<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1995 Commission File Number 1-9905
ATLANTA GAS LIGHT COMPANY
(Exact name of registrant as specified in its charter)
Georgia 58-0145925
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
303 Peachtree Street, N.E., Atlanta, Georgia 30308
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 404-584-4000
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $5 Par Value New York Stock Exchange
Depositary Preferred Shares New York Stock Exchange
(Title of Class) (Name of exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act:
Cumulative Preferred Stock, $100 Par Value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Aggregate market value of the voting stock held by non-affiliates of the
registrant, computed by reference to the closing price of such stock as of
November 30, 1995: $1,052,321,837.
The number of shares of Common Stock outstanding as of November 30, 1995 was
55,023,364 shares (as adjusted for a 2-for-1 stock split paid in the form of
a 100% stock dividend on December 1, 1995).
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the 1995 Annual Report for the fiscal year ended September 30,
1995 are incorporated herein by reference in Part II and portions of the
Proxy Statement for the 1996 Annual Meeting of Shareholders are incorporated
herein by reference in Part III.
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
<PAGE>
TABLE OF CONTENTS
Page
PART I
Item 1. Business. . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 2. Properties. . . . . . . . . . . . . . . . . . . . . . . . . 13
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . 13
Item 4. Submission of Matters to a Vote of Security Holders . . . . 16
Item 4.(A)Executive Officers of the Registrant . . . . . . . . . . . 17
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters . . . . . . . . . . . . . . . . . . . . . . . . . 18
Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . 18
Item 7. Management's Discussion and Analysis of Results of Operations and
Financial Condition . . . . . . . . . . . . . . . . . . . 18
Item 8. Financial Statements and Supplementary Data . . . . . . . . 18
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure. . . . . . . . . . . . . . . . . . . 19
PART III
Item 10. Directors and Executive Officers of the Registrant. . . . . 19
Item 11. Executive Compensation. . . . . . . . . . . . . . . . . . . 19
Item 12. Security Ownership of Certain Beneficial Owners and Management.19
Item 13. Certain Relationships and Related Transactions. . . . . . . 19
PART IV
Item 14.Exhibits, Financial Statement Schedules and Reports on
on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . 20
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
<PAGE>
Part I
Item 1. Business
GENERAL
Atlanta Gas Light Company (AGL) was incorporated on February 16, 1856 by a
special act of the Georgia General Assembly. Unless noted specifically or
otherwise required by the context, reference to the "Company" includes AGL
and its wholly owned subsidiaries, AGL Energy Services, Inc., AGL
Investments, Inc., Chattanooga Gas Company (Chattanooga), Georgia Gas
Company, Georgia Gas Service Company, Georgia Energy Company and Trustees
Investments, Inc. The Company is predominantly engaged in the distribution
of natural gas to customers in central, northwest, northeast and southeast
Georgia and the Chattanooga, Tennessee area.
The Company's major service area is the ten county metropolitan Atlanta area.
Metropolitan Atlanta has an estimated population of 2.9 million, constituting
approximately 41% of the total population of Georgia. Approximately 66% of
the Company's natural gas customers are located in the Atlanta metropolitan
area. These customers consume 45% of the natural gas sold and transported and
provide approximately 63% of the gas revenues of the Company. The Company's
other principal service areas in Georgia are the Athens, Augusta, Brunswick,
Macon, Rome, Savannah and Valdosta areas. During the fiscal year ended
September 30, 1995, the Company supplied natural gas service to an average of
approximately 1.3 million customers in Georgia including 531 centrally
metered customers serving 52,555 apartment units. The Company provides
natural gas service in 229 cities and surrounding areas in Georgia. In
addition to the Company's service areas in Georgia, natural gas service was
supplied by Chattanooga to an average of approximately 49,000 customers in
Chattanooga and Cleveland, Tennessee, and surrounding portions of Hamilton
County and Bradley County, Tennessee during the fiscal year ended September
30, 1995. All of the Company's natural gas service area is certificated by
the Georgia Public Service Commission (Georgia Commission) and the Tennessee
Public Service Commission (Tennessee Commission).
The areas served by the Company in Georgia outside the metropolitan areas
described in the preceding paragraph were for many years primarily
agricultural, with timber, poultry, cattle, cotton, tobacco, peanuts and soy
beans among the principal products. However, both industry and agriculture
are currently important to the economies of these areas. In addition to the
industries that use local natural resources such as pulpwood, clay, marble,
talc and kaolin, the Company serves a number of nationally known
organizations that operate installations in Georgia. These operations
increase substantially the diversification of industry in the Company's
service area.
During fiscal 1995, the Company added approximately 37,000 customers, based
on 12-month average calculations, representing an increase over the prior
year of approximately 2.8%. Substantially all of this growth was in the
residential and small commercial service categories.
The ten largest customers of the Company accounted for 3.1% and 1.8% of total
operating revenues and operating margin, respectively, for the fiscal year
ended September 30, 1995. For the same period, volumes of gas sold and
transported to the ten largest customers accounted for 12.6% of total volumes
of gas sold and transported.
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Consolidated operating revenues during the fiscal year ended September 30,
1995 were $1.1 billion, of which approximately 57% was derived from
residential customers, 23% from commercial customers, 16% from industrial
customers, 2% from transportation customers and 2% other.
In addition to its predominant business of natural gas distribution, the
Company, through wholly owned subsidiaries, serves approximately 17,000
customers in Georgia and Alabama with liquefied petroleum gas and also has
interests in gas production activities, real estate holdings and natural gas
vehicle conversions. The aggregate net income contributed by diversified
operations in fiscal 1995 was $0.9 million.
On August 31, 1995, the Company signed an agreement with Sonat Inc. (Sonat)
to form a joint venture to acquire the business of Sonat Marketing Company, a
wholly owned subsidiary of Sonat. The joint venture, Sonat Marketing Company
L.P. (Sonat Marketing), offers natural gas sales, transportation, risk
management and storage services to natural gas users in key natural gas
producing and consuming areas of the United States.
The Company invested $32.6 million for a 35% ownership interest in Sonat
Marketing. The Company's 35% investment is being accounted for under the
equity method. The Company has certain rights for a period of five years to
sell its interest to Sonat at a predetermined fixed price, as defined, or for
fair market value at any time.
Through September 30, 1995, the Company's historic maximum daily sendout was
1.943 billion cubic feet which occurred on January 18, 1994. The mean
temperature in the metropolitan Atlanta area that day was 23 degrees F. The
Company's business is highly seasonal in nature and heavily dependent on
weather because of the substantial use of gas for heating purposes. However,
the Company has implemented weather normalization adjustment riders. The
weather normalization adjustment riders, which were approved by the Georgia
and Tennessee Commissions, offset the impact that either unusually cold or
unusually warm weather has upon the Company's operating margin, earnings and
cash flow and are designed to stabilize the Company's operating margin and
earnings at the levels which would occur with normal weather. For the
effects of seasonal variations on the Company's quarterly earnings, see Note
15 in Notes to Consolidated Financial Statements in the Company's 1995 Annual
Report to Shareholders.
On September 30, 1995, the Company had 2,941 employees. Approximately 750 of
AGL's employees are covered by provisions of collective bargaining agreements
with the General Teamsters Local Union No. 528. The master agreement with
the Teamsters provides for a general wage increase of 3% effective September
18, 1995. This agreement expires September 15, 1996.
The Company also has a collective bargaining agreement covering
approximately 60 employees in Savannah, Georgia. A three-year agreement with
the International Union of Operating Engineers, Local Union No. 474, was
ratified on November 9, 1994. The contract stipulates that wages will be
negotiated in 1995 and 1996. Wages subsequent to November 9, 1995 are still
being negotiated.
The Company also has approximately 60 employees at its Chattanooga and
Cleveland, Tennessee facilities covered by an agreement with the Utility
Workers Union of America, Local Union No. 461. A new three-year agreement
with the Utility Workers became effective on November 28, 1994, and specifies
that wages will be negotiated in 1995 and 1996. Wages subsequent to November
28, 1995 are still being negotiated.
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The Company holds franchises, permits, certificates and rights which
management believes are sufficient for the operation of its properties
without any substantial restrictions and adequate for the operation of its
gas distribution business.
Corporate Restructuring
In November 1994, the Company announced a corporate restructuring plan and
began its implementation during fiscal 1995. As a result of the
restructuring, the Company has combined offices and established centralized
customer service centers. During 1995, the Company reduced the average
number of employees by approximately 500 through voluntary retirement and
severance programs and attrition. The Company recorded $43.1 million, after
income taxes, in restructuring-related expenses during 1995.
As a result of the restructuring, the Company expects considerable reductions
in future annual operating expenses, which should enable the Company to be
more competitive.
Subsequent Event
On November 27, 1995, the Company filed with the Securities and Exchange
Commission (SEC) and the Georgia Commission to form a holding company, AGL
Resources Inc. (the Holding Company). The Holding Company would become the
parent corporation of Atlanta Gas Light Company and its subsidiaries. In
addition to the SEC and Georgia Commission approvals, the Company will seek
shareholder approval of the reorganization at the 1996 annual shareholders
meeting.
If approved, holders of Atlanta Gas Light Company common stock will become
holders of the Holding Company common stock, and the present stock
certificates representing Atlanta Gas Light Company common stock will
represent the Holding Company common stock on a share-for-share basis. The
Holding Company common stock is expected to be approved for listing on the
New York Stock Exchange. If requisite approvals are obtained, it is
anticipated that the reorganization into holding company structure will be
completed during the second fiscal quarter of 1996.
The purpose of the formation of the holding company is to separate the
Company's regulated business from its unregulated business, which will allow
the Company to adapt to the increasingly deregulated energy marketplace and
take advantage of potential business opportunities.
The remainder of this page was intentionally left blank.
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<TABLE>
<CAPTION>
Gas Sales and Statistics
FOR THE YEARS ENDED SEPTEMBER 30
1995 1994 1993 1992 1991
Operating Revenues (Millions of Dollars)
<S> <C> <C> <C> <C> <C>
Sales of Gas
Residential $ 610.6 $ 700.7 $ 658.2 $ 575.7 $ 550.2
Commercial 243.2 285.8 268.1 231.5 226.0
Industrial 169.4 172.1 154.2 140.9 144.1
Transportation Revenues 23.9 22.6 33.8 36.6 37.8
Miscellaneous Revenues 15.9 18.7 16.0 9.9 5.7
Total $ 1,063.0 $ 1,199.9 $ 1,130.3 $ 994.6 $ 963.8
Therms Sold (Millions)
Residential 916.8 1,003.1 1,001.4 915.4 819.5
Commercial 454.0 478.9 478.5 433.9 402.8
Industrial 526.0 424.8 388.7 445.0 455.1
Therms Transported 722.8 697.4 795.6 901.8 862.6
Total 2,619.6 2,604.2 2,664.2 2,696.1 2,540.0
Number of Customers (Average in Thousands)
Residential 1,250.4 1,215.2 1,182.7 1,152.2 1,124.0
Commercial 100.0 98.0 95.7 93.7 92.0
Industrial 2.6 2.5 2.5 2.5 2.5
Total 1,353.0 1,315.7 1,280.9 1,248.4 1,218.5
Sales, Average Residential Customer
Gas Sold (Therms) 733 825 847 794 729
Revenue (Dollars) $ 488.32 $ 576.61 $ 556.52 $ 499.65 $ 489.50
Revenue Per Therm (Cents) 66.6 69.9 65.7 62.9 67.1
Degree Days - Atlanta Area
30-Year Normal 2,991 2,991 3,021 3,021 3,021
Actual 2,121 2,565 2,852 2,552 2,273
Percentage of Actual to 30-Year Normal 70.9 85.8 94.4 84.5 75.2
Gas Account (Millions of Therms)
Natural Gas Purchased 1,406.9 1,453.6 1,629.9 1,555.4 1,563.0
Natural Gas Withdrawn from Storage 520.7 500.3 276.4 263.3 148.2
Gas Transported 722.8 697.4 795.6 901.8 862.6
Total Send-Out 2,650.4 2,651.3 2,701.9 2,720.5 2,573.8
Less
Unaccounted For 20.4 37.2 29.0 16.2 24.4
Company Use 10.4 9.9 8.7 8.2 9.4
Sold to Customers and Transported 2,619.6 2,604.2 2,664.2 2,696.1 2,540.0
Cost of Gas (Millions of Dollars)
Natural Gas Purchased $ 389.4 $ 550.1 $ 595.7 $ 487.9 $ 502.5
Natural Gas Withdrawn from Storage 182.4 186.7 105.3 102.6 77.4
Total $ 571.8 $ 736.8 $ 701.0 $ 590.5 $ 579.9
Gas Plant - End of Year (Millions of Dollars)
Gross Plant $ 1,919.9 $ 1,833.2 $ 1,740.6 $ 1,634.8 $ 1,517.0
Net Plant $ 1,336.6 $ 1,279.6 $ 1,217.9 $ 1,157.4 $ 1,081.4
Gross Plant Investment per
Customer (Thousands of Dollars) $ 1.4 $ 1.4 $ 1.4 $ 1.3 $ 1.2
Capital Expenditures (Millions of Dollars) $ 121.7 $ 122.5 $ 122.2 $ 132.9 $ 141.9
Gas Mains - Miles of 3" Equivalent 28,520 27,972 27,390 26,936 26,623
Employees - Average 3,249 3,764 3,764 3,794 3,820
Average Btu Content of Gas 1,027 1,032 1,027 1,024 1,025
</TABLE>
<PAGE>
GAS SUPPLY SERVICES, PRICING AND COMPETITION
General
The Company is served directly by four interstate pipelines: Southern
Natural Gas Company (Southern), South Georgia Natural Gas Company (South
Georgia), Transcontinental Gas Pipe Line Corporation (Transco) and East
Tennessee Natural Gas Company (East Tennessee) in combination with its
upstream pipeline, Tennessee Gas Pipeline Company (Tennessee), the parent
company and primary source of gas for East Tennessee.
The implementation of Federal Energy Regulatory Commission (FERC) Order 636
mandated the unbundling of interstate pipeline sales service and established
certain open access transportation regulations. The unbundling of pipeline
sales service requires local distribution companies (LDCs), such as AGL and
Chattanooga, to contract directly and separately for wellhead gas supply,
underground storage and firm transportation services. Unbundling also shifts
the responsibility and risk of securing a reliable and cost-effective gas
services portfolio from the pipelines to LDCs such as AGL and Chattanooga
(See Part I, Item 1, "Federal Regulatory Matters - Order 636.")
As a result of Order 636, gas purchasing decisions made by LDCs may be
subject to greater review by state regulatory commissions. Prior to the
implementation of Order 636, the cost of bundled pipeline sales service was
reviewed and approved by the FERC. Because of diminished review by the FERC,
LDCs face greater accountability and risks from their purchasing practices
for gas supply, transportation and storage services.
During the 1994 session of the Georgia General Assembly, legislation was
passed that provides for annual review and approval by the Georgia Commission
of AGL's gas services portfolio on a prospective basis. The legislation
requires the filing of a gas supply plan with the Georgia Commission on or
before August 1 of each year for the subsequent fiscal year. Purchases made
pursuant to an approved plan are recovered under the purchased gas provisions
of AGL's rate schedules.
On August 1, 1995, AGL filed its gas supply plan consisting of an array of
gas supply, transportation and storage options designed to provide reliable
service to firm customers at the best cost for fiscal year 1996. On
September 14, 1995, the Georgia Commission approved AGL's gas supply plan for
fiscal year 1996 (See Part I, Item 1, "State Regulatory Matters - Gas Supply
Filing.")
Firm Pipeline Transportation and Underground Storage
The table on the following page shows the amount of firm transportation and
describes the types and amounts of underground storage that both AGL and
Chattanooga have elected or been assigned under Order 636. The table also
shows services that were not affected by the implementation of Order 636.
<PAGE>
Production
Area Supplemental
Maximum Underground Underground
Firm Storage Storage
Trans- Maximum Maximum
portation Withdrawal Withdrawal Expiration
Mcf/Day Mcf/Day(1) Mcf/Day(2) Date
Atlanta Gas Light Company
Southern
Firm Transportation 1,000 June 30, 2007
Firm Transportation 650,129 February 28, 1998
Firm Transportation 110,905 April 30, 2007
CSS 406,222 February 28, 1998
ANR-50 113,000 March 31, 2003
ANR-100 55,500 March 31, 2003
Transco
Firm Transportation 107,600 March 31, 2010
Firm Transportation 15,000 July 1, 2005
Firm Transportation 6,222 March 17, 2008
Firm Transportation 4,500 October 31, 2009
WSS 70,588 March 31, 2010
Eminence Storage 12,011 March 31, 1997(3)
Eminence Storage 20,298 March 31, 2001(3)
GSS 124,935 March 31, 1992(3)
LSS 17,430 March 31, 1994(3)
SS-1 20,211 March 31, 2009
LGA 41,522 October 31, 1991(3)
Tennessee/East Tennessee
Firm Transportation 62,000 November 1, 2000(3)
FSS 20,000 November 1, 2000
FSM 8,533 November 1, 2000
FSP 1,837 November 1, 2000
CNG 3,421 March 31, 2001
Southern/South Georgia
Firm Transportation 11,877 April 30, 2007
ANR-100 708 March 31, 2004
CSS 6,764 February 28, 1998
Total 969,233 549,674 373,306
Chattanooga Gas Company
Southern
Firm Transportation 4,756 June 30, 2007
Firm Transportation 13,944 February 28, 1998
Firm Transportation 3,300 April 30, 2007
CSS 14,051 February 28, 1998
Tennessee/East Tennessee
Firm Transportation 45,000 November 1, 2000(3)
FSS 12,300 November 1, 2000
FSM 6,193 November 1, 2000
FSP 1,333 November 1, 2000
CNG 2,483 March 31, 2001
Total 67,000 36,360
(1)Production area storage requires a complementary amount of the firm
transportation capacity identified in the first column to move storage gas
withdrawals to the Company's service area.
(2)Supplemental underground storage includes delivery to the Company's
service area and does not require any of the firm transportation capacity
identified in the first column.
(3)The Company is operating under Natural Gas Act (NGA) certificate
authority.
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Wellhead Supply
AGL and Chattanooga have entered into firm wellhead supply contracts of
approximately 398,000 Mcf/day and approximately 26,000 Mcf/day, respectively,
to supply their firm transportation and underground storage requirements.
The Company anticipates entering into additional firm wellhead supply
contracts by the end of December 1995 of up to approximately 104,000 Mcf/day
for AGL and approximately 7,800 Mcf/day for Chattanooga. The Company also
purchases spot market gas as needed during the year.
Liquefied Natural Gas
To meet the demand for natural gas on the coldest days of the winter months,
the Company must also maintain sufficient supplemental quantities of
liquefied natural gas (LNG) in its supply portfolio. The Company's three
strategically located Georgia-based LNG plants -- north and south of Atlanta
and near Macon -- provide a combined maximum daily supplement of
approximately 665,000 Mcf and a combined usable storage capacity of 72
million gallons, equivalent to approximately 5,952,000 Mcf. Chattanooga's LNG
plant provides a maximum daily supplement of approximately 90,000 Mcf and has
a usable storage capacity of 13 million gallons, equivalent to approximately
1,076,000 Mcf.
Competition
The Company competes to supply natural gas to interruptible customers who are
capable of switching to alternative fuels, including fuel oil, coal, propane,
electricity and, in some cases, combustible wood by-products. The Company
also competes to supply gas to interruptible customers who might seek to
bypass the Company's distribution system.
On February 17, 1995, the Georgia Commission approved a settlement that
permits the Company to negotiate contracts with customers who have the option
of bypassing the Company's facilities (Bypass Customers) and receiving
natural gas from other suppliers. The bypass avoidance contracts (Negotiated
Contracts) can be renewable, provided that the initial term does not exceed
five years, unless a longer term specifically is authorized by the Georgia
Commission. The rate provided by the Negotiated Contract may be lower than
AGL's filed rate, but not less than AGL's marginal cost of service to the
potential Bypass Customer. Service pursuant to a Negotiated Contract may
commence without Georgia Commission action, once a copy of the contract is
filed with the Georgia Commission. Negotiated Contracts may be rejected by
the Georgia Commission within 90 days of filing; absent such action, however,
the Negotiated Contracts remain effective. None of the Negotiated Contracts
filed with the Georgia Commission have been rejected.
The settlement also provides for a bypass loss recovery mechanism to operate
until the earlier of September 30, 1998, or the effective date of new rates
for AGL resulting from a general rate case. Under the recovery mechanism, AGL
is allowed to recover from other customers 75% of the difference between (a)
the non-gas cost revenue that was received from the potential Bypass Customer
during the most recent twelve month period and (b) the non-gas cost revenue
that is calculated to be received from the lower Negotiated Contract rate
applied to the same volumetric level. With respect to the remaining 25% of
the difference, AGL is allowed to retain a 44% share of capacity release
revenues in excess of $5 million until AGL is made whole for discounts from
Negotiated Contracts. To the extent that there are additional capacity
release revenues, AGL is allowed to retain 15% of such amounts.
In addition to Negotiated Contracts, which are designed to serve existing and
potential Bypass Customers, the Company's Interruptible Transportation and
Sales Maintenance (ITSM) Rider continues to permit discounts for short-term
transactions to compete with alternative fuels. Revenue shortfalls,
<PAGE>
if any, from interruptible customers as measured by the test-year
interruptible revenues determined by the Georgia Commission in the Company's
1993 rate case will continue to be recovered under the ITSM Rider.
The settlement approved by the Georgia Commission also provides that AGL may
file contracts (Special Contracts) for Georgia Commission approval if the
service cannot be provided through the ITSM Rider, existing rate schedules or
the Negotiated Contract procedures. An example of an application for a
Special Contract would be to provide for a long-term service contract to
compete with alternative fuels where physical bypass was not the relevant
competition.
Since the Georgia Commission's order approving the settlement, AGL has filed,
and is providing service pursuant to, 40 Negotiated Contracts. Additionally,
the Georgia Commission has approved Special Contracts with four additional
customers.
On November 21, 1995, the Georgia Commission issued a Natural Gas Notice of
Inquiry (NOI) which sets forth a procedure and schedule for soliciting
comments from Georgia LDCs and other interested parties concerning how to
work together to move the local distribution of natural gas toward a more
competitive future. Among other opinions expressed within the NOI, the
Georgia Commission recommended pursuing a legislative solution to establish
regulatory rules that will allow for an efficient and customer-responsive
retail natural gas sector. The schedule calls for comments from interested
parties in December 1995 and January 1996.
FEDERAL REGULATORY MATTERS
Order 636
In 1992, FERC issued Order 636 which, among other things, mandated the
unbundling of interstate pipeline sales service and established certain open
access transportation regulations that became effective beginning in the
1993-1994 heating season. In Order 636, FERC acknowledged that, without
special recovery mechanisms, certain costs that previously were recovered in
the pipelines' rate for bundled sales services no longer could be recovered
by the pipelines in a restructured environment. Those costs, referred to as
transition costs, include such things as unrecovered gas costs, gas supply
realignment costs and various stranded costs resulting from unbundling.
Accordingly, Order 636 included a recovery mechanism that allows the pipeline
companies to pass through to their customers any prudently incurred
transition costs attributable to compliance with Order 636.
The Company, based on filings with FERC by its pipeline suppliers, estimates
that its portion of such costs from all of its pipeline suppliers would be
approximately $97.7 million. Such filings currently are pending before FERC
for final approval, and the transition costs are being collected subject to
refund. Approximately $71 million of such costs have been incurred by the
Company as of November 30, 1995, and are being recovered from its customers
under the purchased gas provisions of the Company's rate schedules.
Transition costs have not affected the total cost of gas to the Company's
customers significantly because (1) the Company purchases its wellhead gas
supplies based upon market prices that are below the cost of gas previously
embedded in the bundled pipeline sales service rates and (2) many elements
of transition costs previously were embedded in the rates for the pipelines'
bundled sales service. See Part I, Item 1, "State Regulatory Matters - Gas
Supply Filing" in this Form 10-K for further discussion of recovery of gas
costs.
Details concerning the status of the Order 636 restructuring proceedings
involving the pipelines that serve the Company directly are set forth below.
SOUTHERN Restructuring Proceeding. The Company has filed several
petitions for review with the United States Court of Appeals for the District
of Columbia Circuit concerning various aspects of Southern's restructuring.
These aspects include favorable treatment of small customers, rate
mitigation,
<PAGE>
mitigation of gas supply realignment (GSR) costs, and tying of firm storage
service to firm transportation service. The Company's petitions for review
currently are pending with the court, but will be withdrawn if the settlement
between Southern and its customers, discussed below, is approved by
the FERC.
GSR Cost Recovery Proceeding. Southern has made several quarterly GSR
recovery filings, has filed on a monthly basis to revise its GSR billing
determinants, and has made quarterly filings to recover other transition
costs. The Company has entered into a settlement agreement with Southern and
other customers to resolve virtually all pending Southern proceedings before
the FERC and the courts. The FERC approved the settlement on September 29,
1995, but the order approving the settlement is subject to rehearing before
the agency. The settlement would, if approved by the FERC, resolve
Southern's pending general rate proceedings, which relate to Southern's rates
charged from January 1, 1991, through the present. The settlement also
provides for rate reductions and refund offsets against GSR costs. It would
also resolve Southern's Order 636 transition cost proceedings and provide for
revisions to Southern's tariff. Assuming the settlement is approved,
the Company's share of Southern's transition costs is estimated to be $84.5
million. As of November 30, 1995, $65.8 million of such costs have been
incurred by the Company.
TENNESSEE Restructuring Proceeding. The Company has filed several
petitions for review with the United States Court of Appeals for the District
of Columbia Circuit concerning various aspects of Tennessee's restructuring.
These aspects include favorable treatment for small customers, rate
mitigation and others. The Company also has filed a petition for review of
FERC orders concerning Tennessee's service obligation to the Company. The
Company's petitions for review currently are pending with the court.
GSR Cost Recovery Proceeding. Tennessee has made several quarterly GSR
recovery filings. The Company's estimated liability as a result of
Tennessee's prior GSR recovery filings is approximately $8.4 million,
subject to possible reduction based upon the hearing FERC established to
investigate Tennessee's costs. The Company is actively participating in
Tennessee's GSR cost recovery proceeding. As of November 30, 1995, $4.6
million of such costs have been incurred by the Company.
Columbia Gas Transmission Corporation. The Company has filed a petition for
review of a FERC order approving a settlement between Tennessee and Columbia
Gas Transmission Corporation (Columbia). The settlement resolves issues
relating to Columbia's upstream capacity on Tennessee's system, as well as
certain other matters between the two pipelines. The Company has sought
review of the order on the ground that the FERC has failed to ensure that
Tennessee's customers will be made whole with respect to Tennessee's
agreement to permit Columbia to abandon certain contracts for capacity on
Tennessee's system.
FERC Rate Proceedings
The Company also is participating in various rate proceedings before the FERC
involving applications for rate changes filed by its pipeline suppliers,
Southern, Transco, Tennessee and South Georgia. To the extent that these
cases have not been settled, as described below, the rates filed in these
proceedings have been accepted, and made effective subject to refund and the
outcome of the FERC proceedings.
SOUTHERN The Company is participating in two Southern rate proceedings
which affect two prior rate periods, from January 1, 1991 through August 31,
1992, and from September 1, 1992 through April 30, 1993. In each case, the
FERC has approved partial settlement offers. The former settlement reserved
certain issues for briefing before the FERC, but procedures have not yet been
established for such briefing. The latter settlement reserved one contested
issue for hearing and decision. This issue concerns Southern's recovery of
costs associated with its construction of facilities to attach certain
offshore gas supplies. An Administrative Law Judge (ALJ) has ruled that an
earlier settlement bars recovery of the costs in question. This ruling
currently is pending review by the FERC.
<PAGE>
Southern's current rate case involves Southern's rates from May 1, 1993
forward, and also involves undue discrimination claims raised by the Company
against Southern. These claims arise out of a settlement between Southern
and Arcadian Corporation (Arcadian) related to the bypass of the Company's
system and certain discounted transportation arrangements entered into
between Southern and Arcadian as a part of the settlement. See Part I, Item
3, "Legal Proceedings." As noted previously, the Company has entered into a
settlement agreement with Southern that will, if approved by the FERC,
resolve virtually all issues between the Company and Southern for Southern's
outstanding rate proceedings, including the undue discrimination issue raised
by the Company in Southern's current rate case.
SOUTH GEORGIA On February 9, 1995, an ALJ issued an initial decision in
South Georgia's rate case that South Georgia's interruptible transportation
(IT) rate should be based on a load factor of 100% on a prospective basis.
AGL supported the 100% load factor IT rate at the hearing in this proceeding.
South Georgia and an intervenor have filed exceptions to the initial decision
with the FERC, and AGL has responded to the exceptions and supported the
initial decision. The FERC has not yet acted on the exceptions.
TENNESSEE On July 24, 1995, a FERC ALJ issued an initial decision
addressing rates to be charged by Tennessee on a prospective basis. Among
other matters, the ALJ approved Tennessee's proposal to decrease the load
factor used to calculate its IT rates from 125% to 100%. The Company
supported a further reduction to 50%, but argued that 100% would be the
highest reasonable load factor. The ALJ also rejected challenges by the
Company and others to Tennessee's "straight-fixed-variable-to-the-wellhead"
rate design for firm transportation rates. Various parties, including the
Company, have filed exceptions to the initial decision, which therefore is
not yet final.
In addition, on December 30, 1994, Tennessee filed a new general rate case
seeking an increase of approximately $117.9 million annually, and reflecting
numerous modifications to its tariff. The impact of that rate increase on
the Company is approximately $2.6 million annually. The FERC has accepted
Tennessee's filing and has set it for hearing. The FERC has also accepted
Tennessee's motion filing to implement slightly lower rates than originally
sought by Tennessee, effective July 1, 1995, subject to refund and the
outcome of the hearing. The Company is actively participating in the hearing
procedures.
TRANSCO On July 19, 1995, a FERC ALJ rejected Transco's proposal to adopt
a "firm-to-the-wellhead" rate structure for firm transportation rates which
would, if approved, shift approximately $60 million in production area fixed
costs into firm transportation rates. In addition, the ALJ determined that
Transco's existing production area rate design is unjust and unreasonable,
and adopted a production area rate design proposal offered by another
intervenor in the proceeding. AGL opposed Transco's "firm-to-the-wellhead"
proposal, but supported Transco's existing production area rate design.
Various parties, including AGL, have filed exceptions to the initial
decision, which therefore is not yet final.
In addition, on March 1, 1995, Transco filed a new general rate case seeking
approximately $132 million in additional revenues annually, and to reflect
numerous modifications to its tariff. The impact of that rate increase on
the Company is approximately $2.2 million annually. The FERC has accepted
Transco's filing, and Transco has implemented its rate increase, effective
September 1, 1995, subject to refund and the outcome of a hearing. AGL is
actively participating in the hearing procedures.
ANR PIPELINE ANR Pipeline (ANR) provides transportation services to
Southern under a case-specific certificate issued by the FERC in 1980.
Southern entered into this transportation arrangement with ANR in order to
provide Southern's customers, including AGL, access to storage facilities
owned and operated by ANR Storage Company. According to Southern,
approximately 96% of Southern's service entitlement on ANR is used to serve
AGL. AGL is participating in ANR's general rate proceeding, and has
protested the proposed rates for ANR's service to Southern. The FERC has
established hearing procedures with respect to ANR's application, and AGL is
actively participating in the hearing, supporting a reduced transportation
rate for ANR's services to Southern.
<PAGE>
Arcadian
The FERC has issued an order approving the settlement between Southern and
Arcadian; see Part I, Item 3, "Legal Proceedings." The settlement resolves
both Arcadian's FERC complaint against Southern and Arcadian's antitrust
lawsuit against Southern and AGL. The settlement provides for Southern to
provide firm transportation service to Arcadian at a discounted rate for an
initial term of five years. In addition, the settlement establishes tariff
language addressing the conditions under which Southern will address future
requests for direct transportation service. AGL has sought rehearing of the
FERC's order approving the settlement, and has petitioned for review in the
United States Court of Appeals for the Eleventh Circuit. AGL's appeals are
currently being held in abeyance pending action by the FERC on AGL's
rehearing request. The settlement between Southern and AGL will, if
approved, resolve the undue discrimination issue raised by AGL in Southern's
current rate case.
The Company cannot predict the outcome of these federal proceedings nor can
it determine the effect, if any, such proceedings may have on the Company.
STATE REGULATORY MATTERS
Atlanta Gas Light Company
1993 Rate Case
On March 31, 1993, AGL made a rate filing with the Georgia Commission seeking
an increase in revenues of $62.5 million annually, based upon a test year
ending September 30, 1994. During the course of the rate proceedings, AGL
modified its requested increase to $47 million to reflect changes in
conditions expected during the test year. On September 29, 1993, the
Georgia Commission approved an annual increase in revenues of approximately
$11.2 million, effective October 1, 1993.
In its decision, the Georgia Commission approved a restructuring of AGL's
interruptible service rates. The Georgia Commission, however, did not
approve the redesigned firm service rates proposed by AGL. On October 12,
1993, AGL filed a petition with the Georgia Commission for rehearing,
reconsideration and oral argument with respect to the redesigned firm service
rates. Oral argument was heard on December 2, 1993. On September 25, 1995,
the Georgia Commission issued an order revising firm service rates, on a
revenue neutral basis, to more accurately reflect the cost to serve those
customers.
Economic Development Policy
On September 19, 1993, the Georgia Commission initiated an investigation of
Economic Development Incentive Policies of the utilities under its
jurisdiction. On November 3, 1994, the Georgia Commission issued a final
order establishing guidelines for utility economic development incentives
which are designed to provide incentives to industrial customers to locate or
expand facilities in Georgia. On December 19, 1994, AGL filed its proposed
economic development incentive program in compliance with the Georgia
Commission's order. As filed, the AGL Economic Development Policy is
designed to promote economic development within the context of its approved
Integrated Resource Plan (IRP) by providing cost-effective job creation
incentive payments and investment incentive payments to industrial customers
where such payments provide positive benefits both to AGL and its new and
existing industrial customers.
On October 3, 1995 the Georgia Commission approved AGL's filed program with
one modification. As a result, on November 29, 1995, AGL withdrew the
Economic Development Incentive Program it filed with the Georgia Commission
on December 19, 1994 and filed a revised Economic Development Incentive
Program that provides investment incentive payments under AGL's approved IRP.
<PAGE>
Gas Supply Filing
Federal restructuring resulting from the implementation of Order 636 caused
LDCs to face greater accountability and risks related to their purchasing
practices for gas supply, transportation and storage services. As a result,
during the 1994 session of the Georgia General Assembly, legislation was
passed that provides for annual review and approval by the Georgia Commission
of AGL's gas services portfolio on a prospective basis.
The legislation requires AGL to file a gas supply plan with the Georgia
Commission on or before August 1 of each year for the subsequent fiscal year.
Purchases made pursuant to an approved plan may be recovered under the
purchased gas provisions of AGL's rate schedules.
On August 1, 1995, AGL filed its gas supply plan consisting of an array of
gas supply, transportation and storage options designed to provide reliable
service to firm customers at the best cost for fiscal year 1996. On
September 14, 1995, the Georgia Commission approved AGL's gas supply plan for
fiscal year 1996. In addition to approving the array of services AGL
proposed, the Georgia Commission also approved the recovery of Order 636
transition costs that currently are being collected by AGL's pipeline
suppliers.
Other Commission Proceedings
On July 21, 1995, AGL filed with the Georgia Commission a request to approve
a refund of $38.5 million of the revenues collected through the Purchased Gas
Adjustment (PGA) Rider since October 1994. On August 23, 1995, the Georgia
Commission approved a $38.5 million refund of deferred purchased gas costs,
plus interest. The refund resulted from the overrecovery of gas costs by AGL
through the PGA Rider. The refund was credited to customers' bills in
September 1995.
On November 21, 1995, the Georgia Commission issued a Natural Gas Notice of
Inquiry (NOI) which sets forth a procedure and schedule for soliciting
comments from Georgia LDCs and other interested parties concerning how to
work together to move the local distribution of natural gas toward a more
competitive future. Among other opinions expressed within the NOI, the
Georgia Commission recommended pursuing a legislative solution to establish
regulatory rules that will allow for an efficient and customer-responsive
retail natural gas sector. The schedule calls for comments from interested
parties in December 1995 and January 1996. For additional information
concerning the effects of competition on AGL's provision of gas service, see
Part I, Item 1, "Business - Competition."
The staff of the Georgia Commission has undertaken a financial and
management process audit related to AGL's former manufactured gas plant
sites. The result of such audit is not expected to have a significant
effect on the Company's consolidated financial statements. See Part I, Item
3, "Legal Proceedings - Environmental Matters."
Chattanooga Gas Company
On May 1, 1995, Chattanooga filed a rate proceeding with the Tennessee
Commission seeking an increase in revenues of $5.2 million annually. On
September 27, 1995, a settlement agreement was reached that provides for an
annual increase in revenues of approximately $2.5 million, effective November
1, 1995.
The Company cannot predict the outcome of pending state regulatory matters
nor can it determine the ultimate effect, if any, such proceedings may have
on the Company.
<PAGE>
Item 2. Properties
The Company's properties consist primarily of distribution systems and
related facilities and local offices serving 229 cities and surrounding areas
in the State of Georgia and 2 cities and surrounding areas in the State of
Tennessee. As of September 30, 1995, AGL had 25,043 miles of mains and
5,952,000 Mcf of LNG storage capacity in three LNG plants to supplement the
gas supply in very cold weather or emergencies. Chattanooga had 1,308 miles
of mains and 1,076,000 Mcf of LNG storage capacity in its one LNG plant.
At September 30, 1995, the Company's gross utility plant amounted to
approximately $1.9 billion.
Item 3. Legal Proceedings
The nature of the Company's business ordinarily results in periodic
regulatory proceedings before various state and federal authorities as well
as litigation incidental to the business. For information regarding
regulatory proceedings, see the preceding sections in Part I, Item 1,
"Business - Federal Regulatory Matters" and "Business - State Regulatory
Matters."
Arcadian
Arcadian Corporation v. Southern Natural Gas Company and Atlanta Gas Light
Company, U. S. District Court for the Southern District of Georgia, Augusta
Division, Case No. CV192-006. On January 10, 1992, Arcadian, an industrial
customer of AGL, filed a complaint against Southern and AGL alleging
violation of the federal antitrust laws and seeking treble damages in excess
of $45 million. In the complaint, Arcadian alleged that Southern and AGL
conspired to restrain trade by agreeing not to compete in the provision of
direct transportation service to end users in the areas served by the
Company. The Company denied the allegations of the complaint.
On November 30, 1993, a proposed settlement between Southern and Arcadian was
filed with FERC that would resolve both Arcadian's FERC complaint against
Southern and Arcadian's antitrust lawsuit against Southern and AGL. The
settlement provided for firm and interruptible transportation service from
Southern to Arcadian at discounted rates for an initial term of five years.
In addition, the settlement establishes tariff conditions for addressing
future requests for direct transportation service. In connection with the
proposed settlement, the antitrust lawsuit has been stayed and
administratively closed. On May 12, 1994, FERC approved the settlement over
AGL's objections. AGL has sought rehearing of the FERC's order approving the
settlement, and has petitioned for review in the United States Court of
Appeals for the Eleventh Circuit. AGL's appeals are currently being held in
abeyance pending action by the FERC on AGL's rehearing request.
Environmental Matters
Prior to the general availability of natural gas in the 1800s and early
1900s, manufactured gas was a chief source of gas for lighting and heat
nationwide. The process involved heating certain combustibles such as coal,
oil and pine knots in a low oxygen atmosphere. Gas was manufactured by this
process at over 1,500 different sites throughout the country. The residue
from this process, including lampblack and coal tar, was typically stored on
site or sold for commercial use. Such plants were operated in Georgia until
the early 1950s.
<PAGE>
In June 1990, the Company was contacted by attorneys for Florida Public
Utilities Company (FPUC) in connection with a former manufactured gas plant
(MGP) site in Sanford, Florida. Thereafter, FPUC received a "Warning Notice"
from the Florida Department of Environmental Regulation (FDER) demanding that
FPUC enter into a consent order to investigate the Sanford site. Preliminary
investigation results indicate some environmental impacts at this site. In
addition, limited investigations of the surrounding area indicate potential
environmental impacts off-site. On January 31, 1992, FPUC filed suit against
the Company, two other corporations and the City of Sanford, under the
federal Comprehensive Environmental Response, Compensation and Liability Act,
and an equivalent state statute, alleging the Company is a former "owner," to
obtain contribution from the Company and others for all costs incurred and
for a declaratory judgment that all defendants are jointly and severally
liable for future response costs. On May 15, 1992, the Court administratively
terminated the case for one year while the parties, pursuant to an agreement,
attempted to determine the nature and extent of impacts at the Sanford MGP
site. By letter dated September 11, 1992, FPUC responded to the "Warning
Notice" issued by FDER and proposed to conduct a joint investigation of the
site under FDER supervision, without the entry of any formal order. By
letter dated September 23, 1992, FDER rejected this proposal. Pursuant to an
agreement among the parties to fund the conduct of further studies, an
administrative termination of the case was reinstituted. On February 3, 1994,
the parties submitted a Contamination Assessment Report (CAR) to the Florida
Department of Environmental Protection (FDEP), previously known as FDER.
The CAR confirmed the existence of environmental impacts at the site and
off-site. On April 10, 1994, FDEP completed its review of the CAR and
submitted a preliminary scoring of the site to Region IV of the U. S.
Environmental Protection Agency (EPA). FDEP concluded that further study is
necessary in some areas because the site did not exceed the listing threshold
under one set of assumptions but did exceed that threshold under different
assumptions. On February 17, 1995, FPUC dismissed its lawsuit without
prejudice. The EPA has requested that FPUC conduct an Expanded Site
Investigation (ESI) of the Sanford site and the nearby area. FPUC declined
and it is expected that EPA will conduct the ESI.
In addition to the Sanford site noted above, there are two other sites in
Florida presently being investigated by environmental authorities in
connection with which the Company may be contacted as a potentially
responsible party. No claim has been made by any party regarding these
sites.
AGL has identified nine sites in Georgia where it currently owns all or part
of an MGP site. These sites are located in Athens, Augusta, Brunswick,
Griffin, Macon, Rome, Savannah, Valdosta and Waycross. In addition, AGL has
identified three other sites in Georgia which AGL does not now own, but which
may have been associated with the operation of MGPs by AGL or its
predecessors. These sites are located in Atlanta (2) and Macon. A
Preliminary Assessment (PA) has been conducted at each of these sites and a
subsequent Site Investigation (SI) was conducted at ten of the twelve sites
(all but the two Atlanta sites). Results from these investigations reveal
environmental impacts at and near nine sites (all but the two Atlanta sites
and the second Macon site).
AGL has entered into consent orders with the Georgia Environmental Protection
Division (EPD) with respect to four sites (Augusta, Griffin, Savannah and
Valdosta) pursuant to which AGL is obligated to investigate and clean-up, if
necessary, these sites. The Company has submitted to EPD the PA/SIs for each
site. The Company, in response to a request by EPD, also has submitted the
SI for the Athens site. For the four sites subject to EPD orders, the orders
require the Company, if necessary, to conduct additional investigations
sufficient to develop a Corrective Action Plan (CAP), which will provide a
proposal for cleanup of groundwater, surface water and soil at and near each
consent order site. This CAP will then be submitted to EPD for review and
approval. Within 180 days of approval of the CAP by EPD, AGL must complete
installation of all remedial structures called for in the CAP. The Company
developed a proposed CAP for the Griffin site, and submitted the CAP to EPD
for review. Additional assessment activities are now being conducted, and
the Company expects to submit a revised CAP for
<PAGE>
Griffin in January 1996. Assessment activities are being conducted at Augusta
and Savannah. In addition, further studies are underway at the Athens site.
AGL expects these activities in Augusta, Savannah and Athens to be completed
in early 1996.
On March 22, 1994, AGL submitted to the EPD, under regulations issued by EPD
under the Georgia Hazardous Site Response Act (HSRA), formal notifications
pertaining to MGP site conditions at seven of the eight then owned MGP sites:
Athens, Augusta, Brunswick, Macon, Savannah, Valdosta and Waycross. On
November 4, 1994, the Company submitted a notification for the acquired
portion of the Griffin site. EPD has completed its initial review of these
submissions, has eliminated one site (Macon) from further consideration at
this time, and has listed the seven remaining sites (Athens, Augusta,
Brunswick, Griffin, Savannah, Valdosta and Waycross) on Georgia's "Hazardous
Site Inventory" (HSI). EPD has also listed the Rome MGP site with which AGL
has been associated and which is the subject of pending litigation. Under the
HSRA regulations, the sites subject to consent orders (Augusta, Griffin,
Savannah and Valdosta) are presumed to require corrective action. EPD will
determine whether corrective action is required at any or all of the
remaining four sites (Athens, Brunswick, Rome and Waycross). EPD had
requested Compliance Status Reports (CSRs) for Athens, Brunswick and Rome.
The Company has estimated the investigation and remediation expenses likely
to be associated with the former MGP sites. First, for some sites, the
Company has determined that its liability, if any, for future investigation
and cleanup expenses is likely to arise from claims by potentially
responsible parties, or equivalent proceedings by the government, for
contribution and/or cost recovery. Under such circumstances, although the
Company may be jointly and severally liable for all investigation and cleanup
expenses, the probable amount of the Company's ultimate liability is likely
to be limited to the Company's equitable share of such expenses under the
circumstances. Accordingly, the Company has adjusted the range of future
investigation and cleanup expenses for these sites by estimating, where
possible, the range of reasonably possible values for the Company's share of
such expenses, given the current methods of equitable apportionment and the
Company's knowledge of relevant facts, including the solvency of potential
contributors and likely disputes over appropriate shares. In all other cases
where such values were not reasonably estimable, the Company has simply
continued to use a range of expenses without adjustment for the Company's
equitable share. Second, the issuance of regulations under HSRA and the
listing of MGP sites on the HSI has altered the basis upon which the Company
has projected future investigation and remediation costs associated with the
former MGP sites in Georgia. Under a thorough analysis of these and other
current potentially applicable requirements, the Company has estimated that,
under the most favorable circumstances reasonably possible, the future cost
of investigating and remediating the former MGP sites could be as low as
$28.6 million. Alternatively, the Company has estimated that, under the
least favorable circumstances reasonably possible, the future cost of
investigating and remediating the former MGP sites could be as high as $109
million. The Company cannot estimate at this time the amount of any other
future expenses or liabilities, or the impact on these estimates of future
environmental regulatory changes, that may be associated with or related to
the MGP sites, including expenses or liabilities relating to any litigation.
At the present time, no amount within the range can be identified as a better
estimate than any other estimate. Therefore, a liability for the low end of
this range and a corresponding regulatory asset have been recorded in the
financial statements.
The Georgia Commission has approved the recovery by AGL of Environmental
Response Costs, as defined below, effective October 1, 1992, pursuant to
AGL's Environmental Response Cost Recovery Rider (ERCRR). For purposes of
the ERCRR, Environmental Response Costs include investigation, testing,
remediation and litigation costs and expenses or other liabilities relating
to or arising from MGP sites. AGL is permitted to recover from its
ratepayers Environmental Response Costs that it may incur in succeeding
12-month periods ending each June 30, net of working capital benefits
resulting from deferred income taxes, amortized over a 60-month recovery
period beginning each October 1. The
<PAGE>
carrying costs to AGL of Environmental Response Costs during the period of
amortization are subject to recovery from any amounts received from insurance
carriers and from former owners or operators of MGP sites. Any amounts
received from such sources are shared equally by AGL and its customers. AGL
records its portion as income to offset unrecovered carrying costs. AGL has
recorded income to date of $0.8 million as a result of amounts received from
such sources.
In connection with the ERCRR, the staff of the Georgia Commission has
undertaken a financial and management process audit related to the MGP sites,
cleanup activities at the sites and Environmental Response Costs which have
been incurred for purposes of the ERCRR. The result of such audit is not
expected to have a significant effect on the Company's consolidated financial
statements.
The Company notified its insurance carriers and filed a declaratory judgment
action against 23 insurance companies in the United States District Court for
the Northern District of Georgia, seeking a determination that various
policies held by the Company provide coverage for Environmental Response
Costs. Nine of the 23 carriers named in the action have settled with the
Company. On October 8, 1993, the Court granted summary judgment to the
remaining carriers on the basis that the Company provided untimely notice.
The Court entered a final judgment in favor of the defendants. On October
20, 1995, the Eleventh Circuit Court of Appeals reversed the grant of summary
judgment and remanded the case to the trial court, with instructions to
dismiss the case on the grounds that there was no case or controversy when
filed. The Company has not determined the nature or extent of actions it
will take as a result of this decision.
On November 14, 1995, one of the insurance companies named in the declaratory
judgment action initiated a new action against the Company in the United
States District Court for the Northern District of Georgia seeking a
declaratory judgment that it is not obligated to provide insurance coverage
for third party damage resulting from the operation of the former MGP sites.
The Company has not been served with the summons and the Company and the
insurance carrier have entered into an agreement not to pursue the action for
a period of time.
With regard to other legal proceedings related to the former MGP sites, the
Company is or expects to be a party to claims or counterclaims on an ongoing
basis. Among such matters, the Company intends to continue to pursue
insurance coverage and contribution from potentially responsible parties.
Management currently believes that the outcome of MGP-related litigation in
which the Company is involved will not have a material adverse effect on the
financial condition and results of operations of the Company.
As a result of the ERCRR, the Company expects that it will be able to recover
all of its Environmental Response Costs. See Note 10 in Notes to
Consolidated Financial Statements in the Company's 1995 Annual Report to
Shareholders.
Other Legal Proceedings
With regard to other legal proceedings, the Company is a party, as both
plaintiff and defendant, to a number of other suits, claims and counterclaims
on an ongoing basis. Management believes that the outcome of all litigation
in which it is involved will not have a material adverse effect on the
consolidated financial statements of the Company.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.
<PAGE>
Item 4.(A) Executive Officers of the Registrant
Set forth below, in accordance with General Instruction G(3) of Form 10-K and
Instruction 3 of Item 401(b) of Regulation S-K, is certain information
regarding the executive officers of AGL. Unless otherwise indicated, the
information set forth is as of September 30, 1995.
Other Offices
Held Present Held During
Name and Position Age Office Since Past Five Years
David R. Jones 58 February 1988
President and Chief
Executive Officer and
Director
Charles W. Bass 48 November 1994 (1)Senior Vice
Executive Vice President - President -
Market Service Governmental and
and Development Regulatory Affairs
Thomas H. Benson 50 November 1994 (1)Senior Vice
Executive Vice President - President -
Customer Operations Operations and
Engineering
Robert L. Goocher 45 November 1994 (1)Senior Vice
Executive Vice President - President, Chief
Business Support Financial Officer
and Secretary
(2)Vice President -
Finance
(3)Vice President -
Augusta Division
Charlie J. Lail 56 November 1994 (1)Senior Vice
Senior Vice President - President -
Operations Improvement Divisions
(2)Vice President -
Divisions
(3)Vice President -
Northeast Georgia
Division
Richard H. Woodward, Jr. 48 November 1994 (1)Senior Vice
Senior Vice President - President -
Business Development Corporate Services
Michael D. Hutchins 44 November 1994 (1)Vice President -
Vice President - Operations Engineering
and Engineering
Clayton H. Preble 48 November 1994 (1)Vice President -
Vice President - Marketing and Corporate Planning
Sales (2)Director -
Corporate Planning
(3)Division Manager -
Northeast Georgia
(4)Manager - Gwinnett
J. Michael Riley 44 November 1994 (1)Vice President and
Vice President - Finance and Controller
Accounting (2)Controller
There are no family relationships among the executive officers.
All officers generally are elected annually by the Board of Directors at the
first meeting following the Annual Meeting of Shareholders in February.
<PAGE>
Part II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters
Information relating to the market for holders of and dividends on the
Company's common stock is set forth under the caption "Shareholder
Information" on page 46 of the Company's 1995 Annual Report. Such information
is incorporated herein by reference. Portions of the 1995 Annual Report are
filed as Exhibit 13 to this report.
Item 6. Selected Financial Data
Selected financial data for the Company for each year of the five-year period
ended September 30, 1995 is set forth under the caption "Selected Financial
Data" on pages 42 and 43 of the Company's 1995 Annual Report referred to in
Item 5 above. Such five-year selected financial data is incorporated herein
by reference.
Item 7. Management's Discussion and Analysis of Results of Operations
and Financial Condition
A discussion of the Company's results of operations and financial condition
is set forth under the caption "Management's Discussion and Analysis of
Results of Operations and Financial Condition" on pages 22 through 27 of the
Company's 1995 Annual Report referred to in Item 5 above. Such discussion is
incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
The following financial statements of the Company, which are set forth on
pages 28 through 41 of the Company's 1995 Annual Report referred to in Item 5
above, are incorporated herein by reference:
Statements of Consolidated Income for the years ended September 30, 1995,
1994 and 1993.
Statements of Consolidated Cash Flows for the years ended September 30, 1995,
1994 and 1993.
Consolidated Balance Sheets as of September 30, 1995 and 1994.
Statements of Consolidated Common Stock Equity for the years ended September
30, 1995, 1994 and 1993.
Notes to Consolidated Financial Statements.
Independent Auditors' Report.
The supplementary financial information required by Item 302 of Regulation
S-K is set forth in Note 15 in Notes to Consolidated Financial Statements in
the Company's 1995 Annual Report to Shareholders.
The following supplemental data is submitted herewith:
Independent Auditors' Report on Financial Statement Schedule.
<PAGE>
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
None
Part III
Item 10. Directors and Executive Officers of the Registrant
Information relating to nominees for director of the Company is set forth
under the caption "Election of Directors-Information Concerning Nominees" in
the Proxy Statement for the 1996 Annual Meeting of Shareholders. Such
information is incorporated herein by reference. The definitive Proxy
Statement will be filed with the Securities and Exchange Commission within
120 days after the Company's fiscal year end. Information relating to the
executive officers of the Company, pursuant to Instruction 3 of Item 401(b)
of Regulation S-K and General Instruction G(3) of Form 10-K, is set forth at
Part I, Item 4(A) of this report under the caption "Executive Officers of the
Registrant."
Item 11. Executive Compensation
Information relating to executive compensation is set forth under the caption
"Executive Compensation" in the Proxy Statement referred to in Item 10
above. Such information is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information relating to ownership of common stock of the Company by certain
persons is set forth under the caption "Security Ownership of Management" in
the Proxy Statement referred to in Item 10 above. Such information is
incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
Information relating to existing or proposed relationships or transactions
between the Company and any affiliate of the Company is set forth under the
caption "Compensation Committee Interlocks and Insider Participation" in the
Proxy Statement referred to in Item 10 above. Such information is
incorporated herein by reference.
<PAGE>
Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) Documents Filed as Part of This Report:
1. Financial Statements
Included under Item 8 are the following financial statements:
Statements of Consolidated Income for the Years Ended
September 30, 1995, 1994 and 1993.
Statements of Consolidated Cash Flows for the Years
Ended September 30, 1995, 1994 and 1993.
Consolidated Balance Sheets as of September 30, 1995 and 1994.
Statements of Consolidated Common Stock Equity for
the Years Ended September 30, 1995, 1994 and 1993.
Notes to Consolidated Financial Statements.
Independent Auditors' Report.
2. Supplemental Consolidated Financial Schedules for Each of the
Three Years in the Period Ended September 30, 1995:
Independent Auditors' Report.
II. - Valuation and Qualifying Account--Allowance for
Uncollectible Accounts.
Schedules other than those referred to above are omitted and are
not applicable or not required, or the required information
is shown in the financial statements or notes thereto.
3. Exhibits
Where an exhibit is filed by incorporation by reference to a
previously filed registration statement or report, such
registration statement or report is identified in parentheses.
<PAGE>
3(a) - Charter of the Company, as amended through February 20, 1990
(Exhibit 3(a), Registration No. 33-52752).
3(b) - Articles of Amendment to the Articles of Incorporation (Charter)
of the Company filed on October 9, 1992, with the Secretary of State of the
State of Georgia (Exhibit 3(b), Form 10-K for the fiscal year ended September
30, 1992).
3(c) - Articles of Correction to the Charter of the Company filed on
October 16, 1992, with the Secretary of State of the State of Georgia
(Exhibit 3(c), Form 10-K for the fiscal year ended September 30, 1992).
3(d) - Articles of Amendment to the Articles of Incorporation (Charter)
of the Company filed on February 22, 1993, with the Secretary of State of the
State of Georgia (Exhibit 3, Form 10-Q for the quarter ended March 31, 1993).
3(e) - By-Laws of the Company, as amended through November 17, 1995.
4(a) - Indenture, dated as of December 1, 1989, between Atlanta Gas Light
Company and Bankers Trust Company, as Trustee (Exhibit 4(a), Registration No.
33-32274).
4(b) - First Supplemental Indenture, dated as of March 16, 1992, between
Atlanta Gas Light Company and NationsBank of Georgia, National Association,
as Successor Trustee, (Exhibit 4(a), Registration No. 33-46419).
10(a) - Executive Compensation Plans and Arrangements;
Atlanta Gas Light Company Long-Term Stock Incentive Plan of 1990, (Exhibit
10(ii), Form 10-K for the fiscal year ended September 30, 1991).
Atlanta Gas Light Company Nonqualified Savings Plan.
10(b) - Service Agreement under Rate Schedule GSS dated April 13, 1972,
between the Company and Transcontinental Gas Pipe Line Corporation (Exhibit
5(c), Registration No. 2-48297).
10(c) - Service Agreement under Rate Schedule LG-A, effective August 16,
1974, between the Company and Transcontinental Gas Pipe Line Corporation
(Exhibit 5(d), Registration No. 2-58971).
10(d) - Storage Transportation Agreement, dated June 1, 1979, between the
Company and Southern Natural Gas Company, (Exhibit 5(n), Registration No.
2-65487).
<PAGE>
10(e) - Letter of Intent dated September 18, 1987, between the Company and
Jupiter Industries, Inc. relating to the purchase by the Company of the
assets of the Chattanooga Gas Company Division of Jupiter Industries, Inc.
(Exhibit 10(p), Form 10-K for the fiscal year ended September 30, 1987).
10(f) - Agreement for the Purchase of Assets dated April 5, 1988, between
the Company and Jupiter Industries, Inc., (Exhibit 10(q), Form 10-K for the
fiscal year ended September 30, 1988).
10(g) - 100 Day Storage Service Agreement, dated June 1, 1979, between the
Company and South Georgia Natural Gas Company, (Exhibit 10(r), Form 10-K for
the fiscal year ended September 30, 1989).
10(h) - Service Agreement under Rate Schedule LSS, dated October 31, 1984,
between the Company and Transcontinental Gas Pipe Line Corporation, (Exhibit
10(s), Form 10-K for the fiscal year ended September 30, 1989).
10(i) - Letter from Transcontinental Gas Pipe Line Corporation, dated
April 19, 1988, relating to commencement of storage service under Rate
Schedule SS-1, (Exhibit 10(v), Form 10-K for the fiscal year ended September
30, 1989).
10(j) - Storage Transportation Agreement, dated June 1, 1979, between the
Company and South Georgia Natural Gas Company, (Exhibit 10(v), Form 10-K for
the fiscal year ended September 30, 1990).
10(k) - Firm Seasonal Transportation Agreement, dated June 29, 1990,
between the Company and Transcontinental Gas Pipe Line Corporation, (Exhibit
10(bb), Form 10-K for the fiscal year ended September 30, 1990).
10(l) - Service Agreement under Rate Schedule WSS, dated June 1, 1990,
between the Company and Transcontinental Gas Pipe Line Corporation, (Exhibit
10(cc), Form 10-K for the fiscal year ended September 30, 1990).
10(m) - Limited-Term Transportation Agreement Contract # A970 dated April
1, 1988, between the Company and CNG Transmission Corporation, (Exhibit
10(bb), Form 10-K for the fiscal year ended September 30, 1991).
10(n) - Service Agreement System Contract #.2271 under Rate Schedule FT,
dated August 1, 1991, between the Company and Transcontinental Gas Pipe Line
Corporation, (Exhibit 10(dd), Form 10-K for the fiscal year ended September
30, 1991).
10(o) - Service Agreement System Contract #.4984 dated August 1, 1991,
between the Company and Transcontinental Gas Pipe Line Corporation, (Exhibit
10(ee), Form 10-K for the fiscal year ended September 30, 1991).
<PAGE>
10(p) - Service Agreement Contract #830810 under Rate Schedule FT, dated
March 1, 1992, between the Company and South Georgia Natural Gas Company
(Exhibit 10(aa), Form 10-K for the fiscal year ended September 30, 1992).
10(q) - Firm Gas Transportation Contract #3699 under Rate Schedule FT,
dated February 1, 1992, between the Company and Transcontinental Gas Pipe
Line Corporation (Exhibit 10(dd), Form 10-K for the fiscal year ended
September 30, 1992).
10(r) - Firm Gas Transportation Agreement under Rate Schedule FT-1, dated
July 1, 1992, between the Company and East Tennessee Natural Gas Company
(Exhibit 10(ff), Form 10-K for the fiscal year ended September 30, 1992).
10(s) - Service Agreement Applicable to the Storage of Natural Gas under
Rate Schedule GSS, dated October 25, 1993, between the Company and CNG
Transmission Corporation (Exhibit 10(y), Form 10-K for the fiscal year ended
September 30, 1993).
10(t) - Service Agreement Applicable to the Storage of Natural Gas under
Rate Schedule GSS, dated September, 1993, between Chattanooga Gas Company and
CNG Transmission Corporation (Exhibit 10(z), Form 10-K for the fiscal year
ended September 30, 1993).
10(u) - Gas Storage Contract #2031 under Rate Schedule FS, dated September
1, 1993, between the Company and Tennessee Gas Pipeline Company (Exhibit
10(aa), Form 10-K for the fiscal year ended September 30, 1993).
10(v) - Firm Seasonal Transportation Agreement, dated February 1, 1992,
between the Company and Transcontinental Gas Pipe Line Corporation amending
Exhibit 10(bb), Form 10-K for the fiscal year ended September 30, 1990
(Exhibit 10(cc), Form 10-K for the fiscal year ended September 30, 1993).
10(w) - Service Agreement under Rate Schedule SS-1, dated April 1, 1988,
between the Company and Transcontinental Gas Pipe Line Corporation (Exhibit
10(z), Form 10-K for the fiscal year ended September 30, 1994).
10(x) - Firm Gas Transportation Agreement #5049 under Rate Schedule FT-A,
dated November 1, 1993, between the Company and Tennessee Gas Pipeline
Company (Exhibit 10(aa), Form 10-K for the fiscal year ended September 30,
1994).
10(y) - Firm Gas Transportation Agreement #5051 under Rate Schedule FT-A,
dated November 1, 1993, between Chattanooga Gas Company and Tennessee Gas
Pipeline Company (Exhibit 10(bb), Form 10-K for the fiscal year ended
September 30, 1994).
10(z) - Gas Storage Contract #3998 under Rate Schedule FS, dated November
1, 1993, between the Company and Tennessee Gas Pipeline Company (Exhibit
10(cc), Form 10-K for the fiscal year ended September 30, 1994).
<PAGE>
10(aa) - Gas Storage Contract #3999 under Rate Schedule FS, dated
November 1, 1993, between Chattanooga Gas Company and Tennessee Gas Pipeline
Company (Exhibit 10(dd), Form 10-K for the fiscal year ended September 30,
1994).
10(bb) - Gas Storage Contract #3923 under Rate Schedule FS, dated
November 1, 1993, between the Company and Tennessee Gas Pipeline Company
(Exhibit 10(ee), Form 10-K for the fiscal year ended September 30, 1994).
10(cc) - Gas Storage Contract #3947 under Rate Schedule FS, dated
November 1, 1993, between Chattanooga Gas Company and Tennessee Gas Pipeline
Company (Exhibit 10(ff), Form 10-K for the fiscal year ended September 30,
1994).
10(dd) - Gas Storage Contract #2027 under Rate Schedule FS, dated
September 1, 1993, between Chattanooga Gas Company and Tennessee Gas Pipeline
Company (Exhibit 10(gg), Form 10-K for the fiscal year ended September 30,
1994).
10(ee) - Service Agreement #902470 under Rate Schedule FT, dated
September 1, 1994, between the Company and Southern Natural Gas Company
(Exhibit 10(hh), Form 10-K for the fiscal year ended September 30, 1994).
10(ff) - Service Agreement #904460 under Rate Schedule FT, dated
November 1, 1994, between the Company and Southern Natural Gas Company
(Exhibit 10(ii), Form 10-K for the fiscal year ended September 30, 1994).
10(gg) - Service Agreement #904480 under Rate Schedule FT, dated
November 1, 1994, between the Company and Southern Natural Gas Company
(Exhibit 10(jj), Form 10-K for the fiscal year ended September 30, 1994).
10(hh) - Service Agreement #904461 under Rate Schedule FT-NN, dated
November 1, 1994, between the Company and Southern Natural Gas Company
(Exhibit 10(kk), Form 10-K for the fiscal year ended September 30, 1994).
10(ii) - Service Agreement #904481 under Rate Schedule FT-NN, dated
November 1, 1994, between the Company and Southern Natural Gas Company
(Exhibit 10(ll), Form 10-K for the fiscal year ended September 30, 1994).
10(jj) - Service Agreement #S20140 under Rate Schedule CSS, dated
November 1, 1994, between the Company and Southern Natural Gas Company
(Exhibit 10(mm), Form 10-K for the fiscal year ended September 30, 1994).
10(kk) - Service Agreement #S20150 under Rate Schedule CSS, dated
November 1, 1994, between the Company and Southern Natural Gas Company
(Exhibit 10(nn), Form 10-K for the fiscal year ended September 30, 1994).
<PAGE>
10(ll) - Service Agreement #904470 under Rate Schedule FT, dated
November 1, 1994, between Chattanooga Gas Company and Southern Natural Gas
Company (Exhibit 10(oo), Form 10-K for the fiscal year ended September 30,
1994).
10(mm) - Service Agreement #904471 under Rate Schedule FT-NN, dated
November 1, 1994, between Chattanooga Gas Company and Southern Natural Gas
Company (Exhibit 10(pp), Form 10-K for the fiscal year ended September 30,
1994).
10(nn) - Service Agreement #S20130 under Rate Schedule CSS, dated
November 1, 1994, between Chattanooga Gas Company and Southern Natural Gas
Company (Exhibit 10(qq), Form 10-K for the fiscal year ended September 30,
1994).
10(oo) - Firm Storage (FS) Agreement, dated November 1, 1994, between
the Company and ANR Storage Company (Exhibit 10(a), Form 10-Q for the quarter
ended March 31, 1995).
10(pp) - Firm Storage (FS) Agreement, dated November 1, 1994, between
the Company and ANR Storage Company (Exhibit 10(b), Form 10-Q for the quarter
ended March 31, 1995).
10(qq) - Firm Transportation Agreement, dated March 1, 1995, between
the Company and Southern Natural Gas Company amending Exhibits 10(jj),
10(ll) and 10(mm), Form 10-K for the fiscal year ended September 30, 1994
(Exhibit 10(c), Form 10-Q for the quarter ended March 31, 1995).
10(rr) - Firm Transportation Agreement, dated March 1, 1995, between
the Company and Southern Natural Gas Company amending Exhibits 10(hh),
10(ii), 10(kk) and 10(nn), Form 10-K for the fiscal year ended September 30,
1994 (Exhibit 10(d), Form 10-Q for the quarter ended March 31, 1995).
10(ss) - Firm Transportation Agreement, dated March 1, 1995, between
Chattanooga Gas Company and Southern Natural Gas Company amending Exhibits
10(oo), 10(pp) and 10(qq), Form 10-K for the fiscal year ended September 30,
1994 (Exhibit 10(a), Form 10-Q for the quarter ended June 30, 1995).
10(tt) - Firm Transportation Agreement, dated June 1, 1995, between
the Company and Southern Natural Gas Company amending Exhibit 10(ii), Form
10-K for the fiscal year ended September 30, 1994.
10(uu) - Firm Storage Agreement, effective December 1, 1994, between
Chattanooga Gas Company and Tennessee Gas Pipeline Company amending Exhibit
10(ff), Form 10-K for the fiscal year ended September 30, 1994.
<PAGE>
10(vv) - Firm Storage Agreement, effective July 1, 1995, between
Chattanooga Gas Company and Tennessee Gas Pipeline Company amending Exhibit
10(ff), Form 10-K for the fiscal year ended September 30, 1994.
10(ww) - Firm Storage Agreement, effective July 1, 1995, between
Chattanooga Gas Company and Tennessee Gas Pipeline Company amending Exhibit
10(dd), Form 10-K for the fiscal year ended September 30, 1994.
10(xx) - Firm Transportation Agreement, dated September 26, 1994,
between the Company and South Georgia Natural Gas Company amending Exhibit
10(s), Form 10-K for the fiscal year ended September 30, 1994.
10(yy) - Firm Storage Agreement, effective July 1, 1995, between the
Company and Tennessee Gas Pipeline Company amending Exhibit 10(ee), Form 10-K
for the fiscal year ended September 30, 1994.
10(zz) - Firm Storage Agreement, effective July 1, 1995, between the
Company and Tennessee Gas Pipeline Company amending Exhibit 10(cc), Form 10-K
for the fiscal year ended September 30, 1994.
13 - Portions of the 1995 Annual Report to Shareholders incorporated herein
by reference.
21 - Subsidiaries of the Registrant.
23 - Independent Auditors' Consent.
24 - Powers of Attorney.
27 - Financial Data Schedule.
(b) Reports on Form 8-K
No Form 8-K was filed during the last quarter of the year ended September 30,
1995.
The remainder of this page was intentionally left blank.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
ATLANTA GAS LIGHT COMPANY
(Registrant)
By/s/ David R. Jones December 22, 1995
David R. Jones Date
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ David R. Jones
David R. Jones President and Chief December 22, 1995
Executive Officer
(Principal Executive
Officer) and Director
/s/ Robert L. Goocher Executive Vice President - December 22, 1995
Robert L. Goocher Business Support and
Chief Financial Officer (Principal
Financial Officer)
/s/ J. Michael Riley Vice President - December 22, 1995
J. Michael Riley Finance and Accounting
(Principal Accounting Officer)
*Frank Barron, Jr. Director December 22, 1995
Frank Barron, Jr.
*W. Waldo Bradley Director December 22, 1995
W. Waldo Bradley
<PAGE>
Signature Title Date
*Otis A. Brumby, Jr.
Otis A. Brumby, Jr. Director December 22, 1995
*L. L. Gellerstedt, Jr.
L. L. Gellerstedt, Jr. Director December 22, 1995
Kenneth D. Lewis Director
*Albert G. Norman, Jr.
Albert G. Norman, Jr. Director December 22, 1995
*D. Raymond Riddle
D. Raymond Riddle Director December 22, 1995
*Betty L. Siegel
Betty L. Siegel Director December 22, 1995
*Ben J. Tarbutton, Jr.
Ben J. Tarbutton, Jr. Director December 22, 1995
*Charles McKenzie Taylor
Charles McKenzie Taylor Director December 22, 1995
*Felker W. Ward, Jr.
Felker W. Ward, Jr. Director December 22, 1995
*By: /s/ Robert L. Goocher
Robert L. Goocher
(Attorney-in-Fact)
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors
of Atlanta Gas Light Company:
We have audited the consolidated balance sheets of Atlanta Gas Light Company
and subsidiaries as of September 30, 1995 and 1994, and the related
statements of consolidated income, common stock equity, and cash flows for
each of the three years in the period ended September 30, 1995, and have
issued our report thereon dated November 27, 1995; such financial statements
and report are included in your 1995 Annual Report to Shareholders and are
incorporated herein by reference. Our audits also included the financial
statement schedule of Atlanta Gas Light Company and subsidiaries, listed in
Item 14. This financial statement schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion based on
our audits. In our opinion, such financial statement schedule, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Atlanta, Georgia
November 27, 1995
<PAGE>
SCHEDULE II
ATLANTA GAS LIGHT COMPANY AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNT
ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
(IN THOUSANDS)
1995 1994 1993
Balance, beginning of year . . . . . . $ 2,755 $ 1,854 $ 3,327
Additions:
Provisions charged to income . . . . 5,282 7,506 6,370
Recovery of accounts
previously written off
as uncollectible . . . . . . . . . 6,622 7,129 4,415
-------- -------- --------
Total . . . . . . . . . . . . . . 14,659 16,489 14,112
Deduction:
Accounts written off
as uncollectible . . . . . . . . . 10,267 13,734 12,258
-------- -------- --------
Balance, end of year . . . . . . . . . $ 4,392 $ 2,755 $ 1,854
======== ======== ========
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
3(a) - Charter of the Company, as amended through February 20, 1990 (Exhibit
3(a), Registration No. 33-52752).
3(b) - Articles of Amendment to the Articles of Incorporation (Charter) of
the Company filed on October 9, 1992, with the Secretary of State of the
State of Georgia (Exhibit 3(b), Form 10-K for the fiscal year ended September
30, 1992).
3(c) - Articles of Correction to the Charter of the Company filed on October
16, 1992, with the Secretary of State of the State of Georgia (Exhibit 3(c),
Form 10-K for the fiscal year ended September 30, 1992).
3(d) - Articles of Amendment to the Articles of Incorporation (Charter) of
the Company filed on February 22, 1993, with the Secretary of State of the
State of Georgia (Exhibit 3, Form 10-Q for the quarter ended March 31, 1993).
3(e) - By-Laws of the Company, as amended through November 17, 1995.
4(a) - Indenture, dated as of December 1, 1989, between Atlanta Gas Light
Company and Bankers Trust Company, as Trustee (Exhibit 4(a), Registration No.
33-32274).
4(b) - First Supplemental Indenture, dated as of March 16, 1992, between
Atlanta Gas Light Company and NationsBank of Georgia, National Association,
as Successor Trustee, (Exhibit 4(a), Registration No. 33-46419).
<PAGE>
Exhibit
Number Description
10(a) - Executive Compensation Plans and Arrangements;
Atlanta Gas Light Company Long-Term Stock Incentive Plan of 1990, (Exhibit
10(ii), Form 10-K for the fiscal year ended September 30, 1991).
Atlanta Gas Light Company Nonqualified Savings Plan.
10(b) - Service Agreement under Rate Schedule GSS dated April 13, 1972,
between the Company and Transcontinental Gas Pipe Line Corporation (Exhibit
5(c), Registration No. 2-48297).
10(c) - Service Agreement under Rate Schedule LG-A, effective August 16,
1974, between the Company and Transcontinental Gas Pipe Line Corporation
(Exhibit 5(d), Registration No. 2-58971).
10(d) - Storage Transportation Agreement, dated June 1, 1979, between the
Company and Southern Natural Gas Company, (Exhibit 5(n), Registration No.
2-65487).
10(e) - Letter of Intent dated September 18, 1987, between the Company and
Jupiter Industries, Inc. relating to the purchase by the Company of the
assets of the Chattanooga Gas Company Division of Jupiter Industries, Inc.
(Exhibit 10(p), Form 10-K for the fiscal year ended September 30, 1987).
10(f) - Agreement for the Purchase of Assets dated April 5, 1988, between the
Company and Jupiter Industries, Inc., (Exhibit 10(q), Form 10-K for the
fiscal year ended September 30, 1988).
10(g) - 100 Day Storage Service Agreement, dated June 1, 1979, between the
Company and South Georgia Natural Gas Company, (Exhibit 10(r), Form 10-K for
the fiscal year ended September 30, 1989).
10(h) - Service Agreement under Rate Schedule LSS, dated October 31, 1984,
between the Company and Transcontinental Gas Pipe Line Corporation, (Exhibit
10(s), Form 10-K for the fiscal year ended September 30, 1989).
<PAGE>
Exhibit
Number Description
10(i) - Letter from Transcontinental Gas Pipe Line Corporation, dated April
19, 1988, relating to commencement of storage service under Rate Schedule
SS-1, (Exhibit 10(v), Form 10-K for the fiscal year ended September 30,
1989).
10(j) -Storage Transportation Agreement, dated June 1, 1979, between the
Company and South Georgia Natural Gas Company, (Exhibit 10(v), Form 10-K for
the fiscal year ended September 30, 1990).
10(k) - Firm Seasonal Transportation Agreement, dated June 29, 1990, between
the Company and Transcontinental Gas Pipe Line Corporation, (Exhibit 10(bb),
Form 10-K for the fiscal year ended September 30, 1990).
10(l) - Service Agreement under Rate Schedule WSS, dated June 1, 1990,
between the Company and Transcontinental Gas Pipe Line Corporation, (Exhibit
10(cc), Form 10-K for the fiscal year ended September 30, 1990).
10(m) - Limited-Term Transportation Agreement Contract # A970 dated April 1,
1988, between the Company and CNG Transmission Corporation, (Exhibit 10(bb),
Form 10-K for the fiscal year ended September 30, 1991).
10(n) - Service Agreement System Contract #.2271 under Rate Schedule FT,
dated August 1, 1991, between the Company and Transcontinental Gas Pipe Line
Corporation, (Exhibit 10(dd), Form 10-K for the fiscal year ended September
30, 1991).
10(o) - Service Agreement System Contract #.4984 dated August 1, 1991,
between the Company and Transcontinental Gas Pipe Line Corporation, (Exhibit
10(ee), Form 10-K for the fiscal year ended September 30, 1991).
10(p) - Service Agreement Contract #830810 under Rate Schedule FT, dated
March 1, 1992, between the Company and South Georgia Natural Gas Company
(Exhibit 10(aa), Form 10-K for the fiscal year ended September 30, 1992).
<PAGE>
Exhibit
Number Description
10(q) - Firm Gas Transportation Contract #3699 under Rate Schedule FT, dated
February 1, 1992, between the Company and Transcontinental Gas Pipe Line
Corporation (Exhibit 10(dd), Form 10-K for the fiscal year ended September
30, 1992).
10(r) - Firm Gas Transportation Agreement under Rate Schedule FT-1, dated
July 1, 1992, between the Company and East Tennessee Natural Gas Company
(Exhibit 10(ff), Form 10-K for the fiscal year ended September 30, 1992).
10(s) - Service Agreement Applicable to the Storage of Natural Gas under Rate
Schedule GSS, dated October 25, 1993, between the Company and CNG
Transmission Corporation (Exhibit 10(y), Form 10-K for the fiscal year ended
September 30, 1993).
10(t) - Service Agreement Applicable to the Storage of Natural Gas under Rate
Schedule GSS, dated September, 1993, between Chattanooga Gas Company and CNG
Transmission Corporation (Exhibit 10(z), Form 10-K for the fiscal year ended
September 30, 1993).
10(u) - Gas Storage Contract #2031 under Rate Schedule FS, dated September 1,
1993, between the Company and Tennessee Gas Pipeline Company (Exhibit
10(aa), Form 10-K for the fiscal year ended September 30, 1993).
10(v) - Firm Seasonal Transportation Agreement, dated February 1, 1992,
between the Company and Transcontinental Gas Pipe Line Corporation amending
Exhibit 10(bb), Form 10-K for the fiscal year ended September 30, 1990
(Exhibit 10(cc), Form 10-K for the fiscal year ended September 30, 1993).
10(w) - Service Agreement under Rate Schedule SS-1, dated April 1, 1988,
between the Company and Transcontinental Gas Pipe Line Corporation (Exhibit
10(z), Form 10-K for the fiscal year ended September 30, 1994).
<PAGE>
Exhibit
Number Description
10(x) - Firm Gas Transportation Agreement #5049 under Rate Schedule FT-A,
dated November 1, 1993, between the Company and Tennessee Gas Pipeline
Company (Exhibit 10(aa), Form 10-K for the fiscal year ended September 30,
1994).
10(y) - Firm Gas Transportation Agreement #5051 under Rate Schedule FT-A,
dated November 1, 1993, between Chattanooga Gas Company and Tennessee Gas
Pipeline Company (Exhibit 10(bb), Form 10-K for the fiscal year ended
September 30, 1994).
10(z) - Gas Storage Contract #3998 under Rate Schedule FS, dated November 1,
1993, between the Company and Tennessee Gas Pipeline Company (Exhibit 10(cc),
Form 10-K for the fiscal year ended September 30, 1994).
10(aa) - Gas Storage Contract #3999 under Rate Schedule FS, dated November 1,
1993, between Chattanooga Gas Company and Tennessee Gas Pipeline Company
(Exhibit 10(dd), Form 10-K for the fiscal year ended September 30, 1994).
10(bb) - Gas Storage Contract #3923 under Rate Schedule FS, dated November 1,
1993, between the Company and Tennessee Gas Pipeline Company (Exhibit 10(ee),
Form 10-K for the fiscal year ended September 30, 1994).
10(cc) - Gas Storage Contract #3947 under Rate Schedule FS, dated November 1,
1993, between Chattanooga Gas Company and Tennessee Gas Pipeline Company
(Exhibit 10(ff), Form 10-K for the fiscal year ended September 30, 1994).
10(dd) - Gas Storage Contract #2027 under Rate Schedule FS, dated September
1, 1993, between Chattanooga Gas Company and Tennessee Gas Pipeline Company
(Exhibit 10(gg), Form 10-K for the fiscal year ended September 30, 1994).
10(ee) - Service Agreement #902470 under Rate Schedule FT, dated September 1,
1994, between the Company and Southern Natural Gas Company (Exhibit 10(hh),
Form 10-K for the fiscal year ended September 30, 1994).
<PAGE>
Exhibit
Number Description
10(ff) - Service Agreement #904460 under Rate Schedule FT, dated November 1,
1994, between the Company and Southern Natural Gas Company (Exhibit 10(ii),
Form 10-K for the fiscal year ended September 30, 1994).
10(gg) - Service Agreement #904480 under Rate Schedule FT, dated November 1,
1994, between the Company and Southern Natural Gas Company (Exhibit 10(jj),
Form 10-K for the fiscal year ended September 30, 1994).
10(hh) - Service Agreement #904461 under Rate Schedule FT-NN, dated November
1, 1994, between the Company and Southern Natural Gas Company (Exhibit
10(kk), Form 10-K for the fiscal year ended September 30, 1994).
10(ii) - Service Agreement #904481 under Rate Schedule FT-NN, dated November
1, 1994, between the Company and Southern Natural Gas Company (Exhibit
10(ll), Form 10-K for the fiscal year ended September 30, 1994).
10(jj) - Service Agreement #S20140 under Rate Schedule CSS, dated November 1,
1994, between the Company and Southern Natural Gas Company (Exhibit 10(mm),
Form 10-K for the fiscal year ended September 30, 1994).
10(kk) - Service Agreement #S20150 under Rate Schedule CSS, dated November 1,
1994, between the Company and Southern Natural Gas Company (Exhibit 10(nn),
Form 10-K for the fiscal year ended September 30, 1994).
10(ll) - Service Agreement #904470 under Rate Schedule FT, dated November 1,
1994, between Chattanooga Gas Company and Southern Natural Gas Company
(Exhibit 10(oo), Form 10-K for the fiscal year ended September 30, 1994).
10(mm) - Service Agreement #904471 under Rate Schedule FT-NN, dated November
1, 1994, between Chattanooga Gas Company and Southern Natural Gas Company
(Exhibit 10(pp), Form 10-K for the fiscal year ended September 30, 1994).
<PAGE>
Exhibit
Number Description
10(nn) - Service Agreement #S20130 under Rate Schedule CSS, dated November 1,
1994, between Chattanooga Gas Company and Southern Natural Gas Company
(Exhibit 10(qq), Form 10-K for the fiscal year ended September 30, 1994).
10(oo) - Firm Storage (FS) Agreement, dated November 1, 1994, between the
Company and ANR Storage Company (Exhibit 10(a), Form 10-Q for the quarter
ended March 31, 1995).
10(pp) - Firm Storage (FS) Agreement, dated November 1, 1994, between the
Company and ANR Storage Company (Exhibit 10(b), Form 10-Q for the quarter
ended March 31, 1995).
10(qq) - Firm Transportation Agreement, dated March 1, 1995, between the
Company and Southern Natural Gas Company amending Exhibits 10(jj), 10(ll)
and 10(mm), Form 10-K for the fiscal year ended September 30, 1994 (Exhibit
10(c), Form 10-Q for the quarter ended March 31, 1995).
10(rr) - Firm Transportation Agreement, dated March 1, 1995, between the
Company and Southern Natural Gas Company amending Exhibits 10(hh), 10(ii),
10(kk) and 10(nn), Form 10-K for the fiscal year ended September 30, 1994
(Exhibit 10(d), Form 10-Q for the quarter ended March 31, 1995).
10(ss) - Firm Transportation Agreement, dated March 1, 1995, between
Chattanooga Gas Company and Southern Natural Gas Company amending Exhibits
10(oo), 10(pp) and 10(qq), Form 10-K for the fiscal year ended September 30,
1994 (Exhibit 10(a), Form 10-Q for the quarter ended June 30, 1995).
10(tt) - Firm Transportation Agreement, dated June 1, 1995, between the
Company and Southern Natural Gas Company amending Exhibit 10(ii), Form 10-K
for the fiscal year ended September 30, 1994.
10(uu) - Firm Storage Agreement, effective December 1, 1994, between
Chattanooga Gas Company and Tennessee Gas Pipeline Company amending Exhibit
10(ff), Form 10-K for the fiscal year ended September 30, 1994.
<PAGE>
Exhibit
Number Description
10(vv) - Firm Storage Agreement, effective July 1, 1995, between Chattanooga
Gas Company and Tennessee Gas Pipeline Company amending Exhibit 10(ff), Form
10-K for the fiscal year ended September 30, 1994.
10(ww) - Firm Storage Agreement, effective July 1, 1995, between Chattanooga
Gas Company and Tennessee Gas Pipeline Company amending Exhibit 10(dd), Form
10-K for the fiscal year ended September 30, 1994.
10(xx) - Firm Transportation Agreement, dated September 26, 1994, between the
Company and South Georgia Natural Gas Company amending Exhibit 10(s), Form
10-K for the fiscal year ended September 30, 1994.
10(yy) - Firm Storage Agreement, effective July 1, 1995, between the Company
and Tennessee Gas Pipeline Company amending Exhibit 10(ee), Form 10-K for the
fiscal year ended September 30, 1994.
10(zz) - Firm Storage Agreement, effective July 1, 1995, between the Company
and Tennessee Gas Pipeline Company amending Exhibit 10(cc), Form 10-K for the
fiscal year ended September 30, 1994.
13 - Portions of the 1995 Annual Report to Shareholders incorporated herein
by reference.
21 - Subsidiaries of the Registrant.
23 - Independent Auditors' Consent.
24 - Powers of Attorney.
27 - Financial Data Schedule.
<PAGE>
Exhibit 3e
ATLANTA GAS LIGHT COMPANY
BY-LAWS
AS AMENDED NOVEMBER 17, 1995
<PAGE>
BY-LAWS
ATLANTA GAS LIGHT COMPANY
ARTICLE I.
SHAREHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of the
Shareholders for the election of Directors and for the transaction
of general business shall be held at the office of the Corporation
in Atlanta, Georgia, except in cases in which the calls therefor
designate some other place within the State of Georgia, on such
date and at such time as may be fixed by resolution of the Board of
Directors. Such annual meeting shall be general meetings, that is
to say, open for the transaction of any business within the powers
of the Corporation without special notice of such business, except
in cases in which special notice is required by statute, by the
Charter or by these By-Laws.
SECTION 2. SPECIAL MEETINGS. At any time in the interval
between annual meetings, 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 50% of the shares of
Common Stock then outstanding and entitled to vote. Special
meetings of the Shareholders shall be held at the office of the
Corporation in Atlanta, Georgia, except in cases in which the calls
therefor designate some other place within the State of Georgia.
Notice of a special meeting must include a description of the
purpose or purposes for which the meeting is called.
SECTION 3. NOTICE OF MEETING. Written or printed notice of
every meeting of the Shareholders shall be given to each
Shareholder entitled to vote at such meeting, not less than ten
(10) nor more than sixty (60) days before such meeting, by leaving
the same with him or at his residence or usual place of business or
by mailing it, postage prepaid, to him at his address as it appears
upon the records of the Corporation on the record date for such
meeting as provided in Section 3 of Article V of these By-Laws. In
the event of the transfer of stock after the giving of such notice
and prior to the holding of the meeting, it shall not be necessary
to give notice of the meeting to the transferee. Notice of every
special meeting shall state the place, day and hour of such meeting
and the general nature of the business proposed to be transacted
thereat. Failure to give notice of any annual meeting or any
irregularity in such notice shall not affect the validity of such
annual meeting or of any proceeding at such meeting (other than
proceedings of which special notice is required by law, by the
Charter or by the By-Laws). It shall not be requisite to the
validity of any meeting of Shareholders that notice thereof,
whether prescribed by law, by the Charter or by these By-Laws,
shall have been given to any Shareholder who attends in person or
<PAGE>
by proxy, or to any Shareholder who, in writing executed and filed
with the records of the meeting either before or after the holding
thereof, waives such notice. No notice other than by verbal
announcement need be given of any adjourned meetings of
Shareholders.
SECTION 4. QUORUM. At all meetings of Shareholders, a
majority of the outstanding shares of capital stock entitled to
vote, represented by Shareholders in person or by proxy, shall
constitute a quorum for the transaction of business; but in the
absence of a quorum the Shareholders present in person or by proxy
at the time and place fixed by Section 1 of this Article I for an
annual meeting, or designated in the notice of a special meeting,
or at the time and place of any adjournment thereof, 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 original meeting.
SECTION 5. VOTING AND PROXIES. Any Shareholder having the
right to vote at any meeting shall be entitled to one vote for each
share of stock held by him.
Any Shareholder entitled to vote at any meeting may vote
either in person or by proxy. Every proxy shall be in writing,
subscribed by a Shareholder or his duly authorized attorney, and
dated, but need not be sealed, witnessed or acknowledged.
SECTION 6. LIST OF SHAREHOLDERS. A complete list of the
Shareholders entitled to vote at the annual meeting of the
Shareholders or at any special meeting of Shareholders, arranged in
alphabetical order, with the mailing address of each according to
the records of the Corporation and the number of voting shares held
by each, shall be prepared by the Secretary or any Assistant
Secretary and produced at any meeting of Shareholders upon the
request of any Shareholder.
SECTION 7. NOTICE OF ACTION. At any meeting of the
Shareholders, only such business, including nomination of
candidates for election to the Board of Directors, shall be
conducted as shall have been brought before the meeting (i) by or
at the direction of the Board of Directors or (ii) by any
Shareholder of the Corporation who complies with the notice
procedures set forth in this Section 7; provided, in each case,
that such business proposed to be conducted is, under the law, an
appropriate subject for shareholder action. For such business to
be properly brought before a 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
<PAGE>
released to Shareholders in connection with the previous year's
annual meeting of Shareholders, except 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 offices of the Corporation not less than the later of
(a) the date which is 150 calendar days prior to the date of the
contemplated annual meeting and (b) the date which is 10 calendar
days after the date of the first public announcement or other
notification to Shareholders of the contemplated annual meeting.
In the case of special meetings 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 special meeting. A
Shareholder's notice to the Secretary shall set forth as to each
matter such Shareholder proposes to bring before the meeting (i) a
brief description of the business desired to be brought before the
meeting and the reasons for conducting the business at the meeting;
(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 that 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; (vii) a statement in support of the matter and any other
information required by said Rule 14a-8; and (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-11
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). The chairman of a Shareholders meeting may, if the facts
warrant, determine and declare to the meeting that such business or
nomination was not properly brought before the meeting in
accordance with the provisions of this Section 7, 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.
ARTICLE II.
BOARD OF DIRECTORS
SECTION 1. ELECTION AND POWERS.
A. The business and property of the Corporation shall
be conducted and managed by a Board of Directors, which shall
consist of such number of Directors as shall be fixed from time to
<PAGE>
time exclusively pursuant to a resolution adopted by the Board of
Directors. The members of the Board of Directors shall be elected
by the Shareholders at their annual meeting, or at any meeting held
in lieu thereof. Each Director shall hold office until the Annual
Meeting of Shareholders held next after his election and until his
successor shall have been duly chosen and qualified or until he
shall have resigned or shall have been removed in the manner
provided in Section 6 of this Article II.
B. To be eligible to be a Director of the Company, a
person must own at least 100 shares of the Common Stock of the
Company.
C. If any Director ceases to hold the position in his
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 person shall not be eligible for
re-election to the Board of Directors at the expiration of such
current term unless the Board of Directors decides that such person
should be eligible for re-election.
D. Any Director who
(i) was not a Director on September 30, 1965 and
(ii) either (aa) attains his seventieth (70th) birthday
or (bb) retires from or discontinues his employment with the
Corporation, whichever first occurs,
shall thereafter, upon completion of the term for which he was
elected a Director, cease to be an active Director; provided,
however, anyone who, upon his 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 was elected a Director.
E. 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 of Directors 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 this Section 1.
<PAGE>
SECTION 2. MEETINGS. Regular meetings of the Board of
Directors shall be held at such places within or without the State
of Georgia and at such times as the Board of Directors by vote may
from time to time determine and if so determined, no notice
thereof need be given. Special meetings of the Board of Directors
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 Executive
Committee by vote at a meeting, or by a majority of the Directors
in writing without a meeting, notice thereof being given to each
Director at least two days before the meeting by delivering the
same to him personally or by sending the same to him by telegraph
or by leaving the same at his residence or usual place of business
or, in the alternative, upon three days notice by mailing 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
meetings of the Board of Directors that notice thereof shall have
been given to any Director who attends, or to any Director who, in
writing executed and filed with the records of the meeting either
before or after the holding thereof, waives such notice. No notice
of adjourned meetings of the Board of Directors need be given. All
regular and special meetings of the Board of Directors shall be
general meetings open for the transaction of any business within
the powers of the Corporation without special notice of such
business, except in cases in which special notice is required by
law, by the Charter, by these By-Laws or by the call of such
meeting.
SECTION 3. QUORUM. At all meetings of the Board of
Directors, a majority of the total number of the Directors shall
constitute a quorum for the transaction of business, except in
cases where it is by law, by the Charter or by the By-Laws
otherwise provided, a majority of such quorum shall decide any
questions that may come before the meeting. 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.
SECTION 4. VACANCIES. The Board of Directors at any time
may create vacancies in the Board of Directors by increasing the
number of Directors from the number elected by the Shareholders to
any number not more than fifteen (15). Vacancies occurring in the
Board of Directors, through death, resignation, increase in the
number of Directors or any cause other than removal by the
Shareholders, may be filled by the vote of a majority of the
remaining Directors.
SECTION 5. COMPENSATION. The Directors may be compensated
for their services on an annual basis and/or they may receive a
fixed sum for attendance at each regular or special meeting and
every adjournment thereof; such compensation or fixed sum to be
<PAGE>
fixed from time to time by resolution of the Board of Directors.
The Directors shall be reimbursed for all reasonable traveling
expenses incurred in attending meetings. Nothing in this Section
shall preclude a Director from serving the Corporation in any
other capacity and receiving compensation therefor.
SECTION 6. REMOVAL. At any meeting of the Shareholders
called for the purpose, any Director may, by vote of the
Shareholders entitled to cast a majority in number of all the
votes, be removed from office, with or without cause, and another
be appointed in the place of the person so removed, to serve for
the remainder of his term.
SECTION 7. INDEMNIFICATION OF DIRECTORS AND OFFICERS;
INSURANCE.
A. This Corporation shall indemnify any Director made
a party to a proceeding because he is or was a Director or who,
while a Director, is or was serving at the Corporation's request
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
reasonable expenses and liability, as defined in Official Code of
Georgia Annotated Section 14-2-850, as it may from time to time be
amended, incurred by such Director in any threatened, pending or
completed proceeding, whether civil, criminal, administrative or
investigative, and whether formal or informal, and shall advance
expenses upon receipt from such Director of the written
affirmation and repayment promise required by Section 14-2-856 of
the Official Code of Georgia Annotated or successor provisions;
provided, however, that the Corporation shall not indemnify any
Director for any liability or expenses incurred by such Director
(i) for any appropriation, in violation of his duties, of any
business opportunity of the Corporation; (ii) for any acts or
omissions which involve intentional misconduct or a knowing
violation of law; (iii) for the types of liability set forth in
Section 14-2-832 of the Official Code of Georgia Annotated or
successor provisions; or (iv) for any transaction from which the
Director derives an improper personal benefit.
B. This Corporation shall indemnify any Officer made
a party to a proceeding because he is or was an Officer or who,
while an Officer, is or was serving at the Corporation's request
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
reasonable expenses and liability, as defined in Official Code of
Georgia Annotated Section 14-2-850, as it may from time to time be
amended, incurred by such Officer in any threatened, pending or
completed proceeding, whether civil, criminal, administrative or
investigative, and whether formal or informal, and shall advance
expenses to the same extent, and subject to the same conditions,
as are provided in Subsection A of this Section with respect to
Directors.
<PAGE>
C. The indemnification under Subsection A of this
Section (unless ordered by a court) shall be effective only when
a determination of eligibility under Subsection A is made:
(i) By the Board of Directors by majority vote of a
quorum consisting of Directors not at the time parties to the
proceeding;
(ii) If a quorum cannot be obtained under subparagraph
(i) of this subsection, by majority vote of a committee duly
designated by the Board of Directors (in which designation
Directors who are parties may participate), consisting solely
of two or more Directors not at the time parties to the
proceeding;
(iii) By special legal counsel:
(a) Selected by the Board of Directors or its
committee in the manner prescribed in subparagraph (i)
or (ii) of this subsection; or
(b) If a quorum of the Board of Directors cannot
be obtained under subparagraph (i) of this subsection
and a committee cannot be designated under subparagraph
(ii) of this subsection, selected by majority vote of
the full Board of Directors (in which selection
Directors who are parties may participate); or
(iv) By the shareholders, but shares owned by or voted
under the control of Directors who are at the time parties to
the proceeding may not be voted on the determination.
D. Expenses incurred in defending a civil or criminal
action, suit or proceeding may be paid by the Corporation in
advance of the final disposition of such action, suit or
proceeding on receipt of a written affirmation of the person
seeking such advance of his good faith belief that he has met the
standard of conduct set forth in Section 14-2-856(b) of the
Official Code of Georgia Annotated or successor provisions, and
receipt of an undertaking by or on behalf of such person to repay
any advances if it is ultimately determined that such person is
not entitled to indemnification.
E. 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 Corporation, is or was serving at the request of the
Corporation 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
<PAGE>
power to indemnify him against the same liability under the
provisions of this section.
F. If the Corporation indemnifies or advances expenses
to a Director, otherwise than by action by the shareholders or by
an insurance carrier pursuant to insurance maintained by the
Corporation, the Corporation shall report the indemnification or
advance in writing to the shareholders with or before the notice
of the next annual shareholders' meeting.
G. The rights to indemnification provided by this
section shall apply to all proceedings described in Subsections A
and B of this Section 7 with respect to actions or omissions of a
Director or Officer that occur while this Section 7 is in effect,
regardless of whether any provision of this Section 7 has been
amended or repealed subsequent to such actions or omissions. All
rights to indemnification under this Section shall be deemed to be
a contract between the Corporation and each Director and Officer
who serves or served in such capacity and shall not be diminished
by any written agreement providing any such person with rights of
indemnification, but shall be in addition to such rights.
H. For purposes of this Section, references to the
"Corporation" shall include, in addition to this Corporation, any
merging or consolidating corporation (including any merging or
consolidating 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 or
Officer of such merging or consolidating corporation, or who is or
was serving at the request of such merging or consolidating
corporation as a Director or Officer of another corporation,
partnership, joint venture, trust or other enterprise, shall stand
in the same position under this Section with respect to this
Corporation as he would if he had served this Corporation in the
same capacity, provided that no indemnification under Subsections
A and B of this Section permitted by this Subsection I shall be
mandatory under this Subsection or any By-Law of this Corporation
without the approval of such indemnification by the Board of
Directors or the Shareholders of this Corporation in the manner
provided in paragraphs (i) and (iii) of Subsection D of this
Section.
I. The indemnification and advancement of expenses
provided by or granted pursuant to this Section shall continue as
to a person who has ceased to be a Director or Officer and shall
inure to the benefit of the heirs, executors and administrators of
such a person.
J. The indemnification and advancement of expenses
provided by or granted pursuant to this Section is intended and
shall be interpreted to provide indemnification and advancement of
expenses to the full extent permitted by the Official Code of
Georgia Annotated but shall not be deemed exclusive of any other
rights, in respect of indemnification or otherwise, to which any
Director or Officer may be entitled under any By-Law, agreement,
<PAGE>
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 such office.
ARTICLE III.
COMMITTEES
SECTION 1. 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 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 powers of the Board of Directors in the management of
the business and affairs of the Corporation conferred by these By-
Laws or otherwise, 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, in all
cases in which specific directions shall not have been given by
the Board of Directors. The Executive Committee shall keep full
and fair accounts of its transactions. All action by the
Executive 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 Executive Committee shall be
filled by the Board of Directors.
SECTION 2. MEETINGS OF EXECUTIVE COMMITTEE. Regular
meetings of the Executive Committee shall be held at such places
within or without the State of Georgia and at such times as the
Executive Committee by vote may from time to time determine and if
so determined no notice thereof need be given. Special meetings of
the Executive 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 Executive Committee by vote at a meeting, or by
two members of the Committee in writing without a meeting, notice
thereof being given to each member of the Committee at least one
day before the meeting, by delivering the same to him personally
or by sending the same to him by telephone or telegraph or, in the
alternative, upon two days notice by mailing same to him at his
<PAGE>
last known mailing address according to the records of the
Corporation. It shall not be requisite to the validity of any
meeting of the Executive Committee that notice thereof shall have
been given to any member of the Committee who attends or to any
member of the 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 and special meetings of
the Executive Committee 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 Charter, by these By-Laws or by the
call of such meeting.
SECTION 3. QUORUM OF EXECUTIVE COMMITTEE. At all meetings
of the Executive 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 Charter, 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 4. COMPENSATION OF EXECUTIVE COMMITTEE. Members of
the Executive Committee may be compensated for their services on
an annual basis and/or they may receive a fixed sum for attendance
at each meeting of the Executive Committee and every adjournment
thereof; such compensation or fixed sum to be fixed from time to
time by resolution of the Board of Directors. The members of the
Executive Committee shall be reimbursed for all reasonable
traveling expenses incurred in attending meetings. Nothing in this
Section shall preclude a member of the Executive Committee from
serving the Corporation in any other capacity and receiving
compensation therefor.
SECTION 4A. 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 that
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
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.
An Honorary Member of the Executive Committee shall not be
included in any calculation of the number of active members of
the Executive Committee authorized and serving under this ARTICLE
III.
<PAGE>
SECTION 5. AUDIT COMMITTEE.
A. 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 outside Directors. The members of
said Audit Committee shall serve at the pleasure of the Board of
Directors or until their successor shall be duly designated. Each
outside 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 such 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 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 audits of the financial statements of the Corporation, their
reports thereon and their recommendations with respect to
accounting, internal controls and other matters, shall convey
information to and from the Board and its independent public
accountants and auditors, shall review the scope of the audits of
the internal auditors and the results of their audits, 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 filled by
the Board of Directors.
B. Regular meetings of the Audit Committee shall be
held at such places within or without the State of Georgia and at
such times as the Audit Committee by vote may from time to time
determine and if so determined no notice thereof need be given.
Special meetings of the Audit 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 Audit Committee by vote at a
meeting, or by two members of the Committee in writing without a
meeting, notice thereof being given to each member of the
Committee at least one day before the meeting, by delivering the
same to him personally or by sending the same to him by telephone
or facsimile or, in the alternative, upon two days notice by
mailing 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 the Audit Committee that notice thereof
shall have been given to any member of the Committee who attends
or to any member of the Committee who, in writing executed and
filed with the records of the meeting either before or after the
<PAGE>
holding thereof, waives such notice. All regular and special
meetings of the Audit Committee 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 Charter, by these By-Laws or by the
call of such meeting.
C. At all meetings of the Audit 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 Charter, 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.
D. Members of the Audit Committee may be compensated
for their services on an annual basis and/or they may receive a
fixed sum for attendance at each meeting of the Audit Committee
and every adjournment thereof; such compensation or fixed sum to
be fixed from time to time by resolution of the Board of
Directors. The members of the Audit Committee shall be reimbursed
for all reasonable traveling expenses incurred in attending
meetings. Nothing in this Section shall preclude a member of the
Audit Committee from serving the Corporation in any other capacity
and receiving compensation therefor.
SECTION 6. N0MINATING AND COMPENSATION COMMITTEE.
A. 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 said 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 such 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 shall review and recommend to the Board of
Directors any changes in the various benefit programs of the
<PAGE>
Corporation; and shall review the level of fees paid and the
manner in which fees are paid to the 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 election to 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 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 Nominating and Compensation Committee shall be filled by the
Board of Directors.
B. Regular meetings of the Nominating and Compensation
Committee shall be held at such places within or without the State
of Georgia and at such times as the Nominating and Compensation
Committee by vote may from time to time determine and if so
determined no notice thereof need be given. Special meetings of
the Nominating and Compensation 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 Nominating and Compensation
Committee by vote at a meeting, or by two members of the Committee
in writing without a meeting, notice thereof being given to each
member of the Committee at least one day before the meeting, by
delivering the same to him personally or by sending the same to
him by telephone or telegraph or, in the alternative, upon two
days notice by mailing 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 the Nominating and
Compensation Committee that notice thereof shall have been given
to any member of the Committee who attends or to any member of the
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 and special meetings of the Nominating
and Compensation Committee 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 Charter, by these By-Laws or by the
call of such meeting.
C. At all meetings of the Nominating and Compensation
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 Charter, 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.
<PAGE>
D. Members of the Nominating and Compensation
Committee may be compensated for their services on an annual basis
and/or they may receive a fixed sum for attendance at each meeting
of the Nominating and Compensation Committee and every adjournment
thereof; such compensation or fixed sum to be fixed from time to
time by resolution of the Board of Directors. The members of the
Nominating and Compensation Committee shall be reimbursed for all
reasonable traveling expenses incurred in attending meetings.
Nothing in this Section shall preclude a member of the Nominating
and Compensation Committee from serving the Corporation in any
other capacity and receiving compensation therefor.
SECTION 7. LONG RANGE PLANNING COMMITTEE.
A. 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 said Long Range Planning Committee shall serve at the
pleasure of the Board of Directors or until their successor 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 such 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 Long Range
Planning 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, said 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.
B. Regular meetings of the Long Range Planning
Committee shall be held at such places within or without the State
of Georgia and at such times as the Long Range Planning Committee
by vote may from time to time determine, and if so determined, no
notice thereof need be given. Special meetings of the Long Range
Planning 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
<PAGE>
or the Long Range Planning Committee by vote at a meeting, or by
two members of the Committee in writing without a meeting, notice
thereof being given to each member of the Committee at least one
day before the meeting, by delivering the same to him personally
or by sending the same to him by telephone or telegraph or, in the
alternative, upon two days notice by mailing 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 the Long Range Planning Committee that notice thereof
shall have been given to any member of the Committee who attends
or to any member of the 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 and special
meetings of the Long Range Planning Committee 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 Charter, by these
By-Laws or by the call of such meeting.
C. At all meetings of the Long Range Planning
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 Charter, 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.
D. Members of the Long Range Planning Committee may be
compensated for their services on an annual basis and/or they may
receive a fixed sum for attendance at each meeting of the Long
Range Planning Committee and every adjournment thereof; such
compensation or fixed sum to be fixed from time to time by
resolution of the Board of Directors. The members of the Long
Range Planning Committee shall be reimbursed for all reasonable
traveling expenses incurred in attending meetings. Nothing in this
Section shall preclude a member of the Long Range Planning
Committee from serving the Corporation in any other capacity and
receiving compensation therefor.
SECTION 8. OTHER COMMITTEES. The Board of Directors may by
resolution designate such other standing or special committees as
it deems desirable and discontinue the same at pleasure. Each such
committee shall have such powers and perform such duties, not
inconsistent with law, as may be assigned to it by the Board of
Directors.
Each of the Executive, Audit, Nominating and Compensation and
Long Range Planning Committees shall be furnished a secretary to
be chosen by each Committee from the employees of the Company.
<PAGE>
ARTICLE IV.
OFFICERS
SECTION 1. EXECUTIVE OFFICERS. The Executive Officers of
the Corporation shall be a President, one or more Senior Vice
Presidents, one or more Vice Presidents, a Secretary, a Treasurer,
and a Controller. If the Board of Directors sees fit, it also may
elect the Chairman of the Board of Directors and one or more
Executive Vice Presidents as Executive Officers of the
Corporation. In the event no Executive Vice President is so
elected, the Board of Directors may, from time to time determine
which, if any, of the Vice Presidents shall perform all or any
part of the duties of an Executive Vice President in addition to
his duties as Vice President. The Chairman of the Board of
Directors and the Executive Officers shall be elected annually by
the Board of Directors at its first meeting following the Annual
Meeting of Shareholders and each such person shall hold office
until the corresponding meeting of the Board of Directors in the
next year and until his successor shall have been duly chosen and
qualified or until he shall have resigned or shall have been
removed in the manner provided in Section II of this Article IV.
Any vacancy in any of the above offices may be filled for the
unexpired portion of the term by the Board of Directors at any
regular or special meeting.
SECTION 2. 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 2.1. CHIEF EXECUTIVE OFFICER. The Board 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 an Executive officer of the
Corporation. 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
<PAGE>
Chief Executive Officer during the absence or disability of the
Chief Executive Officer.
SECTION 3. PRESIDENT. The President shall have immediate
supervision of the affairs of the Corporation and maintain a
strict oversight over all its affairs and interests, and shall be
the Chief Operating Officer of the Corporation. He may sign all
authorized certificates, contracts, bonds, deeds, mortgages, and
other instruments, except in cases in which the signing thereof
shall have been expressly delegated to some other Officer or Agent
of the Corporation. In the event there is no Chairman of the
Board, the President shall also have all the powers and authority
that the Chairman is given in the By-Laws or otherwise. During the
absence or disability of the Chairman, 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 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 4. EXECUTIVE VICE PRESIDENTS, SENIOR VICE
PRESIDENTS, AND 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 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, and each Vice President shall have such
powers and duties as from time to time may be properly delegated
to each of them by the President and such other powers and duties
as from time to time may be assigned to each of them by the Board
of Directors.
SECTION 5. SECRETARY. The Secretary shall keep accurate
minutes of all meetings of the Shareholders, the Board of
Directors and the Executive Committee; he shall see that all
notices of said meetings are given in accordance with the law, the
Charter and these By-Laws; he shall be custodian of said minutes
and of the corporate seal or seals of the Corporation; he shall
see that the corporate seal, when required, is affixed to all
authorized documents and when so affixed may attest the same; and,
in general, he shall have the usual powers and duties incident to
the office of a secretary of a corporation and such other powers
and duties as from time to time may be assigned to him by the
Board of Directors. During his absence or disability, an
Assistant Secretary or a Secretary pro tempore shall exercise all
his powers and discharge all his duties.
<PAGE>
SECTION 6.A. TREASURER.
The Treasurer 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 other 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; and, in general, he shall perform all the duties
incident to the office of a treasurer of a corporation and such
other duties as may be assigned to him by the Board of Directors.
SECTION 6.B. 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 from time to time may be assigned by the Board of
Directors.
SECTION 7. ASSISTANT OFFICERS. The Board of Directors may
elect one or more Assistant Vice Presidents, one or more Assistant
Secretaries and one or more Assistant Treasurers. Each Assistant
Vice President, each Assistant Secretary, and each Assistant
Treasurer, if any, shall hold office for such period and shall
have such authority and perform such duties as the President and
the Board of Directors may prescribe.
SECTION 8. 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 any
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 9. 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 Charter or by these By-Laws to be executed,
acknowledged or verified by any two or more officers.
<PAGE>
SECTION 10. 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.
SECTION 11. REMOVAL. Any officer of the Corporation may be
removed, with or without cause, by vote of a majority of the
entire Board of Directors at a meeting called for that purpose, or
(except in case of an officer elected by the Board of Directors)
by the Executive Committee or by an officer upon whom such power
of removal may have been conferred.
ARTICLE V.
STOCK
SECTION 1. CERTIFICATES. Every Shareholder shall be
entitled to a certificate or certificates of stock of the
Corporation in form prescribed by the Board of Directors, duly
numbered and sealed with the corporate seal of the Corporation,
and setting forth the number and kind of shares represented
thereby to which each Shareholder is entitled. Such certificates
shall be signed by the President or Vice President and by the
Secretary or an Assistant Secretary of the Corporation. The Board
of Directors may also appoint one or more Transfer Agents and/or
Registrars for its stock of any class or classes and may require
stock certificates to be countersigned and/or registered by one or
more of such Transfer Agents and/or Registrars. If certificates
of capital stock of the Corporation are signed by a Transfer Agent
and by a Registrar, the signature of the Officers of the
Corporation and the seal of the Corporation thereon may be
facsimiles, engraved or printed. Any provisions of these By-Laws
with reference to the signing and sealing of stock certificates
shall include, in cases above permitted, such facsimiles. In case
any officer or officers who shall have signed, or whose facsimile
signature or signatures shall have been used on, any such
certificate or certificates, shall cease to be such officer or
officers of the Corporation, whether because of death, resignation
or otherwise, before such certificate or certificates shall have
been delivered by the Corporation, such certificate or
certificates may nevertheless be adopted by the Board of Directors
of the Corporation and be issued and delivered as though the
person or persons who signed such certificate or certificates or
whose facsimile signature or signatures shall have been used
thereon had not ceased to be such officer or officers of the
Corporation.
SECTION 2. TRANSFER OF SHARES. The Board of Directors shall
have power and authority to make all such rules and regulations as
it may deem expedient concerning the issue, transfer and
registration of certificates of stock.
<PAGE>
SECTION 3. RECORD DATES. The Board of Directors is hereby
authorized to fix the time, not exceeding seventy (70) days
preceding the date of any meeting of Shareholders, or the date for
payment of any dividend, or the date for the allotment of rights,
or the date when any change, or conversion, or exchange of capital
stock shall go into effect, during which the books of the
Corporation shall be closed against transfer of stock. In lieu of
providing for the closing of the books against transfers of stock
as aforesaid, the Board of Directors shall have the authority to
fix in advance a date, not exceeding seventy (70) days preceding
(1) the date of any meeting of Shareholders, (2) the date for the
payment of any dividend, (3) the date for the allotment of rights,
or (4) the date when any change or conversion or exchange of
capital stock shall go into effect, as a record date for the
determination of the Shareholders entitled to notice of or to vote
at any such meeting, or entitled to receive payment of any such
dividend, or to any such allotment or rights, or to exercise the
rights in respect of any such change, conversion or exchange of
capital stock, and in such case such Shareholders and only such
Shareholders, as shall be Shareholders of record on the date so
fixed, shall be entitled to such notice of and to vote at such
meeting, or to receive payment of such dividend, or to receive
such allotment of rights, or to exercise such rights, 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. In
any case in which the Board of Directors does not provide for the
closing of the books against transfer of stock as aforesaid, or
fix a record date as aforesaid, the twentieth day preceding the
date of the meeting of Shareholders, the dividend payment date or
the date for the allotment of rights, shall be the record date for
the determination of the Shareholders entitled to notice of and to
vote at such meeting, or to receive such dividends or rights, as
the case may be.
SECTION 4. MUTILATED, LOST OR DESTROYED CERTIFICATES. In
case of the loss, mutilation or destruction of any certificates of
stock of the Corporation, a new or duplicate certificate may be
issued in lieu thereof upon such terms and conditions as the Board
of Directors shall prescribe.
ARTICLE VI.
DIVIDENDS AND FINANCE
SECTION 1. DIVIDENDS. Subject to the provisions of the
Charter, the Board of Directors may in its discretion declare
what, if any, dividends shall be paid upon the stock of the
Corporation, or upon any class of such stock. Except as otherwise
provided by the Charter, dividends shall be payable upon such
dates as the Board of Directors may designate. Before payment of
any dividend there may be set aside out of any funds of the
Corporation available for dividends such sum or sums as the
Directors from time to time in their absolute discretion think
proper as a reserve fund to meet contingencies, or for equalizing
<PAGE>
dividends, or for repairing or maintaining any property of the
Corporation, or for such other purposes as the Directors shall
think conducive to the interests of the Corporation, and the
Directors may abolish any such reserve in the manner in which it
was created.
SECTION 2. CHECKS, DRAFTS, ETC. All checks, drafts, or
orders for the payment of money, notes and other evidences of
indebtedness, issued in the name of the Corporation, shall, unless
otherwise provided by the Board of Directors, be signed by the
Treasurer or an Assistant Treasurer and countersigned by an
Executive Officer other than the Treasurer.
SECTION 3. ANNUAL REPORTS. A report on the affairs of the
Corporation shall be submitted at the annual meeting of the
Shareholders. Such statement shall be prepared by such Executive
Officer of the Corporation as may be designated by the Board of
Directors. If no other Executive Officer is so designated, it
shall be the duty of the President to prepare such statement.
ARTICLE VII.
SUNDRY PROVISIONS
SECTION 1. SEAL. The corporate seal of the Corporation
shall bear the name of the Corporation and the words "INCORPORATED
FEBRUARY 16, 1856 - GEORGIA." If deemed advisable by the Board of
Directors, a duplicate seal or duplicate seals may be provided and
kept for the necessary purposes of the Corporation.
SECTION 2. BOOKS AND RECORDS. The Board of Directors may
determine from time to time whether and, if allowed, when and
under what conditions and regulations the books and records of the
Corporation, or any of them, shall be open to the inspection of
Shareholders, and the rights of Shareholders in this respect are
and shall be limited accordingly, except as otherwise provided by
statute. Under no circumstances shall any Shareholder have the
right to inspect any book or record or receive any statement for
an illegal or improper purpose.
SECTION 3. BONDS. The Board of Directors may require any
officer, agent or employee of the Corporation to give a bond to
the Corporation, conditioned upon the faithful discharge of his
duties, with one or more sureties and in such amount as may be
satisfactory to the Board of Directors.
SECTION 4. VOTING UPON STOCK IN OTHER CORPORATIONS. Any
stock in other corporations, which may from time to time be held
by the Corporation, may be represented and voted at any meeting of
Shareholders of such other corporations by the President or a Vice
President of the Corporation or by proxy executed in the name of
the Corporation by its President or a Vice President with the
corporate seal affixed and attested by the Secretary or an
Assistant Secretary.
<PAGE>
SECTION 5. EXECUTION OF BONDS, DEBENTURES, EVIDENCES OF
DEBT, CHECKS, DRAFTS AND OTHER OBLIGATIONS AND ORDERS FOR PAYMENT
OF MONEY. The signatures of any officer or officers of this
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
or by a transfer agent, or registered by a registrar, other than
the Corporation itself or an employee of the corporation. In case
any officer or officers whose signature or signatures, whether
manual or facsimile, shall have been used on any corporate bond,
debenture or other debt security shall cease to be an officer or
officers of the Corporation for any reason before the same has
been delivered by the Corporation, such bond, debenture or other
debt security may nevertheless be issued and delivered as though
the person or persons whose signatures were used thereon had not
ceased to be such officer or officers. Checks, drafts and other
orders for the payment of money by the Corporation may, if and as
from time to time authorized by the Board of Directors, be signed
with facsimile signatures.
SECTION 6. AMENDMENTS. Except in cases in which a larger or
different vote is required by law, these By-Laws may be altered or
amended or repealed by the affirmative vote of a majority of the
Directors of the Corporation at a regular or special meeting.
SECTION 7. BUSINESS COMBINATIONS. All of the requirements
of Sections 14-2-1131 to 1133, inclusive, of the Official Code of
Georgia Annotated, 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 after the date of the adoption of this By-Law.
<PAGE>
ATLANTA GAS LIGHT COMPANY
EXECUTIVE COMMITTEE
Rules for Holding and Conduct of
Meetings and Keeping of Records
Adopted April 2, 1948
(1) Regular Meetings of the Executive Committee shall be held at
such places, on such dates and at such times as such Committee may
by resolution determine from time to time, and if so determined no
notice thereof need be given.
(2) Special Meetings of the Executive Committee may be held
whenever called by the Chairman of the Committee or any two or
more members of the Committee, by causing notice thereof to be
given to each member of the Committee by the Secretary or an
Assistant Secretary of the Committee, stating the date, time and
place thereof, by mailing such notice to each member of the
Committee at his residence or business address at least two days
before the meeting or by delivering the same to him personally or
by telephoning or telegraphing the same to him at his residence or
business address at least one day before the meeting. It shall not
be requisite to the validity of any meeting of the Committee that
notice thereof shall have been given to any member who attends or
to any member who, in writing, executed and filed with the records
of the meeting, either before or after the holding thereof, waives
such notice. Such Special Meetings shall be held at such places,
on such dates and at such times as the notices thereof or waivers
shall specify.
(3) A majority of the members of the Executive Committee shall
constitute a quorum for the transaction of business and may
adjourn any meeting from time to time and the meeting may be held
as adjourned without further notice. When a quorum is present at
any meeting, the affirmative vote of a majority of the members
present thereat shall decide any question brought before such
meeting, except as otherwise provided by law, by the Charter, by
resolution of the Board of Directors, or by the By-Laws of the
Corporation.
(4) The President of the Corporation shall be ex-officio Chairman
of the Executive Committee and shall preside at meetings of the
Committee. He may call meetings of the Committee whenever he deems
it necessary. In the absence of the Chairman from any meeting of
the Committee, a Temporary Chairman shall be chosen who shall
perform his duties.
(5) The Secretary of the Corporation shall be Secretary of the
Executive Committee and shall record the proceedings of the
meetings of the Executive Committee in books provided for that
purpose. The Assistant Secretaries of the Corporation shall be
Assistant Secretaries of the Executive Committee and, in the
<PAGE>
absence or disability of the Secretary, shall have the powers and
duties of the Secretary of the Committee.
(6) The foregoing rules and any amendments thereto may be
amended, added to, altered or repealed in whole or in part at any
meeting of the Executive Committee by the affirmative vote of a
majority of all the members of the Committee.
<PAGE>
Exhibit 10a
ATLANTA GAS LIGHT COMPANY
NONQUALIFIED SAVINGS PLAN
July, 1995
<PAGE>
ATLANTA GAS LIGHT COMPANY
NONQUALIFIED SAVINGS PLAN
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Account . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Active Participant. . . . . . . . . . . . . . . . . . . 1
1.3 Administrative Committee. . . . . . . . . . . . . . . . 1
1.4 Affiliate . . . . . . . . . . . . . . . . . . . . . . . 1
1.5 Before Tax Account. . . . . . . . . . . . . . . . . . . 1
1.6 Before Tax Contributions. . . . . . . . . . . . . . . . 1
1.7 Before Tax Deferral Election. . . . . . . . . . . . . . 1
1.8 Beneficiary . . . . . . . . . . . . . . . . . . . . . . 1
1.9 Board . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.10 Break in Service. . . . . . . . . . . . . . . . . . . . 2
1.11 Change in Control . . . . . . . . . . . . . . . . . . . 2
1.12 Code. . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.13 Company Contributions . . . . . . . . . . . . . . . . . 5
1.14 Company Stock . . . . . . . . . . . . . . . . . . . . . 5
1.15 Compensation. . . . . . . . . . . . . . . . . . . . . . 5
1.16 Contributions . . . . . . . . . . . . . . . . . . . . . 5
1.17 Controlling Company . . . . . . . . . . . . . . . . . . 5
1.18 Covered Employee. . . . . . . . . . . . . . . . . . . . 5
1.19 Deferral Election . . . . . . . . . . . . . . . . . . . 5
1.20 Disability or Disabled. . . . . . . . . . . . . . . . . 6
1.21 Effective Date. . . . . . . . . . . . . . . . . . . . . 6
1.22 Eligibility Service . . . . . . . . . . . . . . . . . . 6
1.23 Employee. . . . . . . . . . . . . . . . . . . . . . . . 6
1.24 Entry Date. . . . . . . . . . . . . . . . . . . . . . . 6
1.25 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.26 Forfeiture. . . . . . . . . . . . . . . . . . . . . . . 6
1.27 Hour of Service . . . . . . . . . . . . . . . . . . . . 6
1.28 Leave of Absence. . . . . . . . . . . . . . . . . . . . 7
1.29 Matching Account. . . . . . . . . . . . . . . . . . . . 8
1.30 Matching Contributions. . . . . . . . . . . . . . . . . 8
1.31 Maternity or Paternity Leave. . . . . . . . . . . . . . 8
1.32 Named Fiduciary . . . . . . . . . . . . . . . . . . . . 8
1.33 Normal Retirement Age . . . . . . . . . . . . . . . . . 8
1.34 Participant . . . . . . . . . . . . . . . . . . . . . . 8
1.35 Participating Company . . . . . . . . . . . . . . . . . 8
1.36 Plan. . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.37 Plan Year . . . . . . . . . . . . . . . . . . . . . . . 8
1.38 Qualified Separation. . . . . . . . . . . . . . . . . . 8
1.39 Qualified Spousal Waiver. . . . . . . . . . . . . . . . 8
1.40 Spouse or Surviving Spouse. . . . . . . . . . . . . . . 8
1.41 Retirement Savings Plus Plan or RSP . . . . . . . . . . 9
-i-
<PAGE>
1.42 Trust or Trust Agreement. . . . . . . . . . . . . . . . 9
1.43 Trustee . . . . . . . . . . . . . . . . . . . . . . . . 9
1.44 Trust Fund. . . . . . . . . . . . . . . . . . . . . . . 9
1.45 Valuation Date. . . . . . . . . . . . . . . . . . . . . 9
1.46 Year of Vesting Service . . . . . . . . . . . . . . . . 9
ARTICLE II ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . .10
2.1 Initial Eligibility Requirements. . . . . . . . . . . .10
(a) General Rule . . . . . . . . . . . . . . . . . . .10
(b) New Participating Companies. . . . . . . . . . . .10
2.2 Treatment of Interruptions of Service . . . . . . . . .10
(a) Leave of Absence . . . . . . . . . . . . . . . . .10
(b) Reemployment Before Break in Service . . . . . . .10
(c) Reemployment After Break in Service. . . . . . . .10
(d) Reparticipation Upon Reemployment. . . . . . . . .10
2.3 Change in Status. . . . . . . . . . . . . . . . . . . .10
(a) Loss of Covered Employee Status. . . . . . . . . .10
(b) Change to Covered Employee Status. . . . . . . . .11
(c) Change by Participant. . . . . . . . . . . . . . .11
ARTICLE III CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . .12
3.1 Before Tax Contributions. . . . . . . . . . . . . . . .12
(a) Before Tax Contributions . . . . . . . . . . . . .12
(b) Deferral Elections . . . . . . . . . . . . . . . .12
3.2 Matching Contributions. . . . . . . . . . . . . . . . .13
3.3 Form of Contributions . . . . . . . . . . . . . . . . .13
3.4 Timing of Contributions . . . . . . . . . . . . . . . .13
ARTICLE IV PARTICIPANTS' ACCOUNTS; CREDITING AND ALLOCATIONS . . .14
4.1 Establishment of Participants' Accounts . . . . . . . .14
4.2 Allocation and Crediting of Before Tax and Matching
Contributions . . . . . . . . . . . . . . . . . . . . .14
4.3 Allocation and Crediting of Investment Experience . . .14
(a) Determination of Earnings or Losses. . . . . . . .14
(b) Formula For Allocation . . . . . . . . . . . . . .14
4.4 Notice to Participants of Account Balances. . . . . . .15
4.5 Good Faith Valuation Binding. . . . . . . . . . . . . .15
4.6 Errors and Omissions in Accounts. . . . . . . . . . . .15
ARTICLE V INVESTMENT OF ACCOUNTS. . . . . . . . . . . . . . . . .16
5.1 Establishment of Trust Fund . . . . . . . . . . . . . .16
(a) No Trust Required. . . . . . . . . . . . . . . . .16
(b) Rabbi Trust Permitted. . . . . . . . . . . . . . .16
(c) Trust Required Upon Change in Control. . . . . . .16
5.2 Investment of Trust Fund. . . . . . . . . . . . . . . .16
5.3 Acquisition of Company Stock. . . . . . . . . . . . . .16
(a) In General . . . . . . . . . . . . . . . . . . . .16
(b) Stock Rights, Warrants or Options. . . . . . . . .16
5.5 Value of Assets . . . . . . . . . . . . . . . . . . . .17
-ii-
<PAGE>
ARTICLE VI VESTING IN ACCOUNTS . . . . . . . . . . . . . . . . . .18
6.1 General Vesting Rule. . . . . . . . . . . . . . . . . .18
6.2 Vesting Upon Attainment of Normal Retirement Age,
Disability or Death . . . . . . . . . . . . . . . . . .18
6.3 Timing of Forfeitures . . . . . . . . . . . . . . . . .18
ARTICLE VII PAYMENT OF BENEFITS . . . . . . . . . . . . . . . . .19
7.1 Benefit Payments Upon Termination of Service For
Reasons Other Than Death. . . . . . . . . . . . . . . .19
(a) General Rule Concerning Benefits Payable . . . . .19
(b) Timing of Distribution . . . . . . . . . . . . . .19
7.2 Death Benefits. . . . . . . . . . . . . . . . . . . . .19
7.3 Form of Distribution. . . . . . . . . . . . . . . . . .19
7.4 Beneficiary Designation . . . . . . . . . . . . . . . .19
(a) General. . . . . . . . . . . . . . . . . . . . . .19
(b) No Designation or Designee Dead or Missing . . . .20
7.5 Hardship Withdrawals. . . . . . . . . . . . . . . . . .20
(a) Parameters of Hardship Withdrawals . . . . . . . .20
(b) Unforeseeable Emergency. . . . . . . . . . . . . .20
(c) Application for Hardship Withdrawal. . . . . . . .20
(d) Payment of Withdrawal. . . . . . . . . . . . . . .21
7.6 Unclaimed Benefits. . . . . . . . . . . . . . . . . . .21
7.7 Claims. . . . . . . . . . . . . . . . . . . . . . . . .21
(a) Procedure. . . . . . . . . . . . . . . . . . . . .21
(b) Review Procedure . . . . . . . . . . . . . . . . .21
(c) Satisfaction of Claims . . . . . . . . . . . . . .22
ARTICLE VIII ADMINISTRATION. . . . . . . . . . . . . . . . . . . .23
8.1 Administrative Committee; Appointment and Term of
Office. . . . . . . . . . . . . . . . . . . . . . . . .23
8.2 Organization of Administrative Committee. . . . . . . .23
8.3 Powers and Responsibility . . . . . . . . . . . . . . .23
8.4 Records of Administrative Committee . . . . . . . . . .24
8.5 Reporting and Disclosure. . . . . . . . . . . . . . . .24
8.6 Construction of the Plan. . . . . . . . . . . . . . . .25
8.7 Assistants and Advisers . . . . . . . . . . . . . . . .25
8.8 Direction of Trustee. . . . . . . . . . . . . . . . . .25
8.9 Bonding . . . . . . . . . . . . . . . . . . . . . . . .25
8.10 Indemnification . . . . . . . . . . . . . . . . . . . .25
ARTICLE IX ALLOCATION OF AUTHORITY AND RESPONSIBILITIES. . . . . .27
9.1 Controlling Company and Board . . . . . . . . . . . . .27
(a) General Responsibilities . . . . . . . . . . . . .27
(b) Allocation of Authority. . . . . . . . . . . . . .27
(c) Authority of Participating Companies . . . . . . .27
9.2 Administrative Committee. . . . . . . . . . . . . . . .27
9.3 Trustee . . . . . . . . . . . . . . . . . . . . . . . .27
9.4 Limitations on Obligations of Fiduciaries . . . . . . .27
9.5 Delegation. . . . . . . . . . . . . . . . . . . . . . .28
9.6 Multiple Fiduciary Roles. . . . . . . . . . . . . . . .28
-iii-
<PAGE>
ARTICLE X AMENDMENT, TERMINATION AND ADOPTION . . . . . . . . . .29
10.1 Amendment . . . . . . . . . . . . . . . . . . . . . . .29
10.2 Termination . . . . . . . . . . . . . . . . . . . . . .29
(a) Right to Terminate . . . . . . . . . . . . . . . .29
(b) Dissolution of Trust . . . . . . . . . . . . . . .29
10.3 Adoption of the Plan by a Participating Company . . . .29
(a) Procedures for Participation . . . . . . . . . . .29
(b) Authority under Plan . . . . . . . . . . . . . . .30
(c) Contributions to Plan. . . . . . . . . . . . . . .30
(d) Withdrawal from Plan . . . . . . . . . . . . . . .30
ARTICLE XI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . .31
11.1 Nonalienation of Benefits and Spendthrift Clause. . . .31
11.2 Headings. . . . . . . . . . . . . . . . . . . . . . . .31
11.3 Construction, Controlling Law . . . . . . . . . . . . .31
11.4 No Contract of Employment . . . . . . . . . . . . . . .31
11.5 Legally Incompetent . . . . . . . . . . . . . . . . . .31
11.6 Heirs, Assigns and Personal Representatives . . . . . .32
11.7 Unsecured Creditor Rights . . . . . . . . . . . . . . .32
11.8 Legal Action. . . . . . . . . . . . . . . . . . . . . .32
11.9 Severability. . . . . . . . . . . . . . . . . . . . . .32
11.10 Exclusive Benefit; Refund of Contributions. . . . . . .32
11.11 Predecessor Service . . . . . . . . . . . . . . . . . .32
11.12 Plan Expenses . . . . . . . . . . . . . . . . . . . . .32
SCHEDULE A EFFECTIVE DATES FOR PARTICIPATING COMPANIES . . . . . .34
SCHEDULE B ITEMS EXCLUDED FROM "COMPENSATION" UNDER 1.15(3)(i). .35
-iv-
<PAGE>
ATLANTA GAS LIGHT COMPANY
NONQUALIFIED SAVINGS PLAN
Effective as of the 1st day of July, 1995, ATLANTA GAS LIGHT
COMPANY, a corporation duly organized and existing under the laws of the
State of Georgia (the "Controlling Company"), hereby establishes the Atlanta
Gas Light Company Nonqualified Savings Plan (the "Plan").
STATEMENT OF PURPOSE
A. The primary purpose of the Plan is to recognize the
contributions made to the Controlling Company and its participating
affiliates by certain employees and to reward those contributions by
providing eligible employees with an opportunity to accumulate savings for
their future security.
B. The Plan is intended to be an unfunded nonqualified deferred
compensation plan maintained by the Controlling Company primarily for the
purpose of providing deferred compensation for a select group of management
or highly compensated employees (within the meaning of 201(2), 301(a)(3),
401(a)(1) and 4021(b)(6) of the Employee Retirement Income Security Act of
1974, as amended), and shall be construed in all respects in accordance with
such intended purposes.
C. It is anticipated that the Controlling Company may establish a
trust fund to maintain and invest the amounts contributed to the Plan. Any
such trust fund shall be established under a trust agreement which meets the
requirements of a "rabbi trust," pursuant to guidelines issued by the
Internal Revenue Service (the "IRS").
D. Regardless of the establishment of a trust fund, all assets of
the Plan shall remain assets of the Controlling Company and shall be subject
to the general creditors of the Controlling Company. Participants and
Beneficiaries shall have only the rights of unsecured creditors with respect
to any assets of the Plan.
STATEMENT OF AGREEMENT
In order to establish the Plan with the purposes and goals as
hereinabove described, the Controlling Company hereby sets forth the terms
and provisions of the Plan as follows:
<PAGE>
ARTICLE I
DEFINITIONS
For purposes of the Plan, the following terms, when used with an initial
capital letter, shall have the meanings set forth below unless a different
meaning plainly is required by the context.
1.1 Account shall mean, with respect to a Participant or Beneficiary,
the amount of money or other property in the Trust Fund, as is evidenced by
the last balance posted in accordance with the terms of the Plan to the
account record established for such Participant or Beneficiary. The
Administrative Committee may establish and maintain separate subaccounts for
each Participant and Beneficiary, provided allocations are made to such
subaccounts in the manner described in Article IV of the Plan. "Account"
shall refer to the aggregate of all separate subaccounts or to individual,
separate subaccounts, as may be appropriate in context.
1.2 Active Participant shall mean, for any Plan Year (or any portion
thereof), any Covered Employee who is eligible to make contributions to the
Plan for that Plan Year.
1.3 Administrative Committee shall mean the committee designated by the
Board which shall act on behalf of the Controlling Company to administer the
Plan; provided, the Controlling Company may act in lieu of the Administrative
Committee as it deems appropriate or desirable.
1.4 Affiliate shall mean, as of any date, (i) a Participating Company,
and (ii) any company, person or organization which, on such date, (A) is a
member of the same controlled group of corporations [within the meaning of
Code 414(b)] as is a Participating Company; (B) is a trade or business
(whether or not incorporated) which controls, is controlled by or is under
common control with [within the meaning of Code 414(c)] a Participating
Company; (C) is a member of an affiliated service group [as defined in Code
414(m)] which includes a Participating Company; or (D) is required to be
aggregated with a Participating Company pursuant to regulations promulgated
under Code 414(o).
1.5 Before Tax Account shall mean the separate subaccount established
and maintained on behalf of a Participant or his Beneficiary to reflect his
interest in the Trust Fund attributable to his Before Tax Contributions.
1.6 Before Tax Contributions shall mean the amounts paid by each
Participating Company to the Trust Fund at the election of Participants, all
pursuant to the terms of 3.1(a).
1.7 Before Tax Deferral Election shall mean a written election by an
Active Participant directing the Participating Company of which he is an
Employee to withhold a percentage of his current Compensation from his
paychecks and to contribute such withheld amount to the Plan as a Before Tax
Contribution, all as provided in 3.1(a) and 3.1(d).
1.8 Beneficiary shall mean the person(s) designated in accordance with
7.4 to receive any death benefits that may be payable under the Plan upon the
death of a Participant.
1.9 Board shall mean the board of directors of the Controlling Company.
A reference to the board of directors of any other Participating Company
shall specify it as such.
<PAGE>
1.10 Break in Service shall mean, with respect to an Employee, any year
during which such Employee fails to complete more than 500 Hours of Service;
provided, a Break in Service shall not be deemed to have occurred during any
period for which he is granted a Leave of Absence if he returns to the
service of an Affiliate within the time permitted as set forth in the Plan.
A Break in Service shall be deemed to have commenced on the first day of the
year in which it occurs.
For purposes of determining whether or not an Employee has incurred a
Break in Service, an Employee absent from work due to a Maternity or
Paternity Leave shall be credited with (i) the number of Hours of Service
with which he normally would have been credited but for the Maternity or
Paternity Leave, or (ii) if the Administrative Committee is unable to
determine the hours described in (i), 8 Hours of Service for each day of
absence included in the Maternity or Paternity Leave; provided, the maximum
number of Hours of Service credited for purposes of this Section shall not
exceed 501 hours. Hours of Service so credited shall be applied only to the
year in which the Maternity or Paternity Leave begins, unless such Hours of
Service are not required to prevent the Employee from incurring a Break in
Service, in which event such Hours of Service shall be credited to the
Employee in the immediately following year. No Hour of Service shall be
credited due to Maternity or Paternity Leave as described in this Section
unless the Employee furnishes proof satisfactory to the Administrative
Committee (A) that his absence from work was due to a Maternity or Paternity
Leave and (B) of the number of days he was absent due to the Maternity or
Paternity Leave. The Administrative Committee shall prescribe uniform and
nondiscriminatory procedures by which to make the above determinations.
As used in this Section, the term "year" shall mean the same 12-month
period as forms the basis for determining a Year of Vesting Service.
1.11 Change in Control shall mean:
(a) the occurrence of any one of the following events (the terms
used in this Section 1.11 with an initial capital letter shall have the
meanings set forth in Section 1.11(b) unless otherwise defined in the Plan):
(1) The acquisition by a Person, together with Affiliates and
Associates of such Person, whether by purchase, tender offer, exchange,
reclassification, recapitalization, merger or otherwise, of a sufficient
number of shares of Company Stock or Company Stock Equivalents to constitute
the Person an Acquiring Person; or
(2) During any period of two consecutive years, individuals
who at the beginning of such period constitute the Board cease for any reason
to constitute at least a majority thereof, unless the election of each
director who was not a director at the beginning of such period has been
approved in advance by a majority of the Continuing Directors then in office;
or
(3) Any merger or consolidation the result of which is that
less than 90 percent of the common stock, Voting Securities or other equity
interests of the surviving or resulting corporation or other Person shall be
owned in the aggregate by the former shareholders of the Controlling Company,
other than Affiliates or Associates of any party to such merger or
consolidation, as the same shall have existed immediately prior to such
merger or consolidation; or
(4) The sale by the Controlling Company, in one transaction
or a series of related transactions, whether in liquidation, dissolution or
otherwise, of assets or earning power aggregating more than 50 percent of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons.
<PAGE>
(b) The following definitions shall apply in determining when a
Change in Control has occurred:
(1) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall become the
Beneficial Owner of 10 percent or more of the shares of Company Stock then
outstanding, but shall not include the Company, any Subsidiary of the
Controlling Company, or any Person who or which, together with all Affiliates
and Associates of such Person, is the Beneficial Owner of 10 percent or more
of the shares of Company Stock as of the effective date of the Plan, any
employee benefit plan of the Company or of any Subsidiary of the Company [if
approved by a majority of the Continuing Directors], or any Person or entity
organized, appointed or established by the Company for or pursuant to the
terms of any such plan.
(2) "Affiliate" shall have the meaning ascribed to such term
in Rule 12b-2 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended and in effect on the effective date of the
Plan (the "Exchange Act").
(3) "Associate" shall mean:
(A) Any corporation or organization, or parent or
subsidiary of such corporation or organization, of which a Person is an
officer, director or partner or is, directly or indirectly, the Beneficial
Owner of 10 percent or more of any class of equity securities;
(B) Any trust or other estate in which a Person
has a beneficial interest of 10 percent or more or as to which such Person
serves as trustee or in a similar fiduciary capacity; and
(C) Any brother or sister (whether by whole or
half blood), ancestor, lineal descendant or spouse of a Person, or any such
relative of such spouse.
(4) "Beneficial Owner" shall mean, with respect to any
securities, any Person who, together with such Person's Affiliates and
Associates, directly or indirectly:
(A) Has the right to acquire such securities
(whether such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding (whether or not
in writing) or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided, a Person shall not be
deemed the Beneficial Owner of, or to Beneficially Own:
(i) Securities acquired by participation in good
faith in a firm commitment underwriting by a Person engaged in business as an
underwriter of securities until the expiration of 40 days after the date of
such acquisition; or
(ii) Securities tendered pursuant to a tender or
exchange offer made by such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or
exchange; or
<PAGE>
(iii) Securities issuable upon exercise of rights
issued to all shareholders generally, which rights are only exercisable upon
separation from the Company Stock, or securities issuable upon exercise of
rights that have separated from the Company Stock upon the occurrence of
events specified in a rights agreement between the Company and a rights
agent;
(B) Has the right to vote or dispose of or has Beneficial
Ownership (as determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act) of such securities, including pursuant to
any agreement, arrangement or understanding, whether or not in writing;
provided, a Person shall not be deemed the Beneficial Owner of, or to
Beneficially Own, any security under this subparagraph (ii) as a result of an
agreement, arrangement or understanding to vote such security if such
agreement, arrangement or understanding:
(i) Arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the General Rules and
Regulations under the Exchange Act; and
(ii) Is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor report);
or
(C) With respect to any securities which are Beneficially
Owned, directly or indirectly, by any other Person (or any Affiliate or
Associate thereof), has any agreement, arrangement or understanding (whether
or not in writing), for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described herein or disposing of any voting
securities of the Company.
(5) "Company Stock Equivalents" shall mean preferred stock or
other entity securities of the Controlling Company having the right to be
converted by the holders thereof into shares of Company Stock, or having the
right to vote generally for the election of directors and on other matters.
For purposes of determining the total amount of Company Stock and Company
Stock Equivalents owned by any Person, such Company Stock Equivalents shall
be equal to the number of shares into which they may be converted by the
holders thereof, or in the case of securities that are not convertible having
the right to vote, shall be equal to the number of votes they are entitled to
cast in elections for directors.
(6) "Continuing Director" shall mean:
(A) Any member of the Board who is not an Acquiring
Person, or an Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or Associate,
and was a member of the Board prior to the effective date of the Plan; or
(B) Any Person who subsequently becomes a member of the
Board who is not an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, or a representative of an Acquiring Person or of any such
Affiliate or Associate, if such Person's nomination for election or election
to the Board is recommended or approved by a majority of the Continuing
Directors.
<PAGE>
(7) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(8) "Subsidiary" shall mean any corporation, partnership,
joint venture, trust or other entity more than 50 percent of the Voting
Securities of which are Beneficially Owned, directly or indirectly, by a
Person.
(9) "Voting Securities" shall mean any class of then
outstanding shares of stock or other beneficial interests entitled to vote in
election of directors or other Persons charged with management of a Person."
1.12 Code shall mean the Internal Revenue Code of 1986, as amended, and
any succeeding federal tax provisions.
1.13 Company Contributions shall mean Before Tax and Matching
Contributions made by the Participating Companies pursuant to the terms of
the Plan.
1.14 Company Stock shall mean the common stock of the Controlling
Company.
1.15 Compensation shall mean, for any Plan Year, the total of the
amounts described in subsections (1) and (2), minus the amount described in
subsection (3):
(1) all such Participant's wages, as defined in Code 3401(a)
for purposes of income tax withholding at the source, that are reportable
for federal income tax purposes on IRS Form W-2, but determined without
regard to any rules that limit the remuneration included in wages based on
the nature or location of the employment or the services performed (such as
the exception for agricultural labor in Code 3401(a)(2); plus
(2) all before-tax, salary deferral or reduction
contributions made to the Plan and other 401(k) and 125 plans (such as the
Controlling Company's Flex Plan) of the Participating Companies on behalf of
a Participant for such Plan Year [including any contributions made under Code
402(a)(8) or 402(h)]; minus
(3) the following: (i) items listed on the attached Schedule
B, (ii) any other nonperiodic compensation otherwise reportable for federal
income tax purposes, and (iii) any amounts paid or made available to a
Participant during the Plan Year while he is not an Active Participant.
1.16 Contributions shall mean, individually or collectively, the Before
Tax and Matching Contributions permitted under the Plan.
1.17 Controlling Company shall mean the Atlanta Gas Light Company, a
Georgia corporation with its principal office in Atlanta, Georgia, and its
successors.
1.18 Covered Employee shall mean any Employee of a Participating Company
who as of the last day of the second calendar month immediately preceding a
respective Entry Date, had annual base salary in an amount equal to or in
excess of the compensation limit designated by the IRS for determining
"highly compensated employee" under Code 414(q)(1)(C) plus $10,000 (for
example, the 1995 IRS limit is $66,000 plus $10,000 = $76,000).
1.19 Deferral Election shall mean a written election by an Active
Participant directing the Participating Company of which he is an Employee to
withhold a percentage of his current Compensation from his paychecks and to
contribute such withheld amount to the Plan as a Before Tax Contribution, all
as provided in 3.1.
<PAGE>
1.20 Disability or Disabled shall mean that a Participant is (i) wholly
prevented from engaging in any substantially gainful activity by reason of a
medically-determinable physical or mental impairment which can be expected to
result in death or to be of long-continued and indefinite duration, and (ii)
determined eligible to receive long term disability benefits from a
Participating Company's long term disability plan, or if no such plan exists,
upon the discretionary determination by the Administrative Committee that the
employee meets the definition of "disabled" under the Controlling Company's
long-term disability plan.
1.21 Effective Date shall mean July 1, 1995, the date that this Plan
initially shall be effective. The effective date of participation in the
Plan for each Participating Company shall be the date set forth with respect
to the Participating Company in Schedule A hereto.
1.22 Eligibility Service shall mean a 6-consecutive-month period during
which an Employee completes no less than 500 Hours of Service; for this
purpose, the computation period initially shall be the 6-consecutive-month
period beginning on the date the Employee's employment or reemployment
commences and thereafter shall be each subsequent 6-consecutive-month period,
beginning on the first day of each succeeding month.
1.23 Employee shall mean any individual who is a common law employee of
a Participating Company (including officers, but excluding directors who are
not officers or otherwise employees).
1.24 Entry Date shall mean every January 1, April 1, July 1 and October
1 during the period in which the Plan remains in effect.
1.25 ERISA shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.26 Forfeiture shall mean, for any Plan Year, the nonvested dollar
amount of an Account of a former Participant which is removed from the
Account during such Plan Year. Forfeitures shall be used to reduce Matching
Contributions.
1.27 Hour of Service shall mean the increments of time described in
subsection (a) hereof, as modified by subsections (b), (c) and (d) hereof:
(a) (1) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for an Affiliate during the applicable
computation period;
(2) Each hour for which an Employee is paid, or entitled to
payment, by an Affiliate on account of a period of time during which no
duties are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or Leave of Absence; provided:
(A) No more than 501 Hours of Service shall be credited
under this subsection (2) to an Employee for any single continuous period
during which he performs no duties as an employee of an Affiliate (whether or
not such period occurs in a single computation period);
(B) An hour for which an Employee is directly or
indirectly paid, or entitled to payment, on account of a period during which
he performs no duties as an employee of an Affiliate shall not be credited as
an Hour of Service if such payment is made or due under a plan maintained
solely to comply with applicable workers' compensation, unemployment
compensation or disability insurance laws; and
<PAGE>
(C) Hours of Service shall not be credited to an
Employee for a payment which solely reimburses such Employee for medical or
medically related expenses incurred by him.
For purposes of this subsection (2), a payment shall be deemed to be made by
or due from an Affiliate regardless of whether such payment is made by or due
from an Affiliate directly, or indirectly through, among others, a trust fund
or insurer, to which the Affiliate contributes or pays premiums and
regardless of whether contributions made or due to the trust fund, insurer or
other entity are for the benefit of particular employees or are on behalf of
a group of employees in the aggregate; and
(3) Each hour for which back pay, irrespective of mitigation
of damages, is either awarded or agreed to by an Affiliate; provided, the
same Hours of Service shall not be credited both under subsection (1) or
subsection (2), as the case may be, and under this subsection (3); and,
provided further, crediting of Hours of Service for back pay awarded or
agreed to with respect to periods described in subsection (2) shall be
subject to the limitations set forth in that subsection.
(b) Each Employee for whom an Affiliate does not keep records of
actual Hours of Service shall be credited, in accordance with this Section
and applicable regulations promulgated by the Department of Labor, with 45
Hours of Service for each week for which such Employee would be required to
be credited with at least 1 Hour of Service.
(c) The rate or manner used for crediting Hours of Service may be
changed at the direction of the Administrative Committee from time to time so
as to facilitate administration and to equitably reflect the purposes of the
Plan; provided, no change shall be effective as to any Plan Year for which
allocations have been made pursuant to Article IV at the time such change is
made; and, provided further, Hours of Service shall be credited and
determined in compliance with Department of Labor Regulation 2530.200b-2(b)
and (c), 29 CFR Part 2530, as may be amended from time to time, or such other
federal regulations as may from time to time be applicable.
(d) For purposes of this Section, a "computation period" shall
mean the 12-month period that forms the basis for determining an Employee's
Years of Eligibility Service or Years of Vesting Service, whichever is
applicable.
1.28 Leave of Absence shall mean an excused leave of absence granted to
an Employee by an Affiliate in accordance with applicable federal or state
law or the Affiliate's personnel policy. Among other things, Leave of
Absence shall be granted to an Employee:
(a) who leaves the service of an Affiliate, voluntarily or
involuntarily, to enter the Armed Forces of the United States; provided, (i)
the Employee is legally entitled to reemployment under the veteran's
reemployment rights provisions as codified at 38 USC 2021, et seq., its
predecessors and successors; and (ii) the Employee applies for and reenters
service with an Affiliate within the time, in the manner and under the
conditions prescribed by law;
(b) for any time such Employee is drawing workers' compensation
benefits or is sick, disabled or incapacitated, if he is thereby precluded
from properly performing his assigned duties for a temporary period of time;
and
(c) under such other circumstances as the Administrative Committee
shall determine are fair, reasonable and equitable as applied uniformly among
Employees under similar circumstances.
<PAGE>
1.29 Matching Account shall mean the separate subaccount established and
maintained on behalf of a Participant or his Beneficiary to reflect his
interest in the Trust Fund attributable to Matching Contributions.
1.30 Matching Contributions shall mean the amounts paid by each
Participating Company to the Trust Fund as a match to Participants' Before
Tax Contributions, all as pursuant to the terms of 3.2.
1.31 Maternity or Paternity Leave shall mean any period, during which an
Employee is absent from work as an employee of an Affiliate (i) because of
the pregnancy of such Employee; (ii) because of the birth of a child of such
Employee; (iii) because of the placement of a child with such Employee in
connection with the adoption of such child by such Employee; or (iv) for
purposes of such Employee caring for a child immediately after the birth or
placement of such child.
1.32 Named Fiduciary shall mean the Controlling Company, the Board, the
Trustee, and the Administrative Committee.
1.33 Normal Retirement Age shall mean age 65.
1.34 Participant shall mean any person who has an Account under the Plan.
1.35 Participating Company shall mean all companies which have adopted
or hereafter may adopt the Plan for the benefit of their employees and which
continue to participate in the Plan, all as provided in 10.3.
1.36 Plan shall mean the Atlanta Gas Light Company Nonqualified Savings
Plan as contained herein and all amendments thereto. The Plan is intended to
be an unfunded nonqualified deferred compensation plan for the benefit of a
select group of management or highly compensated employees.
1.37 Plan Year shall mean July 1 through December 31, 1995, and
thereafter, each 12-month period beginning on January 1 and ending on
December 31.
1.38 Qualified Separation shall mean a separation by an employee from
the active employ of an Affiliate (i) on or after his obtaining Normal
Retirement Age, (ii) on account of his becoming Disabled, (iii) due to his
death, or (iv) on account of a Leave of Absence or Maternity or Paternity
Leave.
1.39 Qualified Spousal Waiver shall mean a written election executed by
a Spouse, delivered to the Administrative Committee and witnessed by a notary
public or a representative of the Administrative Committee, which consents to
the payment of all or a specified portion of a Participant's death benefit to
a Beneficiary other than such Spouse and which acknowledges that such Spouse
has waived his right to be the Participant's Beneficiary under the Plan. A
Qualified Spousal Waiver shall be valid only with respect to the Spouse who
signs it and shall apply only to the alternative Beneficiary designated
therein, unless the written election expressly permits other designations
without further consent of the Spouse. A Qualified Spousal Waiver shall be
irrevocable unless revoked by the Participant by way of (i) a written
statement executed by the Participant and delivered to the Administrative
Committee or (ii) a written revocation of the nonspouse Beneficiary
designation to which such Spouse has consented; provided, any such revocation
must be received by the Administrative Committee prior to the Participant's
date of death.
1.40 Spouse or Surviving Spouse shall mean, with respect to a
Participant, the person who is treated as married to such Participant under
the laws of the state in which the Participant resides. The determination of
a Participant's Spouse or Surviving Spouse shall be made as of the earlier of
the date as of which benefit payments from the Plan to such Participant are
made or commence (as applicable) or the date of such Participant's death. In
<PAGE>
addition, a Participant's former spouse shall be treated as his Spouse or
Surviving Spouse to the extent provided under a qualified domestic relations
order, as defined in Code 414(p).
1.41 Retirement Savings Plus Plan or RSP shall mean the Atlanta Gas
Light Company Retirement Savings Plus Plan.
1.42 Trust or Trust Agreement shall mean a separate agreement between
the Controlling Company and the Trustee governing the creation of the Trust
Fund, and all amendments thereto.
1.43 Trustee shall mean the party or parties so designated from time to
time pursuant to the Trust Agreement.
1.44 Trust Fund shall mean the total amount of cash and other property
held by the Trustee (or any nominee thereof) at any time under the Trust
Agreement.
1.45 Valuation Date shall mean every March 31, June 30, September 30 and
December 31 during the period in which the Plan remains in effect and each
interim date on which a valuation of the Trust Fund is made.
1.46 Year of Vesting Service shall mean a Plan Year during which an
Employee completes no less than 1,000 Hours of Service; provided:
(a) Years of Vesting Service completed prior to a period in which
the Participant incurred 5 or more consecutive Breaks in Service shall be
disregarded under the Plan if the Participant had no vested interest in his
Account at the time the first such Break in Service commenced and the number
of such consecutive Breaks in Service equals or exceeds the number of his
prior Years of Vesting Service;
(b) Years of Vesting Service completed after a period in which the
Participant had at least 5 consecutive Breaks in Service shall be disregarded
for the purpose of determining his vested interest in that portion of his
Account which accrued before such Breaks in Service; and
(c) For purposes of this Section, employment with an Affiliate
shall be considered employment with the Company, and in the case of a leased
employee (within the meaning of Code 414(n)) of any Affiliate, such leased
employee shall be considered as being a leased employee of the Company.
<PAGE>
ARTICLE II
ELIGIBILITY
2.1 Initial Eligibility Requirements.
(a) General Rule. Except as provided in subsection (b) hereof,
every Covered Employee shall become an Active Participant in the Plan on the
Entry Date coinciding with or next following the date on which he first has
completed Eligibility Service and attained age 21, provided he is a Covered
Employee on such date.
(b) New Participating Companies. For employees of companies that
become Participating Companies after the Effective Date, each Covered
Employee employed by a Participating Company on the date such Participating
Company first becomes a Participating Company shall become an Active
Participant as of such Participating Company's effective date under the Plan,
if, as of the Participating Company's effective date, the Covered Employee
has completed Eligibility Service and has attained age 21.
2.2 Treatment of Interruptions of Service.
(a) Leave of Absence. If a Covered Employee satisfies the
eligibility requirements set forth in 2.1 but is on a Leave of Absence on
the Entry Date on which he otherwise would have become an Active Participant,
he shall become an Active Participant as of the date he subsequently resumes
the performance of duties as a Covered Employee in accordance with the terms
of his Leave of Absence.
(b) Reemployment Before Break in Service. If a Covered Employee
satisfies the eligibility requirements set forth in 2.1, separates from
service with a Participating Company (and all other Participating Companies)
before the Entry Date on which he otherwise would become an Active
Participant, and then is reemployed by a Participating Company prior to
completing a Break in Service, he shall become an Active Participant as of
the later of (i) the Entry Date on which he otherwise would have become an
Active Participant if he had not separated from service or (ii) the date he
is reemployed as a Covered Employee.
(c) Reemployment After Break in Service. If a Covered Employee
satisfies the eligibility requirements set forth in 2.1, separates from
service with a Participating Company (and all other Participating Companies)
before the Entry Date on which he otherwise would become an Active
Participant, and then is reemployed as a Covered Employee by a Participating
Company after completing a Break in Service, he shall become an Active
Participant as of the Entry Date coinciding with or next following his
completion of Eligibility Service after his reemployment following the last
such Break in Service.
(d) Reparticipation Upon Reemployment. If an Active Participant
separates from service with a Participating Company (and all other
Participating Companies), his active participation in the Plan shall cease
immediately, and he again shall become an Active Participant as of the day he
is reemployed as a Covered Employee, regardless of whether he has received a
distribution of his Account balance under the Plan at the time of his
reemployment. However, regardless of whether he again becomes an Active
Participant, he shall continue to be a Participant until he no longer has an
Account under the Plan.
2.3 Change in Status.
(a) Loss of Covered Employee Status. If a Covered Employee (i)
satisfies the eligibility requirements set forth in 2.1, (ii) changes his
employment status (but remains employed) so that he ceases to be a
<PAGE>
Covered Employee before the Entry Date on which he otherwise would become an
Active Participant, and (iii) then again changes his employment status and
becomes a Covered Employee prior to completing a Break in Service, he shall
become an Active Participant as of the later of (A) the Entry Date on which
he otherwise would have become an Active Participant if he had not ceased to
be a Covered Employee or (B) the date he again becomes a Covered Employee.
If an Employee covered by this Section does complete a Break in Service prior
to again becoming a Covered Employee, his entry to participation in the Plan
will be governed by 2.2(c).
(b) Change to Covered Employee Status. If an Employee who first
satisfies the eligibility requirements of 2.1 while he is not a Covered
Employee subsequently changes his employment status so that he becomes a
Covered Employee, he shall become an Active Participant on the Entry Date
coinciding with or next following his change in status. If, on such date, he
has not satisfied the eligibility requirements of 2.1 or is not a Covered
Employee, he shall become an Active Participant on the Entry Date coinciding
with or next following the date he satisfies the eligibility requirements of
2.1; provided, he is a Covered Employee on such Entry Date.
(c) Change by Participant. If an Active Participant changes his
status of employment (but remains employed) so that he is no longer a Covered
Employee, his active participation in the Plan shall cease immediately, and
he shall again become an Active Participant in the Plan as of the day he
again becomes a Covered Employee. However, regardless of whether he again
becomes an Active Participant, he shall continue to be a Participant until he
no longer has an Account under the Plan.
<PAGE>
ARTICLE III
CONTRIBUTIONS
3.1 Before Tax Contributions.
(a) Before Tax Contributions. Each Participating Company shall
contribute to the Plan, on behalf of each Active Participant employed by such
Participating Company and for each payroll period for which such Active
Participant has a Before Tax Deferral Election in effect with such
Participating Company, a Before Tax Contribution in an amount equal to the
amount by which such Active Participant's Compensation has been reduced for
such period pursuant to his Before Tax Deferral Election. The amount of the
Before Tax Contribution shall be determined in percentage increments of such
Active Participant's Compensation for each payroll period. The Active
Participant may elect to reduce his Compensation for any period by a maximum
of 15 percent; provided, that the total of the Active Participant's Before
Tax Contributions to the Plan and to the Retirement Savings Plus Plan shall
not exceed 15 percent of his Compensation.
(b) Deferral Elections. Each Active Participant, who desires that
his Participating Company make a Before Tax Contribution on his behalf, shall
complete and deliver to the Participating Company (or its designee) a Before
Tax Deferral Election. Such Deferral Election shall provide for the
reduction of his Compensation for each payroll period ending or occurring
while he is an Active Participant employed by such Participating Company.
The Administrative Committee, in its sole discretion, shall prescribe the
form of all Deferral Elections and may prescribe such nondiscriminatory terms
and conditions governing the use of the Deferral Elections as it deems
appropriate. Subject to any modifications, additions or exceptions which the
Administrative Committee, in its sole discretion, deems necessary,
appropriate or helpful, the following terms shall apply to Deferral
Elections:
(1) Effective Date. An Active Participant's initial Deferral
Election with a Participating Company shall be effective for the first
payroll period which ends after the Deferral Election is made and after the
effective date of such Deferral Election. If an Active Participant fails to
submit a Deferral Election in a timely manner, he shall be deemed to have
elected a deferral of zero percent. For purposes of this subsection, the
"effective date" of a Deferral Election shall mean: (A) for a Participant
who commences participation in the Plan on an Entry Date, that Entry Date;
and (B) for a Participant who commences or recommences participation in the
Plan on a date other than an Entry Date, the Entry Date next following the
Participant's commencement of participation in the Plan.
(2) Term. Each Active Participant's Deferral Election with a
Participating Company shall remain in effect in accordance with its original
terms until the earlier of (A) the date the Active Participant ceases to be
an Employee of all Participating Companies, (B) the date the Active
Participant revokes such Deferral Election pursuant to the terms of
subsection (b)(3) hereof, or (C) the date the Active Participant or the
Administrative Committee modifies such Deferral Election pursuant to the
terms of subsection (b)(4) or (b)(5) hereof. If a Participant is transferred
from the employment of a Participating Company to the employment of another
Participating Company, his Deferral Election with the first Participating
Company will remain in effect and will apply to his Compensation from the
second Participating Company until the earlier of (A), (B) or (C) of the
preceding sentence.
(3) Revocation. An Active Participant's Deferral Election
with a Participating Company shall terminate upon his ceasing to be an
Employee of such Participating Company. In addition, an Active Participant
may revoke his Before Tax Deferral Election with a Participating Company by
delivering a
<PAGE>
written notice of revocation to such Participating Company (or its designee),
and such revocation shall be effective as soon as practicable after the date
on which it is received by such Participating Company. An Active Participant
who revokes a Before Tax Deferral Election may not enter into a new Deferral
Election until the second calendar quarter following the revocation; such new
Deferral Election shall then be effective for the first payroll period which
begins after the new Deferral Election is made and the applicable March 31,
June 30, September 30 and December 31. The Participant shall deliver the new
Deferral Election to his Participating Company (or its designee) at least 30
days (or such lesser period as the Administrative Committee may permit)
before such March 31, June 30, September 30 and December 31.
(4) Modification by Participant. Effective for the first
payroll period which begins after a new Deferral Election is made and after
any March 31, June 30, September 30 and December 31, an Active Participant
may modify any of his existing Deferral Elections to increase or decrease the
percentage of his Before Tax Contributions by delivering the new Deferral
Election to his Participating Company (or its designee) at least 30 days (or
such lesser period as the Administrative Committee may permit) before such
March 31, June 30, September 30 and December 31.
(5) Compliance with SEC Rule 16b-3. Notwithstanding any
other provision of the Plan, the Administrative Committee shall take any and
all actions as may be necessary with regard to Deferral Elections made by
Participants who are deemed to be "insiders" of the Company under the terms
of the Securities Exchange Act of 1934, as amended (the "1934 Act"), in order
to meet the requirements of Rule 16b-3 and regulations promulgated
thereunder.
3.2 Matching Contributions.
For each Active Participant on whose behalf a Participating Company
has made, with respect to a payroll period, any Before Tax Contributions,
such Participating Company shall make, with respect to such payroll period, a
Matching Contribution equal to 65 percent of the aggregate amount of such
Before Tax Contributions up to the first 6 percent of the Participant's
Compensation (or the difference between the amount of Before Tax
Contributions made by the Participant and matched by the Company under the
Retirement Savings Plus Plan so that only a total of 6 percent of the
Participant's Compensation is matched under both the RSP and the Plan).
Matching Contributions for a Plan Year shall be reduced by the amount of any
Forfeitures available for reallocation during that Plan Year.
3.3 Form of Contributions.
All Contributions shall be paid to the Trustee in the form of cash
or Company Stock or a combination thereof, as the Controlling Company or
Administrative Committee may determine from time to time.
3.4 Timing of Contributions.
Each Participating Company which withholds Before Tax Contributions
from an Active Participant's paychecks pursuant to a Deferral Election shall
pay such Before Tax Contributions to the Trustee as of the earliest date (not
to exceed 90 days from the date on which such amounts otherwise would have
been payable to such Active Participants in cash) on which such Contributions
can reasonably be transmitted.
<PAGE>
ARTICLE IV
PARTICIPANTS' ACCOUNTS; CREDITING AND ALLOCATIONS
4.1 Establishment of Participants' Accounts.
To the extent appropriate, the Administrative Committee shall
establish and maintain, on behalf of each Participant and Beneficiary, an
Account which shall be divided into segregated subaccounts. The subaccounts
shall include Before Tax and Matching Accounts and such other subaccounts as
the Administrative Committee shall deem appropriate or helpful. Each Account
shall be credited with Contributions allocated to such Account and generally
shall be credited with income on investments derived from the assets of such
Accounts. Each Account of a Participant or Beneficiary shall be maintained
until the value thereof has been distributed to or on behalf of such
Participant or Beneficiary.
4.2 Allocation and Crediting of Before Tax and Matching Contributions.
As of each Valuation Date coinciding with or immediately following
the date on which Before Tax and Matching Contributions are received on
behalf of an Active Participant, such Contributions shall be allocated and
credited directly to the appropriate Before Tax and Matching Accounts,
respectively, of such Active Participant. Matching Contributions shall be
allocated to a Participant's Account in the same proportion that his Before
Tax Contributions bears to the total Before Tax Contributions of all
Participants.
4.3 Allocation and Crediting of Investment Experience.
As of each Valuation Date, the Trustee shall determine the fair
market value of the Trust Fund which shall be the sum of the fair market
values of the Investment Funds. The Administrative Committee shall determine
the amount of the Accounts as follows:
(a) Determination of Earnings or Losses. As of each Valuation
Date, the investment earnings (or losses) of each Investment Fund shall be
the amount by which the sum determined in (1) exceeds (or is less than) the
sum determined in (2), where (1) and (2) are as follows:
(1) The sum of (A) the fair market value of such Investment
Fund as of such Valuation Date, plus (B) the amount of any distributions,
withdrawals and transfers to other Investment Funds made since the
immediately preceding Valuation Date from amounts invested in the Investment
Fund; and
(2) The sum of (A) the fair market value of the Investment
Fund as of the immediately preceding Valuation Date, plus (B) Contributions
deposited in and amounts transferred to such Investment Fund since the
immediately preceding Valuation Date.
(b) Formula For Allocation. As of each Valuation Date and prior
to the allocations described in 4.2, and 4.3, each Participant's Account
shall be allocated and shall be credited with a portion of such earnings or
debited with a portion of such losses of each Investment Fund, as determined
in accordance with subsection (a) hereof, in the proportion that (i)(A) the
amount credited to such Account that was invested in such Investment Fund as
of the immediately preceding Valuation Date, minus (B) any distributions,
withdrawals or transfers to other Investment Funds which were made from such
Account since such preceding Valuation Date and on or before such current
Valuation Date, plus (C) any Contributions deposited in and amounts
transferred to such Investment Fund
<PAGE>
from such Account since the preceding Valuation Date; bears to (ii)(A) the
total amount invested in such Investment Fund by all Participants as of the
immediately preceding Valuation Date, minus (B) any distributions,
withdrawals or transfers to other Investment Funds which were made from such
Accounts since such preceding Valuation Date and on or before such current
Valuation Date, plus (C) any Contributions deposited in and amounts
transferred to such Investment Fund since the preceding Valuation Date.
4.4 Notice to Participants of Account Balances.
At least once for each Plan Year, the Administrative Committee
shall cause a written statement of a Participant's Account balance to be
distributed to the Participant.
4.5 Good Faith Valuation Binding.
In determining the value of the Trust Fund and the Accounts, the
Trustee and the Administrative Committee shall exercise their best judgment,
and all such determinations of value (in the absence of bad faith) shall be
binding upon all Participants and Beneficiaries.
4.6 Errors and Omissions in Accounts.
If an error or omission is discovered in the Account of a
Participant or Beneficiary, the Administrative Committee shall cause
appropriate, equitable adjustments to be made as of the Valuation Date
coinciding with or immediately following the discovery of such error or
omission.
<PAGE>
ARTICLE V
INVESTMENT OF ACCOUNTS
5.1 Establishment of Trust Fund.
(a) No Trust Required. The Controlling Company may, but is not
required to, establish a trust fund to hold the assets of the Plan. If no
trust fund is established, benefits shall be payable from the general assets
of the Controlling Company.
(b) Rabbi Trust Permitted. If the Controlling Company desires to
establish a trust fund, all Contributions are to be paid over to the Trustee
to be held in the Trust Fund and invested in accordance with the terms of the
Plan and the Trust Agreement. If a Trust Fund is established, it shall exist
under an agreement constituting a "rabbi trust" agreement, under which all
assets of the Trust Fund shall be considered to be subject to the general
creditors of the Controlling Company, and all Plan participants shall be
unsecured creditors under such Trust Agreement.
(c) Trust Required Upon Change in Control. Upon a Change in
Control of the Controlling Company, the Controlling Company must within ten
(10) business days after such Change in Control, establish and fully fund a
rabbi trust (if and to the extent such a fully funded rabbi trust does not
already exist) to pay all benefits accrued by Participants through that date
under the Plan. Further, upon a Change of Control, an entity other than the
Controlling Company, a Participating Company, any Affiliate or any employee,
officer or director of such companies shall be named by the Board as Trustee
of the rabbi trust. This subsection 5.1(c) of the Plan shall be irrevocable
and may not be amended by the Controlling Company or any other company after
the effective date of the Plan (unless required by law).
5.2 Investment of Trust Fund.
To the extent a trust fund is established, all Contributions to the
Plan shall be invested in Company Stock.
5.3 Acquisition of Company Stock.
(a) In General. To the extent that Contributions and investment
earnings on Company Stock are paid in cash, the Trustee, as directed by the
Administrative Committee, shall effect purchases of Company Stock in
compliance with all applicable securities laws, and in its sole discretion,
may purchase Company Stock in the open market and/or in privately negotiated
transactions with holders of Company Stock and/or the Controlling Company.
All purchases of Company Stock by the Trust will be made at a price or prices
which, in the judgment of the Trustee, do not exceed the fair market value of
such Company Stock as of the date of the purchase.
(b) Stock Rights, Warrants or Options. In the event any rights,
warrants or options are issued on Company Stock, the Trustee may exercise
them for the acquisition of additional Company Stock, to the extent that cash
is then available and allocable to the Company Stock Fund. Any Company Stock
acquired in this fashion will be treated as Company Stock bought by the
Trustee for the net price paid. Any rights, warrants or options on Company
Stock which cannot be exercised for lack of available cash may be sold by the
Trustee (provided the sale
<PAGE>
thereof is reasonably practicable), and the proceeds of such a sale shall be
treated as a current cash dividend received on Company Stock.
5.5 Value of Assets.
For purposes under the Plan for which the value of assets must be
determined, the value of such assets shall be the fair market value. For
purposes of purchasing or selling Company Stock through an exchange on any
day, the fair market value per share of such stock on such day shall be the
price of the stock on the New York Stock Exchange at the time of the purchase
or sale. For all other purposes under the Plan, the fair market value per
share of the Company Stock on any particular day shall be the closing price
of such Company Stock as reported on the New York Stock Exchange Composite
Transaction listing on the day preceding the particular day in question. If,
for any reason, the fair market value per share of Company Stock cannot be
ascertained or is unavailable for a particular day, the fair market value of
such stock shall be determined as of the nearest preceding day on which such
fair market value can be ascertained pursuant to the terms hereof.
<PAGE>
ARTICLE VI
VESTING IN ACCOUNTS
6.1 General Vesting Rule.
All Participants shall at all times be fully vested in their Before
Tax Account. Except as provided in 6.2, the Matching Account of a
Participant shall vest in accordance with the following vesting schedule,
based on the total of the Participant's Years of Vesting Service:
Years of Vesting Service Vested Percentage of
Completed by Participant Participant's Matching Account
Less than 3 Years None
3 Years, but less than 4 50%
4 Years, but less than 5 75%
5 Years or more 100%
6.2 Vesting Upon Attainment of Normal Retirement Age, Disability or
Death.
Notwithstanding 6.1, a Participant's Matching Account shall become
100 percent vested and nonforfeitable upon the occurrence of any of the
following events:
(a) The Participant's attainment of Normal Retirement Age while
still employed as an employee of any Affiliate;
(b) The Participant's death while still employed as an employee of
any Affiliate; or
(c) The Participant's becoming Disabled while still employed as an
employee of any Affiliate.
6.3 Timing of Forfeitures.
If a Participant who is not yet 100 percent vested in his Matching
Account separates from service with all Affiliates, the nonvested amount in
his Matching Account shall be immediately forfeited and shall become
available as a Forfeiture as of the Valuation Date coincident with or
immediately following the date on which such termination occurs; provided, if
a Participant has no vested interest in his Account at the time he separates
from service, he shall be deemed to have received a cash-out distribution at
the time he separates from service, and the forfeiture provisions of this
Section shall apply. If such a Participant resumes employment with an
Affiliate, such forfeited amount shall not be restored.
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ARTICLE VII
PAYMENT OF BENEFITS
7.1 Benefit Payments Upon Termination of Service For Reasons Other Than
Death.
(a) General Rule Concerning Benefits Payable. In accordance with
the terms of subsection (b) hereof, if a Participant separates from service
with all Affiliates for any reason other than death, or if a Participant
becomes Disabled but remains an employee of an Affiliate, he (or his
Beneficiary, if he dies after such separation from service) shall be
entitled to receive a distribution of the total of (i) the entire vested
amount credited to his Account, determined as of the Valuation Date
coincident with or immediately preceding the date payment of such
distribution is to be made, plus (ii) the vested amount of any Contributions
made on his behalf since such Valuation Date. For purposes of this
subsection, the "date payment of such distribution is to be made" refers to
the date established for such purpose by administrative practice, even if
actual payment is made at a later date due to delays in the valuation,
administrative or any other procedure.
(b) Timing of Distribution. Benefits payable to a Participant
under this Section shall be distributed as soon as administratively feasible
after such Participant becomes Disabled or separates from service with all
Affiliates for any reason other than death.
7.2 Death Benefits.
If a Participant dies before payment of his benefits from the Plan
is made, the Beneficiary or Beneficiaries designated by such Participant in
his latest beneficiary designation form filed with the Administrative
Committee in accordance with the terms of 7.4 shall be entitled to receive a
distribution of the total of (i) the entire vested amount credited to such
Participant's Account, determined as of the Valuation Date coincident with or
immediately preceding the date payment of such distribution is to be made,
plus (ii) any Contributions made on such Participant's behalf since such
Valuation Date. For purposes of this subsection, the "date payment of such
distribution is to be made" refers to the date established for such purpose
by administrative practice, even if actual payment is made at a later date
due to delays in the valuation, administrative or any other procedure.
Benefits shall be distributed to such Beneficiary or Beneficiaries within 90
days after the date of the Participant's death if it is administratively
feasible to make such distribution within such 90-day period; if not, as soon
as administratively feasible thereafter within any reasonable period. The
Administrative Committee may direct the Trustee to distribute a Participant's
Account to a Beneficiary without the written consent of such Beneficiary.
7.3 Form of Distribution.
Any distribution to a Participant or his Beneficiary or
Beneficiaries shall be made in the form of a single sum payment. The payment
shall be made in whole shares of Company Stock and cash representing any
fractional shares of stock. Such single sum payment may be divided among
multiple Beneficiaries, as applicable.
7.4 Beneficiary Designation.
(a) General. Participants shall designate and from time to time
may redesignate their Beneficiary or Beneficiaries in such form and manner as
the Administrative Committee may determine. A Participant shall be deemed to
have named his Spouse, if any, as his sole Beneficiary unless his Spouse
consents to the payment of all or a specified portion of the Participant's
death benefit to a Beneficiary other than or in addition to the Spouse in a
manner satisfying the requirements of a Qualified Spousal Waiver and such
other procedures as the Administrative Committee may establish.
Notwithstanding the foregoing, a married Participant may designate a
<PAGE>
nonspouse Beneficiary without a Qualified Spousal Waiver if the Participant
establishes to the satisfaction of the Administrative Committee that a
Qualified Spousal Waiver may not be obtained because his Spouse cannot be
located or such other permissible circumstances exist as the Secretary of the
Treasury may prescribe by regulation. If any Participant dies prior to
receiving his benefits under the Plan, his Account shall be changed to the
name of such deceased Participant's named or deemed Beneficiary or
Beneficiaries.
(b) No Designation or Designee Dead or Missing. In the event that:
(1) a Participant dies without designating a Beneficiary;
(2) the Beneficiary designated by a Participant is not
surviving when a payment is to be made to such person under the Plan, and no
contingent Beneficiary was designated by the Participant; or
(3) the Beneficiary designated by a Participant cannot be
located by the Administrative Committee within 1 year from the date benefits
are to commence to such person; then, in any of such events, the Beneficiary
of such Participant with respect to any benefits that remain payable under
the Plan shall be the Participant's Surviving Spouse, if any, and if not,
then the estate of the Participant.
7.5 Hardship Withdrawals.
(a) Parameters of Hardship Withdrawals. A Participant may make a
withdrawal on account of hardship from his vested Account. For purposes of
this subsection, a withdrawal will be on account of "hardship" only if it is
necessary to respond to an "unforeseeable emergency" resulting in a severe
financial need of the Participant. A withdrawal based on financial hardship
cannot exceed the amount necessary to meet the severe financial need created
by the hardship and not reasonably available from other resources of the
Participant. The Administrative Committee shall make its determination, as
to whether a Participant has suffered a severe financial need as a result of
an unforeseeable emergency and whether it is necessary to use a hardship
withdrawal from the Plan to satisfy that need on the basis of all relevant
facts and circumstances.
(b) Unforeseeable Emergency. For purposes of the Plan, an
unforeseeable emergency shall be a sudden and unexpected illness or accident
of the Participant or of a dependent (as defined in Code Section 152(a)) of
the Participant, loss of the Participant's property due to casualty, or other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant. The circumstances that will
constitute an unforeseeable emergency will depend upon the facts of each
case, but, in any case, payment may not be made to the extent that such
hardship is or may be relieved -
(i) through reimbursement or compensation by insurance or
otherwise;
(ii) by liquidation of the Participant's assets, to the extent
the liquidation of such assets would not itself cause severe financial
hardship; or
(iii) by cessation of deferrals under the Plan.
Examples of events not considered to be unforeseeable emergencies include the
need to send a participant's child to college or the desire to purchase a
home.
(c) Application for Hardship Withdrawal. All applications for
hardship withdrawals shall be in writing on a form provided by the
Administrative Committee and shall contain such information as the
Administrative Committee may reasonably request.
<PAGE>
(d) Payment of Withdrawal. The amount of a hardship withdrawal
shall be paid to a Participant in a single sum in cash as soon as practicable
after the Administrative Committee approves the withdrawal application.
7.6 Unclaimed Benefits.
In the event a Participant becomes entitled to benefits under the
Plan other than death benefits and the Administrative Committee is unable to
locate such Participant (after sending a letter, return receipt requested, to
the Participant's last known address, and after such further diligent efforts
as the Administrative Committee in its sole discretion deems appropriate)
within 1 year from the date upon which he becomes so entitled, the
Administrative Committee shall direct that such benefits be paid to the
Beneficiary of such Participant; provided, if the distribution is payable
upon the termination of the Plan, the Administrative Committee shall not be
required to wait until the end of such 1-year period. If the Participant and
the Beneficiary cannot be located and fail to claim such benefits by the end
of the 5th Plan Year following the Plan Year in which such Participant
becomes entitled to such benefits, then the full Account of the Participant
shall be deemed abandoned and shall be used to reduce the Matching
Contributions of the Participating Company or Companies which employed such
Participant; provided, in the event such Participant or Beneficiary is
located or makes a claim subsequent to the allocation of the abandoned
Account but prior to the expiration of the time within which any such
person's claim to the Account would expire under appropriate state law, then
the amount of the abandoned Account (unadjusted for any investment gains or
losses from the time of abandonment) shall be restored (from abandoned
Accounts, Trust earnings or Contributions made by the Participating Company
or Companies with whom the Participant formerly was employed) and paid to
such Participant or Beneficiary, as appropriate; and, provided, further, the
Administrative Committee, in its sole discretion, may delay the deemed date
of abandonment of any such Account for a period longer than the prescribed 5
Plan Years if it believes that it is in the best interest of the Plan to do
so.
7.7 Claims.
(a) Procedure. Claims for benefits under the Plan may be filed
with the Administrative Committee on forms supplied by the Administrative
Committee. The Administrative Committee shall furnish to the claimant
written notice of the disposition of a claim within 90 days after the
application therefor is filed; provided, if special circumstances require an
extension of time for processing the claim, the Administrative Committee
shall furnish written notice of the extension to the claimant prior to the
termination of the initial 90-day period, and such extension shall not exceed
one additional, consecutive 90-day period. In the event the claim is denied,
the notice of the disposition of the claim shall provide the specific reasons
for the denial, cites of the pertinent provisions of the Plan, and, where
appropriate, an explanation as to how the claimant can perfect the claim
and/or submit the claim for review.
(b) Review Procedure. Any Participant or Beneficiary who has been
denied a benefit, or his duly authorized representative, shall be entitled,
upon request to the Administrative Committee, to appeal the denial of his
claim. To do so, the claimant must make a written request to the
Administrative Committee for further consideration of his position. The
claimant, or his duly authorized representative, may review pertinent
documents related to the Plan and in the Administrative Committee's
possession in order to prepare the appeal. The form containing the request
for review, together with a written statement of the claimant's position,
must be filed with the Administrative Committee no later than 60 days after
receipt of the written notification of denial of a claim provided for in
subsection (a). The Administrative Committee's decision shall be made within
120 days following the filing of the request for review and shall be
communicated in writing to the claimant. If unfavorable, the notice of
decision shall explain the reason or reasons for denial and indicate the
provisions of the Plan or other documents used to arrive at the decision.
<PAGE>
(c) Satisfaction of Claims. Any payment to a Participant or
Beneficiary or to their legal representative or heirs at law, all in
accordance with the provisions of the Plan, shall to the extent thereof be in
full satisfaction of all claims hereunder against the Trustee, the
Administrative Committee and the Controlling Company, any of whom may require
such Participant, Beneficiary, legal representative or heirs at law, as a
condition to such payment, to execute a receipt and release therefor in such
form as shall be determined by the Trustee, the Administrative Committee or
the Controlling Company, as the case may be. If receipt and release shall be
required but execution by such Participant, Beneficiary, legal representative
or heirs at law shall not be accomplished so that the terms of 7.1 and 7.2
may be fulfilled, such benefits may be distributed or paid into any
appropriate court or to such other place as such court shall direct, for
disposition in accordance with the order of such court, and such distribution
shall be deemed to comply with the requirements of 7.1 and 7.2.
<PAGE>
ARTICLE VIII
ADMINISTRATION
8.1 Administrative Committee; Appointment and Term of Office.
(a) The Administrative Committee shall consist of not less than
one member who shall be appointed by and serve at the pleasure of the Board.
(b) The Board shall have the right to remove any member of the
Administrative Committee at any time. A member may resign at any time by
written resignation to the Board. If a vacancy in the Administrative
Committee should occur, a successor may be appointed by the Board.
(c) A written certification shall be given to the Trustee by the
Board of all members of the Administrative Committee together with a specimen
signature of each member. For all purposes hereunder, the Trustee shall be
conclusively entitled to rely upon such certification until the Trustee is
otherwise notified in writing.
8.2 Organization of Administrative Committee.
The Administrative Committee may elect a Chairman and a Secretary
from among its members. In addition to those powers set forth elsewhere in
the Plan, the Administrative Committee may appoint such agents, who need not
be members of such Administrative Committee, as it may deem necessary for the
effective performance of its duties and may delegate to such agents such
powers and duties, whether ministerial or discretionary, as the
Administrative Committee may deem expedient or appropriate. The compensation
of such agents who are not full-time Employees of a Participating Company
shall be fixed by the Administrative Committee within limits set by the Board
and shall be paid by the Controlling Company (to be divided equitably among
the Participating Companies) or from the Trust Fund as determined by the
Administrative Committee. The Administrative Committee shall act by majority
vote. Its members shall serve as such without compensation.
8.3 Powers and Responsibility.
The Administrative Committee shall fulfill the duties of
"administrator" as set forth in 3(16) of ERISA and shall have complete
control of the administration of the Plan hereunder, with all powers
necessary to enable it properly to carry out its duties as set forth in the
Plan and the Trust Agreement. The Administrative Committee shall have the
following duties and responsibilities:
(a) to construe the Plan and to determine all questions that
shall arise thereunder;
(b) to have all powers elsewhere herein conferred upon it;
(c) to decide all questions relating to the eligibility of
Employees to participate in the benefits of the Plan;
(d) to determine the benefits of the Plan to which any Participant
or Beneficiary may be entitled;
(e) to maintain and retain records relating to Participants and
Beneficiaries;
<PAGE>
(f) to prepare and furnish to Participants all information
required under federal law or provisions of the Plan to be furnished to them;
(g) to prepare and furnish to the Trustee sufficient employee
data and the amount of Contributions received from all sources so that the
Trustee may maintain separate accounts for Participants and Beneficiaries and
make required payments of benefits;
(h) to prepare and file or publish with the Secretary of Labor,
the Secretary of the Treasury, their delegates and all other appropriate
government officials all reports and other information required under law to
be so filed or published;
(i) to provide directions to the Trustee with respect to methods
of benefit payment, valuations at dates other than the quarterly Valuation
Date and all other matters where called for in the Plan or requested by the
Trustee;
(j) to engage assistants and professional advisers;
(k) to arrange for fiduciary bonding; and
(l) to provide procedures for determination of claims for
benefits; all as further set forth herein.
8.4 Records of Administrative Committee.
(a) Any notice, direction, order, request, certification or
instruction of the Administrative Committee to the Trustee shall be in
writing and shall be signed by a member of the Administrative Committee. The
Trustee and every other person shall be entitled to rely conclusively upon
any and all such notices, directions, orders, requests, certifications and
instructions received from the Administrative Committee and reasonably
believed to be properly executed, and shall act and be fully protected in
acting in accordance therewith.
(b) All acts and determinations of the Administrative Committee
shall be duly recorded by its Secretary or under his supervision, and all
such records, together with such other documents as may be necessary for the
administration of the Plan, shall be preserved in the custody of such
Secretary.
8.5 Reporting and Disclosure.
The Administrative Committee shall keep all individual and group
records relating to Participants and Beneficiaries and all other records
necessary for the proper operation of the Plan. Such records shall be made
available to the Participating Companies and to each Participant and
Beneficiary for examination during normal business hours except that a
Participant or Beneficiary shall examine only such records as pertain
exclusively to the examining Participant or Beneficiary and the Plan and
Trust Agreement. The Administrative Committee shall prepare and shall file
as required by law or regulation all reports, forms, documents and other
items required by ERISA and every other relevant statute, each as amended,
and all regulations thereunder. This provision shall not be construed as
imposing upon the Administrative Committee the responsibility or authority
for the preparation, preservation, publication or filing of any document
required to be prepared, preserved or filed by the Trustee or by any other
Named Fiduciary to whom such responsibilities are delegated by law or by the
Plan.
<PAGE>
8.6 Construction of the Plan.
The Administrative Committee shall take such steps as are
considered necessary and appropriate to remedy any inequity that results from
incorrect information received or communicated in good faith or as the
consequence of an administrative error. The Administrative Committee shall
interpret the Plan and shall determine the questions arising in the
administration, interpretation and application of the Plan. The
Administrative Committee shall endeavor to act, whether by general rules or
by particular decisions, so as not to discriminate in favor of or against any
person and so as to treat all persons in similar circumstances uniformly.
The Administrative Committee shall correct any defect, reconcile any
inconsistency or supply any omission with respect to the Plan.
8.7 Assistants and Advisers.
(a) The Administrative Committee shall have the right to hire, at
the expense of the Controlling Company (to be divided equitably among the
Participating Companies), such professional assistants and consultants as it,
in its sole discretion, deems necessary or advisable. To the extent that the
costs for such assistants and advisers are not so paid by the Controlling
Company, they shall be paid at the direction of the Administrative Committee
from the Trust Fund as an expense of the Trust Fund.
(b) The Administrative Committee and the Participating Companies
shall be entitled to rely upon all certificates and reports made by an
actuary, accountant or attorney selected pursuant to this 8.7; the
Administrative Committee, the Participating Companies, and the Trustee shall
be fully protected in respect to any action taken or suffered by them in good
faith in reliance upon the advice or opinion of any such actuary, accountant
or attorney; and any action so taken or suffered shall be conclusive upon
each of them and upon all other persons interested in the Plan.
8.8 Direction of Trustee.
The Administrative Committee shall have the power to provide the
Trustee with general investment policy guidelines and directions to assist
the Trustee respecting investments made in compliance with, and pursuant to,
the terms of the Plan.
8.9 Bonding.
The Administrative Committee shall arrange for fiduciary bonding
as is required by law, but no bonding in excess of the amount required by law
shall be required by the Plan.
8.10 Indemnification.
The Administrative Committee and each member of that Committee
shall be indemnified by the Participating Companies against judgment amounts,
settlement amounts (other than amounts paid in settlement to which the
Participating Companies do not consent) and expenses reasonably incurred by
the Committee or each member of the Committee in connection with any action
to which the Committee or any member thereof may be a party (by reason of his
service as a member of the Committee) except in relation to matters as to
which the Committee or any member thereof shall be adjudged in such action to
be personally guilty of gross negligence or willful misconduct in the
performance of its or any member's duties. The foregoing right to
indemnification shall be in addition to such other rights as such Committee
or each Committee member may enjoy as a matter of law or by reason of
insurance coverage of any kind. Rights granted hereunder shall be in
addition to and not in lieu of any rights to indemnification to which such
Committee or each Committee member may be entitled pursuant to the by-laws of
the Controlling Company. Service on the Administrative Committee shall be
deemed in partial fulfillment of
<PAGE>
a Committee member's function as an Employee, officer and/or director of the
Controlling Company or any Participating Company, if he serves in such other
capacity as well.
<PAGE>
ARTICLE IX
ALLOCATION OF AUTHORITY AND RESPONSIBILITIES
9.1 Controlling Company and Board.
(a) General Responsibilities. The Controlling Company, as Plan
sponsor, and the Board each shall serve as a Named Fiduciary having the
following (and only the following) authority and responsibilities:
(1) To appoint the Trustee and the Administrative Committee
and to monitor each of their performances;
(2) To communicate such information to the Trustee and the
Administrative Committee as each needs for the proper performance of its
duties; and
(3) To provide channels and mechanisms through which the
Administrative Committee and/or the Trustee can communicate with Participants
and Beneficiaries.
In addition, the Controlling Company shall perform such duties as are
imposed by law or by regulation and shall serve as Plan Administrator in the
absence of an appointed Administrative Committee.
(b) Allocation of Authority. In the event any of the areas of
authority and responsibilities of the Controlling Company and the Board
overlap with that of any other Plan fiduciary, the Controlling Company and
the Board shall coordinate with such other fiduciaries the execution of such
authority and responsibilities; provided, the decision of the Controlling
Company and the Board with respect to such authority and responsibilities
ultimately shall be controlling.
(c) Authority of Participating Companies. Notwithstanding
anything herein to the contrary, and in addition to the authority and
responsibilities specifically given to the Participating Companies in the
Plan, the Controlling Company, in its sole discretion, may grant the
Participating Companies such authority and charge them with such
responsibilities as the Controlling Company deems appropriate.
9.2 Administrative Committee.
The Administrative Committee shall have the authority and
responsibilities imposed by Article VIII hereof. With respect to said
authority and responsibilities, the Administrative Committee shall be a Named
Fiduciary, and as such, shall have no authority or responsibilities other
than as granted in the Plan or as imposed as a matter of law.
9.3 Trustee.
The Trustee shall be a Named Fiduciary with respect to investment
of Trust Fund assets and shall have the powers and duties set forth in the
Trust Agreement.
9.4 Limitations on Obligations of Fiduciaries.
No fiduciary shall have authority or responsibility to deal with
matters other than as delegated to it under the Plan, under the Trust
Agreement or by operation of law. A fiduciary shall not in any event be
liable for
<PAGE>
breach of fiduciary responsibility or obligation by another fiduciary
(including Named Fiduciaries) if the responsibility or authority for the act
or omission deemed to be a breach was not within the scope of such
fiduciary's authority or delegated responsibility.
9.5 Delegation.
Named Fiduciaries shall have the power to delegate specific
fiduciary responsibilities (other than Trustee responsibilities). Such
delegations may be to officers or Employees of a Participating Company or to
other persons, all of whom shall serve at the pleasure of the Named Fiduciary
making such delegation and, if full-time Employees of a Participating
Company, without compensation. Any such person may resign by delivering a
written resignation to the delegating Named Fiduciary. Vacancies created by
any reason may be filled by the appropriate Named Fiduciary or the assigned
responsibilities may be reabsorbed or redelegated by the Named Fiduciary.
9.6 Multiple Fiduciary Roles.
Any person may hold more than one position of fiduciary
responsibility and shall be liable for each such responsibility separately.
<PAGE>
ARTICLE X
AMENDMENT, TERMINATION AND ADOPTION
10.1 Amendment.
The provisions of the Plan may be amended at any time and from
time to time by the Board; provided:
(a) No amendment shall increase the duties or liabilities of the
Trustee without the consent of such party;
(b) No amendment shall decrease the balance or vested percentage
of an Account or eliminate an optional form of benefit;
(c) No amendment shall be made which would divert any of the
assets of the Trust Fund to any purpose other than the exclusive benefit of
Participants and Beneficiaries, except that the Plan and Trust Agreement may
be amended retroactively and to affect the Accounts of Participants and
Beneficiaries if necessary to cause the Plan and Trust to be qualified and
exempt from taxation under the Code;
(d) Each amendment shall be approved by the Board by resolution;
and
(e) No amendment shall be made to Section 5.1(c) of the Plan
(unless required by law).
10.2 Termination.
(a) Right to Terminate. The Controlling Company expects the Plan
to be continued indefinitely, but it reserves the right to terminate the Plan
or to completely discontinue Contributions to the Plan at any time by action
of the Board. In either event, the Administrative Committee, each
Participating Company and the Trustee shall be promptly advised of such
decision in writing.
(b) Dissolution of Trust. In the event that the Administrative
Committee decides to dissolve the Trust, as soon as practicable following the
termination of the Plan or the Administrative Committee's decision, whichever
is later, the assets under the Plan shall be converted to cash or other
distributable assets, to the extent necessary to effect a complete
distribution of the Trust assets to the Controlling Company.
10.3 Adoption of the Plan by a Participating Company.
(a) Procedures for Participation. The Controlling Company shall
become a Participating Company in the Plan as of July 1, 1995. Georgia Gas
Company, Georgia Gas Service Company and Chattanooga Gas Company also shall
become Participating Companies as of July 1, 1995. Any other company may
become a Participating Company and commence participation in the Plan subject
to the provisions of this subsection. In order for a company to become a
Participating Company, the Administrative Committee must designate such
company as a Participating Company and specify the effective date of such
designation. The name of any company which shall commence participation in
the Plan, along with the effective date of its participation, shall be
recorded on Schedule A hereto which shall be appropriately modified each time
a Participating Company is added or deleted. To adopt the Plan as a
Participating Company, the board of directors of the company must approve a
resolution expressly adopting
<PAGE>
the Plan for the benefit of its eligible employees and accepting designation
as a Participating Company, subject to all of the provisions of this Plan and
of the Trust. The resolution shall specify the date as of which the
designation as a Participating Company shall be effective. A copy of the
resolution (certified if requested) of the board of directors of the adopting
Participating Company shall be provided to the Administrative Committee.
Upon adoption of the Plan by a Participating Company as herein provided, the
Employees of such company shall be eligible to participate in the Plan
subject to the terms hereof and of the resolution of the Administrative
Committee designating the adopting company as such.
(b) Authority under Plan. As long as a Participating Company's
designation as such remains in effect, such Participating Company shall be
bound by, and subject to, all provisions of the Plan and the Trust. The
exclusive authority to amend the Plan and the Trust shall be vested in the
Administrative Committee, and no Participating Company other than the
Controlling Company shall have any right to amend the Plan or the Trust. Any
amendment to the Plan or the Trust adopted by the Administrative Committee
shall be binding upon every Participating Company without further action by
such Participating Company.
(c) Contributions to Plan. As long as each Participating Company
shall be so designated, such Participating Company shall be required to make
Contributions to the Plan at such times and in such amounts as specified in
Article III. The Contributions made (or to be made) to the Plan by the
Participating Companies shall be allocated between and among such companies
in whatever equitable manner or amounts as the Administrative Committee shall
determine.
(d) Withdrawal from Plan. No Participating Company other than
the Controlling Company shall have the right to terminate the Plan. However,
any Participating Company may withdraw from the Plan, with the approval of
the Administrative Committee, by action of its board of directors, provided
such action is communicated in writing to the Administrative Committee. The
withdrawal of a Participating Company shall be effective as of the last day
of the Plan Year which follows receipt of the notice of withdrawal (unless
the Controlling Company consents to a different effective date). In
addition, the Administrative Committee may terminate the designation of a
Participating Company to be effective on such date as the Administrative
Committee specifies. Any such Participating Company which ceases to be a
Participating Company shall be liable for all costs accrued through the
effective date of its withdrawal or termination. In the event of the
withdrawal or termination of a Participating Company as provided in this
Section, such Participating Company shall have no right to direct that assets
of the Plan be transferred to a successor plan for its employees, unless such
transfer is approved by the Controlling Company or Administrative Committee
in its sole discretion.
<PAGE>
ARTICLE XI
MISCELLANEOUS
11.1 Nonalienation of Benefits and Spendthrift Clause.
None of the Accounts, benefits, payments, proceeds or
distributions under the Plan shall be subject to the claim of any creditor of
a Participant or Beneficiary or to any legal process by any creditor of such
Participant or of such Beneficiary; and neither such Participant nor any such
Beneficiary shall have any right to alienate, commute, anticipate or assign
any of the Accounts, benefits, payments, proceeds or distributions under the
Plan except to the extent expressly provided herein. If any Participant
shall attempt to dispose of his Account or the benefits provided for him
hereunder or to dispose of the right to receive such benefits, or, in the
event there should be an effort to seize such Account or benefits by
attachment, execution or other legal or equitable process, such right may
pass and be transferred, at the discretion of the Administrative Committee,
to such person or persons as may be selected by the Administrative Committee
from among the Beneficiaries, if any, theretofore designated by the
Participant, or from the Spouse, children or other dependents of the
Participant, in such shares as the Administrative Committee may appoint. Any
appointments so made by the Administrative Committee may be revoked by it at
any time, and further appointments made by it may include the Participant.
11.2 Headings.
The headings and subheadings in the Plan have been inserted for
convenience of reference only and are to be ignored in any construction of
the provisions hereof.
11.3 Construction, Controlling Law.
In the construction of the Plan, the masculine shall include the
feminine and the feminine the masculine, and the singular shall include the
plural and the plural the singular, in all cases where such meanings would be
appropriate. Unless otherwise specified, any reference to a section shall be
interpreted as a reference to a section of the Plan. The Plan shall be
construed in accordance with the laws of the State of Georgia and applicable
federal laws.
11.4 No Contract of Employment.
Neither the establishment of the Plan, nor any modification
thereof, nor the creation of any fund, trust or account, nor the payment of
any benefits shall be construed as giving any Participant, Employee or any
person whomsoever the right to be retained in the service of any Affiliate,
and all Participants and other Employees shall remain subject to discharge to
the same extent as if the Plan had never been adopted.
11.5 Legally Incompetent.
The Administrative Committee may in its discretion direct that
payment be made and the Trustee shall make payment on such direction,
directly to an incompetent or disabled person, whether incompetent or
disabled because of minority or mental or physical disability, or to the
guardian of such person or to the person having legal custody of such person,
without further liability with respect to or in the amount of such payment
either on the part of any Participating Company, the Administrative Committee
or the Trustee.
<PAGE>
11.6 Heirs, Assigns and Personal Representatives.
The Plan shall be binding upon the heirs, executors,
administrators, successors and assigns of the parties, including each
Participant and Beneficiary, present and future.
11.7 Unsecured Creditor Rights.
No Participant or Beneficiary shall have any right to, or interest
in, any assets of the Trust Fund other than that of a general unsecured
creditor of the Controlling Company.
11.8 Legal Action.
In any action or proceeding involving the assets held with respect
to the Plan or Trust Fund or the administration thereof, the Participating
Companies, the Administrative Committee and the Trustee shall be the only
necessary parties and no Participants, Employees, or former Employees of the
Company, their Beneficiaries or any other person having or claiming to have
an interest in the Plan shall be entitled to any notice of process; provided,
that such notice as is required by the IRS and the Department of Labor to be
given in connection with Plan amendments, termination, curtailment or other
activity shall be given in the manner and form and at the time so required.
Any final judgment which is not appealed or appealable that may be entered in
any such action or proceeding shall be binding and conclusive on the parties
hereto, the Administrative Committee and all persons having or claiming to
have an interest in the Plan.
11.9 Severability.
If any provisions of the Plan shall be held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provisions hereof, and the Plan shall be construed and enforced as if such
provisions had not been included.
11.10 Exclusive Benefit; Refund of Contributions.
No part of the Trust Fund shall be used for or diverted to
purposes other than the exclusive benefit of the Participants and their
Beneficiaries, subject, however, to the payment of all costs of maintaining
and administering the Plan and Trust.
11.11 Predecessor Service.
In the event a Participating Company maintains the Plan as
successor to a predecessor employer who maintained the Plan, service for the
predecessor employer shall be treated as service for the Participating
Company.
11.12 Plan Expenses.
Expenses incurred with respect to administering the Plan and Trust
shall be paid by the Trustee from the Trust Fund only to the extent such
costs are not paid by the Participating Companies or to the extent the
Controlling Company requests that the Trustee reimburse it for its payment of
such expenses.
<PAGE>
IN WITNESS WHEREOF, the Controlling Company has caused this Plan
to be executed by its duly authorized officers and its corporate seal to be
affixed hereto, all as of the date first above written.
ATLANTA GAS LIGHT COMPANY
By: /s/ Robert L. Goocher
Title: Executive Vice President
Attest: /s/ Melanie M. Platt
Title: Corporate Secretary
[CORPORATE SEAL]
<PAGE>
SCHEDULE A
EFFECTIVE DATES FOR PARTICIPATING COMPANIES
Name of Effective Date
Participating Company of Participation
Atlanta Gas Light Company July 1, 1995
Georgia Gas Company (Draketown) July 1, 1995
Chattanooga Gas Company July 1, 1995
Georgia Gas Service Company July 1, 1995
<PAGE>
SCHEDULE B
ITEMS EXCLUDED FROM "COMPENSATION" UNDER 1.15(3)(i)
PAYROLL CODE DESCRIPTION
IMP LIFE Imputed income attributable to employer provided life
insurance over $50,000
AWARDS Pay attributable to Y.E.S. Suggestions, Company awards
BONUS Christmas bonus
BOND PAY N/A
INTEREST Mortgage rate interest differential payments
CAR ALLO End of year allowance for persons with company cars
MOV EXPS Moving expenses
PRO CERT Professional certification bonus for attainment of the
Professional Engineer, Attorney or Certified Public
Accountant designation
3RD PRTY Long term disability benefits paid during the year by 3rd
party administrator and included in gross wages
E B P Employee bonus plan
TUITION Taxable tuition reimbursement
GRIP Group replacement insurance plan premium gross-up
NTUITION Nontaxable tuition reimbursement
MERIT Lump sum merit payments in lieu of salary increases
EXEC PAY Executive allowance fund end of year adjustment
SETTLEMT
(NONPERIODIC) Settlement as a result of arbitration or legal proceedings
RS/NQSTK Restricted non-qualified stock
PROSPECT For employees who have turned in prospects and merchandise has
been sold to them
QSTK OPT Qualified stock option
3PRTY TX Tax paid on behalf of employee by 3rd party administrator on
long term disability
NMOV EXP Nontaxable moving expenses
FLEX $$$ FlexBenefits Plan benefit credits
FLEX IMP Imputed income attributable to employer provided life
insurance over $50,000 under FlexBenefits Plan
SEVERANCE PAY Severance Pay
<PAGE>
Exhibit 10tt
AMENDATORY AGREEMENT
The Amendment is entered into this 1st day of June, 1995, between SOUTHERN
NATURAL GAS COMPANY ("Company") and ATLANTA GAS LIGHT COMPANY ("Shipper").
WITNESSETH:
WHEREAS, Company and Shipper are parties to a firm transportation agreement
dated November 1, 1994, (#904460) for 259,812 Mcf per day, as amended March
1, 1995 ("FT Agreement"); and
WHEREAS, Shipper has released 4,000 Mcf per day of its capacity under the FT
Agreement on a permanent basis to the City of Lawrenceville, Georgia,
effective June 1,1995; and
WHEREAS, the parties wish to memorialize such permanent release through this
amendment to the FT Agreement;
NOW THEREFORE, in consideration for the premises and the mutual promises and
covenants contained herein, the parties agree as follows:
1. The Transportation Demand set forth in Section 1.1 of the FT Agreement
shall be revised to be 255,812 Mcf per day effective June 1,1995.
2. Section 4.1 of the FT Agreement shall be deleted in its entirety and the
following Section 4.1 substituted therefor:
4.1 Subject to the provisions hereof, this Agreement shall become effective
as of the date first hereinabove written and shall be in full force and
effect for a primary term through the following dates: (a) April 30, 2007
for 110,905 Mcf per day of Transportation Demand and June 30, 2007 for 1,000
Mcf per day of Transportation Demand, and shall continue and remain in force
and effect for successive terms of one year each after the end of each
primary term for the specified volume, unless and until cancelled with
respect to the associated volume by either party giving 180 days written
notice to the other party prior to the end of the specified primary term or
any yearly extension thereof; and (b) February 28, 1998, for 143,907 Mcf per
day of Transportation Demand, and shall continue and remain in force and
effect for successive terms of one year each thereafter if the parties
mutually
<PAGE>
Amendatory Agreement
Page 2
agree in writing to each such yearly extension at least 60 days prior to the
end of the primary term or subsequent yearly extension.
3. The current Exhibits A and B to the FT Agreement shall be deleted in their
entirety and the First Revised Exhibits A and B attached hereto effective
June 1, 1995, shall be substituted therefor.
4. Except as provided herein, the FT Agreement shall remain in full force and
effect as written and as amended effective March 1,1995.
5. This Amendment is subject to all applicable, valid laws, orders, rules and
regulations of any governmental entity having jurisdiction over the parties
or the subject matter hereof.
WHEREFORE, the parties have executed this Amendment through their duly
authorized representatives to be effective as of the date first written
above.
ATTEST: SOUTHERN NATURAL GAS COMPANY
By: By: /s/ Joel Anderson
Title: Secretary Title: Vice President
ATTEST: ATLANTA GAS LIGHT COMPANY
By: /s/ Melanie M. Platt By: /s/ Stephen J. Gunther
Title: Corporate Secretary Title: Vice President
<PAGE>
SERVICE AGREEMENT NO: 904460
EXHIBIT A
The legal description of the Receipt Points listed below are more
particularly set forth in Company's Receipt Point catalog, a copy of
which can be requested from Company or accessed through
SoNet, Company's electronic computer system.
MDRQ
RECEIPT POINT: ZONE in Mcf
016400 MAIN PASS 69 PA 490
017250 GRAND BAY - MID-LOUISIANA EXCHANGE PA 4,968
017400 WEST DELTA 75 - AMOCO (wd 73) PA 17,384
017500 WEST DELTA 105 PA 9,794
018400 MAIN PASS 289 - M.P. 290 - SHELL PA 19,219
018450 VKGC - MAIN PASS 289 TO SNG PA 9,794
018600 SOUTH PASS 62 - SHELL PA 3,918
020400 SOUTH PASS 60 PA 9,794
022400 MISSISSIPPI CANYON 194 PA 28,588
022800 CARTHAGE - UPRC PA 10,420
023500 MAIN PASS 129 - HALL HOUSTON PA 2,774
023800 MAIN PASS 116 - MAXUS PA 14,691
024950 MISSISSIPPI CANYON 268 - ORYX EXCHANGE PA 25,347
026600 WEST DELTA 89 - AGIP PA 1,959
026950 SOUTH PASS 62 - BP EXCHANGE PA 7,595
027400 MAIN PASS 69(FEDERAL) PA 4,652
028050 MAIN PASS 181 - DIAMOND SHAMROCK EXCHANGE PA 2,449
030000 BAYOU SALE - TEXACO - HORSESHOE BAYOU PA 4,897
037000 MISSISSIPPI CANYON 311 PA 9,794
037400 MISSISSIPPI CANYON 268A - EXXON PA 2,449
046040 OAK GROVE #5 - TAURUS 2 3,428
046050 OAK GROVE #2 - BASIN 2 2,449
046070 OAK GROVE #4 - AMOCO 2 490
046080 OAK GROVE #6 - AMOCO 2 3,428
605200 SABINE - HENRY HUB TO SNG PA 13,884
605300 SEA ROBIN - ERATH TO SNG PA 20,617
664000 LRC - WHITE CASTLE TO SNG PA 3,763
690500 BOURBON LINE (FGT) FROM WEST DELTA 152 PA 16,777
/s/ Stephen J. Gunther /s/ Joel Anderson
ATLANTA GAS LIGHT COMPANY SOUTHERN NATURAL GAS COMPANY
EFFECTIVE DATE: 9/18/95
<PAGE>
EXHIBIT B
Page No. 1 of 4
ATLANTA GAS LIGHT COMPANY
The legal description of the Delivery Points listed below are more
particularly set forth in the Company's Delivery Point catalogs, a
copy of which can be requested from Company or accessed through
SoNet, Company's electronic computer system. This exhibit reflects
Maximum Daily Delivery Quantities for FT Service Agreement No. 904460
and FT-NN Service Agreement No. 904461
Delivery Delivery MDDQ Meter Capability Cont.
Point Point in Daily Hourly Press.
Description Code MCF (Mcf/d) (Mcf/h) (psig) Notes
- ---------------- -------- -------- ------------------ ------ ----------
ATLANTA AREA 683600 257,814 A
FULTON IND'IAL 910800 48,000 2,000 LINE
EAST POINT 911000 20,000 1,000 LINE 200#-335#
SO. ATLANTA #1 911300 137,000 8,200 250
SEWELL ROAD 911400 270,000 14,000 LINE < 335#, B
SO. ATLANTA #2 911600 172,000 7,165 LINE
MARIETTA 912200 33,000 1,500 REG 300#-500#
HAMPTON 913000 4,200 252 290
AGL FARM TAPS 907000
CHATSWORTH 907600 2,127 LINE
CATOOSA COUNTY 907800 258 300
RINGGOLD 908000 3,814 275
MACON AREA 911500 53,916 A
NORTH MACON 915400 50,000 3,000 LINE
EAST MACON 915500 27,500 1,700 LINE
WEST MACON 915600 14,400 864 LINE
MACON-MVILLE#1 915800 89,395 5,360 LINE D
MACON-MVILLE#2 915900 60,000 3,600 LINE D
JEFFERSONVILLE 918200 2,110 126 LINE > 400#
SAVANNAH AREA 911800 69,327 A
SAVANNAH #1 934600 30,000 1,800 125
SAVANNAH #2 934700 46,500 2,790 LINE > 225 #
SAVANNAH #3 934800 6,000 250 150
SAVANNAH #4 934900 28,800 1,200 LINE > 400 #
GRIFFIN 913400 18,750 290
FORSYTH 917200 2,073 LINE
ZEBULON 917400 555 LINE
THOMASTON 917600 7,406 150
BARNESVILLE 917800 3,567 250
JACKSON 918000 2,385 LINE > 200 #
DANVILLE 918400 350 400
<PAGE>
EXHIBIT B
Page No. 2 of 4
ATLANTA GAS LIGHT COMPANY
The legal description of the Delivery Points listed below are more
particularly set forth in the Company's Delivery Point catalogs, a
copy of which can be requested from Company or accessed through
SoNet, Company's electronic computer system. This exhibit reflects
Maximum Daily Delivery Quantities for FT Service Agreement No. 904460
and FT-NN Service Agreement No. 904461
Delivery Delivery MDDQ Meter Capability Cont.
Point Point in Daily Hourly Press.
Description Code MCF (Mcf/d) (Mcf/h) (psig) Notes
- ---------------- -------- -------- ------------------ ------ ----------
DEXTER 918600 410 400
EASTMAN/C'WELL 918800 2,500 400
ALAMO 919200 9,601 750
HAZLEHURST 919400 2,035 400
BAXLEY 919600 3,821 600
JESUP 919800 14,255 450
BRUNSWICK 920200 14,605 150
WARRENTON 930600 4,429 325
BLYTHE 931600 160 300
SANDERSVILLE 932500 6,430 200
S'FIELD-GUYTON 934200 850 REG 380#-400#
ROME AREA 940013 29,971 A
ROME #1 904200 13,300 800 LINE > 450 #
ROME #2 904300 20,000 1,100 260
ROME #3 904400 11,000 540 LINE > 400#
SHANNON 906200 1,300 70 150 C
AUGUSTA AREA 940016 69,381 A
AUGUSTA #1 932000 53,140 3,188 400
AUGUSTA #2 932100 35,000 1,500 LINE
AUGUSTA #3 932200 18,333 1,100 450
AUGUSTA #4 932300 19,200 800 LINE
NEW-YAT-DAL AR 940018 47,162 A
VILLA RICA 909400 150
DALLAS #2 909800 888 53 300
YATES JUNCTION 910100 9,152 548 LINE
NEWNAN JUNCT'N 910200 8,500 492 LINE
DOUGLASVILLE 910400 LINE > 250#
CALHOUN AREA 940019 4,552 A
CALHOUN #1 907200 9,640 578 190
CALHOUN #2 907300 9,640 402 LINE > 350 #
CTOWN-RMART AR 940020 10,321 A
<PAGE>
EXHIBIT B
Page No. 3 of 4
ATLANTA GAS LIGHT COMPANY
The legal description of the Delivery Points listed below are more
particularly set forth in the Company's Delivery Point catalogs, a
copy of which can be requested from Company or accessed through
SoNet, Company's electronic computer system. This exhibit reflects
Maximum Daily Delivery Quantities for FT Service Agreement No. 904460
and FT-NN Service Agreement No. 904461
Delivery Delivery MDDQ Meter Capability Cont.
Point Point in Daily Hourly Press.
Description Code MCF (Mcf/d) (Mcf/h) (psig) Notes
- ---------------- -------- -------- ------------------ ------ ----------
CEDARTOWN 903600 7,300 430 250
ROCKMART 903800 7,800 470 250
CAR'LLTON AREA 940026 19,209 A
BOWDEN 902800 300
BREMEN 903000 300
CARROLLTON 909000 310
TEMPLE 909200 150
GRAND TOTAL 662,034
ATLANTA GAS LIGHT COMPANY SOUTHERN NATURAL GAS COMPANY
By: /s/ Stephen J. Gunther By: /s/ Joel Anderson
Vice President
Date: September 11, 1995 Date: 9-18-95
<PAGE>
EXHIBIT B
Page No. 4 of 4
ATLANTA GAS LIGHT COMPANY Service Agreement No. 904460
(A) Company's obligation to deliver gas at each measurement station
comprising this Delivery Point is limited to the delivery capacity of
Company's facilities (at the measurement station and of the up-stream
pipelines serving said station) as it exists from time to time.
(B) At a delivery pressure of 300 PSIG, the maximum hourly rate will be
12,000 Mcf; and the maximum daily rate 258,470 Mcf.
(C) Maximum hourly rate to be 80 Mcf upon the installation of additional
meter (after notification by purchaser) when required increased load.
(D) In accordance with ordering Paragraph (B) of the Commission's Order
issued December 27, 1973, in Docket No CP74-7, combined deliveries through
the Macon-Milledgeville No. 1 and No. 2 Meter Stations for any calendar year
may not exceed 20,047,991 Mcf.
<PAGE>
Exhibit 10uu
Service Package: 3947
Amendment: 1
GAS STORAGE CONTRACT
(For Use Under Rate Schedule FS)
This Contract is made as of the 1st day of December 1, 1994, by and between
TENNESSEE GAS PIPELINE COMPANY, a Delaware corporation herein called
"Transporter," and CHATTANOOGA GAS COMPANY, a private corporation of the
State of Tennessee, herein called "Shipper." Transporter and Shipper
collectively shall be referred to herein as the "Parties."
ARTICLE I - SCOPE OF AGREEMENT
Following the commencement of service hereunder, in accordance with the terms
of Transporter's Rate Schedule FS (Market Area), and of this Agreement,
Transporter shall receive for injection for Shipper's account a daily
quantity of gas up to Shipper's Maximum Injection Quantity of 5,682
dekatherms (Dth) and Maximum Storage Quantity (MSQ) of 852,286 (Dth) (on a
cumulative basis) and on demand shall withdraw from Shipper's storage account
and deliver to Shipper a daily quantity of gas up to Shipper's Maximum Daily
Withdrawal Quantity (MDWQ) of 7,741 Dth; provided however, that when
Shipper's storage balance is equal to or less than 30% of the MSQ but greater
than 20% of the MSQ, the Maximum Daily Withdrawal Quantity shall be 6,193
Dth; and provided further, that when Shipper's storage balance is less than
or equal to 20% of the MSQ, the Maximum Daily Withdrawal Quantity shall be
6,193 Dth. For demand charge purposes, the MDWQ for balances greater than
30% of the MSQ shall be used.
ARTICLE II - SERVICE POINT
The point or points at which the gas is to be tendered for delivery by
Transporter to Shipper under this Agreement shall be at the storage service
point at Transporter's Compressor Station 87-Portland.
ARTICLE III - PRICE
1. Shipper agrees to pay Transporter for all natural gas storage
service furnished to Shipper hereunder, including compensation
for system fuel and losses, at Transporter's legally effective
rate or at any effective superseding rate applicable to the type
of service specified herein. Transporter's present legally
effective rate for said service is contained in Transporter's
Tariff as filed with the Federal Energy Regulatory Commission.
2. Shipper agrees to reimburse Transporter for any filing or similar
fees, which have not been previously paid by Shipper, which
Transporter incurs in rendering service hereunder.
<PAGE>
Service Package: 3947
Amendment: 1
3. Shipper agrees that Transporter shall have the unilateral right
to file with the appropriate regulatory authority and make
changes effective in (a) the rates and charges applicable to
service pursuant to Transporter's Rate Schedule FS, (b) the rate
schedule(s) pursuant to which service hereunder is rendered, or
(c) any provision of the General Terms and Conditions applicable
to those rate schedules. Transporter agrees that Shipper may
protest or contest the aforementioned filings, or may seek
authorization from duly constituted regulatory authorities for
such adjustment of Transporter's existing FERC Gas Tariff as may
be found necessary to assure Transporter just and reasonable
rates.
ARTICLE IV - INCORPORATION OF RATE SCHEDULE AND TARIFF PROVISIONS
This agreement shall be subject to the terms of Transporter's Rate
Schedule FS, as filed with the Federal Energy Regulatory Commission,
together with the General Terms and Conditions applicable thereto
(including any changes in said Rate Schedule or General Terms and
Conditions as may from time to time be filed and made effective by
Transporter).
ARTICLE V - TERM OF AGREEMENT
This Agreement shall be effective as of the December 1, 1994 and shall
remain in force and effect until November 1, 2000, ("Primary
Term") and on a month to month basis thereafter unless terminated by
either Party upon at least thirty (30) days prior written notice to
the other Party; provided, however, that if the Primary Term is one
year or more, then unless Shipper elects upon one year's prior
written notice to Transporter to request a lesser extension term,
the Agreement shall automatically extend upon the expiration of the
Primary Terms for a term of five years; and shall automatically
extend for successive five year terms thereafter unless Shipper
provides notice described above in advance of the expiration of a
succeeding term; provided further, if the FERC or other
governmental body having jurisdiction over the service rendered
pursuant to this Agreement authorizes abandonment of such service,
this Agreement shall terminate on the abandonment date permitted by
the FERC or such other governmental body.
This Agreement will terminate upon notice from Transporter in the
event Shipper fails to pay all of the amount of any bill for service
rendered by Transporter hereunder in accordance with the terms and
conditions of Article VI of the General Terms and Conditions of
Transporters Tariff.
ARTICLE VI - NOTICES
Except as otherwise provided in the General Terms and Conditions
applicable to this Agreement, any notice under this Agreement shall
be in writing and mailed to the post office address of the Party
intended to receive the same, as follows:
<PAGE>
Service Package: 3947
Amendment: 1
TRANSPORTER: TENNESSEE GAS PIPELINE COMPANY
P. O. Box 2511
Houston, Texas 77252-2511
Attention: Transportation Services
SHIPPER:
NOTICES: CHATTANOOGA GAS COMPANY
6125 PRESERVATION DRIVE
CHATTANOOGA, TN 37416
Attention: Mr. K. A. Royse
BILLING: CHATTANOOGA GAS COMPANY
C/O ATLANTA GAS LIGHT COMPANY
303 PEACHTREE STREET, N.E
ATLANTA, GA 30308-3249
Attention: MS. LAURIE HENRY
or to such other address as either Party shall designate by formal
written notice to the other.
ARTICLE VII - ASSIGNMENT
Any company which shall succeed by purchase, merger or consolidation
to the properties, substantially as an entirety, of Transporter or
of Shipper, as the case may be, shall be entitled to the rights and
shall be subject to the obligations of its predecessor in title
under this Agreement. Otherwise no assignment of the Agreement or
any of the rights or obligations thereunder shall be made by
Shipper, except pursuant to the General Terms and Conditions of
Transporter's FERC Gas Tariff.
It is agreed, however, that the restrictions on assignment contained
in this article shall not in any way prevent either Party to the
Agreement from pledging or mortgaging its rights thereunder as
security for its indebtedness.
ARTICLE VIII - MISCELLANEOUS
8.1 The interpretation and performance of this Agreement shall be
in accordance with and controlled by the laws of the State of
Texas, without regard to doctrines governing choice of law.
8.2 If any provision of this Agreement is declared null and void,
or voidable, by court of competent jurisdiction, then that
provision will be considered severable at either Party's
option; and if the severability option is exercised, the
remaining provisions of the Agreement shall remain in full
force and effect.
<PAGE>
Service Package: 3947
Amendment: 1
8.3 Unless otherwise expressly provided in this Agreement or
Transporter's Tariff, no modification of or supplement to the
terms and provisions stated in this Agreement shall be or
become effective, until Shipper has submitted a request for
change through the TENN-SPEED 2 System and Shipper has been
notified through TENN-SPEED 2 of Transporter's agreement to
such change.
8.4 Transporter and Shipper agree that this Agreement, as of the
date hereof, shall supersede and cancel the Gas Storage
Contract 3947 Amendment 0 dated November 1, 1993 between
the Parties hereto.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
duly executed by their authorized agents.
TENNESSEE GAS PIPELINE COMPANY
BY /s/ Lawrence G. Williams
LAWRENCE G. WILLIAMS
Agent and Attorney-in-Fact
CHATTANOOGA GAS COMPANY
BY /s/ K A Royse
Title President
Date 11/18/94
<PAGE>
GAS STORAGE SERVICE AGREEMENT
EXHIBIT "A" TO FIRM GAS STORAGE SERVICE AGREEMENT
DATED DECEMBER 1, 1994
BETWEEN
TENNESSEE GAS PIPELINE COMPANY AND
CHATTANOOGA GAS COMPANY
SERVICE PACKAGE: 3947
AMENDMENT: 1
SERVICE PACKAGE MSQ: 852,286
MAXIMUM DAILY INJECTION QUANTITY: 5,682
MAXIMUM DAILY WITHDRAWAL QUANTITY (MDWQ): 7,741
STORAGE BALANCE STORAGE BALANCE MAXIMUM DAILY WITHDRAWAL
FROM DTH TO DTH QUANTITY DTH
Ratchet 0 from 255,687 Ratchet 0 to 852,286 Ratchet 0 7,741
Ratchet I from 170,458 Ratchet I to 255,686 Ratchet I 6,193
Ratchet II from 0 Ratchet II to 170,457 Ratchet II 6,193
SERVICE POINT: Compressor Station 87 - Portland
INJECTION METER: 060020
WITHDRAWAL METER: 070020
<TABLE>
<CAPTION>
STORAGE STORAGE BALANCE BALANCE MDWQ\
METER METER NAME COUNTY ST ZONE I/W LEG FROM TO MDIQ
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
070020 TGP-Portland Sumner TN 01 W 100 Ratchet 0 Ratchet 0 Ratchet 0 7,741
Storage Withdrawal from 255,687 to 852,286
Ratchet I Ratchet I Ratchet I 6,193
from 170,458 to 255,686
Ratchet II Ratchet II Ratchet II 6,193
from 0 to 170,457
060020 TGP-Portland Sumner TN 01 I 100 5,682
Storage Injection
</TABLE>
<PAGE>
Exhibit 10vv
(LETTERHEAD OF TENNESSEE GAS PIPELINE APPEARS HERE)
August 25, 1995
Mr. Ken A. Royse
Chattanooga Gas Company
6125 Preservation Drive
Chattanooga, TN 37416
RE: Amendment No. 2 to
Gas Storage Agreement
Dated December 1, 1994
Service Package No. 3947
Dear Mr. Royse:
Enclosed for retention is a fully executed original of Amendment No. 2 to
Service Package No. 3947 dated December 1, 1994 referenced above.
If you have any questions, please do not hesitate to contact me at (713)
757-3614.
Sincerely,
TENNESSEE GAS PIPELINE COMPANY
/s/ Rick Lisenbe
Rick Lisenbe
Southern Accounts
RL/mdm
Enclosure
<PAGE>
(LETTERHEAD OF TENNESSEE GAS PIPELINE APPEARS HERE)
August 9, 1995
Mr. Ken A. Royse
Chattanooga Gas Company
6125 Preservation Drive
Chattanooga, TN 37416
Re: Amendment No. 2 to Gas Storage
Contract Dated December 1, 1994
Service Package No. 3947
Dear Mr. Royse:
TENNESSEE GAS PIPELINE COMPANY (Transporter) AND CHATTANOOGA GAS COMPANY
(Shipper) agree to amend the above referenced gas storage contract effective
July 1, 1995, to increase the Maximum Daily Withdrawal Quantity (MDWQ) when
Shipper's storage balance is equal to or less than 30% of the Maximum Storage
Quantity (MSQ) and 20% of the MSQ, respectively, as reflected in the attached
Exhibit A-1 and as described below.
The parties agree to amend Article I of the subject gas storage contract as
follows:
Following the commencement of services hereunder, in accordance with the
terms of Transporter's Rate Schedule FS, and of this Agreement, Transporter
shall receive for injection for Shipper's account a daily quantity of gas up
to Shipper's Maximum Injection Quantity of 5,682 dekatherms (Dth) and Maximum
Storage Quantity (MSQ) of 852,286 (Dth) (on a cumulative basis) and on demand
shall withdraw from Shipper's storage account and deliver to Shipper a daily
quantity of gas up to Shipper's Maximum Daily Withdrawal Quantity (MDWQ) of
7,741 Dth; provided however, that when Shipper's storage balance is equal to
or less than 30% of the MSQ but greater than 20% of the MSQ, the Maximum
Daily Withdrawal Quantity shall be 6,314 Dth; and provided further, that when
Shipper's storage balance is less than or equal to 20% of the MSQ, the
Maximum Daily Withdrawal Quantity shall be 6,314 Dth. For demand charge
proposes, the MDWQ for balances greater than 30% of the MSQ shall be used.
Except as amended herein, all terms and provisions of the above referenced
gas storage contract shall remain in full force and effect as written.
If the foregoing is in accordance with your understanding of our agreement,
please so indicate by signing and returning to my attention both originals of
this letter. Upon Tennessee's execution, an original will be forwarded to
you for your files.
<PAGE>
CHATTANOOGA GAS COMPANY
August 9, 1995
Service Package No.: 3947
Amendment Number: 2
Amendment Effective Date: July 1, 1995
Page -2-
Should you have any questions, please do not hesitate to contact me at (713)
757-3614.
Sincerely,
/s/ Rick Lisenbe
Rick Lisenbe
Southern Accounts
ACCEPTED AND AGREED TO
This 23rd day August, 1995.
TENNESSEE GAS PIPELINE COMPANY
By: /s/ Lawrence G. Williams
Title: Agent and Attorney-in-Fact
Date: 8/23/95
ACCEPTED AND AGREED TO
This 15th day August, 1995.
CHATTANOOGA GAS COMPANY
By: /s/ Kenneth A. Royse
Title: President
Date: 8/15/95
<PAGE>
GAS STORAGE SERVICE AGREEMENT
EXHIBIT "A" TO FIRM GAS STORAGE SERVICE AGREEMENT
DATED DECEMBER 1, 1994
BETWEEN
TENNESSEE GAS PIPELINE COMPANY
AND
CHATTANOOGA GAS COMPANY
SERVICE PACKAGE: 3947
AMENDMENT: 2
SERVICE PACKAGE MSQ: 852,286
MAXIMUM DAILY INJECTION QUANTITY: 5,682
MAXIMUM DAILY WITHDRAWAL QUANTITY (MDWQ): 7,741
STORAGE BALANCE STORAGE BALANCE MAXIMUM DAILY WITHDRAWAL
FROM DTH TO DTH QUANTITY DTH
Ratchet 0 from 255,687 Ratchet 0 to 852,286 Ratchet 0 7,741
Ratchet I from 170,458 Ratchet I to 255,686 Ratchet I 6,314
Ratchet II from 0 Ratchet II to 170,457 Ratchet II 6,314
SERVICE POINT: Compressor Station 87 - Portland
INJECTION METER: 060020
WITHDRAWAL METER: 070020
<TABLE>
<CAPTION>
STORAGE STORAGE BALANCE BALANCE MDWQ\
METER METER NAME COUNTY ST ZONE I/W LEG FROM TO MDIQ
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
070020 TGP-Portland Sumner TN 01 W 100 Ratchet 0 Ratchet 0 Ratchet 0 7,741
Storage Withdrawal from 255,687 to 852,286
Ratchet I Ratchet I Ratchet I 6,314
from 170,458 to 255,686
Ratchet II Ratchet II Ratchet II 6,314
from 0 to 170,457
060020 TGP-Portland Sumner TN 01 I 100 5,682
Storage Injection
</TABLE>
<PAGE>
Exhibit 10ww
(LETTERHEAD OF TENNESSEE GAS PIPELINE APPEARS HERE)
September 26, 1995
Mr. Kenneth Royse
Chattanooga Gas Company
6125 Preservation Drive
Chattanooga, TN 37416
Dear Mr. Royse:
Attached for your records is the fully executed amendment to Chattanooga's
TGP Storage Agreement No. 3999 for the increase in deliverability.
If you have questions, please give me a call at (423) 694-1679 or Rick
Lisenbe at (713) 757-3614.
Best regards,
/s/ Margie Klepper
Margie Klepper
Central Region
Attachments
<PAGE>
CHATTANOOGA GAS COMPANY
August 10,1995
Page 2
Contract Number: 3999
Amendment number: 1
Amendment effective date: July 1, 1995
ACCEPTED AND AGREED TO
This 21st Day of August, 1995
TENNESSEE GAS PIPELINE COMPANY
By: /s/ Lawrence G. Williams
Title: Agent and Attorney-in-Fact
ACCEPTED AND AGREED TO
This 15th Day of August, 1995
CHATTANOOGA GAS COMPANY
By: /s/ Kenneth A. Royse, President
Title: Agent and Attorney-in-Fact
<PAGE>
GAS STORAGE SERVICE AGREEMENT
EXHIBIT "A"
AMENDMENT #1 TO GAS STORAGE SERVICE AGREEMENT
DATED November 1, 1993
BETWEEN
TENNESSEE GAS PIPELINE COMPANY
AND
CHATTANOOGA GAS CO
CHATTANOOGA GAS CO
EFFECTIVE DATE OF AMENDMENT: July 1, 1995
RATE SCHEDULE: FS
SERVICE PACKAGE: 3999
SERVICE PACKAGE MSQ: 197,390
WITHDRAWAL QUANTITY: 1,359
INJECTION QUANTITY: 1,316
SERVICE POINT: PORTLAND
METER METER NAME COUNTY ST ZONE I/W LEG TOTAL- BILLABLE-
TQ TQ
060020 TGP-PORTLAND SUMNER TN 01 I 100 1,316 1,316
STORAGE
INJECTION
Total Injection TQ: 1,316 1,316
070020 TGP-PORTLAND SUMNER TN 01 W 100 1,359 1,359
STORAGE
WITHDRAWAL
Total Withdrawal TQ: 1,359 1,359
NUMBER OF INJECTION POINTS: 2
NUMBER OF WITHDRAWAL POINTS: 2
Note: Exhibit "A" is a reflection of the contract and all amendments as of
the amendment effective date.
<PAGE>
GAS STORAGE SERVICE AGREEMENT
EXHIBIT "A-1"
SHOWING REQUESTED CHANGES
AMENDMENT #1 TO GAS STORAGE SERVICE AGREEMENT
DATED November 1, 1993
BETWEEN
TENNESSEE GAS PIPELINE COMPANY
AND
CHATTANOOGA GAS CO
CHATTANOOGA GAS CO
EFFECTIVE DATE OF AMENDMENT: July 1, 1995
RATE SCHEDULE: FS
SERVICE PACKAGE: 3999
SERVICE PACKAGE MSQ: 0
WITHDRAWAL QUANTITY: 26
INJECTION QUANTITY: 0
SERVICE POINT: PORTLAND
METER METER NAME COUNTY ST ZONE I/W LEG TOTAL- BILLABLE-
TQ TQ
Total Injection TQ: 0 0
070020 TGP-PORTLAND SUMNER TN 01 W 100 26 26
STORAGE
WITHDRAWAL
Total Withdrawal TQ: 26 26
NUMBER OF INJECTION POINTS AFFECTED: 1
NUMBER OF WITHDRAWAL POINTS AFFECTED: 2
<PAGE>
Exhibit 10xx
(LETTERHEAD OF ATLANTA GAS LIGHT COMPANY APPEARS HERE)
September 26, 1994
Mr. Les Culpepper
South Georgia Natural Gas Company
Post Office Box 2563
Birmingham, AL 35202 2563
Subject: Notice of Call Back of Firm Transportation Capacity
Dear Mr. Culpepper:
Pursuant to Section 9 of Rate Schedule FT of South
Georgia Natural Gas Company's (South Georgia) FERC Gas Tariff,
Atlanta Gas Light Company (Atlanta) reduced its Transportation
Demand under its FT Service Agreements for Valdosta and
Montezuma with South Georgia during the Summer Season (April
through September) from a combined total of 11,877 Mcf/d to a
combined total of 5,939 Mcf/d. Section 9 provides that a
Shipper that elected to reduce its Transportation Demand has a
one-time right to increase its Summer Season Transportation
Demand for the remaining Summer Seasons under its FT Service
Agreement, up to the Transportation Demand in effect prior to
the reduction. Atlanta hereby gives South Georgia notice of
Atlanta's election to increase its Summer Season Transportation
Demand for the City of Valdosta by 3,628 Mcf/d, for a total
Summer Season Transportation Demand of 8,878 Mcf/d and to
increase its Summer Season Transportation Demand for the City
of Montezuma by 687 Mcf/d, for a total Summer Season
Transportation Demand of 1,377 Mcf/d.
If you have any questions concerning the election, please do not hesitate to
contact the undersigned.
Sincerely,
/s/ Stephen J. Gunther
Vice President
Gas Supply & Federal Regulation
Attachment
<PAGE>
Attachment
FT Shipper's Name: Atlanta Gas Light Company
Summer Transportation Demand: 5,939 Mcf/day
Winter Transportation Demand: 11,877 Mcf/day
The undersigned authorized representative hereby notifies South Georgia
Natural Gas Company that the FT Shipper referenced above elects to increase
the Summer Transportation Demand under its FT Service Agreement to 10,255
Mcf/day for the remaining summer seasons under its FT Service Agreement.
By: /s/ Stephen J. Gunther
Stephen J. Gunther
Title: Vice President
Date: September 26, 1994
(Please return this form by October 1, 1994, to Les Culpepper at South
Georgia Natural Gas Company, P.O. Box 2563, Birmingham, AL 35202-2563;
Fax No. 205-326-2038.)
<PAGE>
Exhibit 10yy
ATLANTA GAS LIGHT CO.
August 10, 1995
Page 2
Contract Number: 3923
Amendment number: 1
Amendment effective date: July 1, 1995
ACCEPTED AND AGREED TO
This 7 Day of Nov, 1995
TENNESSEE GAS PIPELINE COMPANY
By: /s/ Lawrence G. Williams
Title: Agent and Attorney-in-Fact
ACCEPTED AND AGREED TO
This 4th Day of Oct, 1995
ATLANTA GAS LIGHT CO.
By: /s/ Stephen J. Gunther
Title: Agent and Attorney-in-Fact
<PAGE>
GAS STORAGE SERVICE AGREEMENT
EXHIBIT "A"
AMENDMENT #1 TO GAS STORAGE SERVICE AGREEMENT
DATED November 1, 1993
BETWEEN
TENNESSEE GAS PIPELINE COMPANY
AND
ATLANTA GAS LIGHT CO
ATLANTA GAS LIGHT CO
EFFECTIVE DATE OF AMENDMENT: July 1, 1995
RATE SCHEDULE: FS
SERVICE PACKAGE: 3923
SERVICE PACKAGE MSQ: 1,174,258
WITHDRAWAL QUANTITY: 8,699
INJECTION QUANTITY: 7,829
SERVICE POINT: PORTLAND
METER METER NAME COUNTY ST ZONE I/W LEG TOTAL- BILLABLE-
TQ TQ
060020 TGP-PORTLAND SUMNER TN 01 I 100 7,829 7,829
STORAGE
INJECTION
Total Injection TQ: 7,829 7,829
070020 TGP-PORTLAND SUMNER TN 01 W 100 8,699 8,699
STORAGE
WITHDRAWAL
Total Withdrawal TQ: 8,699 8,699
NUMBER OF INJECTION POINTS: 1
NUMBER OF WITHDRAWAL POINTS: 1
Note: Exhibit "A" is a reflection of the contract and all amendments as of
the amendment effective date.
<PAGE>
GAS STORAGE SERVICE AGREEMENT
EXHIBIT "A-1"
SHOWING REQUESTED CHANGES
AMENDMENT #1 TO GAS STORAGE SERVICE AGREEMENT
DATED November 1, 1993
BETWEEN
TENNESSEE GAS PIPELINE COMPANY
AND
ATLANTA GAS LIGHT CO
ATLANTA GAS LIGHT CO
EFFECTIVE DATE OF AMENDMENT: July 1, 1995
RATE SCHEDULE: FS
SERVICE PACKAGE: 3923
SERVICE PACKAGE MSQ: 0
WITHDRAWAL QUANTITY: 166
INJECTION QUANTITY: 0
SERVICE POINT: PORTLAND
METER METER NAME COUNTY ST ZONE I/W LEG TOTAL- BILLABLE-
TQ TQ
Total Injection TQ: 0 0
070020 TGP-PORTLAND SUMNER TN 01 W 100 166 166
STORAGE
WITHDRAWAL
Total Withdrawal TQ: 166 166
NUMBER OF INJECTION POINTS AFFECTED: 0
NUMBER OF WITHDRAWAL POINTS AFFECTED: 1
<PAGE>
Exhibit 10zz
ATLANTA GAS LIGHT CO.
August 10, 1995
Page 2
Contract Number: 3998
Amendment number: 1
Amendment effective date: July 1, 1995
ACCEPTED AND AGREED TO
This 7th Day of Nov, 1995
TENNESSEE GAS PIPELINE COMPANY
By: /s/ Lawrence G. Williams
Title: Agent and Attorney-in-Fact
ACCEPTED AND AGREED TO
This 24th Day of Oct, 1995
ATLANTA GAS LIGHT CO.
By: /s/ Stephen J. Gunther
Title: Agent and Attorney-in-Fact
<PAGE>
GAS STORAGE SERVICE AGREEMENT
EXHIBIT "A"
AMENDMENT #1 TO GAS STORAGE SERVICE AGREEMENT
DATED November 1, 1993
BETWEEN
TENNESSEE GAS PIPELINE COMPANY
AND
ATLANTA GAS LIGHT CO
ATLANTA GAS LIGHT CO
EFFECTIVE DATE OF AMENDMENT: July 1, 1995
RATE SCHEDULE: FS
SERVICE PACKAGE: 3998
SERVICE PACKAGE MSQ: 271,959
WITHDRAWAL QUANTITY: 1,873
INJECTION QUANTITY: 1,814
SERVICE POINT: PORTLAND
METER METER NAME COUNTY ST ZONE I/W LEG TOTAL- BILLABLE-
TQ TQ
060020 TGP-PORTLAND SUMNER TN 01 I 100 1,814 1,814
STORAGE
INJECTION
Total Injection TQ: 1,814 1,814
070020 TGP-PORTLAND SUMNER TN 01 W 100 1,873 1,873
STORAGE
WITHDRAWAL
Total Withdrawal TQ: 1,873 1,873
NUMBER OF INJECTION POINTS: 1
NUMBER OF WITHDRAWAL POINTS: 1
Note: Exhibit "A" is a reflection of the contract and all amendments as of
the amendment effective date.
<PAGE>
GAS STORAGE SERVICE AGREEMENT
EXHIBIT "A-1"
SHOWING REQUESTED CHANGES
AMENDMENT #1 TO GAS STORAGE SERVICE AGREEMENT
DATED November 1, 1993
BETWEEN
TENNESSEE GAS PIPELINE COMPANY
AND
ATLANTA GAS LIGHT CO
ATLANTA GAS LIGHT CO
EFFECTIVE DATE OF AMENDMENT: July 1, 1995
RATE SCHEDULE: FS
SERVICE PACKAGE: 3998
SERVICE PACKAGE MSQ: 0
WITHDRAWAL QUANTITY: 36
INJECTION QUANTITY: 0
SERVICE POINT: PORTLAND
METER METER NAME COUNTY ST ZONE I/W LEG TOTAL- BILLABLE-
TQ TQ
Total Injection TQ: 0 0
070020 TGP-PORTLAND SUMNER TN 01 W 100 36 36
STORAGE
WITHDRAWAL
Total Withdrawal TQ: 36 36
NUMBER OF INJECTION POINTS AFFECTED: 0
NUMBER OF WITHDRAWAL POINTS AFFECTED: 1
<PAGE>
Exhibit 13
Management's Discussion and Analysis of Results
of Operations and Financial Condition
(GRAPH APPEARS HERE)
The following discussion and analysis cover events affecting
the Company's results of operations for each of the three years
ended September 30, 1995, financial condition and factors
expected to impact future operations.
Results of Operations
Fiscal Year 1995 Compared with Fiscal Year 1994
OPERATING REVENUES
Operating revenues decreased 11.4% in 1995 compared with 1994 primarily
due to (1) a decrease in the cost of the Company's gas supply recovered
from customers under the purchased gas provisions of the Company's rate
schedules and (2) decreased volumes of gas sold to firm service customers
as a result of weather that was 17% warmer in 1995 than in 1994. The
decrease in operating revenues was offset partly by an increase of
approximately 37,000 in the number of customers served.
COST OF GAS
Cost of gas decreased 22.4% in 1995 compared with 1994 primarily due to
(1) a decrease in the cost of the Company's gas supply recovered from
customers under the purchased gas provisions of the Company's rate
schedules and (2) decreased volumes of gas sold to firm service customers
as a result of weather that was 17% warmer in 1995 than in 1994.
The Company's cost of gas per therm was 29.7 cents in 1995 and 37.7 cents
in 1994. Variations in the cost of purchased gas are passed through to
customers under the purchased gas adjustment provisions of the Company's
rate schedules. Overrecoveries or underrecoveries of purchased gas costs
are charged or credited to cost of gas and are included in current assets
or liabilities, thereby eliminating the effect that recovery of gas costs
would have on net income otherwise.
OPERATING MARGIN
Operating margin increased 6.1% in 1995 compared with 1994 primarily due
to an increase of approximately 37,000 in the number of customers served.
RESTRUCTURING COSTS
In November 1994, the Company announced a corporate restructuring plan in
response to increased competition and changes in the federal and state
regulatory environments in which the Company operates.
The restructuring plan provided for reengineering the Company's business
processes and streamlining the Company's statewide field organizations.
As a result of restructuring, the Company has combined offices and
established centralized call centers, as well as a network of locations
throughout the Company's service area where customers can pay their
bills. During 1995, the Company reduced the average number of employees
by approximately 500 through voluntary retirement and severance programs
and attrition. The Company, however, anticipates a slight increase in
employees during fiscal 1996.
During 1995, the Company recorded restructuring costs of $61.4 million
related to the early retirement and severance programs and $8.9 million
related to office closings and costs to exit the Company's appliance
merchandising and
22
<PAGE>
real estate investment operations. The Company anticipates that
restructuring costs should be offset within three years with lower
operating costs.
As a result of the restructuring, the Company expects considerable
reductions in future annual operating expenses, which should enable the
Company to be more competitive.
OTHER OPERATING EXPENSES
Operation and maintenance expenses increased 1.7% in 1995 compared with
1994 primarily due to an increase of $17 million in expenses related to
Atlanta Gas Light Company's (AGL's) Integrated Resource Plan (IRP). The
Company is recovering such IRP program expenses through an IRP Cost
Recovery Rider approved by the Georgia Public Service Commission (Georgia
Commission). As a result, IRP program costs do not affect net income.
Operation and maintenance expenses excluding IRP expenses decreased 5.4%
in 1995 compared with 1994 primarily due to (1) decreased labor costs as
a result of the Company's restructuring plan, (2) decreased uncollectible
accounts expenses and (3) decreased regulatory commission expenses.
Depreciation expense increased 5.6% in 1995 compared with 1994 primarily
due to increased depreciable plant in service. The composite
straight-line depreciation rate was approximately 3.2% for utility
property other than transportation equipment during 1995 and 1994.
Income taxes decreased $19.6 million in 1995 compared with 1994 primarily
due to decreased taxable income.
Taxes other than income taxes decreased $0.4 million primarily due to
decreased payroll taxes as a result of the Company's restructuring plan.
The decrease in taxes other than income taxes was offset partly by
increased ad valorem taxes.
OTHER INCOME
Other income decreased $1.8 million in 1995 compared with 1994 primarily
due to (1) decreased income from propane operations as a result of warmer
weather and (2) decreased income from merchandise operations.
INTEREST CHARGES
Total interest charges decreased $0.1 million in 1995 compared with 1994
primarily due to increased allowance for funds used during
construction-debt. Interest on long-term debt decreased $0.5 million in
1995 compared with 1994 due to decreased amounts of long-term debt
outstanding. The decreased interest expense on long-term debt was offset
by a $0.5 million increase in other interest expenses primarily due to
increased interest rates on short-term debt.
NET INCOME AND DIVIDENDS
On November 3, 1995, the Company's Board of Directors declared a
two-for-one stock split of the common stock effected in the form of a
100% stock dividend to shareholders of record on November 17, 1995, and
payable on December 1, 1995. All references to number of shares and to
per share amounts in Management's Discussion and Analysis of Results of
Operations and Financial Condition have been restated retroactively to
reflect the stock split.
Net income for 1995 was $30.8 million, compared with $63.2 million for
1994. Earnings per share of common stock were $0.50 in 1995 compared
with $1.17 in 1994. Dividends per share of common stock were $1.04 for
1995 and 1994. The decreases in net income and earnings per share were
primarily due to the cost of the Company's restructuring plan. The
decreases in net income and earnings per share were offset partly by (1)
increased operating margin as a result of an increase of approximately
37,000 in the number of customers served and (2) decreased other
operating expenses as a result of the Company's restructuring plan.
Excluding charges recorded during 1995 related to the Company's
restructuring plan, net income and earnings per share would have been
approximately $73.9 million and $1.32, respectively.
Fiscal Year 1994 Compared with Fiscal Year 1993
OPERATING REVENUES
Operating revenues increased 6.2% in 1994 compared with 1993 primarily
due to (1) an increase in the cost of the Company's gas supply recovered
from customers under the purchased gas provisions of the Company's rate
schedules, (2) increased volumes of gas sold, (3) revenue increases
granted by the Georgia Commission effective October 1, 1993, and the
Tennessee Public Service Commission (Tennessee Commission) effective
February 1, 1994, and (4) an increase of approximately 35,000 in the
number of customers served. Although weather was 10% warmer in 1994 than
in 1993, volumes of gas sold to firm service customers increased slightly
due to (1) increased consumption by firm service customers and (2) the
increase of approximately 35,000 in the number of customers served.
COST OF GAS
Cost of gas increased 5.1% in 1994 compared with 1993 primarily due to
(1) an increase in the cost of the Company's gas supply recovered from
customers under the purchased gas provisions of the Company's rate
schedules and (2) increased volumes of gas sold.
The Company's cost of gas per therm was 37.7 cents in 1994 and 36.8 cents
in 1993. Variations in the cost of purchased gas are passed through to
customers under the purchased gas adjustment provisions of the Company's
rate schedules.
OPERATING MARGIN
Operating margin increased 7.9% in 1994 compared with 1993 primarily due
to (1) increased consumption by firm service customers, (2) revenue
increases granted by the Georgia and Tennessee Commissions and (3) an
increase of approximately 35,000 in the number of customers served.
OTHER OPERATING EXPENSES
Operation and maintenance expenses increased 9.8% in 1994 compared with
1993 primarily due to increased (1) postretirement benefits other than
pensions, (2) costs for labor and labor-related expenses and (3) outside
services employed. Also, in 1994 the Company began to incur expenses for
programs associated with the
23
<PAGE>
implementation of AGL's IRP. The Company is recovering such IRP program
expenses through an IRP Cost Recovery Rider approved by the Georgia
Commission. As a result, IRP program costs do not affect net income.
Operation and maintenance expenses excluding IRP expenses increased 8.5%
in 1994, compared with 1993.
Depreciation expense decreased 5.8% in 1994 compared with 1993 due to the
implementation of updated depreciation rates approved by the Georgia
Commission, effective October 1, 1993. The composite straight-line
depreciation rate was approximately 3.2% for utility property other than
transportation equipment during 1994 and 3.6% during 1993.
Income taxes increased $5.8 million in 1994 compared with 1993 primarily
due to an increase in taxable income.
Taxes other than income taxes increased $2.1 million in 1994 compared
with 1993 primarily due to increased ad valorem taxes.
OTHER INCOME
Other income decreased $1.1 million in 1994 compared with 1993 primarily
due to decreased interest income associated with income tax refunds
related to prior years.
INTEREST CHARGES
Interest charges increased 1.9% in 1994 compared with 1993 primarily due
to increased amounts of short-term debt outstanding.
NET INCOME AND DIVIDENDS
Net income for 1994 was $63.2 million, compared with $57.5 million for
1993. Earnings per share of common stock were $1.17 in 1994, compared
with $1.08 in 1993. Dividends per share of common stock were $1.04 for
1994 and 1993. The increases in 1994 net income and earnings per share
were primarily due to (1) increased consumption by firm service
customers, (2) rate increases granted by the Georgia and Tennessee
Commissions and (3) an increase of approximately 35,000 in the number of
customers served. The increases were offset partly by (1) increased other
operating expenses, (2) increased interest charges and (3) decreased
other income.
Impact of Inflation
Inflation impacts the prices the Company must pay for labor and other
goods and services required for operation, maintenance and capital
improvements. The Company's rate schedules include purchased gas
adjustment provisions that permit the increases in gas costs to be passed
on to its customers. Increases in costs not recovered through the
purchased gas adjustment provisions and other similar rate riders must be
recovered through timely filings for rate relief.
Financial Condition
Financing
COMMON STOCK
On June 16, 1995, the Company issued and sold approximately 3 million
shares of its common stock at $16.81 per share, resulting in net proceeds
of $48.6 million. Proceeds from that sale of common stock were used to
finance the Company's capital expenditure program and for other corporate
purposes. The Company also issued 1,092,486; 1,144,270; and 1,029,228
shares of common stock during fiscal 1995, 1994 and 1993, respectively,
for its Retirement Savings Plus Plan, Dividend Reinvestment and Stock
Purchase Plan and Long-Term Stock Incentive Plan, which increased common
equity by approximately $18 million, $20 million and $19.5 million,
respectively.
PREFERRED STOCK
During October 1992, the Company issued an aggregate of 445,000 shares of
$100 par or stated value preferred stock consisting of two classes of
preferred stock and represented by 1,780,000 depositary receipts at $25
per receipt with a dividend rate of 7.70%. Net proceeds from the issuance
were $42.8 million and were used to repay short-term debt and for other
corporate purposes.
LONG-TERM DEBT
During fiscal year 1994, the Company issued $194.5 million principal
amount of Medium-Term Notes, Series C, with maturity dates ranging from
10 to 30 years and with interest rates ranging from 5.9% to 7.2%. The
notes are issued under an Indenture dated as of December 1, 1989, as
supplemented and modified, and are unsecured and rank on a parity with
all other unsecured indebtedness of the Company. Net proceeds from the
notes were used to repay short-term debt, to refund the remaining $125
million principal balance of the Company's only outstanding series of
First Mortgage Bonds and for other corporate purposes. Approximately $105
million principal amount of Medium-Term Notes, Series C was unissued as
of September 30, 1995, and 1994.
During fiscal year 1994, pursuant to the request of the Company, the
Trustee released and discharged the lien of and canceled the First
Mortgage Bond Indenture, thereby removing the lien from the public
utility properties owned by AGL.
During fiscal year 1993, the Company issued $194 million principal amount
of Medium Term Notes, Series B, with maturity dates ranging from 7 to 30
years and with interest rates ranging from 7.15% to 8.25%. The Series B
notes are unsecured and rank on a parity with all other unsecured
indebtedness of the Company. Net proceeds from the Series B notes were
used to redeem $7.5 million principal amount of First Mortgage Bonds 7%
Series due 1992, $110 million principal amount of First Mortgage Bonds
9.30% Series due 1992, to repay short-term debt and for other corporate
purposes.
SHORT-TERM DEBT
Because the Company's business is highly seasonal, short-term debt is
used to meet seasonal working capital requirements. The Company also
funds a portion of its capital expenditures with short-term debt. The
Company's lines of credit with various banks provide for direct
borrowings from the banks and are subject to annual renewal. The current
lines of credit vary from $20 million in the summer months to $250
million for peak winter financing. Short-term debt decreased $44.4
million from the amount outstanding as of September 30, 1994, to $51
million as of September 30, 1995. For additional information concerning
short-term debt, see Note 7 in Notes to Consolidated Financial
Statements.
24
<PAGE>
Capital Requirements
Capital expenditures for construction of distribution facilities,
purchase of equipment and other general improvements were $121.7 million
during 1995.
(GRAPH APPEARS HERE)
In addition, the Company invested $32.6 million in Sonat Marketing
Company, L.P., for a 35% ownership interest. The Company estimates that
capital requirements will total approximately $335 million for the three
years ending September 30, 1998. During the same period, approximately
$1.2 million will be required to fund preferred stock purchase fund
obligations. The Company plans to fund those expenditures through a
combination of internal sources and the issuance of short-term and
long-term debt and common stock.
As a result of the implementation of Order 636 issued by the Federal
Energy Regulatory Commission (FERC), the Company's inventory of natural
gas stored underground increased by $40.8 million during fiscal 1994.
Natural gas stored underground decreased $33.3 million to $111.2 million
as of September 30, 1995, primarily due to a decrease in the cost of gas
injected into storage.
Ratios and Coverages
On September 30, 1995, the Company's capitalization ratios consisted of
47.4% long-term debt, 5.0% preferred stock and 47.6% common equity.
As shown in the Selected Financial Data on page 42, the times interest
earned and ratio of earnings to fixed charges decreased in 1995 compared
with 1994 primarily due to decreased earnings. The times interest earned
and ratio of earnings to fixed charges increased in 1994 compared with
1993 primarily due to increased earnings.
The weighted average cost of long-term debt decreased from 8.2% on
September 30, 1993, to 7.6% on September 30, 1995. The decrease was due
to the redemption of high coupon long-term debt and lower interest rates
for new issues of long-term debt. The weighted average cost of preferred
stock was 7.5% on September 30, 1993, 1994 and 1995. The return on
average common equity was 11% for 1993; 11.6% for 1994; and 4.9% for
1995. Earnings applicable to common stock in 1995 included a charge for
restructuring of $43.1 million after income taxes.
Regulatory Activity
ORDER 636
In 1992, FERC issued Order 636 which, among other things, mandated the
unbundling of interstate pipeline sales service and established certain
open access transportation regulations that became effective beginning in
the 1993-1994 heating season.
In Order 636, FERC acknowledged that, without special recovery
mechanisms, certain costs that previously were recovered in the
pipelines' rate for bundled sales services no longer could be recovered
by the pipelines in a restructured environment. Those costs, referred to
as transition costs, include such things as unrecovered gas costs, gas
supply realignment costs and various stranded costs resulting from
unbundling. Accordingly, Order 636 included a recovery mechanism that
allows the pipeline companies to pass through to their customers any
prudently incurred transition costs attributable to compliance with Order
636.
The Company, based on filings with FERC by its pipeline suppliers,
estimates that its portion of such costs from all of its pipeline
suppliers would be approximately $92.5 million. Such filings currently
are pending before FERC for final approval, and the transition costs are
being collected subject to refund. Approximately $68 million of such
costs have been incurred by the Company as of September 30, 1995, and are
being recovered from its customers under the purchased gas provisions of
the Company's rate schedules.
Transition costs have not affected the total cost of gas to the Company's
customers significantly because (1) the Company purchases its wellhead
gas supplies based upon market prices that are below the cost of gas
previously embedded in the bundled pipeline sales service rates and (2)
many elements of transition costs previously were embedded in the rates
for the pipelines' bundled sales service.
GAS COST RECOVERY FILING
Gas purchasing decisions made by local distribution companies (LDCs) in
the restructured environment may be subject to greater review by state
regulatory commissions. AGL is now required to make an annual gas cost
recovery filing with the Georgia Commission. Prior to industry
restructuring mandated under Order 636, the cost of bundled pipeline
sales service was reviewed and approved by FERC. Because of diminished
review by FERC, LDCs face greater accountability and risks related to
their purchasing practices for gas supply, transportation and storage
services. The purchasing practices of AGL are subject to review under
legislation passed in Georgia in 1994 as described below.
The Georgia General Assembly enacted legislation establishing procedures
for determining appropriate gas supply plans and gas cost adjustment
factors applicable to firm service customers.
25
<PAGE>
The legislation requires the Company to file a gas supply plan with the
Georgia Commission on or before August 1 of each year for the subsequent
fiscal year. Purchases made pursuant to an approved plan may be recovered
under the purchased gas provisions of AGL's rate schedules. By requiring
the Georgia Commission to review AGL's plan prior to the purchase of gas
supply, transportation and storage services, AGL's proposed purchasing
practices are preapproved in a regulatory proceeding.
The Georgia Commission has approved AGL's gas supply plans for fiscal
years 1995 and 1996 with minor modifications pursuant to the legislative
requirements. Gas supply plans for both years include the recovery of
transition costs that currently are being collected by AGL's pipeline
suppliers.
RATE FILINGS
Since 1991, rate cases have been filed by AGL under a statute that
requires the Georgia Commission to consider AGL's revenues and expenses
during the period when the rates will be in effect. The statute allows
rate filings by gas utilities to reflect estimated operations during the
12-month period beginning five months from the proposed effective date of
the rates.
On March 31, 1993, AGL made a rate filing with the Georgia Commission
seeking an increase in revenues of $62.5 million annually based upon a
test year ending September 30, 1994. During the course of the rate
proceedings, the Company modified its requested increase to $47 million
to reflect changes in conditions expected during the test year. On
September 29, 1993, the Georgia Commission approved an annual increase in
revenues of approximately $11.2 million, effective October 1, 1993.
On May 1, 1995, Chattanooga Gas Company (Chattanooga) filed a rate
proceeding with the Tennessee Commission seeking an increase in revenues
of $5.2 million annually. On September 27, 1995, a settlement agreement
was reached that provides for an annual increase in revenues of
approximately $2.5 million, effective November 1, 1995.
On August 3, 1993, Chattanooga made a rate filing with the Tennessee
Commission seeking an increase in revenues of $5.7 million annually. On
December 31, 1993, Chattanooga entered into a settlement agreement that
provided for an annual rate increase of $3.45 million, effective February
1, 1994.
WEATHER NORMALIZATION
The Georgia and Tennessee Commissions have authorized weather
normalization adjustment riders (WNARs), which are designed to offset the
impact that unusually cold or warm weather has on customer billings and
the Company's operating margin. Because fiscal years 1995, 1994 and 1993
were warmer than normal, the WNARs had a positive impact on net income
and net cash flow from operating activities. The WNARs increased net
income by $27.3 million in 1995, $12.6 million in 1994 and $4.7 million
in 1993.
Environmental Matters
AGL has identified nine sites in Georgia where it currently owns all or
part of a manufactured gas plant (MGP) site. In addition, AGL has
identified other sites in Georgia and Florida that AGL does not now own,
but that may have been associated with the operation of MGPs by AGL or
its predecessors. Preliminary assessments and subsequent site
investigations have revealed environmental impacts at and near some of
those sites.
AGL has entered into consent orders with the Georgia Environmental
Protection Division with respect to certain of those sites pursuant to
which AGL is obligated to investigate and to clean up, if necessary.
The Company has estimated the investigation and remediation expenses
likely to be associated with the former MGP sites. Based upon a thorough
analysis of the potentially applicable requirements, the Company has
estimated that, under the most favorable circumstances reasonably
possible, the future cost of investigating and remediating the former MGP
sites could be as low as approximately $28.6 million. Alternatively, the
Company has estimated that, under the least favorable circumstances
reasonably possible, the future cost of investigating and remediating the
former MGP sites could be as high as approximately $109 million. The
Company cannot estimate at this time the amount of any other future
expenses or liabilities, or the impact on those estimates of future
environmental regulatory changes, that may be associated with or related
to the MGP sites, including expenses or liabilities relating to any
litigation. At the present time, no amount within the range can be
identified as a better estimate than any other estimate. Therefore, the
low end of that range and a corresponding regulatory asset have been
recorded in the financial statements.
With regard to other legal proceedings related to the former MGP sites,
the Company is or expects to be a party to claims or counterclaims on an
ongoing basis. Among such matters, the Company intends to continue to
pursue insurance coverage and contributions from potentially responsible
parties. Management currently believes that the outcome of MGP-related
litigation in which the Company is involved will not have a material
adverse effect on the financial condition and results of operations of
the Company.
The Georgia Commission has approved the recovery by AGL of Environmental
Response Costs, as defined below, pursuant to an Environmental Response
Cost Recovery Rider (ERCRR), effective October 1, 1992. For purposes of
the ERCRR, Environmental Response Costs include investigation, testing,
remediation and litigation costs and expenses or other liabilities
relating to or arising from MGP sites.
The ERCRR authorized AGL to recover from its customers Environmental
Response Costs that it may incur in succeeding 12-month periods ending
June 30th, net of working capital benefits resulting from deferred income
taxes, amortized over a 60-month recovery period beginning each October
1. The carrying costs to AGL of such Environmental Response Costs during
the period of amortization are subject to recovery from any amounts that
may be received from insurance carriers and
26
<PAGE>
former owners and operators of MGP sites. Any such amounts received are
shared equally by AGL and its customers.
In connection with the ERCRR, the staff of the Georgia Commission has
undertaken a financial and management process audit related to the MGP
sites, clean-up activities at the sites and Environmental Response Costs
that have been incurred for purposes of the ERCRR. The result of such
audit is not expected to have a significant effect on the Company's
consolidated financial statements.
Competition
The Company competes to supply natural gas to interruptible customers who
are capable of switching to alternative fuels, including fuel oil, coal,
propane, electricity and, in some cases, combustible wood by-products.
The Company also competes to supply gas to interruptible customers who
might seek to bypass the Company's distribution system.
On February 17, 1995, the Georgia Commission approved a settlement that
permits the Company to negotiate contracts with customers who have the
option of bypassing the Company's facilities (Bypass Customers) and
receiving natural gas from other suppliers. The bypass avoidance
contracts (Negotiated Contracts) can be renewable, provided that the
initial term does not exceed five years, unless a longer term
specifically is authorized by the Georgia Commission. The rate provided
by the Negotiated Contract may be lower than AGL's filed rate, but not
less than AGL's marginal cost of service to the potential Bypass
Customer. Service pursuant to a Negotiated Contract may commence without
Georgia Commission action, once a copy of the contract is filed with the
Georgia Commission. Negotiated Contracts may be rejected by the Georgia
Commission within 90 days of filing; absent such action, however, the
Negotiated Contracts remain effective. None of the Negotiated Contracts
filed with the Georgia Commission have been rejected.
The settlement also provides for a bypass loss recovery mechanism to
operate until the earlier of September 30, 1998, or the effective date of
new rates for AGL resulting from a general rate case.
In addition to Negotiated Contracts, which are designed to serve existing
and potential Bypass Customers, the Company's Interruptible
Transportation and Sales Maintenance (ITSM) Rider continues to permit
discounts for short-term transactions to compete with alternative fuels.
Revenue shortfalls, if any, from interruptible customers - as measured by
the test-year interruptible revenues determined by the Georgia Commission
in the Company's 1993 rate case - continue to be recovered under the ITSM
Rider.
The settlement approved by the Georgia Commission also provides that AGL
may continue to file contracts for Georgia Commission approval if the
service cannot be provided through the ITSM Rider, existing rate
schedules or the Negotiated Contract procedures. An example would be a
long-term service contract to compete with alternative fuels where
physical bypass was not the relevant competition.
Accounting Developments
The Company adopted Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of" (SFAS 121), effective October 1, 1994. That
statement requires entities to review long-lived assets and certain
identifiable intangibles whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. There was no
significant effect on the consolidated financial statements as a result
of the adoption of SFAS 121.
The Company adopted Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Postemployment Benefits" (SFAS 112), effective
October 1, 1994. That statement requires accrual of the cost of post-
employment benefits, other than pensions and postretirement benefits,
either during the period that the employee renders service or at the date
of the event giving rise to the benefit. There was no significant effect
on the consolidated financial statements as a result of the adoption of
SFAS 112.
The Company adopted Statement of Financial Accounting Standards No. 106
"Employers' Accounting for Postretirement Benefits Other Than Pensions"
(SFAS 106), effective October 1, 1993. That statement requires accrual of
postretirement benefits during the years an employee provides service.
Previously the costs of those benefits, which include health care and
life insurance benefits, were recorded using the pay-as-you-go method. In
its September 29, 1993, rate case decision, the Georgia Commission
approved a five-year phase-in of SFAS 106 expense that defers a portion
of SFAS 106 expense for future recovery. The Company records a regulatory
asset for the deferred portion of SFAS 106 expense. On June 14, 1993, the
Tennessee Commission issued an order resulting from a generic docket that
approved the recovery of SFAS 106 expense, which is funded through an
external trust. Approximately $8.7 million and $8 million of net periodic
postretirement benefits costs for fiscal years 1995 and 1994,
respectively, were recovered from customers. The remainder was deferred
for future recovery through amortization and recognized as a regulatory
asset in the financial statements of the Company consistent with
regulatory decisions. The Company has funded through an external trust
SFAS 106 expenses recovered from customers in excess of the pay-as-
you-go amounts.
The Company adopted Statement of Financial Accounting Standards No. 109
"Accounting for Income Taxes"(SFAS 109), effective October 1, 1993. Under
SFAS 109, deferred tax balances are measured at the tax rates that will
apply during the period the taxes become payable and are adjusted
whenever new rates are enacted. Due to the regulated nature of the
Company's utility business, the principal effect of the adoption of SFAS
109 was to record a regulatory liability. There was no significant effect
on the consolidated financial statements as a result of the adoption of
SFAS 109.
27
<PAGE>
Statements of Consolidated Income
For the years ended September 30,
---------------------------------
In millions, except per share amounts 1995 1994 1993
- -------------------------------------------------------------------------
Operating Revenues $1,063.0 $1,199.9 $1,130.3
Cost of Gas 571.8 736.8 701.0
- -------------------------------------------------------------------------
Operating Margin 491.2 463.1 429.3
- -------------------------------------------------------------------------
Other Operating Expenses
Operation 213.5 207.0 187.6
Restructuring costs 70.3
Maintenance 30.4 32.8 30.9
Depreciation of utility plant other
than transportation equipment 58.5 55.4 58.8
Income taxes 16.0 34.3 28.2
Taxes other than income taxes 25.6 26.0 23.9
- -------------------------------------------------------------------------
Total other operating expenses 414.3 355.5 329.4
- -------------------------------------------------------------------------
Operating Income 76.9 107.6 99.9
- -------------------------------------------------------------------------
Other Income
Allowance for funds used during
construction-equity 0.2 0.2 0.4
Other income and deductions 1.9 5.0 6.2
Income taxes (0.7) (2.0) (2.3)
- -------------------------------------------------------------------------
Total other income-net 1.4 3.2 4.3
- -------------------------------------------------------------------------
Income Before Interest Charges 78.3 110.8 104.2
- -------------------------------------------------------------------------
Interest Charges
Interest on long-term debt 42.7 43.2 43.5
Allowance for funds used during
construction-debt (0.3) (0.2) (0.5)
Other interest 5.1 4.6 3.7
- -------------------------------------------------------------------------
Total interest charges 47.5 47.6 46.7
- -------------------------------------------------------------------------
Net Income 30.8 63.2 57.5
Dividends on Preferred Stock 4.4 4.5 4.3
- -------------------------------------------------------------------------
Earnings Applicable to Common Stock $ 26.4 $ 58.7 $ 53.2
- -------------------------------------------------------------------------
Earnings Per Share of Common
Stock (Note 4) $ 0.50 $ 1.17 $ 1.08
- -------------------------------------------------------------------------
Average Number of Common Shares
Outstanding (Note 4) 52.4 50.2 49.2
- -------------------------------------------------------------------------
See notes to consolidated financial statements.
28
<PAGE>
Statements of Consolidated Cash Flows
For the years ended September 30,
---------------------------------
In millions 1995 1994 1993
- -------------------------------------------------------------------------
Cash Flows from Operating Activities
Net income $ 30.8 $ 63.2 $ 57.5
Adjustments to reconcile net income to
net cash flow from operating activities
Noncash restructuring costs 52.9
Depreciation and amortization 62.5 59.2 62.4
Deferred income taxes 4.2 13.6 21.0
Other 3.8 6.3 5.8
- -------------------------------------------------------------------------
154.2 142.3 146.7
Changes in assets and liabilities
Receivables 10.0 8.7 (23.3)
Inventories 43.3 (38.5) (32.9)
Deferred purchased gas adjustment (13.8) 20.8 (15.1)
Accounts payable 14.7 (6.0) (3.1)
Other-net 1.6 5.4 6.1
- -------------------------------------------------------------------------
Net cash flow from operating activities 210.0 132.7 78.4
- -------------------------------------------------------------------------
Cash Flows from Financing Activities
Sale of common stock, net of expenses 50.4 2.4 2.6
Sale of preferred stock, net of expenses 42.8
Short-term borrowings, net (44.4) (36.0) 22.9
Redemptions, purchase fund and sinking
fund requirements of preferred stock
and long-term debt (15.0) (125.7) (169.8)
Sale of long-term debt 194.5 194.0
Common stock dividends (44.3) (42.9) (42.4)
Preferred stock dividends (4.4) (4.5) (4.0)
- -------------------------------------------------------------------------
Net cash flow from financing activities (57.7) (12.2) 46.1
- -------------------------------------------------------------------------
Cash Flows from Investing Activities
Utility plant expenditures (120.8) (122.0) (120.7)
Investment in joint venture (32.6)
Nonutility capital expenditures (0.4) (0.1) (0.6)
Cost of removal, net of salvage 1.9 1.6 (1.1)
- -------------------------------------------------------------------------
Net cash flow from investing activities (151.9) (120.5) (122.4)
- -------------------------------------------------------------------------
Net increase in cash and cash
equivalents 0.4 2.1
Cash and cash equivalents at
beginning of year 3.3 3.3 1.2
- -------------------------------------------------------------------------
Cash and cash equivalents at
end of year $ 3.7 $ 3.3 $ 3.3
- -------------------------------------------------------------------------
Cash Paid During the Year for
Interest $ 48.4 $ 51.1 $ 42.8
Income taxes $ 28.6 $ 18.0 $ 16.9
- -------------------------------------------------------------------------
See notes to consolidated financial statements. 29
<PAGE>
Consolidated Balance Sheets
September 30,
Assets
In millions 1995 1994
- -------------------------------------------------------------------------
Utility Plant $1,919.9 $1,833.2
Less accumulated depreciation 583.3 553.6
- -------------------------------------------------------------------------
Utility plant-net 1,336.6 1,279.6
- -------------------------------------------------------------------------
Nonutility Property and Investments
(less accumulated depreciation of $2.9 in
1995 and $2.8 in 1994) 46.3 17.8
- -------------------------------------------------------------------------
Current Assets
Cash and cash equivalents 3.7 3.3
Receivables
Gas (less allowance for uncollectible accounts
of $2.5 in 1995 and $2.4 in 1994) 36.9 45.2
Merchandise (less allowance for uncollectible
accounts of $1.9 in 1995 and $0.4 in 1994) 5.3 8.0
Other 9.6 7.3
Unbilled revenues 17.5 18.8
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 and Other Assets
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 and other assets 71.7 74.4
- -------------------------------------------------------------------------
Total $1,674.6 $1,642.9
- -------------------------------------------------------------------------
See notes to consolidated financial statements.
30
<PAGE)
September 30,
Capitalization and Liabilities
In millions 1995 1994
- -------------------------------------------------------------------------
Capitalization
Common stock equity (See accompanying statements
of consolidated common stock equity) $ 557.3 $ 518.5
Cumulative preferred stock
Redeemable 55.5 55.5
Nonredeemable 3.0 3.0
Long-term debt 554.5 554.5
- -------------------------------------------------------------------------
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-trade 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
Refunds from suppliers 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
Accrued environmental response costs 28.6 24.3
Accrued pension costs 10.3
Accrued postretirement benefits costs 30.1 3.6
- -------------------------------------------------------------------------
Total long-term liabilities 69.0 27.9
- -------------------------------------------------------------------------
Deferred Credits
Unamortized 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
- -------------------------------------------------------------------------
Commitments and Contingencies (Notes 8 and 10)
- -------------------------------------------------------------------------
Total $1,674.6 $1,642.9
- -------------------------------------------------------------------------
31
<PAGE>
Statements of Consolidated Common Stock Equity
For the years ended September 30,
---------------------------------
In millions, except per share amounts 1995 1994 1993
- -------------------------------------------------------------------------
Common Stock (Note 4)
$5 par value; authorized 100.0 shares;
outstanding, 54.9 in 1995, 50.8 in 1994
and 49.6 in 1993
Beginning of year $127.1 $124.2 $121.7
Issuance of common stock
Public sale 7.5
Employees' benefit plans, dividend
reinvestment and stock purchase plan
and long-term stock incentive plan 2.7 2.9 2.5
- -------------------------------------------------------------------------
End of year 137.3 127.1 124.2
- -------------------------------------------------------------------------
Premium on Capital Stock (Note 4)
Beginning of year 241.3 224.2 207.2
Issuance of common stock
Public sale 41.1
Employees' benefit plans, dividend
reinvestment and stock purchase plan
and long-term stock incentive plan 15.3 17.1 17.0
- -------------------------------------------------------------------------
End of year 297.7 241.3 224.2
- -------------------------------------------------------------------------
Earnings Reinvested
Beginning of year 150.1 143.6 143.2
Net income 30.8 63.2 57.5
Cash dividends
Preferred stock (4.4) (4.5) (4.3)
Common stock ($1.04 a share in 1995,
1994 and 1993) (54.2) (52.2) (51.1)
Other (1.7)
- -------------------------------------------------------------------------
End of year 122.3 150.1 143.6
- -------------------------------------------------------------------------
Total common stock equity $557.3 $518.5 $492.0
- -------------------------------------------------------------------------
See notes to consolidated financial statements.
32
<PAGE>
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the financial statements of
Atlanta Gas Light Company and its wholly owned subsidiaries, Chattanooga
Gas Company, Georgia Gas Company, Georgia Gas Service Company, Georgia
Energy Company and Trustees Investments, Inc. (collectively, the
Company). Intercompany balances and transactions have been eliminated.
SYSTEM OF ACCOUNTS
Atlanta Gas Light Company (AGL) and Chattanooga Gas Company (Chattanooga)
are public utilities that distribute and transport natural gas and are
subject to regulation by the Georgia Public Service Commission (Georgia
Commission) and the Tennessee Public Service Commission (Tennessee
Commission), respectively, with respect to their rates for service,
maintenance of their accounting records and various other matters. The
consolidated financial statements are prepared in accordance with
generally accepted accounting principles, which give appropriate
recognition to the rate-making and accounting practices and policies of
the Georgia and Tennessee Commissions.
BASIS OF ACCOUNTING
The Company's consolidated financial statements reflect regulatory
actions by the Georgia and Tennessee Commissions that result in the
recognition of revenues and expenses in different time periods than do
enterprises that are not rate regulated. In accordance with Statement of
Financial Accounting Standards No.71, "Accounting for the Effects of
Certain Types of Regulation" (SFAS 71), regulatory assets and
liabilities are recorded and represent regulator-approved deferrals
resulting from the rate-making process. SFAS 71 assets and liabilities
recorded on September 30 consist of the following:
(Millions of dollars) 1995 1994
- ------------------------------------------------------------------------
Assets:
Unrecovered environmental response costs $34.9 $30.5
Unrecovered integrated resource plan costs 9.9 11.4
Unrecovered postretirement benefits costs 7.2 3.6
Unamortized cost to repurchase long-term debt 4.9 6.3
- ------------------------------------------------------------------------
Total $56.9 $51.8
========================================================================
Liabilities:
Unamortized investment tax credit $30.3 $32.2
Regulatory tax liability 23.3 26.7
Deferred purchased gas adjustment 6.3 20.1
Other 15.0 5.5
- ------------------------------------------------------------------------
Total $74.9 $84.5
========================================================================
UTILITY PLANT AND DEPRECIATION
Utility plant is stated at original cost. The Company adds to utility
plant all direct labor and material costs of plant construction and
related indirect construction costs, including administrative,
engineering and general overhead, taxes and an allowance for funds used
during construction (AFUDC). The portion of AFUDC attributable to equity
funds is included in other income, and the portion attributable to
borrowed funds is shown as a reduction in interest charges in the
statements of consolidated income. The Company's AFUDC rates of 9.32% in
fiscal 1995 and 1994, and 9.93% in fiscal 1993, were the cost of
capital approved by the Georgia Commission in the Company's rate
proceedings.
The original cost of property retired or otherwise disposed of, plus the
cost of dismantling, less salvage, is charged to accumulated
depreciation. Maintenance, repairs and minor additions, renewals and
betterments to property are charged to operations.
33
<PAGE>
The Company changed its method of calculating book depreciation from a
composite straight-line rate to individual utility plant account
straight-line rates, as approved by the Georgia Commission, effective
October 1, 1993. The composite straight-line depreciation rate was
approximately 3.2% for utility property other than transportation
equipment during 1995 and 1994 and 3.6% during 1993. Transportation
equipment is depreciated over a period of five to 10 years.
DEFERRED PURCHASED GAS ADJUSTMENT
The Company's rate schedules include purchased gas adjustment provisions
that permit the recovery of purchased gas costs. The purchased gas
adjustment factor is revised periodically to reflect changes in the cost
of purchased gas without formal rate proceedings. Any overrecoveries or
underrecoveries of gas costs are charged or credited to cost of gas and
are included in current assets or liabilities.
OPERATING REVENUES
Revenues are based on rates approved by the Georgia and Tennessee
Commissions. Customers' base rates may not be changed without formal
approval of the Georgia and Tennessee Commissions. The Company
recognizes revenues on the accrual basis, which includes estimated
amounts for gas delivered but not yet billed.
The Georgia and Tennessee Commissions have authorized Weather
Normalization Adjustment Riders. Such riders are designed to offset the
impact that unusually cold or warm weather has on the Company's
operating margin.
Certain of the Company's interruptible customers purchase gas directly
from gas producers and marketers. The Georgia and Tennessee Commissions
have approved programs whereby the Company bills a transportation charge
on those purchases.
INCOME TAXES
The Company adopted Statement of Financial Accounting Standards No. 109
"Accounting for Income Taxes" (SFAS 109), effective October 1, 1993. For
fiscal 1995 and 1994, deferred income taxes were provided for temporary
differences between book and taxable income. For fiscal 1993, deferred
income taxes primarily were provided for significant timing differences
between book and taxable income.
Investment tax credits have been deferred and are being amortized by
credits to income in accordance with regulatory treatment over the
estimated life of the related properties.
STATEMENT OF CASH FLOWS
For purposes of reporting cash flows, the Company considers all highly
liquid investments purchased with a maturity of three months or less to
be cash equivalents.
Noncash investing and financing transactions included the issuance of
common stock for the Retirement Savings Plus Plan, Dividend Reinvestment
and Stock Purchase Plan and Long-Term Stock Incentive Plan of $16.2
million in 1995, $17.6 million in 1994 and $16.9 million in 1993.
OTHER
Gas inventories are stated at cost on a principally first-in, first-out
method. Merchandise and materials and supplies inventories are stated at
lower of average cost or market.
Consistent with the rate treatment prescribed by the Georgia and
Tennessee Commissions, the Company expenses vacation pay as those
benefits are paid.
The computation of earnings per share of common stock is based upon the
weighted average number of common shares outstanding during each year as
adjusted for the two-for-one stock split. See Note 4.
Certain reclassifications have been made in 1994 and 1993 to conform
with the 1995 financial statement presentation.
2.Income Tax Expense
In accordance with SFAS 109, deferred tax balances are measured at the
tax rates that will apply during the period the taxes become payable and
are adjusted whenever new rates are enacted. Due to the regulated nature
of the Company's utility business, the principal effect of the adoption
of SFAS 109 was to record a regulatory liability that is being amortized
over approximately 30 years. There was no significant effect on net
income as a result of the adoption of SFAS 109.
Components of income tax expense shown in the consolidated income
statements are as follows:
(Million of dollars) 1995 1994 1993
- -------------------------------------------------------------------------
Included in operating expenses:
Current income taxes
Federal $16.4 $19.7 $ 7.7
State 2.5 3.1 0.9
Deferred income taxes
Federal (1.1) 11.5 18.1
State (0.2) 1.5 3.0
Amortization of investment tax credits (1.6) (1.5) (1.5)
- -------------------------------------------------------------------------
Total 16.0 34.3 28.2
- -------------------------------------------------------------------------
Included in other income:
Current income taxes
Federal 0.5 1.2 2.1
State 0.1 0.2 0.3
Deferred income taxes
Federal 0.1 0.5 (0.1)
State 0.1
- -------------------------------------------------------------------------
Total 0.7 2.0 2.3
- -------------------------------------------------------------------------
Total income tax expense $16.7 $36.3 $30.5
=========================================================================
34
<PAGE>
A reconciliation between the statutory federal income tax rate and the
effective rate is as follows:
(Millions of dollars) 1995
- -------------------------------------------------------------------------
% of
Pretax
Amount Income
- -------------------------------------------------------------------------
Computed tax expense $16.6 35.0
State income tax, net of federal
income tax benefit 1.3 2.7
Amortization of investment tax credits (1.6) (3.4)
Other-net 0.4 0.8
- -------------------------------------------------------------------------
Total income tax expense $16.7 35.1
=========================================================================
1994
- -------------------------------------------------------------------------
% of
Pretax
Amount Income
- -------------------------------------------------------------------------
Computed tax expense $34.8 35.0
State income tax, net of federal
income tax benefit 3.2 3.2
Amortization of investment tax credits (1.5) (1.5)
Other-net (0.2) (0.2)
- -------------------------------------------------------------------------
Total income tax expense $36.3 36.5
=========================================================================
1993
- -------------------------------------------------------------------------
% of
Pretax
Amount Income
- -------------------------------------------------------------------------
Computed tax expense $30.6 34.8
State income tax, net of federal
income tax benefit 2.5 2.8
Amortization of investment tax credits (1.5) (1.7)
Other-net (1.1) (1.2)
- -------------------------------------------------------------------------
Total income tax expense $30.5 34.7
=========================================================================
Components that give rise to the net deferred income tax liability as of
September 30 are as follows:
(Millions of dollars) 1995 1994
- -------------------------------------------------------------------------
Deferred tax liabilities:
Property - accelerated depreciation and other
property related items $187.1 $170.9
Other 15.8 14.6
- -------------------------------------------------------------------------
Total deferred tax liabilities 202.9 185.5
- -------------------------------------------------------------------------
Deferred tax assets:
Deferred investment tax credits 11.7 12.5
Alternative minimum tax 12.3 10.9
Other 40.1 27.5
- -------------------------------------------------------------------------
Total deferred tax assets 64.1 50.9
- -------------------------------------------------------------------------
Net deferred tax liability $138.8 $134.6
=========================================================================
3.Employee Benefit Plans
The Company has a noncontributory defined benefit retirement plan
covering substantially all of its employees. The plan's assets consist
primarily of marketable securities, corporate obligations, U.S.
government obligations, insurance contracts, real estate investments and
cash equivalents. The plan provides pension benefits that are based upon
years of service and the employee's highest 36 consecutive months'
compensation out of the last 60 months worked. The Company's funding
policy is to make the annual contribution required by applicable
regulations and recommended by its actuary.
The Company has an excess benefit plan that is unfunded and provides
supplemental benefits to certain officers after retirement. In September
1994, the Company established a voluntary early retirement plan for
certain officers of the Company that is unfunded and provides
supplemental pension benefits to participants who elected early
retirement. The annual expense and accumulated benefits of such plans
are not significant.
Net periodic pension costs for the plans include service cost, interest
cost, return on pension assets and straight-line amortization of
unrecognized initial net assets over approximately 16 years. Net
periodic pension costs include the following components:
(Millions of dollars) 1995 1994 1993
- -------------------------------------------------------------------------
Service cost $ 4.5 $ 5.5 $ 5.0
Interest cost 14.9 13.2 11.2
Actual return on assets (17.0) (3.3) (9.7)
Net amortization and deferral 5.9 (6.2) 0.8
- -------------------------------------------------------------------------
Net periodic pension cost $ 8.3 $ 9.2 $ 7.3
- -------------------------------------------------------------------------
Actuarial assumptions used were:
Discount rate 8.3% 8.3% 8.0%
Rate of increase in compensation levels 5.0% 5.0% 5.5%
Expected long-term rate of return on assets 8.3% 8.3% 8.5%
=========================================================================
The following schedule sets forth the plans' funded status as of June
30, 1995, and 1994, and amounts recognized in the Company's consolidated
balance sheets as of September 30, 1995, and 1994:
(Millions of dollars) 1995 1994
- -------------------------------------------------------------------------
Actuarial present value of benefit obligations
Vested benefit obligation $ 175.6 $ 119.9
- -------------------------------------------------------------------------
Accumulated benefit obligation $ 178.3 $ 123.5
- -------------------------------------------------------------------------
Projected benefit obligation $(207.4) $(162.0)
Plan assets at fair value 163.9 134.2
- -------------------------------------------------------------------------
Plan assets less than projected benefit obligation (43.5) (27.8)
Unrecognized net loss 34.1 35.9
Remaining unrecognized net assets at date of
initial adoption (5.2) (6.0)
Unrecognized prior service cost 4.3 5.0
- -------------------------------------------------------------------------
Prepaid (accrued) pension costs $ (10.3) $ 7.1
=========================================================================
The plans' change in status from a prepaid to an accrued balance is
primarily a result of expenses related to the Company's restructuring
plan. During 1995, the Company incurred a curtailment loss of $6 million
and a loss associated with incentive benefits of $25.3 million related
to the restructuring plan. The effect of the curtailment loss and
incentive loss was to increase the Company's accumulated benefit
obligation and projected benefit obligation by $25.3 million and $31.3
million, respectively.
The Company's Retirement Savings Plus Plan (RSPPlan), a 401(k) plan,
provides participants a mechanism for making contributions for
retirement savings. Each participant may contribute amounts up to 15% of
eligible compensation. The Company makes a contribution equal to 65%
(50% prior to January 1, 1994) of the participant's contribution not to
exceed 3.9% (3% prior to January 1, 1994) of the participant's
compensation for the plan year. The Company's contribution was $3.3
million for 1995, $3.4 million for 1994 and $2.8 million for 1993.
35
<PAGE>
On July 1, 1995, the Company established a Nonqualified Savings Plan
(NSP), an unfunded, nonqualified plan similar to the Company's RSP Plan.
The NSP provides an opportunity for eligible employees to make
contributions for retirement savings. The Company's contribution during
1995 to the NSP was not significant.
In January 1988, the Atlanta Gas Light Company Leveraged Employee Stock
Ownership Plan (LESOP), acting through its Trustee, purchased 2 million
shares of common stock of the Company for $11.75 per share, with the
proceeds of a loan secured by such common stock. The Company has not
guaranteed the repayment of the loan. The loan is expected to be repaid
from regular cash dividends on the Company's common stock paid to the
LESOP and from Company contributions to the LESOP as approved by the
Company's Board of Directors. The principal balance of the loan was $5.3
million as of September 30, 1995, and $7.6 million as of September 30,
1994. The loan is payable on December 31, 1997, with interest payable
quarterly at 80% of the prime rate of interest. The Company's
contribution to the LESOP was $0.8 million for 1995, $0.8 million for
1994 and $0.9 million for 1993.
The Company's Long-Term Stock Incentive Plan (LTSIP) provides that
incentive and nonqualified stock options, restricted stock and stock
appreciation rights may be granted to key employees of the Company. The
exercise price of any shares under option must be at least equal to the
fair market value on the date of the grant. The options granted become
exercisable six months after the date of grant and expire 10 years after
the date of grant.
Option transactions during the three years ended September 30, 1995, are
as follows:
Shares Exercise Price
- ------------------------------------------------------------------------
Outstanding
Sept. 30, 1992 300,002 $13.75-17.44
Granted 152,870 18.94-21.13
Exercised (62,220) 13.75-17.44
Forfeited (2,308) 17.44
- ------------------------------------------------------------------------
Outstanding
Sept. 30, 1993 388,344 $13.75-21.13
Granted 234,994 18.56
Exercised (4,000) 13.75
Forfeited (21,626) 20.44-20.81
- ------------------------------------------------------------------------
Outstanding
Sept. 30, 1994 597,712 $13.75-21.13
Granted 325,576 16.00-19.25
Exercised (46,264) 13.75-18.94
Forfeited (11,508) 15.94-20.44
- ------------------------------------------------------------------------
Outstanding
Sept. 30, 1995 865,516 $13.75-21.13
========================================================================
As of September 30, 1995, and 1994, there were 850,678 and 597,712
options, respectively, which were exercisable. As of September 30, 1995,
1,346,386 shares were reserved under the LTSIP.
In addition to providing pension benefits, the Company provides certain
health care and life insurance benefits for retired employees.
Substantially all of the Company's employees become eligible for those
benefits if they reach retirement age while working for the Company.
Prior to 1994, the cost of retiree health care and life insurance
benefits was recognized as expense as claims or premiums were paid. For
fiscal 1993, those costs totaled approximately $3 million. Effective
October 1, 1993, the Company adopted Statement of Financial Accounting
Standards No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions"(SFAS 106), which requires accrual of postretirement
benefits other than pensions during the years an employee provides
service.
In its September 29, 1993, rate case decision, the Georgia Commission
approved a five-year phase-in of SFAS 106 expense that defers a portion
of SFAS 106 expense for future recovery. The Company has recorded a
regulatory asset for the deferred portion of SFAS 106 expense. On June
14, 1993, the Tennessee Commission issued an order resulting from a
generic docket that approved the recovery of SFAS 106 expense that is
funded through an external trust.
Net periodic postretirement benefits costs for fiscal 1995 and 1994
include the following components:
(Millions of dollars) 1995 1994
- ------------------------------------------------------------------------
Service cost $ 0.9 $ 1.0
Interest cost 7.6 6.5
Actual return on assets (0.3)
Amortization of transition obligation 4.2 4.1
- ------------------------------------------------------------------------
Net postretirement benefits costs $12.4 $11.6
========================================================================
Approximately $8.7 million and $8 million of net periodic postretirement
benefits costs for fiscal years 1995 and 1994, respectively, were
recovered from customers. The remaining $3.7 million and $3.6 million
for 1995 and 1994, respectively, were deferred for future recovery
through amortization and recognized as a regulatory asset in the
financial statements of the Company consistent with regulatory
decisions. The Company has funded through an external trust SFAS 106
expense recovered from customers in excess of the pay-as-you-go amounts.
The following schedule sets forth the plan's funded status as of
September 30, 1995, and 1994:
(Millions of dollars) 1995 1994
- ------------------------------------------------------------------------
Retirees $ 94.1 $ 49.1
Fully eligible active plan participants 9.3 28.1
Other active plan participants 14.5 16.0
- ------------------------------------------------------------------------
Total accumulated postretirement benefit obligation 117.9 93.2
Plan assets at fair value 8.0 4.6
- ------------------------------------------------------------------------
Accumulated postretirement benefit obligation
in excess of plan assets 109.9 88.6
Unrecognized transition obligation (73.6) (77.7)
Unrecognized loss (6.2) (7.3)
- ------------------------------------------------------------------------
Accrued postretirement benefits costs $ 30.1 $ 3.6
========================================================================
36
<PAGE>
During 1995, the Company recorded a curtailment loss of $22.9 million
associated with its restructuring plan. The assumed health care cost
trend rate used in measuring the accumulated postretirement benefit
obligation for pre-Medicare eligibility is 11.5% in 1995, decreasing
0.5% per year to 6.0% in the year 2006 and an additional 0.25% to 5.75%
in 2007. The rate for post-Medicare eligibility is 10.0% in 1995,
decreasing 0.5% per year to 5.5% in the year 2004 and an additional
0.25% to 5.25% in 2005. Increasing the assumed health care cost trend
rate by 1% would increase the accumulated postretirement benefit
obligation as of September 30, 1995, by approximately $7.7 million and
the accrued postretirement benefits cost by approximately $0.5 million
for fiscal 1995. The assumed discount rate used in determining the
postretirement benefit obligation was 7.75% in 1995 and 8.25% in 1994.
4. Common Stock
On November 3, 1995, the Company's Board of Directors declared a
two-for-one stock split of the common stock effected in the form of a
100% stock dividend to shareholders of record on November 17, 1995, and
payable on December 1, 1995. In fiscal 1996, the Company will record a
credit to common stock and a debit to premium on capital stock of
approximately $137.5 million to transfer the amount of the par value of
the stock dividend to common stock. All references to number of shares
and to per share amounts in the consolidated financial statements and
related notes have been restated retroactively to reflect the stock
dividend.
On June 16, 1995, the Company issued and sold approximately 3 million
shares of its common stock at $16.81 per share, resulting in net
proceeds of $48.6 million. Proceeds from that sale of common stock were
used to finance the Company's capital expenditure program and for other
corporate purposes.
The Company also issued 1,092,486; 1,144,270; and 1,029,228 shares of
its common stock during the years ended September 30, 1995, 1994, and
1993, respectively, to its Dividend Reinvestment and Stock Purchase
Plan, RSP Plan and LTSIP.
As of September 30, 1995, 2,995,774 shares of common stock were reserved
for issuance pursuant to the Company's Dividend Reinvestment and Stock
Purchase Plan, RSP Plan, NSP and LTSIP.
5. Preferred Stock
The Company is required under its charter to offer to purchase or call
for redemption 4,100 shares of preferred stock for each of the five
years ending September 30, 2000. The issues are callable at the option
of the Company, in whole or in part, upon 30 days' notice. Shares
reacquired by the Company to satisfy future requirements and reported as
if canceled were 7,715; 8,715; and 9,715, as of September 30, 1995,
1994, and 1993, respectively.
The Company's charter contains provisions limiting the issuance of
additional shares of preferred stock. The most restrictive of those
provisions requires gross income, as defined, for a specified 12-month
period to be at least equal to 1.5 times the sum of annualized interest
requirements on outstanding indebtedness and the dividend requirements
on outstanding preferred stock, including the preferred stock being
issued. Based on earnings for fiscal 1995, the Company's gross income
was 1.55 times the sum of its interest and preferred stock dividend
requirements.
During October 1992, the Company issued an aggregate of 445,000 shares
of $100 par or stated value preferred stock consisting of two classes of
preferred stock and represented by 1,780,000 depositary receipts at $25
per receipt with a dividend rate of 7.70%. Net proceeds from the
issuance were $42.8 million and were used to repay short-term debt and
for other corporate purposes.
As of September 30, 1995, the Company had 10 million shares of
authorized but unissued preferred stock, no par value.
The outstanding preferred stock, net of current maturities, as of
September 30 is as follows:
(Millions of dollars) 1995 1994
- ------------------------------------------------------------------------
$100 par or stated value
(callable at option of Company)
Redeemable preferred stock
4.72% - Current call
price $103.00 $ 1.5 $ 1.5
7.70% - Current call
price (a) 44.5 44.5
7.84% - Current call
price $101.96 4.6 4.6
8.32% - Current call
price $102.08 4.9 4.9
Nonredeemable preferred stock
4.50% - Current call
price $105.25 2.0 2.0
5.00% - Current call
price $105.00 1.0 1.0
- ------------------------------------------------------------------------
Total $58.5 $58.5
========================================================================
(a) Not redeemable prior to December 1, 1997. Redeemable at par,
thereafter.
The outstanding shares of preferred stock net of previously reacquired
shares and shares reacquired during the year for purchase fund
requirements are as follows:
1995 1994 1993
- ------------------------------------------------------------------------
4.50% Series
Outstanding 20,000 20,000 20,000
Reacquired
4.72% Series
Outstanding 15,285 15,285 15,285
Reacquired
5.00% Series
Outstanding 10,000 10,000 10,000
Reacquired
7.70% Series
Outstanding 445,000 445,000 445,000
Reacquired
7.84% Series
Outstanding 47,797 47,802 49,302
Reacquired 5 1,500 198
8.32% Series
Outstanding 50,004 50,004 50,219
Reacquired 215 70
- ------------------------------------------------------------------------
Total
Outstanding 588,086 588,091 589,806
Reacquired 5 1,715 268
========================================================================
37
<PAGE>
6. Long-Term Debt
Medium-term notes Series A, Series B and Series C were issued under an
Indenture dated December 1, 1989, as supplemented and modified. The
notes are unsecured and rank on a parity with all other unsecured
indebtedness of the Company. During 1994 and 1993, the Company issued
$194.5 million and $194 million principal amount of such notes,
respectively.
The annual maturities of long-term debt for the five years ending
September 30, 2000, are $50 million in 2000. On December 15, 1993, the
Company redeemed at par its $125 million principal amount First Mortgage
Bonds 8-1/4% series due 1996, the last series outstanding under its
First Mortgage Bond Indenture. Pursuant to the request of the Company,
during fiscal 1994 the Trustee released and discharged the lien of and
canceled the Indenture, thereby removing the lien from the public
utility properties owned by AGL.
The outstanding long-term debt, net of current maturities, as of
September 30 is as follows:
(Millions of dollars) 1995 1994
- ------------------------------------------------------------------------
Medium-term notes
Series A (1) $ 60.0 $ 60.0
Series B (2) 300.0 300.0
Series C (3) 194.5 194.5
- ------------------------------------------------------------------------
Total $554.5 $554.5
========================================================================
(1) Interest rates from 8.90% to 9.10% with maturity dates
from 2000 to 2021.
(2) Interest rates from 7.15% to 8.70% with maturity dates
from 2000 to 2023.
(3) Interest rates from 5.90% to 7.20% with maturity dates
from 2004 to 2024.
7. Short-Term Debt
The Company's lines of credit with various banks provide for direct
borrowings from the banks and are subject to annual renewal. The current
lines of credit vary throughout the year from $20 million in the summer
months to $250 million for peak winter financing. Certain of the lines
are on a commitment fee basis. As of September 30, 1995, the Company had
$55 million available on its lines of credit.
The Company's short-term borrowings consisted of the following:
(Millions of dollars) 1995 1994 1993
- ------------------------------------------------------------------------
Short-term debt outstanding
at end of year $ 51.0 $ 95.4 $131.4
Maximum amounts of short-term
debt outstanding at any month
end during the year 155.0 229.4 135.5
Average amounts of short-term
debt outstanding at any month
end during the year (a) 51.5 69.3 51.5
- ------------------------------------------------------------------------
Weighted Average Interest Rates
1995 1994 1993
- ------------------------------------------------------------------------
Short-term debt outstanding
at end of year 5.9% 5.1% 3.3%
Average amounts of short-term
debt outstanding at any month
end during the year (a) 5.7% 3.6% 3.3%
- ------------------------------------------------------------------------
(a) Average amount outstanding during the year calculated based on daily
outstanding balances. Weighted average interest rate during the year
calculated based on interest expense and average amount outstanding
during the year.
8. Commitments and Contingencies
The Company has agreements for firm pipeline and storage capacity that
expire at various dates through 2011. The aggregate amount of required
payments under such agreements totals approximately $1.4 billion, with
annual required payments during the following five years of $208 million
in 1996, $199 million in 1997, $185 million in 1998, $83 million in 1999
and $82 million in 2000. The Company's total payments of fixed charges
under all agreements were $230 million in 1995, $232 million in 1994 and
$225 million in 1993. The purchased gas adjustment provisions of the
Company's rate schedules permit the recovery of gas costs from the
Company's customers.
In 1992, the Federal Energy Regulatory Commission (FERC) issued Order
636 which, among other things, mandated the unbundling of interstate
pipeline sales service and established certain open access
transportation regulations that became effective beginning in the 1993-
1994 heating season. Order 636 permits the Company's pipeline suppliers
to pass through to the Company any prudently incurred transition costs,
such as unrecovered gas costs, gas supply realignment costs and stranded
costs. The Company estimates its portion of such costs from all of its
pipeline suppliers would approximate $92.5 million based upon filings
with FERC by the pipeline suppliers. Approximately $68 million of such
costs have been incurred by the Company as of September 30, 1995, and
are being recovered from its customers under the purchased gas
provisions of the Company's rate schedules.
Total rental expense for property and equipment was $6.3 million in
1995, $6.5 million in 1994 and $5.9 million in 1993. Minimum rentals
under noncancelable operating leases total $38.1 million. Annual rentals
are as follows: 1996 - $8 million; 1997 - $6.9 million; 1998 - $4.7
million; 1999 - $4.2 million; 2000 - $4.1 million; and thereafter -
$10.2 million.
The Company is involved in litigation arising in the normal course of
business. Management believes that the ultimate resolution of such
litigation will not have a material adverse effect on the consolidated
financial statements of the Company.
9. Customers and Suppliers Refunds
Pursuant to orders of FERC, the Company has received refunds from its
interstate natural gas suppliers. Those refunds are a result of FERC
orders adjusting the price of various pipeline services purchased by the
Company from its suppliers in prior periods. The Company passes the
refunds on to its customers under plans approved by the Georgia and
Tennessee Commissions.
On August 23, 1995, the Georgia Commission approved a $38.5 million plus
interest refund of deferred purchased gas costs. The refund resulted
from the overrecovery of gas costs by the Company through the purchased
gas provisions of the Company's rate schedules. The refund was credited
to customers' bills in September 1995.
38
<PAGE>
On September 7, 1994, the Georgia Commission approved a $13.5 million
refund of deferred purchased gas costs. The refund resulted from the
overrecovery of gas costs by the Company through the purchased gas
provisions of the Company's rate schedules. The refund was credited to
customers' bills beginning in September 1994.
10. Environmental Matters
AGL has identified nine sites in Georgia where it currently owns all or
part of a manufactured gas plant (MGP) site. In addition, AGL has
identified other sites in Georgia and Florida that AGL does not now own,
but that may have been associated with the operation of MGPs by AGL or
its predecessors. Preliminary assessments and subsequent site
investigations have revealed environmental impacts at and near some of
those sites.
AGL has entered into consent orders with the Georgia Environmental
Protection Division with respect to certain of those sites pursuant to
which AGL is obligated to investigate and to clean up, if necessary.
The Company has estimated the investigation and remediation expenses
likely to be associated with the former MGP sites. Based upon a thorough
analysis of the potentially applicable requirements, the Company has
estimated that, under the most favorable circumstances reasonably
possible, the future cost of investigating and remediating the former
MGP sites could be as low as approximately $28.6 million. Alternatively,
the Company has estimated that, under the least favorable circumstances
reasonably possible, the future cost of investigating and remediating
the former MGP sites could be as high as approximately $109 million. The
Company cannot estimate at this time the amount of any other future
expenses or liabilities, or the impact on those estimates of future
environmental regulatory changes, that may be associated with or related
to the MGP sites, including expenses or liabilities relating to any
litigation. At the present time, no amount within the range can be
identified as a better estimate than any other estimate. Therefore, the
low end of that range and a corresponding regulatory asset have been
recorded in the financial statements.
With regard to other legal proceedings related to the former MGP sites,
the Company is or expects to be a party to claims or counterclaims on an
ongoing basis. Among such matters, the Company intends to continue to
pursue insurance coverage and contributions from potentially responsible
parties. Management currently believes that the outcome of MGP-related
litigation in which the Company is involved will not have a material
adverse effect on the financial condition and results of operations of
the Company.
The Georgia Commission has approved the recovery by AGL of Environmental
Response Costs, as defined below, pursuant to an Environmental Response
Cost Recovery Rider (ERCRR), effective October 1, 1992. For purposes of
the ERCRR, Environmental Response Costs include investigation, testing,
remediation and litigation costs and expenses or other liabilities
relating to or arising from MGP sites.
The ERCRR authorized AGL to recover from its customers Environmental
Response Costs that it may incur in succeeding 12-month periods ending
June 30, net of working capital benefits resulting from deferred income
taxes, amortized over a 60-month recovery period beginning each October
1. The carrying costs to AGL of such Environmental Response Costs
during the period of amortization are subject to recovery from any
amounts that may be received from insurance carriers and former owners
and operators of MGP sites. Any such amounts received are shared equally
by AGL and its customers.
In connection with the ERCRR, the staff of the Georgia Commission has
undertaken a financial and management process audit related to the MGP
sites, clean-up activities at the sites and Environmental Response Costs
that have been incurred for purposes of the ERCRR. The result of such
audit is not expected to have a significant effect on the Company's
consolidated financial statements.
11. Fair Value of Financial Instruments
The Company has estimated the fair value of its financial instruments,
the carrying value of which differed from fair value using available
market information and appropriate valuation methodologies. Considerable
judgment is required in developing the estimates of fair value presented
herein, and therefore the values are not necessarily indicative of the
amounts that the Company could realize in a current market exchange.
The carrying amount and the estimated fair value of such financial
instruments as of September 30, 1995, and 1994 consist of the following:
Carrying Estimated
(Millions of dollars) Amount Fair Value
- ------------------------------------------------------------------------
1995
Long-term debt including current portion $554.5 $571.5
Redeemable cumulative preferred stock,
including current portion 55.8 56.6
- ------------------------------------------------------------------------
1994
Long-term debt including current portion $569.5 $532.3
Redeemable cumulative preferred stock,
including current portion 55.8 51.6
- ------------------------------------------------------------------------
The estimated fair values are determined based on the following:
Long-term debt - interest rates that are currently available to the
Company for issuance of debt with similar terms and remaining
maturities.
Redeemable cumulative preferred stock - quoted market price and dividend
rates for preferred stock with similar terms.
The fair value estimates presented herein are based on information
available to management as of September 30, 1995. Management is not
aware of any subsequent factors that would affect the estimated fair
value amounts significantly.
39
<PAGE>
12. Corporate Restructuring
In November 1994, the Company announced a corporate restructuring plan
and began its implementation during fiscal 1995. As a result of the
restructuring, the Company has combined offices and established
centralized customer service centers. During 1995, the Company reduced
the average number of employees by approximately 500 through voluntary
retirement and severance programs and attrition. The Company, however,
anticipates a slight increase in employees during fiscal 1996. The
Company recorded $43.1 million, after income taxes, in restructuring-
related expenses during 1995. The principal effects of the restructuring
charges were to increase the Company's obligations with respect to
pension benefits and postretirement benefits other than pensions.
13. Joint Venture
On August 31, 1995, the Company signed an agreement with Sonat Inc.
(Sonat) to form a joint venture to acquire the business of Sonat
Marketing Company, a wholly owned subsidiary of Sonat. The joint
venture, Sonat Marketing Company L.P. (Sonat Marketing), offers natural
gas sales, transportation, risk management and storage services to
natural gas users in key natural gas producing and consuming areas of
the United States.
The Company invested $32.6 million for a 35% ownership interest in Sonat
Marketing. The Company's 35% investment is being accounted for under the
equity method. The excess of the purchase price over the estimated fair
value of the net tangible assets of approximately $23 million has been
allocated preliminarily to intangible assets consisting of customer
lists, computer software and goodwill. Such amount is expected to be
amortized over a period not to exceed 30 years.
The Company has certain rights for a period of five years to sell its
interest to Sonat at a predetermined fixed price, as defined, or for
fair market value at any time.
During September 1995, the Company purchased gas totaling $23.7 million
from Sonat Marketing and its affiliates and as of September 30, 1995,
the Company had a payable to Sonat Marketing of $23.7 million.
14. Subsequent Event
The Company has announced its plan to form a holding company, AGL
Resources Inc., of which AGL will become a wholly owned subsidiary. The
change in corporate structure requires, among other things, the approval
of the Company's shareholders and is expected to be voted upon at the
1996 Shareholders Meeting.
15. Quarterly Financial Data (Unaudited)
Quarterly financial data for fiscal 1995 and 1994 are summarized as
follows:
(Millions, except per share data) Operating Operating
Quarter Ended Revenues Income
- ------------------------------------------------------------------------
1995
December 31, 1994 $328.8 $14.1
March 31, 1995 448.2 48.9
June 30, 1995 177.5 12.2
September 30, 1995 (a) 108.5 1.7
- ------------------------------------------------------------------------
1994
December 31, 1993 $361.9 $37.9
March 31, 1994 500.2 60.5
June 30, 1994 191.2 7.6
September 30, 1994 146.6 1.6
- ------------------------------------------------------------------------
Earnings (Loss)
Per Share of
Net Income Common
Quarter Ended (Loss) Stock (c)
- ------------------------------------------------------------------------
1995 (b)
December 31, 1994 $ 1.8 $ 0.01
March 31, 1995 37.3 0.70
June 30, 1995 1.4 0.01
September 30, 1995 (9.7) (0.20)
- ------------------------------------------------------------------------
1994
December 31, 1993 $26.3 $ 0.51
March 31, 1994 50.4 0.98
June 30, 1994 (3.8) (0.10)
September 30, 1994 (9.7) (0.22)
- ------------------------------------------------------------------------
(a) During the fourth quarter of fiscal 1995, the Company recorded a
refund to its customers of $38.5 million plus interest. See Note 9.
(b) Quarterly net income (loss) and earnings per share data for 1995
include the effects of charges for restructuring costs as follows:
$28.4 million and $0.56 for the quarter ended December 31, 1994, $13.0
million and $0.25 for the quarter ended March 31, 1995, $1.1 million and
$0.02 for the quarter ended June 30, 1995 and $0.6 million and $0.01 for
the quarter ended September 30, 1995. Earnings per share have been
adjusted to reflect the effects of a two-for-one stock split. See Note
4.
(c) Earnings per share are calculated based on the weighted average
number of shares outstanding during the quarter. That total differs from
the earnings per share as shown on the statements of consolidated
income, which is based on the weighted average number of shares
outstanding for the entire year.
The wide variance in quarterly earnings results from the highly seasonal
nature of the business.
40
<PAGE>
Independent Auditors' Report
To the Shareholders and Board of Directors of Atlanta Gas Light Company:
We have audited the accompanying consolidated balance sheets of Atlanta
Gas Light Company and subsidiaries as of September 30, 1995, and 1994,
and the related statements of consolidated income, common stock equity
and cash flows for each of the three years in the period ended September
30, 1995. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly,
in all material respects, the financial position of Atlanta Gas Light
Company and subsidiaries as of September 30, 1995, and 1994, and the
results of their operations and their cash flows for each of the three
years in the period ended September 30, 1995, in conformity with
generally accepted accounting principles.
As discussed in the notes to the consolidated financial statements, in
1994 the Company changed its methods of accounting for postretirement
benefits other than pensions and for income taxes.
Atlanta, Georgia
November 27, 1995 DELOITTE & TOUCHE LLP
Management's Responsibility for Financial Reporting
The consolidated financial statements and related information are the
responsibility of management. The financial statements have been
prepared in conformity with generally accepted accounting principles
appropriate in the circumstances. The financial information contained
elsewhere in this Annual Report is consistent with that in the financial
statements.
The Company maintains a system of internal accounting controls designed
to provide reasonable assurance that assets are safeguarded from loss
and that transactions are executed and recorded in accordance with
established procedures. The concept of reasonable assurance is based on
the recognition that the cost of maintaining a system of internal
accounting controls should not exceed related benefits. The system of
internal accounting controls is supported by written policies and
guidelines.
The financial statements have been audited by Deloitte & Touche LLP,
independent auditors. Their audits were made in accordance with
generally accepted auditing standards, as indicated in the Independent
Auditors' Report, and included a review of the system of internal
accounting controls and tests of transactions to the extent they
considered necessary to carry out their responsibilities.
The Board of Directors pursues its responsibility for reported financial
information through its Audit Committee. The Audit Committee meets
periodically with management and the independent auditors to assure that
they are carrying out their responsibilities and to discuss internal
accounting controls, auditing and financial reporting matters.
Robert L. Goocher J. Michael Riley
Executive Vice President and Vice President-Finance and Accounting
Chief Financial Officer
41
<PAGE>
Selected Financial Data
For the years ended September 30,
---------------------------------
In millions, except per share amounts 1995 1994 1993
- ------------------------------------------------------------------------
Income Statement Data
Operating revenues $1,063.0 $1,199.9 $1,130.3
Cost of gas 571.8 736.8 701.0
- ------------------------------------------------------------------------
Operating margin 491.2 463.1 429.3
- ------------------------------------------------------------------------
Other operating expenses
Operation 213.5 207.0 187.6
Restructuring costs 70.3
Maintenance 30.4 32.8 30.9
Depreciation 58.5 55.4 58.8
Income taxes 16.0 34.3 28.2
Taxes other than income taxes 25.6 26.0 23.9
- ------------------------------------------------------------------------
Total other operating expenses 414.3 355.5 329.4
- ------------------------------------------------------------------------
Operating income 76.9 107.6 99.9
Other income (expense)-net 1.4 3.2 4.3
- ------------------------------------------------------------------------
Income before interest charges 78.3 110.8 104.2
Interest charges 47.5 47.6 46.7
- ------------------------------------------------------------------------
Income before cumulative effect of
change in accounting 30.8 63.2 57.5
Cumulative effect of change
in accounting
- ------------------------------------------------------------------------
Net income 30.8 63.2 57.5
Dividends on preferred stock 4.4 4.5 4.3
- ------------------------------------------------------------------------
Earnings applicable to common stock 26.4 58.7 53.2
Common dividends paid 54.2 52.2 51.1
- ------------------------------------------------------------------------
Earnings reinvested $ (27.8) $ 6.5 $ 2.1
========================================================================
Common Stock Data (1)
Average shares outstanding 52.4 50.2 49.2
Earnings per share
Income before cumulative effect of
change in accounting $ 0.50 $ 1.17 $ 1.08
Cumulative effect of change
in accounting
- ------------------------------------------------------------------------
Total $ 0.50 $ 1.17 $ 1.08
Dividends paid per share $ 1.04 $ 1.04 $ 1.04
Dividend payout ratio 208.0% 88.9% 96.3%
Book value per share(2) $ 10.15 $ 10.20 $ 9.90
Market value per share(2) $ 19.31 $ 15.31 $ 18.81
========================================================================
Balance Sheet Data (2)
Total assets $1,674.6 $1,642.9 $1,533.0
Long-term liabilities
Take-or-pay charges payable
Accrued environmental response costs $ 28.6 $ 24.3 $ 19.6
Accrued pension costs $ 10.3
Accrued postretirement benefits costs $ 30.1 $ 3.6
- ------------------------------------------------------------------------
Capitalization
Long-term debt $ 554.5 $ 569.5 $ 500.7
Preferred stock-redeemable 55.8 55.8 56.0
-nonredeemable 3.0 3.0 3.0
Common equity 557.3 518.5 492.0
- ------------------------------------------------------------------------
Total $1,170.6 $1,146.8 $1,051.7
========================================================================
Financial Ratios (2)
Capitalization
Long-term debt 47.4% 49.6% 47.6%
Preferred stock-redeemable 4.8% 4.9% 5.3%
-nonredeemable 0.2% 0.3% 0.3%
Common equity 47.6% 45.2% 46.8%
- ------------------------------------------------------------------------
Total 100.0% 100.0% 100.0%
- ------------------------------------------------------------------------
Return on average common equity 4.9% 11.6% 11.0%
- ------------------------------------------------------------------------
Times charges earned before income taxes(3)
Total interest 1.99 3.08 2.86
Total interest and preferred dividends 1.83 2.82 2.63
Fixed(4) 1.95 3.00 2.80
========================================================================
(1) Adjusted for two-for-one stock splits paid in the form of a 100%
stock dividend on December 1, 1995, and on December 1, 1986.
(2) Year-End.
42
<PAGE>
- ------------------------------------------------------------------------
1992 1991 1990 1989 1988 1987 1986 1985
- ------------------------------------------------------------------------
$ 994.6 $ 963.8 $1,000.9 $ 938.6 $ 975.6 $ 983.5 $1,008.3 $1,164.7
590.5 579.9 632.3 616.6 675.5 694.9 750.9 927.6
- ------------------------------------------------------------------------
404.1 383.9 368.6 322.0 300.1 288.6 257.4 237.1
- ------------------------------------------------------------------------
170.7 165.2 159.2 145.6 134.3 122.4 114.1 104.6
29.5 28.6 28.1 25.3 24.0 22.4 21.3 18.0
54.9 50.2 46.3 43.2 36.1 31.2 28.1 24.9
25.6 26.2 23.4 13.1 19.9 34.8 22.7 23.4
23.2 19.2 18.5 16.4 12.5 11.5 10.5 9.9
- ------------------------------------------------------------------------
303.9 289.4 275.5 243.6 226.8 222.3 196.7 180.8
- ------------------------------------------------------------------------
100.2 94.5 93.1 78.4 73.3 66.3 60.7 56.3
2.6 1.8 (2.7) 5.6 5.4 3.4 3.0 3.9
- ------------------------------------------------------------------------
102.8 96.3 90.4 84.0 78.7 69.7 63.7 60.2
47.4 46.9 44.8 41.9 32.7 30.3 34.5 30.5
- ------------------------------------------------------------------------
55.4 49.4 45.6 42.1 46.0 39.4 29.2 29.7
2.9
- ------------------------------------------------------------------------
55.4 49.4 45.6 42.1 48.9 39.4 29.2 29.7
1.0 1.1 1.3 1.5 1.5 1.6 1.7 1.9
- ------------------------------------------------------------------------
54.4 48.3 44.3 40.6 47.4 37.8 27.5 27.8
49.6 47.4 43.4 39.8 34.6 29.6 22.8 19.4
- ------------------------------------------------------------------------
$ 4.8 $ 0.9 $ 0.9 $ 0.8 $ 12.8 $ 8.2 $ 4.7 $ 8.4
========================================================================
48.2 46.6 43.8 43.0 39.6 37.0 33.0 30.6
$ 1.13 $ 1.04 $ 1.01 $ 0.94 $ 1.13 $ 1.02 $ 0.83 $ 0.91
0.07
- ------------------------------------------------------------------------
$ 1.13 $ 1.04 $ 1.01 $ 0.95 $ 1.21 $ 1.02 $ 0.83 $ 0.91
$ 1.03 $ 1.02 $ 0.98 $ 0.94 $ 0.88 $ 0.80 $ 0.70 $ 0.63
91.2% 98.1% 97.0% 98.9% 72.7% 78.4% 84.3% 69.2%
$ 9.70 $ 9.42 $ 8.97 $ 8.83 $ 8.72 $ 7.91 $ 7.59 $ 7.13
$ 18.81 $ 17.19 $ 15.19 $ 13.81 $ 13.31 $ 10.69 $ 10.56 $ 8.06
========================================================================
$1,428.6 $1,350.3 $1,291.8 $1,237.0 $1,195.1 $ 922.3 $ 845.8 $ 768.5
$ 5.0 $ 15.0 $ 27.0 $ 37.9 $ 86.6
$ 25.0
- ------------------------------------------------------------------------
$ 476.5 $ 458.3 $ 440.4 $ 378.5 $ 381.2 $ 279.4 $ 299.8 $ 247.3
11.5 12.8 15.0 16.1 17.4 18.7 19.8 21.0
3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0
472.1 448.2 397.3 383.2 370.4 295.8 277.4 221.7
- ------------------------------------------------------------------------
$ 963.1 $ 922.3 $ 855.7 $ 780.8 $ 772.0 $ 596.9 $ 600.0 $ 493.0
========================================================================
49.5% 49.7% 51.5% 48.5% 49.4% 46.8% 50.0% 50.1%
1.2% 1.4% 1.8% 2.0% 2.2% 3.1% 3.3% 4.3%
0.3% 0.3% 0.3% 0.4% 0.4% 0.5% 0.5% 0.6%
49.0% 48.6% 46.4% 49.1% 48.0% 49.6% 46.2% 45.0%
- ------------------------------------------------------------------------
100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
- ------------------------------------------------------------------------
11.8% 11.4% 11.4% 10.8% 14.2% 13.2% 11.0% 13.7%
- ------------------------------------------------------------------------
2.66 2.56 2.47 2.37 2.92 3.32 2.56 2.78
2.60 2.50 2.40 2.30 2.80 3.16 2.43 2.62
2.62 2.53 2.44 2.35 2.89 3.27 2.54 2.76
========================================================================
(3) Interest charges exclude the debt portion of allowance for funds
used during construction.
(4) Fixed charges consist of interest on short- and long-term debt,
other interest charges and the estimated interest component of rentals.
43
<PAGE>
Gas Sales and Statistics
For the years ended September 30,
---------------------------------
1995 1994 1993
- ------------------------------------------------------------------------
Operating Revenues (Millions of Dollars)
Sales of gas
Residential $ 610.6 $ 700.7 $ 658.2
Commercial 243.2 285.8 268.1
Industrial 169.4 172.1 154.2
Transportation revenues 23.9 22.6 33.8
Miscellaneous revenues 15.9 18.7 16.0
- ------------------------------------------------------------------------
Total $1,063.0 $1,199.9 $1,130.3
========================================================================
Therms Sold (Millions)
Residential 916.8 1,003.1 1,001.4
Commercial 454.0 478.9 478.5
Industrial 526.0 424.8 388.7
Therms Transported 722.8 697.4 795.6
- ------------------------------------------------------------------------
Total 2,619.6 2,604.2 2,664.2
========================================================================
Number of Customers (Average in Thousands)
Residential 1,250.4 1,215.2 1,182.7
Commercial 100.0 98.0 95.7
Industrial 2.6 2.5 2.5
- ------------------------------------------------------------------------
Total 1,353.0 1,315.7 1,280.9
========================================================================
Sales, Average Residential Customer
Gas sold (Therms) 733 825 847
Revenue (Dollars) 488.32 576.61 556.52
Revenue per therm (Cents) 66.6 69.9 65.7
Degree Days-Atlanta Area
30-year normal 2,991 2,991 3,021
Actual 2,121 2,565 2,852
Percentage of actual to 30-year normal 70.9 85.8 94.4
Gas Account (Millions of Therms)
Natural gas purchased 1,406.9 1,453.6 1,629.9
Natural gas withdrawn from storage 520.7 500.3 276.4
Gas transported 722.8 697.4 795.6
- ------------------------------------------------------------------------
Total send-out 2,650.4 2,651.3 2,701.9
Less
Unaccounted for 20.4 37.2 29.0
Company use 10.4 9.9 8.7
- ------------------------------------------------------------------------
Sold to customers and transported 2,619.6 2,604.2 2,664.2
========================================================================
Cost of Gas (Millions of Dollars)
Natural gas purchased $ 389.4 $ 550.1 $ 595.7
Natural gas withdrawn from storage 182.4 186.7 105.3
- ------------------------------------------------------------------------
Total $ 571.8 $ 736.8 $ 701.0
========================================================================
Gas Plant-End of Year (Millions of Dollars)
Gross plant $1,919.9 $1,833.2 $1,740.6
Net plant $1,336.6 $1,279.6 $1,217.9
Gross plant investment per customer
(Thousands of Dollars) $ 1.4 $ 1.4 $ 1.4
Capital Expenditures
(Millions of Dollars) $ 121.7 $ 122.5 $ 122.2
Gas Mains-Miles of 3" Equivalent 28,520 27,972 27,390
Employees-Average 3,249 3,764 3,764
Average Btu Content of Gas 1,027 1,032 1,027
========================================================================
(1) Includes $46.8 million of net utility plant related to the purchase of
Chattanooga Gas Company on October 1, 1988.
44
<PAGE>
- ------------------------------------------------------------------------
1992 1991 1990 1989 1988 1987 1986 1985
- ------------------------------------------------------------------------
$ 575.7 $ 550.2 $ 560.4 $ 517.9 $ 534.3 $ 513.9 $ 471.9 $ 474.9
231.5 226.0 241.3 227.0 239.7 244.0 242.7 261.7
140.9 144.1 157.9 149.8 168.1 205.8 284.6 424.5
36.6 37.8 35.4 36.5 27.0 17.3 7.9 2.3
9.9 5.7 5.9 7.4 6.5 2.5 1.2 1.3
- ------------------------------------------------------------------------
$ 994.6 $ 963.8 $1,000.9 $ 938.6 $ 975.6 $ 983.5 $1,008.3 $1,164.7
========================================================================
915.4 819.5 866.1 858.5 854.1 809.0 722.8 734.6
433.9 402.8 433.2 436.2 445.7 461.0 443.5 467.7
445.0 455.1 455.5 437.9 491.8 606.0 755.9 953.4
901.8 862.6 802.6 828.3 686.7 477.7 277.6 46.0
- ------------------------------------------------------------------------
2,696.1 2,540.0 2,557.4 2,560.9 2,478.3 2,353.7 2,199.8 2,201.7
========================================================================
1,152.2 1,124.0 1,099.8 1,072.5 1,010.6 971.4 927.9 880.7
93.7 92.0 90.8 88.5 79.8 76.2 73.6 70.6
2.5 2.5 2.5 2.4 2.1 2.1 2.0 1.9
- ------------------------------------------------------------------------
1,248.4 1,218.5 1,193.1 1,163.4 1 092.5 1,049.7 1,003.5 953.2
========================================================================
794 729 788 800 845 833 779 834
499.65 489.50 509.55 482.89 528.70 529.03 508.57 539.23
62.9 67.1 64.7 60.3 62.6 63.5 65.3 64.7
3,021 3,021 3,021 3,021 3,021 3,021 3,021 3,021
2,552 2,273 2,409 2,520 2,715 2,760 2,509 2,663
84.5 75.2 79.7 83.4 89.9 91.4 83.1 88.1
1,555.4 1,563.0 1,616.7 1,610.6 1,616.4 1,831.8 1,882.5 2,117.3
263.3 148.2 168.7 148.4 216.6 85.0 70.9 84.4
901.8 862.6 802.6 828.3 686.7 477.7 277.6 46.0
- ------------------------------------------------------------------------
2,720.5 2,573.8 2,588.0 2,587.3 2,519.7 2,394.5 2,231.0 2,247.7
16.2 24.4 19.3 15.0 34.2 34.9 24.9 40.1
8.2 9.4 11.3 11.4 7.2 5.9 6.3 5.9
- ------------------------------------------------------------------------
2,696.1 2,540.0 2,557.4 2,560.9 2,478.3 2,353.7 2,199.8 2,201.7
========================================================================
$ 487.9 $ 502.5 $ 547.0 $ 534.8 $ 563.4 $ 619.6 $ 677.6 $ 851.0
102.6 77.4 85.3 81.8 112.1 75.3 73.3 76.6
- ------------------------------------------------------------------------
$ 590.5 $ 579.9 $ 632.3 $ 616.6 $ 675.5 $ 694.9 $ 750.9 $ 927.6
========================================================================
$1,634.8 $1,517.0 $1,392.3 $1,293.2 $1,121.2 $1,004.5 $ 876.8 $ 764.5
$1,157.4 $1,081.4 $ 992.7 $ 924.2 $ 810.6 $ 725.8 $ 623.6 $ 535.1
$ 1.3 $ 1.2 $ 1.2 $ 1.1 $ 1.0 $ 1.0 $ 0.9 $ 0.8
$ 132.9 $ 141.9 $ 119.9 $ 160.9(1)$123.6 $ 135.5 $ 118.8 $ 93.2
26,936 26,623 25,987 25,421 22,631 21,339 20,424 19,557
3,794 3,820 3,768 3,764 3,544 3,467 3,356 3,194
1,024 1,025 1,028 1,026 1,026 1,026 1,027 1,027
========================================================================
45
<PAGE>
Shareholder Information
Stock Listing
Atlanta Gas Light Company's common stock is traded on the New York Stock
Exchange (NYSE) under the symbol ATG. It appears in newspaper financial
section stock listings as AtlGas or AtlaGasLt.
Ownership
The 55 million outstanding shares of the Company's common stock are owned by
17,242 shareholders of record in 50 states, the District of Columbia and
seven foreign countries.
Market Prices and Dividends
The following table reflects the quarterly high and low closing sales prices,
as reported in the listing of the NYSE composite transactions for shares of
the Company's common stock for the fiscal years 1995 and 1994, and the
quarterly dividends paid per share.
Dividends
Quarter Ended High Low Paid Per Share
- ------------------------------------------------------------------------
1995
September 30, 1995 $19.31 $16.94 $0.26
June 30, 1995 18.31 17.13 0.26
March 31, 1995 17.38 15.00 0.26
December 31, 1994 16.25 14.69 0.26
- ------------------------------------------------------------------------
1994
September 30, 1994 $17.63 $15.19 $0.26
June 30, 1994 18.25 16.81 0.26
March 31, 1994 19.31 17.06 0.26
December 31, 1993 19.44 17.31 0.26
- ------------------------------------------------------------------------
Annual Meeting
It is anticipated that the 1996 Annual Meeting of Shareholders will be held
in late February at the offices of the Company, 303 Peachtree Street, N.E.,
Atlanta, Georgia. Proxies for the meeting of shareholders will be solicited
by the Board of Directors in a separate communication. A formal notice of the
meeting, proxy statement and form of proxy is expected to be mailed to
shareholders during January 1996.
Shareholder Reports, Form 10-K and Inquiries
Additional copies of this report and of the Company's Form 10-K Annual Report
to the Securities and Exchange Commission (excluding exhibits) can be
obtained by writing to or calling the Corporate Secretary's Office, Atlanta
Gas Light Company, Post Office Box 4569, Atlanta, Georgia 30302, (404)
584-3794. Shareholder inquiries also should be directed to the Corporate
Secretary's office.
Shareholder Services Available
Direct deposit of cash dividends and automated stock purchase services are
available. For information, shareholders should contact Wachovia Bank of
North Carolina, N.A., at the address listed below.
Transfer Agent, Registrar and Dividend Disbursing Agent
Wachovia Bank of North Carolina, N.A.
Corporate Trust Department
Post Office Box 3001
Winston-Salem, North Carolina 27102
(800) 633-4236
Financial Inquiries
Financial analysts and professional investment managers are invited to
contact:
J. Michael Riley
Vice President - Finance and Accounting Atlanta Gas Light Company
Post Office Box 4569
Atlanta, Georgia 30302
(404) 584-3954
46
<PAGE>
Where To Buy Stock
The Company's common and preferred stock may be purchased through a brokerage
firm. A shareholder of record holding the Company's common stock in his or
her name may purchase common stock through the Company's Dividend
Reinvestment and Stock Purchase Plan. See the section titled "Dividend
Reinvestment and Stock Purchase Plan" for details.
Where To Sell Stock
The Company's common or preferred stock held in certificated form may be sold
through a brokerage firm. The common stock held in the Dividend Reinvestment
and Stock Purchase Plan may be sold through a brokerage firm or may be sold
through the Dividend Reinvestment and Stock Purchase Plan by sending written
authorization to Wachovia Bank of North Carolina, N.A., at the address listed
on page 46.
Dividend Reinvestment and Stock Purchase Plan
The Company's Dividend Reinvestment and Stock Purchase Plan provides common
shareholders with an economical and convenient method for purchasing
additional shares of the Company's common stock without paying any brokerage
fees or service charges. Dividends reinvested through the plan are used to
purchase shares of common stock directly from the Company. The Company will
issue the shares to the plan participants without brokerage commissions.
Common shareholders whose shares are registered in names other than their own
(for example, shares registered in the name of a broker or bank nominee)
either must arrange for the holder of record to participate in the plan or
have the shares they wish to enroll in the plan transferred into their own
name. Participants also may invest optional cash payments through the plan in
amounts ranging from a minimum of $25 to a maximum of $5,000 per month. The
same amount of money need not be sent with each payment, and there is no
obligation to make an optional cash payment each month. Optional cash
payments must be received by the 25th day of the month. If payments are
received after the 25th day of the month, they will be deemed, for
reinvestment purposes, to have been received in the next month. The price of
shares purchased for the account of each participant in the plan will be the
last sale price of the common stock as reported in the listing of the NYSE
composite transactions on the date of such purchase. If the common stock is
not traded on the date of purchase, the price will be that of the preceding
day on which the stock was traded. To obtain a prospectus describing the
Dividend Reinvestment and Stock Purchase Plan and enrollment information, you
may write to or call the Corporate Secretary's Office, Atlanta Gas Light
Company, Post Office Box 4569, Atlanta, Georgia 30302, (404) 584-3794.
How To Transfer Stock
A transfer of stock is required whenever the registration of a stock
certificate is changed. A change in registration generally occurs when stock
held in other than "nominee" or "street name" is sold. Changes in name,
co-ownership, and tenancy also require a transfer. A transfer can be
accomplished by properly filling in the stock assignment form on the reverse
side of the stock certificate and endorsing the assignment form exactly as
the registration is shown on the face of the certificate. The signature or
signatures of the transferor must be guaranteed either by a commercial bank
or a brokerage firm that is a member of one of the major stock exchanges. The
certificate with the properly completed assignment then can be sent to
Wachovia Bank of North Carolina, N.A., at the address listed on page 46. For
your protection, certificates should be sent by registered or certified
insured mail.
Stock Registration
A purchaser of the Company's stock either can have the stock certificate
delivered or can leave the shares with the broker. Stock left with the broker
generally is held in the brokerage firm's name and referred to as "street
name" stock. The purchaser generally is referred to as the beneficial owner.
A purchaser who elects to take physical possession of the stock receives a
certificate or certificates representing the number of shares purchased. The
stock is registered on the Company's books in the name of the purchaser, who
becomes a shareholder of record.
Safekeeping of Certificates
When a shareholder receives stock certificates, they should be safeguarded by
placing them in a secure place, such as a bank safe deposit box. A separate
certificate record should be maintained that includes each certificate
number, purchase date, date of issue, amount paid and exact registration. The
Company does not safeguard certificates for shareholders. If you are a
participant in the Company's Dividend Reinvestment and Stock Purchase Plan,
you may deposit the certificates you hold in the plan for safekeeping;
however, all dividends on those shares must be reinvested.
Lost or Stolen Certificates
If a stock certificate is lost or stolen, the shareholder should notify
Wachovia Bank of North Carolina, N.A., immediately in writing so a "stop" can
be placed on the missing certificate. The letter should describe the
certificate in as much detail as possible, including the certificate number,
date issued and registration. Once a "stop" has been placed on the missing
certificate, the shareholder will be sent an affidavit that must be
completed, signed, notarized and returned to Wachovia Bank of North Carolina,
N.A., before a replacement certificate can be issued. The shareholder also
must purchase an irrevocable indemnity bond for the lost stock certificate.
The cost of the bond is 2% of the market value of the missing certificate,
(minimum $10.00), calculated at the time the indemnity bond is issued.
Information regarding lost or stolen certificates should be sent to Wachovia
Bank of North Carolina, N.A., at the address listed on page 46.
47
<PAGE>
PAGE 22 GRAPH:
Bar graph reflects consolidated operating revenues, operating expenses and
operating expenses as a percentage of operating revenues for the fiscal years
ended September 30, 1991 through 1995, inclusive. For dollar amounts with
respect to operating revenues, please refer to "Selected Financial Data"
included at pages 42 and 43 herein. Operating expenses, in millions, for the
five years ended September 30, 1995 are as follows: 1991: $869, 1992: $895,
1993: $1,030, 1994: $1,092, 1995: $986. Operating expenses as a percentage
of operating revenues for this same period are as follows: 90%, 90%, 91%,
91% and 93%. 1995 data is footnoted: (a) Operating expenses include
restructuring costs of $70.3 million.
PAGE 25 GRAPH:
Bar graph reflects consolidated capital expenditures for the fiscal years
ended September 30, 1991 through 1995, inclusive. For dollar amounts, please
refer to "Gas Sales and Statistics" included at pages 44 and 45 herein.
<PAGE>
Exhibit 21
ATLANTA GAS LIGHT COMPANY
FORM 10-K FOR THE YEAR ENDED SEPTEMBER 30, 1995
Subsidiaries of the Registrant
The Company has eight active wholly -- owned subsidiaries, AGL Resources
Inc., AGL Energy Services, Inc., AGL Investments, Inc., Georgia Gas Company,
Georgia Gas Service Company, Georgia Energy Company and Trustees Investments,
Inc., all Georgia corporations and Chattanooga Gas Company, a Tennessee
corporation.
Financial statements of the subsidiaries are included in the consolidated
financial statements which are a part of the Company's Form 10-K.
<PAGE>
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Nos.
33-31674, 33-36231, 33-50301, 33-62155, and 33-52907 on Forms S-8 and
Registration Statement Nos. 33-50233 and 33-52905 on Forms S-3 of our reports
dated November 27, 1995, appearing and incorporated by reference in this
Annual Report on Form 10-K of Atlanta Gas Light Company for the year ended
September 30, 1995.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Atlanta, Georgia
December 22, 1995
<PAGE>
Exhibit 24
POWERS OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David R. Jones, Robert L. Goocher and Albert
G. Norman, Jr., and each of them, his or her true and lawful
attorneys-in-fact and agents, with full power of substitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign
the Annual Report on Form 10-K for the fiscal year ended September 30, 1995
and any and all amendments to such Annual Report, and to file the same, with
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done, as fully to all
intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
This 3rd day of November, 1995.
/s/ Frank Barron, Jr. /s/ Albert G. Norman, Jr.
Frank Barron, Jr. Albert G. Norman, Jr.
/s/ W. Waldo Bradley /s/ D. Raymond Riddle
W. Waldo Bradley D. Raymond Riddle
/s/ Otis A. Brumby, Jr. /s/ Dr. Betty L. Siegel
Otis A. Brumby, Jr. Dr. Betty L. Siegel
/s/ L. L. Gellerstedt, Jr. /s/ Ben J. Tarbutton, Jr.
L. L. Gellerstedt, Jr. Ben J. Tarbutton, Jr.
/s/ David R. Jones /s/ Charles McKenzie Taylor
David R. Jones Charles McKenzie Taylor
/s/ Felker W. Ward, Jr.
Kenneth D. Lewis Felker W. Ward, Jr.
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