File No. 70-9137
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT No. 1
to
FORM U-1
APPLICATION OR DECLARATION
under
The Public Utility Holding Company Act of 1935
THE SOUTHERN COMPANY
270 Peachtree Street, N.W.
Atlanta, Georgia 30303
ALABAMA POWER COMPANY GULF POWER COMPANY
600 North 18th Street 500 Bayfront Parkway
Birmingham, Alabama 35291 Pensacola, Florida 32501
GEORGIA POWER COMPANY MISSISSIPPI POWER COMPANY
333 Piedmont Avenue, N.E. 2992 West Beach
Atlanta, Georgia 30308 Gulfport, Mississippi 39501
(Name of company or companies filing this statement
and addresses of principal executive offices)
THE SOUTHERN COMPANY
(Name of top registered holding company parent of each
applicant or declarant)
Tommy Chisholm, Secretary
The Southern Company
270 Peachtree Street, N.W.
Atlanta, Georgia 30303
Art P. Beattie, Vice President, Warren E. Tate, Secretary and Treasurer
Secretary and Treasurer Gulf Power Company
Alabama Power Company 500 Bayfront Parkway
600 North 18th Street Pensacola, Florida 32501
Birmingham, Alabama 35291
Judy M. Anderson, Vice President Michael W. Southern, Vice President,
and Corporate Secretary Secretary, Treasurer and
Georgia Power Company Chief Financial Officer
333 Piedmont Avenue, N.E. Mississippi Power Company
Atlanta, Georgia 30308 2992 West Beach
Gulfport, Mississippi 39501
(Names and addresses of agents for service)
The Commission is requested to mail signed copies of all orders, notices and
communications to:
W. L. Westbrook John D. McLanahan, Esq.
Financial Vice President Troutman Sanders LLP
The Southern Company 600 Peachtree Street, N.E., Suite 5200
270 Peachtree Street, N.W. Atlanta, Georgia 30308
Atlanta, Georgia 30303
<PAGE>
The Southern Company ("SOUTHERN"), a Delaware corporation and a holding
company registered under the Public Utility Holding Company Act of 1935 (the
"1935 Act"), and Alabama Power Company ("ALABAMA"), an Alabama corporation,
Georgia Power Company ("GEORGIA"), a Georgia corporation, Gulf Power Company
("GULF"), a Maine corporation, and Mississippi Power Company ("MISSISSIPPI"), a
Mississippi corporation, hereby amend their Application or Declaration on Form
U-1 in File No. 70-9137 as follows:
1. By amending and restating subparagraphs (i), (ii), (iii) and (iv)
of ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION, Part D. Proposed Transactions:
Offer, Section 1. Terms of the Offer, as follows:
"(i) ALABAMA - $78.50 per share, in the case of the 4.20%
Series (`ALABAMA Purchase Price') .
(ii) GEORGIA - $85.98 per share, in the case of the $4.60
Series; $91.09 per share, in the case of the $4.60 1962 Series; $91.09
per share, in the case of the $4.60 1963 Series; $91.09 per share, in
the case of the $4.60 1964 Series; $93.47 per share, in the case of the
$4.72 Series; $97.43 per share, in the case of the $4.92 Series; $98.22
per share, in the case of the $4.96 Series; $95.24 per share, in the
case of the $5.00 Series; and $100.00 per share, in the case of the
$5.64 Series (each, a `GEORGIA Purchase Price').
(iii) GULF - $86.73 per share, in the case of the 4.64%
Series; $100.00 per share, in the case of the 5.16% Series; $100.00 per
share, in the case of the 5.44% Series; $25.00 per share, in the case
of the 6.72% Series; and $25.00 per share, in the case of the AR 1993
Series (each, a `GULF Purchase Price').
(iv) MISSISSIPPI - $87.13 per share, in the case of the 4.40%
Series; $85.98 per share, in the case of the 4.60% MS Series; and
$93.47 per share, in the case of the 4.72% MS Series (each, a
`MISSISSIPPI Purchase Price').1"
2. By amending and restating the second paragraph of ITEM 1.
DESCRIPTION OF PROPOSED TRANSACTION, Part D. Proposed Transactions: Offer,
Section 2. Benefits of Offer; Utilization of SOUTHERN rather than the
Subsidiaries as Offeror, as follows:
"More specifically, assuming only a 50% overall success rate
for the Offers, the estimated cash savings to the Subsidiaries
thereafter amount to between $3.0 million each year (based on purchased
shares being refinanced entirely with short-term debt at prevailing
rates on the date hereof) and $0.7 million each year (based on
purchased Shares being refinanced entirely by long-term tax-deductible
preferred securities), after taxes and excluding expenses incurred in
connection with the Offers and the Proxy Solicitations. On a cumulative
- --------
1 The ALABAMA Purchase Price, the GEORGIA Purchase Price, the GULF Purchase
Price and the MISSISSIPPI Purchase Price are sometimes referred to herein
individually as a "Purchase Price" and collectively as the "Purchase Prices."
<PAGE>
net present value savings basis, assuming (x) a 50% overall success
rate for the Offers (and that 25% of all Preferred Stockholders do not
tender their Shares pursuant to the Offer but do vote in favor of the
Proposed Amendments at the Special Meeting), (y) refinancing of Shares
acquired and paid for pursuant to the Offers with a combination of
long-term tax deductible hybrid securities and short-term debt at
prevailing rates at the date hereof, and (z) a discount rate equal to
the new securities after-tax weighted average cost of capital, the
proposed transactions are anticipated to yield total after-tax, present
value cash savings of about $16.5 million over approximately the
original remaining lives of the Series of Preferred, net of cash
expenditures incurred in the Offers and Proxy Solicitations (i.e., Cash
Payments, the applicable Purchase Prices paid for validly tendered and
accepted Shares, and the other fees and expenses listed in Item 2). A
success rate for the Offers higher than the 50% rate assumed above has
the potential to generate even further cash savings."
3. By amending and restating, ITEM 2. FEES, COMMISSIONS AND EXPENSES
as follows:
"Other than the Cash Payments and the applicable Purchase Prices
described in Item 1, the fees, commissions and expenses (each, a `fee') to be
incurred, directly or indirectly, by the Applicants or any associate company
thereof in connection with the proposed transactions, assuming the tender and
acceptance of 100% of the Shares, are estimated as follows:
SEC filing fees $ 35,014
Southern Company Services fees 150,000
Outside counsel fees 335,000
Information Agent fees 70,000
Dealer Manager fees 3,303,000
Depositary fees 60,000
Broker/dealer fees 3,625,000
Printing 350,000
Mailing 190,000
Miscellaneous fees 21,986
----------
TOTAL $8,140,000"
<PAGE>
4. By filing the following exhibits:
B-1 Offer to Purchase and Proxy Statement for ALABAMA Tendered
Series (Designated as Exhibit 99(a)(1) to SOUTHERN's Issuer
Tender Offer Statement on Schedule 13E-4, ALABAMA as Issuer).
B-2 Offer to Purchase and Proxy Statement for GEORGIA Tendered
Series (Designated as Exhibit 99(a)(1) to SOUTHERN's Issuer
Tender Offer Statement on Schedule 13E-4, GEORGIA as Issuer).
B-3 Offer to Purchase and Proxy Statement for GULF Tendered Series
(Designated as Exhibit 99(a)(1) to SOUTHERN's Issuer Tender
Offer Statement on Schedule 13E-4, GULF as Issuer).
B-4 Offer to Purchase and Proxy Statement for MISSISSIPPI Tendered
Series (Designated as Exhibit 99(a)(1) to SOUTHERN's Issuer
Tender Offer Statement on Schedule 13E-4, MISSISSIPPI as
Issuer).
B-5 Proxy Statement for ALABAMA Non-Tendered Series.
B-6 Proxy Statement for GEORGIA Non-Tendered Series.
B-7 Proxy Statement for MISSISSIPPI Non-Tendered Series.
B-8 Notice of Special Meeting (attached as part of Exhibit B-1
(ALABAMA Tendered Series), Exhibit B-2 (GEORGIA Tendered
Series ), Exhibit B-3 (GULF Tendered Series), Exhibit B-4
(MISSISSIPPI Tendered Series), Exhibit B-5 (ALABAMA
Non-Tendered Series), Exhibit B-6 (GEORGIA Non-Tendered Series
) and Exhibit B-7 (MISSISSIPPI Non-Tendered Series).
B-9 Letter of Transmittal and Proxy for ALABAMA Tendered Series
(Designated as Exhibit 99(a)(2) to SOUTHERN's Issuer Tender
Offer Statement on Schedule 13E-4, ALABAMA as Issuer).
B-10 Form of Letter of Transmittal and Proxy for GEORIGA Tendered
Series (Designated as Exhibit 99(a)(2) to SOUTHERN's Issuer
Tender Offer Statement on Schedule 13E-4, GEORGIA as Issuer).
<PAGE>
B-11 Form of Letter of Transmittal and Proxy for GULF Tendered
Series (Designated as Exhibit 99(a)(2) to SOUTHERN's Issuer
Tender Offer Statement on Schedule 13E-4, GULF as Issuer).
B-12 Form of Letter of Transmittal and Proxy for MISSISSIPPI
Tendered Series (Designated as Exhibit 99(a)(2) to SOUTHERN's
Issuer Tender Offer Statement on Schedule 13E-4, MISSISSIPPI
as Issuer).
B-13 Notice of Guaranteed Delivery and Proxy for ALABAMA Tendered
Series (Designated as Exhibit 99(a)(3) to SOUTHERN's Issuer
Tender Offer Statement on Schedule 13E-4, ALABAMA as Issuer).
B-14 Notice of Guaranteed Delivery and Proxy for GEORGIA Tendered
Series (Designated as Exhibit 99(a)(3) to SOUTHERN's Issuer
Tender Offer Statement on Schedule 13E-4, GEORGIA as Issuer).
B-15 Notice of Guaranteed Delivery and Proxy for GULF Tendered
Series (Designated as Exhibit 99(a)(3) to SOUTHERN's Issuer
Tender Offer Statement on Schedule 13E-4, GULF as Issuer).
B-16 Notice of Guaranteed Delivery and Proxy for MISSISSIPPI
Tendered Series (Designated as Exhibit 99(a)(3) to SOUTHERN's
Issuer Tender Offer Statement on Schedule 13E-4, MISSISSIPPI
as Issuer).
B-17 Proxy for ALABAMA Non-Tendered Series.
B-18 Proxy for GEORGIA Non-Tendered Series.
B-19 Proxy for MISSISSIPPI Non-Tendered Series.
F-1 Opinion of counsel to SOUTHERN.
F-2 Opinion of counsel to ALABAMA.
F-3 Opinion of counsel to GEORGIA.
F-4 Opinion of counsel to GULF.
F-5 Opinion of counsel to MISSISSIPPI.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned companies have duly caused this amendment to be signed
on their behalf by the undersigned thereunto duly authorized.
Date: November 26, 1997
THE SOUTHERN COMPANY
By /s/Tommy Chisholm
Tommy Chisholm
Secretary
ALABAMA POWER COMPANY
By /s/Wayne Boston
Wayne Boston
Assistant Secretary
GEORGIA POWER COMPANY
By /s/Wayne Boston
Wayne Boston
Assistant Secretary
GULF POWER COMPANY
By /s/Wayne Boston
Wayne Boston
Assistant Secretary
MISSISSIPPI POWER COMPANY
By /s/Wayne Boston
Wayne Boston
Assistant Secretary
<PAGE>
Exhibit B-5
ALABAMA POWER COMPANY
BIRMINGHAM, ALABAMA
---------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 10, 1997
NOTICE IS HEREBY GIVEN that a special meeting of the shareholders of
Alabama Power Company will be held at the offices of its affiliate, Georgia
Power Company, 333 Piedmont Avenue, N.E., Atlanta, Georgia on December 10, 1997
at 3:30 p.m., Eastern time, to consider and act on the following proposal, as
more fully described in the attached Proxy Statement:
PROPOSAL: To remove from the Company's Charter (i) Paragraph
A.2.f.(2) of Article IX, a provision restricting the amount of securities
representing unsecured indebtedness issuable by the Company, (ii) Paragraph
A.2.f.(1) of Article IX, a provision which requires the vote of the holders
of at least a majority of the total voting power of the outstanding Company
preferred stock to approve the sale of all or substantially all of the
Company's property and mergers or consolidations that have not been
approved under the Public Utility Holding Company Act of 1935, as amended,
(iii) Paragraph A.2.b. (except the first paragraph therein) of Article IX,
a provision restricting the ability of the Company to pay dividends on its
common stock in the event that its common equity capitalization falls below
certain levels and (iv) the words after "January 31, 1942" of the first
paragraph of Paragraph A.2.b. of Article IX, a provision restricting the
ability of the Company to pay dividends on its common stock in the event
that its retained earnings are not at least equal to two times the annual
dividends on its outstanding preferred stock;
and for the purpose of transacting any and all business in connection with the
foregoing and any other business that may properly come before said meeting or
any adjournment or adjournments thereof.
Only shareholders of record at the close of business on November 7, 1997,
with respect to Class A Preferred Stock listed on the New York Stock Exchange,
and November 6, 1997, with respect to $100 Preferred Stock and Class A Preferred
Stock traded over-the-counter, will be entitled to notice of and to vote at said
meeting or any adjournment or adjournments thereof.
For the reasons set forth in the attached Proxy Statement, you are urged to
vote FOR the proposal.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. PLEASE
MARK, DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE. In
the event you are able to attend the meeting, you may revoke the Proxy by voting
your shares in person.
BY ORDER OF THE BOARD OF DIRECTORS
Art P. Beattie
Vice President, Secretary and Treasurer
Birmingham, Alabama
November 3, 1997
<PAGE>
ALABAMA POWER COMPANY
BIRMINGHAM, ALABAMA
---------------------
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 10, 1997
---------------------
PROXY STATEMENT
<TABLE>
<CAPTION>
OUTSTANDING CUSIP
TITLE OF SERIES OF PREFERRED SHARES NUMBER
- ---------------------------- ----------- ---------
<S> <C> <C>
Class A Preferred Stock ($25 stated capital)
6.40% Series.............................................. 2,000,000 010392678
6.80% Series.............................................. 1,520,000 010392694
1993 Adjustable Rate Series............................... 2,000,000 010392660
Preferred Stock ($100 par value)
4.52% Series.............................................. 50,000 010392306
4.60% Series.............................................. 100,000 010392405
4.64% Series.............................................. 60,000 010392504
4.72% Series.............................................. 50,000 010392603
4.92% Series.............................................. 80,000 010392702
Preferred Stock ($100 stated capital)
1988 Auction Series....................................... 500,000 010392736
Preferred Stock ($100,000 stated capital)
1993 Auction Series....................................... 200 010392686
</TABLE>
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Alabama Power Company (the "Company") from the holders
(the "Preferred Shareholders") of the 6.40% Series, the 6.80% Series and the
1993 Adjustable Rate Series of the Company's outstanding Class A Preferred
Stock, with stated capital of $25 per share (collectively, the "Class A
Preferred Stock"), and the 4.52% Series, the 4.60% Series, the 4.64% Series, the
4.72% Series and the 4.92% Series of the Company's outstanding Preferred Stock,
with par values of $100 per share (collectively, the "$100 Preferred Stock"),
the 1988 Auction Series of the Company's outstanding Class A Preferred Stock,
with $100 stated capital per share (the "1988 Auction Preferred Stock"), and the
1993 Auction Series of the Company's outstanding preferred stock, with stated
capital of $100,000 (the "1993 Auction Preferred Stock" and, together with the
Class A Preferred Stock, the $100 Preferred Stock and the 1988 Auction Preferred
Stock, the "Preferred Stock"). Such proxies are to be used at the Special
Meeting of Shareholders of the Company to be held at the offices of its
affiliate Georgia Power Company, 333 Piedmont Avenue, N.E., Atlanta, Georgia on
December 10, 1997 at 3:30 p.m., Eastern time, or any adjournment or postponement
of such meeting (the "Special Meeting"). IF THE PROPOSED AMENDMENT (AS DEFINED
HEREIN) IS APPROVED AND ADOPTED BY THE COMPANY'S SHAREHOLDERS, THE COMPANY WILL
MAKE A SPECIAL CASH PAYMENT (THE "SPECIAL CASH PAYMENT") EQUAL TO 1.00% OF THE
PAR VALUE OR STATED CAPITAL, AS APPLICABLE, PER SHARE (AS DEFINED HEREIN)
(EXCEPT THAT THE SPECIAL CASH PAYMENT SHALL EQUAL 0.25% OF THE STATED CAPITAL
PER SHARE FOR THE 1988 AUCTION SERIES AND THE 1993 AUCTION SERIES) (OR $1.00 PER
SHARE OF $100 PREFERRED STOCK, $0.25 PER SHARE FOR CLASS A PREFERRED STOCK,
$0.25 PER SHARE OF 1988 AUCTION PREFERRED STOCK, AND $250.00 PER SHARE OF 1993
AUCTION PREFERRED STOCK) FOR EACH SHARE PROPERLY VOTED IN FAVOR OF THE PROPOSED
AMENDMENT. If a Preferred Shareholder votes against the Proposed Amendment or
abstains, such Preferred Shareholder shall not be entitled to the Special Cash
Payment (regardless of whether the Proposed Amendment is approved and adopted).
The solicitation of proxies has been approved by the Securities and
Exchange Commission (the "Commission") under the Public Utility Holding Company
Act of 1935, as amended (the "Holding Company Act"). This Proxy Statement is
first being mailed on or about November 3, 1997. The record date with respect to
the Class A Preferred Stock listed on the New York Stock Exchange is November 7,
1997 and the record
<PAGE>
date with respect to the $100 Preferred Stock and Class A Preferred Stock traded
over-the-counter is November 6, 1997.
The principal executive offices of the Company are located at 600 North
18th Street, Birmingham, Alabama 35291. The telephone number is (205) 257-1000.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS VOTING FOR THE PROPOSED
AMENDMENT.
SUMMARY
The Board of Directors of the Company is soliciting proxies from all
holders of the shares of each series of the Company's outstanding preferred
stock (the "Shares") for use at the Special Meeting of Shareholders of the
Company. The proposal to be presented at the Special Meeting, if adopted, is
intended to provide the Company with the necessary flexibility to meet the
demands of an increasingly competitive electric utility industry. See "Reasons
for the Proposed Amendment."
The Special Meeting is being held to consider an amendment to the Company's
charter (the "Charter") which would eliminate the provisions restricting the
ability of the Company to issue unsecured indebtedness, to sell assets, merge or
consolidate, to pay dividends on its common stock in the event that its common
equity capitalization falls below certain levels and to pay dividends on its
common stock in the event that its retained earnings are not at least equal to
two times the annual dividends on its outstanding preferred stock. If the
Proposed Amendment is approved by the shareholders, such restrictions contained
in the Charter will be eliminated with respect to the outstanding Shares.
The Company will pay certain consent fees. See "Solicitation of Proxies."
If the Proposed Amendment is approved and adopted by the Company's
shareholders, the Company will make a Special Cash Payment equal to 1.00% of the
par value or stated capital, as applicable, per Share (except that the Special
Cash Payment shall equal 0.25% of the stated capital per Share for the 1988
Auction Series and the 1993 Auction Series) (or $1.00 per Share of $100
Preferred Stock, $0.25 per Share of Class A Preferred Stock, $0.25 per Share of
1988 Auction Preferred Stock and $250.00 per Share of 1993 Auction Preferred
Stock) for each Share properly voted in favor of the Proposed Amendment.
Questions or requests for assistance may be directed to Corporate Investor
Communications, Inc. (the "Information Agent") at (888) 881-0526 (toll free) or
banks and brokers call (888) 349-2003 or to Merrill Lynch & Co. ("Merrill
Lynch") at (888) 654-8637 (toll free). Requests for additional copies of this
Proxy Statement, the Proxy or other proxy materials may be directed to the
Information Agent, and such copies will be furnished promptly at the Company's
expense.
The foregoing summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information appearing elsewhere in this
Proxy Statement.
EXECUTION AND REVOCATION OF PROXY
THE ENCLOSED PROXY IS SOLICITED BY THE COMPANY'S BOARD, WHICH RECOMMENDS
VOTING FOR THE PROPOSED AMENDMENT. ALL SHARES OF THE COMPANY'S COMMON STOCK WILL
BE VOTED IN FAVOR OF THE PROPOSED AMENDMENT. Preferred Shareholders voting at
the Special Meeting by proxy must use the enclosed Proxy. Shares of the
Company's outstanding preferred stock represented by properly executed proxies
received at or prior to the Special Meeting will be voted in accordance with the
instructions thereon. If no instructions are indicated, duly executed proxies
will be voted in accordance with the recommendation of the Board. It is not
anticipated that any other matters will be brought before the Special Meeting.
However, the enclosed proxy gives discretionary authority to the proxy holders
named therein should any other matters be presented at the Special Meeting, and
it is the intention of the proxy holders to act on any other matters in their
discretion.
2
<PAGE>
Execution of a proxy will not prevent a shareholder from attending the
Special Meeting and voting in person. Any shareholder giving a proxy may revoke
it at any time before it is voted by delivering to the Secretary of the Company
written notice of revocation bearing a later date than the proxy, by delivering
a duly executed proxy bearing a later date, or by voting in person by ballot at
the Special Meeting.
SPECIAL CASH PAYMENTS
Subject to the terms and conditions set forth in this Proxy Statement, if
(but only if) the Proposed Amendment is approved and adopted by the shareholders
of the Company, the Company will make a Special Cash Payment to each Preferred
Shareholder who voted in favor of the Proposed Amendment, in person by ballot or
by proxy, at the Special Meeting in the amount equal to 1.00% of the par value
or stated capital, as applicable, per Share (except that the special cash
payment shall equal 0.25% of the stated capital per Share for the 1988 Auction
Series and the 1993 Auction Series) (or $1.00 per Share of $100 Preferred Stock,
$0.25 per Share of Class A Preferred Stock, $0.25 per Share of 1988 Auction
Preferred Stock and $250.00 per Share of 1993 Auction Preferred Stock) for each
Share held by such Preferred Shareholder which is so voted. The Company has been
advised that there is no controlling precedent under state law as to the
permissibility of its making the Special Cash Payment. Although, as a result,
there can be no assurance as to how a court would rule on the issue, the Company
believes that the Offer (as defined herein) is fair to Preferred Shareholders
and has determined to make the Special Cash Payment. SPECIAL CASH PAYMENTS WILL
BE MADE TO PREFERRED SHAREHOLDERS AS OF THE RECORD DATE ONLY IN RESPECT OF EACH
SHARE WHICH IS VOTED FOR THE ADOPTION OF THE PROPOSED AMENDMENT. If a Preferred
Shareholder votes against the Proposed Amendment or abstains, such Preferred
Shareholder shall not be entitled to the Special Cash Payment (regardless of
whether the Proposed Amendment is approved and adopted). If the Proposed
Amendment is approved and adopted, Special Cash Payments will be paid out of the
Company's general funds, promptly after the Proposed Amendment shall have become
effective. However, no accrued interest will be paid on the Special Cash
Payments regardless of any delay in making such payments.
Only holders of record of the Company's voting securities at the close of
business on the Record Date or persons obtaining a proxy from the holders of
record on the Record Date will be entitled to vote in person or by proxy at the
Special Meeting. Any beneficial holder of Shares who is not the registered
holder of such Shares as of the Record Date (as would be the case for any
beneficial holder whose Shares are registered in the name of such holder's
broker, dealer, commercial bank, trust company or other nominee) must arrange
with the record Preferred Shareholder to execute and deliver a proxy form on
such beneficial owner's behalf. If a beneficial holder of Shares intends to
attend the Special Meeting and vote in person, such beneficial holder must
obtain a legal proxy form from his or her broker, dealer, commercial bank, trust
company or other nominee. The Company will make Special Cash Payments only to
Preferred Shareholders who are registered holders as of the Record Date. Any
beneficial owner of Shares who is not the registered holder of such Shares as of
the Record Date must arrange with the record Preferred Shareholder to receive
his proportionate interest in the Special Cash Payments made to such record
Preferred Shareholder. The Company will have no responsibility or liability for
any aspect of the records relating to or payments made on account of any
beneficial owner's interest in the Special Cash Payments made to a record
Preferred Shareholder.
PROPOSED AMENDMENT
BUSINESS TO COME BEFORE THE SPECIAL MEETING
The following proposed amendment (the "Proposed Amendment") to the Charter
is the only item of business expected to be presented at the Special Meeting:
To remove in their entirety (i) Paragraph A.2.f.(2) of Article IX of the
Charter, a provision restricting the amount of securities representing unsecured
indebtedness issuable by the Company, (ii) Paragraph A.2.f.(1) of Article IX of
the Charter, a provision which requires the vote of the holders of at least a
majority of the total voting power of the outstanding Company preferred stock to
approve the sale of all or substantially all of the Company's property and
mergers or consolidations that have not been approved
3
<PAGE>
under the Holding Company Act, (iii) Paragraph A.2.b. (except the first
paragraph therein) of Article IX of the Charter, a provision restricting the
ability of the Company to pay dividends on its common stock in the event that
its common equity capitalization falls below certain levels, and (iv) the words
after "January 31, 1942" of the first paragraph of Paragraph A.2.b. of Article
IX of the Charter, a provision restricting the ability of the Company to pay
dividends on its common stock in the event that its retained earnings are not at
least equal to two times the annual dividends on its outstanding preferred
stock.
THE FOLLOWING STATEMENTS ARE SUMMARIES OF THE SUBSTANCE OR GENERAL EFFECT
OF PROVISIONS OF THE CHARTER, AND ARE QUALIFIED IN THEIR ENTIRETY BY THE CHARTER
AND SUBPARAGRAPHS A.2.B., A.2.F.(1), AND A.2.F.(2) OF ARTICLE IX THEREIN (AS
DESCRIBED BELOW). SEE APPENDIX A HERETO FOR THE TEXT OF THE PROVISIONS TO BE
DELETED.
EXPLANATION OF THE PROPOSED AMENDMENT
Paragraph A.2.f.(2) of Article IX of the Charter currently provides that,
so long as any shares of the Company's preferred stock are outstanding, without
the affirmative vote of the holders of at least a majority of the total voting
power of its outstanding shares of preferred stock, the Company shall not issue
or assume any securities representing unsecured debt (other than for the purpose
of refunding or renewing outstanding unsecured securities issued by the Company
resulting in equal or longer maturities or redeeming or otherwise retiring all
outstanding shares of its preferred stock or of any senior or equally ranking
stock) if, immediately after such issue or assumption, the total outstanding
principal amount of all securities representing unsecured debt of the Company
would exceed 20% of the aggregate of all existing secured debt of the Company
and the capital stock, premiums thereon and surplus of the Company as stated on
the Company's books (the "Debt Limitation Provision").
Paragraph A.2.f.(1) of Article IX of the Charter currently provides that,
so long as any shares of the Company's preferred stock are outstanding, without
the affirmative vote of the holders of at least a majority of the total voting
power of its outstanding shares of preferred stock, the Company shall not
dispose of all or substantially all of its property or merge or consolidate,
unless such action has been approved by the Commission under the Holding Company
Act (the "Merger Provision").
Paragraph A.2.b. (except the first paragraph therein) of Article IX of the
Charter currently provides that, so long as any shares of the Company's
preferred stock are outstanding (except as may be approved by the affirmative
vote of the holders of at least two-thirds of the total voting power of its
outstanding preferred stock), the Company's dividends on its common stock are
limited to 50% of net income available for such stock during a period of 12
months if, calculated on a corporate basis, the ratio of its common stock equity
to total capitalization, including surplus, adjusted to reflect the payment of
the proposed dividend, is below 20%, and to 75% of such net income if such ratio
is 20% or more but less than 25% (the "Common Stock Dividend Provision").
The clause after the words "January 31, 1942" in the first paragraph of
Paragraph A.2.b. of Article IX currently provides that, so long as any shares of
the Company's preferred stock are outstanding, the Company shall not pay
dividends on its common stock (except those paid concurrently with the receipt
of a cash capital contribution in like amount) in cases where retained earnings
are not at least equal to two times the annual dividends on its outstanding
preferred stock (the "Retained Earnings Dividend Provision").
The Proposed Amendment, if adopted, would eliminate from the Charter in
their entirety the Debt Limitation Provision, the Merger Provision, the Common
Stock Dividend Provision and the Retained Earnings Dividend Provision
(collectively, the "Restriction Provisions"), each as set forth in full in
Appendix A hereto.
4
<PAGE>
REASONS FOR THE PROPOSED AMENDMENT
The electric utility industry has become, and will continue to be,
increasingly competitive as the result of various factors, including regulatory
and technological developments. Various federal and state regulatory initiatives
designed to promote wholesale and retail competition include, among other
things, proposals that would allow customers to choose their electricity
provider. As these competitive initiatives materialize, the structure of the
utility industry could radically change. The Company believes that maintaining
and improving its position as a low-cost producer and having the flexibility to
respond to developments in the industry will be crucial to its success in the
new competitive marketplace.
The Company believes that adoption of the Proposed Amendment is important
to creating the necessary flexibility to respond to any industry developments.
The restrictions that would be eliminated by the Proposed Amendment
generally do not burden the industry's new competitors (power marketers,
independent power producers, exempt wholesale generators and owners of
cogeneration facilities), nor even other public utility companies. These
restrictions stem from the fact that the Company and its affiliates are subject
to regulation under the Holding Company Act. Such restrictions were initially
imposed as a result of the Commission's 1956 Statement of Policy Regarding
Preferred Stock Subject to the Public Utility Holding Company Act of 1935. The
Commission recently has noted that the Statement of Policy is out of date and
has not kept pace with the rapidly changing securities markets. Furthermore, the
Commission stated that the marketplace should more appropriately determine the
terms and conditions applicable to securities issuances.
Management considers that elimination of the Debt Limitation Provision is
crucial to the Company's financial flexibility and its ability to effect future
capital cost reductions. The deletion of this provision from the Charter will
allow the Company to utilize more fully various unsecured debt alternatives and
thus improve its ability to take full advantage of changing conditions in the
capital markets. The additional flexibility will, for example, permit the
Company to issue long-term debt when, because of mortgage coverage restrictions
or other reasons, it may be unattractive or not possible to issue any additional
first mortgage bonds. In addition, elimination of the Debt Limitation Provision
will afford the Company greater flexibility in the issuance of short-term debt
to meet seasonal cash requirements with what is usually the least expensive form
of capital.
The Company believes that the Merger Provision is an unnecessary
restriction on the ability of the Company to consider strategic responses to the
increasingly competitive utility industry. For instance, the Merger Provision
provides that, unless approved under the Holding Company Act, the sale or lease
of certain of the Company's properties would require Preferred Shareholder
approval in addition to any statutory requirement under state law. Such an
additional burden could hinder the Company's ability to conduct its business
operations in this changing utility environment. Furthermore, the elimination of
the Merger Provision will not affect voting rights of stockholders under
applicable state law.
Similarly, the Common Stock Dividend Restriction and the Retained Earnings
Dividend Restriction unnecessarily impede the financial flexibility of the
Company and The Southern Company ("Southern"). The Common Stock Dividend
Restriction and the Retained Earnings Dividend Restriction prevent the Company
from paying dividends on its common stock unless the Company maintains a certain
equity capitalization. These restrictions (vestiges of the 1956 Statement of
Policy) are in addition to (i) the statutory requirements on the Company's
ability to pay dividends on its common stock that arise under state law and (ii)
other provisions of the Company's Charter, which provide that the Company may
not pay dividends unless it is current in the payment of dividends on its
preferred stock. Due to continued applicability of these restrictions, the
Company views the Common Stock Dividend Restriction and the Retained Earnings
Dividend Restriction as unduly burdensome and unnecessary provisions which could
restrict the ability of the Company and Southern to participate in today's
capital markets.
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CERTAIN EFFECTS OF THE PROPOSED AMENDMENT
If the Proposed Amendment becomes effective, preferred shareholders will no
longer be entitled to the benefits of the Charter provision limiting the amount
of unsecured debt the Company may issue, which will have been deleted by the
Proposed Amendment. As discussed above, such provision places restrictions on
the Company's ability to issue or assume unsecured indebtedness. Although the
Company's debt instruments may contain certain restrictions on the Company's
ability to issue or assume debt, any such restrictions may be waived and the
increased flexibility afforded the Company by the deletion of the Debt
Limitation Provision may permit the Company to take certain actions that may
increase the credit risks with respect to the Company, adversely affecting the
market price and credit rating of the shares of preferred stock, or otherwise be
materially adverse to the interests of the preferred shareholders. In addition,
to the extent that the Company elects to issue additional unsecured debt,
including trust preferred securities, the preferred shareholders' relative
position in the Company's capital structure could be perceived to decline, which
in turn could adversely affect the market price and credit rating of the shares
of preferred stock.
The Proposed Amendment, if it becomes effective, would delete the Merger
Provision and, therefore, may permit the Company to engage in certain
transactions not subject to approval by the Commission under the Holding Company
Act that would otherwise have required the consent of preferred stockholders. In
addition, elimination of the Common Stock Dividend Provision may permit the
Company to pay common stock dividends in amounts that would otherwise have been
prohibited. Any such transaction or payment may have a material adverse effect
on the holders of the Company's preferred stock. As described under "Reasons for
the Proposed Amendment," however, adoption of the Proposed Amendment will not
affect voting rights of stockholders or restrictions on the Company's ability to
pay common stock dividends under applicable state law.
VOTING SHARES
With respect to the Class A Preferred Stock listed on the New York Stock
Exchange (i.e., the 6.80% and the 6.40% Series), November 7, 1997 and, with
respect to the $100 Preferred Stock and Class A Preferred Stock traded
over-the-counter, November 6, 1997 (collectively, the "Record Date") have been
fixed as the respective record dates for the determination of shareholders
entitled to notice of and to vote at the Special Meeting. A separate Offer to
Purchase and Proxy Statement is being mailed to the holders of the 4.20% Series
of the Company's preferred stock pursuant to which Southern is making a tender
offer (the "Offer") for such series and the Company is soliciting proxies in
connection with the Proposed Amendment.
The Company's Charter authorizes the issuance of 6,000,000 shares of common
stock, $40 par value, of which 5,608,955 shares are outstanding. All of such
shares are owned by Southern.
The Company's Charter also authorizes the issuance of 3,850,000 shares of
$100 Preferred Stock, par value $100 per share, and 27,500,000 shares of Class A
Preferred Stock, par value $1 per share, of which 704,000 and 6,020,200 shares,
respectively, are outstanding on the Record Date. Such shares are publicly held
and are divided into six separate classes of $100 Preferred Stock and five
separate classes of Class A Preferred Stock. Such classes constitute series of
$100 Preferred Stock and Class A Preferred Stock, respectively, and vary from
each other with respect to dividend rates, redemption prices and amounts payable
on liquidation. All of such outstanding shares of the Company's preferred stock
are entitled to vote on the Proposed Amendment as a single class, each share of
$100 Preferred Stock and each share of Class A Preferred Stock with a stated
value of $100 being counted as one, each share of Class A Preferred Stock with a
stated capital of $25 being counted as one-quarter, and each share of Class A
Preferred Stock with a stated capital of $100,000 being counted as 1,000.
Pursuant to Section 13(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), a beneficial owner of a security is any person who
directly or indirectly has or shares voting or investment power over such
security. No person or group is known by management of the Company to be the
beneficial owner of more than 5% of the Shares as of October 30, 1997.
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Officers and directors of the Company as a group owned, as of October 30,
1997, less than 1% of the total number of Shares and of the common stock of
Southern.
VOTING REQUIREMENTS AND PROCEDURES
Adoption of the Proposed Amendment requires the affirmative vote of the
holders of (i) at least a majority of the shares of the capital stock of the
Company then outstanding and entitled to vote (i.e., the common stock) and (ii)
at least two-thirds of the total voting power of the Company's preferred stock
outstanding (counting shares as described above). Abstentions and broker
non-votes will have the effect of votes against the Proposed Amendment.
SOUTHERN, THE OWNER OF ALL OF THE OUTSTANDING SHARES OF COMMON STOCK OF THE
COMPANY, HAS ADVISED THE COMPANY THAT IT INTENDS TO VOTE ALL OF THE OUTSTANDING
SHARES OF COMMON STOCK OF THE COMPANY IN FAVOR OF THE PROPOSED AMENDMENT.
Votes at the Special Meeting will be tabulated preliminarily by The Bank of
New York, as Depositary for shares tendered pursuant to the Offer, and Corporate
Investor Communications, Inc., the Information Agent. Inspectors of Election,
duly appointed by the presiding officer of the Special Meeting, will
definitively count and tabulate the votes and determine and announce the results
at the Special Meeting. The Company has no established procedure for
confidential voting. There are no rights of appraisal in connection with the
Proposed Amendment.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Balch & Bingham LLP, counsel to the Company, the
following summary describes the principal United States Federal income tax
consequences of the receipt of Special Cash Payments in connection with the
approval and adoption of the Proposed Amendment. This summary is based on the
Internal Revenue Code of 1986, as amended to the date hereof (the "Code"),
administrative pronouncements, judicial decisions and existing and proposed
Treasury Regulations, changes to any of which subsequent to the date of this
Proxy Statement may adversely affect the tax consequences described herein,
possibly on a retroactive basis. This summary is addressed to Preferred
Shareholders who hold Shares as capital assets within the meaning of Section
1221 of the Code. This summary does not discuss all of the tax consequences that
may be relevant to a Preferred Shareholder in light of such Preferred
Shareholder's particular circumstances or to Preferred Shareholders subject to
special rules (including certain financial institutions, tax-exempt
organizations, insurance companies, dealers in securities or currencies, foreign
persons or entities who own or have owned, actually or constructively, more than
five percent of such Shares, Preferred Shareholders who acquired their Shares
pursuant to the exercise of stock options or other compensation arrangements
with the Company or Preferred Shareholders holding the Shares as part of a
conversion transaction, as part of a hedge or hedging transaction, or as a
position in a straddle for tax purposes). PREFERRED SHAREHOLDERS SHOULD CONSULT
THEIR TAX ADVISORS WITH REGARD TO THE APPLICATION OF THE UNITED STATES FEDERAL
INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES
ARISING UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION.
As used herein, the term "United States Holder" means a beneficial owner of
a Share that is (i) for United States Federal income tax purposes a citizen or
resident of the United States; (ii) a corporation, partnership or other entity
created or organized in or under the laws of the United States or of any
political subdivision thereof; (iii) an estate, the income of which is subject
to United States Federal income taxation regardless of its source; or (iv) any
trust that is not a foreign trust under Section 7701(a)(31) of the Code. As used
herein, the term "Non-United States Holder" means a beneficial owner of a Share
that is not a United States Holder.
TAX CONSIDERATIONS GENERALLY
The receipt of a Special Cash Payment by a Preferred Shareholder will be a
taxable transaction for United States Federal income tax purposes. However,
Preferred Shareholders, whether or not they receive
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Special Cash Payments, will not recognize any taxable income or loss with
respect to the Shares as a result of the modification of the Charter by the
Proposed Amendment.
SPECIAL CASH PAYMENTS
United States Holders. The Federal income tax consequences of the receipt
by Preferred Shareholders of Special Cash Payments is not entirely clear. The
Company will, for Federal income tax withholding and information reporting
purposes, treat Special Cash Payments as ordinary, non-dividend income to
recipient United States Holders.
Non-United States Holders. The Company will treat Special Cash Payments
paid to Non-United States Holders as subject to withholding of United States
Federal income tax at a rate of 30%. However, a Special Cash Payment that is
effectively connected with the conduct of a trade or business by a Non-United
States Holder within the United States will not be subject to such withholding
tax (provided such Non-United States Holder provides two originals of Internal
Revenue Service ("IRS") Form 4224 stating that such Special Cash Payments are so
effectively connected), but instead will be subject to United States Federal
income tax on a net income basis at applicable graduated individual or corporate
rates. Any such effectively connected Special Cash Payments received by a
foreign corporation may, under certain circumstances, be subject to an
additional "branch profits tax" at a 30% rate (or such lower rate as may be
specified by an applicable income tax treaty).
A Non-United States Holder eligible for a reduced rate of United States
withholding tax pursuant to an income tax treaty may obtain a refund of any
excess amounts withheld by filing an appropriate claim for refund with the IRS.
BACKUP WITHHOLDING
ANY PREFERRED SHAREHOLDER WHO VOTES IN FAVOR OF THE PROPOSED AMENDMENT AND
WHO FAILS TO COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 THAT IS INCLUDED IN THE
PROXY (OR, IN THE CASE OF A FOREIGN PREFERRED SHAREHOLDER, FORM W-8 OBTAINABLE
FROM THE INFORMATION AGENT) MAY BE SUBJECT TO A REQUIRED FEDERAL INCOME TAX
BACKUP WITHHOLDING OF 31% OF THE SPECIAL CASH PAYMENT. To prevent United States
Federal income tax backup withholding with respect to the Special Cash Payment,
a United States Holder must provide the Information Agent with the Preferred
Shareholder's correct Taxpayer Identification Number ("TIN") and certify that
the Preferred Shareholder is not subject to backup withholding of Federal income
tax by completing the Substitute Form W-9 included in the Proxy. Certain
Preferred Shareholders (including, among others, all corporations and certain
foreign shareholders) are exempt from backup withholding. For a corporate United
States Holder to qualify for such exemption, such Preferred Shareholder must
provide the Information Agent with a properly completed and executed Substitute
Form W-9 attesting to its exempt status. In order for a foreign Preferred
Shareholder to qualify as an exempt recipient, the foreign holder must submit a
Form W-8, Certificate of Foreign Status, signed under penalties of perjury,
attesting to that Preferred Shareholder's exempt status. A copy of Form W-8 may
be obtained from the Information Agent.
Unless a Preferred Shareholder provides the appropriate certification,
under the applicable law and regulations concerning "backup withholding" of
United States Federal income tax, the Information Agent will be required to
withhold, and will withhold, 31% of the gross proceeds otherwise payable to such
Preferred Shareholder or other payee. The amount of any backup withholding from
a payment to a Preferred Shareholder will be allowed as a credit against such
Preferred Shareholder's United States Federal income tax liability and may
entitle such Preferred Shareholder to a refund, provided that the required
information is furnished to the IRS. However, backup withholding is not required
for amounts subject to 30% withholding discussed above under "Special Cash
Payments -- Non-United States Holders."
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SOLICITATION OF PROXIES
The Company will bear the cost of the solicitation of proxies. The Company
has engaged Corporate Investor Communications, Inc. to act as Information Agent
in connection with the solicitation of proxies for a fee of $11,000, plus unit
fees per preferred shareholder contacted, plus reimbursement of reasonable
out-of-pocket expenses. The Company has also engaged Merrill Lynch & Co. to act
as Dealer Manager in connection with the solicitation of proxies for a fee of an
amount equal to 0.50% of the par value or stated capital, as applicable, per
Share of Preferred Stock voted in favor of the Proposed Amendment, plus
reimbursement of certain out-of-pocket expenses. With respect to the Shares of
Preferred Stock described below which are voted in favor of the Proposed
Amendment, if the Proposed Amendment is approved and adopted, the Company will
pay a consent fee of an amount equal to (i) 0.50% of the stated capital per
Share of its 1993 Adjustable Rate Series (but only with respect to transactions
for beneficial owners whose ownership is less than 2,500 Shares) and (ii) 0.50%
of the par value or stated capital, as applicable, per Share of its 4.52%
Series, 4.60% Series, 4.64% Series, 4.72% Series, 4.92% Series, 6.40% Series and
6.80% Series; provided, however, with respect to transactions for beneficial
owners whose ownership equals or exceeds 2,500 Shares of such Shares named in
clause (ii) above, the Company will pay a consent fee of an amount equal to
0.25% of the par value or stated capital, as applicable, per Share of such
Shares. With respect to fees payable pursuant to the immediately preceding
sentence (x) that involve transactions for beneficial owners whose ownership is
less than 2,500 Shares any fee payable thereunder shall be paid in full to the
Dealer Manager unless a Soliciting Dealer is designated, in which case such fee
shall be paid in full to such designated Soliciting Dealer (which designated
Soliciting Dealer may be the Dealer Manager) and (y) that involve transactions
for beneficial owners whose ownership equals or exceeds 2,500 Shares, any fee
payable thereunder shall be paid in full to the Dealer Manager unless a
Soliciting Dealer is designated, in which case 80% of such fee shall be paid to
the Dealer Manager and 20% of such fee shall be paid to the designated
Soliciting Dealer (which designated Soliciting Dealer may be the Dealer
Manager).
A designated Soliciting Dealer is an entity obtaining the Proxy, if the
Proxy shall indicate its name and it is (a) any broker or dealer in securities,
including the Dealer Manager in its capacity as a dealer or broker, which is a
member of any national securities exchange or of the National Association of
Securities Dealers, Inc. (the "NASD"), (b) any foreign broker or dealer not
eligible for membership in the NASD which agrees to conform to the NASD's Rules
of Fair Practice in soliciting proxies outside the United States to the same
extent as though it were an NASD member, or (c) any bank or trust company (each
of which is referred to herein as a "Soliciting Dealer"). No such fee shall be
payable to a Soliciting Dealer with respect to the solicitation of Proxies
unless the Proxy designates such Soliciting Dealer. No such fee shall be payable
to a Soliciting Dealer in respect of Shares registered in the name of such
Soliciting Dealer unless such Shares are held by such Soliciting Dealer as
nominee and such Shares are being voted for the benefit of one or more
beneficial owners identified on the Notice of Solicited Proxies (included in the
materials provided to brokers and dealers). No such fee shall be payable to a
Soliciting Dealer with respect to the solicitation of Proxies by the holder of
record, for the benefit of the beneficial owner, unless the beneficial owner has
designated such Soliciting Dealer. No such fee shall be payable to a Soliciting
Dealer if such Soliciting Dealer is required for any reason to transfer the
amount of such fee to a depositing holder (other than itself). No such fee shall
be paid to a Soliciting Dealer with respect to solicitation of Proxies for such
Soliciting Dealer's own account. No broker, dealer, bank, trust company or
fiduciary shall be deemed to be the agent of the Company, the Information Agent
or the Dealer Manager for purposes of the Proxy solicitation.
Soliciting Dealers will include any organizations described in clauses (a),
(b) or (c) above even when the activities of such organization in connection
with the Proxy solicitation consist solely of forwarding to clients materials
relating to the Proxy solicitation, and rendering Proxies as directed by
beneficial owners thereof. No Soliciting Dealer is required to make any
recommendation to holders of Shares as to whether to vote for or against the
Proposed Amendment. No assumption is made, in making payment to any Soliciting
Dealer, that its activities in connection with the Proxy solicitation included
any activities other than those described above, and for all purposes noted in
all materials relating to the Proxy solicitation, the term "solicit" shall be
deemed to mean no more than "processing shares voted" or "forwarding to
customers materials regarding the Proxy solicitation."
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Proxies will be solicited by mail or by telephone. In addition, officers
and employees of the Company or its affiliates may also solicit proxies
personally or by telephone; such persons will receive no additional compensation
for these services. The Information Agent has not been retained to make, and
will not make, solicitations or recommendations, other than conveying
information related to the recommendations of the Board, in connection with the
Proposed Amendment.
The Company has requested that brokerage houses and other custodians,
nominees and fiduciaries forward solicitation materials to the beneficial owners
of shares of the Company's outstanding preferred stock held of record by such
persons and will reimburse such brokers and other fiduciaries for their
reasonable out-of-pocket expenses incurred in connection therewith.
The solicitation of proxies has been approved by the Commission under the
Holding Company Act. An application has been filed with the Commission under the
Holding Company Act requesting approval of the Proposed Amendment.
WHAT NUMBER TO GIVE THE INFORMATION AGENT
The Taxpayer Identification Number ("TIN") a Preferred Shareholder is
required to give the Information Agent is the social security number or employer
identification number of the registered owner of the Shares. If the Shares are
in more than one name or are not in the name of the actual owner, consult the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for additional guidance on which number to report.
A Preferred Shareholder is required to provide the Information Agent with
(i) in the case of a United States Preferred Shareholder, a TIN and a
certification on Substitute Form W-9 that the IRS has not notified such
shareholder that he is subject to backup withholding, or (ii) in the case of a
foreign Preferred Shareholder, a properly completed Form W-8. Failure to provide
the information on either Substitute Form W-9 or Form W-8 may subject the
Preferred Shareholder to a $50 penalty imposed by the IRS and to 31% Federal
income tax backup withholding on the payment of the Special Cash Payment. The
box in Part 2 of Substitute Form W-9 may be checked if the Preferred Shareholder
has not been issued a TIN and has applied for a number or intends to apply for a
number in the near future. If the box in Part 2 is checked and the Information
Agent is not provided with a TIN by the time of payment, the Information Agent
will withhold 31% on the payment of the Special Cash Payment thereafter until a
TIN is provided to the Information Agent.
FINANCIAL AND OTHER INFORMATION
The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files reports and other information with the
Commission. Such reports and other information may be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549; 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511; and Seven World Trade Center, Suite 1300, New
York, New York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission maintains a Web site at
http://www.sec.gov containing reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission, including the Company. Reports, proxy materials and other
information about the Company are also available at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005.
The financial statements of the Company and related information included in
its Annual Report on Form 10-K for the year ended December 31, 1996, its
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997 and June
30, 1997 and its Current Reports on Form 8-K dated January 9, 1997 and February
12, 1997, each as filed with the Commission, are hereby incorporated by
reference. All documents subsequently filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Proxy
Statement and prior to the date of the Special Meeting (or any adjournment
thereof) shall be deemed to be incorporated by reference in this Proxy Statement
and to be a part hereof from the date
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of filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Proxy Statement to the extent that a
statement contained herein or in any other subsequently filed document which is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Proxy
Statement.
The Company will provide without charge to each person to whom a copy of
this Proxy Statement has been delivered, on the written or oral request of any
such person, a copy of any or all of its documents described above which have
been incorporated by reference in this Proxy Statement, other than exhibits to
such documents. Such requests should be directed to Corporate Secretary, Alabama
Power Company, 600 North 18th Street, Birmingham, Alabama 35291, telephone (205)
257-1000. The information relating to the Company contained in this Proxy
Statement does not purport to be comprehensive and should be read together with
the information contained in the documents incorporated by reference.
Questions or requests for assistance in connection with this Proxy
Statement and the accompanying Proxy may be directed to Corporate Investor
Communications, Inc. at (888) 881-0526 (toll free) or banks and brokers call
(888) 349-2003 or to Merrill Lynch & Co. at (888) 654-8637 (toll free). Requests
for additional copies of this Proxy Statement, the Proxy or other proxy
materials may be directed to the Information Agent, and such copies will be
furnished promptly at the Company's expense.
INDEPENDENT PUBLIC ACCOUNTANTS
No representative of Arthur Andersen LLP, the Company's independent public
accountants, is expected to be present at the Special Meeting unless prior to
the day of the Special Meeting the Corporate Secretary of the Company has
received written notice from a Preferred Shareholder addressed to the Corporate
Secretary at 600 North 18th Street, Birmingham, Alabama 35291, that such
Preferred Shareholder will attend the Special Meeting and wishes to ask
questions of a representative of Arthur Andersen LLP.
DELIVERY OF PROXIES
Properly executed proxies must be received by mail at or prior to the
Special Meeting which will be held on December 10, 1997. Such proxies may be
mailed to The Bank of New York, Tender & Exchange Department, P.O. Box 11248,
Church Street Station, New York, New York 10286-1248. A return envelope is
enclosed for your convenience.
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OTHER MATTERS
The Board of Directors knows of no matter other than the foregoing to come
before the Special Meeting. If any other matters properly come before the
Special Meeting or any adjournment thereof, however, it is intended that the
persons designated as proxies in the enclosed proxy will vote on such matters in
their discretion.
BY ORDER OF THE BOARD OF DIRECTORS
Art P. Beattie
Vice President, Secretary and
Treasurer
Birmingham, Alabama
November 3, 1997
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APPENDIX A
PROVISIONS OF THE CHARTER TO BE DELETED BY THE PROPOSED AMENDMENT
Unless otherwise defined, capitalized terms used herein are used as defined
in the Charter.
THE DEBT LIMITATION PROVISION
Paragraph A.2.f.(2) of Article IX of the Charter states:
"Notwithstanding any of the provisions of Article XI hereof, so long
as any shares of the preferred stock or Class A preferred stock are
outstanding, the consolidated corporation shall not, without the
affirmative vote in favor thereof of the holders of at least a majority of
the total voting power of the shares of preferred stock and Class A
preferred stock at the time outstanding,
(2) issue or assume any unsecured notes, debentures or other
securities representing unsecured debt (other than for the purpose of
refunding or renewing outstanding unsecured securities issued or assumed
by the consolidated corporation resulting in equal or longer maturities
or redeeming or otherwise retiring all outstanding shares of the
preferred stock or Class A preferred stock or of any kind of stock over
which the preferred stock and the Class A preferred stock do not have
preference as to the payment of dividends and as to assets) if
immediately after such issue or assumption the total outstanding
principal amount of all unsecured notes, debentures or other securities
representing unsecured debt of the consolidated corporation will thereby
exceed 20% of the aggregate of all existing secured debt of the
consolidated corporation and the capital stock, premiums thereon and
surplus of the corporation as stated on its books."
THE MERGER PROVISION
Paragraph A.2.f.(1) of Article IX of the Charter states:
"Notwithstanding any of the provisions of Article XI hereof, so long
as any shares of the preferred stock or Class A preferred stock are
outstanding, the consolidated corporation shall not, without the
affirmative vote in favor thereof of the holders of at least a majority of
the total voting power of the shares of preferred stock and Class A
preferred stock at the time outstanding,
(a) sell, lease or exchange all or substantially all of its property
or merge or consolidate with or into any other corporation or corporations,
unless such sale, lease, exchange, merger or consolidation, or the issuance
and assumption of all securities to be issued or assumed in connection
therewith, shall have been ordered, approved or permitted under the Public
Utility Holding Company Act of 1935 by the Securities and Exchange
Commission or any successor commission or regulatory authority of the
United States of America. Nothing in this paragraph contained shall
authorize any such sale, lease, exchange, merger or consolidation by the
vote of the holders of a less number of shares of the preferred stock or
Class A preferred stock, or of any other class of stock, or of all classes
of stock, than is required for any such sale, lease, exchange, merger or
consolidation by the laws of the State of Alabama at the time applicable
thereto."
THE COMMON STOCK DIVIDEND PROVISION
The relevant provision of Paragraph A.2.b. of Article IX of the Charter
states:
"So long as any shares of the preferred stock or Class A preferred
stock are outstanding, the payment of dividends on the common stock (other
than dividends payable in common stock) and the making of any distribution
of assets to holders of common stock by purchase of shares or otherwise
(each of such actions being herein embraced within the term "payment of
common stock dividends") shall be subject to the following limitations
(except as may be approved or permitted by the affirmative favorable vote
of
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the holders of at least two-thirds of the total voting power of the shares
of preferred stock and Class A preferred stock at the time outstanding):
(a) If and so long as the ratio of the aggregate of the par value
of, or stated capital represented by, the outstanding shares of common
stock (including premiums on the common stock but excluding premiums on
the preferred stock and Class A preferred stock) and of the surplus of
the consolidated corporation to the total capitalization and surplus of
the consolidated corporation at the end of a period of twelve
consecutive calendar months within the fourteen calendar months
immediately preceding the calendar month in which the proposed payment
of common stock dividends is to be made (such period being hereinafter
referred to as the "base period"), adjusted to reflect the proposed
payment of common stock dividends (such ratio being hereinafter referred
to as the "capitalization ratio"), is less than 20%, the payment of
common stock dividends, including the proposed payment, during the
twelve calendar months period ending with and including the calendar
month in which the proposed payment is to be made shall not exceed 50%
of the net income of the consolidated corporation available for the
payment of dividends on the common stock during the base period;
(b) If and so long as the capitalization ratio is 20% or more but
less than 25%, the payment of common stock dividends, including the
proposed payment, during the twelve calendar months period ending with
and including the calendar month in which the proposed payment is to be
made shall not exceed 75% of the net income of the consolidated
corporation available for the payment of dividends on the common stock
during the base period; and
(c) Except to the extent permitted under paragraphs (a) and (b)
above, the consolidated corporation shall not make any payment of common
stock dividends which would reduce the capitalization ratio to less than
25%.
For the purpose of the foregoing provisions, the following terms shall have
the following meanings:
(1) The term "net income of the consolidated corporation available for
the payment of dividends on the common stock" shall mean for any period the
balance remaining after deducting from the total gross revenues of the
consolidated corporation from all sources during such period the following:
(i) all operating expenses and taxes, including charges to income
for general taxes and for federal and state taxes measured by income,
for retirement or depreciation reserve and for amortization or other
disposition of amounts, if any, classified as amounts in excess of
original cost of utility plant; (ii) all interest charges and other
income deductions, including charges to income for amortization of debt
discount, premium and expense and preferred stock and Class A preferred
stock premium and expense; (iii) all dividends paid or set aside for
payment to the holders of preferred stock and Class A preferred stock
which are applicable to such period; and (iv) the greater of (x) the
total amount, if any, by which the aggregate of the charges to income or
earned surplus during such period for repairs, maintenance and provision
for depreciation shall have been less than 15% of the gross operating
revenues derived by the consolidated corporation during such period,
after deduction for such revenues of the aggregate cost of electric
energy, gas and steam purchased for resale, and (y) the total amount, if
any, by which the charges to income or earned surplus during such period
as provision for depreciation shall have been less than the sum of the
amounts equal to the product of the applicable percentage (as defined in
Section 3 of the Supplemental Indenture dated as of October 1, 1981) and
the mathematical average of the amounts of depreciable property (as
defined in said Section 3) at the opening of business on the first day
and at the close of business on the last day of such period.
(2) The term "total capitalization" shall mean the aggregate of the
principal amount of all outstanding indebtedness of the consolidated
corporation maturing more than twelve months after the date of issue or
assumption, plus the par value of, or stated capital represented by, the
outstanding shares of all classes of stock of the consolidated corporation,
including any premiums on capital stock.
A-2
<PAGE>
(3) The term "surplus" shall include capital surplus, earned surplus
and any other surplus of the consolidated corporation, adjusted to
eliminate (i) the greater of (x) the total amount, if any, by which the
aggregate of the charges to income or earned surplus since December 31,
1960 and prior to the end of the base period for repairs, maintenance and
provision for depreciation shall have been less than 15% of the operating
revenues derived by the consolidated corporation since December 31, 1960
and prior to the end of the base period, after deduction from such revenues
of the aggregate cost of electric energy, gas and steam purchased for
resale, and (y) the total amount, if any, by which the charges to income or
earned surplus during since December 31, 1960 and prior to the end of the
base period as provision for depreciation shall have been less than the sum
of the amounts equal to the product of the applicable percentage (as
defined in Section 3 of the Supplemental Indenture dated as of October 1,
1981) and the mathematical average of the amounts of depreciable property
(as defined in said Section 3) at the opening of business on the first day
and at the close of business on the last day of each calendar year (and,
proportionately, of each period of months which is less than a calendar
year) subsequent to December 31, 1960 and prior to the end of the base
period; and (ii) any amounts which may then be classified by the
consolidated corporation on its books as amounts in excess of the original
cost of utility plant and which are not provided for by reserve and any
items set forth on the asset side of the balance sheet of the consolidated
corporation as a result of accounting convention, such as unamortized debt
discount, premium and expense and preferred stock and Class A preferred
stock premium and expense, unless any such amount or item, as the case may
be, is being amortized or is being provided for by a reserve."
THE RETAINED EARNINGS DIVIDEND PROVISION
The relevant provision of Paragraph A.2.b. of Article IX of the Charter
states that no dividends on common stock may be paid in certain events "or if,
at the time of declaration thereof or the making of such distribution, there
shall not remain to the credit of earned surplus account (after deducting
therefrom the amount of such dividends and distributions) an amount at least
equal to two times the annual dividend requirements on all then outstanding
shares of the preferred stock and Class A preferred stock and on all other kinds
of stock over which the preferred stock and Class A preferred stock do not have
preference as to the payment of dividends and as to assets."
A-3
<PAGE>
Questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective telephone numbers and addresses
listed below. Requests for additional copies of the Proxy Statement and the
accompanying Proxy may be directed to the Information Agent, and such copies
will be furnished promptly at the Company's expense.
The Information Agent:
CORPORATE INVESTOR COMMUNICATIONS, INC.
111 Commerce Road
Carlstadt, New Jersey 07072
(888) 881-0526 (toll free)
Banks and Brokers call
(888) 349-2003
The Dealer Manager:
MERRILL LYNCH & CO.
World Financial Center
250 Vesey Street
New York, New York 10281
(888) ML4-TNDR (toll free)
((888) 654-8637)
Properly executed Proxies must be received by mail at or prior to the
Special Meeting which will be held on December 10, 1997. Such Proxies should be
sent to:
The Bank of New York
Tender & Exchange Department
P.O. Box 11248
Church Street Station
New York, New York 10286-1248
<PAGE>
Exhibit B-6
GEORGIA POWER COMPANY
ATLANTA, GEORGIA
---------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 10, 1997
NOTICE IS HEREBY GIVEN that a special meeting of the shareholders of
Georgia Power Company will be held at the Company's offices, 333 Piedmont
Avenue, N.E., Atlanta, Georgia, on December 10, 1997 at 3:45 p.m., Eastern time,
to consider and act on the following proposal, as more fully described in the
attached Proxy Statement:
PROPOSAL: To remove from the Company's Charter (i) Subparagraph
14.A.3.f.(2) of Paragraph III, a provision restricting the amount of
securities representing unsecured indebtedness issuable by the Company,
(ii) Subparagraph 14.A.3.f.(1) of Paragraph III, a provision which requires
the vote of the holders of at least a majority of the total voting power of
the outstanding Company preferred stock to approve the sale of all or
substantially all of the Company's property and mergers or consolidations
that have not been approved under the Public Utility Holding Company Act of
1935, as amended, and (iii) Subparagraph 14.A.3.b. (except the first
paragraph therein) of Paragraph III, a provision restricting the ability of
the Company to pay dividends on its common stock in the event that its
common equity capitalization falls below certain levels;
and for the purpose of transacting any and all business in connection with the
foregoing and any other business that may properly come before said meeting or
any adjournment or adjournments thereof.
Only shareholders of record at the close of business on November 7, 1997,
with respect to Class A Preferred Stock, and November 6, 1997, with respect to
$100 Preferred Stock, will be entitled to notice of and to vote at said meeting
or any adjournment or adjournments thereof.
For the reasons set forth in the attached Proxy Statement, you are urged to
vote FOR the proposal.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. PLEASE
MARK, DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE. In
the event you are able to attend the meeting, you may revoke the Proxy by voting
your shares in person.
BY ORDER OF THE BOARD OF DIRECTORS
Judy M. Anderson
Vice President and Corporate Secretary
Atlanta, Georgia
November 3, 1997
<PAGE>
GEORGIA POWER COMPANY
ATLANTA, GEORGIA
---------------------
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 10, 1997
---------------------
PROXY STATEMENT
<TABLE>
<CAPTION>
OUTSTANDING CUSIP
TITLE OF SERIES OF PREFERRED SHARES NUMBER
- ---------------------------- ----------- ---------
<S> <C> <C>
Class A Preferred Stock ($25 stated value)
Adjustable Rate (First 1993) Series....................... 3,000,000 873334580
Adjustable Rate (Second 1993) Series...................... 4,000,000 873334572
Preferred Stock ($100 stated value)
$6.48 Series.............................................. 120,000 873334879
$6.60 Series.............................................. 100,000 873334861
</TABLE>
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Georgia Power Company (the "Company") from the holders
(the "Preferred Shareholders") of the Adjustable Rate (First 1993) Series and
the Adjustable Rate (Second 1993) Series of the Company's outstanding Class A
Preferred Stock, with stated values of $25 (collectively, the "Class A Preferred
Stock"), and the $6.48 Series and the $6.60 Series of the Company's outstanding
Preferred Stock, with stated values of $100 (collectively, the "$100 Preferred
Stock" and, together with the Class A Preferred Stock, the "Preferred Stock").
Such proxies are to be used at the Special Meeting of Shareholders of the
Company to be held at the Company's offices, 333 Piedmont Avenue, N.E., Atlanta,
Georgia, on December 10, 1997 at 3:45 p.m., Eastern time, or any adjournment or
postponement of such meeting (the "Special Meeting"). IF THE PROPOSED AMENDMENT
(AS DEFINED HEREIN) IS APPROVED AND ADOPTED BY THE COMPANY'S SHAREHOLDERS, THE
COMPANY WILL MAKE A SPECIAL CASH PAYMENT (THE "SPECIAL CASH PAYMENT") EQUAL TO
1.00% OF THE STATED VALUE PER SHARE (AS DEFINED HEREIN) (OR $0.25 PER SHARE OF
CLASS A PREFERRED STOCK AND $1.00 PER SHARE OF $100 PREFERRED STOCK) FOR EACH
SHARE PROPERLY VOTED IN FAVOR OF THE PROPOSED AMENDMENT. If a Preferred
Shareholder votes against the Proposed Amendment or abstains, such Preferred
Shareholder shall not be entitled to the Special Cash Payment (regardless of
whether the Proposed Amendment is approved and adopted).
The solicitation of proxies has been approved by the Securities and
Exchange Commission (the "Commission") under the Public Utility Holding Company
Act of 1935, as amended (the "Holding Company Act"). This Proxy Statement is
first being mailed on or about November 3, 1997. The record date with respect to
the Class A Preferred Stock is November 7, 1997 and the record date with respect
to $100 Preferred Stock is November 6, 1997.
The principal executive offices of the Company are located at 333 Piedmont
Avenue, N.E., Atlanta, Georgia 30308. The telephone number is (404) 526-6526.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS VOTING FOR THE PROPOSED
AMENDMENT.
SUMMARY
The Board of Directors of the Company is soliciting proxies from all
holders of the shares of each series (except the $1.925 Series) of the Company's
outstanding preferred stock (the "Shares") for use at the Special Meeting of
Shareholders of the Company. The proposal to be presented at the Special
Meeting, if adopted, is intended to provide the Company with the necessary
flexibility to meet the demands of an increasingly competitive electric utility
industry. See "Reasons for the Proposed Amendment."
<PAGE>
The Special Meeting is being held to consider an amendment to the Company's
charter (the "Charter") which would eliminate the provisions restricting the
ability of the Company to issue unsecured indebtedness, to sell assets, merge or
consolidate and to pay dividends on its common stock in the event that its
common equity capitalization falls below certain levels. If the Proposed
Amendment is approved by the shareholders, such restrictions contained in the
Charter will be eliminated with respect to the outstanding Shares.
The Company will pay certain consent fees. See "Solicitation of Proxies."
If the Proposed Amendment is approved and adopted by the Company's
shareholders, the Company will make a Special Cash Payment equal to 1.00% of the
stated value per Share (or $0.25 per Share of Class A Preferred Stock and $1.00
per Share of $100 Preferred Stock) for each Share properly voted in favor of the
Proposed Amendment.
Questions or requests for assistance may be directed to Corporate Investor
Communications, Inc. (the "Information Agent") at (888) 881-0526 (toll free) or
banks and brokers call (888) 349-2003 or to Merrill Lynch & Co. ("Merrill
Lynch") at (888) 654-8637 (toll free). Requests for additional copies of this
Proxy Statement, the Proxy or other proxy materials may be directed to the
Information Agent, and such copies will be furnished promptly at the Company's
expense.
The foregoing summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information appearing elsewhere in this
Proxy Statement.
EXECUTION AND REVOCATION OF PROXY
THE ENCLOSED PROXY IS SOLICITED BY THE COMPANY'S BOARD, WHICH RECOMMENDS
VOTING FOR THE PROPOSED AMENDMENT. ALL SHARES OF THE COMPANY'S COMMON STOCK WILL
BE VOTED IN FAVOR OF THE PROPOSED AMENDMENT. Preferred Shareholders voting at
the Special Meeting by proxy must use the enclosed Proxy. Shares of the
Company's outstanding preferred stock represented by properly executed proxies
received at or prior to the Special Meeting will be voted in accordance with the
instructions thereon. If no instructions are indicated, duly executed proxies
will be voted in accordance with the recommendation of the Board. It is not
anticipated that any other matters will be brought before the Special Meeting.
However, the enclosed proxy gives discretionary authority to the proxy holders
named therein should any other matters be presented at the Special Meeting, and
it is the intention of the proxy holders to act on any other matters in their
discretion.
Execution of a proxy will not prevent a shareholder from attending the
Special Meeting and voting in person. Any shareholder giving a proxy may revoke
it at any time before it is voted by delivering to the Secretary of the Company
written notice of revocation bearing a later date than the proxy, by delivering
a duly executed proxy bearing a later date, or by voting in person by ballot at
the Special Meeting.
SPECIAL CASH PAYMENTS
Subject to the terms and conditions set forth in this Proxy Statement, if
(but only if) the Proposed Amendment is approved and adopted by the shareholders
of the Company, the Company will make a Special Cash Payment to each Preferred
Shareholder who voted in favor of the Proposed Amendment, in person by ballot or
by proxy, at the Special Meeting in the amount equal to 1.00% of the stated
value per Share (or $0.25 per Share of Class A Preferred Stock and $1.00 per
Share of $100 Preferred Stock) for each Share held by such Preferred Shareholder
which is so voted. The Company has been advised that there is no controlling
precedent under state law as to the permissibility of its making the Special
Cash Payment. Although, as a result, there can be no assurance as to how a court
would rule on the issue, the Company believes that the Offer (as defined herein)
is fair to Preferred Shareholders and has determined to make the Special Cash
Payment. SPECIAL CASH PAYMENTS WILL BE MADE TO PREFERRED SHAREHOLDERS AS OF THE
RECORD DATE ONLY IN RESPECT OF EACH SHARE WHICH IS VOTED FOR THE ADOPTION OF THE
PROPOSED AMENDMENT. If a Preferred Shareholder votes against the Proposed
Amendment or abstains, such Preferred Shareholder shall not be
2
<PAGE>
entitled to the Special Cash Payment (regardless of whether the Proposed
Amendment is approved and adopted). If the Proposed Amendment is approved and
adopted, Special Cash Payments will be paid out of the Company's general funds,
promptly after the Proposed Amendment shall have become effective. However, no
accrued interest will be paid on the Special Cash Payments regardless of any
delay in making such payments.
Only holders of record of the Company's voting securities at the close of
business on the Record Date or persons obtaining a proxy from the holders of
record on the Record Date will be entitled to vote in person or by proxy at the
Special Meeting. Any beneficial holder of Shares who is not the registered
holder of such Shares as of the Record Date (as would be the case for any
beneficial holder whose Shares are registered in the name of such holder's
broker, dealer, commercial bank, trust company or other nominee) must arrange
with the record Preferred Shareholder to execute and deliver a proxy form on
such beneficial owner's behalf. If a beneficial holder of Shares intends to
attend the Special Meeting and vote in person, such beneficial holder must
obtain a legal proxy form from his or her broker, dealer, commercial bank, trust
company or other nominee. The Company will make Special Cash Payments only to
Preferred Shareholders who are registered holders as of the Record Date. Any
beneficial owner of Shares who is not the registered holder of such Shares as of
the Record Date must arrange with the record Preferred Shareholder to receive
his proportionate interest in the Special Cash Payments made to such record
Preferred Shareholder. The Company will have no responsibility or liability for
any aspect of the records relating to or payments made on account of any
beneficial owner's interest in the Special Cash Payments made to a record
Preferred Shareholder.
PROPOSED AMENDMENT
BUSINESS TO COME BEFORE THE SPECIAL MEETING
The following proposed amendment (the "Proposed Amendment") to the Charter
is the only item of business expected to be presented at the Special Meeting:
To remove in their entirety (i) Subparagraph 14.A.3.f.(2) of Paragraph III
of the Charter, a provision restricting the amount of securities representing
unsecured indebtedness issuable by the Company, (ii) Subparagraph 14.A.3.f.(1)
of Paragraph III of the Charter, a provision which requires the vote of the
holders of at least a majority of the total voting power of the outstanding
Company preferred stock to approve the sale of all or substantially all of the
Company's property and mergers or consolidations that have not been approved
under the Holding Company Act, and (iii) Subparagraph 14.A.3.b. (except the
first paragraph therein) of Paragraph III of the Charter, a provision
restricting the ability of the Company to pay dividends on its common stock in
the event that its common equity capitalization falls below certain levels.
THE FOLLOWING STATEMENTS ARE SUMMARIES OF THE SUBSTANCE OR GENERAL EFFECT
OF PROVISIONS OF THE CHARTER, AND ARE QUALIFIED IN THEIR ENTIRETY BY THE CHARTER
AND SUBPARAGRAPHS 14.A.3.B., 14.A.3.F.(1) AND 14.A.3.F.(2) OF PARAGRAPH III
THEREIN (AS DESCRIBED BELOW). SEE APPENDIX A HERETO FOR THE TEXT OF THE
PROVISIONS TO BE DELETED.
EXPLANATION OF THE PROPOSED AMENDMENT
Subparagraph 14.A.3.f.(2) of Paragraph III of the Charter currently
provides that, so long as any shares of the Company's preferred stock are
outstanding, without the affirmative vote of the holders of at least a majority
of the total voting power of its outstanding shares of preferred stock, the
Company shall not issue or assume any securities representing unsecured debt
(other than for the purpose of refunding or renewing outstanding unsecured
securities issued by the Company resulting in equal or longer maturities or
redeeming or otherwise retiring all outstanding shares of its preferred stock or
of any senior or equally ranking stock) if, immediately after such issue or
assumption, (a) the total outstanding principal amount of all securities
representing unsecured debt of the Company would exceed 20% of the aggregate of
all existing secured debt of the Company and the capital stock, premiums thereon
and surplus of the Company as stated on the Company's books; or (b) the total
outstanding principal amount of all securities representing unsecured debt
3
<PAGE>
of the Company of maturities of less than ten years would exceed 10% of such
aggregate (the "Debt Limitation Provision").
Subparagraph 14.A.3.f.(1) of Paragraph III of the Charter currently
provides that, so long as any shares of the Company's are outstanding, without
the affirmative vote of the holders of at least a majority of the total voting
power of its outstanding shares of preferred stock, the Company shall not
dispose of all or substantially all of its property or merge or consolidate,
unless such action has been approved by the Commission under the Holding Company
Act (the "Merger Provision").
Subparagraph 14.A.3.b. (except the first paragraph therein) of Paragraph
III of the Charter currently provides that, so long as any shares of the
Company's preferred stock are outstanding, the Company's dividends on its common
stock are limited to 50% of net income available for such stock during a period
of 12 months if, calculated on a corporate basis, the ratio of its common stock
equity to total capitalization, including surplus, adjusted to reflect the
payment of the proposed dividend, is below 20%, and to 75% of such net income if
such ratio is 20% or more but less than 25% (the "Common Stock Dividend
Provision").
The Proposed Amendment, if adopted, would eliminate from the Charter in
their entirety the Debt Limitation Provision, the Merger Provision and the
Common Stock Dividend Provision (collectively, the "Restriction Provisions"),
each as set forth in full in Appendix A hereto.
REASONS FOR THE PROPOSED AMENDMENT
The electric utility industry has become, and will continue to be,
increasingly competitive as the result of various factors, including regulatory
and technological developments. Various federal and state regulatory initiatives
designed to promote wholesale and retail competition include, among other
things, proposals that would allow customers to choose their electricity
provider. As these competitive initiatives materialize, the structure of the
utility industry could radically change. The Company believes that maintaining
and improving its position as a low-cost producer and having the flexibility to
respond to developments in the industry will be crucial to its success in the
new competitive marketplace.
The Company believes that adoption of the Proposed Amendment is important
to creating the necessary flexibility to respond to any industry developments.
The restrictions that would be eliminated by the Proposed Amendment
generally do not burden the industry's new competitors (power marketers,
independent power producers, exempt wholesale generators and owners of
cogeneration facilities), nor even other public utility companies. These
restrictions stem from the fact that the Company and its affiliates are subject
to regulation under the Holding Company Act. Such restrictions were initially
imposed as a result of the Commission's 1956 Statement of Policy Regarding
Preferred Stock Subject to the Public Utility Holding Company Act of 1935. The
Commission recently has noted that the Statement of Policy is out of date and
has not kept pace with the rapidly changing securities markets. Furthermore, the
Commission stated that the marketplace should more appropriately determine the
terms and conditions applicable to securities issuances.
Management considers that elimination of the Debt Limitation Provision is
crucial to the Company's financial flexibility and its ability to effect future
capital cost reductions. The deletion of this provision from the Charter will
allow the Company to utilize more fully various unsecured debt alternatives and
thus improve its ability to take full advantage of changing conditions in the
capital markets. The additional flexibility will, for example, permit the
Company to issue long-term debt when, because of mortgage coverage restrictions
or other reasons, it may be unattractive or not possible to issue any additional
first mortgage bonds. In addition, elimination of the Debt Limitation Provision
will afford the Company greater flexibility in the issuance of short-term debt
to meet seasonal cash requirements with what is usually the least expensive form
of capital.
The Company believes that the Merger Provision is an unnecessary
restriction on the ability of the Company to consider strategic responses to the
increasingly competitive utility industry. For instance, the Merger Provision
provides that, unless approved under the Holding Company Act, the sale or lease
of certain of the Company's properties would require Preferred Shareholder
approval in addition to any statutory
4
<PAGE>
requirement under state law. Such an additional burden could hinder the
Company's ability to conduct its business operations in this changing utility
environment. Furthermore, the elimination of the Merger Provision will not
affect voting rights of stockholders under applicable state law.
Similarly, the Common Stock Dividend Restriction unnecessarily impedes the
financial flexibility of the Company and The Southern Company ("Southern"). The
Common Stock Dividend Restriction prevents the Company from paying dividends on
its common stock unless the Company maintains a certain equity capitalization.
This restriction (a vestige of the 1956 Statement of Policy) is in addition to
(i) the statutory requirements on the Company's ability to pay dividends on its
common stock that arise under state law and (ii) other provisions of the
Company's Charter, which provide that the Company may not pay dividends unless
it is current in the payment of dividends on its preferred stock. Due to
continued applicability of these restrictions, the Company views the Common
Stock Dividend Restriction as an unduly burdensome and unnecessary provision
which could restrict the ability of the Company and Southern to participate in
today's capital markets.
CERTAIN EFFECTS OF THE PROPOSED AMENDMENT
If the Proposed Amendment becomes effective, preferred shareholders will no
longer be entitled to the benefits of the Charter provision limiting the amount
of unsecured debt the Company may issue, which will have been deleted by the
Proposed Amendment. As discussed above, such provision places restrictions on
the Company's ability to issue or assume unsecured indebtedness. Although the
Company's debt instruments may contain certain restrictions on the Company's
ability to issue or assume debt, any such restrictions may be waived and the
increased flexibility afforded the Company by the deletion of the Debt
Limitation Provision may permit the Company to take certain actions that may
increase the credit risks with respect to the Company, adversely affecting the
market price and credit rating of the shares of preferred stock, or otherwise be
materially adverse to the interests of the preferred shareholders. In addition,
to the extent that the Company elects to issue additional unsecured debt,
including trust preferred securities, the preferred shareholders' relative
position in the Company's capital structure could be perceived to decline, which
in turn could adversely affect the market price and credit rating of the shares
of preferred stock.
The Proposed Amendment, if it becomes effective, would delete the Merger
Provision and, therefore, may permit the Company to engage in certain
transactions not subject to approval by the Commission under the Holding Company
Act that would otherwise have required the consent of preferred stockholders. In
addition, elimination of the Common Stock Dividend Provision may permit the
Company to pay common stock dividends in amounts that would otherwise have been
prohibited. Any such transaction or payment may have a material adverse effect
on the holders of the Company's preferred stock. As described under "Reasons for
the Proposed Amendment," however, adoption of the Proposed Amendment will not
affect voting rights of stockholders or restrictions on the Company's ability to
pay common stock dividends under applicable state law.
VOTING SHARES
With respect to the Class A Preferred Stock, November 7, 1997 and, with
respect to the $100 Preferred Stock, November 6, 1997 (collectively, the "Record
Date") have been fixed as the respective record dates for the determination of
shareholders entitled to notice of and to vote at the Special Meeting. A
separate Offer to Purchase and Proxy Statement is being mailed to the holders of
the $4.60 Series, the $4.60 1962 Series, the $4.60 1963 Series, the $4.60 1964
Series, the $4.72 Series, the $4.92 Series, the $4.96 Series, the $5.00 Series
and the $5.64 Series of the Company's preferred stock pursuant to which Southern
is making a tender offer (the "Offer") for such series and the Company is
soliciting proxies in connection with the Proposed Amendment.
The Company's Charter authorizes the issuance of 15,000,000 shares of
common stock, without nominal or par value, of which 7,761,500 shares are
outstanding. All of such shares are owned by Southern.
5
<PAGE>
The Company's Charter also authorizes the issuance of 5,000,000 shares of
$100 preferred stock and 50,000,000 shares of Class A $25 preferred stock, both
without nominal or par value, of which 1,177,864 and 8,156,500 shares,
respectively, are outstanding on the Record Date. Such shares are publicly held
and are divided into eleven separate classes of preferred stock and three
separate classes of Class A preferred stock. Such classes constitute series of
preferred stock and Class A preferred stock, respectively, and vary from each
other with respect to dividend rates, redemption prices and amounts payable on
liquidation. All outstanding shares of the Company's preferred stock are
entitled to vote on the Proposed Amendment as a single class, each share of
preferred stock with a stated value of $100 being counted as one, and each share
of Class A preferred stock with a stated value of $25 being counted as
one-quarter.
Pursuant to Section 13(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), a beneficial owner of a security is any person who
directly or indirectly has or shares voting or investment power over such
security. No person or group is known by management of the Company to be the
beneficial owner of more than 5% of the Shares as of October 30, 1997, other
than Salomon Brothers Inc, Seven World Trade Center, New York, New York 10048,
which owns 2,789,623 shares of the Company's Class A preferred stock,
representing 21.679% of the Shares.
Officers and directors of the Company as a group owned, as of October 30,
1997, less than 1% of the total number of Shares and of the common stock of
Southern.
VOTING REQUIREMENTS AND PROCEDURES
Adoption of the Proposed Amendment requires the affirmative vote of the
holders of (i) at least two-thirds of the shares of the capital stock of the
Company then outstanding and entitled to vote (i.e., the common stock) and (ii)
at least two-thirds of the total voting power of the Company's preferred stock
outstanding (counting shares as described above). Abstentions and broker
non-votes will have the effect of votes against the Proposed Amendment.
SOUTHERN, THE OWNER OF ALL OF THE OUTSTANDING SHARES OF COMMON STOCK OF THE
COMPANY, HAS ADVISED THE COMPANY THAT IT INTENDS TO VOTE ALL OF THE OUTSTANDING
SHARES OF COMMON STOCK OF THE COMPANY IN FAVOR OF THE PROPOSED AMENDMENT.
Votes at the Special Meeting will be tabulated preliminarily by The Bank of
New York, as Depositary for shares tendered pursuant to the Offer, and Corporate
Investor Communications, Inc., the Information Agent. Inspectors of Election,
duly appointed by the presiding officer of the Special Meeting, will
definitively count and tabulate the votes and determine and announce the results
at the Special Meeting. The Company has no established procedure for
confidential voting. There are no rights of appraisal in connection with the
Proposed Amendment.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Troutman Sanders LLP, counsel to Southern, the following
summary describes the principal United States Federal income tax consequences of
the receipt of Special Cash Payments in connection with the approval and
adoption of the Proposed Amendment. This summary is based on the Internal
Revenue Code of 1986, as amended to the date hereof (the "Code"), administrative
pronouncements, judicial decisions and existing and proposed Treasury
Regulations, changes to any of which subsequent to the date of this Proxy
Statement may adversely affect the tax consequences described herein, possibly
on a retroactive basis. This summary is addressed to Preferred Shareholders who
hold Shares as capital assets within the meaning of Section 1221 of the Code.
This summary does not discuss all of the tax consequences that may be relevant
to a Preferred Shareholder in light of such Preferred Shareholder's particular
circumstances or to Preferred Shareholders subject to special rules (including
certain financial institutions, tax-exempt organizations, insurance companies,
dealers in securities or currencies, foreign persons or entities who own or have
owned, actually or constructively, more than five percent of such Shares,
Preferred Shareholders who acquired their Shares pursuant to the exercise of
stock options or other compensation arrangements with the Company or Preferred
Shareholders holding the Shares as part of a conversion transaction, as part of
a hedge or hedging transaction, or as a position in a straddle for tax
purposes). PREFERRED SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH REGARD
TO THE APPLICATION OF THE UNITED STATES FEDERAL INCOME TAX LAWS TO THEIR
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PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER THE LAWS OF
ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION.
As used herein, the term "United States Holder" means a beneficial owner of
a Share that is (i) for United States Federal income tax purposes a citizen or
resident of the United States; (ii) a corporation, partnership or other entity
created or organized in or under the laws of the United States or of any
political subdivision thereof; (iii) an estate, the income of which is subject
to United States Federal income taxation regardless of its source; or (iv) any
trust that is not a foreign trust under Section 7701(a)(31) of the Code. As used
herein, the term "Non-United States Holder" means a beneficial owner of a Share
that is not a United States Holder.
TAX CONSIDERATIONS GENERALLY
The receipt of a Special Cash Payment by a Preferred Shareholder will be a
taxable transaction for United States Federal income tax purposes. However,
Preferred Shareholders, whether or not they receive Special Cash Payments, will
not recognize any taxable income or loss with respect to the Shares as a result
of the modification of the Charter by the Proposed Amendment.
SPECIAL CASH PAYMENTS
United States Holders. The Federal income tax consequences of the receipt
by Preferred Shareholders of Special Cash Payments is not entirely clear. The
Company will, for Federal income tax withholding and information reporting
purposes, treat Special Cash Payments as ordinary, non-dividend income to
recipient United States Holders.
Non-United States Holders. The Company will treat Special Cash Payments
paid to Non-United States Holders as subject to withholding of United States
Federal income tax at a rate of 30%. However, a Special Cash Payment that is
effectively connected with the conduct of a trade or business by a Non-United
States Holder within the United States will not be subject to such withholding
tax (provided such Non-United States Holder provides two originals of Internal
Revenue Service ("IRS") Form 4224 stating that such Special Cash Payments are so
effectively connected), but instead will be subject to United States Federal
income tax on a net income basis at applicable graduated individual or corporate
rates. Any such effectively connected Special Cash Payments received by a
foreign corporation may, under certain circumstances, be subject to an
additional "branch profits tax" at a 30% rate (or such lower rate as may be
specified by an applicable income tax treaty).
A Non-United States Holder eligible for a reduced rate of United States
withholding tax pursuant to an income tax treaty may obtain a refund of any
excess amounts withheld by filing an appropriate claim for refund with the IRS.
BACKUP WITHHOLDING
ANY PREFERRED SHAREHOLDER WHO VOTES IN FAVOR OF THE PROPOSED AMENDMENT AND
WHO FAILS TO COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 THAT IS INCLUDED IN THE
PROXY (OR, IN THE CASE OF A FOREIGN PREFERRED SHAREHOLDER, FORM W-8 OBTAINABLE
FROM THE INFORMATION AGENT) MAY BE SUBJECT TO A REQUIRED FEDERAL INCOME TAX
BACKUP WITHHOLDING OF 31% OF THE SPECIAL CASH PAYMENT. To prevent United States
Federal income tax backup withholding with respect to the Special Cash Payment,
a United States Holder must provide the Information Agent with the Preferred
Shareholder's correct Taxpayer Identification Number ("TIN") and certify that
the Preferred Shareholder is not subject to backup withholding of Federal income
tax by completing the Substitute Form W-9 included in the Proxy. Certain
Preferred Shareholders (including, among others, all corporations and certain
foreign shareholders) are exempt from backup withholding. For a corporate United
States Holder to qualify for such exemption, such Preferred Shareholder must
provide the Information Agent with a properly completed and executed Substitute
Form W-9 attesting to its exempt status. In order for a foreign Preferred
Shareholder to qualify as an exempt recipient, the foreign holder must submit a
Form W-8, Certificate of Foreign Status, signed under
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penalties of perjury, attesting to that Preferred Shareholder's exempt status. A
copy of Form W-8 may be obtained from the Information Agent.
Unless a Preferred Shareholder provides the appropriate certification,
under the applicable law and regulations concerning "backup withholding" of
United States Federal income tax, the Information Agent will be required to
withhold, and will withhold, 31% of the gross proceeds otherwise payable to such
Preferred Shareholder or other payee. The amount of any backup withholding from
a payment to a Preferred Shareholder will be allowed as a credit against such
Preferred Shareholder's United States Federal income tax liability and may
entitle such Preferred Shareholder to a refund, provided that the required
information is furnished to the IRS. However, backup withholding is not required
for amounts subject to 30% withholding discussed above under "Special Cash
Payments -- Non-United States Holders."
SOLICITATION OF PROXIES
The Company will bear the cost of the solicitation of proxies. The Company
has engaged Corporate Investor Communications, Inc. to act as Information Agent
in connection with the solicitation of proxies for a fee of $13,000, plus unit
fees per preferred shareholder contacted, plus reimbursement of reasonable
out-of-pocket expenses. The Company has also engaged Merrill Lynch & Co. to act
as Dealer Manager in connection with the solicitation of proxies for a fee of an
amount equal to 0.50% of the stated value per Share of Preferred Stock voted in
favor of the Proposed Amendment, plus reimbursement of certain out-of-pocket
expenses. With respect to the Shares of Preferred Stock described below which
are voted in favor of the Proposed Amendment, if the Proposed Amendment is
approved and adopted, the Company will pay a consent fee of an amount equal to
(i) 0.50% of the stated capital per Share of its Adjustable Rate (First 1993)
Series and Adjustable Rate (Second 1993) Series (but only with respect to
transactions for beneficial owners whose ownership is less than 2,500 Shares)
and (ii) 0.50% of the stated value per Share of its $6.48 Series and $6.60
Series; provided, however, with respect to transactions for beneficial owners
whose ownership equals or exceeds 2,500 Shares named in clause (ii) above, the
Company will pay a consent fee of an amount equal to 0.25% of the stated value
per Share of such Shares. With respect to fees payable pursuant to the
immediately preceding sentence (x) that involve transactions for beneficial
owners whose ownership is less than 2,500 Shares, any fee payable thereunder
shall be paid in full to the Dealer Manager unless a Soliciting Dealer is
designated, in which case such fee shall be paid in full to such designated
Soliciting Dealer (which designated Soliciting Dealer may be the Dealer Manager)
and (y) that involve transactions for beneficial owners whose ownership equals
or exceeds 2,500 Shares, any fee payable thereunder shall be paid in full to the
Dealer Manager unless a Soliciting Dealer is designated, in which case 80% of
such fee shall be paid to the Dealer Manager and 20% of such fee shall be paid
to the designated Soliciting Dealer (which designated Soliciting Dealer may be
the Dealer Manager).
A designated Soliciting Dealer is an entity obtaining the Proxy, if the
Proxy shall indicate its name and it is (a) any broker or dealer in securities,
including the Dealer Manager in its capacity as a dealer or broker, which is a
member of any national securities exchange or of the National Association of
Securities Dealers, Inc. (the "NASD"), (b) any foreign broker or dealer not
eligible for membership in the NASD which agrees to conform to the NASD's Rules
of Fair Practice in soliciting proxies outside the United States to the same
extent as though it were an NASD member, or (c) any bank or trust company (each
of which is referred to herein as a "Soliciting Dealer"). No such fee shall be
payable to a Soliciting Dealer with respect to the solicitation of Proxies
unless the Proxy designates such Soliciting Dealer. No such fee shall be payable
to a Soliciting Dealer in respect of Shares registered in the name of such
Soliciting Dealer unless such Shares are held by such Soliciting Dealer as
nominee and such Shares are being voted for the benefit of one or more
beneficial owners identified on the Notice of Solicited Proxies (included in the
materials provided to brokers and dealers). No such fee shall be payable to a
Soliciting Dealer with respect to the solicitation of Proxies by the holder of
record, for the benefit of the beneficial owner, unless the beneficial owner has
designated such Soliciting Dealer. No such fee shall be payable to a Soliciting
Dealer if such Soliciting Dealer is required for any reason to transfer the
amount of such fee to a depositing holder (other than itself). No such fee shall
be paid to a Soliciting Dealer with respect to solicitation of Proxies for such
Soliciting Dealer's own account. No
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broker, dealer, bank, trust company or fiduciary shall be deemed to be the agent
of the Company, the Information Agent or the Dealer Manager for purposes of the
Proxy solicitation.
Soliciting Dealers will include any organizations described in clauses (a),
(b) or (c) above even when the activities of such organization in connection
with the Proxy solicitation consist solely of forwarding to clients materials
relating to the Proxy solicitation, and rendering Proxies as directed by
beneficial owners thereof. No Soliciting Dealer is required to make any
recommendation to holders of Shares as to whether to vote for or against the
Proposed Amendment. No assumption is made, in making payment to any Soliciting
Dealer, that its activities in connection with the Proxy solicitation included
any activities other than those described above, and for all purposes noted in
all materials relating to the Proxy solicitation, the term "solicit" shall be
deemed to mean no more than "processing shares voted" or "forwarding to
customers materials regarding the Proxy solicitation."
Proxies will be solicited by mail or by telephone. In addition, officers
and employees of the Company or its affiliates may also solicit proxies
personally or by telephone; such persons will receive no additional compensation
for these services. The Information Agent has not been retained to make, and
will not make, solicitations or recommendations, other than conveying
information related to the recommendations of the Board, in connection with the
Proposed Amendment.
The Company has requested that brokerage houses and other custodians,
nominees and fiduciaries forward solicitation materials to the beneficial owners
of shares of the Company's outstanding preferred stock held of record by such
persons and will reimburse such brokers and other fiduciaries for their
reasonable out-of-pocket expenses incurred in connection therewith.
The solicitation of proxies has been approved by the Commission under the
Holding Company Act. An application has been filed with the Commission under the
Holding Company Act requesting approval of the Proposed Amendment.
WHAT NUMBER TO GIVE THE INFORMATION AGENT
The Taxpayer Identification Number ("TIN") a Preferred Shareholder is
required to give the Information Agent is the social security number or employer
identification number of the registered owner of the Shares. If the Shares are
in more than one name or are not in the name of the actual owner, consult the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for additional guidance on which number to report.
A Preferred Shareholder is required to provide the Information Agent with
(i) in the case of a United States Preferred Shareholder, a TIN and a
certification on Substitute Form W-9 that the IRS has not notified such
shareholder that he is subject to backup withholding, or (ii) in the case of a
foreign Preferred Shareholder, a properly completed Form W-8. Failure to provide
the information on either Substitute Form W-9 or Form W-8 may subject the
Preferred Shareholder to a $50 penalty imposed by the IRS and to 31% Federal
income tax backup withholding on the payment of the Special Cash Payment. The
box in Part 2 of Substitute Form W-9 may be checked if the Preferred Shareholder
has not been issued a TIN and has applied for a number or intends to apply for a
number in the near future. If the box in Part 2 is checked and the Information
Agent is not provided with a TIN by the time of payment, the Information Agent
will withhold 31% on the payment of the Special Cash Payment thereafter until a
TIN is provided to the Information Agent.
FINANCIAL AND OTHER INFORMATION
The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files reports and other information with the
Commission. Such reports and other information may be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549; 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511; and Seven World Trade Center, Suite 1300, New
York, New York 10048. Copies of such material can be
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obtained from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. The Commission maintains a
Web site at http://www.sec.gov containing reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission, including the Company. Reports, proxy materials and other
information about the Company are also available at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005.
The financial statements of the Company and related information included in
its Annual Report on Form 10-K for the year ended December 31, 1996, its
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997 and June
30, 1997 and its Current Reports on Form 8-K dated January 9, 1997, February 12,
1997 and June 5, 1997, each as filed with the Commission, are hereby
incorporated by reference. All documents subsequently filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of this Proxy Statement and prior to the date of the Special Meeting (or any
adjournment thereof) shall be deemed to be incorporated by reference in this
Proxy Statement and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Proxy Statement to the extent that a statement contained
herein or in any other subsequently filed document which is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Proxy Statement.
The Company will provide without charge to each person to whom a copy of
this Proxy Statement has been delivered, on the written or oral request of any
such person, a copy of any or all of its documents described above which have
been incorporated by reference in this Proxy Statement, other than exhibits to
such documents. Such requests should be directed to Judy M. Anderson, Vice
President and Corporate Secretary, Georgia Power Company, 333 Piedmont Avenue,
N.E., Atlanta, Georgia 30308, telephone: (404) 526-6526. The information
relating to the Company contained in this Proxy Statement does not purport to be
comprehensive and should be read together with the information contained in the
documents incorporated by reference.
Questions or requests for assistance in connection with this Proxy
Statement and the accompanying Proxy may be directed to Corporate Investor
Communications, Inc. at (888) 881-0526 (toll free) or banks and brokers call
(888) 349-2003 or to Merrill Lynch & Co. at (888) 654-8637 (toll free). Requests
for additional copies of this Proxy Statement, the Proxy or other proxy
materials may be directed to the Information Agent, and such copies will be
furnished promptly at the Company's expense.
INDEPENDENT PUBLIC ACCOUNTANTS
No representative of Arthur Andersen LLP, the Company's independent public
accountants, is expected to be present at the Special Meeting unless prior to
the day of the Special Meeting the Vice President and Corporate Secretary of the
Company has received written notice from a Preferred Shareholder addressed to
Judy M. Anderson, Vice President and Corporate Secretary, 333 Piedmont Avenue,
N.E., Atlanta, Georgia 30308 that such Preferred Shareholder will attend the
Special Meeting and wishes to ask questions of a representative of Arthur
Andersen LLP.
DELIVERY OF PROXIES
Properly executed proxies must be received by mail at or prior to the
Special Meeting which will be held on December 10, 1997. Such proxies may be
mailed to The Bank of New York, Tender & Exchange Department, P.O. Box 11248,
Church Street Station, New York, New York 10286-1248. A return envelope is
enclosed for your convenience.
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OTHER MATTERS
The Board of Directors knows of no matter other than the foregoing to come
before the Special Meeting. If any other matters properly come before the
Special Meeting or any adjournment thereof, however, it is intended that the
persons designated as proxies in the enclosed proxy will vote on such matters in
their discretion.
BY ORDER OF THE BOARD OF DIRECTORS
Judy M. Anderson
Vice President and Corporate Secretary
Atlanta, Georgia
November 3, 1997
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APPENDIX A
PROVISIONS OF THE CHARTER TO BE DELETED BY THE PROPOSED AMENDMENT
Unless otherwise defined, capitalized terms used herein are used as defined
in the Charter.
THE DEBT LIMITATION PROVISION
Subparagraph 14.A.3.f.(2) of Paragraph III of the Charter states:
"Notwithstanding any of the provisions of subparagraph 5 of this
paragraph III or of paragraph V or VI hereof, so long as any shares of the
Preferred Stock or Class A Preferred Stock are outstanding, the
Consolidated Corporation shall not, without the affirmative vote in favor
thereof of the holders of at least a majority of the total number of shares
of Preferred Stock and Class A Preferred Stock at the time outstanding
(each share of Preferred Stock being counted as one and each share of Class
A Preferred Stock being counted as one-quarter),
(2)(a) issue or assume any unsecured notes, debentures or other
securities representing unsecured debt (other than for the purpose of
refunding or renewing outstanding unsecured securities issued or assumed
by the Consolidated Corporation resulting in equal or longer maturities
or redeeming or otherwise retiring all outstanding shares of the
Preferred Stock and Class A Preferred Stock or of any kind of stock over
which the Preferred Stock and Class A Preferred Stock do not have
preference as to the payment of dividends and as to assets) if
immediately after such issue or assumption (i) the total outstanding
principal amount of all unsecured notes, debentures or other securities
representing unsecured debt of the Consolidated Corporation will thereby
exceed 20% of the aggregate of all existing secured debt of the
Consolidated Corporation and the capital stock, premiums thereon and
surplus of the Consolidated Corporation, as stated on its books, or (ii)
the total outstanding principal amount of all unsecured notes,
debentures or other securities representing unsecured debt of the
Consolidated Corporation of maturities of less than ten years would
exceed 10% of such aggregate;
(b) for the purpose of sub-paragraph (a) above, the payment due
upon the maturity of unsecured debt having an original single maturity
in excess of ten years or the payment due upon the final maturity of any
unsecured serial debt which had original maturities in excess of ten
years shall not be regarded as unsecured debt of a maturity of less than
ten years until such payment shall be required to be made within three
years."
THE MERGER PROVISION
Subparagraph 14.A.3.f.(1) of Paragraph III of the Charter states:
"Notwithstanding any of the provisions of subparagraph 5 of this
paragraph III or of paragraph V or VI hereof, so long as any shares of the
Preferred Stock or Class A Preferred Stock are outstanding, the
Consolidated Corporation shall not, without the affirmative vote in favor
thereof of the holders of at least a majority of the total number of shares
of Preferred Stock and Class A Preferred Stock at the time outstanding
(each share of Preferred Stock being counted as one and each share of Class
A Preferred Stock being counted as one-quarter),
(1) sell, lease or exchange all or substantially all of its property
or merge or consolidate with or into any other corporation or corporations,
unless such sale, lease, exchange, merger or consolidation, or the issuance
and assumption of all securities to be issued or assumed in connection
therewith, shall have been ordered, approved or permitted by the Securities
and Exchange Commission, or by any successor commission thereto, under the
Public Utility Holding Company Act of 1935. Nothing in this paragraph
contained shall authorize any such sale, lease, exchange, merger or
consolidation by the vote of the holders of a less number of shares of the
Preferred Stock or Class A Preferred Stock, or of any other class of stock,
or of all classes of stock, than is required for any such sale, lease,
exchange, merger or consolidation by the laws of the State of Georgia at
the time applicable thereto."
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THE COMMON STOCK DIVIDEND PROVISION
The relevant provision of Subparagraph 14.A.3.b. of Paragraph III of the
Charter states:
"So long as any shares of the Preferred Stock or Class A Preferred
Stock are outstanding, the payment of dividends on the Common Stock (other
than dividends payable in Common Stock) and the making of any distribution
of assets to holders of Common Stock by purchase of shares or otherwise
(each of such actions being herein embraced within the term "payment of
common stock dividends") shall be subject to the following limitations:
(a) If and so long as the ratio of the aggregate of the par value
of, or stated capital represented by, the outstanding shares of Common
Stock (including premiums on the Common Stock but excluding premiums on
the Preferred Stock and the Class A Preferred Stock) and of the surplus
of the Consolidated Corporation to the total capitalization and surplus
of the Consolidated Corporation at the end of a period of twelve
consecutive calendar months within the fourteen calendar months
immediately preceding the calendar month in which the proposed payment
of Common Stock dividends is to be made (such period being hereinafter
referred to as the "base period"), adjusted to reflect the proposed
payment of Common Stock dividends (such ratio being hereinafter referred
to as the "capitalization ratio"), is less than 20%, the payment of
Common Stock dividends, including the proposed payment, during the
twelve calendar months period ending with and including the calendar
month in which the proposed payment is to be made shall not exceed 50%
of the net income of the Consolidated Corporation available for the
payment of dividends on the Common Stock during the base period;
(b) If and so long as the capitalization ratio is 20% or more but
less than 25%, the payment of Common Stock dividends, including the
proposed payment, during the twelve calendar months period ending with
and including the calendar month in which the proposed payment is to be
made shall not exceed 75% of the net income of the Consolidated
Corporation available for the payment of dividends on the Common Stock
during the base period;
(c) Except to the extent permitted under paragraphs (a) and (b)
above, the Consolidated Corporation shall not make any payment of Common
Stock dividends which would reduce the capitalization ratio to less than
25%.
For the purpose of the foregoing provisions, the following terms shall have
the following meanings:
(1) The term "net income of the Consolidated Corporation available for
the payment of dividends on the Common Stock" shall mean for any period the
balance remaining after deducting from the total gross revenues of the
Consolidated Corporation from all sources during such period the following:
(i) all operating expenses and taxes, including charges to income
for general taxes and for federal and state taxes measured by income,
for retirement or depreciation reserve and for amortization or other
disposition of amounts, if any, classified as amounts in excess of
original cost of utility plant; (ii) all interest charges and other
income deductions, including charges to income for amortization of debt
discount, premium and expense and Preferred Stock and Class A Preferred
Stock premium and expense; (iii) all dividends paid or set aside for
payment to the holders of Preferred Stock and Class A Preferred Stock
and of all other kinds of stock over which the Preferred Stock and Class
A Preferred Stock do not have preference as to the payment of dividends
which are applicable to such period; and (iv) the amount, if any, by
which the charges to income or earned surplus since December 31, 1961 to
the end of the base period as provision for depreciation shall have been
less than the sum of the amounts equal to the product of the applicable
percentage (as defined below) and the mathematical average of the
amounts of depreciable property (as defined in Section 4 of the
Supplemental Indenture dated as of November 1, 1962) at the opening of
business on the first day and at the close of business on the last day
of each calendar year (and, proportionately, of each period of months
which is less than a calendar year) subsequent to December 31, 1961 and
prior to the end of the base period, up to but not exceeding that part
of the applicable deficiency, if any, arising during the base period.
The term "applicable percentage" shall
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mean 3.0% or such other percentage as shall be authorized or approved
under the Public Utility Holding Company Act of 1935 by the Securities
and Exchange Commission or any successor commission or regulatory
authority of the United States of America.
(2) The term "total capitalization" shall mean the aggregate of the
principal amount of all outstanding indebtedness of the Consolidated
Corporation maturing more than twelve months after the date of issue
thereof, plus the par value of, or stated capital represented by, the
outstanding shares of all classes of stock of the Consolidated Corporation,
including any premiums on capital stock.
(3) The term "surplus" shall include capital surplus, earned surplus
and any other surplus of the Consolidated Corporation, adjusted to
eliminate (i) the amount, if any, by which the aggregate of the charges to
income or earned surplus since December 31, 1961 to the end of the base
period as provision for depreciation shall have been less than the sum of
the amounts equal to the product of the applicable percentage (as defined
below) and the mathematical average of the amounts of depreciable property
(as defined in Section 4 of the Supplemental Indenture dated as of November
1, 1962) at the opening of business on the first day and at the close of
business on the last day of each calendar year (and, proportionately, of
each period of months which is less than a calendar year) subsequent to
December 31, 1961 and prior to the end of the base period, (ii) any amounts
which may then be classified by the Consolidated Corporation on its books
as amounts in excess of the original cost of utility plant and which are
not provided for by reserve and any items set forth on the asset side of
the balance sheet of the Consolidated Corporation as a result of accounting
convention, such as unamortized debt discount, premium and expense and
Preferred Stock and Class A Preferred Stock premium and expense, unless any
such amount or item, as the case may be, is being amortized or is being
provided for by a reserve, and (iii) the excess, if any, of the aggregate
amount payable in event of involuntary liquidation of the Consolidated
Corporation upon all outstanding shares of all classes of Preferred Stock
and Class A Preferred Stock over the sum of (a) the aggregate of the par
value of, or stated capital represented by, such shares and (b) any
premiums thereon. The term "applicable percentage" shall mean 3.0% or such
other percentage as shall be authorized or approved under the Public
Utility Holding Company Act of 1935 by the Securities and Exchange
Commission or any successor commission or regulatory authority of the
United States of America."
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Questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective telephone numbers and addresses
listed below. Requests for additional copies of the Proxy Statement and the
accompanying Proxy may be directed to the Information Agent, and such copies
will be furnished promptly at the Company's expense.
The Information Agent:
CORPORATE INVESTOR COMMUNICATIONS, INC.
111 Commerce Road
Carlstadt, New Jersey 07072
(888) 881-0526 (toll free)
Banks and Brokers call
(888) 349-2003
The Dealer Manager:
MERRILL LYNCH & CO.
World Financial Center
250 Vesey Street
New York, New York 10281
(888) ML4-TNDR (toll free)
((888) 654-8637)
Properly executed Proxies must be received by mail at or prior to the
Special Meeting which will be held on December 10, 1997. Such Proxies should be
sent to:
The Bank of New York
Tender & Exchange Department
P.O. Box 11248
Church Street Station
New York, New York 10286-1248
<PAGE>
Exhibit B-7
MISSISSIPPI POWER COMPANY
GULFPORT, MISSISSIPPI
---------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 10, 1997
NOTICE IS HEREBY GIVEN that a special meeting of the shareholders of
Mississippi Power Company will be held at the offices of its affiliate Georgia
Power Company, 333 Piedmont Avenue, N.E., Atlanta, Georgia, on December 10, 1997
at 4:15 p.m., Eastern time, to consider and act on the following proposal, as
more fully described in the attached Proxy Statement:
PROPOSAL: To remove from the Company's Articles of Incorporation, as
amended, (i) Subparagraph (F)(b) of Paragraph FOURTH under "General
Provisions" of the "Preferred Stock" section, a provision restricting the
amount of securities representing unsecured indebtedness issuable by the
Company, (ii) Subparagraph (F)(a) of Paragraph FOURTH under "General
Provisions" of the "Preferred Stock" section, a provision which requires
the vote of the holders of at least a majority of the total voting power of
the outstanding Company preferred stock to approve the sale of all or
substantially all of the Company's property and mergers or consolidations
that have not been approved under the Public Utility Holding Company Act of
1935, as amended, and (iii) Subparagraph (B) (except the first paragraph
therein) of Paragraph FOURTH under "General Provisions" of the "Preferred
Stock" section, a provision restricting the ability of the Company to pay
dividends on its common stock in the event that its common equity
capitalization falls below certain levels;
and for the purpose of transacting any and all business in connection with the
foregoing and any other business that may properly come before said meeting or
any adjournment or adjournments thereof.
Only shareholders of record at the close of business on November 6, 1997,
with respect to $100 Preferred Stock, and November 7, 1997, with respect to
Depositary Preferred Stock, will be entitled to notice of and to vote at said
meeting or any adjournment or adjournments thereof.
For the reasons set forth in the attached Proxy Statement, you are urged to
vote FOR the proposal.
Shareholders are entitled to assert dissenters' rights and demand payment
for their shares under Article 13 of the Mississippi Business Corporation Act,
which is set forth in its entirety as Appendix B to the attached Proxy
Statement. A shareholder who wishes to assert dissenters' rights must not vote
his shares in favor of the proposed amendment and, therefore, cannot receive the
special cash payment described herein.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. PLEASE
MARK, DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE. In
the event you are able to attend the meeting, you may revoke the Proxy by voting
your shares in person.
BY ORDER OF THE BOARD OF DIRECTORS
Michael W. Southern
Vice President, Secretary, Treasurer
and Financial Officer
Gulfport, Mississippi
November 3, 1997
<PAGE>
MISSISSIPPI POWER COMPANY
GULFPORT, MISSISSIPPI
---------------------
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 10, 1997
---------------------
PROXY STATEMENT
<TABLE>
<CAPTION>
OUTSTANDING CUSIP
TITLE OF SERIES OF PREFERRED SHARES NUMBER
- ---------------------------- ----------- ---------
<S> <C> <C>
Depositary Preferred Stock, each representing one-fourth of
a share of preferred stock ($100 par value)
6.32% Series.............................................. 600,000 605417831
6.65% Series.............................................. 336,160 605417815
Preferred Stock ($100 par value)
7.00% Series.............................................. 50,000 605417500
</TABLE>
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Mississippi Power Company (the "Company") from the
holders (the "Preferred Shareholders") of the 7.00% Series of the Company's
outstanding Preferred Stock, with a par value of $100 per share (collectively,
the "$100 Preferred Stock"), and the 6.32% Series and the 6.65% Series of the
outstanding shares of depositary preferred stock, each representing one-fourth
of a share of Preferred Stock, with par values of $100 per share (collectively,
the "Depositary Preferred Stock" and, together with the $100 Preferred Stock,
the "Preferred Stock"). Such proxies are to be used at the Special Meeting of
Shareholders of the Company to be held at the offices of its affiliate Georgia
Power Company, 333 Piedmont Avenue, N.E., Atlanta, Georgia, on December 10, 1997
at 4:15 p.m., Eastern time, or any adjournment or postponement of such meeting
(the "Special Meeting"). IF THE PROPOSED AMENDMENT (AS DEFINED HEREIN) IS
APPROVED AND ADOPTED BY THE COMPANY'S SHAREHOLDERS, THE COMPANY WILL MAKE A
SPECIAL CASH PAYMENT (THE "SPECIAL CASH PAYMENT") EQUAL TO 1.00% OF THE PAR
VALUE PER SHARE (AS DEFINED HEREIN) (OR $1.00 PER SHARE OF $100 PREFERRED STOCK
AND $0.25 PER SHARE OF DEPOSITARY PREFERRED STOCK) FOR EACH SHARE PROPERLY VOTED
IN FAVOR OF THE PROPOSED AMENDMENT. If a Preferred Shareholder votes against the
Proposed Amendment or abstains, such Preferred Shareholder shall not be entitled
to the Special Cash Payment (regardless of whether the Proposed Amendment is
approved and adopted).
The solicitation of proxies has been approved by the Securities and
Exchange Commission (the "Commission") under the Public Utility Holding Company
Act of 1935, as amended (the "Holding Company Act"). This Proxy Statement is
first being mailed on or about November 3, 1997. The record date with respect to
the $100 Preferred Stock is November 6, 1997 and the record date with respect to
the Depositary Preferred Stock is November 7, 1997.
The principal executive offices of the Company are located at 2992 West
Beach, Gulfport, Mississippi 39501. The telephone number is (601) 864-1211.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS VOTING FOR THE PROPOSED
AMENDMENT.
SUMMARY
The Board of Directors of the Company is soliciting proxies from all
holders of the shares of each series of the Company's outstanding preferred
stock (the "Shares") for use at the Special Meeting of Shareholders of the
Company. The proposal to be presented at the Special Meeting, if adopted, is
intended to provide the Company with the necessary flexibility to meet the
demands of an increasingly competitive electric utility industry. See "Reasons
for the Proposed Amendment."
<PAGE>
The Special Meeting is being held to consider an amendment to the Company's
Articles of Incorporation, as amended (the "Charter"), which would eliminate the
provisions restricting the ability of the Company to issue unsecured
indebtedness, to sell assets, merge or consolidate and to pay dividends on its
common stock in the event that its common equity capitalization falls below
certain levels. If the Proposed Amendment is approved by the shareholders, such
restrictions contained in the Charter will be eliminated with respect to the
outstanding Shares.
The Company will pay certain consent fees. See "Solicitation of Proxies."
If the Proposed Amendment is approved and adopted by the Company's
shareholders, the Company will make a Special Cash Payment equal to 1.00% of the
par value per Share (or $1.00 per Share of $100 Preferred Stock and $0.25 per
Share of Depositary Preferred Stock) for each Share properly voted in favor of
the Proposed Amendment.
Preferred Shareholders are entitled to assert dissenters' rights and demand
payment for their Shares under Article 13 of the Mississippi Business
Corporation Act, which is set forth in its entirety as Appendix B to this Proxy
Statement. A Preferred Shareholder who wishes to assert dissenters' rights must
not vote his Shares in favor of the Proposed Amendment and, therefore, cannot
receive the Special Cash Payment. See "Rights of Dissenting Shareholders."
Questions or requests for assistance may be directed to Corporate Investor
Communications, Inc. (the "Information Agent") at (888) 881-0526 (toll free) or
banks and brokers call (888) 349-2003 or to Merrill Lynch & Co. ("Merrill
Lynch") at (888) 654-8637 (toll free). Requests for additional copies of this
Proxy Statement, the Proxy or other proxy materials may be directed to the
Information Agent, and such copies will be furnished promptly at the Company's
expense.
The foregoing summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information appearing elsewhere in this
Proxy Statement.
EXECUTION AND REVOCATION OF PROXY
THE ENCLOSED PROXY IS SOLICITED BY THE COMPANY'S BOARD, WHICH RECOMMENDS
VOTING FOR THE PROPOSED AMENDMENT. ALL SHARES OF THE COMPANY'S COMMON STOCK WILL
BE VOTED IN FAVOR OF THE PROPOSED AMENDMENT. Preferred Shareholders voting at
the Special Meeting by proxy must use the enclosed Proxy. Shares of the
Company's outstanding preferred stock represented by properly executed proxies
received at or prior to the Special Meeting will be voted in accordance with the
instructions thereon. If no instructions are indicated, duly executed proxies
will be voted in accordance with the recommendation of the Board. It is not
anticipated that any other matters will be brought before the Special Meeting.
However, the enclosed proxy gives discretionary authority to the proxy holders
named therein should any other matters be presented at the Special Meeting, and
it is the intention of the proxy holders to act on any other matters in their
discretion.
Execution of a proxy will not prevent a shareholder from attending the
Special Meeting and voting in person. Any shareholder giving a proxy may revoke
it at any time before it is voted by delivering to the Secretary of the Company
written notice of revocation bearing a later date than the proxy, by delivering
a duly executed proxy bearing a later date, or by voting in person by ballot at
the Special Meeting.
SPECIAL CASH PAYMENTS
Subject to the terms and conditions set forth in this Proxy Statement, if
(but only if) the Proposed Amendment is approved and adopted by the shareholders
of the Company, the Company will make a Special Cash Payment to each Preferred
Shareholder who voted in favor of the Proposed Amendment, in person by ballot or
by proxy, at the Special Meeting in the amount equal to 1.00% of the par value
per Share (or $1.00 per Share of $100 Preferred Stock or $0.25 per Share of
Depositary Preferred Stock) for each Share held by such Preferred Shareholder
which is so voted. The Company has been advised that there is no
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<PAGE>
controlling precedent under state law as to the permissibility of its making the
Special Cash Payment. Although, as a result, there can be no assurance as to how
a court would rule on the issue, the Company believes that the Offer (as defined
herein) is fair to Preferred Shareholders and has determined to make the Special
Cash Payment. SPECIAL CASH PAYMENTS WILL BE MADE TO PREFERRED SHAREHOLDERS AS OF
THE RECORD DATE ONLY IN RESPECT OF EACH SHARE WHICH IS VOTED FOR THE ADOPTION OF
THE PROPOSED AMENDMENT. If a Preferred Shareholder votes against the Proposed
Amendment or abstains, such Preferred Shareholder shall not be entitled to the
Special Cash Payment (regardless of whether the Proposed Amendment is approved
and adopted). If the Proposed Amendment is approved and adopted, Special Cash
Payments will be paid out of the Company's general funds, promptly after the
Proposed Amendment shall have become effective. However, no accrued interest
will be paid on the Special Cash Payments regardless of any delay in making such
payments.
Only holders of record of the Company's voting securities at the close of
business on the Record Date or persons obtaining a proxy from the holders of
record on the Record Date will be entitled to vote in person or by proxy at the
Special Meeting. Any beneficial holder of Shares who is not the registered
holder of such Shares as of the Record Date (as would be the case for any
beneficial holder whose Shares are registered in the name of such holder's
broker, dealer, commercial bank, trust company or other nominee) must arrange
with the record Preferred Shareholder to execute and deliver a proxy form on
such beneficial owner's behalf. If a beneficial holder of Shares intends to
attend the Special Meeting and vote in person, such beneficial holder must
obtain a legal proxy form from his or her broker, dealer, commercial bank, trust
company or other nominee. The Company will make Special Cash Payments only to
Preferred Shareholders who are registered holders as of the Record Date. Any
beneficial owner of Shares who is not the registered holder of such Shares as of
the Record Date must arrange with the record Preferred Shareholder to receive
his proportionate interest in the Special Cash Payments made to such record
Preferred Shareholder. The Company will have no responsibility or liability for
any aspect of the records relating to or payments made on account of any
beneficial owner's interest in the Special Cash Payments made to a record
Preferred Shareholder.
PROPOSED AMENDMENT
BUSINESS TO COME BEFORE THE SPECIAL MEETING
The following proposed amendment (the "Proposed Amendment") to the Charter
is the only item of business expected to be presented at the Special Meeting:
To remove in their entirety (i) Subparagraph (F)(b) of Paragraph FOURTH
under "General Provisions" of the "Preferred Stock" section of the Charter, a
provision restricting the amount of securities representing unsecured
indebtedness issuable by the Company, (ii) Subparagraph (F)(a) of Paragraph
FOURTH under "General Provisions" of the "Preferred Stock" section of the
Charter, a provision which requires the vote of the holders of at least a
majority of the total voting power of the outstanding Company preferred stock to
approve the sale of all or substantially all of the Company's property and
mergers or consolidations that have not been approved under the Holding Company
Act, and (iii) Subparagraph (B) (except the first paragraph therein) of
Paragraph FOURTH under "General Provisions" of the "Preferred Stock" section of
the Charter, a provision restricting the ability of the Company to pay dividends
on its common stock in the event that its common equity capitalization falls
below certain levels.
THE FOLLOWING STATEMENTS ARE SUMMARIES OF THE SUBSTANCE OR GENERAL EFFECT
OF PROVISIONS OF THE CHARTER, AND ARE QUALIFIED IN THEIR ENTIRETY BY THE CHARTER
AND SUBPARAGRAPHS (B), (F)(A) AND (F)(B) OF PARAGRAPH FOURTH UNDER "GENERAL
PROVISIONS" OF THE "PREFERRED STOCK" SECTION THEREIN (AS DESCRIBED BELOW). SEE
APPENDIX A HERETO FOR THE TEXT OF THE PROVISIONS TO BE DELETED.
3
<PAGE>
EXPLANATION OF THE PROPOSED AMENDMENT
Subparagraph (F)(b) of Paragraph FOURTH under "General Provisions" of the
"Preferred Stock" section of the Charter currently provides that, so long as any
shares of the Company's preferred stock are outstanding, without the affirmative
vote of the holders of at least a majority of the total voting power of its
outstanding shares of preferred stock, the Company shall not issue or assume any
securities representing unsecured debt (other than for the purpose of refunding
or renewing outstanding unsecured securities issued by the Company resulting in
equal or longer maturities or redeeming or otherwise retiring all outstanding
shares of its preferred stock or of any senior or equally ranking stock) if,
immediately after such issue or assumption, (a) the total outstanding principal
amount of all securities representing unsecured debt of the Company would exceed
20% of the aggregate of all existing secured debt of the Company and the capital
stock, premiums thereon and surplus of the Company as stated on the Company's
books; or (b) the total outstanding principal amount of all securities
representing unsecured debt of the Company of maturities of less than ten years
would exceed 10% of such aggregate (the "Debt Limitation Provision").
Subparagraph (F)(b) of Paragraph FOURTH under "General Provisions" of the
"Preferred Stock" section of the Charter currently provides that, so long as any
shares of the Company's preferred stock are outstanding, without the affirmative
vote of the holders of at least a majority of the total voting power of its
outstanding shares of preferred stock, the Company shall not dispose of all or
substantially all of its property or merge or consolidate, unless such action
has been approved by the Commission under the Holding Company Act (the "Merger
Provision").
Subparagraph (B) (except the first paragraph therein) of Paragraph FOURTH
under "General Provisions" of the "Preferred Stock" section of the Charter
currently provides that, so long as any shares of the Company's preferred stock
are outstanding, the Company's dividends on its common stock are limited to 50%
of net income available for such stock during a period of 12 months if,
calculated on a corporate basis, the ratio of its common stock equity to total
capitalization, including surplus, adjusted to reflect the payment of the
proposed dividend, is below 20%, and to 75% of such net income if such ratio is
20% or more but less than 25% (the "Common Stock Dividend Provision").
The Proposed Amendment, if adopted, would eliminate from the Charter in
their entirety the Debt Limitation Provision, the Merger Provision and the
Common Stock Dividend Provision (collectively, the "Restriction Provisions"),
each as set forth in full in Appendix A hereto.
REASONS FOR THE PROPOSED AMENDMENT
The electric utility industry has become, and will continue to be,
increasingly competitive as the result of various factors, including regulatory
and technological developments. Various federal and state regulatory initiatives
designed to promote wholesale and retail competition include, among other
things, proposals that would allow customers to choose their electricity
provider. As these competitive initiatives materialize, the structure of the
utility industry could radically change. The Company believes that maintaining
and improving its position as a low-cost producer and having the flexibility to
respond to developments in the industry will be crucial to its success in the
new competitive marketplace.
The Company believes that adoption of the Proposed Amendment is important
to creating the necessary flexibility to respond to any industry developments.
The restrictions that would be eliminated by the Proposed Amendment
generally do not burden the industry's new competitors (power marketers,
independent power producers, exempt wholesale generators and owners of
cogeneration facilities), nor even other public utility companies. These
restrictions stem from the fact that the Company and its affiliates are subject
to regulation under the Holding Company Act. Such restrictions were initially
imposed as a result of the Commission's 1956 Statement of Policy Regarding
Preferred Stock Subject to the Public Utility Holding Company Act of 1935. The
Commission recently has noted that the Statement of Policy is out of date and
has not kept pace with the rapidly changing securities markets. Furthermore, the
Commission stated that the marketplace should more appropriately determine the
terms and conditions applicable to securities issuances.
4
<PAGE>
Management considers that elimination of the Debt Limitation Provision is
crucial to the Company's financial flexibility and its ability to effect future
capital cost reductions. The deletion of this provision from the Charter will
allow the Company to utilize more fully various unsecured debt alternatives and
thus improve its ability to take full advantage of changing conditions in the
capital markets. The additional flexibility will, for example, permit the
Company to issue long-term debt when, because of mortgage coverage restrictions
or other reasons, it may be unattractive or not possible to issue any additional
first mortgage bonds. In addition, elimination of the Debt Limitation Provision
will afford the Company greater flexibility in the issuance of short-term debt
to meet seasonal cash requirements with what is usually the least expensive form
of capital.
The Company believes that the Merger Provision is an unnecessary
restriction on the ability of the Company to consider strategic responses to the
increasingly competitive utility industry. For instance, the Merger Provision
provides that, unless approved under the Holding Company Act, the sale or lease
of certain of the Company's properties would require Preferred Shareholder
approval in addition to any statutory requirement under state law. Such an
additional burden could hinder the Company's ability to conduct its business
operations in this changing utility environment. Furthermore, the elimination of
the Merger Provision will not affect voting rights of stockholders under
applicable state law.
Similarly, the Common Stock Dividend Restriction unnecessarily impedes the
financial flexibility of the Company and The Southern Company ("Southern"). The
Common Stock Dividend Restriction prevents the Company from paying dividends on
its common stock unless the Company maintains a certain equity capitalization.
This restriction (a vestige of the 1956 Statement of Policy) is in addition to
(i) the statutory requirements on the Company's ability to pay dividends on its
common stock that arise under state law and (ii) other provisions of the
Company's Charter, which provide that the Company may not pay dividends unless
it is current in the payment of dividends on its preferred stock. Due to
continued applicability of these restrictions, the Company views the Common
Stock Dividend Restriction as an unduly burdensome and unnecessary provision
which could restrict the ability of the Company and Southern to participate in
today's capital markets.
CERTAIN EFFECTS OF THE PROPOSED AMENDMENT
If the Proposed Amendment becomes effective, preferred shareholders will no
longer be entitled to the benefits of the Charter provision limiting the amount
of unsecured debt the Company may issue, which will have been deleted by the
Proposed Amendment. As discussed above, such provision places restrictions on
the Company's ability to issue or assume unsecured indebtedness. Although the
Company's debt instruments may contain certain restrictions on the Company's
ability to issue or assume debt, any such restrictions may be waived and the
increased flexibility afforded the Company by the deletion of the Debt
Limitation Provision may permit the Company to take certain actions that may
increase the credit risks with respect to the Company, adversely affecting the
market price and credit rating of the shares of preferred stock, or otherwise be
materially adverse to the interests of the preferred shareholders. In addition,
to the extent that the Company elects to issue additional unsecured debt,
including trust preferred securities, the preferred shareholders' relative
position in the Company's capital structure could be perceived to decline, which
in turn could adversely affect the market price and credit rating of the shares
of preferred stock.
The Proposed Amendment, if it becomes effective, would delete the Merger
Provision and, therefore, may permit the Company to engage in certain
transactions not subject to approval by the Commission under the Holding Company
Act that would otherwise have required the consent of preferred stockholders. In
addition, elimination of the Common Stock Dividend Provision may permit the
Company to pay common stock dividends in amounts that would otherwise have been
prohibited. Any such transaction or payment may have a material adverse effect
on the holders of the Company's preferred stock. As described under "Reasons for
the Proposed Amendment," however, adoption of the Proposed Amendment will not
affect voting rights of stockholders or restrictions on the Company's ability to
pay common stock dividends under applicable state law.
5
<PAGE>
VOTING SHARES
With respect to the $100 Preferred Stock, November 6, 1997 and, with
respect to the Depositary Preferred Stock, November 7, 1997 (collectively, the
"Record Date") have been fixed as the respective record dates for the
determination of shareholders entitled to notice of and to vote at the Special
Meeting. A separate Offer to Purchase and Proxy Statement is being mailed to the
holders of the 4.40% Series, the 4.60% Series and the 4.72% Series of the
Company's preferred stock pursuant to which Southern is making a tender offer
(the "Offer") for such series and the Company is soliciting proxies in
connection with the Proposed Amendment.
The Company's Charter authorizes the issuance of 1,130,000 shares of common
stock, without par value, of which 1,121,000 shares are outstanding. All of such
shares are owned by Southern.
The Company's Charter also authorizes the issuance of 544,139 shares of
preferred stock, par value $100 per share. The Company has also issued shares of
depositary preferred stock, each representing one-fourth of a share of preferred
stock, par value $100 per share. There are 160,099 shares of the preferred stock
and 936,160 shares of depositary preferred stock outstanding on the Record Date.
Such shares are publicly held and are divided into four separate classes of
preferred stock and two separate classes of depositary preferred stock. Such
classes constitute individual series of preferred stock and depositary preferred
stock, respectively, and vary from each other with respect to dividend rates,
redemption prices and amounts payable on liquidation. All outstanding shares of
the Company's preferred stock are entitled to vote on the Proposed Amendment as
a single class, each share of preferred stock being counted as one, and each
share of depositary preferred stock being counted as one-quarter.
Pursuant to Section 13(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), a beneficial owner of a security is any person who
directly or indirectly has or shares voting or investment power over such
security. No person or group is known by management of the Company to be the
beneficial owner of more than 5% of the Shares as of October 30, 1997.
Officers and directors of the Company as a group owned, as of October 30,
1997, less than 1% of the total number of Shares and of the common stock of
Southern.
VOTING REQUIREMENTS AND PROCEDURES
Adoption of the Proposed Amendment requires the affirmative vote of the
holders of (i) at least a majority of the shares of the capital stock of the
Company then outstanding and entitled to vote (i.e., the common stock) and (ii)
at least two-thirds of the total voting power of the Company's preferred stock
outstanding (counting shares as described above). Abstentions and broker
non-votes will have the effect of votes against the Proposed Amendment.
SOUTHERN, THE OWNER OF ALL OF THE OUTSTANDING SHARES OF COMMON STOCK OF THE
COMPANY, HAS ADVISED THE COMPANY THAT IT INTENDS TO VOTE ALL OF THE OUTSTANDING
SHARES OF COMMON STOCK OF THE COMPANY IN FAVOR OF THE PROPOSED AMENDMENT.
Votes at the Special Meeting will be tabulated preliminarily by The Bank of
New York, as Depositary for shares tendered pursuant to the Offer, and Corporate
Investor Communications, Inc., the Information Agent. Inspectors of Election,
duly appointed by the presiding officer of the Special Meeting, will
definitively count and tabulate the votes and determine and announce the results
at the Special Meeting. The Company has no established procedure for
confidential voting.
RIGHTS OF DISSENTING SHAREHOLDERS
The following is a summary of dissenters' rights available to Preferred
Shareholders of the Company, which summary is necessarily incomplete and
selective and is qualified in its entirety by reference to Article 13 of the
Mississippi Business Corporation Act, set forth in its entirety as Appendix B.
Procedure for Exercise of Dissenters' Rights. A Preferred Shareholder who
wishes to assert dissenters' rights must deliver to the Company, before the vote
is taken at the Special Meeting, a written notice of his or
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<PAGE>
her intent to demand payment for his or her Shares if the Proposed Amendment is
effectuated, and must not vote his or her Shares in favor of the Proposed
Amendment. A Preferred Shareholder who does not satisfy the foregoing notice
requirement will not be entitled to payment for his or her Shares under
Mississippi law. Because a Preferred Shareholder who wishes to assert
dissenters' rights must not vote in favor of the Proposed Amendment, such holder
cannot receive the Special Cash Payment.
If the Proposed Amendment is authorized at the Special Meeting, the Company
will deliver a written dissenters' notice to all Preferred Shareholders who
satisfied the above notice requirement. The notice to dissenters must be sent no
later than ten days after the Proposed Amendment is effective and must: (1)
state where the payment demand must be sent and where and when certificates for
certificated Shares must be deposited; (2) inform holders of uncertificated
Shares to what extent transfer of the Shares will be restricted after the
payment demand is received; (3) supply a form for demanding payment that
includes the date of the first announcement to news media or to shareholders of
the terms of the Proposed Amendment and requires that the person asserting
dissenters' rights certify whether or not he acquired beneficial ownership of
the Shares before that date; (4) set a date by which the Company must receive
the payment demand, which date may not be fewer than 30 nor more than 60 days
after the date the notice described in the first sentence of this paragraph is
delivered; and (5) be accompanied by a copy of Article 13 of the Mississippi
Business Corporation Act.
A shareholder who has been sent a dissenters' notice from the Company must
demand payment, certify whether he or she acquired beneficial ownership of the
Shares before the date required to be set forth in the notice from the Company
pursuant to clause (3) above and deposit his or her certificates in accordance
with the terms of the notice from the Company. A shareholder who demands payment
and deposits his or her Shares will retain all other rights as a shareholder
until his or her rights are canceled or modified by the Proposed Amendment
becoming effective. A shareholder who does not demand payment or deposit his
certificates where required, each by the date set in the notice sent by the
Company, will not be entitled to payment for his or her Shares under the
Mississippi Business Corporation Act.
Except for after-acquired Shares of a Preferred Shareholder, as soon as the
Proposed Amendment is effective, or upon receipt of a payment demand, the
Company will be required to pay each dissenter who complied with the Mississippi
Business Corporation Act the amount the Company estimates to be the fair value
of his or her Shares, plus accrued interest. The payment must be accompanied by:
(1) a balance sheet of the Company as of December 31, 1996, an income statement
for that year, a statement of changes in shareholders' equity for that year and
the latest available interim financial statements of the Company, if any; (2) a
statement of the estimate of the Company of the fair value of the Shares; (3) an
explanation of how interest was calculated; (4) a statement of the right of the
dissenter to demand payment if the shareholder is dissatisfied with the payment
or offer; and (5) a copy of Article 13 of the Mississippi Business Corporation
Act.
If the Company does not effect the Proposed Amendment within 60 days after
the date set for demanding payment and depositing Share certificates, the
Company will return the deposited certificates and release the transfer
restrictions imposed on uncertificated Shares. If, after returning deposited
certificates and releasing transfer restrictions, the Company effects the
Proposed Amendment, it must send a new notice to dissenters under Article 13 of
the Mississippi Business Corporation Act and repeat the payment demand
procedure.
The Company may elect to withhold payment required as described above from
a dissenter unless such dissenter was the beneficial owner of the Shares before
the date set forth in the notice to dissenters as the date of the first
announcement to news media or to shareholders of the terms of the Proposed
Amendment. To the extent the Company elects to withhold payment as set forth in
the preceding sentence, after the Proposed Amendment is effected, the Company
shall estimate the fair value of the Shares, plus accrued interest, and shall
pay this amount to each dissenter who agrees to accept it in full satisfaction
of his or her demand. The Company shall send with its offer a statement of its
estimate of the fair value of the Shares, an explanation of how interest was
calculated and a statement of the right of the dissenter to demand payment if
the dissenter is dissatisfied with the payment or offer.
7
<PAGE>
A dissenter may notify the Company in writing of his or her own estimate of
the fair value of his or her Shares and the amount of interest due, and demand
payment of his or her estimate (less any payment made theretofore by the
Company), or reject the Company's offer and demand payment of the fair value of
his or her Shares and interest due, if: (1) the dissenter believes that the
amount paid or offered by the Company is less than the fair value of his or her
Shares or that the interest due is incorrectly calculated; (2) the Company fails
to make payment within 60 days after the date set for demanding payment; or (3)
the Company, having failed to effect the Proposed Amendment, does not return the
deposited certificates or release the transfer restrictions imposed on
uncertificated Shares within 60 days after the date set for demanding payment. A
dissenter waives his or her right to demand payment under the foregoing
procedure unless he or she notifies the Company of his or her demand in writing
within 30 days after the Company made or offered payment for his or her Shares.
Judicial Appraisal of Shares. If a demand for payment remains unsettled,
the Company shall commence a proceeding within 60 days after receiving the
payment demand and petition the court to determine the fair value of the Shares
and accrued interest. If the Company does not commence the proceeding within the
60-day period, it shall pay each dissenter whose demand remains unsettled the
amount demanded. The Company shall commence the proceeding in the chancery court
of the county where its principal office is located, and it shall make all
dissenters whose demands remain unsettled parties to the proceeding as in an
action against their Shares and all parties must be served with a copy of the
petition. The jurisdiction of the court in which the proceeding is commenced
will be exclusive. The court may appoint one or more persons as appraisers to
receive evidence and recommend decision on the question of fair value. The
dissenters will be entitled to the same discovery rights as parties in other
civil proceedings. Each dissenter made a party to the proceeding is entitled to
judgment (1) for the amount, if any, by which the court finds that fair value of
his or her Shares, plus interest, exceeds the amount paid by the Company, or (2)
for the fair value, plus accrued interest, of his after-acquired Shares for
which the Company elected to withhold payment.
The court in an appraisal proceeding will determine all costs of the
proceeding, including the reasonable compensation and expenses of appraisers
appointed by the court. The court will assess the costs against the Company,
except that the court may assess costs against all or some of the dissenters, in
amounts the court finds equitable, to the extent the court finds the dissenters
acted arbitrarily, vexatiously or not in good faith in demanding payment. The
court may also assess the fees and expenses of counsel and experts for the
respective parties in amounts the court finds equitable: (1) against the Company
and in favor of any or all dissenters if the court finds the Company did not
substantially comply with the relevant requirements of the Mississippi Business
Corporation Act; or (2) against either the Company or a dissenter, in favor of
any other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously or not in good faith with
respect to the rights provided by Article 13 of the Mississippi Business
Corporation Act. If the court finds that the services of counsel for any
dissenter were of substantial benefit to other dissenters similarly situated,
and that the fees for those services should not be assessed against the Company,
the court may award the counsel reasonable fees to be paid out of the amounts
awarded to dissenters who were benefited.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Troutman Sanders LLP, counsel to Southern, the following
summary describes the principal United States Federal income tax consequences of
the receipt of Special Cash Payments in connection with the approval and
adoption of the Proposed Amendment. This summary is based on the Internal
Revenue Code of 1986, as amended to the date hereof (the "Code"), administrative
pronouncements, judicial decisions and existing and proposed Treasury
Regulations, changes to any of which subsequent to the date of this Proxy
Statement may adversely affect the tax consequences described herein, possibly
on a retroactive basis. This summary is addressed to Preferred Shareholders who
hold Shares as capital assets within the meaning of Section 1221 of the Code.
This summary does not discuss all of the tax consequences that may be relevant
to a Preferred Shareholder in light of such Preferred Shareholder's particular
circumstances or to Preferred Shareholders subject to special rules (including
certain financial institutions, tax-exempt organizations, insurance companies,
dealers in securities or currencies, foreign persons or entities
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who own or have owned, actually or constructively, more than five percent of
such Shares, Preferred Shareholders who acquired their Shares pursuant to the
exercise of stock options or other compensation arrangements with the Company or
Preferred Shareholders holding the Shares as part of a conversion transaction,
as part of a hedge or hedging transaction, or as a position in a straddle for
tax purposes). PREFERRED SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH
REGARD TO THE APPLICATION OF THE UNITED STATES FEDERAL INCOME TAX LAWS TO THEIR
PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER THE LAWS OF
ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION.
As used herein, the term "United States Holder" means a beneficial owner of
a Share that is (i) for United States Federal income tax purposes a citizen or
resident of the United States; (ii) a corporation, partnership or other entity
created or organized in or under the laws of the United States or of any
political subdivision thereof; (iii) an estate, the income of which is subject
to United States Federal income taxation regardless of its source; or (iv) any
trust that is not a foreign trust under Section 7701(a)(31) of the Code. As used
herein, the term "Non-United States Holder" means a beneficial owner of a Share
that is not a United States Holder.
TAX CONSIDERATIONS GENERALLY
The receipt of a Special Cash Payment by a Preferred Shareholder will be a
taxable transaction for United States Federal income tax purposes. However,
Preferred Shareholders, whether or not they receive Special Cash Payments, will
not recognize any taxable income or loss with respect to the Shares as a result
of the modification of the Charter by the Proposed Amendment.
SPECIAL CASH PAYMENTS
United States Holders. The Federal income tax consequences of the receipt
by Preferred Shareholders of Special Cash Payments is not entirely clear. The
Company will, for Federal income tax withholding and information reporting
purposes, treat Special Cash Payments as ordinary, non-dividend income to
recipient United States Holders.
Non-United States Holders. The Company will treat Special Cash Payments
paid to Non-United States Holders as subject to withholding of United States
Federal income tax at a rate of 30%. However, a Special Cash Payment that is
effectively connected with the conduct of a trade or business by a Non-United
States Holder within the United States will not be subject to such withholding
tax (provided such Non-United States Holder provides two originals of Internal
Revenue Service ("IRS") Form 4224 stating that such Special Cash Payments are so
effectively connected), but instead will be subject to United States Federal
income tax on a net income basis at applicable graduated individual or corporate
rates. Any such effectively connected Special Cash Payments received by a
foreign corporation may, under certain circumstances, be subject to an
additional "branch profits tax" at a 30% rate (or such lower rate as may be
specified by an applicable income tax treaty).
A Non-United States Holder eligible for a reduced rate of United States
withholding tax pursuant to an income tax treaty may obtain a refund of any
excess amounts withheld by filing an appropriate claim for refund with the IRS.
BACKUP WITHHOLDING
ANY PREFERRED SHAREHOLDER WHO VOTES IN FAVOR OF THE PROPOSED AMENDMENT AND
WHO FAILS TO COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 THAT IS INCLUDED IN THE
PROXY (OR, IN THE CASE OF A FOREIGN PREFERRED SHAREHOLDER, FORM W-8 OBTAINABLE
FROM THE INFORMATION AGENT) MAY BE SUBJECT TO A REQUIRED FEDERAL INCOME TAX
BACKUP WITHHOLDING OF 31% OF THE SPECIAL CASH PAYMENT. To prevent United States
Federal income tax backup withholding with respect to the Special Cash Payment,
a United States Holder must provide the Information Agent with the Preferred
Shareholder's correct Taxpayer Identification Number ("TIN") and certify that
the Preferred Shareholder is not subject to
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backup withholding of Federal income tax by completing the Substitute Form W-9
included in the Proxy. Certain Preferred Shareholders (including, among others,
all corporations and certain foreign shareholders) are exempt from backup
withholding. For a corporate United States Holder to qualify for such exemption,
such Preferred Shareholder must provide the Information Agent with a properly
completed and executed Substitute Form W-9 attesting to its exempt status. In
order for a foreign Preferred Shareholder to qualify as an exempt recipient, the
foreign holder must submit a Form W-8, Certificate of Foreign Status, signed
under penalties of perjury, attesting to that Preferred Shareholder's exempt
status. A copy of Form W-8 may be obtained from the Information Agent.
Unless a Preferred Shareholder provides the appropriate certification,
under the applicable law and regulations concerning "backup withholding" of
United States Federal income tax, the Information Agent will be required to
withhold, and will withhold, 31% of the gross proceeds otherwise payable to such
Preferred Shareholder or other payee. The amount of any backup withholding from
a payment to a Preferred Shareholder will be allowed as a credit against such
Preferred Shareholder's United States Federal income tax liability and may
entitle such Preferred Shareholder to a refund, provided that the required
information is furnished to the IRS. However, backup withholding is not required
for amounts subject to 30% withholding discussed above under "Special Cash
Payments -- Non-United States Holders."
SOLICITATION OF PROXIES
The Company will bear the cost of the solicitation of proxies. The Company
has engaged Corporate Investor Communications, Inc. to act as Information Agent
in connection with the solicitation of proxies for a fee of $2,000, plus unit
fees per preferred shareholder contacted, plus reimbursement of reasonable
out-of-pocket expenses. The Company has also engaged Merrill Lynch & Co. to act
as Dealer Manager in connection with the solicitation of proxies for a fee of an
amount equal to 0.50% of the par value per Share of Preferred Stock voted in
favor of the Proposed Amendment, plus reimbursement of certain out-of-pocket
expenses. With respect to the Shares of Preferred Stock voted in favor of the
Proposed Amendment, if the Proposed Amendment is approved and adopted, the
Company will pay a consent fee of an amount equal to 0.50% of the par value per
Share of its Preferred Stock; provided, however, with respect to transactions
for beneficial owners whose ownership equals or exceeds 2,500 Shares of such
Preferred Stock, the Company will pay a consent fee of an amount equal to 0.25%
of the par value per Share of such Shares. With respect to fees payable pursuant
to the immediately preceding sentence (x) that involve transactions for
beneficial owners whose ownership is less than 2,500 Shares, any fee payable
thereunder shall be paid in full to the Dealer Manager unless a Soliciting
Dealer is designated, in which case such fee shall be paid in full to such
designated Soliciting Dealer (which designated Soliciting Dealer may be the
Dealer Manager) and (y) that involve transactions for beneficial owners whose
ownership equals or exceeds 2,500 Shares, any fee payable thereunder shall be
paid in full to the Dealer Manager unless a Soliciting Dealer is designated, in
which case 80% of such fee shall be paid to the Dealer Manager and 20% of such
fee shall be paid to the designated Soliciting Dealer (which designated
Soliciting Dealer may be the Dealer Manager).
A designated Soliciting Dealer is an entity obtaining the Proxy, if the
Proxy shall indicate its name and it is (a) any broker or dealer in securities,
including the Dealer Manager in its capacity as a dealer or broker, which is a
member of any national securities exchange or of the National Association of
Securities Dealers, Inc. (the "NASD"), (b) any foreign broker or dealer not
eligible for membership in the NASD which agrees to conform to the NASD's Rules
of Fair Practice in soliciting proxies outside the United States to the same
extent as though it were an NASD member, or (c) any bank or trust company (each
of which is referred to herein as a "Soliciting Dealer"). No such fee shall be
payable to a Soliciting Dealer with respect to the solicitation of Proxies
unless the Proxy designates such Soliciting Dealer. No such fee shall be payable
to a Soliciting Dealer in respect of Shares registered in the name of such
Soliciting Dealer unless such Shares are held by such Soliciting Dealer as
nominee and such Shares are being voted for the benefit of one or more
beneficial owners identified on the Notice of Solicited Proxies (included in the
materials provided to brokers and dealers). No such fee shall be payable to a
Soliciting Dealer with respect to the solicitation of Proxies by the holder of
record, for the benefit of the beneficial owner, unless the beneficial owner has
designated such Soliciting Dealer. No such fee shall be payable to a Soliciting
Dealer if such Soliciting Dealer is required for
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any reason to transfer the amount of such fee to a depositing holder (other than
itself). No such fee shall be paid to a Soliciting Dealer with respect to
solicitation of Proxies for such Soliciting Dealer's own account. No broker,
dealer, bank, trust company or fiduciary shall be deemed to be the agent of the
Company, the Information Agent or the Dealer Manager for purposes of the Proxy
solicitation.
Soliciting Dealers will include any organizations described in clauses (a),
(b) or (c) above even when the activities of such organization in connection
with the Proxy solicitation consist solely of forwarding to clients materials
relating to the Proxy solicitation, and rendering Proxies as directed by
beneficial owners thereof. No Soliciting Dealer is required to make any
recommendation to holders of Shares as to whether to vote for or against the
Proposed Amendment. No assumption is made, in making payment to any Soliciting
Dealer, that its activities in connection with the Proxy solicitation included
any activities other than those described above, and for all purposes noted in
all materials relating to the Proxy solicitation, the term "solicit" shall be
deemed to mean no more than "processing shares voted" or "forwarding to
customers materials regarding the Proxy solicitation."
Proxies will be solicited by mail or by telephone. In addition, officers
and employees of the Company or its affiliates may also solicit proxies
personally or by telephone; such persons will receive no additional compensation
for these services. The Information Agent has not been retained to make, and
will not make, solicitations or recommendations, other than conveying
information related to the recommendations of the Board, in connection with the
Proposed Amendment.
The Company has requested that brokerage houses and other custodians,
nominees and fiduciaries forward solicitation materials to the beneficial owners
of shares of the Company's outstanding preferred stock held of record by such
persons and will reimburse such brokers and other fiduciaries for their
reasonable out-of-pocket expenses incurred in connection therewith.
The solicitation of proxies has been approved by the Commission under the
Holding Company Act. An application has been filed with the Commission under the
Holding Company Act requesting approval of the Proposed Amendment.
WHAT NUMBER TO GIVE THE INFORMATION AGENT
The Taxpayer Identification Number ("TIN") a Preferred Shareholder is
required to give the Information Agent is the social security number or employer
identification number of the registered owner of the Shares. If the Shares are
in more than one name or are not in the name of the actual owner, consult the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for additional guidance on which number to report.
A Preferred Shareholder is required to provide the Information Agent with
(i) in the case of a United States Preferred Shareholder, a TIN and a
certification on Substitute Form W-9 that the IRS has not notified such
shareholder that he is subject to backup withholding, or (ii) in the case of a
foreign Preferred Shareholder, a properly completed Form W-8. Failure to provide
the information on either Substitute Form W-9 or Form W-8 may subject the
Preferred Shareholder to a $50 penalty imposed by the IRS and to 31% Federal
income tax backup withholding on the payment of the Special Cash Payment. The
box in Part 2 of Substitute Form W-9 may be checked if the Preferred Shareholder
has not been issued a TIN and has applied for a number or intends to apply for a
number in the near future. If the box in Part 2 is checked and the Information
Agent is not provided with a TIN by the time of payment, the Information Agent
will withhold 31% on the payment of the Special Cash Payment thereafter until a
TIN is provided to the Information Agent.
FINANCIAL AND OTHER INFORMATION
The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files reports and other information with the
Commission. Such reports and other information may be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
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Street, N.W., Washington, D.C. 20549; 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511; and Seven World Trade Center, Suite 1300, New
York, New York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission maintains a Web site at
http://www.sec.gov containing reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission, including the Company. Reports, proxy materials and other
information about the Company are also available at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005.
The financial statements of the Company and related information included in
its Annual Report on Form 10-K for the year ended December 31, 1996, its
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997 and June
30, 1997 and its Current Reports on Form 8-K dated February 12, 1997 and
February 20, 1997, each as filed with the Commission, are hereby incorporated by
reference. All documents subsequently filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Proxy
Statement and prior to the date of the Special Meeting (or any adjournment
thereof) shall be deemed to be incorporated by reference in this Proxy Statement
and to be a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this Proxy
Statement to the extent that a statement contained herein or in any other
subsequently filed document which is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Proxy Statement.
The Company will provide without charge to each person to whom a copy of
this Proxy Statement has been delivered, on the written or oral request of any
such person, a copy of any or all of its documents described above which have
been incorporated by reference in this Proxy Statement, other than exhibits to
such documents. Such requests should be directed to Secretary, Mississippi Power
Company, 2992 West Beach, Gulfport, Mississippi 39501, telephone: (601)
864-1211. The information relating to the Company contained in this Proxy
Statement does not purport to be comprehensive and should be read together with
the information contained in the documents incorporated by reference.
Questions or requests for assistance in connection with this Proxy
Statement and the accompanying Proxy may be directed to Corporate Investor
Communications, Inc. at (888) 881-0526 (toll free) or banks and brokers call
(888) 349-2003 or to Merrill Lynch & Co. at (888) 654-8637 (toll free). Requests
for additional copies of this Proxy Statement, the Proxy or other proxy
materials may be directed to the Information Agent, and such copies will be
furnished promptly at the Company's expense.
INDEPENDENT PUBLIC ACCOUNTANTS
No representative of Arthur Andersen LLP, the Company's independent public
accountants, is expected to be present at the Special Meeting unless prior to
the day of the Special Meeting the Secretary of the Company has received written
notice from a Preferred Shareholder addressed to the Secretary at Mississippi
Power Company, 2992 West Beach, Gulfport, Mississippi 39501 that such Preferred
Shareholder will attend the Special Meeting and wishes to ask questions of a
representative of Arthur Andersen LLP.
DELIVERY OF PROXIES
Properly executed proxies must be received by mail at or prior to the
Special Meeting which will be held on December 10, 1997. Such proxies may be
mailed to The Bank of New York, Tender & Exchange Department, P.O. Box 11248,
Church Street Station, New York, New York 10286-1248. A return envelope is
enclosed for your convenience.
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OTHER MATTERS
The Board of Directors knows of no matter other than the foregoing to come
before the Special Meeting. If any other matters properly come before the
Special Meeting or any adjournment thereof, however, it is intended that the
persons designated as proxies in the enclosed proxy will vote on such matters in
their discretion.
BY ORDER OF THE BOARD OF DIRECTORS
Michael W. Southern
Vice President, Secretary, Treasurer
and Chief Financial Officer
Gulfport, Mississippi
November 3, 1997
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APPENDIX A
PROVISIONS OF THE CHARTER TO BE DELETED BY THE PROPOSED AMENDMENT
Unless otherwise defined, capitalized terms used herein are used as defined
in the Charter.
THE DEBT LIMITATION PROVISION
Subparagraph (F)(b) of Paragraph FOURTH under "General Provisions" of the
"Preferred Stock" section of the Charter states:
"So long as any shares of the preferred stock are outstanding, the
corporation shall not, without the affirmative vote in favor thereof of the
holders of at least a majority of the shares of preferred stock at the time
outstanding,
(b)(i) issue or assume any unsecured notes, debentures or other
securities representing unsecured debt (other than for the purpose of
refunding or renewing outstanding unsecured securities issued or assumed
by the corporation resulting in equal or longer maturities or redeeming
or otherwise retiring all outstanding shares of the preferred stock or
of any kind of stock over which the preferred stock does not have
preference as to the payment of dividends and as to assets) if
immediately after such issue or assumption (1) the total outstanding
principal amount of all unsecured notes, debentures or other securities
representing unsecured debt of the corporation will thereby exceed 20%
of the aggregate of all existing secured debt of the corporation and the
capital stock, premiums thereon and surplus of the corporation as stated
on its books; or (2) the total outstanding principal amount of all
unsecured notes, debentures or other securities representing unsecured
debt of the corporation of maturities of less than ten years would
exceed 10% of such aggregate;
(ii) for the purpose of sub-paragraph (i) above, the payment due
upon the maturity of unsecured debt having an original single maturity
in excess of 10 years or the payment due upon the final maturity of any
unsecured serial debt which had original maturities in excess of ten
years shall not be regarded as unsecured debt of a maturity of less than
10 years until such payment shall be required to be made within 3
years."
THE MERGER PROVISION
Subparagraph (F)(a) of Paragraph FOURTH under "General Provisions" of the
"Preferred Stock" section of the Charter states:
"So long as any shares of the preferred stock are outstanding, the
corporation shall not, without the affirmative vote in favor thereof of the
holders of at least a majority of the shares of preferred stock at the time
outstanding,
(a) sell, lease or exchange all or substantially all of its property
or merge or consolidate with or into any other corporation or corporations,
unless such sale, lease, exchange, merger or consolidation, or the issuance
and assumption of all securities to be issued or assumed in connection
therewith, shall have been ordered, approved or permitted by the Securities
and Exchange Commission, or by any successor commission thereto, under the
Public Utility Holding Company Act of 1935; provided, however, that nothing
in this paragraph contained shall authorize any such sale, lease, exchange,
merger or consolidation by the vote of the holders of a less number of
shares of the preferred stock, or of any other class of stock, or of all
classes of stock, than is required for any such sale, lease, exchange,
merger or consolidation by the laws of the State of Mississippi at the time
applicable thereto."
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THE COMMON STOCK DIVIDEND PROVISION
The relevant provision of Subparagraph (B) of Paragraph FOURTH under
"General Provisions" of the "Preferred Stock" section of the Charter states:
"So long as any shares of the preferred stock are outstanding, the
payment of dividends on the common stock (other than dividends payable in
common stock) and the making of any distribution of assets to holders of
common stock by purchase of shares or otherwise (each of such actions being
herein embraced within the term "payment of common stock dividends") shall
be subject to the following limitations:
(a) If and so long as the ratio of the aggregate of the par value
of, or stated capital represented by, the outstanding shares of common
stock (including premiums on the common stock but excluding premiums on
the preferred stock) and of the surplus of the corporation to the total
capitalization and surplus of the corporation at the end of a period of
twelve consecutive calendar months within the fourteen calendar months
immediately preceding the calendar month in which the proposed payment
of common stock dividends is to be made (which period is hereinafter
referred to as the "base period"), adjusted to reflect the proposed
payment of common stock dividends (which ratio is hereinafter referred
to as the "capitalization ratio"), is less than 20%, the payment of
common stock dividends, including the proposed payment, during the
twelve calendar months period ending with and including the calendar
month in which the proposed payment is to be made shall not exceed 50%
of the net income of the corporation available for the payment of
dividends on the common stock during the base period;
(b) If and so long as the capitalization ratio is 20% or more but
less than 25%, the payment of common stock dividends, including the
proposed payment, during the twelve calendar months period ending with
and including the calendar month in which the proposed payment is to be
made shall not exceed 75% of the net income of the corporation available
for the payment of dividends on the common stock during the base period;
(c) Except to the extent permitted under paragraphs (a) and (b)
above, the corporation shall not make any payment of common stock
dividends which would reduce the capitalization ratio to less than 25%.
For the purpose of the foregoing provisions, the following terms shall have
the following meanings:
(1) The term "net income of the corporation available for the payment
of dividends on the common stock" shall mean for any period the balance
remaining after deducting from the total gross revenues of the corporation
from all sources during such period the following:
(a) all operating expenses and taxes, including charges to income
for general taxes and for federal and state taxes measured by income,
for retirement or depreciation reserve and for amortization or other
disposition of amounts, if any, classified as amounts in excess of
original cost of utility plant; (b) the greater of (i) the amount, if
any, by which the aggregate of the charges to income during the period
in question for repairs, maintenance and provision for depreciation is
less than the maintenance and replacement requirement embodied in the
Indenture or any indenture supplemental thereto, succeeding the same or
in substitution therefor, and (ii) the amount, if any, by which the
charges to income during the period in question as provision for
depreciation is less than the replacement requirement embodied in
Section 4 of the Supplemental Indenture dated as of June 1, 1964
supplemental to the Indenture, or any requirement succeeding the same or
in substitution therefor; (c) all interest charges and other income
deductions, including charges to income for amortization of debt
discount, premium and expense and preferred stock premium and expense;
and (d) all dividends applicable to the period in question on stock
having preference over the common stock as to the payment of dividends.
(2) The term "total capitalization" shall mean the aggregate of the
principal amount of all outstanding indebtedness of the corporation
maturing more than twelve months after the date of issue
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thereof, plus the par value of, or stated capital represented by, the
outstanding shares of all classes of stock of the corporation, including
any premiums on capital stock.
(3) The term "surplus" shall include capital surplus, earned surplus
and any other surplus of the corporation, adjusted to eliminate (i) any
amounts which may then be classified by the corporation on its books as
amounts in excess of the original cost of utility plant and which are not
provided by reserve, (ii) any items set forth on the asset side of the
balance sheet of the corporation as a result of accounting convention, such
as unamortized debt discount and expense and preferred stock expense,
unless any such amount or item, as the case may be, is being amortized or
is being provided for by reserve, and (iii) the excess, if any, of the
aggregate amount payable in event of involuntary liquidation of the
corporation upon all series of preferred stock over the sum of (a) the
aggregate of the par value of, or stated capital represented by, such
shares and (b) any premiums thereon."
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APPENDIX B
ARTICLE 13 OF THE MISSISSIPPI BUSINESS CORPORATION ACT
DISSENTERS' RIGHTS
SUBARTICLE A
RIGHT TO DISSENT AND OBTAIN PAYMENT FOR SHARES
SEC. 79-4-13.01. DEFINITIONS.
In this article:
(1) "Corporation" means the issuer of the shares held by a dissenter
before the corporate action, or the surviving or acquiring corporation by
merger or share exchange of that issuer.
(2) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under Section 79-4-13.02 and who exercises that right when
and in the manner required by Sections 79-4-13.20 through 79-4-13.28.
(3) "Fair value," with respect to a dissenter's shares, means the
value of the shares immediately before the effectuation of the corporate
action to which the dissenter objects, excluding any appreciation or
depreciation in anticipation of the corporate action unless exclusion would
be inequitable.
(4) "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, if none, at a rate that is fair
and equitable under all the circumstances.
(5) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of
shares to the extent of the rights granted by a nominee certificate on file
with a corporation.
(6) "Beneficial shareholder" means the person who is a beneficial
owner of shares held in a voting trust or by a nominee as the record
shareholder.
(7) "Shareholder" means the record shareholder or the beneficial
shareholder.
SEC. 79-4-13.02. RIGHT TO DISSENT.
(a) A shareholder is entitled to dissent from, and obtain payment of the
fair value of his shares in the event of, any of the following corporate
actions:
(1) Consummation of a plan of merger to which the corporation is a
party (i) if shareholder approval is required for the merger by Section
79-4-11.03 or the articles of incorporation and the shareholder is entitled
to vote on the merger, or (ii) if the corporation is a subsidiary that is
merged with its parent under Section 79-4-11.04;
(2) Consummation of a plan of share exchange to which the corporation
is a party as the corporation whose shares will be acquired, if the
shareholder is entitled to vote on the plan;
(3) Consummation of a sale or exchange of all, or substantially all,
of the property of the corporation other than in the usual and regular
course of business, if the shareholder is entitled to vote on the sale or
exchange, including a sale in dissolution, but not including a sale
pursuant to court order or a sale for cash pursuant to a plan by which all
or substantially all of the net proceeds of the sale will be distributed to
the shareholders within one (1) year after the date of sale;
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(4) An amendment of the articles of incorporation that materially and
adversely affects rights in respect of a dissenter's shares because it:
(i) Alters or abolishes a preferential right of the shares;
(ii) Creates, alters or abolishes a right in respect of redemption,
including a provision respecting a sinking fund for the redemption or
repurchase, of the shares;
(iii) Alters or abolishes a preemptive right of the holder of the
shares to acquire shares or other securities;
(iv) Excludes or limits the right of the shares to vote on any
matter, or to cumulate votes, other than a limitation by dilution
through issuance of shares or other securities with similar voting
rights; or
(v) Reduces the number of shares owned by the shareholder to a
fraction of a share if the fraction share so created is to be acquired
for cash under Section 79-4-6.04; or
(5) Any corporate action taken pursuant to a shareholder vote to the
extent the articles of incorporation, bylaws or a resolution of the board
of directors provides that voting or nonvoting shareholders are entitled to
dissent and obtain payment for their shares.
(b) Nothing in subsection (a)(4) shall entitle a shareholder of a
corporation to dissent and obtain payment for his shares as a result of an
amendment of the articles of incorporation exclusively for the purpose of either
(i) making such corporation subject to application of the Mississippi Control
Share Act, or (ii) making such act inapplicable to a control share acquisition
of such corporation.
(c) A shareholder entitled to dissent and obtain payment for his shares
under this article may not challenge the corporate action creating his
entitlement unless the action is unlawful or fraudulent with respect to the
shareholder or the corporation.
SEC. 79-4-13.03. DISSENT BY NOMINEES AND BENEFICIAL OWNERS.
(a) A record shareholder may assert dissenters' rights as to fewer than all
the shares registered in his name only if he dissents with respect to all shares
beneficially owned by any one person and notifies the corporation in writing of
the name and address of each person on whose behalf he asserts dissenters'
rights. The rights of a partial dissenter under this subsection are determined
as if the shares as to which he dissents and his other shares were registered in
the names of different shareholders.
(b) A beneficial shareholder may assert dissenters' rights as to shares
held on his behalf only if:
(1) He submits to the corporation the record shareholder's written
consent to the dissent not later than the time the beneficial shareholder
asserts dissenters' rights; and
(2) He does so with respect to all shares of which he is the
beneficial shareholder or over which he has power to direct the vote.
SUBARTICLE B
PROCEDURE FOR EXERCISE OF DISSENTERS' RIGHTS
SEC. 79-4-13.20. NOTICE OF DISSENTERS' RIGHTS.
(a) If proposed corporate action creating dissenters' rights under Section
79-4-13.02 is submitted to a vote at a shareholders' meeting, the meeting notice
must state that shareholders are or may be entitled to assert dissenters' rights
under this article and be accompanied by a copy of this article.
(b) If corporate action creating dissenters' rights under Section
79-4-13.02 is taken without a vote of shareholders, the corporation shall notify
in writing all shareholders entitled to assert dissenters' rights that the
action was taken and send them the dissenters' notice described in Section
79-4-13.22.
B-2
<PAGE>
SEC. 79-4-13.21. NOTICE OF INTENT TO DEMAND PAYMENT.
(a) If proposed corporate action creating dissenters' rights under Section
79-4-13.02 is submitted to a vote at a shareholders' meeting, a shareholder who
wishes to assert dissenters' rights (1) must deliver to the corporation before
the vote is taken written notice of his intent to demand payment for his shares
if the proposed action is effectuated, and (2) must not vote his shares in favor
of the proposed action.
(b) A shareholder who does not satisfy the requirement of subsection (a) is
not entitled to payment for his shares under this article.
SEC. 79-4-13.22. DISSENTERS' NOTICE.
(a) If proposed corporate action creating dissenters' rights under Section
79-4-13.02 is authorized at a shareholders' meeting, the corporation shall
deliver a written dissenters' notice to all shareholders who satisfied the
requirements of Section 79-4-13.21.
(b) The dissenters' notice must be sent no later than ten (10) days after
the corporate action was taken, and must:
(1) State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited;
(2) Inform holders of uncertificated shares to what extent transfer of
the shares will be restricted after the payment demand is received;
(3) Supply a form for demanding payment that includes the date of the
first announcement to news media or to shareholders of the terms of the
proposed corporate action and requires that the person asserting
dissenters' rights certify whether or not he acquired beneficial ownership
of the shares before that date;
(4) Set a date by which the corporation must receive the payment
demand, which date may not be fewer than thirty (30) nor more than sixty
(60) days after the date the subsection (a) notice is delivered; and
(5) Be accompanied by a copy of this article.
SEC. 79-4-13.23. DUTY TO DEMAND PAYMENT.
(a) A shareholder sent a dissenters' notice described in Section 79-4-13.22
must demand payment, certify whether he acquired beneficial ownership of the
shares before the date required to be set forth in the dissenter's notice
pursuant to Section 79-4-13.22(b)(3), and deposit his certificates in accordance
with the terms of the notice.
(b) The shareholder who demands payment and deposits his shares under
subsection (a) retains all other rights of a shareholder until these rights are
cancelled or modified by the taking of the proposed corporate action.
(c) A shareholder who does not demand payment or deposit his share
certificates where required, each by the date set in the dissenters' notice, is
not entitled to payment for his shares under this article.
SEC. 79-4-13.24. SHARE RESTRICTIONS.
(a) The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received until the proposed corporate
action is taken or the restrictions released under Section 79-4-13.26.
(b) The person for whom dissenters' rights are asserted as to
uncertificated shares retains all other rights of a shareholder until these
rights are cancelled or modified by the taking of the proposed corporate action.
B-3
<PAGE>
SEC. 79-4-13.25. PAYMENT.
(a) Except as provided in Section 79-4-13.27, as soon as the proposed
corporate action is taken, or upon receipt of a payment demand, the corporation
shall pay each dissenter who complied with Section 79-4-13.23 the amount the
corporation estimates to be the fair value of his shares, plus accrued interest.
(b) The payment must be accompanied by:
(1) The corporation's balance sheet as of the end of a fiscal year
ending not more than sixteen (16) months before the date of payment, an
income statement for that year, a statement of changes in shareholders'
equity for that year, and the latest available interim financial
statements, if any;
(2) A statement of the corporation's estimate of the fair value of the
shares;
(3) An explanation of how the interest was calculated;
(4) A statement of the dissenters' right to demand payment under
Section 79-4-13.28; and
(5) A copy of this article.
SEC. 79-4-13.26. FAILURE TO TAKE ACTION.
(a) If the corporation does not take the proposed action within sixty (60)
days after the date set for demanding payment and depositing share certificates,
the corporation shall return the deposited certificates and release the transfer
restrictions imposed on uncertificated shares.
(b) If after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under Section 79-4-13.22 and repeat the payment demand
procedure.
SEC. 79-4-13.27. AFTER-ACQUIRED SHARES.
(a) A corporation may elect to withhold payment required by Section
79-4-13.25 from a dissenter unless he was the beneficial owner of the shares
before the date set forth in the dissenters' notice as the date of the first
announcement to news media or to shareholders of the terms of the proposed
corporate action.
(b) To the extent the corporation elects to withhold payment under
subsection (a), after taking the proposed corporate action, it shall estimate
the fair value of the shares, plus accrued interest, and shall pay this amount
to each dissenter who agrees to accept it in full satisfaction of his demand.
The corporation shall send with its offer a statement of its estimate of the
fair value of the shares, an explanation of how the interest was calculated and
a statement of the dissenter's right to demand payment under Section 79-4-13.28.
SEC. 79-4-13.28. PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR OFFER.
(a) A dissenter may notify the corporation in writing of his own estimate
of the fair value of his shares and amount of interest due, and demand payment
of his estimate (less any payment under Section 79-4-13.25), or reject the
corporation's offer under Section 79-4-13.27 and demand payment of the fair
value of his shares and interest due, if;
(1) The dissenter believes that the amount paid under Section
79-4-13.25 or offered under Section 79-4-13.27 is less than the fair value
of his shares or that the interest due is incorrectly calculated;
(2) The corporation fails to make payment under Section 79-4-13.25
within sixty (60) days after the date set for demanding payment; or
(3) The corporation, having failed to take the proposed action, does
not return the deposited certificates or release the transfer restrictions
imposed on uncertificated shares within sixty (60) days after the date set
for demanding payment.
B-4
<PAGE>
(b) A dissenter waives his right to demand payment under this section
unless he notifies the corporation of his demand in writing under subsection (a)
within thirty (30) days after the corporation made or offered payment for his
shares.
SUBARTICLE C
JUDICIAL APPRAISAL OF SHARES
SEC. 79-4-13.30. COURT ACTION.
(a) If a demand for payment under Section 79-4-13.28 remains unsettled, the
corporation shall commence a proceeding within sixty (60) days after receiving
the payment demand and petition the court to determine the fair value of the
shares and accrued interest. If the corporation does not commence the proceeding
within the 60-day period, it shall pay each dissenter whose demand remains
unsettled the amount demanded.
(b) The corporation shall commence the proceeding in the chancery court of
the county where a corporation's principal office (or, if none in this state,
its registered office) is located. If the corporation is a foreign corporation
without a registered office in this state, it shall commence the proceeding in
the county in this state where the registered office of the domestic corporation
merged with or whose shares were acquired by the foreign corporation was
located.
(c) The corporation shall make all dissenters (whether or not residents of
this state) whose demands remain unsettled parties to the proceeding as in an
action against their shares and all parties must be served with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.
(d) The jurisdiction of the court in which the proceeding is commenced
under subsection (b) is plenary and exclusive. The court may appoint one or more
persons as appraisers to receive evidence and recommend decision on the question
of fair value. The appraisers have the powers described in the order appointing
them, or in any amendment to it. The dissenters are entitled to the same
discovery rights as parties in other civil proceedings.
(e) Each dissenter made a party to the proceeding is entitled to judgment
(1) for the amount, if any, by which the court finds the fair value of his
shares, plus interest, exceeds the amount paid by the corporation, or (2) for
the fair value, plus accrued interest, of his after-acquired shares for which
the corporation elected to withhold payment under Section 79-4-13.27.
SEC. 79-4-13.31. COURT COSTS AND COUNSEL FEES.
(a) The court in an appraisal proceeding commenced under Section 79-4-13.30
shall determine all costs of the proceeding, including the reasonable
compensation and expenses of appraisers appointed by the court. The court shall
assess the costs against the corporation, except that the court may assess costs
against all or some of the dissenters, in amounts the court finds equitable, to
the extent the court finds the dissenters acted arbitrarily, vexatiously or not
in good faith in demanding payment under Section 79-4-13.28.
(b) The court may also assess the fees and expenses of counsel and experts
for the respective parties, in amounts the court finds equitable:
(1) Against the corporation and in favor of any or all dissenters if
the court finds the corporation did not substantially comply with the
requirements of Sections 79-4-13.20 through 79-4-13.28; or
(2) Against either the corporation or a dissenter, in favor of any
other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously or not in good faith
with respect to the rights provided by this article.
(c) If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated, and that the fees
for those services should not be assessed against the corporation, the court may
award to these counsel reasonable fees to be paid out of the amounts awarded the
dissenters who were benefited.
B-5
<PAGE>
Questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective telephone numbers and addresses
listed below. Requests for additional copies of the Proxy Statement and the
accompanying Proxy may be directed to the Information Agent, and such copies
will be furnished promptly at the Company's expense.
The Information Agent:
CORPORATE INVESTOR COMMUNICATIONS, INC.
111 Commerce Road
Carlstadt, New Jersey 07072
(888) 881-0526 (toll free)
Banks and Brokers call
(888) 349-2003
The Dealer Manager:
MERRILL LYNCH & CO.
World Financial Center
250 Vesey Street
New York, New York 10281
(888) ML4-TNDR (toll free)
((888) 654-8637)
Properly executed Proxies must be received by mail at or prior to the
Special Meeting which will be held on December 10, 1997. Such Proxies should be
sent to:
The Bank of New York
Tender & Exchange Department
P.O. Box 11248
Church Street Station
New York, New York 10286-1248
<PAGE>
Exhibit B-17
PROXY PROXY
ALABAMA POWER COMPANY
The undersigned hereby appoints Elmer B. Harris, Art P. Beattie and Wayne
Boston, or any of them, as proxies, each with the power to appoint his or her
substitute, and hereby authorizes them to represent and to vote as designated
hereunder and in their discretion with respect to any other business properly
brought before the Special Meeting all the shares of preferred stock of Alabama
Power Company (the "Company") which the undersigned is entitled to vote at the
Special Meeting of Shareholders to be held on December 10, 1997, or any
adjournment(s) or postponement(s) thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder(s). If no direction is made, the proxy will be
voted FOR item 1.
Indicate your vote by an (X). The Board of Directors recommends voting FOR
item 1.
ITEM 1.
To remove from the Company's Charter (i) Paragraph A.2.f.(2) of Article IX,
a provision restricting the amount of securities representing unsecured
indebtedness issuable by the Company, (ii) Paragraph A.2.f.(1) of Article IX, a
provision which requires the vote of the holders of at least a majority of the
total voting power of the Company's outstanding preferred stock to approve the
sale of all or substantially all of the Company's property and mergers or
consolidations that have not been approved under the Public Utility Holding
Company Act of 1935, as amended, (iii) Paragraph A.2.b. (except the first
paragraph therein) of Article IX, a provision restricting the ability of the
Company to pay dividends on its common stock in the event that its common equity
capitalization falls below certain levels, and (iv) the words after "January 31,
1942" of the first paragraph of Paragraph A.2.b. of Article IX, a provision
restricting the ability of the Company to pay dividends on its common stock in
the event that its retained earnings are not at least equal to two times the
annual dividends on its outstanding preferred stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
SHARES REPRESENTED BY ALL PROPERLY EXECUTED PROXIES WILL BE VOTED IN
ACCORDANCE WITH INSTRUCTIONS APPEARING ON THIS PROXY. IN THE ABSENCE OF SPECIFIC
INSTRUCTIONS, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS, AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
ALTHOUGH HOLDERS OF SHARES OF THE COMPANY'S 1988 AUCTION RATE SERIES MAY
ONLY PURCHASE AND TRANSFER THEIR SHARES IN BLOCKS OF 1,000 SHARES, SUCH
SHAREHOLDERS MAY VOTE ANY NUMBER OF SHARES TO WHICH THEY ARE THE RECORD HOLDER.
SHAREHOLDERS OF SUCH SERIES OF THE COMPANY'S PREFERRED STOCK SHOULD INDICATE
BELOW THE NUMBER OF SHARES THEY ARE VOTING.
Please check box if you plan to attend the Special Meeting. [ ]
<PAGE>
SIGNATURE(S) OF OWNER(S)
X
-------------------------------------------------------------------------------
X
-------------------------------------------------------------------------------
Dated: , 1997
-------------------------------------------------------------------
Name(s):
------------------------------------------------------------------------
(Please Print)
Capacity (full title):
----------------------------------------------------------
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
DAYTIME Area Code and Telephone No.:
--------------------------------------------
Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
stock certificates or on a security position listing or by person(s) authorized
to become registered holder(s) by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, please set forth full title.
To be Filled Out if Applicable:
Name of Beneficial Holders
-------------------------------------------------
Beneficial Holder's Address
and Daytime Area Code and Telephone No.:
-----------------------------------
Name of Broker Dealers
------------------------------------------------------
-- Account Numbers
----------------------------------------------------------
-- DTC No.:
-----------------------------------------------------------------
2
<PAGE>
PAYER'S NAME: ALABAMA POWER COMPANY
<TABLE>
<S> <C> <C>
PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND ----------------------------
SUBSTITUTE CERTIFY BY SIGNING AND DATING BELOW. SOCIAL SECURITY NUMBER
FORM W-9
OR
----------------------------
EMPLOYER IDENTIFICATION TIN
NAME (PLEASE PRINT)____________________________________ PART 2 --
ADDRESS________________________________________________ AWAITING TIN [ ]
CITY______________________________ STATE_______________
ZIP CODE ____________________
DEPARTMENT OF THE TREASURY PART 3 -- CERTIFICATION -- UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
INTERNAL REVENUE SERVICE
(1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER (OR A TIN
HAS NOT BEEN ISSUED TO ME BUT I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE A TIN OR
INTEND TO DO SO IN THE NEAR FUTURE), (2) I AM NOT SUBJECT TO BACKUP WITHHOLDING EITHER
BECAUSE I HAVE NOT BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE (THE "IRS") THAT I AM
SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF A FAILURE TO REPORT ALL INTEREST OR DIVIDENDS
OR THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP WITHHOLDING AND (3) ALL
OTHER INFORMATION PROVIDED ON THIS FORM IS TRUE, CORRECT AND COMPLETE.
SIGNATURE_________________________________________________________________________________
DATE ____________________, 1997
YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE
CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST OR DIVIDENDS ON
YOUR TAX RETURN.
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF
PAYER'S REQUEST FOR ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER OR PROXY SOLICITATION. PLEASE REVIEW THE
TAXPAYER IDENTIFICATION ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM
NUMBER ("TIN") AND CERTIFICATION W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE
BOX IN PART 2 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER:
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS NOT BEEN
ISSUED TO ME AND EITHER (1) I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE A TAXPAYER
IDENTIFICATION NUMBER TO THE APPROPRIATE INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY
ADMINISTRATION OFFICE OR (2) I INTEND TO DO SO IN THE NEAR FUTURE. I UNDERSTAND THAT IF I
DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER BY THE TIME OF PAYMENT, 31% OF ALL PAYMENTS
MADE TO ME WILL BE WITHHELD UNTIL I PROVIDE A NUMBER.
SIGNATURE___________________________________ DATE:_________________________________ , 1997
</TABLE>
SPECIAL PAYMENT INSTRUCTIONS
To be completed ONLY if the check for the Special Cash Payment is to be issued
in the name of someone other than the abovesigned.
Issue check to:
Name
-------------------------------------------------
(PLEASE PRINT)
Address
----------------------------------------------
(INCLUDE ZIP CODE)
- ------------------------------------------------------
(TAXPAYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
To be completed ONLY if the check for the Special Cash Payment is to be mailed
to someone other than the abovesigned or to the abovesigned at an address other
than that shown below the abovesigned's signature(s).
Mail check to:
Name
--------------------------------------------------
(PLEASE PRINT)
Address
-----------------------------------------------
- ------------------------------------------------------
(INCLUDE ZIP CODE)
3
<PAGE>
ALABAMA POWER COMPANY
CONSENT FEES
Pursuant to the terms of the Proxy Statement dated November 3, 1997, if the
Proposed Amendment is approved and adopted, for shares described below which are
voted in favor of the Proposed Amendment, the Company will pay a consent fee of
an amount equal to (i) 0.50% of the stated capital per share of its 1993
Adjustable Rate Series (but only with respect to transactions for beneficial
owners whose ownership is less than 2,500 shares) and (ii) 0.50% of the par
value or stated capital, as applicable, per share of its 4.52% Series, 4.60%
Series, 4.64% Series, 4.72% Series, 4.92% Series, 6.40% Series and 6.80% Series,
provided, however, with respect to transactions for beneficial owners whose
ownership equals or exceeds 2,500 shares of such shares named in clause (ii),
the Company will pay a consent fee of an amount equal to 0.25% of the par value
or stated capital, as applicable, per share of such shares. No such fee shall be
payable to a Soliciting Dealer (as defined in the Proxy Statement) with respect
to the vote of shares by a holder unless the proxy accompanying the vote
designates such Soliciting Dealer. However, Soliciting Dealers will not be
entitled to such fee for shares beneficially owned by such broker or dealer.
The abovesigned represents that the Soliciting Dealer who solicited and
obtained this vote in favor of the Proposed Amendment is:
Name of Firm:
------------------------------------------------------------------
(Please Print)
Name of Individual Broker or Financial Consultant:
-----------------------------
Telephone Number of Broker or Financial Consultant:
----------------------------
Identification Number (if known):
----------------------------------------------
Address:
-----------------------------------------------------------------------
The acceptance of compensation by such broker or dealer will constitute a
representation by it that (a) it has complied with the applicable requirements
of the Securities Exchange Act of 1934, as amended, and the applicable rules and
regulations thereunder, in connection with such solicitation; (b) it is entitled
to such compensation for such solicitation under the terms and conditions of the
Proxy Statement; (c) in soliciting votes of shares it has used no solicitation
materials other than those furnished by The Southern Company or Alabama Power
Company; and (d) if it is a foreign broker or dealer not eligible for membership
in the National Association of Securities Dealers, Inc. (the "NASD"), it has
agreed to conform to the NASD's Rules of Fair Practice in making solicitations.
The payment of compensation to any broker or dealer is dependent on such
broker or dealer returning a Notice of Solicited Proxies to the Information
Agent.
4
<PAGE>
Exhibit B-18
PROXY PROXY
GEORGIA POWER COMPANY
The undersigned hereby appoints H. Allen Franklin, Judy M. Anderson and
Wayne Boston, or any of them, as proxies, each with the power to appoint his or
her substitute, and hereby authorizes them to represent and to vote as
designated hereunder and in their discretion with respect to any other business
properly brought before the Special Meeting all the shares of preferred stock of
Georgia Power Company (the "Company") which the undersigned is entitled to vote
at the Special Meeting of Shareholders to be held on December 10, 1997, or any
adjournment(s) or postponement(s) thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder(s). If no direction is made, the proxy will be
voted FOR item 1.
Indicate your vote by an (X). The Board of Directors recommends voting FOR
item 1.
ITEM 1.
To remove from the Company's Charter (i) Subparagraph 14.A.3.f.(2) of
Paragraph III, a provision restricting the amount of securities representing
unsecured indebtedness issuable by the Company, (ii) Subparagraph 14.A.3.f.(1)
of Paragraph III, a provision which requires the vote of the holders of at least
a majority of the total voting power of the Company's outstanding preferred
stock to approve the sale of all or substantially all of the Company's property
and mergers or consolidations that have not been approved under the Public
Utility Holding Company Act of 1935, as amended, and (iii) Subparagraph
14.A.3.b. (except the first paragraph therein) of Paragraph III, a provision
restricting the ability of the Company to pay dividends on its common stock in
the event that its common equity capitalization falls below certain levels.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
SHARES REPRESENTED BY ALL PROPERLY EXECUTED PROXIES WILL BE VOTED IN
ACCORDANCE WITH INSTRUCTIONS APPEARING ON THIS PROXY. IN THE ABSENCE OF SPECIFIC
INSTRUCTIONS, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS, AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
Please check box if you plan to attend the Special Meeting. [ ]
<PAGE>
SIGNATURE(S) OF OWNER(S)
X
------------------------------------------------------------------------------
X
------------------------------------------------------------------------------
Dated: , 1997
------------------------------------------------------------------
Name(s):
------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title):
----------------------------------------------------------
Address:
----------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
DAYTIME Area Code and Telephone No.:
-------------------------------------------
Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
stock certificates or on a security position listing or by person(s) authorized
to become registered holder(s) by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, please set forth full title.
To be Filled Out if Applicable:
Name of Beneficial Holders
-------------------------------------------------
Beneficial Holder's Address
and Daytime Area Code and Telephone No.:
----------------------------------
Name of Broker Dealers
-----------------------------------------------------
-- Account Numbers
---------------------------------------------------------
-- DTC No.:
----------------------------------------------------------------
2
<PAGE>
PAYER'S NAME: GEORGIA POWER COMPANY
<TABLE>
<S> <C> <C>
PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND ----------------------------
SUBSTITUTE CERTIFY BY SIGNING AND DATING BELOW. SOCIAL SECURITY NUMBER
FORM W-9
OR
----------------------------
EMPLOYER IDENTIFICATION TIN
NAME (PLEASE PRINT) PART 2 --
--------------------------------------
ADDRESS AWAITING TIN [ ]
-------------------------------------------------
CITY STATE
------------------------------------ ----------
ZIP CODE
-------------------------
DEPARTMENT OF THE TREASURY PART 3 -- CERTIFICATION -- UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
INTERNAL REVENUE SERVICE
(1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER (OR A TIN
HAS NOT BEEN ISSUED TO ME BUT I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE A TIN OR
INTEND TO DO SO IN THE NEAR FUTURE), (2) I AM NOT SUBJECT TO BACKUP WITHHOLDING EITHER
BECAUSE I HAVE NOT BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE (THE "IRS") THAT I AM
SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF A FAILURE TO REPORT ALL INTEREST OR DIVIDENDS
OR THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP WITHHOLDING AND (3) ALL
OTHER INFORMATION PROVIDED ON THIS FORM IS TRUE, CORRECT AND COMPLETE.
SIGNATURE
---------------------------------------------------------------------------------
DATE , 1997
---------------------
YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE
CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST OR DIVIDENDS ON
YOUR TAX RETURN.
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF
PAYER'S REQUEST FOR ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER OR PROXY SOLICITATION. PLEASE REVIEW THE
TAXPAYER IDENTIFICATION ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM
NUMBER ("TIN") AND CERTIFICATION W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE
BOX IN PART 2 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER:
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS NOT BEEN
ISSUED TO ME AND EITHER (1) I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE A TAXPAYER
IDENTIFICATION NUMBER TO THE APPROPRIATE INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY
ADMINISTRATION OFFICE OR (2) I INTEND TO DO SO IN THE NEAR FUTURE. I UNDERSTAND THAT IF I
DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER BY THE TIME OF PAYMENT, 31% OF ALL PAYMENTS
MADE TO ME WILL BE WITHHELD UNTIL I PROVIDE A NUMBER.
SIGNATURE DATE: , 1997
----------------------------------------- ------------------------
</TABLE>
SPECIAL PAYMENT INSTRUCTIONS
To be completed ONLY if the check for the Special Cash Payment is to be issued
in the name of someone other than the abovesigned.
Issue check to:
Name
----------------------------------------------
(PLEASE PRINT)
Address
--------------------------------------------
(INCLUDE ZIP CODE)
- ----------------------------------------------------
(TAXPAYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
To be completed ONLY if the check for the Special Cash Payment is to be mailed
to someone other than the abovesigned or to the abovesigned at an address other
than that shown below the abovesigned's signature(s).
Mail check to:
Name
-----------------------------------------------
(PLEASE PRINT)
Address
------------------------------------------
- ----------------------------------------------------
(INCLUDE ZIP CODE)
3
<PAGE>
GEORGIA POWER COMPANY
CONSENT FEES
Pursuant to the terms of the Proxy Statement dated November 3, 1997, if the
Proposed Amendment is approved and adopted, for shares described below which are
voted in favor of the Proposed Amendment, the Company will pay a consent fee of
an amount equal to (i) 0.50% of the stated value per share of its Adjustable
Rate (First 1993) Series and Adjustable Rate (Second 1993) Series (but only with
respect to transactions for beneficial owners whose ownership is less than 2,500
shares) and (ii) 0.50% of the stated value per share of its $6.48 Series and
$6.60 Series, provided, however, with respect to transactions for beneficial
owners whose ownership equals or exceeds 2,500 shares of such shares named in
clause (ii), the Company will pay a consent fee of an amount equal to 0.25% of
the stated value per share or such shares. No such fee shall be payable to a
Soliciting Dealer (as defined in the Proxy Statement) with respect to the vote
of shares by a holder unless the proxy accompanying the vote designates such
Soliciting Dealer. However, Soliciting Dealers will not be entitled to such fee
for shares beneficially owned by such broker or dealer.
The abovesigned represents that the Soliciting Dealer who solicited and
obtained this vote in favor of the Proposed Amendment is:
Name of Firm:
------------------------------------------------------------
(PLEASE PRINT)
Name of Individual Broker
or Financial Consultant:
-------------------------------------------------
Telephone Number of Broker
or Financial Consultant:
-------------------------------------------------
Identification Number (if known):
----------------------------------------
Address:
-----------------------------------------------------------------
The acceptance of compensation by such broker or dealer will constitute a
representation by it that (a) it has complied with the applicable requirements
of the Securities Exchange Act of 1934, as amended, and the applicable rules and
regulations thereunder, in connection with such solicitation; (b) it is entitled
to such compensation for such solicitation under the terms and conditions of the
Proxy Statement; (c) in soliciting votes of shares it has used no solicitation
materials other than those furnished by The Southern Company or Georgia Power
Company; and (d) if it is a foreign broker or dealer not eligible for membership
in the National Association of Securities Dealers, Inc. (the "NASD"), it has
agreed to conform to the NASD's Rules of Fair Practice in making solicitations.
The payment of compensation to any broker or dealer is dependent on such
broker or dealer returning a Notice of Solicited Proxies to the Information
Agent.
4
<PAGE>
Exhibit B-19
PROXY PROXY
MISSISSIPPI POWER COMPANY
The undersigned hereby appoints Dwight H. Evans, Michael W. Southern and
Wayne Boston, or any of them, as proxies, each with the power to appoint his or
her substitute, and hereby authorizes them to represent and to vote as
designated hereunder and in their discretion with respect to any other business
properly brought before the Special Meeting all the shares of preferred stock of
Mississippi Power Company (the "Company") which the undersigned is entitled to
vote at the Special Meeting of Shareholders to be held on December 10, 1997, or
any adjournment(s) or postponement(s) thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder(s). If no direction is made, the proxy will be
voted FOR item 1.
Indicate your vote by an (X). The Board of Directors recommends voting FOR
item 1.
ITEM 1.
To remove from the Company's Charter (i) Subparagraph (F)(b) of Paragraph
FOURTH under "General Provisions" of the "Preferred Stock" section, a provision
restricting the amount of securities representing unsecured indebtedness
issuable by the Company, (ii) Subparagraph (F)(a) of Paragraph FOURTH under
"General Provisions" of the "Preferred Stock" section, a provision which
requires the vote of the holders of at least a majority of the total voting
power of the Company's outstanding preferred stock to approve the sale of all or
substantially all of the Company's property and mergers or consolidations that
have not been approved under the Public Utility Holding Company Act of 1935, as
amended, and (iii) Subparagraph (B) (except the first paragraph therein) of
Paragraph FOURTH under "General Provisions" of the "Preferred Stock" section, a
provision restricting the ability of the Company to pay dividends on its common
stock in the event that its common equity capitalization falls below certain
levels.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
SHARES REPRESENTED BY ALL PROPERLY EXECUTED PROXIES WILL BE VOTED IN
ACCORDANCE WITH INSTRUCTIONS APPEARING ON THIS PROXY. IN THE ABSENCE OF SPECIFIC
INSTRUCTIONS, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS, AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
Please check box if you plan to attend the Special Meeting. [ ]
<PAGE>
SIGNATURE(S) OF OWNER(S)
X
-------------------------------------------------------------------------------
X
-------------------------------------------------------------------------------
Dated: , 1997
--------------------------------------------------------------------
Name(s):
------------------------------------------------------------------------
(Please Print)
Capacity (full title):
----------------------------------------------------------
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
DAYTIME Area Code and Telephone No.:
--------------------------------------------
Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
stock certificates or on a security position listing or by person(s) authorized
to become registered holder(s) by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, please set forth full title.
To be Filled Out if Applicable:
Name of Beneficial Holders
-------------------------------------------------
Beneficial Holder's Address
and Daytime Area Code and Telephone No.:
----------------------------------
Name of Broker Dealers
-----------------------------------------------------
-- Account Numbers
---------------------------------------------------------
-- DTC No.:
----------------------------------------------------------------
2
<PAGE>
PAYER'S NAME: MISSISSIPPI POWER COMPANY
<TABLE>
<S> <C> <C>
--------------------------------------------------------------------------------------------
PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND ----------------------------
SUBSTITUTE CERTIFY BY SIGNING AND DATING BELOW. SOCIAL SECURITY NUMBER
FORM W-9
OR
----------------------------
EMPLOYER IDENTIFICATION TIN
--------------------------------------------------------------------------------------------
NAME (PLEASE PRINT) PART 2 --
--------------------------------------
ADDRESS AWAITING TIN [ ]
-------------------------------------------------
CITY STATE
------------------------------------ ----------
ZIP CODE
-------------------------
--------------------------------------------------------------------------------------------
DEPARTMENT OF THE TREASURY PART 3 -- CERTIFICATION -- UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
INTERNAL REVENUE SERVICE
(1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER (OR A TIN
HAS NOT BEEN ISSUED TO ME BUT I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE A TIN OR
INTEND TO DO SO IN THE NEAR FUTURE), (2) I AM NOT SUBJECT TO BACKUP WITHHOLDING EITHER
BECAUSE I HAVE NOT BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE (THE "IRS") THAT I AM
SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF A FAILURE TO REPORT ALL INTEREST OR DIVIDENDS
OR THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP WITHHOLDING AND (3) ALL
OTHER INFORMATION PROVIDED ON THIS FORM IS TRUE, CORRECT AND COMPLETE.
SIGNATURE
---------------------------------------------------------------------------------
DATE , 1997
---------------------
YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE
CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST OR DIVIDENDS ON
YOUR TAX RETURN.
--------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF
PAYER'S REQUEST FOR ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER OR PROXY SOLICITATION. PLEASE REVIEW THE
TAXPAYER IDENTIFICATION ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM
NUMBER ("TIN") AND CERTIFICATION W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE
BOX IN PART 2 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER:
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS NOT BEEN
ISSUED TO ME AND EITHER (1) I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE A TAXPAYER
IDENTIFICATION NUMBER TO THE APPROPRIATE INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY
ADMINISTRATION OFFICE OR (2) I INTEND TO DO SO IN THE NEAR FUTURE. I UNDERSTAND THAT IF I
DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER BY THE TIME OF PAYMENT, 31% OF ALL PAYMENTS
MADE TO ME WILL BE WITHHELD UNTIL I PROVIDE A NUMBER.
SIGNATURE DATE: , 1997
----------------------------------------- ------------------------
</TABLE>
SPECIAL PAYMENT INSTRUCTIONS
To be completed ONLY if the check for the Special Cash Payment is to be issued
in the name of someone other than the abovesigned.
Issue check to:
Name
-------------------------------------------------
(PLEASE PRINT)
Address
----------------------------------------------
(INCLUDE ZIP CODE)
- ------------------------------------------------------
(TAXPAYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
To be completed ONLY if the check for the Special Cash Payment is to be mailed
to someone other than the abovesigned or to the abovesigned at an address other
than that shown below the abovesigned's signature(s).
Mail check to:
Name
-------------------------------------------------
(PLEASE PRINT)
Address
----------------------------------------------
- ------------------------------------------------------
(INCLUDE ZIP CODE)
3
<PAGE>
MISSISSIPPI POWER COMPANY
CONSENT FEES
Pursuant to the terms of the Proxy Statement dated November 3, 1997, if the
Proposed Amendment is approved and adopted, for shares described below which are
voted in favor of the Proposed Amendment, the Company will pay a consent fee of
an amount equal to 0.50% of the par value per share of its 7.00% Series, its
6.32% Series and its 6.65% Series (each share of the 6.32% Series and the 6.65%
Series represents one-fourth of a share of Preferred Stock), provided, however,
with respect to transactions for beneficial owners whose ownership equals or
exceeds 2,500 shares, the Company will pay a consent fee of an amount equal to
0.25% of the par value per share. No such fee shall be payable to a Soliciting
Dealer (as defined in the Proxy Statement) with respect to the vote of shares by
a holder unless the proxy accompanying the vote designates such Soliciting
Dealer. However, Soliciting Dealers will not be entitled to such fee for shares
beneficially owned by such broker or dealer.
The abovesigned represents that the Soliciting Dealer who solicited and
obtained this vote in favor of the Proposed Amendment is:
Name of Firm:
-----------------------------------------------------------------
(Please Print)
Name of Individual Broker or Financial Consultant:
-----------------------------
Telephone Number of Broker or Financial Consultant:
----------------------------
Identification Number (if known):
-----------------------------------------------
Address:
------------------------------------------------------------------------
The acceptance of compensation by such broker or dealer will constitute a
representation by it that (a) it has complied with the applicable requirements
of the Securities Exchange Act of 1934, as amended, and the applicable rules and
regulations thereunder, in connection with such solicitation; (b) it is entitled
to such compensation for such solicitation under the terms and conditions of the
Proxy Statement; (c) in soliciting votes of shares it has used no solicitation
materials other than those furnished by The Southern Company or Mississippi
Power Company; and (d) if it is a foreign broker or dealer not eligible for
membership in the National Association of Securities Dealers, Inc. (the "NASD"),
it has agreed to conform to the NASD's Rules of Fair Practice in making
solicitations.
The payment of compensation to any broker or dealer is dependent on such
broker or dealer returning a Notice of Solicited Proxies to the Information
Agent.
4
Exhibit F-1
TROUTMAN SANDERS LLP
600 Peachtree Street, N.E., Suite 5200
Atlanta, Georgia 30308-2216
(404) 885-3000
November 26, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: The Southern Company et al.
File No. 70-9137
Ladies and Gentlemen:
We are familiar with the statement on Form U-1, as amended, filed by
The Southern Company ("Southern") and Alabama Power Company, Georgia Power
Company, Gulf Power Company and Mississippi Power Company (collectively, the
"Subsidiaries") in the above-referenced proceeding. The transactions proposed
therein include the authority (i) for each of the Subsidiaries to solicit
proxies from the holders of their respective shares of preferred stock and
common stock; (ii) for each of the Subsidiaries to amend their respective
charters; (iii) for Southern to make an offer to the holders of shares of
certain series of the Subsidiaries' outstanding preferred stock to acquire such
shares for cash; and (iv) for Southern to sell to the respective Subsidiaries
any preferred stock so acquired at Southern's purchase price plus expenses. We
are representing Southern in connection with this matter and are furnishing this
opinion with respect to the proposed transactions by Southern.
We are of the opinion that Southern is a validly organized and duly
existing corporation under the laws of the State of its incorporation and that,
upon the issuance of your order or orders herein, and in the event that the
proposed transactions are consummated in accordance with the terms of such
statement on Form U-1 and your order or orders:
(a) all state laws applicable to the proposed transactions by Southern
will have been complied with;
(b) Southern will lawfully acquire the shares of the Subsidiaries'
preferred stock, if any, purchased by it pursuant to its offer and will lawfully
sell such shares to the respective Subsidiaries; and
(c) the consummation of such proposed transactions by Southern will not
violate the legal rights of the holders of any securities issued by Southern or
any associate company thereof.
We hereby consent to the use of this opinion as an exhibit to the
above-mentioned statement on Form U-1.
Very truly yours,
/s/Troutman Sanders LLP
TROUTMAN SANDERS LLP
Exhibit F-2
Balch & Bingham LLP
November 24, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Alabama Power Company (the "Company") et al.
File No. 70-9137
Ladies and Gentlemen:
We are familiar with the statement on Form U-1, as amended, filed by
The Southern Company ("Southern") and Alabama Power Company, Georgia Power
Company, Gulf Power Company and Mississippi Power Company (collectively, the
"Subsidiaries") in the above-referenced proceeding. The transactions proposed
therein include the authority (i) for each of the Subsidiaries to solicit
proxies from the holders of their respective shares of preferred stock and
common stock; (ii) for each of the Subsidiaries to amend their respective
charters; (iii) for Southern to make an offer to the holders of shares of
certain series of the Subsidiaries' outstanding preferred stock to acquire such
shares for cash; and (iv) for Southern to sell to the respective Subsidiaries
any preferred stock so acquired at Southern's purchase price plus expenses. We
are representing the Company in connection with this matter and are furnishing
this opinion with respect to the proposed transactions by the Company.
We are of the opinion that the Company is a validly organized and duly
existing corporation under the laws of the State of its incorporation and that,
upon the issuance of your order or orders herein, and in the event that the
proposed transactions are consummated in accordance with the terms of such
statement on Form U-1 and your order or orders:
(a) all state laws applicable to the proposed transactions by the
Company will have been complied with;
(b) the Company will lawfully acquire from Southern the shares of
its preferred stock, if any, purchased by Southern; and
(c) the consummation of such proposed transactions by the Company will
not violate the legal rights of the holders of any securities issued by the
Company or any associate company thereof.
We hereby consent to the use of this opinion as an exhibit to the
above-mentioned statement on Form U-1.
Very truly yours,
/s/ Balch & Bingham LLP
Exhibit F-3
TROUTMAN SANDERS LLP
600 Peachtree Street, N.E., Suite 5200
Atlanta, Georgia 30308-2216
(404) 885-3000
November 26, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Georgia Power Company (the "Company") et al.
File No. 70-9137
Ladies and Gentlemen:
We are familiar with the statement on Form U-1, as amended, filed by
The Southern Company ("Southern") and Alabama Power Company, the Company, Gulf
Power Company and Mississippi Power Company (collectively, the "Subsidiaries")
in the above-referenced proceeding. The transactions proposed therein include
the authority (i) for each of the Subsidiaries to solicit proxies from the
holders of their respective shares of preferred stock and common stock; (ii) for
each of the Subsidiaries to amend their respective charters; (iii) for Southern
to make an offer to the holders of shares of certain series of the Subsidiaries'
outstanding preferred stock to acquire such shares for cash; and (iv) for
Southern to sell to the respective Subsidiaries any preferred stock so acquired
at Southern's purchase price plus expenses. We are representing the Company in
connection with this matter and are furnishing this opinion with respect to the
proposed transactions by the Company.
We are of the opinion that the Company is a validly organized and duly
existing corporation under the laws of the State of its incorporation and that,
upon the issuance of your order or orders herein, and in the event that the
proposed transactions are consummated in accordance with the terms of such
statement on Form U-1 and your order or orders:
(a) all state laws applicable to the proposed transactions by the
Company will have been complied with;
(b) the Company will lawfully acquire from Southern the shares of its
preferred stock, if any, purchased by Southern; and
(c) the consummation of such proposed transactions by the Company will
not violate the legal rights of the holders of any securities issued by the
Company or any associate company thereof.
We hereby consent to the use of this opinion as an exhibit to the
above-mentioned statement on Form U-1.
Very truly yours,
/s/Troutman Sanders LLP
TROUTMAN SANDERS LLP
Exhibit F-4
Beggs & Lane
November 24, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Gulf Power Company (the "Company") et al.
File No. 70-9137
Ladies and Gentlemen:
We are familiar with the statement on Form U-1, as amended, filed by
The Southern Company ("Southern") and Alabama Power Company, Georgia Power
Company, Gulf Power Company and Mississippi Power Company (collectively, the
"Subsidiaries") in the above-referenced proceeding. The transactions proposed
therein include the authority (i) for each of the Subsidiaries to solicit
proxies from the holders of their respective shares of preferred stock and
common stock; (ii) for each of the Subsidiaries to amend their respective
charters; (iii) for Southern to make an offer to the holders of shares of
certain series of the Subsidiaries' outstanding preferred stock to acquire such
shares for cash; and (iv) for Southern to sell to the respective Subsidiaries
any preferred stock so acquired at Southern's purchase price plus expenses. We
are representing the Company in connection with this matter and are furnishing
this opinion with respect to the proposed transactions by the Company.
We are of the opinion that the Company is a validly organized and duly
existing corporation under the laws of the State of its incorporation and that,
upon the issuance of your order or orders herein, and in the event that the
proposed transactions are consummated in accordance with the terms of such
statement on Form U-1 and your order or orders:
(a) all state laws applicable to the proposed transactions by the
Company will have been complied with;
(b) the Company will lawfully acquire from Southern the shares of
its preferred stock, if any, purchased by Southern; and
(c) the consummation of such proposed transactions by the Company will
not violate the legal rights of the holders of any securities issued by the
Company or any associate company thereof.
We hereby consent to the use of this opinion as an exhibit to the
above-mentioned statement on Form U-1.
Very truly yours,
/s/ Beggs & Lane
Exhibit F-5
EATON AND COTTRELL, P. A.
November 24, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Mississippi Power Company (the "Company") et al.
File No. 70-9137
Ladies and Gentlemen:
We are familiar with the statement on Form U-1, as amended, filed by
The Southern Company ("Southern") and Alabama Power Company, Georgia Power
Company, Gulf Power Company and Mississippi Power Company (collectively, the
"Subsidiaries") in the above-referenced proceeding. The transactions proposed
therein include the authority (i) for each of the Subsidiaries to solicit
proxies from the holders of their respective shares of preferred stock and
common stock; (ii) for each of the Subsidiaries to amend their respective
charters; (iii) for Southern to make an offer to the holders of shares of
certain series of the Subsidiaries' outstanding preferred stock to acquire such
shares for cash; and (iv) for Southern to sell to the respective Subsidiaries
any preferred stock so acquired at Southern's purchase price plus expenses. We
are representing Mississippi Power Company (the "Company") in connection with
this matter and are furnishing this opinion with respect to the proposed
transactions by the Company.
We are of the opinion that the Company is a validly organized and duly
existing corporation under the laws of the State of its incorporation and that,
upon the issuance of your order or orders herein, and in the event that the
proposed transactions are consummated in accordance with the terms of such
statement on Form U-1 and your order or orders:
(a) all state laws applicable to the proposed transactions by the
Company will have been complied with;
(b) the Company will lawfully acquire from Southern the shares of
its preferred stock, if any, purchased by Southern; and
(c) the consummation of such proposed transactions by the Company will
not violate the legal rights of the holders of any securities issued by the
Company or any associate company thereof.
We hereby consent to the use of this opinion as an exhibit to the
above-mentioned statement on Form U-1.
Very truly yours,
/s/ Eaton & Cottrell, P. A.
