241.3
Earnings reinvested 122.3 150.1
------- -------
Total common stock equity 557.3 518.5
Preferred stock
Redeemable 55.5 55.5
<PAGE>
Non-redeemable 3.0 3.0
Long-term debt 554.5 554.5
------- -------
613.0 613.0
------- -------
Total capitalization 1,170.3 1,131.5
------- -------
Current liabilities
Redemption requirements on preferred stock 0.3 0.3
Long-term debt due within one year --- 15.0
Short-term debt 51.0 95.4
Accounts payable 72.3 57.6
Take-or-pay charges payable 8.0 --
Customer Deposits 29.5 26.8
Interest 25.4 24.9
Other accrued liabilities 11.9 20.6
Suppliers refunds 3.4 1.4
Deferred purchased gas adjustment 6.3 20.1
Other 22.8 20.2
------- -------
Total current liabilities 230.9 282.3
------- -------
Long-term liabilities
Environmental response costs 28.6 24.3
Accrued pension costs 10.3 --
30.1 3.6
Accrued postretirement benefits costs ------- -------
Total long-term liabilities 69.0 27.9
------- -------
Deferred credits
Federal investment tax credit 30.3 32.2
Regulatory tax liability 23.3 26.7
Other 12.0 7.7
------- -------
Total deferred credits 65.6 66.6
------- -------
Accumulated deferred income taxes 138.8 134.6
------- -------
Total $1,674.6 $1,642.9
---------- ----------
---------- ----------
<PAGE>
ATLANTA GAS LIGHT COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1995 (UNAUDITED)
(MILLIONS)
SEPTEMBER
1995
-----------------
Balance Sheet
- --------------
Assets
Property
Utility plant $1,969.8
Less accumulated depreciation 583.3
Less contributions in aid of construction 49.9
-------
Utility plant-net 1,336.6
-------
Non-utility property and investments 46.3
-------
Current assets
Cash 3.7
Temporary cash investments --
Receivables-net 69.3
Inventories
Natural gas stored underground 111.2
Liquefied natural gas 14.3
Liquefied petroleum gas 1.8
Materials and supplies 7.8
Merchandise 1.0
Other 10.9
-------
Total current assets 220.0
-------
Deferred debits
Unrecovered environmental response costs 34.9
Unrecovered integrated resource plan costs 9.9
Prepaid pension costs
Unrecovered postretirement benefits costs 7.2
Unamortized cost to repurchase long-term debt 4.9
Other 14.8
-------
Total deferred debits 71.7
-------
Total $1,674.6
----------
Capitalization and liabilities
Capitalization
Common stock $137.3
Premium on capital stock 297.7
Earnings reinvested 122.3
-------
Total common stock equity 557.3
Preferred stock
Redeemable 55.5
Non-redeemable 3.0
<PAGE>
Long-term debt 554.5
-------
613.0
-------
Total capitalization 1,170.3
-------
Current liabilities
Redemption requirements on preferred stock 0.3
Long-term debt due within one year --
Short-term debt 51.0
Accounts payable 72.3
Take-or-pay charges payable 8.0
Customer Deposits 29.5
Interest 25.4
Other accrued liabilities 11.9
Suppliers refunds 3.4
Deferred purchased gas adjustment 6.3
Other 22.8
-------
Total current liabilities 230.9
-------
Long-term liabilities
Environmental response costs 28.6
Accrued pension costs 10.3
Accrued postretirement benefits costs 30.1
-------
Total long-term liabilities 69.0
-------
Deferred credits
Federal investment tax credit 30.3
Regulatory tax liability 23.3
Other 12.0
-------
Total deferred credits 65.6
-------
Accumulated deferred income taxes 138.8
-------
Total $1,674.6
-------
<PAGE>
ATLANTA GAS LIGHT COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 1995 (UNAUDITED)
(MILLIONS OF DOLLARS)
Twelve Months
1995
-----------------
Cash flows from operating activities
Net income $30.8
Adjustments to reconcile net income to net cash flow
from operating activities
Non-Cash Restructuring Costs 52.9
Depreciation and amortization 62.5
Deferred income taxes 4.2
Other 3.8
-------
154.2
Changes in assets and liabilities
Accounts receivable 10.0
Inventories 43.3
Deferred purchased gas adjustment (13.8)
Accounts payable 14.7
Other - net 1.6
-------
Net cash flow from operating activities 210.0
-------
Cash flows from financing activities
Short-term borrowings, net (44.4)
Redemptions, purchase fund and sinking fund
requirements of preferred stock and long-term debt (15.0)
Sale of common stock, net of expenses 50.4
Common stock dividends (44.3)
Preferred stock dividends (4.4)
-------
Net cash flow from financing activities (57.7)
-------
Cash flows from investing activities
Utility plant expenditures (120.8)
Non-utility capital expenditures (0.4)
Purchase of Sonat (32.6)
Cost of removal, net of salvage 1.9
-------
Net cash flow from investing activities (151.9)
-------
Net increase in cash and cash equivalents 0.4
Cash and cash equivalents at beginning of 3.3
period -------
Cash and cash equivalents at end of period $3.7
-------
Cash paid during the period for
Interest $48.4
Income taxes $28.6
<PAGE>
ATLANTA GAS LIGHT COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 1995 (UNAUDITED) AND 1994
(MILLIONS OF DOLLARS)
Twelve Months
----------------
1995 1994
------- -------
Cash flows from operating activities
Net income $30.8 $63.2
Adjustments to reconcile net income to net cash flow
from operating activities
Non-Cash Restructuring Costs 52.9
Depreciation and amortization 62.5 59.2
Deferred income taxes 4.2 13.6
Other 3.8 6.3
------- -------
154.2 142.3
Changes in assets and liabilities
Accounts receivable 10.0 8.7
Inventories 43.3 (38.5)
Deferred purchased gas adjustment (13.8) 20.8
Accounts payable 14.7 (6.0)
Other - net 1.6 5.4
------- -------
Net cash flow from operating activities 210.0 132.7
------- -------
Cash flows from financing activities
Short-term borrowings, net (44.4) (36.0)
Redemptions, purchase fund and sinking fund
requirements of preferred stock and
long-term debt (15.0) (125.7)
Sale of common stock, net of expenses 50.4 2.4
Sale of long-term debt 0.0 194.5
Common stock dividends (44.3) (42.9)
Preferred stock dividends (4.4) (4.5)
------- -------
Net cash flow from financing activities (57.7) (12.2)
------- -------
Cash flows from investing activities
Utility plant expenditures (120.8) (122.0)
Non-utility capital expenditures (0.4) (0.1)
Investment in joint-venture (32.6)
Cost of removal, net of salvage 1.9 1.6
------- -------
Net cash flow from investing activities (151.9) (120.5)
------- -------
Net increase in cash and cash equivalents 0.4 0.0
Cash and cash equivalents at beginning of 3.3 3.3
period ------- -------
Cash and cash equivalents at end of period $3.7 $3.3
------- -------
Cash paid during the period for
Interest $48.4 $51.1
Income taxes $28.6 $18.0
EXHIBIT G-3
ATLANTA GAS LIGHT COMPANY
CHATTANOOGA GAS COMPANY
Statement of Operating Revenues, Pretax Operating Income
and Total Assets (excluding non-utility property)
(Millions)
<TABLE>
Fiscal Year 1993 Fiscal Year 1994 Fiscal Year 1995 (unaudited)<FN>
(1)
AGL/ Chattanooga % Chatt/ AGL/ Chattanooga % Chatt/ AGL/ Chattanooga %
Chattanooga (Unaudited) Consol Chattanooga (Unaudited) Consol Chattanooga Chatt/
Consolidated Consolidated Consolidated Consol
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating $ 1,130.3 $ 68.1 6.0% $ 1,199.9 $ 74.8 6.2% $ 1,063.0 $ 66.4 6.2%
Revenues
Pre-tax $ 128.1 $ 7.7 6.0% $ 141.9 $ 8.4 5.9% $ 92.9 $ 10.4 11.2%
Operating Income
Pre-tax $ 163.2 $ 10.6 6.5%
Operating
Income<FN>
(2)
Total Assets - $ 1,515.2 $ 93.6 6.2% $ 1,625.1 $ 104.1 6.4% $ 1,628.3 $ 112.5 6.9%
Excluding
Nonutility
Property
(1) AGL's fiscal year ends on September 30.
(2) Excluding Non-recurring Restructuring Charges of AGL
and Chattanooga.</TABLE>
EXHIBIT H-1
UNITED STATES OF AMERICA
BEFORE THE
SECURITIES AND EXCHANGE COMMISSION
AGL Resources Inc. ) File No.
Atlanta Gas Light Company ) ----------------------
NOTICE OF FILING
Take notice that on November 27, 1995, AGL Resources Inc., a Georgia
corporation ("Holding Company"), 303 Peachtree Street, N.E., Atlanta, Georgia
30308, and Atlanta Gas Light Company ("AGL"), a Georgia gas public-utility
holding company exempt from registration under Section 3(a)(2) of the Public
Utility Holding Company Act of 1935 (the "Act") pursuant to Rule 2 thereunder,
have filed an application under Sections 3(a)(1), 3(a)(2), 9(a)(2) and 10 of
the Act.
The application requests an order: (1) authorizing Holding Company to
acquire directly all of the outstanding common stock of AGL and indirectly all
of the outstanding shares of Chattanooga Gas Company ("Chattanooga"), a gas
utility subsidiary of AGL; (2) granting Holding Company an exemption under
Section 3(a)(1) from all provisions of the Act, except Section 9(a)(2) thereof;
and (3) granting AGL an exemption under Section 3(a)(2) from all provisions of
the Act, except Section 9(a)(2) thereof.
Both AGL and Chattanooga are "gas utility companies" as defined under
Section 2(a)(4) of the Act and thus are "public utility companies" as defined
in Section 2(a)(5) of the Act. AGL supplies natural gas distribution service
to the public in central, northwest, northeast and southeast Georgia, with the
majority of its customers located in the metropolitan Atlanta area.
Chattanooga supplies natural gas service to customers in Chattanooga and
Cleveland, Tennessee, and surrounding portions of Hamilton County and Bradley
County.
Holding Company was incorporated under Georgia law to carry out the
proposed corporate restructuring, which would result in Holding Company's
becoming a holding company over AGL. Currently, Holding Company owns all of
the outstanding common stock of AGL Merger Co. ("Merger-Sub"), a Georgia
corporation that has also been incorporated to carry out the proposed
restructuring. Neither Holding Company nor Merger-Sub presently conduct any
business or own any utility assets.
<PAGE>
The proposed restructuring is intended to establish a more
appropriate corporate structure for the conduct of non-utility business
activities, while providing a mechanism for protecting the utility business and
utility customers of AGL and Chattanooga from the risks and costs of such
activities.
The transaction would be accomplished pursuant to an Agreement and
Plan of Merger to be entered into among AGL, Holding Company and Merger Sub,
under which Merger-Sub would be merged with and into AGL (the "Merger") and
each outstanding share of common stock of Merger-Sub would be converted into
one share of common stock of AGL (collectively, the "AGL Stock"). In addition,
pursuant to the Merger, each outstanding share of AGL Stock would be converted
into one share of common stock of Holding Company. Upon consummation of the
Merger, each person that would own AGL Stock immediately prior to the Merger
would own a corresponding number of outstanding shares of common stock of
Holding Company, and Holding Company would own all of the outstanding AGL
Stock. Additionally, following the Merger, AGL would continue to own all of
the outstanding stock of Chattanooga.
Each class of preferred stock of AGL (collectively, the "AGL
Preferred Stock") and all indebtedness of AGL would remain securities and
obligations of AGL after the proposed restructuring. Consequently, the holders
of AGL's debt securities and the AGL Preferred Stock would not be affected by
the proposed restructuring.
Holding Company asserts that, following the consummation of the
proposed restructuring, it would be a public-utility holding company entitled
to an exemption under Section 3(a)(1) of the Act because it and each of its
public-utility subsidiaries from which it would derive a material part of its
income would be predominately intrastate in character and would carry on their
business substantially within the state of Georgia. In addition, AGL asserts
that it would remain a public-utility holding company entitled to exemption
under Section 3(a)(2) of the Act because it would still be predominately a
public-utility company whose operations as such do not extend beyond the State
in which it is organized, Georgia, and states contiguous thereto.
All interested persons are referred to the application for complete
statements of the proposed restructuring summarized above. The application is
available for public inspection through the Commission's Office of Public
Reference.
<PAGE>
Interested persons wishing to comment or request a hearing on the
application should submit their views in writing by , , to the
Secretary, Securities and Exchange Commission, Washington, DC 20549, and serve
a copy on the relevant applicants at the address specified above. Proof of
service (by affidavit or, in case of an attorney at law, by certificate) should
be filed with the request. Any request for hearing shall identify specifically
the issues of fact or law that are disputed. A person who so requests will be
notified of any hearing, if ordered, and will receive a copy of any notice or
order issued in the matter. After said date, the application, as filed or as
amended, may be granted.
