[Federal Register Volume 62, Number 216 (Friday, November 7, 1997)]
[Notices]
[Pages 60288-60293]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-29418]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26769]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
October 31, 1997.
Notice is hereby given that the following filing(s) has/have been
made with the Commission pursuant to provisions of the Act and rules
promulgated thereunder. All interested persons are referred to the
application(s) and/or declaration(s) for complete statements of the
proposed transaction(s) summarized below. The application(s) and/or
declaration(s) and any amendments thereto is/are available for public
inspection through the Commission's Office or Public Reference.
Interested persons wishing to comment or request a hearing on the
application(s) and/or declaration(s) should submit their views in
writing by November 24, 1997, to the Secretary, Securities and Exchange
Commission, Washington, D.C. 20549, and serve a copy on the relevant
applicant(s) and/or declarant(s) at the address(es) specified below.
Proof of service (by affidavit or, in case of an attorney at law, by
certificate) should be filed with the request. Any request for hearing
shall identify specifically the issues of fact or law that are
disputed. A person who so requests will be notified of any hearing, if
ordered, and will receive a copy of any notice or order issued in the
matter. After said date, the application(s) and/or declaration(s), as
filed or as amended, may be granted and/or permitted to become
effective.
The Southern Company, et al. (70-9137); Notice of Proposal To Amend
Articles of Incorporation and Authorize Registered Holding Company To
Acquire Preferred Stock of Utility Subsidiaries; Order Authorizing
Solicitation of Proxies
The Southern Company (``Southern''), 270 Peachtree Street, N.W.,
Atlanta, Georgia 30303, a registered holding company, and certain of
its public-utility subsidiaries, Alabama Power Company (``Alabama''),
600 North 18th Street, Birmingham, Alabama 35291, Georgia Power Company
(``Georgia''), 333 Piedmont Avenue, N.E., Atlanta, Georgia 30308, Gulf
Power Company (``Gulf''), 500 Bayfront Parkway, Pensacola, Florida
32501, and Mississippi Power Company (``Mississippi''), 2992 West
Beach, Gulfport, Mississippi 39501 (Alabama, Georgia, Gulf and
Mississippi collectively, ``Subsidiaries''), have filed an application-
declaration under sections 6(a), 7, 9(a), 10, 12(c), 12(d) and 12(e) of
the Act, and rules 43, 44, 51, 54, 62 and 65 thereunder.
Alabama
Alabama has outstanding 5,608,955 shares of common stock, par value
$40 per share (``Alabama Common Stock''), all of which are held by
Southern. Alabama's outstanding preferred stock consists of: (1) 5.52
million shares of Class A cumulative preferred stock, stated capital
$25 per share, issued in three series,\1\ which are traded on the New
York Stock Exchange (``Alabama NYSE Preferred Stock''); (2) 704,000
shares of cumulative preferred stock, par value $100 per share, issued
in six series,\2\ which are traded over-the-counter (``Alabama $100
Preferred Stock''); (3) 200 shares of Class A cumulative preferred
stock, stated capital $100,000 per share, which are traded over-the-
counter (``Alabama 1993 Auction Preferred Stock''); and (4) 500,000
shares of Class A cumulative preferred stock, stated capital $100,
which are traded over-the-counter (``Alabama 1988 Auction Preferred
Stock'' and, together with the Alabama NYSE Preferred Stock, Alabama
$100 Preferred Stock and Alabama 1993 Auction Preferred Stock,
``Alabama Preferred Stock''). Alabama has outstanding no other class of
equity securities.
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\1\ The three series of Alabama NYSE Preferred Stock consist of
a 6.80% series, of which 1.52 million shares are outstanding
(``6.80% Series''); a 6.40% series, of which two million shares are
outstanding (``6.40% Series''); and an adjustable rate series, of
which two million shares are outstanding (``AR Series'').
\2\ The six series of Alabama $100 Preferred Stock consist of a
4.20% series, of which 364,000 shares are outstanding (``4.20%
Series''); a 4.52% series, of which 50,000 shares are outstanding
(``4.52% Series''); a 4.60% series, of which 100,000 shares are
outstanding (``4.60% Series''); a 4.64% series, of which 60,000
shares are outstanding (``4.64% Series''); a 4.72% series, of which
50,000 shares are outstanding (``4.72% Series''); and a 4.92%
series, of which 80,000 shares are outstanding (``4.92% Series'').
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Paragraph A.2.f.(2) of Article IX of Alabama's Charter (``Alabama
Charter'') currently provides that, so long as any shares of Alabama's
Preferred Stock are outstanding, without the affirmative vote of the
holders of at least a majority
[[Page 60289]]
of the total voting power of the outstanding Alabama Preferred Stock,
Alabama shall not issue or assume any securities representing unsecured
debt (other than for the purpose of refunding or renewing outstanding
unsecured securities issued by Alabama resulting in equal or longer
maturities or redeeming or otherwise retiring all outstanding shares of
the Alabama Preferred Stock or of any senior or equally ranking stock)
if, immediately after the issue or assumption, the total outstanding
principal amount of all securities representing unsecured debt of
Alabama would exceed 20% of the aggregate of all existing secured debt
of Alabama and the capital stock, premiums thereon and surplus of
Alabama as stated on Alabama's books (``Alabama Debt Limitation
Provision'').
Paragraph A.2f.(1) of Article IX of the Alabama Charter currently
provides that, so long as any shares of Alabama Preferred Stock are
outstanding, without the affirmative vote of the holders of at least a
majority of the total voting power of the outstanding Alabama Preferred
Stock, Alabama shall not dispose of all or substantially all of its
property or merge or consolidate, unless the action has been approved
by the Commission (``Alabama Merger Provision'').
Paragraph A.2.b. (except the first paragraph therein) of Article IX
of the Alabama Charter currently provides that, so long as any shares
of Alabama Preferred Stock are outstanding (except as may be approved
or permitted by the affirmative vote of the holders of at least two-
thirds of the total voting power of the outstanding Alabama Preferred
Stock), Alabama's payment of dividends on the Alabama Common Stock is
limited to 50% of net income available for the stock during a period of
12 months if, calculated on a corporate basis, the ratio of Alabama
Common Stock equity to total capitalization, including surplus,
adjusted to reflect the payment of the proposed dividend, is below 20%
and to 75% of net income if the ratio is 20% or more but less than 25%
(``Alabama Common Stock Dividend Provision'').
The clause after the words ``January 31, 1942'' in the first
paragraph of Paragraph A.2.b. of Article IX of the Alabama Charter
currently provides that, so long as any shares of Alabama Preferred
Stock are outstanding, Alabama shall not pay dividends on Alabama
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 annual dividends on the outstanding
Alabama Preferred Stock (``Alabama Retained Earnings Dividend
Provision'' and, together with the Alabama Debt Limitation Provision,
the Alabama Merger Provision and the Alabama Common Stock Dividend
Provision, (``Alabama Restriction Provisions'').
Georgia
Georgia has outstanding 7.7615 million shares of common stock, no
par value (``Georgia Common Stock''), all of which are held by
Southern. Georgia's outstanding preferred stock consists of: (1) 8.1565
million shares of Class A cumulative preferred stock, stated value $25
per share, issued in three series,\3\ which are traded on the New York
Stock Exchange (``Georgia NYSE Preferred Stock''); and (2) 1,177,864
shares of cumulative preferred stock, stated value $100 per share,
issued in eleven series,\4\ which are traded over-the-counter
(``Georgia OTC Preferred Stock'' and, together with the Georgia NYSE
Preferred Stock, ``Georgia Preferred Stock''). Georgia has outstanding
no other class of equity securities.
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\3\ The three series of Georgia NYSE Preferred Stock consist of
a $1.925 series, of which 1.1565 million shares are outstanding
(``$1.925 Series''); an adjustable rate (first 1993) series, of
which three million shares are outstanding (``AR1 1993 Series'');
and an adjustable rate (second 1993) series, of which four million
shares are outstanding (``AR2 1993 Series'').
\4\ The eleven series of Georgia OTC Preferred Stock consist of
a $4.60 series, of which 433,774 shares are outstanding (``$4.60
Series''); a $4.60 1962 series, of which 70,000 shares are
outstanding (``$4.60 1962 Series''); a $4.60 1963 series, of which
70,000 shares are outstanding (``$4.60 1963 Series''); a $4.60 1964
series, of which 50,000 shares are outstanding (''$4.60 1964
Series''); a $4.72 series, of which 60,000 shares are outstanding
(``$4.72 Series''); a $4.92 series, of which 100,000 shares are
outstanding (``$4.92 Series''); a $4.96 series, of which 70,000
shares are outstanding (``$4.96 Series''); a $5.00 series, of which
14,090 shares are outstanding (``$5.00 Series''); a $5.64 series, of
which 90,000 shares are outstanding (``$5.64 Series''); a $6.48
series, of which 120,000 shares are outstanding (``$6.48 Series'');
and a $6.60 series, of which 100,000 shares are outstanding (``$6.60
Series'').
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Subparagraph 14.A.3.f.(2) of Paragraph III of Georgia's Charter, as
amended (``Georgia Charter''), currently provides that, so long as any
shares of Georgia Preferred Stock are outstanding, without the
affirmative vote of the holders of at least a majority of the total
voting power of the outstanding Georgia Preferred Stock, Georgia shall
not issue or assume any securities representing unsecured debt (other
than for the purpose of refunding or renewing outstanding unsecured
securities issued by Georgia resulting in equal or longer maturities or
redeeming or otherwise retiring all outstanding shares of the Georgia
Preferred Stock or of any senior or equally ranking stock) if,
immediately after the issue or assumption, (1) the total outstanding
principal amount of all securities representing unsecured debt of
Georgia would exceed 20% of the aggregate of all existing secured debt
of Georgia and the capital stock, premiums thereon and surplus of
Georgia as stated on Georgia's books; or (2) the total outstanding
principal amount of all securities representing unsecured debt of
Georgia of maturities of less than ten years \5\ would exceed 10% of
the aggregate (``Georgia Debt Limitation Provision'').
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\5\ For the purpose of this provision, 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 less
than ten years until the payment shall be required to be made within
three years.
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Subparagraph 14.A.3.f.(1) of Paragraph III of the Georgia Charter
currently provides that, so long as any shares of Georgia Preferred
Stock are outstanding, without the affirmative vote of the holders of
at least a majority of the total voting power of the outstanding
Georgia Preferred Stock, Georgia shall not dispose of all or
substantially all of its property or merge or consolidate, unless the
action has been approved by the Commission under the Act (``Georgia
Merger Provision'').
Subparagraph 14.A.3.b. (except the first paragraph therein) of
Paragraph III of the Georgia Charter currently provides that, so long
as any shares of Georgia Preferred Stock are outstanding, Georgia's
payment of dividends on the Georgia Common Stock is limited to 50% of
net income available for the stock during a period of 12 months if,
calculated on a corporate basis, the ratio of Georgia Common Stock
equity to total capitalization, including surplus, adjusted to reflect
the payment of the proposed dividend, is below 20%, and to 75% of net
income if the ratio is 20% or more but less than 25% (``Georgia Common
Stock Dividend Provision'' and, together with the Georgia Debt
Limitation Provision and the Georgia Merger Provision, ``Georgia
Restriction Provisions'').
Gulf
Gulf has outstanding 992,717 shares of common stock, no par value
(``Gulf Common Stock''), all of which are held by Southern. Gulf's
outstanding preferred stock consists of: (1) 151,026 shares of
preferred stock, par value $100 per share, issued in three series,\6\
which
[[Page 60290]]
are traded over-the-counter (``Gulf $100 Preferred Stock''); and (2)
1.4 million shares of Class A preferred stock, par value $10 per share,
stated capital $25 per share, issued in two series,\7\ which are traded
over-the-counter (``Gulf $10 Preferred Stock'' and, together with the
Gulf $100 Preferred Stock, ``Gulf Preferred Stock''). Gulf has
outstanding no other class of equity securities.
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\6\ The three series of Gulf $100 Preferred Stock consist of a
4.64% series, of which 51,026 shares are outstanding (``4.64%
Series''); a 5.16% series, of which 50,000 shares are outstanding
(``5.16% Series''); and a 5.44% series, of which 50,000 shares are
outstanding (``5.44% Series'').
\7\ The two series of Gulf $10 Preferred Stock consist of a
6.72% series, of which 800,000 shares are outstanding (``6.72%
Series''); and an adjustable rate (1993) series, of which 600,000
shares are outstanding ``(AR 1993 Series'').
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Paragraph (F)(b) under the ``General Provisions'' of the
``Preferred Stock'' section of Gulf's Restated Articles of
Incorporation, as amended (``Gulf Charter''), currently provides that,
so long as any shares of Gulf Preferred Stock are outstanding, without
the affirmative vote of the holders of at least a majority of the total
voting power of the outstanding Gulf Preferred Stock, Gulf shall not
issue or assume any securities representing unsecured debt (other than
for the purpose of refunding or renewing outstanding unsecured
securities issued by Gulf resulting in equal or longer maturities or
redeeming or otherwise retiring all outstanding shares of the Gulf
Preferred Stock or of any senior or equally ranking stock) if,
immediately after the issue or assumption, (1) the total outstanding
principal amount of all securities representing unsecured debt or Gulf
would exceed 20% of the aggregate of all existing secured debt of Gulf
and the capital stock, premiums thereon and surplus of Gulf as stated
on Gulf's books; or (2) the total outstanding principal amount of all
securities representing unsecured debt of Gulf maturities of less than
ten years \8\ would exceed 10% of the aggregate (``Gulf Debt Limitation
Provision'').
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\8\ For the purpose of this provision, 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 less
than ten years until the payment shall be required to be made within
three years.
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Paragraph (F)(a) under ``General Provisions'' of the ``Preferred
Stock'' section of the Gulf Charter currently provides that, so long as
any shares of Gulf Preferred Stock are outstanding, without the
affirmative vote of the holders of at least a majority of the total
voting power of the outstanding Gulf Preferred Stock, Gulf shall not
dispose of all or substantially all of its property or merge or
consolidate, unless the action has been approved by the Commission
under the Act (``Gulf Merger Provision'').
Paragraph (B) (except the first paragraph therein) under the
``General Provisions'' of the ``Preferred Stock'' section of the Gulf
Charter currently provides that, so long as any shares of Gulf
Preferred Stock are outstanding (except as may be approved or permitted
by the affirmative vote of the holders of at least two-thirds of the
total voting power of the outstanding Gulf Preferred Stock), Gulf's
payment of dividends on the Gulf Common Stock are limited to 50% of net
income available for the stock during a period of 12 months if,
calculated on a corporate basis, the ratio of Gulf Common Stock equity
to total capitalization, including surplus, adjusted to reflect the
payment of the proposed dividend, is below 20%, and to 75% of net
income if the ratio is 20% or more but less than 25% (``Gulf Common
Stock Dividend Provision'' and, together with the Gulf Debt Limitation
Provision and the Gulf Merger Provision, ``Gulf Restriction
Provisions'').
Mississippi
Mississippi has outstanding 1.121 million shares of common stock,
without par value (``Mississippi Common Stock''), all of which are held
by Southern. Mississippi's outstanding preferred stock consists of: (1)
936,160 shares of depositary preferred shares, each representing one-
fourth a share of preferred stock, par value $100 per share, issued in
two series,\9\ which are traded on the New York Stock Exchange
(``Mississippi NYSE Preferred Stock''); and (2) 160,099 shares of
cumulative preferred stock, par value $1000 per share, issued in four
series,\10\ which are traded over-the-counter (``Mississippi OTC
Preferred Stock'' and, together with Mississippi NYSE Preferred Stock,
``Mississippi Preferred Stock''). Mississippi has outstanding no other
class of equity securities.
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\9\ The two series of Mississippi NYSE Preferred Stock consist
of a 6.32% series, of which 600,000 shares are outstanding (``6.32%
Series''); and a 6.65% series, of which 336,160 shares are
outstanding (``6.65% Series'').
\10\ The four series of Mississippi OTC Preferred Stock consist
of a 4.40% series, of which 40,000 shares are outstanding (``4.40%
Series''); a 4.60% series, of which 20,099 shares are outstanding
(``4.60% Series'')' a 4.72% series, of which 50,000 shares are
outstanding (``4.72% Series''); and a 7.00% series, of which 50,000
shares are outstanding (``7.00% Series'').
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Subparagraph (F)(b) of Paragraph FOURTH under ``General
Provisions'' of the ``Preferred Stock'' section of Mississippi's
Articles of Incorporation, as amended (``Mississippi Charter''),
currently provides that, so long as any shares of Mississippi Preferred
Stock are outstanding, without the affirmative vote of the holders of
at least a majority of the outstanding Mississippi Preferred Stock,
Mississippi shall not issue or assume any securities representing
unsecured debt (other than for the purpose of refunding or renewing
outstanding unsecured securities issued by Mississippi resulting in
equal or longer maturities or redeeming or otherwise retiring all
outstanding shares of the Mississippi Preferred Stock or any senior or
equally ranking stock) if, immediately after the issue or assumption,
(1) the total outstanding principal amount of all securities
representing unsecured debt of Mississippi would exceed 20% of the
aggregate of all existing secured debt of Mississippi and the capital
stock, premiums thereon and surplus of Mississippi as stated on
Mississippi's books; or (2) the total outstanding principal amount of
all securities representing unsecured debt of Mississippi of maturities
of less than ten years \11\ would exceed 10% of the aggregate
(``Mississippi Debt Limitation Provision'').
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\11\ For the purpose of this provision, 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 less
than ten years until the payment shall be required to be made within
three years.
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Subparagraph (F)(a) of Paragraph FOURTH under the ``General
Provisions'' of the ``Preferred Stock'' section of the Mississippi
Charter currently provides that, so long as any shares of Mississippi
Preferred Stock are outstanding, without the affirmative vote of the
holders of at least a majority of the outstanding Mississippi Preferred
Stock, Mississippi shall not dispose of all or substantially all of its
property or merge or consolidate, unless the action has been approved
by the Commission under the Act (``Mississippi Merger Provision'').
Subparagraph (B) (except the first paragraph therein) of Paragraph
FOURTH under ``General Provisions'' of the ``Preferred Stock'' section
of the Mississippi Charter currently provides that, so long as any
shares of Mississippi Preferred Stock are outstanding, Mississippi's
payment of dividends on the Mississippi Common Stock are limited to 50%
of net income available for the stock during a period of 12 months if,
calculated on a corporate
[[Page 60291]]
basis, the ratio of Mississippi Common Stock equity to total
capitalization, including surplus, adjusted to reflect the payment of
the proposed dividend, is below 20%, and to 75% of net income if the
ratio is 20% or more but less than 25% (``Mississippi Common Stock
Dividend Provision'' and together with the Mississippi Debt Limitation
Provision and the Mississippi Merger Provision, ``Mississippi
Restriction Provisions'' and, Mississippi Restriction Provisions
together with Georgia Restriction Provisions, Gulf Restriction
Provisions and Alabama Restriction Provisions ``Subsidiary Restriction
Provisions).
Each Subsidiary proposes to solicit proxies (``Proxy
Solicitation'') from the holders of its outstanding shares of Preferred
Stock of each series (except in the case of Georgia for the $1.925
Series) and Common Stock for use at a special meeting of its
stockholders (``Special Meeting'') to consider a proposed amendment to
its Charter that would in each case eliminate the Subsidiary
Restriction Provisions (``Proposed Amendment''). Adoption of the
Proposed Amendment requires the affirmative vote at a Subsidiary's
Special Meeting (in person by ballot or by proxy) of the holders of at
least (1) two-thirds of the voting power of the outstanding shares of
the Preferred Stock of all Series, voting together as one class, and
(2) in the case of Georgia, two-thirds of the Common Stock, and in the
case of Alabama, Gulf and Mississippi, a majority of the Common Stock.
Southern will vote its shares of Common Stock in favor of the Proposed
Amendment. The Subsidiaries have engaged Corporate Investor
Communications, Inc. to act as information agent in connection with the
Proxy Solicitations for a fee plus reimbursement of reasonable out-of-
pocket expenses.
If a Proposed Amendment is adopted, Alabama, Georgia, Gulf and
Mississippi, as the case may be, propose to make a special cash payment
equal to 1.00% of the par value, stated value or stated capital, as
applicable, per share of the Preferred Stock (except that the special
cash payment shall equal 0.25% of the stated capital per share for
shares of the Alabama 1988 Auction Stock and the Alabama 1993 Preferred
Stock) (each, a ``Special Cash Payment'') for each share of Preferred
Stock (each, a ``Share'' except for Shares of Georgia's $1.925 Series)
properly voted at the Social Meeting in favor of the Proposed
Amendment, provided that the Shares are not tendered under the
concurrent cash tender offer described below. Alabama, Georgia, Gulf
and Mississippi will disburse Special Cash Payments out of their
general funds, promptly after adoption of a Proposed Amendment.
Currently with the commencement of the Proxy Solicitations, subject
to the terms and conditions stated in the relevant offering
documents,\12\ Southern proposes to make offers (each an ``Offer'') to
the holders of Alabama's Preferred Stock of the 4.20% Series (``Alabama
Tendered Series''), Georgia's Preferred Stock 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 (collectively, ``Georgia Tendered Series''), Gulf's
Preferred Stock of each series (collectively, ``Gulf Tendered Series'')
and Mississippi's Preferred Stock of the 4.40% Series, the 4.60% Series
and the 4.72% Series (collectively, ``Mississippi Tendered Series''),
under which Southern will offer to acquire from the holders of the
Alabama, Georgia, Gulf and Mississippi Preferred Stock of each Tendered
Series any and all Shares of that series at the cash purchase prices to
be specified in the Offer (subject to potential increase or decrease
under the terms of the Offer) (``Purchase Price''). Southern
anticipates that the Offer for each Tendered Series of Preferred Stock
will be scheduled to expire at 5:00 P.M. (New York City time) on the
date of the Special Meeting, (``Expiration Date'').
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\12\ With respect to Shares subject to both the Proxy
Solicitation and Southern's offer to the holders of certain
Preferred Stock, the transactions will be effected by means of the
same core document--a combined proxy statement and issuer tender
offer statement under the Securities Exchange Act of 1934
(``Exchange Act'') and applicable rules and regulations thereunder.
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In addition, Georgia has entered into an agreement to purchase
shares of its AR1 1993 Series and AR2 1993 Series from the holders of
the Georgia NYSE Preferred Stock (collectively, ``AR2 1993 Series'').
It is proposed that, subject to Commission authorization herein,
Georgia may assign its rights under the contract to Southern, which it
is expected would than purchase shares of the AR 1993 Series not later
than the time at which Southern purchases the shares under the Georgia
Offer, and Georgia would purchase the shares of the AR 1993 Series from
Southern (at the price paid by Southern) not later than the time at
which Georgia purchases Shares sold to Southern under the Georgia
Offer.
The Offer consists of separate requests to acquire each of the
Alabama Tendered Series, the nine Georgia Tendered Series, the five
Gulf Tendered Series and the three Mississippi Tendered Series
(collectively, ``Tendered Series''), with the offer for any one
Tendered Series being independent of the offer for any other Tendered
Series. The applicable Purchase Price and the other terms and
conditions of the Offers apply equally to all Preferred Stockholders of
the respective Tendered Series. The Offers are not conditioned upon any
minimum number of Shares of the applicable Tendered Series being
tendered, but are conditioned, among other things, on the Proposed
Amendments being adopted at the respective Special Meetings. Subject to
the terms of the offering documents, Southern will purchase at the
applicable Purchase Price any and all Shares of any Tendered Series
that are validly tendered and not withdrawn prior to the Expiration
Date.
To tender Shares according to the terms of the offering documents,
the tendering Preferred Stockholder must either: (1) send to The Bank
of New York, in its capacity as depositary for the Offer
(``Depositary''), a properly completed and duly executed Letter of
Transmittal and Proxy for that Series (if not voting at the Special
Meeting in person by ballot), together with any required signature
guarantees and any other documents required by the Letter of
Transmittal and Proxy, and either (a) certificates for the Shares to be
tendered must be received by the Depositary at one of its addresses
specified in the offering documents, or (b) the Shares must be
delivered under the procedures for book-entry transfer described in the
offering documents (and a confirmation of the delivery must be received
by the Depositary), in each case by the Expiration Date; or (2) comply
with a guaranteed delivery procedure specified in the offering
documents. Tenders of Shares made under an Offer may be withdrawn at
any time prior to the Expiration Date. Thereafter, the tenders are
irrevocable, subject to certain exceptions identified in the offering
documents.
Southern states that its obligations to proceed with the Offers and
to accept for payment and to pay for any Shares tendered will be made
in accordance with rule 51 under the Act and are subject to various
conditions enumerated in the offering documents, including receipt of a
Commission order under the Act authorizing the proposed transactions
and the adoption of the Proposed Amendments at the Special Meetings.
At any time or from time to time, Southern may extend the
Expiration Date applicable to any Series by giving notice of the
extension to the Depositary, without extending the
[[Page 60292]]
Expiration Date for any other Series. During any extension, all shares
of the applicable Series previously tendered will remain subject to the
Offer, and may be withdrawn at any time prior to the Expiration Date as
extendedy.
Conversely, Southern may elect in its sole discretion to terminate
the Offer prior to the scheduled Expiration Date and not accept for
payment and pay for any Shares tendered, subject to applicable
provisions of rule 13e-4 under the Exchange Act requiring Southern
either to pay the consideration offered or to return the Shares
tendered promptly after the termination or withdrawal of the Offer,
upon the occurrence of any of the conditions to closing enumerated in
the offering documents, by giving notice of the termination to the
Depository and making a public announcement thereof.
Subject to compliance with applicable law, Southern further
reserves the right in the offering documents, in its sole discretion,
to amend one or more Offers in any respect by making a public
announcement thereof. If Southern materially changes the terms of an
Offer or the information concerning an Offer, or if it waives a
material condition of an Offer, Southern will extend the Expiration
Date to the extent required by the applicable provisions of rule 13e-4
under the Exchange Act. Those provisions require that the minimum
period during which an issuer tender offer must remain open following
material changes in the terms of the offer or information concerning
the offer (other than a change in price or change in percentage of
securities sought) will depend on the facts and circumstances,
including the relative materiality of the terms or information. If an
Offer is scheduled to expire at any time earlier than the expiration of
a period ending on the tenth business day from, and including, the date
that Southern notifies Preferred Stockholders that it will: (1)
increase or decrease the price it will pay for Shares; (2) decrease the
percentage of Shares it seeks; or (3) increase or decrease soliciting
dealer's fees, the Expiration Date will be extended until the
expiration of the period of ten business days.
Shares validly tendered to the Depositary under an Offer and not
withdrawn according to the procedures stated in the offering documents
will be held by Southern until the Expiration Date (or returned if the
Offer is terminated). Subject to the terms and conditions of the Offer,
as promptly as practicable after the Expiration Date, Southern will
accept for payment (and thereby purchase) and pay for shares validly
tendered and not withdrawn. Southern will pay for Shares that it has
purchased under the Offer by depositing the applicable Purchase Price
with the Depositary, which will act as agent for the tendering
Preferred Stockholders to receive payment from Southern and transmit
payment to tendering Preferred Stockholders. Southern will pay all
stock transfer taxes, if any, payable on account of its acquisition of
Shares under the Offer, except in certain circumstances where special
payment or delivery procedures are utilized in conformance with the
applicable Letters of Transmittal and Proxy.
With respect to Shares validly tendered and accepted for payment by
Southern, each tendering Preferred Stockholder will be entitled to
receive as consideration from Southern only the applicable Purchase
Price (which Southern anticipates will reflect a premium over the
current market price at the commencement of the Offers). Any holder
will not be entitled to receive, with respect to the tendered Shares,
additional consideration in the form of a Special Cash Payment.
As noted above, subject to the terms and conditions of the Offer,
Shares validly tendered and not withdrawn will be accepted for payment
and paid for by Southern as promptly as practicable after the
Expiration Date. If a Proposed Amendment is adopted at a Subsidiary's
Special Meeting, promptly after consummation of the Offer the
Subsidiary will purchase the Shares sold to Southern under the Offer at
the relevant Purchase Price plus expenses incurred in the Offer, and
the Subsidiary will retire and cancel the Shares.
If a Proposed Amendment is not adopted at the Special Meeting,
Southern may elect, but is not obligated, to waive the condition,
subject to applicable law. In that case, as promptly as practicable
after Southern's waiver and purchase of any Shares validly tendered
under the Offers, the affected Subsidiary anticipates that it may
either adjourn the Special Meeting or call another special meeting of
its common and preferred stockholders and solicit proxies therefrom for
the same purpose as in the instant proceeding, i.e., to secure the
requisite two-thirds affirmative vote of preferred stockholders to
amend the Charter to eliminate the Restriction Provisions. At that
meeting, Southern would vote any Shares it acquired under the Offer or
otherwise \13\ (as well as all of its shares of Common Stock) in favor
of the proposed Charter amendment to eliminate the Restriction
Provisions.\14\ If the proposed amendment is adopted at that meeting,
and in any event within one year from the Expiration Date (including
any potential extension thereof under the Offer), Southern will
promptly after the meeting or at the expiration of the one-year period,
as applicable, sell the Shares to the Subsidiary at the Purchase Price
plus expenses paid under the Offer, and the Subsidiary will then retire
and cancel the Shares. Merrill Lynch, Pierce, Fenner & Smith
Incorporated will act as dealer manager for Southern in connection with
the Offers.\15\
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\13\ Following the Expiration Date and the consummation of the
purchase of Shares under the Offer, Southern or one or more
Subsidiaries may determine to purchase additional Shares on the open
market, in privately negotiated transactions, through one or more
tender offers or otherwise. Southern will not undertake any such
transactions without receipt of any required Commission
authorizations under the Act in one or more separate proceedings.
Likewise, if a further special meeting is necessary, the
Subsidiaries would not undertake any associated proxy solicitation
and proposed Charter amendment prior to receipt of any required
Commission authorizations under the Act in a separate proceeding.
\14\ By contrast, if a Subsidiary, rather than Southern, had
acquired Shares under the Offer, upon acquisition by the Subsidiary
any Shares would be deemed treasury shares under Alabama, Georgia,
Maine and Mississippi law, as the case may be, and, the Subsidiary
would be precluded from voting those Shares under any circumstances.
\15\ Southern proposes to agree to pay the dealer manager a fee
for Shares tendered, accepted for payment and paid for pursuant to
the Offer and a fee for any Shares that are not tendered pursuant to
the Offers but which are voted in favor of the Proposed Amendment,
and to reimburse the dealer manager for certain of its reasonable
out-of-pocket expenses. In addition, Southern proposes to pay a
solicitation fee for any Shares tendered, accepted for payment and
paid for pursuant to the Offer and each Subsidiary proposes to pay a
separate fee for any of their respective Shares that are not
tendered pursuant to the Offer but which vote in favor of the
Proposed Amendment.
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To finance its purchase of any Shares tendered, accepted for
payment and paid for under the Offer, Southern intends to use its
general funds and/or incur short-term indebtedness in an amount
sufficient to pay the Purchase Price for all tendered Shares.
The Subsidiaries state that they consider the Restriction Provision
a significant impediment to their ability to maintain financial
flexibility and minimize their financing costs, to the detriment of
their utility customers and, indirectly, Southern's shareholders.
Southern and the Subsidiaries assert that the ongoing financing
flexibility and cost benefits to be gained by the Subsidiaries as a
result of elimination of the Restriction Provisions outweigh the one-
time cost of the Special Cash Payments and the other costs of the Proxy
Solicitation. Southern and the Subsidiaries further represent that the
terms of the purchase of Shares under
[[Page 60293]]
the Offers will benefit not only tendering Preferred Stockholders (by
affording certain Preferred Stockholders who may not favor the
elimination of the Restriction Provisions an option to exit the
Preferred Stock at a premium to the market price and without the usual
transaction costs associated with a sale) but also, taking into account
all related transaction costs, Southern's shareholders and Southern
System utility customers by: (1) contributing to the elimination of the
Restriction Provisions; and (2) resulting in the acquisition and
retirement of outstanding Shares and their potential replacement with
comparatively less expensive financing alternatives, such as short-term
debt.
As noted, the Subsidiaries propose to submit the Proposed Amendment
for consideration and action at special meetings of the stockholder
and, in connection therewith, to solicit proxies from the holders of
their capital stock. The Subsidiaries request that the effectiveness of
the application-declaration with respect to the Proxy Solicitations on
the Proposed Amendments be permitted to become effective immediately,
under rule 62(d).
The applicants also request authorization to deviate from the
preferred stock provisions of the Statement of Policy Regarding
Preferred Stock Subject to the Public Utility Holding Company Act of
1935, HCAR No. 13106 (Feb. 16, 1956), to the extent applicable with
respect to the Proposed Amendments.
It appears to the Commission that the application-declaration to
the extent that it relates to the proposed solicitation of proxies
should be permitted to become effective immediately under rule 62(d):
It is ordered, that the application-declaration, to the extent that
it relates to the proposed solicitation of proxies be, and it hereby
is, permitted to become effective immediately under rule 62 and subject
to the terms and conditions prescribed in rule 24 under the Act.
For the Commission, by the Division of Investment Management,
under delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 97-29418 Filed 11-6-97; 8:45 am]
BILLING CODE 8010-01-M
