SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to_______
Commission File Number 1-3526
A. Full title of the plan and the address of the plan,
if different from that of the issuer named below:
SOUTHERN ENERGY RESOURCES, INC.
BARGAINING UNIT SAVINGS PLAN
(Plan for Covered Employees)
c/o SOUTHERN ENERGY RESOURCES, INC.
900 Ashwood Parkway
Atlanta, Georgia 30338
B. Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office:
THE SOUTHERN COMPANY
270 Peachtree Street, NW
Atlanta, Georgia 30303
<PAGE>
<TABLE>
SOUTHERN ENERGY RESOURCES, INC.
BARGAINING UNIT SAVINGS PLAN
FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1998 and 1997
<CAPTION>
TABLE OF CONTENTS
Page No.
<S> <C>
EXHIBITS 3
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 4
FINANCIAL STATEMENTS
Statements of Net Assets Available for Benefits,
With Fund Information-December 31, 1998 and 1997 5
Statement of Changes in Net Assets Available for Benefits,
With Fund Information, for the Year Ended December 31, 1998 6
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES 7
SCHEDULES SUPPORTING FINANCIAL STATEMENTS
Schedule I: Item 27a--Schedule of Assets Held for Investment
Purposes-December 31, 1998 12
Schedule II: Item 27d--Schedule of Reportable Transactions for
the Year Ended December 31, 1998 13
Signature 14
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS 15
</TABLE>
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EXHIBITS
A-1 - Southern Energy Resources, Inc. Bargaining Unit Savings Plan effective
January 1, 1998. (Designated in Registration Statement No. 333-44127
as Exhibit 4 (c).)
A-2 - First Amendment to the Southern Energy Resources, Inc. Bargaining Unit
Savings Plan.
B - Consent of Independent Public Accountants. (Contained herein at Page
15.)
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<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of the
Southern Energy Resources, Inc.
Bargaining Unit Savings Plan:
We have audited the accompanying statements of net assets available for
benefits, with fund information, of the SOUTHERN ENERGY RESOURCES, INC.
BARGAINING UNIT SAVINGS PLAN as of December 31, 1998 and 1997 and the
related statement of changes in net assets available for benefits, with
fund information, for the year ended December 31, 1998. These financial
statements and the schedules referred to below are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the
Southern Energy Resources, Inc. Bargaining Unit Savings Plan as of
December 31, 1998 and 1997 and the changes in its net assets available for
benefits for the year ended December 31, 1998 in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes and reportable transactions are presented for
purposes of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. The fund
information in the statements of net assets available for benefits and the
statement of changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the net assets
available for benefits and changes in net assets available for benefits of
each fund. The supplemental schedules and fund information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/Arthur Andersen LLP
Atlanta, Georgia
June 25, 1999
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<TABLE>
SOUTHERN ENERGY RESOURCES,INC.
BARGAINING UNIT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1998 and 1997
<CAPTION>
Southern Company Merrill Merrill Merrill Merrill Merrill
Common Stock Lynch Lynch Lynch Lynch Lynch
---------------------------- Retirement Equity Special Global Capital
Nonparticipant- Participant- Preservation Index Value Allocation Fund
Directed Directed Trust Trust Fund Fund Class A
--------------- ----------- ------------ ------- ------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENTS, at fair
value:
Common stock $119,202 $68,674 $ 0 $ 0 $ 0 $ 0 $ 0
Mutual funds 0 0 0 0 44,177 17,365 29,836
INVESTMENTS, at
contract value:
Common/collective trust 0 0 14,313 41,726 0 0 0
DUE TO BROKER FOR
SECURITIES PURCHASED 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- -------
NET ASSETS AVAILABLE
FOR BENEFITS $119,202 $68,674 $14,313 $41,726 $44,177 $17,365 $29,836
======== ======= ======= ======= ======= ======= =======
The accompanying notes are an integral part of these statements
</TABLE>
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<TABLE>
SOUTHERN ENERGY RESOURCES,INC.
BARGAINING UNIT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1998 and 1997
<CAPTION>
PIMCO
Total Hotchkis &
Return Wiley
Fund International 1998 1997
Class A Fund Other Total Total
--------------- --------------- ----- ------ -------
<S> <C> <C> <C> <C> <C>
INVESTMENTS at fair
value:
Common stock $ 0 $ 0 $ 0 $187,876 $0
Mutual funds 34,492 20,891 0 146,761 0
INVESTMENTS, at
contract value:
Common/ collective trust 0 0 0 56,039 0
DUE TO BROKER FOR
SECURITIES PURCHASED 0 0 (27,213) (27,213) 0
------- ------- ------- -------- ---
NET ASSETS AVAILABLE
FOR BENEFITS $34,492 $20,891 $(27,213) $363,463 $0
======= ======= ======== ======== ===
The accompanying notes are an integral part of these statements
</TABLE>
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<TABLE>
SOUTHERN ENERGY RESOURCES,INC.
BARGAINING UNIT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION,
FOR THE YEAR ENDED DECEMBER 31, 1998
<CAPTION>
Southern Company Merrill Merrill Merrill Merrill Merrill Lynch Merrill
Common Stock Lynch Lynch Lynch Lynch Corporate Lynch
--------------------------- Retirement Equity Special Global Investment Capital
Nonparticipant- Participant- Preservation Index Value Allocation Bond Fund Fund
Directed Directed Trust Trust Fund Fund Class A Class A
-------------- ------------ ------------ ----- ------ --------- ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 2,222 $ 1,312 $ 468 $ 0 $ 1,290 $ 1,633 $ 1,183 $ 1,208
Net appreciation
(depreciation) in
fair value of
investments 7,282 4,704 0 4,836 (3,460) (1,788) 474 (571)
-------- -------- -------- ------- ------- ------ -------- --------
Total
investment
income 9,504 6,016 468 4,836 (2,170) (155) 1,657 637
------- ------- -------- ------ ------- ------ -------- --------
CONTRIBUTIONS:
Employer 109,698 0 0 0 0 0 0 0
Employee 0 61,155 15,701 35,170 47,020 17,964 33,133 29,938
------- ------- ------- ------ -------- ------- -------- -------
Total
contributions 109,698 61,155 15,701 35,170 47,020 17,964 33,133 29,938
------- ------- -------- ------ -------- ------- -------- -------
TRANSFERS BETWEEN
FUNDS, net 0 1,503 (1,856) 1,720 (673) (444) (34,790) (739)
------- ------- ------- ------ ------- ------- -------- -------
NET INCREASE IN
ASSETS AVAILABLE
FOR BENEFITS 119,202 68,674 14,313 41,726 44,177 17,365 0 29,836
NET ASSETS,
BEGINNING OF YEAR 0 0 0 0 0 0 0 0
------- ------- ------- ------ ------- ------- -------- -------
NET ASSETS,
END OF YEAR $119,202 $68,674 $14,313 $41,726 $44,177 $17,365 $ 0 $29,836
======== ======= ======= ======= ======= ======= ======== =======
The accompanying notes are an integral part of this statement.
</TABLE>
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<PAGE>
<TABLE>
SOUTHERN ENERGY RESOURCES,INC.
BARGAINING UNIT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION,
FOR THE YEAR ENDED DECEMBER 31, 1998
<CAPTION>
Merrill PIMCO
Lynch Total Hotchkis &
International Return Wiley
Equity Fund Fund International
Class A Class A Fund Other Total
--------------- ----------------- -------------- ---------- ------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 556 $ 0 $ 0 $ 0 $ 9,872
Net appreciation (depreciation) in
fair value of investments (671) 0 0 0 10,806
--------- ------ ------- -------- --------
Total investment
income (115) 0 0 0 20,678
---------- ------- ------- -------- --------
CONTRIBUTIONS:
Employer 0 0 0 (9,237) 100,461
Employee 21,633 0 0 (19,390) 242,324
--------- ------- ------- -------- --------
Total contributions 21,633 0 0 (28,627) 342,785
--------- ------- ------- -------- --------
TRANSFERS BETWEEN FUNDS, net (21,518) 34,492 20,891 1,414 0
--------- ------- ------- -------- --------
NET INCREASE IN ASSETS
AVAILABLE FOR BENEFITS 0 34,492 20,891 (27,213) 363,463
NET ASSETS, BEGINNING OF YEAR 0 0 0 0 0
--------- ------- ------- -------- --------
NET ASSETS, END OF YEAR $ 0 $34,492 $20,891 $(27,213) $363,463
========= ======= ======= ======== ========
The accompanying notes are an integral part of this statement.
</TABLE>
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<PAGE>
SOUTHERN ENERGY RESOURCES, INC.
BARGAINING UNIT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1998 and 1997
1. PLAN DESCRIPTION
The following description of the Southern Energy Resources, Inc.
Bargaining Unit Savings Plan (the "Plan") provides only general
information. Participants should refer to the plan document for a more
complete description of the Plan's provisions.
General
The Plan is a defined contribution plan sponsored by Southern Energy
Resources, Inc. (the "Company"), covering substantially all members of
the Steelworkers of America, AFL-CIO-CLC Local #12502 (the "Bargaining
Unit").
The Plan was established January 1, 1998. All employees of the Company who
are members of the Bargaining Unit become eligible to participate
after completion of one year of service, as defined by the Plan. The
Plan is subject to the applicable provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA"), as amended. The
purpose of the Plan is to provide eligible employees a qualified plan
which meets the requirements of Sections 401(a) and 401(k) of the
Internal Revenue Code of 1986 (the "Code").
Plan Administration
The Company appointed Merrill Lynch Trust Company (the "Trustee") as
trustee. The Trustee executes investment transactions for the Plan.
The Company serves as plan administrator.
Contributions
Participants may contribute from 1% to 16% of their compensation annually,
subject to certain limitations as defined by the Plan, and participants
may change these percentages at any time. The Company provides a matching
contribution equal to 75% of each participant's contribution up to a
maximum of 6% of compensation. The Company's matching contribution is
invested solely in Southern Company common stock.
Each participant's account is credited with the participant's
contribution, the Company's matching contribution, and plan earnings
(losses).
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<PAGE>
Benefits
A participant may elect to receive an amount equal to the value of the
participant's vested interest in his/her account upon termination of
service. The form of payment is lump-sum distribution; however, if a
participant retires, he/she may elect to receive annual installments
for a period not to exceed 20 years or life expectancy.
Vesting
Participants are immediately fully vested in their accounts.
Investment Options
Participants are offered the following investment options in which they
may invest their contributions. Participants are allowed to change their
investment elections at any time. A description of each investment
option is provided below:
Southern Company Common Stock
This fund invests in Southern Company common stock.
Merrill Lynch Retirement Preservation Trust
This fund invests in government agency securities, guaranteed
investment contracts, and money market instruments.
Merrill Lynch Equity Index Trust
This fund invests in certain common stocks that seek to track
the performance of the Standard & Poor's 500 composite
stock price index.
Merrill Lynch Special Value Fund
This fund invests in securities of small-market capitalization
companies.
Merrill Lynch Global Allocation Fund
This fund invests primarily in U.S. and foreign equities as well
as debt and money market securities.
Merrill Lynch Corporate Investment Bond
This fund invests primarily in domestic and international stocks,
preferred stocks, and corporate bonds.
Merrill Lynch Capital Fund
This fund invests primarily in equity, debt, and convertible
securities.
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<PAGE>
Merrill Lynch International Equity Fund
This fund invests in a diversified portfolio of equity securities
in international companies.
Effective December 31, 1998, Merrill Lynch Corporate Investment Bond and
International Equity Funds were removed from the Plan's investment options
and replaced by PIMCO Total Return Fund and Hotchkis & Wiley International
Fund. Prior to December 31, 1998, participants could transfer their
balances from Merrill Lynch Corporate Investment Bond and Merrill Lynch
International Equity Funds to any of the remaining investment options. If
participants did not elect to transfer their balance from Merrill Lynch
Corporate Investment Bond and Merrill Lynch International Equity Funds to
any of the remaining investment options, those balances were automatically
directed to PIMCO Total Return Fund and Hotchkis & Wiley International
Fund, respectively.
Loans to Participants
A participant may borrow the lesser of $50,000, less the highest
outstanding loan balance in the previous 12 months, or 50% of his/her
vested account balance, with a minimum loan amount of $1,000. Loans
are repayable through payroll deductions over the respective term of
the loan. The interest rate is determined by the plan administrator
based on prevailing market conditions and is fixed over the life of
the note. There were no outstanding loans as of December 31, 1998.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accompanying financial statements have been prepared using the
accrual method of accounting.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan's management to use
estimates and assumptions that affect the net assets available for
benefits and the changes therein. Actual results could differ from
these estimates.
Administrative Expenses
Substantially all administrative expenses are paid by the Company.
Investment Valuation
Investments other than investment contracts are stated at market value.
Securities traded on a national securities exchange are valued at the
last reported sales price on the last business day of the year;
investments traded in the over-the-counter market and listed
securities for which no sale was reported on the last day of the plan
year are valued at the last reported bid price. The Plan's investment
in the Merrill Lynch Retirement Preservation Trust Fund is fully
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<PAGE>
benefit-responsive and is stated at contract value in accordance with
Statement of Position 94-4, "Reporting of Investment Contracts Held by
Health and Welfare Benefit Plans and Defined Contribution Pension Plans."
Net Appreciation in Fair Value of Investments
Net realized gains (losses) and unrealized appreciation (depreciation)
are recorded in the accompanying statement of changes in net assets
available for benefits, with fund information, as net appreciation
(depreciation) in fair value of investments.
3. INVESTMENTS
Individual assets that represent 5% or more of the Plan's net assets
available for benefits as of December 31, 1998 are as follows:
Southern Company common stock $187,876
Merrill Lynch Equity Index Trust 41,726
Merrill Lynch Capital Fund 29,836
Merrill Lynch Special Value Fund 44,177
Hotchkis & Wiley International Fund 20,891
PIMCO Total Return Fund 34,492
4. TAX STATUS
The Plan obtained a determination letter dated June 10, 1999 in which the
Internal Revenue Service stated that the Plan, as then designed, was
in compliance with the applicable requirements of the Code. The plan
administrator believes that the Plan is currently designed and is
being operated in compliance with the applicable requirements of the
Code. Therefore, the plan administrator believes that the Plan was
qualified and the related trust was tax-exempt for the year ended
December 31, 1998.
5. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA.
6. SUBSEQUENT EVENTS
Effective January 1, 1999, the Plan was amended to permit employees of
Southern Energy Resources, Inc. who are also members of the Utility
Workers' Union of America (Local #392 and Local #480) and were previously
employed by the Commonwealth Electric Company to contribute from 1% to
16% of their compensation to the Plan.
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<PAGE>
Effective January 1, 1999, the Plan added ten other investment funds,
and four premixed GoalManager Model Portfolios. The ten investment funds
are: The Seligman High Yield Bond Fund, MFS Massachusetts Investors
Trust, Brinson U.S. Equity Fund, Merrill Lynch Growth Fund, Davis Real
Estate Fund, Davis New York Venture Fund, Franklin Small Cap Growth Fund,
GAM Global Fund, GAM International Fund, and Loomis Sayles Small Cap
Value Fund. The GoalManager Model Portfolios will consist of conservative,
moderate, moderate to aggressive, and aggressive investment options.
Participants will be allowed to choose one GoalManager Model Portfolio in
addition to the other investment options in the Plan.
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<PAGE>
<TABLE>
SCHEDULE I
SOUTHERN ENERGY RESOURCES, INC.
BARGAINING UNIT SAVINGS PLAN
ITEM 27a--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1998
<CAPTION>
Identity of Issuer, Borrower, Current
Lessor, or Similar Party Description of Investment Cost Value
----------------------------- ------------------------------------------------------- --------- -----------
<S> <C> <C> <C>
* SOUTHERN COMPANY 6,464 shares of Southern Company common stock $175,909 $187,876
* MERRILL LYNCH 14,313 units of Merrill Lynch Retirement Preservation Trust 14,313 14,313
497 units of Merrill Lynch Equity Index Trust 36,891 41,726
2,524 units of Merrill Lynch Special Value Fund 47,508 44,177
1,377 units of Merrill Lynch Global Allocation Fund (Class A) 19,104 17,365
867 units of Merrill Lynch Capital Fund (Class A) 30,348 29,836
* HOTCHKIS & WILEY 897 units of Hotchkis & Wiley International Fund 20,891 20,891
* PIMCO 3,272 units of PIMCO Total Return Fund (Class A) 34,492 34,492
-------- --------
$379,456 $390,676
======== ========
*Represents a party in interest.
The accompanying notes are an integral part of this schedule.
</TABLE>
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<TABLE>
SCHEDULE II
SOUTHERN ENERGY RESOURCES, INC.
BARGAINING UNIT SAVINGS PLAN
ITEM 27d--SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<CAPTION>
Purchases Sales
------------------------------------- -----------------------
Net
Number of Purchase Number of Selling Cost of Gain
Identity of Party Involved Description of Investment Transactions Price Transactions Price Assets (Loss)
- ------------------------------- ----------------------------- ------------ ---------- ------------ ------- ------- ------
<S> <C> <C> C> <C> <C> <C>
* SOUTHERN COMPANY Common stock 55 $182,376 2 $ 6,486 $ 6,466 $ 20
* MERILL LYNCH Merrill Lynch Retirement Preservation
Trust 37 16,169 2 2,856 2,856 0
Merrill Lynch Equity Index Trust 26 37,373 1 483 481 2
Merrill Lynch Capital Fund (Class A) 26 31,146 2 739 798 (59)
Merrill Lynch Special Value 27 54,490 3 6,853 6,982 (129)
Merrill Lynch Corporate Bond Fund 37 46,673 3 47,149 46,675 474
Merrill Lynch International Equity Fund 27 28,368 4 27,697 28,368 (671)
Merrill Lynch Global Allocation Fund 26 19,597 1 445 493 (48)
(Class A)
* HOTCHKIS & WILEY Hotchkis & Wiley International Fund 1 20,891 0 0 0 0
* PIMCO PIMCO Total Return Fund (Class A) 1 34,492 0 0 0 0
*Represents a party in interest.
The accompanying notes are an integral part of this schedule.
</TABLE>
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the trustee (or other persons who administer the employee benefits plan)
have duly caused this annual report to be signed by the undersigned thereunto
duly authorized.
SOUTHERN ENERGY RESOURCES, INC.
BARGAINING UNIT SAVINGS PLAN
/s/Vance Booker
Vance Booker
Vice President, Administration
of Southern Energy Resources,Inc.
14
June 29, 1999
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated June 25, 1999, included in this annual report
of Southern Energy Resources, Inc. Bargaining Unit Savings Plan on
Form 11-K for the year ended December 31, 1998, into the Plan's previously
filed Registration Statement No. 333-44127.
/s/ ARTHUR ANDERSEN LLP
Atlanta, Georgia
June 25, 1999
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FIRST AMENDMENT TO THE
SOUTHERN ENERGY, INC.
BARGAINING UNIT SAVINGS PLAN
THIS FIRST AMENDMENT TO THE SOUTHERN ENERGY, INC. BARGAINING UNIT
SAVINGS PLAN (the "Plan"), is made and entered into by the Board of Directors of
Southern Energy Resources, Inc. (formerly, Southern Energy, Inc.)(the "Board").
W I T N E S S E T H
WHEREAS, Southern Energy, Inc. ("Company") sponsors the Plan which was
effective January 1, 1998; and
WHEREAS, Section 15.1 of the Plan permits the Board to amend the Plan
from time to time; and
WHEREAS, the Board desires to amend the Plan to change the name of the
Plan and the Plan Sponsor to reflect the current corporate name of the Company;
and
WHEREAS, Southern Energy New England, L.L.C. has acquired certain
assets of the Commonwealth Electric Company; and
WHEREAS, immediately following the acquisition of Commonwealth Electric
Company, certain collective bargaining unit members of Local No. 392 of the
Utility Workers' Union of America and Local No. 480 of the Utility Workers'
Union of America (collectively, "Utility Workers' Union of America") who were
previously employed by the Commonwealth Electric Company will be employed by
Southern Energy Resources Inc. ("Acquired New England Employees"); and
WHEREAS, the Board desires to amend the Plan to allow the Acquired New England
Employees to participate in the Plan effective January 1, 1999, and to provide
them with benefits substantially equivalent to those provided under the
respective collective bargaining agreements;
NOW, THEREFORE, the Plan is hereby amended as follows:
1.
Effective as of January 2, 1998, the Plan is hereby amended by
substituting the name "Southern Energy Resources, Inc." for "Southern Energy,
Inc." everywhere such name appears, whether in reference to the name of the Plan
or the name of the Company.
<PAGE>
2.
Effective January 1, 1999, the attached Schedule B is hereby added to
the Plan to reflect provisions applicable to the following bargaining units:
(i) Local No. 392 of the Utility Workers' Union of America and (ii) Local No.
480 of the Utility Workers' Union of America.
3.
All parts of the Plan not inconsistent herewith are hereby ratified and
affirmed.
IN WITNESS WHEREOF, the Board has caused this amendment to be executed
this 31 day of December 31, 1998.
SOUTHERN ENERGY RESOURCES, INC.
/s/Vance Booker
Vance Booker
By:Vice President, Administration
Title:Vice President, Administration
of Southern Energy Resources,Inc.
(CORPORATE SEAL)
ATTEST:
By: _________________________________________________________
<PAGE>
SCHEDULE B
NEW ENGLAND EMPLOYEES
Notwithstanding any provisions of the Plan to the contrary, the
provisions of this Schedule B shall apply to members of Local No. 392 or Local
No. 480 of the Utility Workers' Union of America who (i) were employed by the
Commonwealth Electric Company immediately preceding, and hired by the Company
immediately following, the acquisition of certain of the assets of Commonwealth
Electric Company or (ii) are hired by the Company after the acquisition at the
locations that were formerly owned by Commonwealth Electric Company
(collectively, the "New England Employees").
B.1 Hours of Service: For all purposes under the Plan, Hours of Service shall
include all hours of service credited under the Employee Savings Plan of
Commonwealth Energy System and Subsidiary Companies (the "CES Plan") to any New
England Employee as of December 31, 1998.
B.2 Years of Service: For all purposes under the Plan, Years of Service shall
include all years of service credited under the CES Plan to any New England
Employee as of December 31, 1998.
B.3 Eligible Employees:
o Each New England Employee who was a participant in the CES Plan
on December 30, 1998, shall be eligible to participate n the
Plan as of January 1, 1999.
o Each other New England Employee, except one who is classified (in
the sole discretion of the Company, pursuant to its normal
practices) as a "Temporary Employee," shall be eligible to
participate in the Plan as soon as administratively feasible
following the date he completes his initial Hour of Service. Any
New England Employee who is classified as a "Temporary Employee"
shall be eligible to become a Participant in the Plan as soon as
administratively feasible following his completion of one Year of
Service.
B.4. Section 4.1: Rate of Elective Employer Contributions
* 1% to 16% of Compensation
B.5. Section 4.6: Rate of Voluntary Participant Contributions:
* 1% to 16% of Compensation
<PAGE>
B.6. Section 5.1: Rate of Employer Matching Contributions:
o New England Employees are eligible to receive an Employer
Matching Contribution commencing as soon as administratively
feasible following the date in which they complete one Year of
Service.
o The rate of Employer Matching Contributions shall equal 100% of
each such Participant's Elective Employer Contributions and
Voluntary Participant Contributions during each payroll period,
but such Employer Matching Contributions shall not exceed 4% of
the Participant's Compensation for such payroll period.
<PAGE>
