SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-3526
A. Full title of the plan:
THE SOUTHERN COMPANY
EMPLOYEE SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
THE SOUTHERN COMPANY
270 Peachtree Street, NW
Atlanta, Georgia 30303
<PAGE>
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
FORM 11-K
DECEMBER 31, 1995
TABLE OF CONTENTS
<TABLE>
<CAPTION>
age No.
<S> <C>
Exhibits 3
Report of Independent Public Accountants 4
Statement of Net Assets Available for Benefits, With Fund Information--
December 31, 1995 5
Statement of Net Assets Available for Benefits, With Fund Information--
December 31, 1994 7
Statement of Changes in Net Assets Available for Benefits, With Fund Information--
for the year ended December 31, 1995 8
Statement of Changes in Net Assets Available for Benefits, With Fund Information--
for the year ended December 31, 1994 10
Notes to Financial Statements and Schedules 11
Schedule I - Item 27a - Schedule of Assets Held for Investment Purposes--
December 31, 1995 17
Schedule II - Item 27d - Schedule of Reportable Transactions--for the year ended
December 31, 1995 20
Signature 21
Consent of Independent Public Accountants 22
2
</TABLE>
<PAGE>
EXHIBITS
A - Amended and Restated Plan Document for The Southern Company
Employee Savings Plan effective July 3, 1995 and First and Second
Amendment thereto. (Designated in Form 10-K for the year ended
December 31, 1995, File No. 1-3526 as Exhibit 10(a) 63.)
B - Copies of Internal Revenue Service determination letters dated
March 5, 1996 and June 10, 1996.
C - Trust Agreement between Southern Company Services, Inc. and Merrill
Lynch Trust Company of Florida.
3
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Savings Plan Committee of
The Southern Company Employee Savings Plan:
We have audited the accompanying statements of net assets available for
benefits, with fund information of THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
(the "Plan") as of December 31, 1995 and 1994, and the related statements of
changes in net assets available for benefits, with fund information for the
years then ended. These financial statements and the schedules referred to below
are the responsibility of the Savings Plan Committee in its capacity as
administrator of the Plan (the "Administrator"). Our responsibility is to
express an opinion on these financial statements and schedules based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 the
Administrator, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1995 and 1994, and the changes in net assets available for benefits
for the years then ended in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules, as listed in
the accompanying table of contents, are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The fund information in the statements of net assets
available for benefits and the statements of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to present
the net assets available for benefits and changes in net assets available for
benefits of each fund. The supplemental schedules and fund information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Atlanta, Georgia
May 2, 1996
4
<PAGE>
Item 1.
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1995
Page 1 of 2
<TABLE>
<CAPTION>
Fund Information (Note 1)
----------------------------------------------------------------------
Participant Directed Portion
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Retirement
Preservation Fully Managed Equity Index Core Fixed Special Value
Total Fund Fund Fund Income Fund Fund
------------- ------------- ------------- ------------- ----------- -------------
Cash $ 487,655 $ 24,767 $ 31,765 $ 20,408 $ 381 $ -
------------- ------------- ------------- ------------ ----------- -----------
Investments, at fair value
(Schedule I and Notes 2 and 3):
Temporary investments 3,714,290 182,521 234,408 150,398 306,100 -
Treasury securities 22,259,990 - 21,324,149 - 935,841 -
Agency securities 14,036,000 - 14,036,000 - - -
Corporate bonds 42,847,517 - 42,447,865 - 399,652 -
Common stock--excluding common
stock of The Southern Company 60,123,400 - 60,123,400 - - -
Common stock--The Southern Company 1,674,952,587 - - - - -
Common/collective trusts 197,436,229 108,267,348 - 89,168,881 - -
Registered investment companies 12,206,266 - - - - 5,276,559
Loans due from participants 86,855,919 - - - - -
-------------- ------------ ------------ ----------- ---------- -----------
Total investments 2,114,432,198 108,449,869 138,165,822 89,319,279 1,641,593 5,276,559
-------------- ------------ ------------ ----------- ----------- -----------
Receivables:
Company contributions 1,778,109 - - - - -
Participant contributions 2,968,214 258,088 371,656 370,387 9,474 31,376
Interest and dividends 1,143,875 - 1,117,600 - 26,275 -
Receivable for securities sold 2,073,337 222,818 54,063 69,702 - -
-------------- ------------ ------------ ----------- ----------- -----------
Total receivables 7,963,535 480,906 1,543,319 440,089 35,749 31,376
-------------- ------------ ------------ ----------- ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $2,122,883,388 $108,955,542 $139,740,906 $89,779,776 $1,677,723 $5,307,935
============== ============ ============ =========== ========== ==========
The accompanying notes are an integral part of this statement.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1995
<S> <C> <C> <C> <C>
Page 2 of 2
Fund Information (Note 1)
Non-Participant
Participant Directed Portion Directed Portion
Global International Participants' The Southern Company Stock
Allocation Fund Equity Fund Loan Fund Fund
--------------- ------------- ------------- -----------------------------
ASSETS:
Cash $ - $ - $ - $ 205,046 $ 205,288
----------- ----------- ------------ ------------- -------------
Investments, at fair value (Schedule I and
Notes 2 and 3):
Temporary investments - - - 1,328,004 1,512,859
Treasury securities - - - - -
Agency securities - - - - -
Corporate bonds - - - - -
Common stock--excluding common
stock of The Southern Company - - - - -
Common stock--The Southern Company - - - 775,349,606 899,602,981
Common/collective trusts - - - - -
Registered investment companies 5,217,404 1,712,303 - - -
Loans due from participants - - 86,855,919 - -
----------- ----------- ------------ ------------- -------------
Total investments 5,217,404 1,712,303 86,855,919 776,677,610 901,115,840
----------- ----------- ------------ ------------- -------------
Receivables:
Company contributions - - - - 1,778,109
Participant contributions 28,319 8,749 - 1,890,165 -
Interest and dividends - - - - -
Receivable for securities sold - - - 1,726,754 -
----------- ----------- ------------ ------------- -------------
Total receivables 28,319 8,749 - 3,616,919 1,778,109
----------- ----------- ------------ ------------- -------------
NET ASSETS AVAILABLE FOR BENEFITS $5,245,723 $1,721,052 $86,855,919 $780,499,575 $903,099,237
========== ========== =========== ============ ============
The accompanying notes are an integral part of this statement.
</TABLE>
6
<PAGE>
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1994
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Fund Information (Note 1)
Non-Participant
Participant Directed Portion Directed Portion
Fixed Income Equity S&P 500 Participants' The Southern Company
Total Fund Fund Index Fund Loan Fund Stock Fund
---------------- ------------- -------- ----------- ------------ -------------------
ASSETS:
Investments, at fair value
(Schedule I and
Notes 2 and 3):
Temporary investments $ 51,602,378 $ 37,764,434 $ 6,121,923 $ 832,652 $ - $ 4,775,531 $ 2,107,838
Certificates of deposit 60,500,000 60,500,000 - - - - -
Common stock--excluding
common stock of The
Southern Company 104,715,606 - 104,715,606 - - - -
Common stock--The
Southern Company 1,299,493,706 - - - - 603,212,501 696,281,205
Mutual fund equity
investments 54,285,339 - - 54,285,339 - - -
Investments, at
contract value:
Guaranteed investment
contracts 1,700,296 1,700,296 - - - - -
Loans due from
participants 78,091,627 - - - 78,091,627 - -
-------------- ------------ ------------ ----------- ----------- ------------ ----------
Total investments 1,650,388,952 99,964,730 110,837,529 55,117,991 78,091,627 607,988,032 698,389,043
Interest and dividends
receivable 1,278,263 1,088,687 148,303 3,300 - 21,671 16,302
Other current assets 387,814 - 281,814 - - - 106,000
-------------- ----------- ------------ ----------- ----------- ------------ ----------
Total Assets 1,652,055,029 101,053,417 111,267,646 55,121,291 78,091,627 608,009,703 698,511,345
-------------- ------------ ------------ ----------- ----------- ------------ ------------
LIABILITIES:
Liabilities for
securities
purchased 1,246,481 - 769,261 - - 477,220 -
-------------- ------------ ------------ ----------- ----------- ----------- ------------
NET ASSETS AVAILABLE
FOR BENEFITS $1,650,808,548 $101,053,417 $110,498,385 $55,121,291 $78,091,627 $607,532,483 $698,511,345
============== ============ ============ =========== =========== ============ ============
The accompanying notes are an integral part of this statement.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Item 2.
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1995
<S> <C> <C> <C> <C> <C> <C> <C>
Page 1 of 2
Fund Information (Note 1)
Participant Directed Portion
Retirement
Fixed Income S&P 500 Index Preservation Fully Managed Equity Index
Total Fund Equity Fund Fund Fund Fund Fund
-------------- ------------ ----------- -------------- ------------- ------------- ----------
INVESTMENT INCOME:
Interest and
dividends $ 95,448,680 $ 3,081,391 $ 958,642 $ 161,018 $ 3,285,268 $ 45,741 $ 43,575
Net appreciation
in fair value
of investments
(Note 3) 363,409,909 27,780 16,884,915 11,099,259 - 12,809,460 10,600,954
------------- ----------- ------------ ------------ ------------- ------------ -------------
Net investment income 458,858,589 3,109,171 17,843,557 11,260,277 3,285,268 12,855,201 10,644,529
CONTRIBUTIONS (Note 4):
Participants' 74,617,433 3,331,270 4,639,393 3,891,748 3,536,517 5,162,698 4,685,949
Company 45,004,423 - - - - - -
DISTRIBUTIONS TO
PARTICIPANTS (106,405,605) (5,639,596) (4,859,229) (2,066,425) (4,226,528) (2,094,987) (1,688,906)
NEW LOANS ISSUED - (1,191,759) (1,573,138) (1,068,899) (1,590,916) (1,874,875) (1,152,809)
LOAN PRINCIPAL PAYMENTS - 1,005,855 1,291,985 1,086,338 955,267 1,427,474 1,172,144
NET TRANSFERS INTO FUNDS - (101,668,358) (127,840,953) (68,224,330) 106,995,934 124,265,395 76,118,869
-------------- ------------ ------------ ------------ ------------- ------------- -------------
CHANGE IN NET ASSETS
AVAILABLE FOR BENEFITS
DURING YEAR 472,074,840 (101,053,417) (110,498,385) (55,121,291) 108,955,542 139,740,906 89,779,776
NET ASSETS AVAILABLE
FOR BENEFITS AT
DECEMBER 31, 1994 1,650,808,548 101,053,417 110,498,385 55,121,291 - - -
-------------- ------------ ------------ ------------ ------------- ----------- -------------
NET ASSETS AVAILABLE
FOR BENEFITS AT
DECEMBER 31, 1995 $2,122,883,388 $ - $ - $ - $108,955,542 $139,740,906 $ 89,779,776
============== ============ ============ ============ ============ ============ =============
The accompanying notes are an integral part of this statement.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1995
Page 2 of 2
<S> <C> <C> <C> <C> <C> <C>
Fund Information (Note 1)
Non-Participant
Participant Directed Portion Directed Portion
Core Fixed Special Global Allocation International Participants' The Southern Company
Income Fund Value Fund Fund Equity Fund Loan Fund Stock Fund
----------- ---------- ----------------- ----------- --------- --------------------
INVESTMENT INCOME:
Interest and
dividends $ 43 $ 85,504 $ 323,719 $ - $ 5,832,640 $ 38,506,594 $ 43,124,545
Net appreciation
(depreciation) in
fair value of
investments
(Note 3) 53,862 88,755 (99,269) 43,445 - 138,245,963 173,654,785
---------- ---------- ----------- ---------- ------------ ------------- -------------
Net investment income 53,905 174,259 224,450 43,445 5,832,640 176,752,557 216,779,330
CONTRIBUTIONS (Note 4):
Participants' 62,846 181,885 176,878 60,812 - 48,887,437 -
Company - - - - - - 45,004,423
DISTRIBUTIONS TO
PARTICIPANTS (4,486) (7,799) (977) (49) (339,101) (35,383,111) (50,094,411)
NEW LOANS ISSUED (6,375) (30,665) (41,822) (6,480) 35,836,262 (24,750,061) (2,548,463)
LOAN PRINCIPAL PAYMENTS 15,490 52,218 52,181 20,887 (26,732,870) 16,642,634 3,010,397
NET TRANSFERS INTO FUNDS 1,556,343 4,938,037 4,835,013 1,602,437 (5,832,639) (9,182,364) (7,563,384)
----------- ---------- ----------- ---------- ------------ ----------- ----------
CHANGE IN NET ASSETS
AVAILABLE FOR
BENEFITS DURING YEAR 1,677,723 5,307,935 5,245,723 1,721,052 8,764,292 172,967,092 204,587,892
NET ASSETS AVAILABLE
FOR BENEFITS AT
DECEMBER 31, 1994 - - - - 78,091,627 607,532,483 698,511,345
---------- --------- ----------- ---------- ------------ ------------- -------------
NET ASSETS AVAILABLE
FOR BENEFITS AT
DECEMBER 31, 1995 $1,677,723 $5,307,935 $5,245,723 $1,721,052 $86,855,919 $780,499,575 $903,099,237
========== ========== ========== ========== =========== ============ ============
The accompanying notes are an integral part of this statement.
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1994
<S> <C> <C> <C> <C> <C> <C>
Fund Information (Note 1)
Non-Participant
Participant Directed Portion Directed Portion
Fixed Income Equity S&P 500 Participants' The Southern Company
Total Fund Fund Index Fund Loan Fund Stock Fund
INVESTMENT INCOME:
Interest and dividends $ 86,486,040 $ 4,517,561 $ 1,250,458 $ 1,453,443 $ 5,160,542 $ 34,007,672 $ 40,096,364
Net (depreciation)
appreciation in fair
value of investments
(Note 3) (117,589,549) (58,474) 5,293,424 (743,473) - (54,682,308) (67,398,718)
-------------- ----------- ----------- ---------- ----------- ------------ ------------
Net investment income (31,103,509) 4,459,087 6,543,882 709,970 5,160,542 (20,674,636) (27,302,354)
CONTRIBUTIONS (Note 4):
Participants' 70,615,207 6,766,645 9,280,520 7,553,630 - 47,014,412 -
Company 42,806,039 - - - - - 42,806,039
DISTRIBUTIONS TO
PARTICIPANT (116,228,235) (10,486,684) (6,855,204) (3,425,344) (2,427,995) (37,367,800) (55,665,208)
NEW LOANS ISSUED - (2,734,073) (3,567,316) (1,784,289) 31,822,210 (18,485,350) (5,251,182)
LOAN PRINCIPAL PAYMENTS - 2,122,958 2,689,242 2,122,176 (28,099,577) 14,733,206 6,431,995
NET TRANSFERS INTO FUNDS - (3,921,496) (9,826,110) 1,503,771 (5,160,542) 16,222,442 1,181,935
-------------- ------------ ----------- ----------- ----------- ------------ ------------
CHANGE IN NET ASSETS
AVAILABLE FOR BENEFITS
DURING YEAR (33,910,498) (3,793,563) (1,734,986) 6,679,914 1,294,638 1,442,274 (37,798,775)
NET ASSETS AVAILABLE
FOR BENEFITS AT
DECEMBER 31, 1993 1,684,719,046 104,846,980 112,233,371 48,441,377 76,796,989 606,090,209 736,310,120
-------------- ------------ ------------ ----------- ----------- ------------ ------------
NET ASSETS AVAILABLE
FOR BENEFITS AT
DECEMBER 31, 1994 $1,650,808,548 $101,053,417 $110,498,385 $55,121,291 $78,091,627 $607,532,483 $698,511,345
============== ============ ============ =========== =========== ============ ============
The accompanying notes are an integral part of this statement.
</TABLE>
10
<PAGE>
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1995 and 1994
1. Description of the Plan:
The following is a brief description of The Southern Company Employee Savings
Plan (the "Plan"), formerly the Employee Savings Plan for The Southern Company
System, and the administration thereof and is provided for general information
purposes only. The Plan includes employees, certain former employees, and
retirees of ten subsidiaries of The Southern Company: Alabama Power Company,
Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah
Electric and Power Company, Southern Communications Services, Inc., Southern
Company Services, Inc., Southern Development and Investment Group, Inc.,
Southern Electric International, Inc., and Southern Nuclear Operating Company,
Inc. (the "Employing Companies"). Participants should refer to the plan document
or the summary plan description for a more complete description of the Plan's
provisions.
The original Plan effective March 1, 1976 is a defined contribution plan
established by The Southern Company System (the "Company") for the primary
purposes of creating added employee interest in the affairs of the Company and
supplementing retirement and death benefits of employees. Under the Plan,
amounts deducted from the compensation or deferred from compensation by an
employee (a "Participant") are contributed to the Plan on the Participant's
behalf and are supplemented by contributions of the Employing Companies. The
Plan was amended and restated effective as of July 3, 1995 in order to
incorporate a variety of plan design and other changes. This amendment and
restatement shall not be applicable to former Participants or Beneficiaries of
former Participants whose participation in the Plan terminated prior to July 3,
1995. The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").
The responsibility for operation and administration of the Plan is vested
in The Southern Company Employee Savings Plan Committee (the "Committee"), which
consist of the individuals serving in the positions of Director, System
Compensation and Benefits of The Southern Company; Vice-President, Human
Resources of The Southern Company; and Comptroller of The Southern Company or
any other position or positions that succeed to the duties of the foregoing
positions. However, the Plan allows a Participant to exercise control over the
assets in his account, with the exception of The Southern Company matching
contributions, and is intended to qualify as a plan described in Section 404(c)
of ERISA and Federal Regulation 2550.404(c)-1. The Board of Directors of
Southern Company Services, Inc. (the "Board") has appointed a trustee for the
Plan and has appointed outside investment managers to manage the portfolio and
investment options in which a Participant may invest his account. The Board has
the responsibility of appointing and removing the trustee. The trustee is
authorized to purchase and sell securities subject to the funding policy
provided by the Pension Fund Investment Review Committee of the Company.
Effective July 3, 1995, the trustee and recordkeeping functions of the Plan
were transferred to Merrill Lynch Trust Company of Florida (the "Trustee") and
Merrill Lynch, Pierce, Fenner & Smith, Inc. (the "Recordkeeper"), respectively.
The Recordkeeper is responsible for maintaining appropriate records of
investment transactions, participant account balances, and, under the direction
of the Committee, for distributions from Participants' accounts.
11
<PAGE>
Participation
Generally, all regular employees of the Employing Companies are eligible to
participate in the Plan provided that they have completed at least one year of
service. This eligibility requirement complies with the provisions of the
Internal Revenue Code of 1986 (the "Code") and ERISA, as amended.
Subject to the limitations of the Code, a Participant may contribute into
his investment fund any whole percentage which is not less than 1% nor more than
16% of his compensation, as defined in the Plan ("Voluntary Participant
Contribution"). In addition, a Participant may elect to have his compensation,
as defined in the Plan, reduced by a whole percentage which is not less than 1%
nor more than 16% of his compensation, such amount to be contributed on his
behalf to his account under the Plan ("Elective Employer Contribution"). A
Participant may not contribute or have contributed on his behalf in total more
than 16% of his compensation as defined in the Plan. Participants may invest in
one or more of the investment funds, provided such investments are made in
one-percent increments totaling, but not exceeding 100%.
A Participant may prospectively change the percentage of his compensation
that he has authorized as the Elective Employer Contribution to be made on his
behalf or his Voluntary Participant Contribution to another permissible
percentage in accordance with procedures established by the Committee. Such
election shall be effective as soon as practicable after it is made.
The Employing Companies currently contribute on behalf of each of the
Participants in their employ an amount equal to 75% of (a) the Elective Employer
Contribution made on a Participant's behalf, plus (b) his Voluntary Participant
Contribution, to the extent such contributions, when combined, do not exceed 6%
of his compensation, as defined in the Plan ("Employer Matching Contribution").
All Employer Matching Contributions are invested in The Southern Company Stock
Fund.
Elective Employer Contributions for Participants who are defined as
"highly compensated employees" under Section 414(q) of the Code are subject to
additional limitations designed to prohibit discrimination in favor of the
"highly compensated employees." Certain limitations also apply to Voluntary
Participant Contributions and Employer Matching Contributions allocated to
highly compensated employees.
Loans to Participants
Plan Participants also have the right to borrow a portion of their account
balances under the terms of the Plan. Under the terms of the Plan, all loans are
considered to be earmarked investments of the Participant's account, and any
repayment of principal and interest is reinvested in accordance with the
Participant's investment direction in effect on the date of such repayments.
The Committee may direct the Trustee to make a loan or loans from the Plan
to any Participant subject to certain limitations. All loans bear a rate of
interest which remains fixed over the term of the loan and may be secured only
by a Participant's account balance. The repayment of such loans is made through
payroll deductions.
12
<PAGE>
Account Distributions
Upon separation from service with the Company, the total value of a
Participant's account will be available to him or his Beneficiary, in the event
of his death. At retirement, a Participant may elect a lump-sum payment or up to
20 annual installments, provided he does not extend installments beyond his life
expectancy. Under certain conditions of financial emergency, the Committee may
accelerate the payment time of a portion or all of the remaining installments.
However, a Participant may also elect to leave all of his funds in the Plan
until mandatory distributions begin at age 70 1/2. Distributions made because of
disability, death, or termination of employment are made only as single lump-sum
distributions. Upon termination of employment for any reason other than
retirement, death, or total and permanent disability, the value of a
Participant's account will be distributed to him in a single lump sum as soon as
practical if one of the following occurs:
The vested amount in the account is not more than $3,500; or The
Participant elects in writing to receive a distribution of his account.
If the value of the account is greater than $3,500, the Participant may
defer the distribution of his account until not later than April 1 of the
calendar year following the calendar year in which he reaches age 70 1/2.
If the distribution is being made after a Participant's death, and he has
not named a Beneficiary or if that beneficiary has predeceased him, his account
will be distributed, in preferential order to the following:
his surviving spouse,
his surviving children (equally),
his surviving parents (equally),
his surviving brothers and sisters (equally), or
his executors or administrators.
If the Participant has been married for at least one year, his Beneficiary
will be his spouse--unless his spouse consents in writing not to be his
Beneficiary and such written consent is witnessed by a notary public.
The Plan allows Participants to make routine withdrawals from their
accounts in the following order: after-tax contributions, earnings from
after-tax contributions, and up to 50 percent of employer matching funds. This
type of withdrawal does not require any hardship qualification. In order to
withdraw before-tax contributions, the participant must establish that a
hardship situation exists. The Committee will determine if a withdrawal is for
immediate and heavy financial need. Early withdrawals can be made for hardship
cases, such as pending eviction from a principal residence, certain medical
expenses, college tuition, or the down payment on the Participant's principal
residence.
Vesting
Participants are immediately vested in their Elective Employer Contributions,
Voluntary Participant Contributions, and Employer Matching Contributions, plus
actual earnings thereon.
Participants
As of December 31, 1995 and 1994, 25,303 and 25,446 employees, respectively,
were participating in the Plan.
Participants' Accounts
Individual accounts are maintained for each of the Plan's Participants to
reflect the particular Participant's contributions and related employer
contributions, as well as the Participant's share of the Plan's income and any
related administrative expenses.
13
<PAGE>
The Plan assigns units to its Participants, effective in 1995, with the
change from monthly to daily valuation of Participant accounts. At December 31,
1995, 192,126,465 units were assigned to Plan Participants. Unit values for each
investment fund were as follows at December 31, 1995:
Retirement Preservation Fund $ 1.00
Fully Managed Fund 11.00
Equity Index Fund 40.49
Core Fixed Income Fund 10.45
Special Value Fund 17.10
Global Allocation Fund 13.88
International Equity Fund 11.13
The Southern Company Stock Fund 24.63
Plan Termination
Although the Company has not expressed any intent to terminate the Plan, the
Company has the right to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, each Participant's fully vested account balance shall be
distributed to the Participant in a non-discriminatory manner, as soon as
practicable after such termination.
2. Investment Options:
During 1994 and the first six months of 1995, the Plan had four investment
options available. Each investment fund had specific guidelines and limitations
as to the type of securities eligible for investment. The primary types of
securities eligible for investment by each fund were as follows: (1) fixed
income obligations for the Fixed Income Fund, (2) common or capital stocks or
securities convertible into common or capital stocks of corporations other than
The Southern Company or its subsidiaries for the Equity Fund, (3) common stock
of The Southern Company for The Southern Company Stock Fund, and (4) common
stock selected from time to time to comprise Standard and Poor's Composite Index
of 500 Stocks for the S&P 500 Index Fund. In addition, monies pending investment
held by each of the funds described above were temporarily invested in
short-term, interest-bearing obligations.
On July 3, 1995, the trustee and recordkeeping functions of the Plan were
transferred to Merrill Lynch Trust Company of Florida and Merrill Lynch, Pierce,
Fenner & Smith, Inc., respectively. The Plan now offers eight investment
options. Participants may direct their investments into one or more of the
following funds: (1) Retirement Preservation Fund investing in a
common/collective trust which invests primarily in a broadly diversified
portfolio of guaranteed investments contracts and in U.S. government securities,
(2) Fully Managed Fund investing in stocks, bonds, and cash equivalents, (3)
Equity Index Fund investing in a common/collective trust which invests seeking
to approximate the total return of the Standard & Poor's 500 Composite Stock
Index, (4) Core Fixed Income Fund investing in all sectors of the U.S. domestic
bond market, (5) Special Value Fund investing in a mutual fund which invests
seeking long-term growth of capital by investing in a diversified portfolio of
securities, (6) Global Allocation Fund investing in a mutual fund which invests
seeking high return from a global portfolio of U.S. and foreign stocks and bonds
and cash equivalents, (7) International Equity Fund investing in a mutual fund
which invests seeking capital appreciation through investment in a diversified
portfolio of primarily equity securities of issuers located in countries other
than the United States, and (8) The Southern Company Stock Fund investing in
common stock of The Southern Company. The Company match will continue to be
non-participant directed and will be invested in The Southern Company Stock
Fund. Investment management and administrative fees for the funds listed as
items (1), (2), (3), and (8) above and certain other plan and trust expenses are
paid by the Employing Companies. Investment management and administrative fees
for the funds listed as items (4), (5), (6), and (7) above are paid from the
particular investment fund to which they relate. The Plan's brokerage fees are
included in the cost of the investments or netted against the sales proceeds.
The objectives of the respective funds are not necessarily an indicator of
14
<PAGE>
actual performance. Investments in common/collective trusts are stated at the
fair value of the underlying assets held by the fund except for benefit-
responsive investment contracts included in the Retirement Preservation Fund
which are carried at contract value (cost plus accrued interest).
3. Accounting Policies:
Basis of Accounting
The accompanying financial statements have been prepared on the accrual basis of
accounting. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported activity during the
reporting period.
Actual results could differ from those estimates.
Presentation
Certain prior year amounts have been reclassified to conform with current
presentation.
Investments
Investments are stated at fair value as determined by the trustee from quoted
market price information. In 1994, investment contracts were reported at
contract value. The net appreciation (depreciation) in fair value of investments
in the accompanying statements of changes in net assets available for benefits
reflects the net difference between the market value and the cost of investments
bought during the year and the net difference between market value and the
beginning of the year market value of assets held, sold, or distributed.
The fair market values of individual assets which represent 5% or more of
the plan's net assets as of December 31, 1995 and 1994 are as follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
The Southern Company common stock $1,674,952,587 $1,299,493,706
Merrill Lynch Retirement Preservation Trust 108,267,348 -
</TABLE>
4. Contributions:
Contributions to the Plan by the Employing Companies and their respective
Participants for the years ended December 31, 1995 and 1994, are set forth
below:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1995 Contributions
--------------------------------------------------------
Company Participants' Total
-------- ------------ -----
Alabama Power Company ...................................... $11,609,336 $19,483,958 $31,093,294
Georgia Power Company....................................... 18,817,029 30,684,608 49,501,637
Gulf Power Company.......................................... 2,164,999 3,947,473 6,112,472
Mississippi Power Company................................... 2,218,419 3,802,242 6,020,661
Savannah Electric and Power Company......................... 885,183 1,521,768 2,406,951
Southern Communications Services, Inc....................... 86,313 142,663 228,976
Southern Company Services, Inc.............................. 5,874,317 9,457,752 15,332,069
Southern Development and Investment Group, Inc.............. 66,384 100,953 167,337
Southern Electric International, Inc........................ 602,820 992,185 1,595,005
Southern Nuclear Operating Company, Inc..................... 2,679,623 4,483,831 7,163,454
----------- ----------- ------------
$45,004,423 $74,617,433 $119,621,856
=========== =========== ============
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1994 Contributions
-------------------------------------------------------
Company Participants' Total
------- ------------ -----
Alabama Power Company....................................... $11,131,568 $18,538,528 $29,670,096
Georgia Power Company....................................... 18,472,108 29,904,712 48,376,820
Gulf Power Company.......................................... 2,072,711 3,754,217 5,826,928
Mississippi Power Company................................... 2,257,013 3,884,010 6,141,023
Savannah Electric and Power Company......................... 853,518 1,468,600 2,322,118
Southern Company Services, Inc.............................. 5,059,619 8,160,072 13,219,691
Southern Electric International, Inc........................ 375,550 603,218 978,768
Southern Nuclear Operating Company, Inc..................... 2,583,952 4,301,850 6,885,802
----------- ----------- ------------
$42,806,039 $70,615,207 $113,421,246
=========== =========== ============
</TABLE>
5. Tax Status:
The Plan received a determination letter dated June 10, 1996 from the Internal
Revenue Service which states that the Plan, as amended through March 4, 1996, is
in compliance with Section 401(a) and applicable subsections of Section 410(b)
of the Code as of that date. In the opinion of the Company's management, the
Plan is currently operating in compliance with applicable provisions of the
Code. Therefore, the Plan administrator believes that the Plan was qualified and
the related trust was tax-exempt as of December 31, 1995 and 1994; accordingly,
no provision for federal income taxes has been made in the accompanying
financial statements.
Employer contributions and income of the Plan are not taxable to
Participants until withdrawals or distributions are made.
6. Reconciliation to the Form 5500:
As of December 31, 1995 and 1994, the Plan had approximately $5,833,206 and
$23,819,529, respectively, of pending distributions to Participants who elected
to withdraw from the Plan. These amounts are recorded as a liability in the
Plan's Form 5500; however, these amounts are not recorded as a liability in the
accompanying statements of net assets available for benefits in accordance with
generally accepted accounting principles.
The following table reconciles net assets available for benefits for the
years ended December 31, 1995 and 1994 per the financial statements to the Form
5500 to be filed by the Company:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Net Assets Available
Benefits Distributions for Benefits
Payable to Participants 1995 1994
------- --------------- ---- ----
Per financial statements $ - $106,405,605 $2,122,883,388 $1,650,808,548
Accrued benefit payments 5,833,206 5,833,206 (5,833,206) (23,819,529)
Reversal of 1994 accrual
for benefit payments - (23,819,529) - -
----------- ------------ ------------- ---------------
Per Form 5500 $5,833,206 $88,419,282 $2,117,050,182 $1,626,989,019
========== =========== ============== ==============
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Schedule I
Page 1 of 3
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1995
<S> <C> <C> <C> <C>
Description of Investment Including
Maturity Date, Rate of Interest,
Identity of Issuer, Borrower Collateral, Par or Maturity Value,
(a) (b) Lessor, or Similar Party (c) Number of Shares (d)Cost (e) Current Value
------------------------------ ------------------------------------- ---- -------------
RETIREMENT PRESERVATION FUND:
Temporary Investment:
* Merrill Lynch Trust Company,
Merrill Lynch CMA Money Fund par $1 182,521 shares $ 182,521 $ 182,521
Common/Collective Trust:
* Merrill Lynch Trust Company,
Merrill Lynch Retirement
Preservation Trust Fund par $1 108,267,348 shares 108,267,348 108,267,348
----------- -----------
Total Retirement Preservation Fund 108,449,869 108,449,869
----------- -----------
FULLY MANAGED FUND:
Temporary Investment:
* Merrill Lynch Trust Company,
Merrill Lynch CMA Money Fund par $1 234,408 shares 234,408 234,408
----------- -----------
Treasury Securities:
United States Treasury Bond NR, 6.25%, due 08/15/23 3,041,563 3,086,730
United States Treasury Note NR, 5.75%, due 08/15/03 17,195,871 18,237,419
------------ -----------
Treasury Securities 20,237,434 21,324,149
----------- -----------
Agency Security:
Federal Home Loan Mortgage Corp. Disc Note, 0%, due 01/02/96 14,027,033 14,036,000
------------ ----------
Corporate Bonds:
Anadarko Petroleum Corp Notes BBB+, 5.875% ,due 10/15/03 3,800,360 3,909,560
Bank Hawaii Subordinated Note A-, 6.875%, due 06/01/03 5,025,000 5,160,450
Bankers Trust NY Corp Sub Deb
FLT Rate Note AA+, FLT%, due 03/19/03 4,659,510 4,878,200
Cardinal Health Inc Notes. A-, 6.500%, due 02/15/04 1,317,940 1,317,485
Carnival Corporation Notes A-, 6.150%, due 10/01/03 2,951,790 2,950,020
Chemical Banking Corp
Subordinated Note A-, 6.500%, due 01/15/09 1,996,160 2,009,640
Chrysler Financial Corp. Notes A-, 5.625%, due 01/15/99 4,859,950 4,975,050
Enron Corporation Senior
Subordinated Note BBB, 6.750%, due 07/01/05 3,966,680 4,087,880
NM General Motors
Acceptance BE Semi-Pay A-, 6.625%, due 09/19/02 3,996,400 4,097,760
Hertz Corporation Senior Notes A, 6.375%, due 10/15/05 1,004,610 992,750
Nabisco Incorporated Notes BBB, 6.700%, due 06/15/02 4,961,500 5,084,450
Philadelphia Electric Co First
and Refunding Mtg BBB+, 5.625%, due 11/01/01 960,280 973,740
Tenneco Incorporated Notes BBB-, 6.500%, due 12/15/05 1,986,200 2,010,880
---------- ----------
Corporate Bonds 41,486,380 42,447,865
----------- ----------
Common Stocks:
American International Group
Incorporated 40,000 shares 2,487,606 3,700,000
Archer Daniels Midland 200,000 shares 3,485,935 3,600,000
Carnival Corporation Cl A 172,000 shares 3,885,270 4,192,500
Columbia/HCA Healthcare Corp 90,000 shares 4,017,682 4,567,500
Federal National Mortgage Association 20,000 shares 1,632,998 2,477,500
General Electric 56,500 shares 2,168,588 4,068,000
General Motors Corp 87,400 shares 4,269,310 4,621,275
Glaxo PLC Sponsored American Depository
Receipts 170,200 shares 4,130,843 4,786,875
Hanson PLC Sponsored American Depository
Receipts 200,000 shares 3,286,390 3,050,000
Merck & Company Inc 50,000 shares 2,349,148 3,281,250
NationsBank Corporation 54.000 shares 3,029,640 3,759,750
Pfizer Inc 40,000 shares 1,701,777 2,520,000
St Paul Companies PV1 50 70,000 shares 3,469,211 3,893,750
Wal-Mart Stores Inc 170,000 shares 4,278,484 3,782,500
Williams Companies Del 60,000 shares 2,099,701 2,632,500
YPF Sociedad Anon American Depository
Receipts 240,000 shares 4,700,777 5,190,000
----------- --------
Common Stocks 50,993,360 60,123,400
----------- -----------
Total Fully Managed Fund 126,978,615 138,165,822
----------- -----------
* Represents a party-in-interest to the Plan.
The accompanying notes are an integral part of this schedule.
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Schedule I
Page 2 of 3
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1995
Description of Investment Including
Maturity Date, Rate of Interest,
Identity of Issuer, Borrower Collaterial, Par or Maturity Value,
(a) (b) Lessor, or Similar Party (c) Number of Shares (d)Cost (e) Current Value
EQUITY INDEX FUND:
Temporary Investment:
* Merrill Lynch Trust Company,
Merrill Lynch CMA Money Fund par $1 150,398 shares $ 150,398 $ 150,398
Common/Collective Trust:
* Merrill Lynch Trust Company,
Merrill Lynch
Equity Index Trust -- Tier III par $1 2,202,245 shares 78,959,395 89,168,881
---------- ----------
Total Equity Index Fund 79,109,793 89,319,279
---------- ----------
CORE FIXED INCOME FUND:
Temporary Investments:
* Merrill Lynch Trust Company,
Merrill Lynch CMA Money Fund par $1 2,956 shares 2,956 2,956
* Merrill Lynch Trust Company,
Merrill Lynch Institutional Fund par $1 303,144 shares 303,144 303,144
--------- ----------
Temporary Investments 306,100 306,100
--------- ----------
Treasury Securities:
United States, US Treasury Bond NR 6.875%, due 08/15/25 109,687 112,781
United States, US Treasury Note NR 6.250%, due 02/15/03 408,624 417,312
United States, US Treasury Note NR 5.75% , due 10/31/00 401,000 405,748
--------- ----------
Treasury Securities 919,311 935,841
--------- ----------
Corporate Bond:
Public Service Electric & Gas Co., First
Refunding Mortgage Bonds A-, 6.125%, due 08/01/02 392,944 399,652
--------- ----------
Total Core Fixed Income Fund 1,618,355 1,641,593
--------- ----------
SPECIAL VALUE FUND:
Investment in Registered Securities:
* Merrill Lynch Asset Management,
Merrill Lynch Special Value Fund, Inc.
-- Class A par $0.10 308,571 shares 5,184,255 5,276,559
--------- ----------
GLOBAL ALLOCATION FUND:
Investment in Registered Securities:
* Merrill Lynch Asset Management,
Merrill Lynch Global Allocation
Fund, Inc. -- Class A par $0.10 375,894 shares 5,316,181 5,217,404
--------- ----------
INTERNATIONAL EQUITY FUND:
Investment in Registered Securities:
* Merrill Lynch Asset Management,
Merrill Lynch International Equity
Fund -- Class A par $0.10 153,845 shares 1,668,766 1,712,303
--------- ----------
LOANS DUE FROM PARTICIPANTS (interest rates vary from 6.0% to 11.5%) 86,855,919 86,855,919
---------- ----------
THE SOUTHERN COMPANY STOCK FUND--PARTICIPANT DIRECTED PORTION:
Temporary Investment:
* Merrill Lynch Trust Company,
Merrill Lynch CMA Money Fund par $1 1,328,004 shares 1,328,004 1,328,004
Common Stock:
* The Southern Company, The Southern
Company Common Stock par $5 31,486,278 shares 504,056,585 775,349,606
----------- -----------
Total Southern Company Stock Fund -- Participant
Directed Portion 505,384,589 776,677,610
----------- -----------
*Represents a party-in-interest to the Plan.
The accompanying notes are an integral part of this schedule.
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Schedule I
Page 3 of 3
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1995
Description of Investment Including
Maturity Date, Rate of Interest,
Identity of Issuer, Borrower (c) Collateral, Par or Maturity Value
(a) (b) Lessor, or Similar Party Number of Shares (d) Cost (e) Current Value
------------------------- --------------------------------- ---- -------------
THE SOUTHERN COMPANY STOCK FUND--
NON-PARTICIPANT DIRECTED PORTION:
Temporary Investment:
* Merrill Lynch Trust Company,
Merrill Lynch CMA Money Fund par $1 1,512,859 shares $ 1,512,859 $ 1,512,859
Common Stock:
* The Southern Company,
The Southern Company
Common Stock par $5 36,532,101 shares 543,776,314 899,602,981
------------ ------------
Total Southern Company Stock Fund--
Non-Participant Directed Portion 545,289,173 901,115,840
------------ ------------
TOTAL INVESTMENT OF ALL FUNDS $1,465,855,515 $2,114,432,198
============== ==============
(NOTE) The last sale price (New York Stock Exchange composite transactions) for The Southern Company common stock on June 24,
1996 was $23.25 as compared to a price of $24.625 on December 31, 1995.
* Represents a party-in-interest to the Plan.
The accompanying notes are an integral part of this schedule.
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Schedule II
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
Item 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(h) Current
(b) Description of asset value of
(include interest (g) Cost asset on (i) Net gain
(a) Identity of rate amd maturity (c)Purchase (d) Selling (e)Lease (f) Expense of transaction or
party involved in case of a loan) price price rental incurred asset date (loss)
-------------- ----------------- -------- ------ ------ --------- ---- ---------- -------
Merrill Lynch Merrill Lynch
Trust Company Retirement
of Florida Preservation Trust
283 transactions $123,748,074
328 transactions $15,453,382 $15,453,382 $15,453,382 $ -0-
Merrill Lynch Merrill Lynch Equity
Trust Company Index Trust
of Florida 210 transactions 84,116,094
285 transactions 5,515,441 5,124,016 5,515,441 391,425
The Southern Common Stock
Company 366 transactions 176,226,915 $29,792
417 transactions 104,404,383 75,216,590 104,404,383 9,187,793
78 transactions 31,625,306 50,413,673 8,788,367
U. S. Treasury Bill 4 transactions 108,048,580
9 transactions 108,330,140 108,048,580 108,330,140 281,560
Federal Home 22 transactions 291,850,793
Loan Bank 22 transactions 291,985,000 291,850,793 291,985,000 134,207
Federal Home 52 transactions 628,708,568
Loan Mortgage 55 transactions 614,960,700 614,681,535 614,960,700 279,165
Federal Farm 2 transactions 44,805,055
Credit Bank 2 transactions 45,020,000 44,805,055 45,020,000 214,945
CP Assoc. Corp. NA 16 transactions 88,654,921
16 transactions 88,676,000 88,654,921 88,676,000 21,079
Wachovia Bank of Wachovia Bank
Georgia, N.A. Diversified Trust Fund
Short-Term Investment Fund
Collective Investment,
Variable Rate, payable upon
demand
284 transactions 308,832,751
182 transactions 459,888,825 459,888,825 459,888,825 -0-
The accompanying notes are an integral part of this schedule.
</TABLE>
20
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
The Southern Company Employee Savings Plan Committee has duly caused this annual
report to be signed by the undersigned thereunto duly authorized.
THE SOUTHERN COMPANY
EMPLOYEE SAVINGS PLAN
/s/ C. Alan Martin
C. Alan Martin,
Chairman Savings Plan Committee
June 24, 1996
21
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated May 2, 1996, included in this annual report of The
Southern Company Employee Savings Plan on Form 11-K for the year ended December
31, 1995, into the Plan's previously filed Registration Statement No.
33-23152.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Atlanta, Georgia
June 24, 1996
22
Exhibit B
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
P.O. BOX 1055
ATLANTA, GA 30370-0000
Employer Identification Number:
Date: March 5, 1996 63-0274273
File Folder Number:
580002166
SOUTHERN COMPANY SERVICES, INC. Person to Contact:
64 PERIMETER CENTER EAST GARY W. FOOTE
ATLANTA, GA 30346 Contact Telephone Number:
(404) 331-0912
Plan Name:
THE SOUTHERN COMPANY EMPLOYEE
SAVINGS PLAN
Plan Number: 002
Dear Applicant:
We have made a favorable determination on your plan, identified above,
based on the information supplied. Please keep this letter in your permanent
records.
Continued qualification of the plan under its present form will depend on
its effect in operation. (See section 1.401-1(b)(3) of the Income Tax
Regulations.) We will review the status of the plan in operation periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the qualified
status of your employee retirement plan, and provides information on the
reporting requirements for your plan. It also describes some events that
automatically nullify it. It is very important that you read the publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other federal or
local statutes.
This determination is subject to your adoption of the proposed amendments
submitted in your letter dated MARCH 1, 1996. The proposed amendments should be
adopted on or before the date prescribed by the regulations under Code section
401(b).
This determination letter is applicable for the amendment(s) adopted on
DECEMBER 22, 1994.
This plan has been mandatorily disaggregated, permissively aggregated, or
restructured to satisfy the nondiscrimination requirements.
This letter is issued under Rev. Proc. 93-39 and considers the
amendments required by the Tax Reform Act of 1986 except as otherwise specified
in this letter.
<PAGE>
- 2 -
SOUTHERN COMPANY SERVICES, INC.
This plan satisfies the nondiscriminatory current availability
requirements of section 1.401(a)(4)-4(b) of the regulations with respect to
those benefits, rights, and features that are currently available to all
employees in the plan's coverage group. For this purpose, the plan's coverage
group consists of those employees treated as currently benefiting for purposes
of demonstrating that the plan satisfies the minimum coverage requirements of
section 410(b) of the Code.
This letter may not be relied upon with respect to whether the plan
satisfies the qualification requirements as amended by the Uruguay Round
Agreements Act, Pub. L. 103-465.
We have sent a copy of this letter to your representative as indicated
in the power of attorney.
If you have questions concerning this matter, please contact the person
whose name and telephone number are shown above.
Sincerely yours,
District Director
Enclosures
Publication 794
<PAGE>
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
P.O. BOX 1055
ATLANTA, GA 30370-0000
Employer Identification Number:
Date: June 10, 1996 63-0274273
File Folder Number:
580002166
SOUTHERN COMPANY SERVICES, INC. Person to Contact:
64 PERIMETER CENTER EAST EP/EO CUSTOMER SERVICE UNIT
ATLANTA, GA 30346 Contact Telephone Number:
(410) 962-6058
Plan Name:
THE SOUTHERN COMPANY EMPLOYEE
SAVINGS PLAN
Plan Number: 002
Dear Applicant:
We have made a favorable determination on your plan, identified above,
based on the information supplied. Please keep this letter in your permanent
records.
Continued qualification of the plan under its present form will depend on
its effect in operation. (See section 1.401-1(b)(3) of the Income Tax
Regulations.) We will review the status of the plan in operation periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the qualified
status of your employee retirement plan, and provides information on the
reporting requirements for your plan. It also describes some events that
automatically nullify it. It is very important that you read the publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other federal or
local statutes.
This determination is subject to your adoption of the proposed amendments
submitted in your letter dated 5/28/96. The proposed amendments should be
adopted on or before the date prescribed by the regulations under Code section
401(b).
This determination letter is applicable for the amendment(s) adopted on
6/27/95.
This determination letter is also applicable for the amendment(s) adopted
on 2/12/96 & 3/04/96.
This plan has been mandatorily disaggregated, permissively aggregated, or
restructured to satisfy the nondiscrimination requirements.
This letter is issued under Rev. Proc. 93-39 and considers the amendments
required by the Tax Reform Act of 1986 except as otherwise specified in this
letter.
<PAGE>
-2-
SOUTHERN COMPANY SERVICES, INC.
This plan satisfies the nondiscriminatory current availability
requirements of section 1.401(a)(4)-4(b) of the regulations with respect to
those benefits, rights, and features that are currently available to all
employees in the plan's coverage group. For this purpose, the plan's coverage
group consists of those employees treated as currently benefiting for purposes
of demonstrating that the plan satisfies the minimum coverage requirements of
section 410(b) of the Code.
This letter may not be relied upon with respect to whether the plan
satisfies the qualification requirements as amended by the Uruguay Round
Agreements Act, Pub. L. 103-465.
We have sent a copy of this letter to your representative as indicated in
the power of attorney.
If you have questions concerning this matter, please contact the person
whose name and telephone number are shown above.
Sincerely yours,
District Director
Enclosures:
Publication 794
Exhibit C
TRUST AGREEMENT
between
Merrill Lynch Trust Company of Florida, as the Trustee
and
Southern Company Services, Inc., as the Employer
Trust Agreement entered into as of July 3, 1995 by and between the
above named employer (the "Employer") and Merrill Lynch Trust Company of
Florida, a Florida corporation (the "Trustee"), with respect to a trust
("Trust") forming part of the Southern Company Employee Savings Plan (the
"Plan").
The Employer and the Trustee hereby agree as follows:
ARTICLE I
STATUS OF TRUST AND APPOINTMENT
AND ACCEPTANCE OF TRUSTEE
1.01 Status of Trust. The Trust is intended to be a qualified trust
under section 40 1 (a) of the Internal Revenue Code of 1986, as amended from
time to time (the "Code"), and exempt from taxation pursuant to section 501(a)
of the Code. This Trust is an amendment and restatement of that certain trust
agreement for the Plan between Southern Company Services, Inc. and Wachovia Bank
of Georgia, N.A. effective as of January 1, 1992.
1.02 Appointment of Trustee. The Employer represents that all necessary
action has been taken for the appointment of the Trustee as trustee of the Trust
and that the Trust Agreement constitutes a legal, valid and binding obligation
of the Employer.
1.03 Acceptance of Appointment. The Trustee accepts its
appointment as trustee of the Trust.
1.04 Title of Trust. The Trust shall be known as the Southern
Company Employee Savings Plan Trust.
1.05 Effectiveness. This Trust Agreement shall not become
effective until executed and delivered by both the Employer and the Trustee.
ARTICLE 11
ADMINISTRATIVE AND INVESTMENT FIDUCIARIES
2.01 Named Administrative and Investment Fiduciaries. For purposes of
this Trust Agreement, the term "Named Administrative Fiduciary" refers to the
committee or its designee(s) named or provided for in the Plan as responsible
for the administration and operation of the Plan, and the term "Named Investment
Fiduciary" refers to the committee or its designee(s) provided for in the Plan
as responsible for the investment and management of Plan assets to the extent
provided for in this Trust Agreement, The Named Administrative Fiduciary and the
Named Investment Fiduciary may be the same person. If any such person is not
named or provided for in the Plan, or if so named or provided for, is not then
serving, the Employer shall be the Named Administrative Fiduciary or the Named
Investment Fiduciary or both, as the case may be.
<PAGE>
2.02 Identification of Named Fiduciaries and Designees. The Named
Administrative Fiduciary and the Named Investment Fiduciary under the Plan shall
each be identified to the Trustee in writing by the Employer, and specimen
signatures of each, or of each member thereof, as appropriate, shall be provided
to the Trustee by the Employer. The Employer shall promptly give written notice
to the Trustee of a change in the identity either of the Named Administrative
Fiduciary or the Named Investment Fiduciary, or any member thereof, as
appropriate, and until such notice is received by the Trustee, the Trustee shall
be fully protected in assuming that the identity of the Named Administrative
Fiduciary or Named Investment Fiduciary, and the members thereof, as
appropriate, is unchanged. Each person authorized in accordance with the Plan to
give a direction to the Trustee on behalf of the Named Administrative Fiduciary
or the Named Investment Fiduciary shall be identified to the Trustee by written
notice from the Employer or the Named Administrative Fiduciary or the Named
Investment Fiduciary, as the case may be, and such notice shall contain a
specimen of the signature. The Trustee shall be entitled to rely upon each such
written notice as evidence of the identity and authority of the persons
appointed until a written cancellation of the appointment, or the written
appointment of a successor, is received by the Trustee from the Employer, the
Named Administrative Fiduciary or the Named Investment Fiduciary. as the case
may be.
ARTICLE III
RECEIPTS AND TRUST FUND
3.01 Receipt by Trustee. The Trustee shall receive in cash or other
assets acceptable to the Trustee all contributions paid or delivered to it which
are allocable under the Plan and to the Trust and all transfers paid or
delivered under the Plan to the Trust from a predecessor trustee or another
trust (including a trust forming part of another plan qualified under section
401(a) of the Code), provided that the Trustee shall not be obligated to receive
any such contribution or transfer unless prior thereto or coincident therewith,
as the Trustee may specify, the Trustee has received such reconciliation,
allocation, investment or other information concerning, or such direction,
contribution or representation with respect to, the contribution or transfer or
the source thereof as the Trustee may require, The Trustee shall have no duty or
authority to (a) require any contributions or transfers to be made under the
Plan or to the Trustee, (b) compute any amount to be contributed or transferred
under the Plan to the Trustee, or (c) determine whether amounts received by the
Trustee comply with the Plan.
3.02 Trust Fund. For purposes of this Trust Agreement, the "Trust Fund"
consists of all money and other property received by the Trustee pursuant to
Section 3.01 hereof, increased by any income or gains on or increment in such
assets and decreased by any investment loss or expense, benefit or disbursement
paid pursuant to this Trust Agreement. The Trustee shall hold the Trust Fund,
without distinction between principal and income, as a nondiscretionary trustee
pursuant to the terms of this Trust Agreement. Assets of the Trust may, in the
Trustee's discretion, be held in an account with an affiliate of the Trustee.
ARTICLE IV
PAYMENTS, ADMINISTRATIVE DIRECTIONS
AND EXPENSES
4.01 Payments by Trustee. Payments of money or property from the Trust
Fund shall be made by the Trustee upon direction from the Named Administrative
Fiduciary or its designee. Payments by the Trustee shall be transmitted to the
Named Administrative Fiduciary or its designee for delivery to the proper payees
or to payee addresses supplied by the Named Administrative Fiduciary or its
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designee, and the Trustee's obligation to make such payments shall be satisfied
upon such transmittal. The Trustee shall have no obligation to determine the
identity of persons entitled to payments under the Plan or their addresses.
4.02 Named Administrative Fiduciary's Directions. Directions from or on
behalf of the Named Administrative Fiduciary or its designee shall be
communicated to the Trustee or the Trustee's designee only in a manner and in
accordance with procedures acceptable to the Trustee. The Trustee's designee
shall not, however, be empowered to implement any such directions except in
accordance with procedures acceptable to the Trustee. The Trustee shall have no
liability for following any such directions or failing to act in the absence of
any such directions. The Trustee shall have no liability for the acts or
omissions of any person making or failing to make any direction under the Plan
or this Trust Agreement nor any duty or obligation to review any such direction,
act or omission.
4.03 Disputed Payments. If a dispute arises over the propriety of the
Trustees making any payment from the Trust Fund, the Trustee may withhold the
payment until the dispute has been resolved by a court of competent jurisdiction
or settled by the parties to the dispute. The Trustee may consult legal counsel,
which counsel is in good standing in the state in which counsel is admitted to
the practice of law, and shall be fully protected in acting upon the advice of
counsel.
4.04 Trustee's Compensation and Expenses. To the extent not previously
paid by the Employer, the Trustee shall withdraw from the Trust Fund such
amounts as are necessary to (a) pay the Trustee reasonable compensation for its
services under this Trust Agreement in accordance with the Trustee's fee
schedule in effect and applicable at the time such compensation becomes payable,
and (b) pay or reimburse the Trustee for all reasonable expenses incurred by the
Trustee in connection with or relating to the performance of its duties under
this Trust Agreement or its status as Trustee, including reasonable attorneys
fees.
Until paid by the Employer or charged against and withdrawn from the
Trust Fund, as the case may be, the Trustee's compensation and expenses shall be
a lien upon the Trust Fund. The Trustee is authorized to charge the Trust Fund
for and withdraw from the Trust Fund, without direction from the Named
Administrative Fiduciary or any other person, the amount of any such fees or
expenses which the Employer has not elected to pay and the amount of any such
fees or expenses which the Employer has so elected to pay but which remain
unpaid for a period of 60 days after presentation of a statement for such amount
to the Employer. Trust Fund assets shall be applied to pay such fees and
expenses in the following priority by asset category to the extent thereof held
at the time of withdrawal in the Trust Fund subfund or account to which the fee
or expense is allocated: (i) uninvested cash balances; (ii) shares of any money
market fund or funds held in the Trust Fund; and (iii) any other Trust Fund
assets. The Trustee is authorized to allocate its fees and expenses among these
subfunds or accounts to which the fees or expenses pertains in such manner as
the Trustee deems appropriate under the circumstances unless prior to such
allocation the Employer or the Named Administrative Fiduciary specifies the
manner in which the allocation is to be made. The Trustee is also authorized but
not required to sell any shares or other assets referred to above to the extent
necessary for the purpose.
4.05 Taxes. The Trustee is authorized, with or without direction from
the Named Administrative Fiduciary or any other person, to withdraw from the
Trust Fund and pay any federal, state or local taxes, charges or assessments of
any kind levied or assessed against the Trust or assets thereof. Until paid,
such taxes shall be a lien against the Trust Fund. The Trustee shall give notice
to the Named Administrative Fiduciary of its receipt of a demand for any such
taxes, charges or assessments. The Trustee shall not be personally liable for
any such taxes, charges or assessments.
4.06 Expenses of Administration. Reasonable expenses incurred by the
Employer, the Named Administrative Fiduciary, the Named Investment Fiduciary,
any Investment Manager designated pursuant to Section 5.02 or any other persons
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designated to act on behalf of the Employer, the Named Administrative Fiduciary
or the Named Investment Fiduciary, including reimbursement for reasonable
expenses incurred in the performance of their respective duties, shall be the
obligation of the Employer or other person specified in the Plan. Such expenses,
however, may be paid from the Trust Fund upon the written direction to the
Trustee of the Named Administrative Fiduciary.
4.07 Restriction on Alienation. Except as provided in Section 4.08 or
under section 401(a)(13) of the Code, the interest of any Plan participant or
beneficiary in the Trust Fund shall not be subject to the claims of such
person's creditors and may not be assigned, sold, transferred, alienated or
encumbered. Any attempt to do so shall be void-, and the Trustee shall disregard
any attempt. Trust assets shall not in any manner be liable for or subject to
debts, contracts, liabilities, engagement or torts of any Plan participant or
beneficiary, and benefits shall not be considered an asset of any such a person
in the event of the person's insolvency or bankruptcy.
4.08 Payment on Court Order. The Trustee is authorized to make any
payments directed by court order in any action in which the Trustee is a party
or pursuant to a "qualified domestic relations order" under section 414(p) of
the Code; provided that the Trustee shall not make such payment if the Trustee
is indemnified and held harmless by the Employer in a manner satisfactory to the
Trustee against all consequences of such failure to pay. The Trustee is not
obligated to defend actions in which the Trustee is named but shall notify the
Employer or Named Administrative Fiduciary of any such action and may tender
defense of the action to the Employer, the Named Administrative Fiduciary or the
participant or beneficiary whose interest is affected. The Trustee may in its
discretion defend any action in which the Trustee is named and any expenses,
including reasonable attorneys fees, incurred by the Trustee in that connection
shall be paid or reimbursed in accordance with Section 4.04 hereof.
ARTICLE V
INVESTMENTS
5.01 Investment Management. The Named Investment Fiduciary shall manage
the investment of the Trust Fund except insofar as (a) a person (an "Investment
Manager") who meets the requirements of section 3(38) of the Employee Retirement
Income Security Act of 1974, as amended from time to time ("ERISA"), has
authority to manage Trust assets as referred to in Section 5.02 hereof or (b)
the Plan provides for participant or beneficiary direction of the investment of
assets allocable under the Plan to the accounts of such participants and
beneficiaries and the Trustee notifies the Employer that such directions will be
acceptable. In the latter situation, a list of the participants and
beneficiaries and such information concerning them as the Trustee may specify
shall be provided by the Employer or the Named Administrative Fiduciary to the
Trustee and/or such person(s) as are necessary for the implementation of the
directions in accordance with the procedure acceptable to the Trustee. Except as
required by ERISA, the Trustee shall invest the Trust Fund as directed by the
Named Investment Fiduciary, an Investment Manager or a Plan participant or
beneficiary, as the case may be, and the Trustee shall have no discretionary
control over, nor any other discretion regarding, the investment or reinvestment
of any asset of the Trust. The Trustee may limit the categories of assets in
which the Trust Fund may be invested.
It is understood that the Trustee may, from time to time, have on hand
funds which are received as contributions or transfers to the Trust which are
awaiting investment or funds from the sale of Trust assets which are awaiting
reinvestment. Absent receipt by the Trustee of a direction from the proper
person for the investment or reinvestment of such funds or otherwise prior to
the application of funds in implementation of such a direction, the Trustee
shall in accordance with the Trustee's normal procedures in this regard cause
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such funds to be invested in shares of the money market fund acceptable to the
Trustee as the Employer or Named Investment Fiduciary may in writing to the
Trustee specify for this purpose from time to time. Any such fund may be
sponsored, managed or distributed by an affiliate of the Trustee. The Employer
or the Named Investment Fiduciary, as the case may be, hereby acknowledges that
prior to any such specification it has read or will have read the then current
prospectus for the specified fund.
5.02 Investment Managers. If so allowed pursuant to the Plan, the
Employer or the Named Investment Fiduciary may appoint one or more Investment
Managers, who may be an affiliate of the Trustee, to direct the Trustee in the
investment of all or a specified portion of the assets of the Trust. Any such
Investment Manager shall be directed by the Employer or the Named Investment
Fiduciary, as the case may be, to act in accordance with the procedures referred
to in Section 5.04. The Named Investment Fiduciary shall notify the Trustee in
writing before the effectiveness of the appointment or removal of any Investment
Manager.
If there is more than one Investment Manager whose appointment is
effective under the Plan at any one time, the Trustee shall, upon written
instructions from the Employer or the Named Investment Fiduciary, establish
separate funds for control by each such Investment Manager. The funds shall
consist of those Trust assets designated by the Employer or the Named Investment
Fiduciary.
5.03 Direction of Voting and Other Rights. Unless an Investment
Manager, as described in Section 5.02, has been appointed by the Employer or by
the Named Investment Fiduciary and the voting and other rights regarding those
assets or securities that have been designated for control by the Investment
Manager have been specifically delegated to and assumed by the Investment
Manager, the voting and other rights in securities or other assets held in the
Trust shall be exercised by the Trustee as directed by the Named Investment
Fiduciary or other person who at the time has the right as referred to in
Section 5.01 hereof to direct the investment or reinvestment of the security or
other asset involved, provided that notwithstanding any provision of the Plan to
the contrary, (a) except as provided in clause (b) of this Section, such voting
and other rights in any such security or other asset selected by the Employer or
the Named Investment Fiduciary shall be exercised by the Named Investment
Fiduciary and (b) such voting and other rights in any "employer security" with
respect to the Plan within the meaning of Section 407(d)(1) of ERISA ("Employer
Securities") which is held in an account under the Plan over which a Plan
participant or beneficiary has control as to specific assets to be held therein
or which is held in an account which consists solely or primarily of Employer
Securities shall be exercised by the participants or beneficiaries having
interests in that account. Notwithstanding any provision hereof or of the Plan
to the contrary, (i) in the event a Plan participant or beneficiary or an
Investment Manager with the right to direct a voting or other decision with
respect to any security or other asset held in the Trust does not communicate
any decision on the matter to the Trustee or the Trustee's designee by the time
prescribed by the Trustee or the Trustee's designee for that purpose or if the
Trustee notifies the Named Investment Fiduciary either that it does not have
precise information as to the securities or other assets involved allocated on
the applicable record date to the accounts of all participants and beneficiaries
or that time constraints make it unlikely that participant, beneficiary or
Investment Manager direction, as the case may be, can be received on a timely
basis, the decision shall be the responsibility of the Named Investment
Fiduciary and shall be communicated to the Trustee on a timely basis, and (ii)
in the event the Named Investment Fiduciary with any right under the Plan or
hereunder to direct a voting or other decision with respect to any security or
other asset held in the Trust, including any such right under clause (a) or
clause (i) of this Section, does not communicate any decision on the matter to
the Trustee or the Trustee's designee by the time prescribed by the Trustee for
that purpose, the Trustee may obtain advice from a bank, insurance company,
investment adviser or other investment professional (including any affiliate of
the Trustee) or retain an Investment Manager with full discretion to make the
decision. The Employer will reimburse the Trustee for the reasonable fees and
expenses incurred in obtaining this advice if the voting or other decision
relates to a contested proxy matter, a tender or merger offer, or other decision
which requires substantial analysis to determine whether the economic
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consequence of the decision will be material to the Plan. Except as required by
ERISA, the Trustee shall (a) follow all directions above-referred to in this
Section and (b) shall have no duty to exercise voting or other rights relating
to any such security or other asset.
5.04 Investment Directions. Directions for the investment or
reinvestment of Trust assets or of a type referred to in Section 5.03 from the
Employer, the Named Investment Fiduciary, an Investment Manager or a Plan
participant or beneficiary, as the case may be, shall, in a manner and in
accordance with procedures acceptable to the Trustee, be communicated to and
implemented by, as the case may be, the Trustee, the Trustee's designee or, with
the Trustee's consent, broker/dealer designated for the purpose by the Employer
or the Named Investment Fiduciary. Communication of any such direction to such a
designee or broker/dealer shall conclusively be deemed an authorization to the
designee or broker/dealer to implement the direction even though coming from a
person other than the Trustee. The Trustee shall have no liability for its or
any other person's following such directions or failing to act in the absence of
any such directions. The Trustee shall have no liability for the acts or
omissions of any person directing the investment or reinvestment of Trust Fund
assets or making or failing to make any direction referred to in Section 5.03.
Neither shall the Trustee have any duty or obligation to review any such
investment or other direction, act or omission or, except upon receipt of a
proper direction, to invest or otherwise manage any asset of the Trust which is
subject to the control of any such person or to exercise any voting or other
right referred to in Section 5.03.
5.05 Communication of Proxy and Other Materials. The Employer or Named
Administrative Fiduciary shall establish a procedure acceptable to the Trustee
for the timely dissemination to each person entitled to direct the Trustee or
its designee as to a voting or other decision called for thereby or referred to
therein of all proxy and other materials bearing on the decision. In the case of
Employer Securities, at such time as proxy or other materials bearing thereon
are disseminated generally to owners of Employer Securities in accordance with
applicable law, the Employer shall cause a copy of such proxy or other materials
to be delivered directly to the Trustee and, thereafter, shall promptly deliver
to the Trustee such number of additional copies of the proxy or other materials
as the Trustee may request.
5.06 Common and Collective Trust Funds. Any person authorized to direct
the investment of Trust assets may, if the Trustee and the Named Investment
Fiduciary so permit, direct the Trustee to invest such assets in a common or
collective trust maintained by the Trustee for the investment of assets of
qualified trusts under section 40 1 (a) of the Code, individual retirement
accounts under section 408(a) of the Code and plans or governmental units
described in section 8 18(a)(6) of the Code. The documents governing any such
common or collective trust fund maintained by the Trustee, and in which Trust
assets have been invested, are hereby incorporated into this Trust Agreement by
reference.
ARTICLE VI
RESPONSIBILITIES AND INDEMNITY
6.01 Relationship of Fiduciaries. Each fiduciary of the Plan and this
Trust shall be solely responsible for its own acts or omissions. The Trustee
shall have no duty to question any other Plan fiduciary's performance of
fiduciary duties allocated to such other fiduciary pursuant to the Plan. The
Trustee shall not be responsible for the breach of responsibility by any other
Plan fiduciary except as provided for in ERISA.
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6.02 Benefit of Participants. Each fiduciary shall, within the meaning
of the Code and ERISA, discharge its duties with respect to the Trust solely in
the interest of participants in the Plan and their beneficiaries and for the
exclusive purpose of providing benefits to such participants and beneficiaries
and defraying reasonable expenses of administering the Plan.
6.03 Status of Trustee. The Trustee acknowledges its status as a
"fiduciary" of the Plan within the meaning of ERISA.
6.04 Location of Indicia of Ownership. Except as permitted by ERISA,
the Trustee shall not maintain the indicia of ownership of any assets of the
Trust outside the jurisdiction of the district courts of the United States.
6.05 Trustee's Reliance. The Trustee shall have no duty to inquire
whether directions by the Employer, the Named Administrative Fiduciary, the
Named Investment Fiduciary or any other person conform to the Plan, and the
Trustee shall be fully protected in relying on any such direction communicated
in accordance with procedures acceptable to the Trustee from any person who the
Trustee reasonably believes is a proper person to give the direction. The
Trustee shall have no liability to any participant, any beneficiary or any other
person for payments made, any failure to make payments, or any discontinuance of
payments, on direction of the Named Administrative Fiduciary, the Named
Investment Fiduciary or any designee of either of them or for any failure to
make payments in the absence of directions from the Named Administrative
Fiduciary or any person responsible for or purporting to be responsible for
directing the investment of Trust assets. The Trustee shall have no obligation
to request proper directions from any person. The Trustee may request
instructions from the Named Administrative Fiduciary or the Named Investment
Fiduciary and shall have no duty to act or liability for failure to act if such
instructions are not forthcoming. The Trustee shall have no responsibility to
determine whether the Trust Fund is sufficient to meet the liabilities under the
Plan, and shall not be liable for payments or Plan liabilities in excess of the
Trust Fund.
6.06 Indemnification. Except as prohibited by ERISA, the Employer
indemnities the Trustee against, and shall hold the Trustee harmless from, any
and all loss, claims, liabilities and expenses, including reasonable attorneys'
fees, imposed upon the Trustee or incurred by the Trustee as a result of any
acts taken, or any failure to act, in accordance with directions given pursuant
to and in accordance with the terms of the Trust from the Named Administrative
Fiduciary, Named Investment Fiduciary, Investment Manager (other than an
Investment Manager which is an affiliate of the Trustee) or any other person
specified in Article IV or V hereof acting under the control or acting at the
direction of the Named Administrative Fiduciary, the Named Investment Fiduciary
or an Investment Manager (other than an Investment Manager which is an affiliate
of the Trustee), or any permitted designee of any such person.
6.07 Protection of Designees. To the extent that any designee of the
Trustee is performing a function of the Trustee under this Trust Agreement, the
designee shall have the benefit of all of the applicable limitations on the
scope of the Trustee's duties and liabilities, all applicable rights of
indemnification granted hereunder to the Trustee and all other applicable
protections of any nature afforded to the Trustee.
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ARTICLE VII
POWERS OF TRUSTEE
7.01 Nondiscretionary Investment Powers. At the direction of the person
authorized to direct such action as referred to in Article V hereof, but limited
to those assets or categories of assets acceptable to the Trustee as referred to
in Section 5.01, the Trustee, or the Trustee's designee or a broker/dealer as
referred to in Section 5.04, is authorized and empowered:
(a) To invest and reinvest the Trust Fund, together with the
income therefrom, in common stock, preferred stock,convertible
preferred stock, bonds, debentures, convertible debentures and
bonds, mortgages, notes, commercial paper and other evidences
of indebtedness (including those issued by the Trustee),
shares of mutual funds (which funds may be sponsored, managed
or offered by an affiliate of the Trustee), guaranteed
investment contracts, bank investment contracts, other
securities, policies of life insurance, annuity contracts,
options, options to buy or sell securities or other assets,
and all other property of any type (personal, real or mixed,
and tangible or intangible);
(b) To deposit or invest all or any part of the assets of
the Trust in savings accounts or certificates of
deposit or other deposits in a bank or savings and
loan association or other depository institution,
including the Trustee or any of its affiliates,
provided with respect to such deposits with the
Trustee or an affiliate the deposits bear a
reasonable interest rate;
(c) To hold, manage, improve, repair and control all
property, real or personal, forming part of the Trust
Fund; to sell, convey, transfer, exchange, partition,
lease for any term, even extending beyond the
duration of this Trust, and otherwise dispose of the
same from time to time;
(d) To have, respecting securities, all the rights, powers and
privileges of an owner, including the power to give proxies,
pay assessments and other sums deemed by the Trustee necessary
for the protection of the Trust Fund; to vote any corporate
stock either in person or by proxy, with or without power of
substitution, for any purpose; to participate in voting trusts,
pooling agreements, foreclosures, reorganizations,
consolidations, mergers and liquidations, and in connection
therewith to deposit securities with or transfer title to any
protective or other committee; to exercise or sell stock
subscriptions or conversion rights-, and, regardless of any
limitation elsewhere in this instrument relative to
investments by the Trustee, to accept and retain as an
investment any securities or other property received through
the exercise of any Of the foregoing powers;
(e) Subject to Section 5.01 hereof, to hold in cash,
without liability for interest, such portion of the
Trust Fund which it is directed to so hold pending
investments, or payment of expenses, or the
distribution of benefits,
(f) To take such actions as may be necessary or desirable
to protect the Trust from loss due to the default on
mortgages held in the Trust including the appointment
of agents or trustees in such other jurisdictions as
may seem desirable, to transfer property to such
agents or trustees, to grant to such agents such
powers as are necessary or desirable to protect the
Trust Fund, to direct such agent or trustee, or to
delegate such power to direct, and to remove such
agent or trustee;
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(g) To settle, compromise or abandon all claims and demands in
favor of or against the Trust Fund;
(h) To invest in any common or collective trust fund of the type
referred to in Section 5.06 hereof maintained by the Trustee;
(i) To exercise all of the further rights, powers,
options and privileges granted, provided for, or
vested in trustees generally under the laws of the
state in which the Trustee is incorporated as set
forth above, so that the powers conferred upon the
Trustee herein shall not be in limitation of any
authority conferred by law, but shall be in addition
thereto;
(j) To borrow money from any source and to execute
promissory notes, mortgages or other obligations and
to pledge or mortgage any trust assets as security,
subject to applicable requirements of the Code and
ERISA-, and
(k) To maintain accounts at, execute transactions
through, and lend on an adequately secured basis
stocks, bonds or other securities to, any brokerage
or other firm, including any firm which is an
affiliate of the Trustee.
7.02 Additional Powers of Trustee. To the extent necessary or which it
deems appropriate to implement its powers under Section 7.01 or otherwise to
fulfill any of its duties and responsibilities as trustee of the Trust Fund, the
Trustee shall have the following additional powers and authority:
(a) to register securities, or any other property, in its
name or in the name of any nominee, including the
name of any affiliate or the nominee name designated
by any affiliate, with or without indication of the
capacity in which property shall be held, or to hold
securities in bearer form and to deposit any
securities or other property in a depository or
clearing corporation;
(b) to designate and engage the services of, and to
delegate powers and responsibilities to, such agents.
representatives, advisers, counsel and accountants as
the Trustee considers necessary or appropriate, any
of whom may be an affiliate of the Trustee or a
person who renders services to such an affiliate,
and, as a part of its expenses under this Trust
Agreement, to pay their reasonable expenses and
compensation;
(c) to make, execute and deliver, as Trustee, any and all
deeds, leases, mortgages, conveyances, waivers,
releases or other instruments in writing necessary or
appropriate for the accomplishment of any of the
powers listed in this Trust Agreement; and
(d) generally to do all other acts which the Trustee deems
necessary or appropriate for the protection of the Trust Fund.
ARTICLE VIII
RECORDS, ACCOUNTINGS AND VALUATIONS
8.01 Records. The Trustee shall maintain or cause to be maintained
accurate records and accounts of all Trust transactions and assets. The records
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and accounts shall be available at reasonable times during normal business hours
for inspection or audit by the Named Administrative Fiduciary and the Named
Investment Fiduciary or any person designated for the purpose by either of them.
8.02 Accountings. Within 60 days following the close of each fiscal
year of the Plan or the effective date of the removal or resignation of the
Trustee, the Trustee shall file with the Named Administrative Fiduciary a
written accounting setting forth all transactions since the end of the period
covered by the last previous accounting. The accounting shall include a listing
of the assets of the Trust showing the value of such assets at the close of the
period covered by the accounting. On direction of the Named Administrative
Fiduciary, and if previously agreed to by the Trustee, the Trustee shall submit
to the Named Administrative Fiduciary interim valuations, reports or other
information pertaining to the Trust.
The Named Administrative Fiduciary may approve the accounting by
written approval delivered to the Trustee or by failure to deliver written
objections to the Trustee within 60 days after receipt of the accounting. Any
such approval shall be binding on the Employer, the Named Administrative
Fiduciary, the Named Investment Fiduciary and, to the extent permitted by ERISA,
all other persons.
8.03 Valuation. The assets of the Trust shall be valued as of each
valuation date under the Plan -at fair market value as determined by the Trustee
based upon such sources of information as it may deem reliable, including, but
not limited to, stock market quotations, statistical evaluation services,
newspapers of general circulation, financial publications, advice from
investment counselors or brokerage firms, or any combination of sources, The
reasonable costs incurred in establishing values of the Trust Fund shall be a
charge against the Trust Fund, unless paid by the Employer.
When the Trustee is unable to arrive at a value based upon information
from independent sources, it may rely upon information from the Employer, Named
Administrative Fiduciary, Named Investment Fiduciary, appraisers, or other
sources, and shall not incur any liability for inaccurate valuation based in
good faith upon such information.
ARTICLE IX
RESIGNATION AND REMOVAL OF TRUSTEE
9.01 Resignation. The Trustee may resign at any time upon at least
60 days' written notice to the Employer.
9.02 Removal. The Employer may remove the Trustee upon at least
60 days' written notice to the Trustee.
9.03 Appointment of a Successor. Upon resignation or removal of the
Trustee, the Employer shall appoint a successor trustee. Upon failure of the
Employer to appoint, or the failure of the effectiveness of the appointment by
the Employer of, a successor trustee by the effective date of the resignation or
removal, the Trustee may apply to any court of competent jurisdiction for the
appointment of a successor.
Promptly after receipt by the Trustee of notice of the effectiveness of
the appointment of the successor trustee, the Trustee shall deliver to the
successor trustee such records as may be reasonably requested to enable the
successor trustee to properly administer the Trust Fund and all property of the
Trust after deducting therefrom such amounts as the Trustee deems necessary to
provide for expenses, taxes, compensation or other amounts due to or by the
Trustee pursuant to Sections 4.04 or 5.03 hereof not paid by the Employer prior
to the delivery.
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9.04 Settlement of Account. Upon resignation or removal of the Trustee,
the Trustee shall have the right to a settlement of its account, which
settlement shall be made, at the Trustee's option, either by an agreement of
settlement between the Trustee and the Employer or by a judicial settlement in
an action instituted by the Trustee. The Employer shall bear the cost of any
such judicial settlement, including reasonable attorneys fees.
9.05 Expenses and Compensation. The Trustee shall not be obligated to
transfer Trust assets until the Trustee is provided assurance by the Employer
satisfactory to the Trustee that all fees and expenses reasonably anticipated
will be paid.
9.06 Termination of Responsibility and Liability. Upon settlement of
the account and transfer of the Trust Fund to the successor trustee, all rights
and privileges under this Trust Agreement shall vest in the successor trustee
and all responsibility and liability of the Trustee with respect to the Trust
and assets thereof shall, except as otherwise required by ERISA, terminate
subject only to the requirement that the Trustee execute all necessary documents
to transfer the Trust assets to the successor trustee.
ARTICLE X
AMENDMENT AND TERMINATION
10.01 Amendment. The Employer reserves the right to amend this Trust
Agreement, provided that no amendment of this Trust Agreement or the Plan shall
be effective which would (a) cause any assets of the Trust Fund to be used for,
or diverted to, purposes other than the exclusive benefit of Plan participants
or their beneficiaries other than an amendment permissible under the Code and
ERISA, or (b) affect the rights, duties, responsibilities, obligations or
liabilities of the Trustee without the Trustee's written consent. The Employer
shall amend this Trust Agreement as requested by the Trustee to reflect changes
in law which counsel for the Trustee advises the Trustee require such changes.
Amendments to the Trust Agreement or a certified copy of the amendments shall be
delivered to the Trustee promptly after adoption, and if practicable under the
circumstances, any proposed amendment under consideration by the Employer shall
be communicated to the Trustee to permit the Trustee to review and comment
thereon in due course before the Employer acts on the proposed amendment.
10.02 Termination. The Trust may be terminated by the Employer upon at
least 60 days' written notice to the Trustee. Upon such termination, and subject
to Section I 1.0 I hereof, the Trust Fund shall be distributed as directed by
the Named Administrative Fiduciary
ARTICLE XI
MISCELLANEOUS
11.01 Exclusive Benefit Rule. Except as provided in Section 11.02, or
as otherwise permitted as required by ERISA or the Code, no asset of this Trust
shall be used for, or diverted to, purposes other than the exclusive benefit of
Plan participants or their beneficiaries or for the reasonable expenses of
administering the Plan and Trust until all liabilities for benefits due Plan
participants or their beneficiaries have been satisfied.
11.02 Refunds to Employer. The Trustee shall, upon the written
direction of the Named Administrative Fiduciary which shall include a
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certification that such action is proper under the Plan, ERISA and the Code
specifying any relevant sections thereof, return to the Employer any amount
referred to in section 403(c)(2) of ERISA.
11.03 Authorized Action. Any action to be taken under this Trust
Agreement by an Employer or other person which is: (a) a corporation shall be
taken by the board of directors of the corporation or any person or persons duly
empowered by the board of directors to take the action involved, (b) a
partnership shall be taken by an authorized general partner of the partnership,
and (c) a sole proprietorship by the sole proprietor.
11.04 Text of Plan. The Employer represents that prior to the execution
of this Trust Agreement by both parties it delivered to the Trustee the text of
the Plan as in effect as of the date of this Trust Agreement. The Employer shall
deliver to the Trustee promptly after adoption thereof a certified copy of each
other amendment of the Plan.
11.05 Conflict with Plan. The rights. duties, responsibilities,
obligations and liabilities of the Trustee are as set forth in this Trust
Agreement, and no provision of the Plan or any other document shall be deemed to
affect such rights, duties, responsibilities, obligations and liabilities. If
there is a conflict between provisions of the Plan and this Trust Agreement with
respect to any subject involving the Trustee, including but not limited to the
responsibility, authority or powers of the Trustee, the provisions of this Trust
Agreement shall be controlling.
11.06 Failure to Maintain Qualification. If the Trust fails to qualify
as a qualified trust under section 401(a) of the Code, or loses its status as
such a qualified trust, the Employer shall immediately so notify the Trustee,
and the Trustee shall, without further notice or direction, remove the Trust
assets from any common or collective trust fund maintained by the Trustee for
investments by qualified trusts.
11.07 Governing Law and Construction. This Trust Agreement and the
Trust shall be construed, administered and governed under ERISA and other
pertinent federal law, and to the extent that federal law is inapplicable, under
the laws of the state in which the Trustee is incorporated as set forth above.
If any provision of this Trust Agreement is susceptible to more than one
interpretation, the interpretation to be given is that which is consistent with
the Trust being a qualified trust under section 401(a) of the Code. If any
provision of this Trust Agreement is held by a court of competent jurisdiction
to be invalid or unenforceable, the remaining provisions shall continue to be
fully effective to the extent possible under the circumstances.
11.08 Successors and Assigns. This Trust Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and assigns
11.09 Gender. As used in this Trust Agreement, the masculine gender
shall include the feminine and the neuter genders and the singular shall include
the plural and the plural the singular as the context requires.
11.10 Headings. Headings and subheadings in this Trust Agreement are
for convenience of reference only and are not to be considered in the
construction of the provisions of the Trust Agreement.
11.11 Counterparts. This Trust Agreement may be executed in several
counterparts, each of which shall be deemed an original, and these counterparts
shall constitute one and the same instrument which may be sufficiently evidenced
by any one counterpart.
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IN WITNESS WHEREOF, the Employer and the Trustee have executed this
Trust Agreement each by action of a duly authorized person.
SOUTHERN COMPANY SERVICES, INC.
By: ------------------------
Name: ----------------------
Title:----------------------
---------------------------
Trustee
By:-------------------------
Name:-----------------------
Title:----------------------
