-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ER8bWva2Srk03qyxvmX5Q20DM7a+2IyEoIdjr+4HJby/KbOiv7VROlLt4ISSCFwL kO9twaI3OpQzRq9IXKfeqg== 0000008154-96-000036.txt : 19961231 0000008154-96-000036.hdr.sgml : 19961231 ACCESSION NUMBER: 0000008154-96-000036 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961227 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATLANTA GAS LIGHT CO CENTRAL INDEX KEY: 0000008154 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 580145925 STATE OF INCORPORATION: GA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09905 FILM NUMBER: 96687079 BUSINESS ADDRESS: STREET 1: 303 PEACHTREE ST NE STREET 2: ONE PEACHTREE CENTER CITY: ATLANTA STATE: GA ZIP: 30308 BUSINESS PHONE: 4045844000 MAIL ADDRESS: STREET 1: 303 PEACHTREE ST NE STREET 2: ONE PEACHTREE CENTER SUITE 5300 CITY: ATLANTA STATE: GA ZIP: 30308 10-K 1 ATLANTA GAS LIGHT COMPANY FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 1996 Commission File Number 1-9905 ATLANTA GAS LIGHT COMPANY (Exact name of registrant as specified in its charter) GEORGIA 58-0145925 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 303 Peachtree Street, N.E., Atlanta Georgia 30308 404-584-4000 (Address and zip code of principal (Registrant's telephone number, executive offices) including area code) Securities registered pursuant to Section 12(b) of the Act: Depositary Preferred Shares New York Stock Exchange (Title of Class) (Name of exchange on which registered) Securities registered pursuant to Section 12(g) of the Act: Cumulative Preferred Stock, $100 Par Value Cumulative Preferred Stock, $100 Stated Value (Title of Class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No[ ] The number of shares of Atlanta Gas Light Company Common Stock outstanding as of November 29, 1996, was one share. All outstanding shares of Atlanta Gas Light Company Common Stock are held by AGL Resources Inc. Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of each of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ X ] TABLE OF CONTENTS Page PART I Item 1. Business............................................. 1 Item 2. Properties........................................... 13 Item 3. Legal Proceedings.................................... 13 Item 4. Submission of Matters to a Vote of Security Holders............................................ 15 PART II Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters........................ 16 Item 6. Selected Financial Data.............................. 17 Item 7. Management's Discussion and Analysis of Results of Operations and Financial Condition.............. 18 Item 8. Financial Statements and Supplementary Data.......... 26 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure................ 49 PART III Item 10. Directors and Executive Officers of the Registrant... 50 Item 11. Executive Compensation............................... 51 Item 12. Security Ownership of Certain Beneficial Owners and Management......................................... 56 Item 13. Certain Relationships and Related Transactions....... 58 PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K ....................................... 59 Signatures ...................................................... 66 Part I Item 1. Business GENERAL Atlanta Gas Light Company (AGLC) was incorporated on February 16, 1856, by a special act of the Georgia General Assembly. On March 6, 1996, AGLC completed a corporate restructuring in which a new company, AGL Resources Inc. (AGL Resources) became the holding company for AGLC, a natural gas distribution utility and its subsidiaries. During the third and fourth quarters of fiscal 1996, ownership of AGLC's nonregulated businesses was transferred to AGL Resources and its various subsidiaries. See Note 1 in Notes to Consolidated Financial Statements on page 32 of this Form 10-K. Unless noted specifically or otherwise required by context, references to AGLC include the operations and activities of AGLC and Chattanooga Gas Company, a wholly owned natural gas utility subsidiary of AGLC (Chattanooga). AGLC is engaged in the distribution of natural gas to customers in central, northwest, northeast and southeast Georgia and the Chattanooga, Tennessee area. AGLC's major service area is the ten county metropolitan Atlanta area. Metropolitan Atlanta has an estimated population of 3 million, constituting approximately 41% of the total population of Georgia. Approximately 66% of AGLC's customers are located in the Atlanta metropolitan area. These customers consume 48% of the natural gas sold and transported and provide approximately 60% of the gas revenues of AGLC. AGLC's other principal service areas in Georgia are the Athens, Augusta, Brunswick, Macon, Rome, Savannah and Valdosta areas. During the fiscal year ended September 30, 1996, AGLC supplied natural gas service to an average of approximately 1.3 million customers in Georgia including 516 centrally metered customers serving 50,098 apartment units. AGLC provides natural gas service in 235 cities and surrounding areas in Georgia. In addition to AGLC's service areas in Georgia, natural gas service was supplied by Chattanooga to an average of approximately 52,000 customers in Chattanooga and Cleveland, Tennessee, and surrounding portions of Hamilton County and Bradley County, Tennessee during the fiscal year ended September 30, 1996. All of AGLC's natural gas service area is certificated by the Georgia Public Service Commission (Georgia Commission) and the Tennessee Regulatory Authority (TRA), formerly the Tennessee Public Service Commission. The areas served by AGLC in Georgia outside the metropolitan areas described in the preceding paragraph were for many years primarily agricultural, with timber, poultry, cattle, cotton, tobacco, peanuts and soy beans among the principal products. However, both industry and agriculture are currently important to the economies of these areas. In addition to the industries that use local natural resources such as pulpwood, clay, marble, talc and kaolin, AGLC serves a number of nationally known organizations that operate installations in Georgia. These operations increase substantially the diversification of industry in AGLC's service area. During fiscal 1996, AGLC added approximately 41,500 customers, based on 12-month average calculations, representing an increase over the prior year of approximately 3%. Substantially all of this growth was in the residential and small commercial service categories. The ten largest customers of AGLC accounted for 1.9% and 1.4% of total operating revenues and operating margin, respectively, for the fiscal year ended September 30, 1996. For the same period, volumes of gas sold and transported to the ten largest customers accounted for 10.6% of total volumes of gas sold and transported. AGLC's consolidated operating revenues during the fiscal year ended September 30, 1996, were $1.2 billion, of which approximately 58% was derived from residential customers, 24% from commercial customers, 15% from industrial customers, 2% from transportation customers and 1% from other sources. 1 Through September 30, 1996, historic maximum daily sendout of natural gas was approximately 2.15 billion cubic feet which occurred on February 4, 1996. The mean temperature in the metropolitan Atlanta area that day was 11(degree) F. AGLC's business is highly seasonal in nature and heavily dependent on weather because of the substantial use of gas for heating purposes. However, AGLC has implemented weather normalization adjustment riders. The weather normalization adjustment riders, which were approved by the Georgia Commission and the TRA, offset the impact that either unusually cold or unusually warm weather has on operating margin, earnings and cash flow and are designed to stabilize operating margin and earnings at the levels which would occur with normal weather. For the effects of seasonal variations on quarterly earnings, see Note 14 in Notes to Consolidated Financial Statements on page 47 of this Form 10-K. On September 30, 1996, AGLC and its subsidiaries had 2,383 employees. Approximately 640 employees working for AGLC are covered by provisions of collective bargaining agreements with the General Teamsters Local Union No. 528. The master agreement, among the Teamsters, AGLC and AGL Resources Service Company (Service Company), provides for a $1,000 lump sum payment to each covered employee in October 1996 and a $500 lump sum payment in September 1997 and 1998. In addition, the pay ranges for all covered positions are scheduled to increase 3% in September 1997 and 1998 and 3.5% in 1999. Based on current pay levels, it is anticipated that few covered employees will see any base rate increases until 1999. That agreement expires September 17, 2000. A five-year collective bargaining agreement among AGLC, Service Company and the International Union of Operating Engineers, Local Union No. 474, covering 60 employees in Savannah, Georgia, was ratified on November 14, 1996. The contract provides for a $1,000 lump sum payment to each covered employee in November 1996 and a $500 lump sum payment in November 1997 and 1998. In addition, the pay ranges for all covered positions are scheduled to increase 3% in September 1997 and 1998, 3.5% in 1999, and 3% in the year 2000. Based on current pay levels, it is anticipated that few covered employees will see any base rate increases until 1998. That agreement expires November 4, 2001. Additionally, AGLC has approximately 60 employees at its Chattanooga and Cleveland, Tennessee facilities covered by an agreement with the Utility Workers Union of America, Local Union No. 461. A new five-year agreement with the Utility Workers became effective October 15, 1996. The agreement provides for a $1,000 lump sum payment to each covered employee in November 1996 and a $500 lump sum payment in October 1997 and 1998. In addition, the pay ranges for all covered positions are scheduled to increase 3% in September 1997 and 1998, 3.5% in 1999, and 3% in the year 2000. Based on current pay levels, it is anticipated that few covered employees will see any base rate increases until 1998. That agreement expires October 14, 2001. AGLC holds franchises, permits, certificates and rights which management believes are sufficient for the operation of its properties without any substantial restrictions and adequate for the operation of its gas distribution business. FORMATION OF HOLDING COMPANY As a result of the formation of the holding company, ownership of nonregulated businesses was transferred from AGLC to AGL Resources and various subsidiaries of AGL Resources. Ownership of Georgia Gas Company (natural gas production activities) has been transferred to AGL Energy Services, Inc. (AGL Energy Services). Ownership of Georgia Energy Company (natural gas vehicle conversions), Georgia Gas Service Company (retail propane sales) and Trustees Investments, Inc. (real estate holdings) has been transferred to AGL Investments, Inc. (AGL Investments). AGLC's interest in Sonat Marketing Company L.P. has been transferred to AGL Gas Marketing, Inc., a wholly owned subsidiary of AGL Investments. In addition, AGL Investments has established two wholly owned subsidiaries: AGL Power Services, Inc., which owns a 35% interest in Sonat Power Marketing, L.P., and AGL Consumer Services, Inc., an energy-related consumer products and services company. The transfer of AGLC's nonregulated businesses to those subsidiaries of AGL Resources was effected through a noncash dividend of $45.9 million during fiscal 1996. Prior to that transfer, the aggregate net income contributed by nonregulated subsidiaries in fiscal 1996 was $3.7 million. 2 Service Company was formed during fiscal 1996 to provide corporate support services to AGL Resources and its subsidiaries. The transfer of related assets from AGLC to Service Company and other nonregulated subsidiaries was effected through a noncash dividend of $34.3 million during the fourth quarter of fiscal 1996. Expenses of Service Company are allocated to AGL Resources and its subsidiaries. NEW JOINT VENTURE During December 1996, AGL Resources signed a letter of intent with Transcontinental Gas Pipe Line Corporation (Transco) to form a joint venture, which would be known as Cumberland Pipeline Company, to operate and market interstate pipeline capacity. The transaction is subject to various corporate and regulatory approvals. Initially, the 135-mile Cumberland pipeline will consist of existing pipeline infrastructure owned by the two companies. Projected to enter service by November 1, 2000, Cumberland will provide service to AGLC, Chattanooga and other markets throughout the eastern Tennessee Valley. Affiliates of Transco and AGL Resources each will own 50% of the new pipeline company, and an affiliate of Transco will serve as operator. The project will be submitted to the Federal Energy Regulatory Commission for approval in the fourth quarter of 1997. The remainder of this page was intentionally left blank. 3
Gas Sales and Statistics FOR THE YEARS ENDED SEPTEMBER 30 1996 1995 1994 1993 1992 - --------------------------------------------------------------------------------------------------------------------- Operating Revenues (Millions of Dollars) Sales of gas Residential ................................. $ 708.8 $ 610.6 $ 700.7 $ 658.2 $ 575.7 Commercial .................................. 288.8 243.2 285.8 268.1 231.5 Industrial .................................. 178.8 169.4 172.1 154.2 140.9 Transportation revenues ....................... 21.5 23.9 22.6 33.8 36.6 Miscellaneous revenues ........................ 19.7 15.9 18.7 16.0 9.9 - --------------------------------------------------------------------------------------------------------------------- Total utility operating revenues .............. $ 1,217.6 $ 1,063.0 $ 1,199.9 $ 1,130.3 $ 994.6 ===================================================================================================================== Utility Throughput Therms sold (Millions) Residential ................................ 1,165.4 916.8 1,003.1 1,001.4 915.4 Commercial ................................. 538.2 454.0 478.9 478.5 433.9 Industrial ................................. 449.6 526.0 424.8 388.7 445.0 - --------------------------------------------------------------------------------------------------------------------- Therms transported ............................ 738.7 722.8 697.4 795.6 901.8 - --------------------------------------------------------------------------------------------------------------------- Total utility throughput .................. 2,891.9 2,619.6 2,604.2 2,664.2 2,696.1 ===================================================================================================================== Average Utility Customers (Thousands) Residential ................................... 1,289.4 1,250.4 1,215.2 1,182.7 1,152.2 Commercial .................................... 102.5 100.0 98.0 95.7 93.7 Industrial .................................... 2.6 2.6 2.5 2.5 2.5 - --------------------------------------------------------------------------------------------------------------------- Total ..................................... 1,394.5 1,353.0 1,315.7 1,280.9 1,248.4 ===================================================================================================================== Sales, Per Average Residential Customer Gas sold (Therms) ............................. 904 733 825 847 794 Revenue (Dollars) ............................. 550.00 488.32 576.61 556.52 499.65 Revenue per therm (Cents) ..................... 60.8 66.6 69.9 65.7 62.9 Degree Days - Atlanta Area 30-year normal ................................ 2,991 2,991 2,991 3,021 3,021 Actual ........................................ 3,191 2,121 2,565 2,852 2,552 Percentage of actual to 30-year normal ........ 106.7 70.9 85.8 94.4 84.5 Gas Account (Millions of Therms) Natural gas purchased ......................... 1,632.9 1,406.9 1,453.6 1,629.9 1,555.4 Natural gas withdrawn from storage ............ 596.0 520.7 500.3 276.4 263.3 Gas transported ............................... 738.7 722.8 697.4 795.6 901.8 - --------------------------------------------------------------------------------------------------------------------- Total send-out ............................ 2,967.6 2,650.4 2,651.3 2,701.9 2,720.5 Less Unaccounted for ............................. 60.4 20.4 37.2 29.0 16.2 Company use ................................. 15.3 10.4 9.9 8.7 8.2 - --------------------------------------------------------------------------------------------------------------------- Sold and transported to utility customers . 2,891.9 2,619.6 2,604.2 2,664.2 2,696.1 ===================================================================================================================== Cost of Gas (Millions of Dollars) Natural gas purchased ......................... $ 547.1 $ 389.4 $ 550.1 $ 595.7 $ 487.9 Natural gas withdrawn from storage ............ 171.6 182.4 186.7 105.3 102.6 - --------------------------------------------------------------------------------------------------------------------- Cost of gas - utility operations .............. $ 718.7 $ 571.8 $ 736.8 $ 701.0 $ 590.5 ===================================================================================================================== Utility Plant - End of Year (Millions of Dollars) Gross plant ................................... $ 1,969.0 $ 1,919.9 $ 1,833.2 $ 1,740.6 $ 1,634.8 Net plant ..................................... $ 1,361.2 $ 1,336.6 $ 1,279.6 $ 1,217.9 $ 1,157.4 Gross plant investment per customer (Thousands of Dollars) ...................... $ 1.4 $ 1.4 $ 1.4 $ 1.4 $ 1.3 Capital Expenditures (Millions of Dollars) ...... $ 132.5 $ 121.7 $ 122.5 $ 122.2 $ 132.9 Gas Mains - Miles of 3" Equivalent .............. 29,045 28,520 27,972 27,390 26,936 Employees - Average ............................. 2,883 3,191 3,711 3,721 3,764 Average Btu Content of Gas ...................... 1,024 1,027 1,032 1,027 1,024 =====================================================================================================================
4 GAS SUPPLY SERVICES, PRICING AND COMPETITION General AGLC is served directly by four interstate pipelines: Southern Natural Gas Company (Southern), South Georgia Natural Gas Company (South Georgia), Transcontinental Gas Pipe Line Corporation (Transco) and East Tennessee Natural Gas Company (East Tennessee), in combination with its upstream pipeline, Tennessee Gas Pipeline Company (Tennessee) ,the parent company and primary source of gas for East Tennessee. As a result of Order 636, gas purchasing decisions made by local distribution companies (LDCs) are subject to greater review by state regulatory commissions. However, out of the 1994 Georgia General Assembly, legislation was enacted which provides for annual review and approval by the Georgia Commission of AGLC's gas services portfolio on a prospective basis. On August 1, 1996, AGLC made its annual gas supply plan filing for fiscal 1997 and on September 13, 1996, the Georgia Commission issued its order approving the mix of gas services in the portfolio. Additionally, AGL Energy Services was formed to provide consulting and energy management services to AGL Resources' regulated operations and to other nonregulated gas marketers. Through innovative management of gas supply assets that maximize off-system sales, AGL Energy Services is expected to boost AGL Resources' operating margins. For example, the TRA has approved a gas supply incentive mechanism under which the net margin associated with off-system sales is shared equally between Chattanooga and its firm customers. Firm Pipeline Transportation and Underground Storage The table on the following page shows the amount of firm transportation and describes the types and amounts of underground storage that both AGLC and Chattanooga have elected or been assigned under Order 636. The table also shows services that were not affected by the implementation of Order 636. The remainder of this page was intentionally left blank. 5
Production Area Supplemental Underground Underground Maximum Storage Storage Firm Maximum Maximum Transportation Withdrawal Withdrawal Expiration Mcf/Day Mcf/Day(1) Mcf/Day(2) Date ------- ------- ------- ------- ATLANTA GAS LIGHT COMPANY - ------------------------- Southern Firm Transportation 1,000 June 30, 2007 Firm Transportation 604,857 February 28, 1999 Firm Transportation 45,272 February 29, 2000 Firm Transportation 110,905 April 30, 2007 CSS 382,089 February 28, 1999 CSS 24,133 February 29, 2000 ANR - 50 113,000 March 31, 2003 ANR - 100 55,500 March 31, 2003 Transco Firm Transportation 107,600 March 31, 2010 Firm Transportation 15,000 July 1, 2005 Firm Transportation 6,222 March 17, 2008 Firm Transportation 4,500 October 31, 2009 WSS 70,588 March 31, 2010 Eminence Storage 11,263 March 31, 1997 Eminence Storage 19,034 October 31, 2013(3) GSS 57,016 June 30, 2001(3) GSS 67,919 March 31, 2013(3) LSS 17,430 March 31, 1994(4) SS-1 20,211 March 31, 2009 LGA 41,522 October 31, 1991(4) Cove Point LNG 66,667 April 15, 1997 Other 14,493 March 31, 2001 Other 4,831 March 31, 1997 Tennessee/East Tennessee Firm Transportation 62,000 November 1, 2000(3) FS Storage 29,485 November 1, 2000 CNG 3,321 March 31, 2001 South Georgia Firm Transportation 11,877 April 30, 2007 ANR - 100 708 March 31, 2003 CSS 6,764 February 28, 1998 ------- ------- ------- Total 969,233 546,677 459,297 ======= ======= ======= CHATTANOOGA GAS COMPANY - ----------------------- Southern Firm Transportation 4,649 February 28, 2000 Firm Transportation 14,051 February 28, 2000 Firm Transportation 3,300 April 30, 2007 CSS 14,051 February 28, 2000 Tennessee/East Tennessee Firm Transportation 45,000 November 1, 2000(3) FS Storage 20,802 November 1, 2000 CNG 2,411 March 31, 2001 ------- ------- Total 67,000 37,264 ======= ======= (1) Production area storage requires a complementary amount of the firm transportation capacity identified in the first column to move storage gas withdrawals to AGLC's service area. (2) Supplemental underground storage withdrawals include delivery to AGLC's service area and do not require any of the firm transportation capacity identified in the first column. Injections into supplemental " underground storage require incremental transportation, primarily from transportation identified in Column 1." (3) Expiration dates are shown for these contracts although contracts have not yet been executed. AGLC is operating under Natural Gas Act (NGA) certificate authority while negotiating these contracts. (4) AGLC is operating under NGA certificate authority while negotiating these contracts.
6 Wellhead Supply AGLC and Chattanooga have entered into firm wellhead supply contracts of 442,973 Mcf/day and 27,427 Mcf/day, respectively, to supply their firm transportation and underground storage requirements. AGLC anticipates entering into additional firm wellhead supply contracts by the end of December 1996 of up to 58,851 Mcf/day for AGLC and 6,342 Mcf/day for Chattanooga. AGLC also purchases spot market gas as needed during the year. Liquefied Natural Gas To meet the demand for natural gas on the coldest days of the winter months, AGLC must also maintain sufficient supplemental quantities of liquefied natural gas (LNG) in its supply portfolio. AGLC's three strategically located Georgia-based LNG plants -- north and south of Atlanta and near Macon -- currently provide a combined maximum daily supplement of 665,000 Mcf and a combined usable storage capacity of 72 million gallons, equivalent to 6,214,921 Mcf. This combined maximum daily supplement is expected to increase to 765,000 Mcf in January 1997 with the installation of additional equipment at the LNG plant north of Atlanta. Chattanooga's LNG plant provides a maximum daily supplement of 90,000 Mcf and has a usable storage capacity of 13 million gallons, equivalent to 1,207,574 Mcf. Competition AGLC competes to supply natural gas to interruptible customers who are capable of switching to alternative fuels, including propane, fuel and waste oils, electricity and, in some cases, combustible wood by-products. AGLC also competes to supply gas to interruptible customers who might seek to bypass its distribution system. AGLC can price distribution services to interruptible customers four ways. First, multiple rates are established under the rate schedules of AGLC's tariff approved by the Georgia Commission. If an existing tariff rate does not produce a price competitive with a customer's relevant competitive alternative, three alternate pricing mechanisms exist: Negotiated Contracts, Interruptible Transportation and Sales Maintenance (ITSM) discounts and Special Contracts. On February 17, 1995, the Georgia Commission approved a settlement that permits AGLC to negotiate contracts with customers who have the option of bypassing AGLC's facilities (Bypass Customers) to receive natural gas from other suppliers. The bypass avoidance contracts (Negotiated Contracts) can be renewable, provided the initial term does not exceed five years, unless a longer term specifically is authorized by the Georgia Commission. The rate provided by the Negotiated Contract may be lower than AGLC's filed rate, but not less than AGLC's marginal cost of service to the potential Bypass Customer. Service pursuant to a Negotiated Contract may commence without Georgia Commission action, after a copy of the contract is filed with the Georgia Commission. Negotiated Contracts may be rejected by the Georgia Commission within 90 days of filing; absent such action, however, the Negotiated Contracts remain in effect. None of the Negotiated Contracts filed to date with the Georgia Commission have been rejected. The settlement also provides for a bypass loss recovery mechanism to operate until the earlier of September 30, 1998, or the effective date of new rates for AGLC resulting from a general rate case. Under the recovery mechanism, AGLC is allowed to recover from other customers 75% of the difference between (a) the nongas cost revenue that was received from the potential Bypass Customer during the most recent 12- month period and (b) the nongas cost revenue that is calculated to be received from the lower Negotiated Contract rate applied to the same volumetric level. Concerning the remaining 25% of the difference, AGLC is allowed to retain a 44% share of capacity release revenues in excess of $5 million until AGLC is made whole for discounts from Negotiated Contracts. To the extent there are additional capacity release revenues, AGLC is allowed to retain 15% of such amounts. In addition to Negotiated Contracts, which are designed to serve existing and potential Bypass Customers, AGLC's ITSM Rider continues to permit discounts for short-term transactions to compete with alternative fuels. Revenue shortfalls, if any, from interruptible customers as measured by the test-year interruptible revenues determined by the Georgia Commission in AGLC's 1993 rate case will continue to be recovered under the ITSM Rider. 7 The settlement approved by the Georgia Commission also provides that AGLC may file contracts (Special Contracts) for Georgia Commission approval if the service cannot be provided through the ITSM Rider, existing rate schedules, or Negotiated Contract procedures. A Special Contract, for example, could involve AGLC providing a long-term service contract to compete with alternative fuels where physical bypass is not the relevant competition. Pursuant to the approved settlement, AGLC has filed and is providing service pursuant to approximately 50 Negotiated Contracts. Additionally, the Georgia Commission has approved Special Contracts between AGLC and five interruptible customers. For additional information regarding competitive initiatives in Georgia, see Part I, Item 1, "Business State Regulatory Matters." On July 22, 1996, Chattanooga filed a plan with the TRA that permits Chattanooga to negotiate contracts with customers in Tennessee who have long-term competitive options, including bypass. On November 7, 1996, the TRA hearing officer recommended approval of a settlement that permits Chattanooga to negotiate contracts with large commercial or industrial customers who are capable of bypassing Chattanooga's distribution system. The settlement provides for approval on an experimental basis, with the TRA to review the measure two years from the approval date. The pricing terms provided in any such contract may be neither less than Chattanooga's marginal cost of providing service nor greater than the filed tariff rate generally applicable to such service. Chattanooga can recover 50% of the difference between the contract rate and the applicable tariff rate through the balancing account of the purchased gas adjustment provisions of Chattanooga's rate schedules. FEDERAL REGULATORY MATTERS Order 636 On July 16, 1996, the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) issued its ruling in UNITED DISTRIBUTION COS. V. FERC, concerning the appeals from Order No. 636, which mandated the unbundling of interstate pipeline sales service and established new open access transportation regulations. The court generally upheld the Federal Energy Regulatory Commission's (FERC) orders against a broad array of challenges, but remanded the orders to the FERC for reconsideration of certain issues, including the FERC's decision to permit pipelines to pass all of their gas supply realignment (GSR) costs through to their customers and its decision to require interruptible transportation customers to bear 10% of GSR costs. The FERC has not yet issued an order on remand, and thus it is not known whether the FERC will change its GSR policies. On October 29, 1996, the D.C. Circuit rejected requests for rehearing filed by AGLC and others, which sought reversal of the court's ruling affirming the FERC's authority over capacity release by LDCs. The court's order is subject to possible further proceedings before the United States Supreme Court. AGLC, based on filings with FERC by its pipeline suppliers, currently estimates that its portion of transition costs, costs that previously were recovered in the pipelines' rate for bundled sales services, from all of its pipeline suppliers would be approximately $109.9 million. Such filings currently are pending before FERC for final approval, and the transition costs are being collected subject to refund. Approximately $80.6 million of such costs have been incurred by AGLC as of September 30, 1996, and are being recovered from its customers under the purchased gas provisions of AGLC's rate schedules. Transition costs have not affected the total cost of gas to AGLC's customers significantly because (1) AGLC purchases its wellhead gas supplies based on market prices that are below the cost of gas previously embedded in the bundled pipelines' sales service rates and (2) many elements of transition costs previously were embedded in the rates for the pipelines' bundled sales service. See Part I, Item 1, "State Regulatory Matters - Gas Supply Filing" in this Form 10-K for further discussion of recovery of gas costs. Details concerning the status of the Order 636 restructuring proceedings involving the pipelines that serve AGLC directly are set forth below. 8 SOUTHERN Restructuring Proceeding. AGLC has filed several petitions for review with the D. C. Circuit concerning various aspects of Southern's restructuring. Those aspects include favorable treatment of small customers, rate mitigation, mitigation of GSR costs, and tying of firm storage service to firm transportation service. AGLC has moved to withdraw those petitions for review in light of the FERC's approval of the restructuring settlement between Southern and its customers, as discussed below, but the court has not yet acted on AGLC's motion. GSR Cost Recovery Proceeding. On April 11, 1996, the FERC issued an order constituting final approval of the settlement agreement between AGLC, Southern, and other customers which resolves virtually all pending Southern proceedings before the FERC and the courts. The settlement resolves Southern's pending general rate proceedings, which relate to Southern's rates charged from January 1, 1991, through the present. The settlement provides for rate reductions and refund offsets against GSR costs. It also resolves Southern's Order No. 636 transition cost proceedings and provides for revisions to Southern's tariff. The FERC's approval of the settlement is subject to action on petitions for review filed by parties opposing the settlement. On April 25, 1996, the FERC issued an order accepting Southern's March 29, 1996, filing to reduce its volumetric GSR surcharge for consenting parties to the restructuring settlement to reflect actual GSR costs incurred by Southern through December 31, 1995. Southern continues to make quarterly and monthly transition cost filings to recover costs from contesting parties to the settlement, and the FERC has ordered that such costs may be recovered by Southern, subject to the outcome of a hearing for contesting parties. However, GSR and other transition cost charges to AGLC are in accordance with the settlement. Assuming the FERC's approval of the settlement is upheld on judicial review, AGLC's share of Southern's transition costs is estimated to be $85.5 million. This estimate would not be affected by the remand of Order No. 636, unless FERC's approval of the settlement is not upheld on judicial review. As of September 30, 1996, $70.9 million of such costs have already been incurred by AGLC. TENNESSEE Restructuring Proceeding. AGLC has filed several petitions for review with the D. C. Circuit concerning various aspects of Tennessee's restructuring. Those aspects include favorable treatment for small customers, rate mitigation and others. AGLC also has filed a petition for review of FERC orders concerning Tennessee's service obligation to AGLC. AGLC's petitions for review currently are pending with the court. GSR Cost Recovery Proceeding. Tennessee has made several quarterly GSR recovery filings. AGLC's estimated liability as a result of Tennessee's prior GSR recovery filings is approximately $16.8 million, assuming that the FERC does not change its GSR policies pursuant to the Order No. 636 remand and subject to possible reduction based on the hearing FERC established to investigate Tennessee's costs. AGLC is actively participating in Tennessee's GSR cost recovery proceeding. As of September 30, 1996, $5.4 million of such costs have been incurred by AGLC. Columbia Gas Transmission Corporation. AGLC has filed a petition for review of a FERC order approving a settlement between Tennessee and Columbia Gas Transmission Corporation (Columbia). The settlement resolves issues relating to Columbia's upstream capacity on Tennessee's system, as well as certain other matters between the two pipelines. AGLC has sought review of the order on the ground that the FERC has failed to ensure that Tennessee's customers will be made whole with respect to Tennessee's agreement to permit Columbia to abandon certain contracts for capacity on Tennessee's system. FERC Rate Proceedings AGLC also is participating in various rate proceedings before the FERC involving applications for rate changes filed by its pipeline suppliers. To the extent that these cases have not been settled, as described below, the rates filed in these proceedings have been accepted, and made effective subject to refund and the outcome of the FERC proceedings. SOUTHERN As noted above, the FERC has approved the restructuring settlement agreement between AGLC, Southern, and other customers that resolves all issues between AGLC and Southern for Southern's outstanding rate proceedings. 9 SOUTH GEORGIA On December 20, 1995, the FERC issued an order upholding an initial decision by an administrative law judge (ALJ) in South Georgia's rate case that South Georgia's interruptible transportation (IT) rate should be based on a load factor of 100% on a prospective basis. AGLC supported the 100% load factor IT rate at the hearing in this proceeding. No party has sought rehearing of the FERC's ruling, which is therefore final. TENNESSEE On April 5, 1996, Tennessee filed with the FERC a comprehensive settlement to resolve all issues in its current rate case. The settlement provides for a reduction of approximately $83 million in the cost of service underlying Tennessee's rates in effect since July 1, 1995, and also provides for Tennessee to share a portion of costs associated with firm capacity relinquished by its customers. AGLC filed comments supporting the settlement. AGLC's estimated annual reduction in cost is $2.2 million. The FERC approved the proposed settlement on October 30, 1996, but the order approving the settlement is pending requests for rehearing and therefore is not yet final. On July 3, 1996, the FERC issued an order on exceptions from the rulings of an ALJ in a prior Tennessee rate case. Among other things, the FERC's order, which is to have prospective effect, rejects a proposal to unbundle Tennessee's production area rates from its market area rates. AGLC supported the unbundling proposal. The order also upholds the ALJ's ruling that Tennessee's interruptible transportation rates should be set at the 100% load factor derivative of the firm transportation rate. AGLC supported the 100% load factor proposal. The order also rejects proposals to revise Tennessee's rate zone boundaries. AGLC has opposed such proposals. The FERC's rulings may impact the rates contained in the settlement agreement in Tennessee's FERC rate case, which was approved by the FERC on November 1, 1996. The FERCs order approving the settlement is pending requests for rehearing and therefore is not yet final. TRANSCO On June 19, 1996, Transco filed a proposed partial settlement to resolve cost of service and throughput issues in its current rate case. The partial settlement reserves certain cost allocation and rate design issues for hearing, including roll-in of Transco's incrementally priced Leidy Line facilities and Transco's use of the straight-fixed-variable rate design methodology. The proposal provides for a reduction of approximately $58 million in the cost of service underlying Transco's rates that have been in effect since September 1, 1995. The estimated annual reduction in costs to AGLC is $2.4 million. AGLC filed comments in support of the proposed settlement, which was approved by the FERC on November 1, 1996. The FERC's order approving the settlement is pending requests for rehearing and therefore is not yet final. On July 3, 1996, the FERC issued an order on exceptions from the rulings of an ALJ in a prior Transco rate case. Among other things, the FERC's order, which is to have prospective effect, rejects Transco's proposal to established a firm-to-the-wellhead production area rate design, but permits Transco to file a rate case to establish firm-to-the-wellhead rates if customers with entitlements to production area capacity are permitted to determine whether they require such capacity in an open season. AGLC opposed Transco's firm-to-the-wellhead proposal. The order also reverses the ALJ's ruling that Transco must establish a separate production area cost of service. AGLC had filed exceptions seeking reversal of this aspect of the ALJ's ruling. AGLC has joined other Transco customers in seeking rehearing of the July 3, 1996 order with respect to the FERC's determination that Transco may file a new proposal to establish firm-to-the-wellhead rates, and also has sought clarification that the FERC's order does not eliminate protections against abandonment that originated in the settlements by which AGLC and other customers agreed to convert from sales to firm transportation service. On November 1, 1996, Transco filed to increase its rates by approximately $83 million over the last rates approved by the FERC. Among other things, Transco filed its own proposal to roll into systemwide rates the costs of the incrementally-priced Leidy Line and Southern Expansion facilities on a prospective basis, after a hearing. AGLC filed a protest challenging the roll-in proposal and the magnitude of the requested rate increase. On November 29, 1996, the FERC issued an order accepting Transco's filing, subject to refund and a hearing, and consolidated Transco's roll-in proposal with its ongoing rate case, where a Leidy Line roll-in proposal by other parties is being litigated. ANR PIPELINE ANR Pipeline (ANR) provides transportation services to Southern under a case-specific certificate issued by the FERC in 1980. Southern entered into this transportation arrangement with ANR in order to provide Southern's customers, including AGLC, access to storage facilities owned and operated by ANR Storage Company. According to Southern, approximately 96% of Southern's service entitlement on ANR is used to serve AGLC. AGLC has actively participated in the hearing procedures established by the FERC 10 with respect to ANR's general rate proceeding, supporting a reduced transportation rate for ANR's services to Southern. That proceeding currently is pending for decision before an ALJ. Miscellaneous SECONDARY MARKETS On July 31, 1996, the FERC issued a notice of proposed rulemaking concerning changes to the FERC's regulations governing release of firm pipeline capacity, as well as the sale by pipelines of interruptible transportation and short-term firm capacity. The FERC is not proposing to eliminate the prohibition against pricing released capacity at higher than the pipeline's maximum tariff rate for firm service. However, the FERC has solicited applications from pipelines and local distribution companies to participate in a pilot program in which the prices for released firm capacity, interruptible transportation, and short-term firm capacity are not capped. AGLC has not sought permission to participate in the pilot program, but is monitoring the process. One of AGLC's pipeline suppliers, Transco, sought approval to participate in the pilot program, but the FERC rejected Transco's application. NEGOTIATED RATES The FERC has issued a policy statement authorizing pipelines to establish mechanisms by which they may charge separately negotiated rates to particular customers in lieu of their tariff rates. The FERC has required pipelines to retain in their tariffs a "recourse rate," which must be approved by the FERC, and which must be available to those customers that do not choose to separately negotiate a rate with the pipeline. Of the pipelines that supply AGLC, Transco, Tennessee, and East Tennessee have requested authority to separately negotiate rates. The FERC has approved the applications by Transco, Tennessee, and the application filed by East Tennessee. The FERC's policy statement has been appealed to the D. C. Circuit, and AGLC has intervened in that proceeding. Arcadian The FERC has granted final approval to the settlement between Southern and Arcadian Corporation (Arcadian); see Part I, Item 3, "Legal Proceedings." The settlement resolves both Arcadian's FERC complaint against Southern and Arcadian's antitrust lawsuit against Southern and AGLC. The settlement provides for Southern to provide firm transportation service to Arcadian at a negotiated rate for an initial term of five years ending October 31, 1998. In addition, the settlement establishes tariff language addressing the conditions under which Southern will address future requests for direct transportation service. AGLC sought rehearing of the FERC's order approving the settlement but the FERC rejected AGLC's rehearing request on November 26, 1996. AGLC had petitioned for review of the FERC's prior orders in this proceeding in the United States Court of Appeals for the Eleventh Circuit. AGLC's appeals have been held in abeyance pending action by the FERC on AGLC's rehearing request. If the FERC's orders approving the restructuring settlement between Southern, AGLC and the other customers are upheld on appeal, it will resolve the undue discrimination issue raised by AGLC in Southern's current rate case. On April 22, 1996, AGLC filed to withdraw portions of its request for rehearing of the FERC's order approving the November 12, 1993, settlement between Arcadian and Southern. The portions of the request for rehearing that AGLC proposes to withdraw, pursuant to the restructuring settlement with Southern, are those that allege that Southern's discounted rates to Arcadian constitute an anticompetitive "price squeeze" against AGLC. AGLC cannot predict the outcome of these federal proceedings nor determine the ultimate effect, if any, such proceedings may have on AGLC. STATE REGULATORY MATTERS Atlanta Gas Light Company REGULATORY REFORM INITIATIVES Two regulatory reform initiatives are pending in Georgia, both designed to increase competition and reduce the role of regulation within the natural gas industry. The first such initiative is the subject of a proceeding at the Georgia Commission; the second initiative is before study committees of the Georgia General Assembly. 11 With respect to the first initiative, on November 20, 1995, the Georgia Commission issued a Natural Gas Notice of Inquiry soliciting comments on how to introduce more competition into natural gas markets within Georgia. Following written comments and oral presentations from numerous parties, on May 21, 1996, the Georgia Commission adopted a Policy Statement that, among other things, sets up a distinction between competitive and natural monopoly services; favors performance-based regulation in lieu of traditional cost-of-service regulation; calls for unbundling interruptible service; directs the Georgia Commission Staff to develop standards of conduct for utilities and their marketing affiliates; and invites pilot programs for unbundling services to residential and small business customers. Consistent with specific goals in the Georgia Commission's Policy Statement, on June 10, 1996, AGLC filed a comprehensive plan for serving interruptible markets called the Natural Gas Service Provider Selection Plan (the Plan). The Plan proposes further unbundling of services to provide large customers more service options and the ability to purchase only those services they require. Proposed tariff changes would allow AGLC to cease its sales service function and the associated sales obligation for large customers; implement delivery-only service for large customers on a firm and interruptible basis; and provide pooling services to marketers. The Plan also includes proposed standards of conduct for utilities and marketing affiliates of utilities. Hearings on the proposal began in December 1996 and are scheduled to resume in January and February 1997. A decision is expected from the Georgia Commission prior to March 1, 1997. The second major initiative to increase competition and decrease the role of regulation in Georgia is before study committees of the Georgia General Assembly. The 1996 Georgia General Assembly considered, but delayed action on, The Natural Gas Fair Pricing Act, which would have allowed local gas companies to negotiate contract prices and terms for gas services with large commercial and industrial customers absent Georgia Commission-mandated rates. The Georgia General Assembly stated through resolutions a desire to fashion a more comprehensive approach to deregulation and unbundling of natural gas services in Georgia. Those resolutions, adopted during the 1996 session, created Senate and House committees to study and recommend a comprehensive course of action by December 31, 1996, for deregulating natural gas markets in Georgia. The separate Senate and House study committees conducted joint meetings during September, October and November 1996, with the goal of crafting a comprehensive deregulation bill for the 1997 General Assembly, which convenes in January 1997. The natural gas deregulation plan under consideration by the committees would unbundle services to all of AGLC's natural gas customers, would continue AGLC's role as the intrastate transporter of natural gas, would allow AGLC to assign firm delivery capacity to certificated marketers who would sell the gas commodity, and would create a secondary transportation market for interruptible transportation capacity. Although AGLC cannot predict the outcome of these two regulatory reform initiatives, it supports both the plan under consideration by the Georgia Commission and the plan under consideration by the Georgia General Assembly. AGLC currently makes no profit on the purchase and sale of gas because actual gas costs are passed through to customers under the purchased gas provisions of AGLC's rate schedules. Earnings are provided through revenues received for intrastate transportation of the commodity. Consequently, allowing AGLC to cease its sales service function and the associated sales obligation would not adversely affect AGLC's ability to earn a return on its distribution system investment. GAS COST RECOVERY FILING Pursuant to legislation enacted by the Georgia General Assembly, each investor-owned local gas distribution company is required to file on or before August 1 of each year, a proposed gas supply plan for the subsequent year, as well as a proposed cost recovery factor to be used during the same time period. Costs of natural gas supply, interstate transportation and storage incurred pursuant to an approved plan may be recovered under the purchased gas provisions of AGLC's rate schedules. On August 1, 1996, AGLC filed its 1997 Gas Supply Plan, which consists of gas supply, transportation and storage options designed to provide reliable service to firm customers at the best cost. On September 13, 1996, the Georgia Commission approved the entire supply portfolio contained in the 1997 Gas Supply Plan. 12 As part of the 1997 Gas Supply Plan, AGLC is authorized to continue limited gas supply hedging activities. The 1997 hedging program has been expanded beyond the program approved in the 1996 Gas Supply Plan. The financial results of all hedging activities are passed through to firm service customers under the purchased gas provisions of AGLC's rate schedules. Accordingly, there is no earnings impact as a result of the hedging program. Chattanooga Gas Company RATE FILINGS On May 1, 1995, Chattanooga filed a rate proceeding with the TRA seeking an increase in revenues of $5.2 million annually. On September 27, 1995, a settlement agreement was reached that provides for an annual increase in revenues of approximately $2.5 million, effective November 1, 1995. - -------------------------------------------------------------------------------- Item 2. Properties AGLC's properties consist primarily of distribution systems and related facilities and local offices serving 230 cities and surrounding areas in the State of Georgia and 12 cities and surrounding areas in the State of Tennessee. As of September 30, 1996, AGLC had 25,642 miles of mains and 5,952,000 Mcf of LNG storage capacity in three LNG plants to supplement the gas supply in very cold weather or emergencies. Chattanooga had 1,328 miles of mains and 1,076,000 Mcf of LNG storage capacity in its one LNG plant. At September 30, 1996, AGLC's gross utility plant amounted to approximately $2.0 billion. - -------------------------------------------------------------------------------- Item 3. Legal Proceedings The nature of AGLC's business ordinarily results in periodic regulatory proceedings before various state and federal authorities as well as litigation incidental to the business. For information regarding regulatory proceedings, see the preceding sections in Part I, Item 1, "Business - Federal Regulatory Matters" and "Business - State Regulatory Matters." Arcadian ARCADIAN CORPORATION V. SOUTHERN NATURAL GAS COMPANY AND ATLANTA GAS LIGHT COMPANY, U. S. District Court for the Southern District of Georgia, Augusta Division, Case No. CV192-006. On January 10, 1992, Arcadian, an industrial customer of AGLC, filed a complaint against Southern and AGLC alleging violation of the federal antitrust laws and seeking treble damages in excess of $45 million. In the complaint, Arcadian alleged that Southern and AGL conspired to restrain trade by agreeing not to compete in the provision of direct transportation service to end users in the areas served by AGLC. AGLC denied the allegations of the complaint. On November 30, 1993, a proposed settlement between Southern and Arcadian was filed with FERC that would resolve both Arcadian's FERC complaint against Southern and Arcadian's antitrust lawsuit against Southern and AGLC. The settlement provided for firm and interruptible transportation service from Southern to Arcadian at discounted rates for an initial term of five years. In addition, the settlement establishes tariff conditions for addressing future requests for direct transportation service. In connection with the proposed settlement, the antitrust lawsuit has been stayed and administratively closed. On May 12, 1994, FERC approved the settlement over AGLC's objections. AGLC has sought rehearing of the FERC's order approving the settlement, and has petitioned for review in the United States Court of Appeals for the Eleventh Circuit. AGLC's appeals are currently being held in abeyance pending action by the FERC on AGLC's rehearing request. On April 22, 1996, AGLC filed to withdraw portions of its request for rehearing of the FERC's order approving the November 12, 1993, settlement between Arcadian and Southern. The arguments that AGLC proposes to withdraw, pursuant to the restructuring settlement with Southern, are those that allege that Southern's discounted rates to Arcadian constitute an anticompetitive "price squeeze" against AGLC. 13 Environmental Matters AGLC has identified nine sites in Georgia where it currently owns all or part of a manufactured gas plant (MGP) site. These sites are located in Athens, Augusta, Brunswick, Griffin, Macon, Rome, Savannah, Valdosta and Waycross. In addition, AGLC has identified three other sites in Georgia which AGLC does not now own, but that may have been associated with the operation of MGPs by AGLC or its predecessors. These sites are located in Atlanta (2) and Macon. A Preliminary Assessment (PA) was conducted at each of those twelve sites, and a subsequent Site Investigation (SI) was conducted at ten sites (all but the two Atlanta sites). Results from those investigations reveal environmental impacts at and near nine sites (all but the two Atlanta sites and the second Macon site). In addition, AGLC has identified three sites in Florida which may have been associated with AGLC or its predecessors. One of these, located in Sanford, Florida, is now the subject of an Expanded Site Investigation (ESI) which has been or is being conducted by the U.S. Environmental Protection Agency (EPA). Investigations at the site by AGLC and others have indicated environmental impacts on and near the site. In addition, the current owner of this site, Florida Public Utilities Company (FPUC), had previously filed suit against AGLC and others alleging that AGLC is a former "owner" and seeking to obtain a declaratory judgment that all defendants are jointly and severally liable for past and future costs of investigating and remediating the site. That suit has since been dismissed by FPUC without prejudice. AGLC's response to MGP sites in Georgia is proceeding under two state regulatory programs. First, AGLC has entered into consent orders with the Georgia Environmental Protection Division (EPD) with respect to four sites: Augusta, Griffin, Savannah, and Valdosta. Under these consent orders, AGLC is obliged to investigate and, if necessary, remediate impacts at the site. AGLC developed a proposed Corrective Action Plan (CAP) for the Griffin site, is now conducting certain follow-up investigations in response to EPD's comments, and expects to submit a revised CAP once EPD clarifies certain regulatory matters. Assessment activities are being conducted at Augusta and Savannah. In addition, AGLC is in the process of planning certain interim remedial measures at the Augusta MGP site. Those measures are expected to be implemented principally during fiscal 1997. Second, AGLC's response to all Georgia sites is proceeding in substantial compliance with Georgia's "Hazardous Site Response Act" (HSRA). AGLC submitted to EPD formal notifications pertaining to all of its owned MGP sites, and EPD had listed seven sites (Athens, Augusta, Brunswick, Griffin, Savannah, Valdosta and Waycross) on the state's "Hazardous Site Inventory" (HSI). EPD has not listed the Macon site on the HSI at this time. In addition, EPD has also listed the Rome site on the HSI. Under the HSRA regulations, the four sites subject to consent orders are presumed to require corrective action; EPD will determine whether corrective action is required at the four remaining sites (Athens, Brunswick, Rome and Waycross) in due course. In that respect, however, AGLC has submitted Compliance Status Reports (CSRs) for the Athens, Brunswick and Rome MGP sites, and AGLC has concluded that these sites do not meet applicable risk reduction standards. Accordingly, some degree of response action is likely to be required at those sites. AGLC has estimated the investigation and remediation expenses likely to be associated with the former MGP sites. First, since such liabilities are often spread among potentially responsible parties, AGLC's ultimate liability will, in some cases, be limited to AGLC's equitable share of such expenses under the circumstances. Therefore, where reasonably possible, AGLC has attempted to estimate the range of AGLC's equitable share, given AGLC's current knowledge of relevant facts, including the current methods of equitable apportionment and the solvency of potential contributors. Where such an estimation was not reasonably possible, AGLC has estimated a range of expenses without adjustment for AGLC's equitable share. Second, the regulatory structure of the cleanup requirements under HSRA has permitted AGLC to estimate future investigation and remediation costs for the Georgia MGP sites, assuming such costs arise under this framework. Applying both of these concepts to those sites where some future action presently appears reasonably possible, AGLC has estimated that, under the most favorable circumstances reasonably possible, the future cost to AGLC of investigating and remediating the former MGP sites could be as low as $30.4 million. Alternatively, AGLC has estimated that, under reasonably possible unfavorable circumstances, the future cost to AGLC of investigating and remediating the former MGP sites could be as high as $110.8 million. If 14 additional sites were added to those for which action now appears reasonably likely, or if substantially more stringent cleanups were required, or if site conditions are markedly worse than those now anticipated, the costs could be higher. In addition, those costs do not include other expenses, such as property damage claims, for which AGLC may ultimately be held liable, but for which neither the existence nor the amount of such liabilities can be reasonably forecast. Within the stated range of $30.4 million to $110.8 million, no amount within the range can be reliably identified as a better estimate than any other estimate. Therefore, a liability at the low end of this range and a corresponding regulatory asset have been recorded in the financial statements. AGLC has two means of recovering the expenses associated with the former MGP sites. First, the Georgia Commission has approved the recovery by AGLC of Environmental Response Costs, as defined, pursuant to an Environmental Response Cost Recovery Rider (ERCRR). For purposes of the ERCRR, Environmental Response Costs include investigation, testing, remediation and litigation costs and expenses or other liabilities relating to or arising from MGP sites. In connection with the ERCRR, the staff of the Georgia Commission has undertaken a financial and management process audit related to the MGP sites, cleanup activities at the sites and environmental response costs that have been incurred for purposes of the ERCRR. On October 10, 1996, the Georgia Commission issued an order to prohibit funds collected through the ERCRR from being used for the payment of any damage award, including punitive damages, as a result of any litigation associated with any of the MGP sites in which AGLC is involved. AGLC is currently pursuing judicial review of the October 10, 1996, order. Second, AGLC intends to seek recovery of appropriate costs from its insurers and other potentially responsible parties. With respect to its insurers, in 1991, AGLC filed a declaratory judgment action against 23 of its insurance companies. After the trial court entered a judgment adverse to AGLC and AGLC appealed that ruling, the Eleventh Circuit Court of Appeals held that the case did not present a case or controversy when filed, and the case was remanded with instructions to dismiss. Since the Eleventh Circuit's decision, AGLC has settled with, or is close to settlement with, most of the major insurers. AGLC has not determined what actions it will take with respect to non-settling insurers. During fiscal 1996 AGLC recovered $14.7 million from its insurance carriers and other potentially responsible parties. In accordance with provisions of the ERCRR, AGLC recognized other income of $2.9 million and established regulatory liabilities for the remainder of those recoveries. Other Legal Proceedings With regard to other legal proceedings, AGLC is a party, as both plaintiff and defendant, to a number of other suits, claims and counterclaims on an ongoing basis. Management believes that the outcome of all litigation in which it is involved will not have a material adverse effect on the consolidated financial statements of AGLC. - -------------------------------------------------------------------------------- Item 4. Submission of Matters to a Vote of Security Holders No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report. - -------------------------------------------------------------------------------- 15 Part II - -------------------------------------------------------------------------------- Item 5. Market for the Registrants' Common Equity and Related Stockholder Matters As of September 30, 1996, all of AGLC's common stock was beneficially owned by AGL Resources. Accordingly, there is no established public trading market for AGLC's common stock. Further, as of September 30, 1996, all of the outstanding shares of AGLC common stock were owned of record by AGL Resources, the sole shareholder of record. The following table reflects the quarterly dividends paid per share on AGLC's common stock for fiscal years ended September 30, 1996 and 1995. On November 3, 1995, the Board of Directors of AGLC declared a two-for-one stock split of the common stock effected in the form of a 100% stock dividend to shareholders of record on November 17, 1995, and payable on December 1, 1995. All references to per share amounts have been restated retroactively to reflect the stock dividend. Quarter Ended Dividends Paid Per Share 1996 September 30, 1996(a) 26.5(cent) June 30, 1996(a) 26.5(cent) March 31, 1996(a) 26.5(cent) December 31, 1995 26.5(cent) 1995 September 30, 1995 26(cent) June 30, 1995 26(cent) March 31, 1995 26(cent) December 31, 1994 26(cent) (a) Amount paid to AGL Resources Inc. - -------------------------------------------------------------------------------- The remainder of this page was intentionally left blank. 16 Item 6. Selected Financial Data Selected financial data for AGLC for each year of the five-year period ended September 30, 1996, is set forth as follows:
ATLANTA GAS LIGHT COMPANY Selected Financial Data For the years ended September 30, ------------------------------------------------------------------------ In millions, except per share amounts 1996 1995 1994 1993 1992 1991 - -------------------------------------------------------------------------------------------------------------------------------- Income Statement Data Operating revenues .......................... $ 1,217.6 $ 1,063.0 $ 1,199.9 $ 1,130.3 $ 994.6 $ 963.8 Cost of gas ................................. 718.7 571.8 736.8 701.0 590.5 579.9 - -------------------------------------------------------------------------------------------------------------------------------- Operating margin ............................ 498.9 491.2 463.1 429.3 404.1 383.9 - -------------------------------------------------------------------------------------------------------------------------------- Other operating expenses Operation ................................ 217.7 213.5 207.0 187.6 170.7 165.2 Restructuring costs ...................... 70.3 Maintenance .............................. 29.3 30.4 32.8 30.9 29.5 28.6 Depreciation ............................. 61.6 58.5 55.4 58.8 54.9 50.2 Income taxes ............................. 43.5 16.0 34.3 28.2 25.6 26.2 Taxes other than income taxes ............ 24.9 25.6 26.0 23.9 23.2 19.2 - -------------------------------------------------------------------------------------------------------------------------------- Total other operating expenses ....... 377.0 414.3 355.5 329.4 303.9 289.4 - -------------------------------------------------------------------------------------------------------------------------------- Operating income ............................ 121.9 76.9 107.6 99.9 100.2 94.5 Other income - net .......................... 7.8 1.4 3.2 4.3 2.6 1.8 - ------------------------------------------------------------------------------------------------------------------------------- Income before interest charges .............. 129.7 78.3 110.8 104.2 102.8 96.3 Interest charges ............................ 49.1 47.5 47.6 46.7 47.4 46.9 - -------------------------------------------------------------------------------------------------------------------------------- Net Income .................................. 80.6 30.8 63.2 57.5 55.4 49.4 Dividends on preferred stock ................ 4.4 4.4 4.5 4.3 1.0 1.1 - -------------------------------------------------------------------------------------------------------------------------------- Earnings available for common stock ......... 76.2 26.4 58.7 53.2 54.4 48.3 Common dividends paid ....................... 58.6 54.2 52.2 51.1 49.6 47.4 - -------------------------------------------------------------------------------------------------------------------------------- Earnings reinvested ......................... $ 17.6 $ (27.8) $ 6.5 $ 2.1 $ 4.8 $ 0.9 ================================================================================================================================ Balance Sheet Data(1) Total assets ................................ $ 1,738.1 $ 1,674.6 $ 1,642.9 $ 1,533.0 $ 1,428.6 $ 1,350.3 Long-term liabilities Take-or-pay charges payable ............... $ 5.0 $ 15.0 Accrued environmental response costs ..... $ 30.4 $ 28.6 $ 24.3 $ 19.6 $ 25.0 Accrued pension costs .................... $ 4.9 $ 10.3 Accrued postretirement benefits costs .... $ 36.2 $ 30.1 $ 3.6 Deferred Credits ......................... $ 60.9 $ 65.6 $ 66.6 $ 42.3 $ 43.8 $ 47.6 - -------------------------------------------------------------------------------------------------------------------------------- Capitalization Long-term debt ........................... $ 554.5 $ 554.5 $ 569.5 $ 500.7 $ 476.5 $ 458.3 Preferred stock - redeemable ............ 55.5 55.8 55.8 56.0 11.5 12.8 - nonredeemable ......... 3.0 3.0 3.0 3.0 3.0 3.0 Common equity ............................ 502.7 557.3 518.5 492.0 472.1 448.2 - -------------------------------------------------------------------------------------------------------------------------------- Total ............................... $ 1,115.7 $ 1,170.6 $ 1,146.8 $ 1,051.7 $ 963.1 $ 922.3 ================================================================================================================================ Financial Ratios(1) Capitalization Long-term debt ........................... 49.7% 47.4% 49.6% 47.6% 49.5% 49.7% Preferred stock - redeemable ............ 5.0 4.8 4.9 5.3 1.2 1.4 - nonredeemable ......... 0.2 0.2 0.3 0.3 0.3 0.3 Common equity ............................ 45.1 47.6 45.2 46.8 49.0 48.6 - -------------------------------------------------------------------------------------------------------------------------------- Total ................................ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% ================================================================================================================================ Return on average common equity ............. 14.4% 4.9% 11.6% 11.0% 11.8% 11.4% - -------------------------------------------------------------------------------------------------------------------------------- Times charges earned before income taxes(2) Total interest ........................... 3.60 1.99 3.08 2.86 2.66 2.56 Total interest and preferred dividends ... 3.31 1.83 2.82 2.63 2.60 2.50 Fixed(3) ................................. 3.49 1.95 3.00 2.80 2.62 2.53 ================================================================================================================================ (1) Year-End. (2) Interest charges exclude the debt portion of allowance for funds used during construction. (3) Fixed charges consist of interest on short- and long-term debt, other interest and the estimated interest component of rentals.
17 - -------------------------------------------------------------------------------- Item 7. Management's Discussion and Analysis of Results of Operations and Financial Condition On March 6, 1996, Atlanta Gas Light Company (AGLC) completed a corporate restructuring in which a new company, AGL Resources Inc. (AGL Resources) became the holding company for AGLC, a natural gas distribution utility, AGLC's wholly owned natural gas utility subsidiary, Chattanooga Gas Company (Chattanooga), and AGLC's nonregulated subsidiaries: AGL Energy Services, Inc.; AGL Investments, Inc.; Georgia Gas Company; Georgia Gas Service Company; Georgia Energy Company and Trustees Investments, Inc. During the third and fourth quarters of fiscal 1996, ownership of AGLC's nonregulated businesses was transferred to AGL Resources and its various subsidiaries. (See Note 1 in Notes to Consolidated Financial Statements.) Unless noted specifically or otherwise required by the context, references to AGLC include the operations and activities of AGLC and Chattanooga. The following discussion and analysis cover events affecting AGLC's results of operations and financial condition for each of the three years ended September 30, 1996, and factors expected to impact future operations. Results of Operations Fiscal 1996 Compared with Fiscal 1995 OPERATING REVENUES Operating revenues increased 14.5% in 1996 compared with 1995 primarily due to (1) an increase in the cost of the gas supply recovered from customers under the purchased gas provisions of AGLC's rate schedules, (2) increased volumes of gas sold to firm service customers as a result of weather that was 50% colder in 1996 than in 1995 and (3) an increase of approximately 41,500 in the number of customers served. COST OF GAS Cost of gas increased 25.7% in 1996 compared with 1995 primarily due to (1) an increase in the cost of the gas supply recovered from customers under the purchased gas provisions of AGLC's rate schedules and (2) increased volumes of gas sold to firm service customers as a result of weather that was 50% colder in 1996 than in 1995. AGLC's cost of natural gas per therm was 32.2 cents in 1996 and 29.7 cents in 1995. Variations in the cost of purchased gas are passed through to customers under the purchased gas provisions of AGLC's rate schedules. Overrecoveries or underrecoveries of purchased gas costs are charged or credited to cost of gas and are included in current assets or liabilities, thereby eliminating the effect that recovery of gas costs otherwise would have on net income. OPERATING MARGIN Operating margin increased 1.6% in 1996 compared with 1995 primarily due to (1) recovery of increased expenses related to an Integrated Resource Plan (IRP), which are recovered through an IRP Cost Recovery Rider approved by the Georgia Public Service Commission (Georgia Commission), (2) a revenue increase granted by the Tennessee Regulatory Authority (TRA), formerly the Tennessee Public Service Commission, effective November 1, 1995, and (3) an increase of approximately 41,500 in the number of customers served. RESTRUCTURING COSTS In November 1994 AGLC announced a corporate restructuring plan in response to increased competition and changes in the federal and state regulatory environments in which it operates. Restructuring costs of $61.4 million related to early retirement and severance programs and $8.9 million related to office closings and costs to exit AGLC's appliance merchandising and real estate investment operations were recorded during 1995. There were no restructuring costs recorded in 1996. 18 During the fourth quarter of fiscal 1996, AGLC reviewed its remaining liabilities with respect to its corporate restructuring plan. As a result, AGLC adjusted its restructuring accruals and reduced operating expenses by $1.6 million, after income taxes. The remaining balance of restructuring liabilities as of September 30, 1996 and 1995 was $1 million and $4.8 million, respectively. OTHER OPERATING EXPENSES Operation and maintenance expenses increased 1.3% in 1996 compared with 1995 primarily due to (1) an increase of $3.6 million in expenses related to an Integrated Resource Plan (IRP) and (2) an increase of $1.2 million in franchise expenses. IRP and franchise expenses are recovered from customers through rate recovery riders approved by the Georgia Commission. As a result, IRP program costs and franchise expenses do not affect net income. Operation and maintenance expenses excluding IRP and franchise expenses decreased slightly primarily due to decreased labor related expenses. The decrease in operation and maintenance expenses excluding IRP and franchise expenses was offset partly by increased uncollectible accounts expenses. Depreciation expense increased 5.3% in 1996 compared with 1995 primarily due to increased depreciable plant in service. The composite straight-line depreciation rate was approximately 3.2% for utility property other than transportation equipment during 1996 and 1995. Income taxes increased $27.5 million in 1996 compared with 1995 primarily due to increased taxable income. Taxes other than income taxes decreased $0.7 million primarily due to decreased ad valorem taxes. OTHER INCOME Other income increased $6.4 million in 1996 compared with 1995 primarily due to (1) income from carrying costs on increased deferred purchased gas undercollections and (2) recoveries of environmental response costs from insurance carriers and third parties. INTEREST CHARGES Total interest charges increased $1.6 million in 1996 compared with 1995 primarily due to increased amounts of short-term debt outstanding. The increase was offset partly by decreased amounts of long-term debt outstanding. EARNINGS AVAILABLE FOR COMMON STOCK Earnings available for common stock for 1996 was $76.2 million, compared with $26.4 million in 1995. The increase in earnings available for common stock was primarily due to (1) corporate restructuring costs of $43.1 million, after income taxes, recorded in 1995, (2) increased other income and (3) increased operating margin as a result of an increase of approximately 41,500 in the number of customers served. The increase in earnings available for common stock was offset partly by increased depreciation expense. Results of Operations Fiscal 1995 Compared with Fiscal 1994 OPERATING REVENUES Operating revenues decreased 11.4% in 1995 compared with 1994 primarily due to (1) a decrease in the cost of the gas supply recovered from customers under the purchased gas provisions of AGLC's rate schedules and (2) decreased volumes of gas sold to firm service customers as a result of weather that was 17% warmer in 1995 than in 1994. The decrease in operating revenues was offset partly by an increase of approximately 37,000 in the number of customers served. COST OF GAS Cost of gas decreased 22.4% in 1995 compared with 1994 primarily due to (1) a decrease in the cost of the gas supply recovered from customers under the purchased gas provisions of AGLC's rate schedules and (2) decreased volumes of gas sold to firm service customers as a result of weather that was 17% warmer in 1995 than in 1994. 19 AGLC's cost of natural gas per therm was 29.7 cents in 1995 and 37.7 cents in 1994. Variations in the cost of purchased gas are passed through to customers under the purchased gas adjustment provisions of AGLC's rate schedules. OPERATING MARGIN Operating margin increased 6.1% in 1995 compared with 1994 primarily due to an increase of approximately 37,000 in the number of customers served. RESTRUCTURING COSTS In November 1994 AGLC announced a corporate restructuring plan in response to increased competition and changes in the federal and state regulatory environments in which AGLC operates. The restructuring plan provided for reengineering AGLC's business processes and streamlining AGLC's statewide field organizations. As a result of restructuring, AGLC has combined offices and established centralized customer service centers. During 1995, AGLC reduced the average number of employees by approximately 500 through voluntary retirement and severance programs, and attrition. Restructuring costs of $61.4 million related to early retirement and severance programs and $8.9 million related to office closings and costs to exit AGLC's appliance merchandising and real estate investment operations were recorded during 1995. OTHER OPERATING EXPENSES Operation and maintenance expenses increased 1.7% in 1995 compared with 1994 primarily due to an increase of $17 million in expenses related to an IRP, which are recovered through an IRP Cost Recovery Rider approved by the Georgia Commission. As a result, IRP program costs do not affect net income. Operation and maintenance expenses excluding IRP expenses decreased 5.4% in 1995 compared with 1994 primarily due to (1) decreased labor costs as a result of the restructuring plan, (2) decreased uncollectible accounts expenses and (3) decreased regulatory commission expenses. Depreciation expense increased 5.6% in 1995 compared with 1994 primarily due to increased depreciable plant in service. The composite straight-line depreciation rate was approximately 3.2% for utility property other than transportation equipment during 1995 and 1994. Income taxes decreased $18.3 million in 1995 compared with 1994 primarily due to decreased taxable income. Taxes other than income taxes decreased $0.4 million primarily due to decreased payroll taxes as a result of the restructuring plan. The decrease in taxes other than income taxes was offset partly by increased ad valorem taxes. OTHER INCOME Other income decreased $1.8 million in 1995 compared with 1994 primarily due to (1) decreased income from propane operations as a result of warmer weather and (2) decreased income from merchandise operations. INTEREST CHARGES Total interest charges decreased $0.1 million in 1995 compared with 1994 primarily due to increased allowance for funds used during construction-debt. Interest on long-term debt decreased $0.5 million in 1995 compared with 1994 due to decreased amounts of long-term debt outstanding. The decreased interest expense on long-term debt was offset by a $0.5 million increase in other interest expenses primarily due to increased interest rates on short-term debt. EARNINGS AVAILABLE FOR COMMON STOCK Earnings available for common stock for 1995 was $26.4 million, compared with $58.7 million for 1994. The decrease in earnings available for common stock was primarily due to corporate restructuring costs of $43.1 million, after income taxes, recorded in 1995. The decrease in earnings available for common stock was offset partly by (1) increased operating margin as a result of an increase of approximately 37,000 in the 20 number of customers served and (2) decreased other operating expenses as a result of the restructuring plan. Excluding charges recorded during 1995 related to the restructuring plan, earnings available for common stock would have been approximately $69.5 million. Impact of Inflation Inflation impacts the prices AGLC must pay for labor and other goods and services required for operation, maintenance and capital improvements. AGLC's rate schedules include purchased gas adjustment provisions that permit the increases in gas costs to be passed on to its customers. Increases in costs not recovered through the purchased gas adjustment provisions and other similar rate riders must be recovered through timely filings for rate relief. Financial Condition Financing LONG-TERM DEBT During fiscal 1994, $194.5 million in principal amount of Medium-Term Notes, Series C, was issued, with maturity dates ranging from 10 to 30 years and with interest rates ranging from 5.9% to 7.2%. The notes are issued under an Indenture dated December 1, 1989, and are unsecured and rank on a parity with all other unsecured indebtedness. Net proceeds from the notes were used to repay short-term debt, to refund $125 million in principal amount of First Mortgage Bonds and for other corporate purposes. Approximately $105 million in principal amount of Medium-Term Notes, Series C, was unissued as of September 30, 1996, and 1995. SHORT-TERM DEBT Because AGLC's business is highly seasonal, short-term debt is used to meet seasonal working capital requirements. In addition, capital expenditures are funded temporarily with short-term debt. Lines of credit with various banks provide for direct borrowings from the banks and are subject to annual renewal. The current lines of credit vary from $75 million in the summer months to $253 million for peak winter financing. Short-term debt increased $101 million from the amount outstanding as of September 30, 1995, to $152 million as of September 30, 1996, primarily as a result of the increased use of short-term debt to temporarily fund capital expenditures. For additional information concerning short-term debt, see Note 8 in Notes to Consolidated Financial Statements. Capital Requirements Capital expenditures for construction of distribution facilities, purchase of equipment and other general improvements were $132.8 million during 1996. Capital requirements are estimated to be approximately $350 million for the three years ending September 30, 1999. During the same period, approximately $1.2 million will be required to fund preferred stock purchase fund obligations. Funding for those expenditures will be provided through a combination of internal sources and the issuance of short-term and long-term debt. The cost of natural gas stored underground increased $32.8 million to $144 million as of September 30, 1996, primarily due to an increase in the cost of the gas that was injected into storage. Ratios and Coverages On September 30, 1996, AGLC's capitalization ratios consisted of 49.7% long-term debt, 5.2% preferred stock and 45.1% common equity. The times interest earned and ratio of earnings to fixed charges increased in 1996 compared with 1995 primarily due to increased earnings. The times interest earned and ratio of earnings to fixed charges decreased in 1995 compared with 1994 primarily due to decreased earnings. 21 The weighted average cost of long-term debt decreased from 7.7% on September 30, 1994, to 7.6% on September 30, 1996. The decrease was due to the redemption of $15 million in principal amount of 8.85% medium-term notes. The weighted average cost of preferred stock was 7.5% on September 30, 1994, 1995 and 1996. The return on average common equity was 11.6% for 1994; 4.9% for 1995; and 14.4% for 1996. Earnings available for common stock in 1995 included a charge for restructuring of $43.1 million, after income taxes. Regulatory Activity ORDER 636 In 1992 the Federal Energy Regulatory Commission (FERC) issued Order 636, which, among other things, mandated the unbundling of interstate pipeline sales service and established certain open access transportation regulations that became effective beginning in the 1993-1994 heating season. In Order 636 FERC acknowledged that, without special recovery mechanisms, certain costs that previously were recovered in the pipelines' rate for bundled sales services no longer could be recovered by the pipelines in a restructured environment. Those costs, referred to as transition costs, include such things as unrecovered gas costs, gas supply realignment (GSR) costs and various stranded costs resulting from unbundling. Accordingly, Order 636 included a recovery mechanism that allows the pipeline companies to pass through to their customers any prudently incurred transition costs attributable to compliance with Order 636. On July 16, 1996, the United States Court of Appeals for the District of Columbia Circuit issued its ruling in United Distribution Cos. v. FERC, concerning appeals from Order 636. The court generally upheld FERC's orders against a broad array of challenges, but remanded the orders to FERC for reconsideration of certain issues, including FERC's decision to permit pipelines to pass all of their GSR costs through to their customers and its decision to require interruptible transportation customers to bear 10% of GSR costs. FERC has not yet issued an order on remand, and thus it is not known whether FERC will change its GSR policies. The court's order is subject to further proceedings before the District of Columbia Circuit, and possibly the United States Supreme Court. AGLC, based on filings with FERC by its pipeline suppliers, estimates that its portion of such costs from all of its pipeline suppliers would be approximately $109.9 million. Such filings currently are pending before FERC for final approval, and the transition costs are being collected subject to refund. Approximately $80.6 million of such costs have been incurred by AGLC as of September 30, 1996, recovery of which is provided under the purchased gas provisions of AGLC's rate schedules. Transition costs have not affected the total cost of gas to AGLC's customers significantly because (1) purchases of wellhead gas supplies are based on market prices that are below the cost of gas previously embedded in the bundled pipeline sales service rates and (2) many elements of transition costs previously were embedded in the rates for the pipelines' bundled sales service. REGULATORY REFORM INITIATIVES Two regulatory reform initiatives are pending in Georgia, both designed to increase competition and reduce the role of regulation within the natural gas industry. The first such initiative is the subject of a proceeding at the Georgia Commission; the second initiative is before study committees of the Georgia General Assembly. With respect to the first initiative, on November 20, 1995, the Georgia Commission issued a Natural Gas Notice of Inquiry soliciting comments on how to introduce more competition into natural gas markets within Georgia. Following written comments and oral presentations from numerous parties, on May 21, 1996, the Georgia Commission adopted a Policy Statement that, among other things, sets up a distinction between competitive and natural monopoly services; favors performance-based regulation in lieu of traditional cost-of-service regulation; calls for unbundling interruptible service; directs the Georgia Commission Staff to develop standards of conduct for utilities and their marketing affiliates; and invites pilot programs for unbundling services to residential and small business customers. 22 Consistent with specific goals in the Georgia Commission's Policy Statement, on June 10, 1996, AGLC filed a comprehensive plan for serving interruptible markets called the Natural Gas Service Provider Selection Plan (the Plan). The Plan proposes further unbundling of services to provide large customers more service options and the ability to purchase only those services they require. Proposed tariff changes would allow AGLC to cease its sales service function and the associated sales obligation; implement delivery-only service for large customers on a firm and interruptible basis; and provide pooling services to marketers. The Plan also includes proposed standards of conduct for utilities and marketing affiliates of utilities. Hearings on the proposal have been scheduled for December 1996 and January and February 1997. A decision is expected from the Georgia Commission prior to March 1, 1997. The second major initiative to increase competition and decrease the role of regulation in Georgia is before study committees of the Georgia General Assembly. The 1996 Georgia General Assembly considered, but delayed action on, The Natural Gas Fair Pricing Act, which would have allowed local gas companies to negotiate contract prices and terms for gas services with large commercial and industrial customers absent Georgia Commission-mandated rates. The Georgia General Assembly stated through resolutions a desire to fashion a more comprehensive approach to deregulation and unbundling of natural gas services in Georgia. Those resolutions, adopted during the 1996 session, created Senate and House committees to study and recommend a comprehensive course of action by December 31, 1996, for deregulating natural gas markets in Georgia. The separate Senate and House study committees conducted meetings during September, October and November 1996, with the goal of crafting a comprehensive deregulation bill for the 1997 General Assembly, which convenes in January 1997. The natural gas deregulation plan under consideration by the committees would unbundle services to all of AGLC's natural gas customers, would continue AGLC's role as the intrastate transporter of natural gas, would allow AGLC to assign firm delivery capacity to certificated marketers who would sell the gas commodity, and would create a secondary transportation market for interruptible transportation capacity. Although AGLC cannot predict the outcome of these two regulatory reform initiatives, it supports both the plan under consideration by the Georgia Commission and the plan under consideration by the Georgia General Assembly. AGLC currently makes no profit on the purchase and sale of gas because actual gas costs are passed through to customers under the purchased gas provisions of AGLC's rate schedules. Earnings are provided through revenues received for intrastate transportation of the commodity. Consequently, allowing AGLC to cease its sales service function and the associated sales obligation would not adversely affect AGLC's ability to earn a return on its distribution system investment. GAS COST RECOVERY FILING Pursuant to legislation enacted by the Georgia General Assembly, each investor-owned local gas distribution company is required to file on or before August 1 of each year, a proposed gas supply plan for the subsequent year, as well as a proposed cost recovery factor to be used during the same time period. Costs of natural gas supply, interstate transportation and storage incurred pursuant to an approved plan may be recovered under the purchased gas provisions of AGLC's rate schedules. On August 1, 1996, AGLC filed its 1997 Gas Supply Plan, which consists of gas supply, transportation and storage options designed to provide reliable service to firm customers at the best cost. On September 13, 1996, the Georgia Commission approved the entire supply portfolio contained in the 1997 Gas Supply Plan. As part of the 1997 Gas Supply Plan, AGLC is authorized to continue limited gas supply hedging activities. The 1997 hedging program has been expanded beyond the program approved in the 1996 Gas Supply Plan. The financial results of all hedging activities are passed through to firm service customers under the purchased gas provisions of AGLC's rate schedules. Accordingly, there is no earnings impact as a result of the hedging program. RATE FILINGS On May 1, 1995, Chattanooga filed a rate proceeding with the TRA seeking an increase in revenues of $5.2 million annually. On September 27, 1995, a settlement agreement was reached that provides for an annual increase in revenues of approximately $2.5 million, effective November 1, 1995. 23 On August 3, 1993, Chattanooga made a rate filing with the TRA seeking an increase in revenues of $5.7 million annually. On December 31, 1993, a settlement agreement was reached that provided for an annual rate increase of $3.5 million, effective February 1, 1994. WEATHER NORMALIZATION The Georgia Commission and the TRA have authorized weather normalization adjustment riders (WNARs), which are designed to offset the impact that unusually cold or warm weather has on customer billings and operating margin. Because fiscal 1996 was colder than normal, the WNARs reduced net income and net cash flow from operating activities to normal levels. Fiscal years 1995 and 1994 were warmer than normal, and the WNARs, therefore, increased net income and net cash flow from operating activities to normal levels for those periods. The WNARs decreased net income by $4.4 million in 1996, and increased net income by $27.3 million in 1995 and $12.6 million in 1994. Environmental Matters AGLC has identified nine sites in Georgia where it currently owns all or part of a manufactured gas plant (MGP) site. In addition, AGLC has identified three other sites in Georgia that AGLC does not now own, but that may have been associated with the operation of MGPs by AGLC or its predecessors. There are three sites in Florida that have been investigated by environmental authorities in connection with which AGLC may be contacted as a potentially responsible party. Preliminary assessments and subsequent site investigations have revealed environmental impacts at and near some of those sites. Under a thorough analysis of potentially applicable requirements, AGLC has estimated that, under the most favorable circumstances reasonably possible, the future cost of investigating and remediating the former MGP sites, excluding sites for which no remediation is expected or the cost of which cannot be estimated, could be as low as $30.4 million. Alternatively, AGLC has estimated that, under the least favorable circumstances reasonably possible, the future cost of investigating and remediating the same former MGP sites could be as high as $110.8 million, excluding sites for which no remediation is expected or the cost of which cannot be estimated. AGLC cannot estimate at this time the amount of any other future expenses or liabilities, or the impact on those estimates of future environmental or regulatory changes, that may be associated with or related to the MGP sites, including expenses or liabilities relating to any litigation. At the present time, no amount within the $30.4 million to $110.8 million range can be identified as a better estimate than any other estimate. Therefore, a liability at the low end of this range and a corresponding regulatory asset have been recorded in the financial statements. The Georgia Commission has approved the recovery by AGLC of environmental response costs, pursuant to AGLC's Environmental Response Cost Recovery Rider (ERCRR). For purposes of the ERCRR, environmental response costs include investigation, testing, remediation and litigation costs and expenses or other liabilities relating to or arising from MGP sites. In connection with the ERCRR, the staff of the Georgia Commission has undertaken a financial and management process audit related to the MGP sites, cleanup activities at the sites and environmental response costs that have been incurred for purposes of the ERCRR. On October 10, 1996, the Georgia Commission issued an order to prohibit funds collected through the ERCRR from being used for the payment of any damage award, including punitive damages, as a result of any litigation associated with any of the MGP sites in which AGLC is involved. AGLC is currently pursuing judicial review of the October 10, 1996, order. AGLC is currently a party to claims and litigation related to the former MGP sites. During fiscal 1996 AGLC recovered $14.7 million from its insurance carriers and other potentially responsible parties. In accordance with provisions of the ERCRR, AGLC recognized other income of $1.6 million, after income taxes, and established regulatory liabilities for the remainder of those recoveries. AGLC intends to continue to pursue insurance coverage and contributions from potentially responsible parties. Competition AGLC competes to supply natural gas to interruptible customers who are capable of switching to alternative fuels, including propane, fuel and waste oils, electricity and, in some cases, combustible wood by-products. AGLC also competes to supply gas to interruptible customers who might seek to bypass its distribution system. 24 AGLC can price distribution services to interruptible customers four ways. First, multiple rates are established under the rate schedules of AGLC's tariff approved by the Georgia Commission. If an existing tariff rate does not produce a price competitive with a customer's relevant competitive alternative, three alternate pricing mechanisms exist: Negotiated Contracts, Interruptible Transportation and Sales Maintenance (ITSM) discounts and Special Contracts. On February 17, 1995, the Georgia Commission approved a settlement that permits AGLC to negotiate contracts with customers who have the option of bypassing AGLC's facilities (Bypass Customers) to receive natural gas from other suppliers. The bypass avoidance contracts (Negotiated Contracts) can be renewable, provided the initial term does not exceed five years, unless a longer term specifically is authorized by the Georgia Commission. The rate provided by the Negotiated Contract may be lower than AGLC's filed rate, but not less than AGLC's marginal cost of service to the potential Bypass Customer. Service pursuant to a Negotiated Contract may commence without Georgia Commission action, after a copy of the contract is filed with the Georgia Commission. Negotiated Contracts may be rejected by the Georgia Commission within 90 days of filing; absent such action, however, the Negotiated Contracts remain in effect. None of the Negotiated Contracts filed to date with the Georgia Commission have been rejected. The settlement also provides for a bypass loss recovery mechanism to operate until the earlier of September 30, 1998, or the effective date of new rates for AGLC resulting from a general rate case. In addition to Negotiated Contracts, which are designed to serve existing and potential Bypass Customers, AGLC's ITSM Rider continues to permit discounts for short-term transactions to compete with alternative fuels. Revenue shortfalls, if any, from interruptible customers as measured by the test-year interruptible revenues determined by the Georgia Commission in AGLC's 1993 rate case will continue to be recovered under the ITSM Rider. The settlement approved by the Georgia Commission also provides that AGLC may file contracts (Special Contracts) for Georgia Commission approval if the service cannot be provided through the ITSM Rider, existing rate schedules, or Negotiated Contract procedures. A Special Contract, for example, could involve AGLC providing a long-term service contract to compete with alternative fuels where physical bypass is not the relevant competition. Pursuant to the approved settlement, AGLC has filed and is providing service pursuant to approximately 50 Negotiated Contracts. Additionally, the Georgia Commission has approved Special Contracts between AGLC and five interruptible customers. On July 22, 1996, Chattanooga filed a plan with the TRA that permits Chattanooga to negotiate contracts with customers in Tennessee who have long-term competitive options, including bypass. On November 7, 1996, the TRA hearing officer recommended approval of a settlement that permits Chattanooga to negotiate contracts with large commercial or industrial customers who are capable of bypassing Chattanooga's distribution system. The settlement provides for approval on an experimental basis, with the TRA to review the measure two years from the approval date. The pricing terms provided in any such contract may be neither less than Chattanooga's marginal cost of providing service nor greater than the filed tariff rate generally applicable to such service. Chattanooga can recover 50% of the difference between the contract rate and the applicable tariff rate through the balancing account of the purchased gas adjustment provisions of Chattanooga's rate schedules. - -------------------------------------------------------------------------------- 25 - -------------------------------------------------------------------------------- Item 8. Financial Statements and Supplementary Data The following financial statements of AGLC are set forth as follows: Statements of Consolidated Income for the years ended September 30, 1996, 1995 and 1994 - page 27. Statements of Consolidated Cash Flows for the years ended September 30, 1996, 1995 and 1994 - page 28. Consolidated Balance Sheets as of September 30, 1996 and 1995 - pages 29-30. Statements of Consolidated Common Stock Equity for the years ended September 30, 1996, 1995 and 1994 - page 31. Notes to Consolidated Financial Statements - pages 32-47. Independent Auditors' Report - page 48. The supplementary financial information required by Item 302 of Regulation S-K is set forth in Note 14 in Notes to Consolidated Financial Statements on page 47 of this Form 10-K. 26 ATLANTA GAS LIGHT COMPANY Statements of Consolidated Income For the years ended September 30, ------------------------------------ In millions, except per share amounts 1996 1995 1994 - -------------------------------------------------------------------------------- Operating Revenues ...................... $ 1,217.6 $ 1,063.0 $ 1,199.9 Cost of Gas ............................. 718.7 571.8 736.8 - -------------------------------------------------------------------------------- Operating Margin ........................ 498.9 491.2 463.1 - -------------------------------------------------------------------------------- Other Operating Expenses Operation ......................... 217.7 213.5 207.0 Restructuring costs ............... 70.3 Maintenance ....................... 29.3 30.4 32.8 Depreciation of utility plant other than transportation equipment . 61.6 58.5 55.4 Income taxes ...................... 43.5 16.0 34.3 Taxes other than income taxes ..... 24.9 25.6 26.0 - -------------------------------------------------------------------------------- Total other operating expenses 377.0 414.3 355.5 - -------------------------------------------------------------------------------- Operating Income ........................ 121.9 76.9 107.6 - -------------------------------------------------------------------------------- Other Income Allowance for funds used during construction-equity ........... 0.4 0.2 0.2 Other income and deductions ....... 12.2 1.9 5.0 Income taxes ...................... (4.8) (0.7) (2.0) - -------------------------------------------------------------------------------- Total other income-net ........ 7.8 1.4 3.2 - -------------------------------------------------------------------------------- Income Before Interest Charges .......... 129.7 78.3 110.8 - -------------------------------------------------------------------------------- Interest Charges Interest on long-term debt ........ 42.2 42.7 43.2 Allowance for funds used during construction-debt ............. (0.4) (0.3) (0.2) Other interest .................... 7.3 5.1 4.6 - -------------------------------------------------------------------------------- Total interest charges ........ 49.1 47.5 47.6 - -------------------------------------------------------------------------------- Net Income .............................. 80.6 30.8 63.2 - -------------------------------------------------------------------------------- Dividends on Preferred Stock ............ 4.4 4.4 4.5 - -------------------------------------------------------------------------------- Earnings Available for Common Stock ..... $ 76.2 $ 26.4 $ 58.7 - -------------------------------------------------------------------------------- See notes to consolidated financial statements. 27 ATLANTA GAS LIGHT COMPANY Statements of Consolidated Cash Flows For the years ended September 30, ---------------------------------- In millions 1996 1995 1994 - -------------------------------------------------------------------------------- Cash Flows from Operating Activities Net income .............................. $ 80.6 $ 30.8 $ 63.2 Adjustments to reconcile net income to net cash flow from operating activities Depreciation and amortization ....... 65.8 62.5 59.2 Noncash restructuring costs ......... 52.9 Deferred income taxes ............... 24.3 (1.2) 13.6 Other ............................... (0.1) 3.8 6.3 - -------------------------------------------------------------------------------- 170.6 148.8 142.3 Changes in assets and liabilities Receivables ......................... (27.3) 14.6 9.4 Inventories ......................... (32.7) 43.3 (38.5) Deferred purchased gas adjustment ... (11.0) (13.8) 20.8 Accounts payable .................... 3.1 14.7 (6.0) Other-net ........................... (12.8) 2.4 4.7 - -------------------------------------------------------------------------------- Net cash flow from operating activities ...................... 89.9 210.0 132.7 - -------------------------------------------------------------------------------- Cash Flows from Financing Activities Sale of common stock, net of expenses ... 1.0 50.4 2.4 Short-term borrowings, net .............. 101.0 (44.4) (36.0) Redemptions and purchase fund requirements of preferred stock and long-term debt ...................... (15.0) (125.7) Sale of long-term debt .................. 194.5 Common stock dividends paid to parent ... (53.8) (44.3) (42.9) Preferred stock dividends ............... (4.4) (4.4) (4.5) - -------------------------------------------------------------------------------- Net cash flow from financing ...... 43.8 (57.7) (12.2) activities - -------------------------------------------------------------------------------- Cash Flows from Investing Activities Utility plant expenditures .............. (132.0) (120.8) (122.0) Investment in joint venture ............. (32.6) Nonutility capital expenditures ......... 1.1 (0.4) (0.1) Cash received from joint venture ........ 2.4 Cost of removal, net of salvage ......... (1.0) 1.9 1.6 - -------------------------------------------------------------------------------- Net cash flow from investing ...... (129.5) (151.9) (120.5) activities - -------------------------------------------------------------------------------- Net increase in cash and cash equivalents ..................... 4.2 0.4 Cash and cash equivalents at beginning of year ............... 3.7 3.3 3.3 - -------------------------------------------------------------------------------- Cash and cash equivalents at end of year ..................... $ 7.9 $ 3.7 $ 3.3 - -------------------------------------------------------------------------------- Supplemental Information Cash Paid During the Year for Interest ............................ $ 49.2 $ 48.4 $ 51.1 Income taxes ........................ $ 19.1 $ 28.6 $ 18.0 Noncash dividend paid to parent ......... $ 80.2 - -------------------------------------------------------------------------------- See notes to consolidated financial statements. 28 ATLANTA GAS LIGHT COMPANY Consolidated Balance Sheets Assets September 30, --------------------------- In millions 1996 1995 - -------------------------------------------------------------------------------- Utility Plant ..................................... $ 1,969.0 $ 1,919.9 Less accumulated depreciation ................... 607.8 583.3 - -------------------------------------------------------------------------------- Utility plant-net ............................. 1,361.2 1,336.6 - -------------------------------------------------------------------------------- Other Property and Investments (less accumulated depreciation of $2.9 in 1995) . 13.7 - -------------------------------------------------------------------------------- Current Assets Cash and cash equivalents ....................... 7.9 3.7 Receivables Gas (less allowance for uncollectible accounts of $2.1 in 1996 and $2.4 in 1995) ........... 62.4 30.3 Merchandise (less allowance for uncollectible accounts of $.4 in 1996 and $1.9 in 1995) ... 2.5 5.3 Integrated resource plan loans (less allowance for uncollectible accounts of $.2 in 1996 and $.1 in 1995) ................................ 3.4 1.3 Other ......................................... 2.5 9.6 Unbilled revenues ............................... 20.5 17.5 Inventories Natural gas stored underground ................ 144.0 111.2 Liquefied natural gas ......................... 16.8 14.3 Materials and supplies ........................ 7.9 8.0 Other ......................................... 0.1 2.6 Deferred purchased gas adjustment ............... 4.7 Other ........................................... 10.3 10.9 - -------------------------------------------------------------------------------- Total current assets .......................... 283.0 214.7 - -------------------------------------------------------------------------------- Deferred Debits and Other Assets Investment in joint ventures .................... 32.6 Unrecovered environmental response costs ........ 38.0 34.9 Unrecovered integrated resource plan costs ...... 10.0 9.9 Unrecovered postretirement benefits costs ....... 9.7 7.2 Unamortized cost to repurchase long-term debt ... 3.5 4.9 Other ........................................... 22.8 20.1 - -------------------------------------------------------------------------------- Total deferred debits and other assets ........ 84.0 109.6 - -------------------------------------------------------------------------------- Total ......................................... $ 1,728.2 $ 1,674.6 - -------------------------------------------------------------------------------- See notes to consolidated financial statements. 29 ATLANTA GAS LIGHT COMPANY Capitalization and Liabilities September 30, -------------------------- In millions 1996 1995 - -------------------------------------------------------------------------------- Capitalization Common stock equity (See accompanying statements of consolidated common stock equity) .......... $ 502.7 $ 557.3 Cumulative preferred stock Redeemable .................................... 55.5 55.5 Nonredeemable ................................. 3.0 3.0 Long-term debt .................................. 554.5 554.5 - -------------------------------------------------------------------------------- Total capitalization .......................... 1,115.7 1,170.3 - -------------------------------------------------------------------------------- Current Liabilities Short-term debt ................................. 152.0 51.0 Accounts payable-trade .......................... 72.7 72.3 Payable to associated companies ................. 2.7 Take-or-pay charges payable ..................... 8.0 Customer deposits ............................... 27.8 29.5 Interest ........................................ 25.7 25.4 Other accrued liabilities ....................... 22.5 11.9 Deferred purchased gas adjustment ............... 6.3 Other ........................................... 20.4 26.5 - -------------------------------------------------------------------------------- Total current liabilities ..................... 323.8 230.9 - -------------------------------------------------------------------------------- Long-Term Liabilities Accrued environmental response costs ............ 30.4 28.6 Payable to AGL Resources - accrued pension costs 4.9 10.3 Payable to AGL Resources - accrued postretirement benefits costs ................................ 36.2 30.1 - -------------------------------------------------------------------------------- Total long-term liabilities ................... 71.5 69.0 - -------------------------------------------------------------------------------- Deferred Credits Unamortized investment tax credit ............... 28.8 30.3 Regulatory tax liability ........................ 19.3 23.3 Other ........................................... 12.8 12.0 - -------------------------------------------------------------------------------- Total deferred credits ........................ 60.9 65.6 - -------------------------------------------------------------------------------- Accumulated Deferred Income Taxes ................. 156.3 138.8 - -------------------------------------------------------------------------------- Commitments and Contingencies (Notes 8 and 10) - -------------------------------------------------------------------------------- Total ......................................... $ 1,728.2 $ 1,674.6 - -------------------------------------------------------------------------------- 30 ATLANTA GAS LIGHT COMPANY Statements of Consolidated Common Stock Equity For the years ended September 30, --------------------------------- In millions, except per share amounts 1996 1995 1994 - -------------------------------------------------------------------------------- Common Stock (Note 4) $5 par value; authorized 100.0 shares; outstanding, 55.4 in 1996, 54.9 in 1995 and 50.8 in 1994 Beginning of year ........................ $ 137.3 $ 127.1 $ 124.2 Issuance of common stock Stock dividend ....................... 137.5 Public sale .......................... 7.5 Employees' benefit plans, dividend reinvestment and stock purchase plan and long-term stock incentive plan . 2.0 2.7 2.9 - -------------------------------------------------------------------------------- End of year .............................. 276.8 137.3 127.1 - -------------------------------------------------------------------------------- Premium on Capital Stock (Note 4) Beginning of year ........................ 297.7 241.3 224.2 Issuance of common stock Stock dividend ....................... (137.5) Public sale .......................... 41.1 Employees' benefit plans, dividend reinvestment and stock purchase plan and long-term stock incentive plan . 6.0 15.3 17.1 - -------------------------------------------------------------------------------- End of year .............................. 166.2 297.7 241.3 - -------------------------------------------------------------------------------- Earnings Reinvested Beginning of year ........................ 122.3 150.1 143.6 Net income ............................. 80.6 30.8 63.2 Cash dividends Preferred stock ........................ (4.4) (4.4) (4.5) Common stock Paid to public shareholders .......... (29.2) (54.2) (52.2) Paid to AGL Resources ................ (29.4) Noncash dividend to parent ............. (80.2) - -------------------------------------------------------------------------------- End of year .............................. 59.7 122.3 150.1 - -------------------------------------------------------------------------------- Total common stock equity .............. $ 502.7 $ 557.3 $ 518.5 - -------------------------------------------------------------------------------- See notes to consolidated financial statements. 31 Notes to Consolidated Financial Statements 1. Summary of Significant Accounting Policies PRINCIPLES OF CONSOLIDATION On March 6, 1996, Atlanta Gas Light Company (AGLC) completed a corporate restructuring in which a new company, AGL Resources, Inc. (AGL Resources), became the holding company for AGLC, AGLC's wholly owned natural gas utility subsidiary, Chattanooga Gas Company (Chattanooga), and AGLC's nonregulated subsidiaries. The holding company formation was completed upon receipt of shareholder approval on March 6, 1996, when each share of AGLC common stock was converted into one share of AGL Resources common stock, and AGLC became the primary subsidiary of AGL Resources. The consolidated financial statements of AGLC include the financial statements of AGLC and Chattanooga. Intercompany balances and transactions between AGLC and Chattanooga have been eliminated. SUBSIDIARIES AGLC is a public utility that distributes and transports natural gas in Georgia and Tennessee and is subject to regulation by the Georgia Public Service Commission (Georgia Commission) and the Tennessee Regulatory Authority (TRA), formerly the Tennessee Public Service Commission, with respect to its rates for service, maintenance of its accounting records and various other matters. The consolidated financial statements are prepared in accordance with generally accepted accounting principles, which give appropriate recognition to the rate-making and accounting practices and policies of the Georgia Commission and the TRA. Ownership of AGLC's nonregulated business, Georgia Gas Company (natural gas production activities), has been transferred to AGL Energy Services, Inc. Ownership of AGLC's other nonregulated businesses, Georgia Energy Company (natural gas vehicle conversions), Georgia Gas Service Company (retail propane sales) and Trustees Investments, Inc. (real estate holdings), has been transferred to AGL Investments. AGLC's interest in Sonat Marketing Company L.P. has been transferred to AGL Gas Marketing, Inc., a wholly owned subsidiary of AGL Investments. The transfer of AGLC's nonregulated businesses to those subsidiaries of AGL Resources was effected through a noncash dividend of $45.9 million during fiscal 1996. AGL Resources Service Company (Service Company) was formed during fiscal 1996 to provide corporate support services to AGLC, AGL Resources and its other subsidiaries. The transfer of related assets from AGLC to Service Company and other nonregulated subsidiaries was effected through a noncash dividend of $34.3 million during the fourth quarter of fiscal 1996. Expenses of Service Company are allocated to AGL Resources and its subsidiaries. REGULATION The consolidated financial statements reflect regulatory actions by the Georgia Commission and the TRA that result in the recognition of revenues and expenses in different time periods than do enterprises that are not rate regulated. In accordance with Statement of Financial Accounting Standards No. 71, "Accounting for the Effects of Certain Types of Regulation" (SFAS 71), regulatory assets and liabilities are recorded and represent regulator-approved deferrals resulting from the rate-making process. SFAS 71 assets and liabilities recorded on September 30 consist of the following: 32 (Millions of dollars) 1996 1995 - ------------------------------------------------------------------ Assets: Unrecovered environmental response costs .... $ 38.0 $ 34.9 Unrecovered integrated resource plan costs .. 10.0 9.9 Unrecovered postretirement benefits costs ... 9.7 7.2 Deferred purchased gas adjustment ........... 4.7 Unamortized cost to repurchase long-term debt 3.4 4.9 - ------------------------------------------------------------------ Total ......................................... $ 65.8 $ 56.9 - ------------------------------------------------------------------ Liabilities: Unamortized investment tax credit ........... $ 28.8 $ 30.3 Regulatory tax liability .................... 19.3 23.3 Deferred purchased gas adjustment 6.3 Environmental response cost recoveries from third parties ........................... 7.4 Environmental response cost recoveries from third parties - customer portion ........ 4.5 Other ....................................... 3.7 15.0 - ------------------------------------------------------------------ Total ......................................... $ 63.7 $ 74.9 - ------------------------------------------------------------------ UTILITY PLANT AND DEPRECIATION Utility plant is stated at original cost. Direct labor and material costs of plant construction and related indirect construction costs, including administrative, engineering and general overhead, taxes, and an allowance for funds used during construction (AFUDC), are added to utility plant. The portion of AFUDC attributable to equity funds is included in other income, and the portion attributable to borrowed funds is shown as a reduction in interest charges in the statements of consolidated income. The AFUDC rate of 9.32% for the three-year period ended September 30, 1996, was the cost of capital approved by the Georgia Commission in a prior rate proceeding. The original cost of utility property retired or otherwise disposed of, plus the cost of dismantling, less salvage, is charged to accumulated depreciation. Maintenance, repairs and minor additions, renewals, and betterments to property are charged to operations. The composite straight-line depreciation rate was approximately 3.2% for utility property other than transportation equipment for the three-year period ended September 30, 1996. Transportation equipment is depreciated over a period of five to 10 years. DEFERRED PURCHASED GAS ADJUSTMENT AGLC's rate schedules include purchased gas adjustment provisions that permit the recovery of purchased gas costs. The purchased gas adjustment factor is revised periodically to reflect changes in the cost of purchased gas without formal rate proceedings. Any overrecoveries or underrecoveries of gas costs are charged or credited to cost of gas and are included in current assets or liabilities. As part of the 1997 Gas Supply Plan, AGLC is authorized to continue limited gas supply hedging activities. The 1997 hedging program has been expanded beyond the program approved in the 1996 Gas Supply Plan. Accounting for hedging activities is provided in accordance with Statement of Financial Accounting Standards No. 80, "Accounting for Futures Contracts." The 33 financial results of all hedging activities are passed through to firm service customers under the purchased gas provisions of AGLC's rate schedules. Accordingly, there is no earnings impact as a result of the hedging program. OPERATING REVENUES Revenues are based on rates approved by the Georgia Commission and the TRA. Customers' base rates may not be changed without formal approval of the Georgia Commission or the TRA. Revenues are recognized on the accrual basis, which includes estimated amounts for gas delivered, but not yet billed. The Georgia Commission and the TRA have authorized weather normalization adjustment riders. Such riders are designed to offset the impact that unusually cold or warm weather has on operating margin. Certain interruptible customers purchase gas directly from gas producers and marketers. The Georgia Commission and the TRA have approved programs whereby transportation charges are billed on those purchases. INCOME TAXES Deferred income taxes result from temporary differences between book and taxable income and principally relate to depreciation. Investment tax credits have been deferred and are being amortized by credits to income in accordance with regulatory treatment over the estimated lives of the related properties. STATEMENT OF CASH FLOWS For purposes of reporting cash flows, AGLC considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. USE OF ESTIMATES Preparing financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. Those estimates and assumptions affect the reported amounts of assets and liabilities, disclosure on contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. OTHER Gas inventories are stated at cost on a principally first-in, first-out method. Materials and supplies inventories are stated at lower of average cost or market. Consistent with the rate treatment prescribed by the Georgia Commission and the TRA, vacation pay and short-term disability benefits are expensed when those benefits are paid. Certain reclassifications have been made in 1995 and 1994 to conform with the 1996 financial statement presentation. 34 2. Income Tax Expense AGLC's income taxes are included as a part of AGL Resources' consolidated income tax return. The information included herein relates to AGLC's allocated portion. Deferred tax balances are measured at the tax rates that will apply during the period the taxes become payable and are adjusted whenever new rates are enacted. Due to the regulated nature of AGLC's business, a regulatory liability has been recorded in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes." The regulatory liability is being amortized over approximately 30 years. Components of income tax expense shown in the consolidated income statements are as follows: (Millions of dollars) 1996 1995 1994 - ------------------------------------------------------------------------------- Included in operating expenses: Current income taxes Federal $18.1 $16.4 $19.7 State 2.6 2.5 3.1 Deferred income taxes Federal 20.4 (1.1) 11.5 State 3.9 (0.2) 1.5 Amortization of investment tax credits (1.5) (1.6) (1.5) - ------------------------------------------------------------------------------- Total 43.5 16.0 34.3 - ------------------------------------------------------------------------------- Included in other income: Current income taxes Federal 4.2 0.5 1.2 State 0.6 0.1 0.2 Deferred income taxes Federal 0.1 0.5 State 0.1 - ------------------------------------------------------------------------------- Total 4.8 0.7 2.0 - ------------------------------------------------------------------------------- Total income tax expense $48.3 $16.7 $36.3 - ------------------------------------------------------------------------------- A reconciliation between the statutory federal income tax rate and the effective rate is as follows: (Millions of dollars) 1996 - -------------------------------------------------------------------- % of Pretax Amount Income - -------------------------------------------------------------------- Computed tax expense $45.1 35.0 State income tax, net of federal income tax benefit 4.4 3.3 Amortization of investment tax credits (1.5) (1.2) Other-net 0.3 0.3 - -------------------------------------------------------------------- Total income tax expense $48.3 37.4 - -------------------------------------------------------------------- 35 (Millions of dollars) 1995 - -------------------------------------------------------------------- % of Pretax Amount Income - -------------------------------------------------------------------- Computed tax expense $16.6 35.0 State income tax, net of federal income tax benefit 1.3 2.7 Amortization of investment tax credits (1.6) (3.4) Other-net 0.4 0.8 - -------------------------------------------------------------------- Total income tax expense $16.7 35.1 - -------------------------------------------------------------------- (Millions of dollars) 1994 - -------------------------------------------------------------------- % of Pretax Amount Income - -------------------------------------------------------------------- Computed tax expense $34.8 35.0 State income tax, net of federal income tax benefit 3.2 3.2 Amortization of investment tax credits (1.5) (1.5) Other-net (0.2) (0.2) - -------------------------------------------------------------------- Total income tax expense $36.3 36.5 - -------------------------------------------------------------------- 36 Components that give rise to the net deferred income tax liability as of September 30 are as follows: (Millions of dollars) 1996 1995 - -------------------------------------------------------------------------------- Deferred tax liabilities: Property - accelerated depreciation and other property-related items $193.4 $187.1 Other 15.2 15.8 - -------------------------------------------------------------------------------- Total deferred tax liabilities 208.6 202.9 - -------------------------------------------------------------------------------- Deferred tax assets: Deferred investment tax credits 11.1 11.7 Alternative minimum tax 11.8 12.3 Other 29.4 40.1 - -------------------------------------------------------------------------------- Total deferred tax assets 52.3 64.1 - -------------------------------------------------------------------------------- Net deferred tax liability $156.3 $138.8 - -------------------------------------------------------------------------------- 3. Corporate Restructuring In November 1994 AGLC announced a corporate restructuring plan and began its implementation during fiscal 1995. As a result of the restructuring, AGLC combined offices and established centralized customer service centers. During 1995 AGLC reduced the average number of employees by approximately 500 through voluntary retirement, severance programs and attrition. Restructuring costs of $43.1 million, after income taxes, were recorded by AGLC during 1995. The principal effects of the restructuring charges were to increase obligations with respect to pension benefits and postretirement benefits other than pensions. During the fourth quarter of fiscal 1996, AGLC reviewed its remaining liabilities with respect to its corporate restructuring plan. As a result, AGLC adjusted its restructuring accruals and reduced operating expenses by $1.6 million, after income taxes. The remaining balance of restructuring liabilities as of September 30, 1996 and 1995 was $1 million and $4.8 million, respectively. 4. Employee Benefit Plans Effective July 1, 1996, the Board of Directors authorized the transfer of the sponsorship of all employee benefit plans from AGLC to AGL Resources. Substantially all employees of AGLC are eligible to participate in the AGL Resources-sponsored benefit plans. AGLC participates in an AGL Resources noncontributory defined benefit retirement plan. The plan's assets consist primarily of marketable securities, corporate obligations, U.S. government obligations, insurance contracts, real estate investments and cash equivalents. The plan provides pension benefits that are based on years of service and the employee's highest 36 consecutive months' compensation out of the last 60 months worked. AGL Resources' funding policy is to make the annual contribution required by applicable regulations and recommended by its actuary. AGLC participates in an AGL Resources excess benefit plan that is unfunded and provides supplemental benefits to certain officers after retirement. In September 1994, AGL 37 Resources established a voluntary early retirement plan for certain officers of AGL Resources that is unfunded and provides supplemental pension benefits to participants who elected early retirement. The annual expense and accumulated benefits of such plans are not significant. Net periodic pension costs for the plans include service cost, interest cost, return on pension assets and straight-line amortization of unrecognized initial net assets over approximately 16 years. Net periodic pension costs allocated to AGLC include the following components: (Millions of dollars) 1996 1995 1994 - -------------------------------------------------------------------------------- Service cost $ 4.0 $ 4.5 $ 5.5 Interest cost 15.8 14.9 13.2 Actual return on assets (19.3) (17.0) (3.3) Net amortization and deferral 6.3 5.9 (6.2) - -------------------------------------------------------------------------------- Net periodic pension cost $ 6.8 $ 8.3 $ 9.2 - -------------------------------------------------------------------------------- Actuarial assumptions used include: Discount rate 7.8% 8.3% 8.3% Rate of increase in compensation levels 4.5% 5.0% 5.0% Expected long-term rate of return on assets 8.3% 8.3% 8.3% - -------------------------------------------------------------------------------- The following schedule sets forth the funded status of the AGL Resources' plan as of June 30, 1996, and 1995, and amounts recognized in the consolidated balance sheets of AGLC as of September 30, 1996 and 1995: (Millions of dollars) 1996 1995 - -------------------------------------------------------------------------------- Actuarial present value of benefit obligations Vested benefit obligation $ 180.5 $ 175.6 - -------------------------------------------------------------------------------- Accumulated benefit obligation $ 183.2 $ 178.3 - -------------------------------------------------------------------------------- Projected benefit obligation $(212.9) $(207.4) Plan assets at fair value 181.8 163.9 - -------------------------------------------------------------------------------- Plan assets less than projected benefit obligation (31.1) (43.5) Unrecognized net loss 26.8 34.1 Remaining unrecognized net assets at date of initial adoption (4.5) (5.2) Unrecognized prior service cost 3.9 4.3 - -------------------------------------------------------------------------------- Accrued pension costs $ (4.9) $ (10.3) - -------------------------------------------------------------------------------- During 1995 a curtailment loss of $6 million and a loss associated with incentive benefits of $25.3 million was incurred as a result of a corporate restructuring plan (see Note 3). The effect of the curtailment loss and incentive loss was to increase the accumulated benefit obligation and projected benefit obligation by $25.3 million and $31.3 million, respectively. AGLC participates in AGL Resources' Retirement Savings Plus Plan (RSP Plan), a 401(k) plan, that provides participants a mechanism for making contributions for retirement savings. Each participant may contribute amounts up to 15% of eligible compensation. AGL Resources makes a contribution equal to 65% of the participant's contribution not to exceed 3.9% 38 of the participant's compensation for the plan year. The contribution was $3.2 million for 1996, $3.3 million for 1995 and $3.4 million for 1994. AGLC participates in AGL Resources' Nonqualified Savings Plan (NSP), an unfunded, nonqualified plan similar to the RSP Plan, that was established on July 1, 1995. The NSP provides an opportunity for eligible employees to make contributions for retirement savings. AGL Resources' contributions during 1996 and 1995 to the NSP were not significant. AGLC participates in AGL Resources' Leveraged Employee Stock Ownership Plan (LESOP). In January 1988, in connection with the LESOP, AGL Resources purchased 2 million shares of its common stock for $11.75 per share, with the proceeds of a loan secured by such common stock. AGL Resources has not guaranteed the repayment of the loan. The loan is expected to be repaid from regular cash dividends on AGL Resources' common stock paid to the LESOP and from contributions to the LESOP as approved by AGL Resources' Board of Directors. Contributions to the LESOP were $0.7 million for 1996 and $0.8 million for 1995 and $0.8 million for 1994. The principal balance of the loan was $2.9 million as of September 30, 1996, and $5.3 million as of September 30, 1995. The loan is payable on December 31, 1997. AGLC's officers and employees participate in AGL Resources' Long-Term Stock Incentive Plan (LTSIP). The LTSIP provides that incentive and nonqualified stock options, restricted stock and stock appreciation rights may be granted to key employees of AGL Resources and its subsidiaries. The exercise price of any shares under option must be at least equal to the fair market value on the date of the grant. The options granted become exercisable six months after the date of grant and generally expire 10 years after the date of grant. In addition to providing pension benefits, AGL Resources provides certain health care and life insurance benefits for retired employees. Substantially all employees become eligible for those benefits if they reach retirement age while working for AGLC. In 1993 the Georgia Commission approved a five-year phase-in of Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions" (SFAS 106) expense that defers a portion of SFAS 106 expense for future recovery. A regulatory asset has been recorded for the deferred portion of SFAS 106 expense. In 1993, the TRA approved the recovery of SFAS 106 expense that is funded through an external trust. Net periodic postretirement benefits costs allocated to AGLC for fiscal 1996 and 1995 include the following components: (Millions of dollars) 1996 1995 1994 - --------------------------------------------------------------------- Service cost $0.8 $ 0.9 $ 1.0 Interest cost 8.8 7.6 6.5 Actual return on assets (0.6) (0.3) Amortization of transition obligation 4.2 4.2 4.1 - --------------------------------------------------------------------- Net postretirement benefits costs $13.2 $12.4 $11.6 - --------------------------------------------------------------------- Approximately $10.7 million, $8.7 million and $8.0 million of net periodic postretirement benefits costs for fiscal 1996, 1995 and 1994, respectively, were recovered from 39 AGLC's customers. The remaining $2.5 million, $3.7 million and $3.6 million for 1996, 1995 and 1994, respectively, were deferred for future recovery through amortization and recognized as a regulatory asset in the financial statements consistent with regulatory decisions. AGL Resources has funded through an external trust SFAS 106 expense recovered from its utility customers in excess of the pay-as-you-go amounts. The following schedule sets forth the funded status of the AGL Resources plan as of September 30, 1996 and 1995: (Millions of dollars) 1996 1995 - ------------------------------------------------------------------------------- Retirees $(85.8) $(94.1) Fully eligible active plan participants (6.4) (9.3) Other active plan participants (13.3) (14.5) - ------------------------------------------------------------------------------- Total accumulated postretirement benefit obligation (105.5) (117.9) Plan assets at fair value 10.4 8.0 - ------------------------------------------------------------------------------- Accumulated postretirement benefit obligation in excess of plan assets (95.1) (109.9) Unrecognized transition obligation 69.5 73.6 Unrecognized (gain) loss (10.6) 6.2 - ------------------------------------------------------------------------------- Accrued postretirement benefits costs $(36.2) $(30.1) - ------------------------------------------------------------------------------- During 1995 a curtailment loss of $22.9 million was incurred as a result of a corporate restructuring (see Note 3). The assumed health care cost trend rate used in measuring the accumulated postretirement benefit obligation for pre-Medicare eligibility is 11% in 1996, decreasing 0.5% per year to 6% in the year 2006 and an additional 0.25% to 5.75% in 2007. The rate for post-Medicare eligibility is 9.5% in 1996, decreasing 0.5% per year to 5.5% in the year 2004 and an additional 0.25% to 5.25% in 2005. Increasing the assumed health care cost trend rate by 1% would increase the accumulated postretirement benefit obligation as of September 30, 1996, by approximately $6 million and the accrued postretirement benefits cost by approximately $0.5 million for fiscal 1996. The assumed discount rate used in determining the postretirement benefit obligation was 7.75% in 1996 and 1995. 5. Common Stock On March 6, 1996, AGLC completed a corporate restructuring in which AGL Resources became the holding company for AGLC and its subsidiaries. The holding company formation was completed upon receipt of shareholder approval on March 6, 1996, when each share of AGLC common stock was converted into one share of AGL Resources common stock, and AGLC became the primary subsidiary of AGL Resources. AGL Resources holds all shares of common stock of AGLC outstanding as of March 6, 1996. On November 3, 1995, the Board of Directors declared a two-for-one stock split of the common stock effected in the form of a 100% stock dividend to shareholders of record on November 17, 1995, and payable on December 1, 1995. AGLC recorded a decrease to premium on capital stock and an increase to common stock of $137.5 million to transfer the amount of the par value of the stock dividend to common stock. All references to number of shares have been restated retroactively to reflect the stock dividend. 40 Common stock dividends declared during the first and second quarters of fiscal 1996 were paid to AGLC's public shareholders. Dividends declared during the third and fourth quarters of fiscal 1996 were paid to AGL Resources. 6. Preferred Stock AGLC is required under its charter to offer to purchase or call for redemption 4,100 shares of preferred stock for each of the five years ending September 30, 2001. The issues are callable at the option of AGLC, in whole or in part, upon 30 days' notice. Shares reacquired by AGLC to satisfy future requirements and reported as if canceled were 6,715; 7,715; and 8,715, as of September 30, 1996, 1995, and 1994, respectively. AGLC's charter contains provisions limiting the issuance of additional shares of preferred stock. The most restrictive of those provisions requires gross income, as defined, for a specified 12-month period to be at least equal to 1.5 times the sum of annualized interest requirements on outstanding indebtedness and the dividend requirements on outstanding preferred stock, including the preferred stock being issued. Based on earnings for fiscal 1996, AGLC's gross income was 2.48 times the sum of its interest and preferred stock dividend requirements. As of September 30, 1996, AGLC had 10 million shares of authorized, but unissued, preferred stock, no par value. The outstanding preferred stock, net of current maturities, as of September 30 is as follows: (Millions of dollars) 1996 1995 - --------------------------------------------------------------------- $100 par or stated value (callable at option of AGLC) Redeemable preferred stock 4.72% - Current call price $103.00 $ 1.5 $ 1.5 7.70% - Current call price (a) 44.5 44.5 7.84% - Current call price $101.96 4.6 4.6 8.32% - Current call price $102.08 4.9 4.9 Nonredeemable preferred stock 4.50% - Current call price $105.25 2.0 2.0 5.00% - Current call price $105.00 1.0 1.0 - --------------------------------------------------------------------- Total $58.5 $58.5 - --------------------------------------------------------------------- (a) Not redeemable prior to December 1, 1997. Redeemable at par thereafter. 41 The outstanding shares of preferred stock net of previously reacquired shares and shares reacquired during the year for purchase fund requirements are as follows: 1996 1995 1994 - ------------------------------------------------------------- 4.50% Series Outstanding 20,000 20,000 20,000 4.72% Series Outstanding 15,285 15,285 15,285 5.00% Series Outstanding 10,000 10,000 10,000 7.70% Series Outstanding 445,000 445,000 445,000 7.84% Series Outstanding 47,645 47,797 47,802 Reacquired 152 5 1,500 8.32% Series Outstanding 49,854 50,004 50,004 Reacquired 150 215 - ------------------------------------------------------------- Total Outstanding 587,784 588,086 588,091 Reacquired 302 5 1,715 - ------------------------------------------------------------- 7. Long-Term Debt Medium-term notes Series A, Series B and Series C were issued under an Indenture dated December 1, 1989. The notes are unsecured and rank on a parity with all other unsecured indebtedness. During 1994, $194.5 million in principal amount of such notes was issued. The annual maturities of long-term debt for the five years ending September 30, 2001, are $50 million in 2000 and $20 million in 2001. The outstanding long-term debt, net of current maturities, as of September 30 is as follows: (Millions of dollars) 1996 1995 - ---------------------------------------------------------------- Medium-term notes Series A (1) $ 60.0 $ 60.0 Series B (2) 300.0 300.0 Series C (3) 194.5 194.5 - ---------------------------------------------------------------- Total $554.5 $554.5 - ---------------------------------------------------------------- (1) Interest rates from 8.90% to 9.10% with maturity dates from 2000 to 2021. (2) Interest rates from 7.15% to 8.70% with maturity dates from 2000 to 2023. (3) Interest rates from 5.90% to 7.20% with maturity dates from 2004 to 2024. 8. Short-Term Debt Lines of credit with various banks provide for direct borrowings and are subject to annual renewal. The current lines of credit vary throughout the year from $75 million in the 42 summer months to $253 million for peak winter financing. Certain of the lines are on a commitment fee basis. As of September 30, 1996, $59.3 million was available on lines of credit. Short-term borrowings consisted of the following: (Millions of dollars) 1996 1995 1994 - ------------------------------------------------------------------- Short-term debt outstanding at end of year $ 152.0 $ 51.0 $ 95.4 Maximum amounts of short-term debt outstanding at any month end during the year 156.3 155.0 229.4 Average amounts of short-term debt outstanding during the year (a) 87.5 51.5 69.3 - ------------------------------------------------------------------- Weighted Average Interest Rates 1996 1995 1994 - ------------------------------------------------------------------- Short-term debt outstanding at end of year 5.7% 5.9% 5.1% Average amounts of short-term debt outstanding during the year (a) 5.8% 5.7% 3.6% - ------------------------------------------------------------------- (a) Average amount outstanding during the year calculated based on daily outstanding balances. Weighted average interest rate during the year calculated based on interest expense and average amount outstanding during the year. 9. Commitments and Contingencies AGLC has agreements for firm pipeline and storage capacity that expire at various dates through 2012. The aggregate amount of required payments under such agreements totals approximately $1.1 billion, with annual required payments of $225 million in 1997, $218 million in 1998, $156 million in 1999, $107 million in 2000 and $78 million in 2001. Total payments of fixed charges under all agreements were $225 million in 1996, $230 million in 1995 and $232 million in 1994. The purchased gas adjustment provisions of AGLC's rate schedules permit the recovery of gas costs from customers. In 1992 the Federal Energy Regulatory Commission (FERC) issued Order 636, which, among other things, mandated the unbundling of interstate pipeline sales service and established certain open access transportation regulations that became effective beginning in the 1993-1994 heating season. Order 636 permits AGLC's pipeline suppliers to pass through any prudently incurred transition costs, such as unrecovered gas costs, gas supply realignment costs and stranded costs. AGLC estimates its portion of such costs from all of its pipeline suppliers would approximate $109.9 million based on filings with FERC by the pipeline suppliers. Approximately $80.6 million of such costs have been incurred by AGLC as of September 30, 1996, recovery of which is provided under the purchased gas provisions of AGLC's rate schedules. 43 As part of the 1997 Gas Supply Plan, AGLC is authorized to continue limited gas supply hedging activities. The 1997 hedging program has been expanded beyond the program approved in the 1996 Gas Supply Plan. The financial results of all hedging activities are passed through to firm service customers under the purchased gas provisions of AGLC's rate schedules. Accordingly, there is no earnings impact as a result of the hedging program. Contracts outstanding as of September 30, 1996, and during the year then ended, were not significant. As of September 30, 1996, approximately 32% of AGLC's labor force was covered by collective bargaining agreements. A collective bargaining agreement with the General Teamsters Local Union No. 528 expired on September 15, 1996. A new, four-year contract was finalized on October 13, 1996. In addition, a new, five-year agreement with the Utility Workers' Union of America, Local Union No. 461, became effective October 15, 1996. Total rental expense for property and equipment was $3 million in 1996, $6.3 million in 1995 and $6.5 million in 1994. Minimum annual rentals under noncancelable operating leases are as follows: 1997 - $3 million; 1998 - $3.1 million; 1999 - $3.1 million; 2000 - $3.3 million; 2001 - $3.4 million; and thereafter - $6.3 million. AGLC is involved in litigation arising in the normal course of business (see Note 11 regarding Environmental Matters). Management believes that the ultimate resolution of such litigation will not have a material adverse effect on the consolidated financial statements. 10. Customers' and Suppliers' Refunds Pursuant to orders of FERC, AGLC has received refunds from its interstate natural gas suppliers. Those refunds are a result of FERC orders adjusting the price of various pipeline services purchased by AGLC from its suppliers in prior periods. AGLC passes the refunds on to its customers under purchased gas provisions of rate schedules approved by the Georgia Commission and the TRA. On August 23, 1995, the Georgia Commission approved a $38.5 million plus interest refund of deferred purchased gas costs. The refund resulted from the overrecovery of gas costs through the purchased gas provisions of AGLC's rate schedules. The refund was credited to customers' bills in September 1995. On September 7, 1994, the Georgia Commission approved a $13.5 million refund of deferred purchased gas costs. The refund resulted from the overrecovery of gas costs through the purchased gas provisions of AGLC's rate schedules. The refund was credited to customers' bills in September 1994. 11. Environmental Matters AGLC has identified nine sites in Georgia where it currently owns all or part of a manufactured gas plant (MGP) site. In addition, AGLC has identified three other sites in Georgia that AGLC does not now own, but that may have been associated with the operation of MGPs by AGLC or its predecessors. There are three sites in Florida that have been investigated by environmental authorities in connection with which AGLC may be contacted as a potentially 44 responsible party. Preliminary assessments and subsequent site investigations have revealed environmental impacts at and near some of those sites. Under a thorough analysis of potentially applicable requirements, AGLC has estimated that, under the most favorable circumstances reasonably possible, the future cost of investigating and remediating the former MGP sites, excluding sites for which no remediation is expected or the cost of which cannot be estimated, could be as low as $30.4 million. Alternatively, AGLC has estimated that, under the least favorable circumstances reasonably possible, the future cost of investigating and remediating the same former MGP sites could be as high as $110.8 million, excluding sites for which no remediation is expected or the cost of which cannot be estimated. AGLC cannot estimate at this time the amount of any other future expenses or liabilities, or the impact on those estimates of future environmental or regulatory changes, that may be associated with or related to the MGP sites, including expenses or liabilities relating to any litigation. At the present time, no amount within the $30.4 million to $110.8 million range can be identified as a better estimate than any other estimate. Therefore, a liability at the low end of this range and a corresponding regulatory asset have been recorded in the financial statements. The Georgia Commission has approved the recovery by AGLC of environmental response costs, pursuant to AGLC's Environmental Response Cost Recovery Rider (ERCRR). For purposes of the ERCRR, environmental response costs include investigation, testing, remediation and litigation costs and expenses or other liabilities relating to or arising from MGP sites. In connection with the ERCRR, the staff of the Georgia Commission has undertaken a financial and management process audit related to the MGP sites, cleanup activities at the sites and environmental response costs that have been incurred for purposes of the ERCRR. On October 10, 1996, the Georgia Commission issued an order to prohibit funds collected through the ERCRR from being used for the payment of any damage award, including punitive damages, as a result of any litigation associated with any of the MGP sites in which AGLC is involved. AGLC is currently pursuing judicial review of the October 10, 1996, order. AGLC is currently a party to claims and litigation related to the former MGP sites. During fiscal 1996 AGLC recovered $14.7 million from its insurance carriers and other potentially responsible parties. In accordance with provisions of the ERCRR, AGLC recognized other income of $1.6 million, after income taxes, and established regulatory liabilities for the remainder of those recoveries. AGLC intends to continue to pursue insurance coverage and contributions from potentially responsible parties. 12. Fair Value of Financial Instruments AGLC has estimated the fair value of its financial instruments, the carrying value of which differed from fair value using available market information and appropriate valuation methodologies. Considerable judgment is required in developing the estimates of fair value presented herein and, therefore, the values are not necessarily indicative of the amounts that could be realized in a current market exchange. The carrying amount and the estimated fair value of such financial instruments as of September 30, 1996 and 1995, consist of the following: 45 Carrying Estimated (Millions of dollars) Amount Fair Value - ------------------------------------------------------------------------------ 1996 Long-term debt including current portion $554.5 $566.6 Redeemable cumulative preferred stock of AGLC, including current portion 55.8 56.9 - ------------------------------------------------------------------------------ 1995 Long-term debt including current portion $554.5 $571.5 Redeemable cumulative preferred stock of AGLC, including current portion 55.8 56.6 - ------------------------------------------------------------------------------ The estimated fair values are determined based on the following: Long-term debt - interest rates that are currently available for issuance of debt with similar terms and remaining maturities. Redeemable cumulative preferred stock - quoted market price and dividend rates for preferred stock with similar terms. The fair value estimates presented herein are based on information available to management as of September 30, 1996, and 1995. Management is not aware of any subsequent factors that would affect the estimated fair value amounts significantly. 13. Related Parties During August 1995 AGLC signed an agreement with Sonat Inc. (Sonat) to form a joint venture to acquire the business of Sonat Marketing Company, a wholly owned subsidiary of Sonat. AGLC invested $32.6 million for a 35% ownership interest in Sonat Marketing. AGLC's 35% investment is being accounted for under the equity method. The excess of the purchase price over the estimated fair value of the net tangible assets of approximately $23 million has been allocated to intangible assets consisting of customer lists and goodwill, which is being amortized over 10 and 35 years, respectively. During the third quarter of fiscal 1996 AGLC's interest in Sonat Marketing was dividended to AGL Investments. During fiscal 1996 and September 1995, AGLC purchased gas totaling $247.5 million and $23.7 million, respectively, from Sonat Marketing and its affiliates. As of September 30, 1996, and 1995, AGLC had outstanding obligations payable to Sonat Marketing of $18.8 million and $23.7 million, respectively. Accounts receivable and accounts payable balances as of September 30, 1996, resulting from related party transactions are as follows: (Millions of dollars) 1996 - ------------------------------------------------------------------ Payable to AGL Resources -- short-term $ (4.7) Payable to AGL Resources -- long-term (41.1) Receivable from nonregulated subsidiaries 2.0 - ------------------------------------------------------------------ Total payable to associated companies $(43.8) - ------------------------------------------------------------------ 46 14. Quarterly Financial Data (Unaudited) Quarterly financial data for fiscal 1996 and 1995 are summarized as follows: (Millions) Operating Operating Net Income Quarter Ended Revenues Income (Loss) - -------------------------------------------------------------------------------- 1996 December 31, 1995 $328.8 $42.0 $30.2 March 31, 1996 478.8 54.5 46.4 June 30, 1996 240.5 16.5 5.0 September 30, 1996(a) 169.5 8.9 (1.0) - -------------------------------------------------------------------------------- 1995(b) December 31, 1994 $328.8 $14.1 $ 1.8 March 31, 1995 448.2 48.9 37.3 June 30, 1995 177.5 12.2 1.4 September 30, 1995(c) 108.5 1.7 (9.7) - -------------------------------------------------------------------------------- (a) During the fourth quarter of fiscal 1996, AGLC increased net income by $1.6 million as a result of a review of remaining liabilities in connection with a corporate restructuring plan. (See Note 3). In addition, net income was increased during the fourth quarter of fiscal 1996 by $1.6 million in connection with recoveries from insurers in accordance with provisions of an environmental response cost recovery rider. (See Note 11). (b) Quarterly operating income (loss) for 1995 includes the effects of charges for restructuring costs as follows: $44.5 million for the quarter ended December 31, 1994; $23.0 million for the quarter ended March 31, 1995; $1.7 million for the quarter ended June 30, 1995; and $1.1 million for the quarter ended September 30, 1995. Quarterly net income (loss) for 1995 includes the effects of charges for restructuring costs as follows: $28.4 million for the quarter ended December 31, 1994; $13.0 million for the quarter ended March 31, 1995; $1.1 million for the quarter ended June 30, 1995; and $0.6 million for the quarter ended September 30, 1995. The wide variance in quarterly earnings results from the highly seasonal nature of AGLC's business. (c) During the fourth quarter of fiscal 1995, AGLC recorded a refund to its customers of $38.5 million plus interest. (See Note 10). 47 Independent Auditors' Report Shareholder and Board of Directors of Atlanta Gas Light Company: We have audited the accompanying consolidated balance sheets of Atlanta Gas Light Company and subsidiaries as of September 30, 1996 and 1995 and the related statements of consolidated income, common stock equity, and cash flows for each of the three years in the period ended September 30, 1996. Our audits also included the financial statement schedule listed in the Index at Item 14. These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the financial position of Atlanta Gas Light Company and subsidiaries as of September 30, 1996 and 1995 and the results of its operations and its cash flows for each of the three years in the period ended September 30, 1996, in conformity with generally accepted accounting principles. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein. /s/ DELOITTE & TOUCHE LLP DELOITTE & TOUCHE LLP Atlanta, Georgia November 5, 1996 48 - -------------------------------------------------------------------------------- Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None - -------------------------------------------------------------------------------- The remainder of this page was intentionally left blank. 49 Part III - -------------------------------------------------------------------------------- Item 10. Directors and Executive Officers of the Registrants Set forth below is certain information regarding AGLC's executive officers and directors (two of whom are employees of AGLC), including their ages, as of September 30, 1996, their principal occupations (which have continued for at least the past five years unless otherwise noted), the year in which each was elected and any directorships held by them in other public companies. DAVID R. JONES, age 59, is President and Chief Executive Officer of AGLC (since 1988) and President and Chief Executive Officer and director of AGL Resources and Service Company (since January 1996 and August 1996, respectively); director of the Federal Reserve Bank of Atlanta. Mr. Jones has been a director of AGLC since 1985. THOMAS H. BENSON, age 51, Chief Operating Officer of AGLC and Executive Vice President of AGL Resources since August 1996, Executive Vice President Customer Operations of AGLC from 1994 until 1996 and Senior Vice President Operations and Engineering of AGLC from 1988 until 1994. Mr. Benson has been a director of AGLC since 1996. CHARLIE J. LAIL, age 57, Senior Vice President Operations Improvement of AGLC since 1994, Senior Vice President Divisions of AGLC from 1992 until 1994, Vice President Divisions of AGLC from 1991 until 1992 and Vice President and Northeast Georgia Division manager of AGLC from 1988 until 1991. MICHAEL D. HUTCHINS, age 45, Vice President Operations and Engineering of AGLC since 1994, Vice President Engineering of AGLC from 1989 until 1994. CHARLES W. BASS, age 49, Executive Vice President and Chief Operating Officer of AGL Resources since August 1996, Executive Vice President Market Service and Development of AGLC from 1994 until 1996 and Senior Vice President Governmental and Regulatory Affairs of AGLC from 1988 until 1994. Mr. Bass has been a director of AGLC since 1996. MELANIE M. PLATT, age 42, Corporate Secretary of AGLC since February 1995, Corporate Secretary of AGL Resources and Service Company (since January 1996 and August 1996, respectively), previously associated with the law firm of Long, Aldridge & Norman, LLP, general counsel for AGLC, from 1985 until December 1994. Ms. Platt has been a director of AGLC since 1996. The By-Laws of AGLC provide that the Board of Directors shall consist of such number of directors as shall be fixed from time to time exclusively pursuant to a resolution adopted by the Board. The Board of Directors has established four directorships and has proposed that AGL Resources, as sole shareholder, elect as directors the four present directors named above to serve until the next succeeding Annual Meeting or until their respective successors have been duly elected. Each nominee presently is a director of AGLC and has consented to serve as a director if elected. 50 Section 16(a) Beneficial Ownership Reporting Compliance AGLC is required to identify any director, executive officer or person who owns more than ten percent of any class of Preferred Stock of AGLC registered pursuant to Section 12 of the Securities Exchange Act of 1934 (Exchange Act) or any interest in any such class of Preferred Stock of AGLC who failed to timely file with the Securities Exchange Commission (Commission) a required report under Section 16(a) of the Exchange Act. Section 16(a) and regulations of the Commission thereunder require executive officers and directors and persons who own more than ten percent of any such class of Preferred Stock of AGLC or any interest in any such class of Preferred Stock of AGLC, as well as certain affiliates of such persons, to file initial reports of ownership and changes in ownership of such securities with the Commission and the New York Stock Exchange. Executive officers, directors and persons owning more than ten percent of any such class of Preferred Stock of AGLC or any interest in any such class of Preferred Stock of AGLC are required by regulation of the Commission to furnish AGLC with copies of all Section 16(a) forms that they file. Based solely on its review of the copies of such forms received by it and written representations that no other reports were required for those persons, AGLC believes that, during the fiscal year ended September 30, 1996, all applicable filing requirements were complied with. - -------------------------------------------------------------------------------- Item 11. Executive Compensation Table 1 summarizes by various categories, for the fiscal years ended September 30, 1996, 1995 and 1994, the total compensation paid to or accrued for the President and Chief Executive Officer of AGLC and each other executive officer of AGLC whose salary and bonus for the fiscal year ended September 30, 1996 exceeded $100,000 (collectively referred to as the "named executive officers").
TABLE 1: SUMMARY COMPENSATION TABLE Annual Compensation Long-Term Compensation Other Fiscal Year Annual Securities All Other Name and Ended Compen- Underlying Compensa- Principal Position September 30 Salary($)(1) Bonus ($)(2) sation($)(3) Options(#)(4) tion($)(5) - ------------------ ------------ ------------ ------------- ------------ ------------- ---------- David R. Jones 1996 $474,923 $160,800 - 37,161 $46,080 President and 1995 444,423 230,000 $11,750 43,126 33,293 Chief Executive Officer 1994 409,981 53,950 26,500 33,536 28,181 Thomas H. Benson 1996 248,885 83,600 - 20,129 17,497 Chief Operating Officer 1995 214,362 67,500 - 24,510 24,510 1994 176,375 23,205 - 14,424 11,636 Charlie J. Lail 1996 147,565 49,245 - 7,587 13,146 Senior Vice President 1995 145,962 44,100 - 11,980 12,554 1994 141,742 18,720 - 11,636 11,947 Michael D. Hutchins 1996 132,162 44,570 - 12,276 8,698 Vice President 1995 107,327 33,600 - 7,000 5,135 1994 96,894 10,342 - 5,306 3,015
51 (1) Includes before-tax contributions for the indicated fiscal years made to the AGL Resources Inc. Retirement Savings Plus Plan (RSP Plan) and the AGL Resources Inc. Nonqualified Savings Plan (NSP). (2) For fiscal 1996, 1995 and 1994, reflects cash bonus earned pursuant to the Variable Compensation Plan (formerly the Short-Term Incentive Plan) by each of the named executive officers other than Mr. Jones. For fiscal 1996, reflects for Mr. Jones a cash bonus earned. For fiscal 1995 and 1994, reflects for Mr. Jones a cash bonus and a bonus award of restricted stock which is not subject to any vesting restrictions. The dollar value of the restricted stock awards is based on the number of shares of restricted stock multiplied by the fair market value per share on the date of issuance. (3) Includes for Mr. Jones director's fees of $11,750 and $26,500 paid during fiscal 1995 and 1994, respectively. Effective January 1, 1995, Mr. Jones no longer receives any compensation for his services as a director or as a member of a standing committee of the Board. (See "Director Compensation" below.) (4) Options to purchase common stock of AGL Resources Inc.; includes grants of reload options pursuant to the AGL Resources Inc. Long-Term Stock Incentive Plan of 1990 (LTSIP). (5) All Other Compensation paid during fiscal 1996 includes the following: (i) contributions to the AGL Resources Inc. Leveraged Employee Stock Ownership Plan: Mr. Jones - $1,829; Mr. Benson - $1,829; Mr. Lail - $1,789; and Mr. Hutchins - $1,347; (ii) contributions to the RSP Plan: Mr. Jones - $4,275; Mr. Benson - $5,297; Mr. Lail - $5,733; and Mr. Hutchins - $5,088; (iii) contributions to the NSP: Mr. Jones - $13,586; Mr. Benson - $3,671; Mr. Lail - $0; and Mr. Hutchins - $0; and (iv) premiums paid for life insurance policies, any proceeds of which are payable to the respective beneficiaries designated by the named officers: Mr. Jones - $26,390; Mr. Benson - $6,700; Mr. Lail - $5,624; and Mr. Hutchins - $2,263. Change in Control Employment Agreements During fiscal 1996, the Board of Directors of AGL Resources approved an Employment Continuity Program in which each of the named executive officers participates on one of three tier levels. The purpose of the program is to retain key management personnel and assure continued productivity of such personnel in the event of a change in control of AGL Resources. For purposes of the program, a "change in control" will be deemed to have occurred in connection with any of the following events: (i) the acquisition by a person or group of persons of 10% or more of the voting securities of AGL Resources; (ii) approval by the shareholders of a merger, business combination, or sale of 50% or more of AGL Resources' assets, the result of which is that less than 80% of the voting securities of the resulting corporation is owned by the former shareholders of AGL Resources; or (iii) the failure, during any period of two years, of incumbent directors to constitute at least a majority of the Board of Directors of AGL Resources. Generally, no benefits are provided under the program for any type of termination prior to the occurrence of a change in control, or for terminations following a change in control due to death, disability, voluntary termination (other than the Chief Executive Officer) or any termination for "cause," which includes failure to perform duties and responsibilities and fraud or dishonesty. Upon becoming operational, and depending on the tier level of participation and on the timing of employment termination, the program provides a severance benefit of between one and three years of base salary and annual incentive compensation to participants whose employment is involuntarily terminated within twelve months following the occurrence of a change in control. Other benefits provided include the payout of a pro rata bonus for the portion of the year in which the termination occurs, full vesting of all long-term incentives, a lump-sum payment of between one and three years of age and service credits under AGL Resources' pension plan, full vesting and funding of nonqualified retirement and deferral plan benefits, a one to three year continuation of healthcare benefits and life insurance, and outplacement assistance. The Chief Executive Officer and the Executive Vice Presidents of AGL Resources also will receive payments of legal fees (up to a maximum dollar limit) in connection with the enforcement of payouts under the program. For all participants, total severance benefits are limited to the maximum benefit allowable without triggering excise taxes. 52 Option Grants Table 2 sets forth information regarding the number and terms of options to purchase shares of AGL Resources common stock granted to the named executive officers during the fiscal year ended September 30, 1996. In addition, in accordance with the rules and regulations of the Commission, set forth is the present value of each option granted, calculated using the Black-Scholes option pricing model.
TABLE 2: OPTION GRANTS IN LAST FISCAL YEAR Number of % of Total Securities Options Underlying Granted to Exercise or Options Employees in Base Price Grant Date Name Granted(#)(1) Fiscal Year ($/Sh)(2) Expiration Date Present Value($)(3) David R. Jones 37,161 12.41% $19.375 2/2/06 $90,673 Thomas H. Benson 20,129 6.72 19.375 2/2/06 49,115 Charlie J. Lail 7,587 * 19.375 2/2/06 18,512 Michael D. Hutchins 870 * 19.750 4/24/02 1,957 1,180 * 19.750 2/3/05 2,808 7,329 * 19.375 2/2/06 17,883 2,897 * 20.500 2/3/05 11,211 - ------------------ * Less than 1%.
(1) Options were granted to each of the named executive officers pursuant to the LTSIP and became fully exercisable six months after the date of grant. Options are subject to early termination upon the occurrence of certain events related to termination of employment. Further, Reload Options (as hereinafter defined) were granted to Mr. Hutchins to purchase the following number of shares: 870 shares on November 6, 1995; 1,180 shares on November 6, 1995; and 2,897 shares on August 16, 1996. (2) The exercise price of options may be paid in cash, by delivery of already owned shares of Common Stock of AGL Resources or by any other method approved by the Nominating and Compensation Committee, which administers the LTSIP. To the extent that the exercise price of an option is paid with shares of common stock of AGL Resources, a "Reload Option" will be granted to the optionee. A Reload Option is an option granted for the same number of shares as is exchanged in payment of the exercise price and is subject to all of the same terms and conditions as the original option except for the exercise price which is determined on the basis of the fair market value of the common stock of AGL Resources on the date the Reload Option is granted. One or more successive Reload Options may be granted to an optionee who pays for the exercise of a Reload Option with shares of common stock of AGL Resources. (3) The "Grant Date Present Value" is calculated using the Black-Scholes Warrant Valuation Call Option Model, assuming a constant dividend yield. This model assumes no dilution effects and includes the following assumptions for the options granted to the named executive officers: expected volatility - 16.15% (14.55%, 14.55% and 21.33% with respect to Mr. Hutchins' Reload Options for 870, 1,180 and 2,897 shares, respectively); annual risk free rate of return (represents the monthly average yield on ten year Treasury notes during the month of the grant) - 5.81% (5.80%, 5.90% and 6.58% with respect to Mr. Hutchins' Reload Options for 870, 1,180 and 2,897 shares, respectively); annual dividend yield - 5.47% (5.37%, 5.37% and 5.17% with respect to Mr. Hutchins' Reload Options for 870, 1,180 and 2,897 shares, respectively). The model also assumes an exercise period for options granted of ten years; provided, however, with respect to Mr. Hutchins' Reload Options to purchase 870, 1,180 and 2,897 shares of common stock, an exercise period of approximately 78 months, 111 months and 111 months, respectively, was assumed. 53 Option Exercises Table 3 sets forth option exercises to purchase shares of AGL Resources Inc. common stock by the named executive officers during the fiscal year ended September 30, 1996, including the aggregate value of gains on the date of exercise. The table also sets forth (i) the number of shares covered by options (both exercisable and unexercisable) as of September 30, 1996 and (ii) the respective values for "in-the-money" options, which represent the positive spread between the exercise price of existing options and the fair market value of AGL Resources' Common Stock at September 30, 1996.
TABLE 3: AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES Exercises During Year Fiscal Year End --------------------- --------------- Number of Securities Value of Unexercised Underlying Unexercised In-the-Money Options Shares Acquired Value Options at Fiscal Year End(#) at Fiscal Year End($)(1) Name on Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable - ---- -------------- ----------- ----------- ------------- ----------- ------------- David R. Jones - - 138,695 - $272,288 - Thomas H. Benson - - 65,055 - 74,888 - Charlie J. Lail - - 41,439 - 46,872 - Michael D. Hutchins 6,250 26,290 23,799 2,897 12,913 - (1) Certain exercisable options held by the named executive officers were not "in-the-money" at September 30, 1996.
54 Retirement Plan Table 4 reflects the estimated annual lifetime benefits calculated on a straight-life annuity basis and payable under the terms of the AGL Resources Inc. Retirement Plan (the "Retirement Plan") and the AGL Resources Inc. Excess Benefit Plan (the "Excess Benefit Plan") (as described below), as currently in effect, to persons in specified compensation and years of service classifications upon retirement at age 65. Benefit amounts as reflected in the table are subject to reductions for a portion of Social Security benefits.
TABLE 4: PENSION PLAN TABLE 3 Year Years of Service Average ------------------------------------------------------------------------ Earnings 20 25 30 35 40 45 - -------- -- -- -- -- -- -- $100,000 $33,333 $41,667 $50,000 $57,500 $65,000 $72,500 150,000 50,000 62,500 75,000 86,250 97,500 108,750 200,000 66,667 83,333 100,000 115,000 130,000 145,000 250,000 83,333 104,167 125,000 143,750 162,500 181,250 300,000 100,000 125,000 150,000 172,500 195,000 217,500 350,000 116,667 145,833 175,000 201,250 227,500 253,750 400,000 133,333 166,667 200,000 230,000 260,000 290,000 450,000 150,000 187,500 225,000 258,750 292,500 326,250 500,000 166,667 208,333 250,000 287,500 325,000 362,500
The Retirement Plan is a qualified defined benefit pension plan which covers all employees of AGL Resources and its participating affiliate companies (except leased employees) who have satisfied certain standards as to hours of service, who have attained age 21 and who have been employed for one year. Benefits under the Retirement Plan are based upon length of service, with varying provisions for employees who are terminated or take early, normal or deferred retirement. A participant's benefits also vary depending upon the participant's earnings for the three consecutive years of highest compensation during his or her final 60 months of employment. The compensation covered by the Retirement Plan includes generally the base rate of earnings actually paid to a participant (up to dollar limits imposed by the Internal Revenue Service). This amount of compensation does not include the bonuses or director's fees that are included in the above Summary Compensation Table. The Retirement Plan also provides, subject to certain conditions, for the payment of vested benefits of a deceased employee to his or her spouse during such spouse's lifetime. AGL Resources makes contributions to the Retirement Plan to fund the benefits which accrue thereunder. Annual contribution amounts are determined actuarially. Participant contributions are not permitted. In addition, AGL Resources maintains an Excess Benefit Plan for its employees, the purpose of which is to restore pension benefits to employees who are prevented from receiving their total accrued benefits under the Retirement Plan because of the maximum benefit limitations imposed on qualified retirement plans by Sections 415 and 401(a)(17) of the Internal Revenue Code of 1986, as amended (the "Code"). The Excess Benefit Plan is not funded, but benefit payments are made directly by AGL Resources. Benefits under the Excess Benefit Plan are payable in the same form and according to the same general terms and conditions as benefits under the Retirement Plan. All employees who participate in the Retirement Plan whose benefits are limited by the provisions of the Code will receive restoration of benefits under the Excess Benefit Plan. 55 The amounts shown in the Summary Compensation Table above do not include AGL Resources's contributions in connection with the Retirement Plan or the Excess Benefit Plan for the named executive officers. Such amounts are not and cannot be readily separated or individually calculated. AGL Resources made a contribution of approximately $13.4 million to the Retirement Plan for the plan year ended June 30, 1996. As of the plan year ended June 30, 1996, Messrs. Jones, Benson, Lail and Hutchins had 36, 26, 32 and 23 years of service, respectively. The Retirement Plan and the Excess Benefit Plan are administered by or are under the direction of the Retirement Plan Administrative Committee appointed by the Board of Directors. Wachovia Bank of North Carolina, N.A., serves as Trustee to the Retirement Plan. The Retirement Plan must be amended to bring it into compliance with recent changes in federal law. Director Compensation Any director who is an officer or employee of AGLC or AGL Resources does not receive any compensation for his or her services as a director or as a member of a standing committee of the Board. Each of the directors of AGLC is an officer of AGLC and/or AGL Resources. - -------------------------------------------------------------------------------- Item 12. Security Ownership of Certain Beneficial Owners and Management As of September 30, 1996, all of the outstanding shares of common stock of AGLC are beneficially owned by AGL Resources. Accordingly, as of September 30, 1996, AGL Resources is the beneficial owner of more than 5% of the AGLC common stock. The following table sets forth certain information as of September 30, 1996 regarding the ownership of AGL Resources common stock by each director and director nominee, by each executive officer named in the Summary Compensation Table (collectively, the "named executive officers") who is not a director and by all directors and executive officers as a group, based on data furnished to AGLC. 56 Name and Relationship of Beneficial Owner to Number of Shares of Common AGLC Stock Owned Beneficially (Percent of Class)(1) David R. Jones President, Chief Executive Officer and Director 223,715 (*)(2)(3)(4)(5) Thomas H. Benson Chief Operating Officer and Director 94,359 (*)(2)(3)(4)(5) Charlie J. Lail Senior Vice President 62,897 (*)(2)(3)(4)(5) Michael D. Hutchins Vice President 33,444 (*)(2)(3)(4)(5) Charles W. Bass Director 103,301 (*)(2)(3)(4)(5) Melanie M. Platt Director 6,629 (*)(2)(3)(4)(5) All executive officers and directors as a group (6 persons) 524,345 (1%)(2)(3)(4)(5) - --------------------------- (*) Less than one percent. (1) As of September 30, 1996, no individual director or executive officer of AGLC owned beneficially 1% or more of the outstanding common stock of AGL Resources or any class of Preferred Stock of AGLC or any interest in any class of Preferred Stock of AGLC. Beneficial ownership as reported herein has been determined in accordance with regulations of the Commission and includes shares of common stock which may be acquired within 60 days upon the exercise of outstanding stock options. Except as otherwise indicated in footnote (4) below, all executive officers, directors and director nominees have sole voting and investment power with respect to the shares shown. (2) Includes shares held for the accounts of the above-named persons and the above-referenced group as participants in the LESOP and RSP Plan as follows: Mr. Jones - 30,747 shares; Mr. Benson - 16,222 shares; Mr. Lail - 13,028 shares; Mr. Hutchins - 5,154 shares; Mr. Bass - 15,415 shares; Ms. Platt - 118 shares; and the above-referenced group -80,684 shares. (3) Includes shares which may be acquired by the above-named persons and the above-referenced group upon the exercise of stock options as follows: Mr. Jones - 138,695 shares; Mr. Benson - 65,055 shares; Mr. Lail - 41,439 shares; Mr. Hutchins - 23,799 shares; Mr. Bass - 77,963 shares; Ms. Platt - 5,600 shares; and the above- referenced group - 352,551 shares. (4) With regard to Mr. Jones, the shares shown include 51,648 shares for which he shares voting and investment power and 1,322 shares which are held of record by the spouse of Mr. Jones as to which he disclaims beneficial ownership; with regard to Mr. Benson, the shares shown include 13,082 shares for which he shares voting and investment power; with regard to Mr. Lail, the shares shown include 3,054 shares for which he shares voting and investment power; with regard to Mr. Hutchins, the shares shown include 3,671 shares for which he shares voting and investment power; with regard to Mr. Bass, the shares shown include 3,683 shares for which he shares voting and investment power; with regard to Ms. Platt, the shares shown include 911 shares for which she shares voting and investment power; and with regard to the group, the shares shown include 76,049 shares held with shared voting and investment power and 1,322 shares held of record by certain spouses of members 57 of the above-referenced group as to which the respective members of the group disclaim beneficial ownership. (5) Excludes shares held by the Trust of the NSP for the benefit of the above-named persons and the above-referenced group as follows: Mr. Jones - 2,252 shares; Mr. Benson - 849 shares; Mr. Lail - 892 shares; Mr. Hutchins - -0- shares; Mr. Bass - 577 shares; Ms. Platt - -0- shares; and the above-referenced group - 4,570 shares. As determined in accordance with regulations of the Commission, such shares are not deemed to be beneficially owned and, accordingly, are excluded from the shares of common stock shown in the table above. (See footnotes (1) and (5) to "Table 1: Summary Compensation Table" above.) - -------------------------------------------------------------------------------- Item 13. Certain Relationships and Related Transactions Compensation Committee Interlocks and Insider Participation Prior to the formation of the AGL Resources holding company in March 1996, the AGLC Nominating and Compensation Committee was composed of Messrs. Bradley, Brumby, Norman, Tarbutton and Taylor, none of whom is an officer or employee of AGLC. Mr. Norman is a partner in the law firm of Long, Aldridge & Norman, LLP, General Counsel to AGLC and AGL Resources. For the fiscal year ended September 30, 1996, AGLC and AGL Resources paid to Long, Aldridge & Norman, LLP approximately $3.6 million for legal services to AGL Resources, AGLC and their subsidiaries. 58 Part IV - -------------------------------------------------------------------------------- Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K (a) Documents Filed as Part of This Report: 1. Financial Statements Included under Item 8 are the following financial statements: Statements of Consolidated Income for the Years Ended September 30, 1996, 1995 and 1994. Statements of Consolidated Cash Flows for the Years Ended September 30, 1996, 1995 and 1994. Consolidated Balance Sheets as of September 30, 1996 and 1995. Statements of Consolidated Common Stock Equity for the Years Ended September 30, 1996, 1995 and 1994. Notes to Consolidated Financial Statements. Independent Auditors' Report. 2. Supplemental Consolidated Financial Schedules for Each of the Three Years in the Period Ended September 30, 1996: II. - Valuation and Qualifying Account--Allowance for Uncollectible Accounts. Schedules other than those referred to above are omitted and are not applicable or not required, or the required information is shown in the financial statements or notes thereto. 3. Exhibits Where an exhibit is filed by incorporation by reference to a previously filed registration statement or report, such registration statement or report is identified in parentheses. Exhibits indicated by an asterisk are provided in electronic format only. 3.1* - Charter of the Company, as amended through February 22, 1993. 3.2 - Articles of Merger of the Company and AGL Merger Co. filed March 6, 1996, with the Secretary of State of the State of Georgia. 3.3 - Articles of Amendment to the Articles of Incorporation (Charter) of the Company filed on October 3, 1996, with the Secretary of State of the State of Georgia. 3.4 - By-Laws of the Company, as amended through November 17, 1995 (Exhibit 3(e), Atlanta Gas Light Company Form 10-K for the fiscal year ended September 30, 1995). 59 4.1 - Indenture, dated as of December 1, 1989, between Atlanta Gas Light Company and Bankers Trust Company, as Trustee (Exhibit 4(a), Registration No. 33-32274). 4.2 - First Supplemental Indenture, dated as of March 16, 1992, between Atlanta Gas Light Company and NationsBank of Georgia, National Association, as Successor Trustee, (Exhibit 4(a), Registration No. 33-46419). 10.1 - Executive Compensation Plans and Arrangements; 10.1.a - Executive Severance Pay Plan of AGL Resources Inc. (Exhibit 10.1.a, AGL Resources Inc. Form 10-K for the fiscal year ended September 30, 1996). 10.1.b - AGL Resources Inc. Long-Term Stock Incentive Plan of 1990 (Exhibit 10(ii), Atlanta Gas Light Company Form 10-K for the fiscal year ended September 30, 1991). 10.1.c - First Amendment to the AGL Resources Inc. Long-Term Stock Incentive Plan of 1990 (Exhibit B to the Atlanta Gas Light Company Proxy Statement for the Annual Meeting of Shareholders held February 5, 1993). 10.1.d - Third Amendment to the AGL Resources Inc. Long-Term Stock Incentive Plan of 1990 (Exhibit C to the Proxy Statement and Prospectus filed as a part of Amendment No. 1 to Registration Statement on Form S-4, No. 33-99826). 10.1.e - AGL Resources Inc. Nonqualified Savings Plan (Exhibit 10(a), Atlanta Gas Light Company Form 10-K for the fiscal year ended September 30, 1995). 10.2 - Service Agreement under Rate Schedule GSS dated April 13, 1972, between the Company and Transcontinental Gas Pipe Line Corporation (Exhibit 5(c), Registration No. 2-48297). 10.3 - Service Agreement under Rate Schedule LG-A, effective August 16, 1974, between the Company and Transcontinental Gas Pipe Line Corporation (Exhibit 5(d), Registration No. 2-58971). 10.4 - Storage Transportation Agreement, dated June 1, 1979, between the Company and Southern Natural Gas Company, (Exhibit 5(n), Registration No. 2-65487). 10.5 - Letter of Intent dated September 18, 1987, between the Company and Jupiter Industries, Inc. relating to the purchase by the Company of the assets of the Chattanooga Gas Company Division of Jupiter Industries, Inc. (Exhibit 10(p), Form 10-K for the fiscal year ended September 30, 1987). 10.6 - Agreement for the Purchase of Assets dated April 5, 1988, between the Company and Jupiter Industries, Inc., (Exhibit 10(q), Form 10-K for the fiscal year ended September 30, 1988). 10.7 - 100 Day Storage Service Agreement, dated June 1, 1979, between the Company and South Georgia Natural Gas Company, (Exhibit 10(r), Form 10-K for the fiscal year ended September 30, 1989). 60 10.8 - Service Agreement under Rate Schedule LSS, dated October 31, 1984, between the Company and Transcontinental Gas Pipe Line Corporation, (Exhibit 10(s), Form 10-K for the fiscal year ended September 30, 1989). 10.9 - Storage Transportation Agreement, dated June 1, 1979, between the Company and South Georgia Natural Gas Company, (Exhibit 10(v), Form 10-K for the fiscal year ended September 30, 1990). 10.10- Firm Seasonal Transportation Agreement, dated June 29, 1990, between the Company and Transcontinental Gas Pipe Line Corporation, (Exhibit 10(bb), Form 10-K for the fiscal year ended September 30, 1990). 10.11- Service Agreement under Rate Schedule WSS, dated June 1, 1990, between the Company and Transcontinental Gas Pipe Line Corporation, (Exhibit 10(cc), Form 10-K for the fiscal year ended September 30, 1990). 10.12- Limited-Term Transportation Agreement Contract # A970 dated April 1, 1988, between the Company and CNG Transmission Corporation, (Exhibit 10(bb), Form 10-K for the fiscal year ended September 30, 1991). 10.13- Service Agreement System Contract #.2271 under Rate Schedule FT, dated August 1, 1991, between the Company and Transcontinental Gas Pipe Line Corporation, (Exhibit 10(dd), Form 10-K for the fiscal year ended September 30, 1991). 10.14- Service Agreement System Contract #.4984 dated August 1, 1991, between the Company and Transcontinental Gas Pipe Line Corporation, (Exhibit 10(ee), Form 10-K for the fiscal year ended September 30, 1991). 10.15- Service Agreement Contract #830810 under Rate Schedule FT, dated March 1, 1992, between the Company and South Georgia Natural Gas Company (Exhibit 10(aa), Form 10-K for the fiscal year ended September 30, 1992). 10.16- Firm Gas Transportation Contract #3699 under Rate Schedule FT, dated February 1, 1992, between the Company and Transcontinental Gas Pipe Line Corporation (Exhibit 10(dd), Form 10-K for the fiscal year ended September 30, 1992). 10.17- Firm Gas Transportation Agreement under Rate Schedule FT-1, dated July 1, 1992, between the Company and East Tennessee Natural Gas Company (Exhibit 10(ff), Form 10-K for the fiscal year ended September 30, 1992). 10.18- Service Agreement Applicable to the Storage of Natural Gas under Rate Schedule GSS, dated October 25, 1993, between the Company and CNG Transmission Corporation (Exhibit 10(y), Form 10-K for the fiscal year ended September 30, 1993). 10.19- Service Agreement Applicable to the Storage of Natural Gas under Rate Schedule GSS, dated September, 1993, between Chattanooga Gas Company and CNG Transmission Corporation (Exhibit 10(z), Form 10-K for the fiscal year ended September 30, 1993). 61 10.20- Firm Seasonal Transportation Agreement, dated February 1, 1992, between the Company and Transcontinental Gas Pipe Line Corporation amending Exhibit 10(bb), Form 10-K for the fiscal year ended September 30, 1990 (Exhibit 10(cc), Form 10-K for the fiscal year ended September 30, 1993). 10.21- Service Agreement under Rate Schedule SS-1, dated April 1, 1988, between the Company and Transcontinental Gas Pipe Line Corporation (Exhibit 10(z), Form 10-K for the fiscal year ended September 30, 1994). 10.22- Firm Gas Transportation Agreement #5049 under Rate Schedule FT-A, dated November 1, 1993, between the Company and Tennessee Gas Pipeline Company (Exhibit 10(aa), Form 10-K for the fiscal year ended September 30, 1994). 10.23- Firm Gas Transportation Agreement #5051 under Rate Schedule FT-A, dated November 1, 1993, between Chattanooga Gas Company and Tennessee Gas Pipeline Company (Exhibit 10(bb), Form 10-K for the fiscal year ended September 30, 1994). 10.24- Gas Storage Contract #3998 under Rate Schedule FS, dated November 1, 1993, between the Company and Tennessee Gas Pipeline Company (Exhibit 10(cc), Form 10-K for the fiscal year ended September 30, 1994). 10.25- Gas Storage Contract #3999 under Rate Schedule FS, dated November 1, 1993, between Chattanooga Gas Company and Tennessee Gas Pipeline Company (Exhibit 10(dd), Form 10-K for the fiscal year ended September 30, 1994). 10.26- Gas Storage Contract #3923 under Rate Schedule FS, dated November 1, 1993, between the Company and Tennessee Gas Pipeline Company (Exhibit 10(ee), Form 10-K for the fiscal year ended September 30, 1994). 10.27- Gas Storage Contract #3947 under Rate Schedule FS, dated November 1, 1993, between Chattanooga Gas Company and Tennessee Gas Pipeline Company (Exhibit 10(ff), Form 10-K for the fiscal year ended September 30, 1994). 10.28- Service Agreement #902470 under Rate Schedule FT, dated September 1, 1994, between the Company and Southern Natural Gas Company (Exhibit 10(hh), Form 10-K for the fiscal year ended September 30, 1994). 10.29- Service Agreement #904460 under Rate Schedule FT, dated November 1, 1994, between the Company and Southern Natural Gas Company (Exhibit 10(ii), Form 10-K for the fiscal year ended September 30, 1994). 10.30- Service Agreement #904480 under Rate Schedule FT, dated November 1, 1994, between the Company and Southern Natural Gas Company (Exhibit 10(jj), Form 10-K for the fiscal year ended September 30, 1994). 10.31- Service Agreement #904461 under Rate Schedule FT-NN, dated November 1, 1994, between the Company and Southern Natural Gas Company (Exhibit 10(kk), Form 10-K for the fiscal year ended September 30, 1994). 62 10.32- Service Agreement #904481 under Rate Schedule FT-NN, dated November 1, 1994, between the Company and Southern Natural Gas Company (Exhibit 10(ll), Form 10-K for the fiscal year ended September 30, 1994). 10.33- Service Agreement #S20140 under Rate Schedule CSS, dated November 1, 1994, between the Company and Southern Natural Gas Company (Exhibit 10(mm), Form 10-K for the fiscal year ended September 30, 1994). 10.34- Service Agreement #S20150 under Rate Schedule CSS, dated November 1, 1994, between the Company and Southern Natural Gas Company (Exhibit 10(nn), Form 10-K for the fiscal year ended September 30, 1994). 10.35- Service Agreement #904470 under Rate Schedule FT, dated November 1, 1994, between Chattanooga Gas Company and Southern Natural Gas Company (Exhibit 10(oo), Form 10-K for the fiscal year ended September 30, 1994). 10.36- Service Agreement #904471 under Rate Schedule FT-NN, dated November 1, 1994, between Chattanooga Gas Company and Southern Natural Gas Company (Exhibit 10(pp), Form 10-K for the fiscal year ended September 30, 1994). 10.37- Service Agreement #S20130 under Rate Schedule CSS, dated November 1, 1994, between Chattanooga Gas Company and Southern Natural Gas Company (Exhibit 10(qq), Form 10-K for the fiscal year ended September 30, 1994). 10.38- Firm Storage (FS) Agreement, dated November 1, 1994, between the Company and ANR Storage Company (Exhibit 10(a), Form 10-Q for the quarter ended March 31, 1996). 10.39- Firm Storage (FS) Agreement, dated November 1, 1994, between the Company and ANR Storage Company (Exhibit 10(b), Form 10-Q for the quarter ended March 31, 1996). 10.40- Firm Transportation Agreement, dated March 1, 1996, between the Company and Southern Natural Gas Company amending Exhibits 10(jj), 10(ll) and 10(mm), Form 10-K for the fiscal year ended September 30, 1994 (Exhibit 10(c), Form 10-Q for the quarter ended March 31, 1996). 10.41- Firm Transportation Agreement, dated March 1, 1996, between the Company and Southern Natural Gas Company amending Exhibits 10(hh), 10(ii), 10(kk) and 10(nn), Form 10-K for the fiscal year ended September 30, 1994 (Exhibit 10(d), Form 10-Q for the quarter ended March 31, 1996). 10.42- Firm Transportation Agreement, dated March 1, 1996, between Chattanooga Gas Company and Southern Natural Gas Company amending Exhibits 10(oo), 10(pp) and 10(qq), Form 10-K for the fiscal year ended September 30, 1994 (Exhibit 10(a), Form 10-Q for the quarter ended June 30, 1996). 63 10.43- Firm Transportation Agreement, dated June 1, 1996, between the Company and Southern Natural Gas Company amending Exhibit 10(ii), Form 10-K for the fiscal year ended September 30, 1994 (Exhibit 10(tt), Form 10-K for the fiscal year ended September 30, 1995). 10.44- Firm Storage Agreement, effective December 1, 1994, between Chattanooga Gas Company and Tennessee Gas Pipeline Company amending Exhibit 10(ff), Form 10-K for the fiscal year ended September 30, 1994 (Exhibit 10(uu), Form 10-K for the fiscal year ended September 30, 1995). 10.45- Firm Storage Agreement, effective July 1, 1996, between Chattanooga Gas Company and Tennessee Gas Pipeline Company amending Exhibit 10(ff), Form 10-K for the fiscal year ended September 30, 1994 (Exhibit 10(vv), Form 10-K for the fiscal year ended September 30, 1995). 10.46- Firm Storage Agreement, effective July 1, 1996, between Chattanooga Gas Company and Tennessee Gas Pipeline Company amending Exhibit 10(dd), Form 10-K for the fiscal year ended September 30, 1994 (Exhibit 10(ww), Form 10-K for the fiscal year ended September 30, 1995). 10.47- Firm Transportation Agreement, dated September 26, 1994, between The Company and South Georgia Natural Gas Company amending Exhibit 10(s), Form 10-K for the fiscal year ended September 30, 1994 (Exhibit 10(xx), Form 10-K for the fiscal year ended September 30, 1995). 10.48- Firm Storage Agreement, effective July 1, 1996, between The Company and Tennessee Gas Pipeline Company amending Exhibit 10(ee), Form 10- K for the fiscal year ended September 30, 1994 (Exhibit 10(yy), Form 10- K for the fiscal year ended September 30, 1995). 10.49- Firm Storage Agreement, effective July 1, 1996, between The Company and Tennessee Gas Pipeline Company amending Exhibit 10(cc), Form 10- K for the fiscal year ended September 30, 1994 (Exhibit 10(zz), Form 10- K for the fiscal year ended September 30, 1995). 10.50- Firm Storage Agreement, effective January 1, 1996, between the Company and Tennessee Gas Pipeline Company amending Exhibit 10(z) and replacing Exhibit 10(u), Form 10-K for the fiscal year ended September 30, 1995 (Exhibit 10(a), Form 10-Q for the quarter ended December 31, 1995). 10.51- Firm Storage Agreement, effective January 1, 1996, between Chattanooga Gas Company and Tennessee Gas Pipeline Company amending Exhibit 10(aa) and replacing Exhibit 10(dd), Form 10-K for the fiscal year ended September 30, 1995 (Exhibit 10(b), Form 10-Q for the quarter ended December 31, 1995). 10.52- Gas Sales Agreement between Seller and Atlanta Gas Light Company, as Buyer (Exhibit 10(a), Form 10-Q for the quarter ended March 31, 1995). 64 10.53- FPS-1 Service Agreement, dated July 9, 1996, between Atlanta Gas Light Company and Cove Point LNG Limited Partnership (Exhibit 10(a), Form 10-Q for the quarter ended June 30, 1996). 10.54- Amendment to FS Agreement, dated September 13, 1994, between Atlanta Gas Light Company and Transcontinental Gas Pipe Line Corporation. 10.55- Amendment to Letter Agreement, dated July 13, 1994, among and between Southern Natural Gas Company, Atlanta Gas Light Company and Chattanooga Gas Company. 10.56- Three-party agreement between ANR Storage Company, Atlanta Gas Light Company and Southern Natural Gas Company, effective November 1, 1994. 10.57- Displacement Service Agreement, effective December 15, 1996, between Washington Gas Light Company and Atlanta Gas Light Company. 10.58- Amendment to Firm Storage Agreement, effective July 26, 1996, between Chattanooga Gas Company and Southern Natural Gas Company amending Exhibit 10(jj) , Form 10-K for the fiscal year ended September 30, 1995. 10.59- Amendatory Agreement, effective August 23, 1996, between Southern Natural Gas Company and Atlanta Gas Light Company amending Exhibits 10(ee), 10(ff), 10(hh) and 10(kk), Form 10-K for the fiscal year ended September 30, 1995. 21 - Subsidiaries of the Registrant. 23 - Independent Auditors' Consent. 24 - Powers of Attorney (included with Signature Page hereto). 27 - Financial Data Schedule. (b) Reports on Form 8-K No Form 8-K was filed during the last quarter of the year ended September 30, 1996. 65 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on November 1, 1996. ATLANTA GAS LIGHT COMPANY By: /s/ David R. Jones David R. Jones President and Chief Executive Officer POWERS OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints David R. Jones and J. Michael Riley, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign the Annual Report on Form 10-K for the fiscal year ended September 30, 1996 and any and all amendments to such Annual Report, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated as of November 1, 1996. Signatures Title /s/ David R. Jones David R. Jones President and Chief Executive Officer (Principal Executive Officer) and Director /s/ J. Michael Riley J. Michael Riley Vice President and Chief Financial Officer (Principal Accounting and Financial Officer) 66 /s/ Charles W. Bass Charles W. Bass Director /s/ Thomas H. Benson Thomas H. Benson Director /s/ Melanie M. Platt Melanie M. Platt Director *By /s/ J. Michael Riley J. Michael Riley, as Attorney-in-Fact 67 SCHEDULE II ATLANTA GAS LIGHT COMPANY VALUATION AND QUALIFYING ACCOUNT ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS FOR THE YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994 (IN MILLIONS) - -------------------------------------------------------------------------------- 1996 1995 1994 - -------------------------------------------------------------------------------- Balance, beginning of year ............. $ 4.4 $ 2.8 $ 1.9 Additions: Provisions charged to income ......... 4.6 5.3 7.5 Recovery of accounts previously written off as uncollectible ................... 8.6 6.6 7.1 ------- ------- ------- Total ............................ 17.6 14.7 16.5 Deduction: Accounts written off as uncollectible ................... 14.9 10.3 13.7 ------- ------- ------- Balance, end of year ................... $ 2.7 $ 4.4 $ 2.8 ======= ======= ======= 68 INDEX TO EXHIBITS Exhibit Number Description 3.1* - Charter of the Company, as amended through February 22, 1993. 3.2 - Articles of Merger of the Company and AGL Merger Co. filed March 6, 1996, with the Secretary of State of the State of Georgia. 3.3 - Articles of Amendment to the Articles of Incorporation (Charter) of the Company filed on October 3, 1996, with the Secretary of State of the State of Georgia. 3.4 - By-Laws of the Company, as amended through November 17, 1995 (Exhibit 3(e), Atlanta Gas Light Company Form 10-K for the fiscal year ended September 30, 1995). 4.1 - Indenture, dated as of December 1, 1989, between Atlanta Gas Light Company and Bankers Trust Company, as Trustee (Exhibit 4(a), Registration No. 33-32274). 4.2 - First Supplemental Indenture, dated as of March 16, 1992, between Atlanta Gas Light Company and NationsBank of Georgia, National Association, as Successor Trustee, (Exhibit 4(a), Registration No. 33-46419). 10.1 - Executive Compensation Plans and Arrangements; 10.1.a - Executive Severance Pay Plan of AGL Resources Inc. (Exhibit 10.1.a, AGL Resources Inc. Form 10-K for the fiscal year ended September 30, 1996). 10.1.b - AGL Resources Inc. Long-Term Stock Incentive Plan of 1990 (Exhibit 10(ii), Atlanta Gas Light Company Form 10-K for the fiscal year ended September 30, 1991). 10.1.c - First Amendment to the AGL Resources Inc. Long-Term Stock Incentive Plan of 1990 (Exhibit B to the Atlanta Gas Light Company Proxy Statement for the Annual Meeting of Shareholders held February 5, 1993). Exhibit Number Description 10.1.d - Third Amendment to the AGL Resources Inc. Long-Term Stock Incentive Plan of 1990 (Exhibit C to the Proxy Statement and Prospectus filed as a part of Amendment No. 1 to Registration Statement on Form S-4, No. 33-99826). 10.1.e - AGL Resources Inc. Nonqualified Savings Plan (Exhibit 10(a), Atlanta Gas Light Company Form 10-K for the fiscal year ended September 30, 1995). 10.2 - Service Agreement under Rate Schedule GSS dated April 13, 1972, between the Company and Transcontinental Gas Pipe Line Corporation (Exhibit 5(c), Registration No. 2-48297). 10.3 - Service Agreement under Rate Schedule LG-A, effective August 16, 1974, between the Company and Transcontinental Gas Pipe Line Corporation (Exhibit 5(d), Registration No. 2-58971). 10.4 - Storage Transportation Agreement, dated June 1, 1979, between the Company and Southern Natural Gas Company, (Exhibit 5(n), Registration No. 2-65487). 10.5 - Letter of Intent dated September 18, 1987, between the Company and Jupiter Industries, Inc. relating to the purchase by the Company of the assets of the Chattanooga Gas Company Division of Jupiter Industries, Inc. (Exhibit 10(p), Form 10-K for the fiscal year ended September 30, 1987). 10.6 - Agreement for the Purchase of Assets dated April 5, 1988, between the Company and Jupiter Industries, Inc., (Exhibit 10(q), Form 10-K for the fiscal year ended September 30, 1988). 10.7 - 100 Day Storage Service Agreement, dated June 1, 1979, between the Company and South Georgia Natural Gas Company, (Exhibit 10(r), Form 10-K for the fiscal year ended September 30, 1989). 10.8 - Service Agreement under Rate Schedule LSS, dated October 31, 1984, between the Company and Transcontinental Gas Pipe Line Corporation, (Exhibit 10(s), Form 10-K for the fiscal year ended September 30, 1989). Exhibit Number Description 10.9 - Storage Transportation Agreement, dated June 1, 1979, between the Company and South Georgia Natural Gas Company, (Exhibit 10(v), Form 10-K for the fiscal year ended September 30, 1990). 10.10 - Firm Seasonal Transportation Agreement, dated June 29, 1990, between the Company and Transcontinental Gas Pipe Line Corporation, (Exhibit 10(bb), Form 10-K for the fiscal year ended September 30, 1990). 10.11 - Service Agreement under Rate Schedule WSS, dated June 1, 1990, between the Company and Transcontinental Gas Pipe Line Corporation, (Exhibit 10(cc), Form 10-K for the fiscal year ended September 30, 1990). 10.12 - Limited-Term Transportation Agreement Contract # A970 dated April 1, 1988, between the Company and CNG Transmission Corporation, (Exhibit 10(bb), Form 10-K for the fiscal year ended September 30, 1991). 10.13 - Service Agreement System Contract #.2271 under Rate Schedule FT, dated August 1, 1991, between the Company and Transcontinental Gas Pipe Line Corporation, (Exhibit 10(dd), Form 10-K for the fiscal year ended September 30, 1991). 10.14 - Service Agreement System Contract #.4984 dated August 1, 1991, between the Company and Transcontinental Gas Pipe Line Corporation, (Exhibit 10(ee), Form 10-K for the fiscal year ended September 30, 1991). 10.15 - Service Agreement Contract #830810 under Rate Schedule FT, dated March 1, 1992, between the Company and South Georgia Natural Gas Company (Exhibit 10(aa), Form 10-K for the fiscal year ended September 30, 1992). 10.16 - Firm Gas Transportation Contract #3699 under Rate Schedule FT, dated February 1, 1992, between the Company and Transcontinental Gas Pipe Line Corporation (Exhibit 10(dd), Form 10-K for the fiscal year ended September 30, 1992). Exhibit Number Description 10.17 - Firm Gas Transportation Agreement under Rate Schedule FT-1, dated July 1, 1992, between the Company and East Tennessee Natural Gas Company (Exhibit 10(ff), Form 10-K for the fiscal year ended September 30, 1992). 10.18 - Service Agreement Applicable to the Storage of Natural Gas under Rate Schedule GSS, dated October 25, 1993, between the Company and CNG Transmission Corporation (Exhibit 10(y), Form 10-K for the fiscal year ended September 30, 1993). 10.19 - Service Agreement Applicable to the Storage of Natural Gas under Rate Schedule GSS, dated September, 1993, between Chattanooga Gas Company and CNG Transmission Corporation (Exhibit 10(z), Form 10-K for the fiscal year ended September 30, 1993). 10.20 - Firm Seasonal Transportation Agreement, dated February 1, 1992, between the Company and Transcontinental Gas Pipe Line Corporation amending Exhibit 10(bb), Form 10-K for the fiscal year ended September 30, 1990 (Exhibit 10(cc), Form 10-K for the fiscal year ended September 30, 1993). 10.21 - Service Agreement under Rate Schedule SS-1, dated April 1, 1988, between the Company and Transcontinental Gas Pipe Line Corporation (Exhibit 10(z), Form 10-K for the fiscal year ended September 30, 1994). 10.22 - Firm Gas Transportation Agreement #5049 under Rate Schedule FT-A, dated November 1, 1993, between the Company and Tennessee Gas Pipeline Company (Exhibit 10(aa), Form 10-K for the fiscal year ended September 30, 1994). 10.23 - Firm Gas Transportation Agreement #5051 under Rate Schedule FT-A, dated November 1, 1993, between Chattanooga Gas Company and Tennessee Gas Pipeline Company (Exhibit 10(bb), Form 10-K for the fiscal year ended September 30, 1994). 10.24 - Gas Storage Contract #3998 under Rate Schedule FS, dated November 1, 1993, between the Company and Tennessee Gas Pipeline Company (Exhibit 10(cc), Form 10-K for the fiscal year ended September 30, 1994). Exhibit Number Description 10.25 - Gas Storage Contract #3999 under Rate Schedule FS, dated November 1, 1993, between Chattanooga Gas Company and Tennessee Gas Pipeline Company (Exhibit 10(dd), Form 10- K for the fiscal year ended September 30, 1994). 10.26 - Gas Storage Contract #3923 under Rate Schedule FS, dated November 1, 1993, between the Company and Tennessee Gas Pipeline Company (Exhibit 10(ee), Form 10-K for the fiscal year ended September 30, 1994). 10.27 - Gas Storage Contract #3947 under Rate Schedule FS, dated November 1, 1993, between Chattanooga Gas Company and Tennessee Gas Pipeline Company (Exhibit 10(ff), Form 10-K for the fiscal year ended September 30, 1994). 10.28 - Service Agreement #902470 under Rate Schedule FT, dated September 1, 1994, between the Company and Southern Natural Gas Company (Exhibit 10(hh), Form 10-K for the fiscal year ended September 30, 1994). 10.29 - Service Agreement #904460 under Rate Schedule FT, dated November 1, 1994, between the Company and Southern Natural Gas Company (Exhibit 10(ii), Form 10-K for the fiscal year ended September 30, 1994). 10.30 - Service Agreement #904480 under Rate Schedule FT, dated November 1, 1994, between the Company and Southern Natural Gas Company (Exhibit 10(jj), Form 10-K for the fiscal year ended September 30, 1994). 10.31 - Service Agreement #904461 under Rate Schedule FT-NN, dated November 1, 1994, between the Company and Southern Natural Gas Company (Exhibit 10(kk), Form 10-K for the fiscal year ended September 30, 1994). 10.32 - Service Agreement #904481 under Rate Schedule FT-NN, dated November 1, 1994, between the Company and Southern Natural Gas Company (Exhibit 10(ll), Form 10-K for the fiscal year ended September 30, 1994). 10.33 - Service Agreement #S20140 under Rate Schedule CSS, dated November 1, 1994, between the Company and Southern Natural Gas Company (Exhibit 10(mm), Form 10-K for the fiscal year ended September 30, 1994). Exhibit Number Description 10.34 - Service Agreement #S20150 under Rate Schedule CSS, dated November 1, 1994, between the Company and Southern Natural Gas Company (Exhibit 10(nn), Form 10-K for the fiscal year ended September 30, 1994). 10.35 - Service Agreement #904470 under Rate Schedule FT, dated November 1, 1994, between Chattanooga Gas Company and Southern Natural Gas Company (Exhibit 10(oo), Form 10-K for the fiscal year ended September 30, 1994). 10.36 - Service Agreement #904471 under Rate Schedule FT-NN, dated November 1, 1994, between Chattanooga Gas Company and Southern Natural Gas Company (Exhibit 10(pp), Form 10-K for the fiscal year ended September 30, 1994). 10.37 - Service Agreement #S20130 under Rate Schedule CSS, dated November 1, 1994, between Chattanooga Gas Company and Southern Natural Gas Company (Exhibit 10(qq), Form 10-K for the fiscal year ended September 30, 1994). 10.38 - Firm Storage (FS) Agreement, dated November 1, 1994, between the Company and ANR Storage Company (Exhibit 10(a), Form 10-Q for the quarter ended March 31, 1996). 10.39 - Firm Storage (FS) Agreement, dated November 1, 1994, between the Company and ANR Storage Company (Exhibit 10(b), Form 10-Q for the quarter ended March 31, 1996). 10.40 - Firm Transportation Agreement, dated March 1, 1996, between the Company and Southern Natural Gas Company amending Exhibits 10(jj), 10(ll) and 10(mm), Form 10-K for the fiscal year ended September 30, 1994 (Exhibit 10(c), Form 10-Q for the quarter ended March 31, 1996). 10.41 - Firm Transportation Agreement, dated March 1, 1996, between the Company and Southern Natural Gas Company amending Exhibits 10(hh), 10(ii), 10(kk) and 10(nn), Form 10-K for the fiscal year ended September 30, 1994 (Exhibit 10(d), Form 10-Q for the quarter ended March 31, 1996). Exhibit Number Description 10.42 - Firm Transportation Agreement, dated March 1, 1996, between Chattanooga Gas Company and Southern Natural Gas Company amending Exhibits 10(oo), 10(pp) and 10(qq), Form 10-K for the fiscal year ended September 30, 1994 (Exhibit 10(a), Form 10-Q for the quarter ended June 30, 1996). 10.43 - Firm Transportation Agreement, dated June 1, 1996, between the Company and Southern Natural Gas Company amending Exhibit 10(ii), Form 10-K for the fiscal year ended September 30, 1994 (Exhibit 10(tt), Form 10-K for the fiscal year ended September 30, 1995). 10.44 - Firm Storage Agreement, effective December 1, 1994, between Chattanooga Gas Company and Tennessee Gas Pipeline Company amending Exhibit 10(ff), Form 10-K for the fiscal year ended September 30, 1994 (Exhibit 10(uu), Form 10-K for the fiscal year ended September 30, 1995). 10.45 - Firm Storage Agreement, effective July 1, 1996, between Chattanooga Gas Company and Tennessee Gas Pipeline Company amending Exhibit 10(ff), Form 10-K for the fiscal year ended September 30, 1994 (Exhibit 10(vv), Form 10-K for the fiscal year ended September 30, 1995). 10.46 - Firm Storage Agreement, effective July 1, 1996, between Chattanooga Gas Company and Tennessee Gas Pipeline Company amending Exhibit 10(dd), Form 10-K for the fiscal year ended September 30, 1994 (Exhibit 10(ww), Form 10-K for the fiscal year ended September 30, 1995). 10.47 - Firm Transportation Agreement, dated September 26, 1994, between The Company and South Georgia Natural Gas Company amending Exhibit 10(s), Form 10-K for the fiscal year ended September 30, 1994 (Exhibit 10(xx), Form 10-K for the fiscal year ended September 30, 1995). 10.48 - Firm Storage Agreement, effective July 1, 1996, between The Company and Tennessee Gas Pipeline Company amending Exhibit 10(ee), Form 10-K for the fiscal year ended September 30, 1994 (Exhibit 10(yy), Form 10-K for the fiscal year ended September 30, 1995). Exhibit Number Description 10.49 - Firm Storage Agreement, effective July 1, 1996, between The Company and Tennessee Gas Pipeline Company amending Exhibit 10(cc), Form 10-K for the fiscal year ended September 30, 1994 (Exhibit 10(zz), Form 10-K for the fiscal year ended September 30, 1995). 10.50 - Firm Storage Agreement, effective January 1, 1996, between the Company and Tennessee Gas Pipeline Company amending Exhibit 10(z) and replacing Exhibit 10(u), Form 10-K for the fiscal year ended September 30, 1995 (Exhibit 10(a), Form 10-Q for the quarter ended December 31, 1995). 10.51 - Firm Storage Agreement, effective January 1, 1996, between Chattanooga Gas Company and Tennessee Gas Pipeline Company amending Exhibit 10(aa) and replacing Exhibit 10(dd), Form 10-K for the fiscal year ended September 30, 1995 (Exhibit 10(b), Form 10-Q for the quarter ended December 31, 1995). 10.52 - Gas Sales Agreement between Seller and Atlanta Gas Light Company, as Buyer (Exhibit 10(a), Form 10-Q for the quarter ended March 31, 1995). 10.53 - FPS-1 Service Agreement, dated July 9, 1996, between Atlanta Gas Light Company and Cove Point LNG Limited Partnership (Exhibit 10(a), Form 10-Q for the quarter ended June 30, 1996). 10.54 - Amendment to FS Agreement, dated September 13, 1994, between Atlanta Gas Light Company and Transcontinental Gas Pipe Line Corporation. 10.55 - Amendment to Letter Agreement, dated July 13, 1994, among and between Southern Natural Gas Company, Atlanta Gas Light Company and Chattanooga Gas Company. 10.56 - Three-party agreement between ANR Storage Company, Atlanta Gas Light Company and Southern Natural Gas Company, effective November 1, 1994. 10.57 - Displacement Service Agreement, effective December 15, 1996, between Washington Gas Light Company and Atlanta Gas Light Company. Exhibit Number Description 10.58 - Amendment to Firm Storage Agreement, effective July 26, 1996, between Chattanooga Gas Company and Southern Natural Gas Company amending Exhibit 10(jj) , Form 10-K for the fiscal year ended September 30, 1995. 10.59 - Amendatory Agreement, effective August 23, 1996, between Southern Natural Gas Company and Atlanta Gas Light Company amending Exhibits 10(ee), 10(ff), 10(hh) and 10(kk), Form 10-K for the fiscal year ended September 30, 1995. 21 - Subsidiaries of the Registrant. 23 - Independent Auditors' Consent. 24 - Powers of Attorney (included with Signature Page hereto). 27 - Financial Data Schedule. EX-3 2 EXHIBIT 3.1 No. 375 AN ACT to incorporate the Atlanta Gas Light Company. APPROVED February 16th, 1856. 1. Section I. Be it enacted, etc., That Julius W. Hayden, William N. Kirkpatrick, Adolph J. Brady, Wm. C. Lawshe, Cicero H. Strong, William Helme, and their associates, subscribers to the capital stock of the association intended to be hereby incorporated, and their successors be and they are hereby made and declared to be a body corporate and politic in deed and in law, by the name and style of the Atlanta Gas Light Company, and as such shall have power to adopt, make and use a common seal, and the same at their pleasure to alter and renew, to make and execute such by-laws, rules and regulations, not repugnant to the laws of the land, as they may deem necessary or convenient for the government of the corporation, to have perpetual succession of members and officers, conformably to such by-laws, rules and regulations to sue and to be sued, to plead and be impleaded in any Court of Law and Equity, to purchase, receive and hold lands, tenements, goods and chattels, and the same to sell, convey and assign, and generally to have, exercise and enjoy all such rights and privileges, and subject to all such liabilities as are incident to bodies politic and corporate. 2. Section II. And be it further enacted, That the said corporation shall have full power and authority to make, manufacture and sell gas, to be made of coal, resin, or other materials, for lighting the streets, public and private buildings, and other places in the city of Atlanta, and shall be, and is hereby authorized and empowered to lay down in any and all of the streets, lanes, avenues, alleys, squares and public grounds of said city, gas pipes and other apparatus for conduction gas through the same, and to erect therein such gas posts, burners and reflectors, as may be necessary or convenient, Provided, That the public thoroughfares shall at no time be unnecessarily interrrupted or impeded by the laying down or erection thereof, and that the said streets, lanes, avenues, alleys, squares and public grounds shall not be thereby injured, but shall be left in good state and condition as they were before the laying down of said pipes, conductors or other apparatus and the erection of said posts. 3 3. Section II. And be it further enacted, That the capital of said corporation shall be divided into shares of twenty-five dollars each and be transferable only on the transfer book of the company, and until such transfer is regularly made thereon, shall be held bound and liable for all debts due and owing to the corporation by the holder thereof, and by order of the Directors on conformity to such by-laws as the Stockholders may adopt in relation thereto, may be sold at public auction for the purpose of paying any debt or debts due by the individual Stockholders to the Company, they accounting to such Stockholders for any surplus of the proceeds of such sale remaining after the payment of such debt or debts. 4. Section IV. And be it further enacted, That the affairs of said corporation shall be managed by a Board of five Directors to be elected annually on such day as may be fixed by the by-laws of the Company, of whom, one shall be elected to preside over the Board to be known as, and to discharge the duties of, President of said corporation; and that at all elections of Directors, and in all meetings of the Stockholders, each Stockholders shall be entitled to one vote for each share of stock standing in his or her name; and said stock may be represented by the Attorney or proxy of the Stockholder. 5. Section V. And be it further enacted, That if at any time an election of Directors should not take place on the day appointed by the by-laws, the corporation shall not be dissolved for that cause, but the Directors previously elected shall continue to exercise as theretofore the functions of their office, as such, until others be elected in conformity to the by-laws. 6. Section VI. And be it further enacted, That if any person or persons shall wilfully do, or cause to be done, any act or acts whereby to injure any pipe, conductor, cock, meter, machine or other thing whatever appertaining to the gas works of said company whereby the same may be stopped, obstructed or injured, the person or persons so offending shall be considered guilty of, and may be indicted for, a misdemeanor, and being thereof duly convicted, shall be punished by fine not exceeding two hundred dollars or imprisonment in the common jail not exceeding sixty days, or by both fine and imprisonment, not exceeding the said sum and time, and such criminal prosecution shall in no wise impair the right of action for damages, which the said Company is hereby authorized to institute in any Court having cognizance and jurisdiction of the same. 2 AMENDING ACT INCORPORATING ATLANTA GAS LIGHT COMPANY No. 373 An Act to amend an Act entitled "An Act to incorporate the Atlanta Gas Light Company," approved February 16th 1856, by vesting in said company authority to furnish electric lights as well as gas, and by vesting in said company authority to issue bonds, and to secure the same by mortgage upon any or all of its property, real and personal, rights, franchises and privileges, and for other purposes. SECTION I. Be it enacted by the General Assembly of the State of Georgia, That, in addition to the powers, rights and authority heretofore granted to the Atlanta Gas Light Company, the said corporation is hereby granted full power and authority to make, sell and furnish gas and electricity for any and all uses to which the same may be put advantageously, and is hereby authorized and empowered to lay pipes and conduits, and to erect poles and to run wires, either below or above the surface of the street, as may be desirable in each case, for the purpose of furnishing either electricity or gas, or both, and to maintain and repair its pipes, conduits, poles, wires and appurtenances. SECTION II. Be it further enacted, That said corporation is hereby expressly authorized and empowered to issue bonds, and to secure the same by mortgage upon any or all of its property, real and personal, rights, privileges and franchises, whenever and as often, and to such amount as it may deem necessary to enable it to properly and advantageously exercise the franchise granted it, and to perform the public service for which it is created. Such bonds and mortgage shall be executed and acknowleged by such officers of the company as may be designated for the purpose by the Board of Directors, but the issue of said bonds and the execution of such mortgage or mortgages shall, in every case, be first authorized and directed at a meeting of the stockholders duly called for the purpose. SECTION III. Be it further enacted by authority aforesaid, That all laws and parts of laws in conflict herewith be, and the same are hereby repealed. Approved October 14, 1889. 1 Thereupon the following resolution was duly offered and second and a stock vote being had thereon received the affirmative vote of 40,585 shares of Common stock and 24,000 shares of Preferred stock being the entire outstanding issue of stock, both Common and Preferred, of the Company, and was declared unanimously adopted, to-w: RESOLVED by the stockholders of the Atlanta Gas Light Company meeting duly assembled that this Company do apply for, secure and accept an amendment to its charter by proper application to the Superior Court of Fulton County, Georgia, authorizing and empowering the Company to lease and mortgage its properties, real and personal, including its franchises, and to execute conveyances appropriate to such purposes; and further amending its charter so that in addition to the powers, rights and authorities heretofore granted to it said corporation shall have full power and authority to make, sell and furnish gas and electricity for any and all uses to which the same may be put advantageously, and that it have power to lay pipes and conduits and run wires either below or above the surface of the streets, roads or highways, as may be desirable in each case and for the purpose of furnishing either gas or electricity, or both, and to maintain and repair its pipes, conduits, poles, wires and appurtenances. BE IT FURTHER RESOLVED that its charter as granted by Act of the General Assembly of Georgia, approved February 15th, 1856, and amended by Act approved October 14th, 1889, shall in all other respects remain of force and unchanged. ------------------------------------- I.R.C. Congdon, Secretary of the Atlanta Gas Light Company, do hereby certify that the foregoing and attached resolution with reference to the amendment of the charter of the Atlanta Gas Light Company was duly and unanimously adopted by the affirmative vote of all of the outstanding stock of the Company at a special meeting of the stockholders of this Company duly and legally called and held at the office of the Company,in Atlanta, Georgia, on November 14th, 1900. Witness my hand and the goal of said Company this November 15th 1919. (Corp Seal) R.C.Congdon Secretary State of Georgia, County of Fulton. TO THE SUPERIOR COURT OF SAID COUNTY: The petition of the Atlanta Gas Light Company respectfully shows: 1. That it is a corporation duly incorporated under the laws of Georgia by an Act of the General Assembly approved February 16th, 1856, as shown by the public Acts of 1855-6, page 420, et seq., to which reference is here made, and as amended by an Act of the General Assembly of Georgia, approved October 14th, 1889, as shown by the Public Acts of said State of 1888-9, page 1398, et.seq., to which reference is here made. 2. That it has fully paid up, duly issued and outstanding forty thousand and five hundred and eighty five (40,585) shares of the par value of twenty five ($25.00) dollars each of common capital stock, aggregating one million and fourteen thousand and six hundred and twenty five ($1,014,625) dollars, and it has likewise duly issued an outstanding twenty four thousand (24,000) shares of the par value of twenty five ($25.00) dollars each of preferred capital stock, aggregating six hundred thousand ($500,000.00) dollars, and it also has duly issued and outstanding one million and one hundred and fifty thousand ($1,150,000.00) dollars principal first mortgage bonds secured by mortgage executed on the 1st day of June 1897, and said bonds maturing fifty (50) years from said date. 3. That petitioner desires that its charter be amended and files herewith a certified abstract from the minutes of its stockholders' meeting, duly held on the 14th day of November, 1919, showing that this application for an amendment has been authorized by proper corporate action. 4. That it desires that its said charter be amended so that in addition to the powers, rights and authority heretofore granted to in said corporation have full power and authority to make, sell and furnish as and electricity for any and all uses to which the same may be put advantageously, and that it have power to lay pipes and conduits and to erect poles and run wires, either below or above the surface of the streets, roads or highways, as may be desirable in each case, and for the purpose of furnishing either gas or electricity, or both, and to maintain and repair its pipes, conduits, poles, wires and appurtenances; That said corporation in addition shall have full power and authority to issue bonds, or other evidences of indebtedness, and to secure the same by mortgage upon any or all of its property, real and personal, rights, privileges and franchises, and to such amount as it may be necessary whenever duly authorized by the stockholder of petitioner; That it further have express power and authority to either lease or mortgage its property, real and personal, and its franchise and to execute conveyances appropriate to such purposes when so authorized by three-fourths vote of the entire voting stock of petitioner, or whenever any such action may be ratified by such vote. 5. That except as herein prayed for said charter shall not be otherwise affected, altered, amended or changed in any respect. 6. Petitioner prays that this application be filed, recorded and published as provided by law, and that this Court do pass an order granting the same and amending its charter as herein petitioner for and petitioner will ever pray. Smith, Hammond & Smith ---------------------- King & Spalding ---------------------- Attorneys for Petitioner. Filed in office this the 17 day of Nov. 1919. Arnold Broyles Clerk Ex Parte IN FULTON SUPERIOR COURT. Atlanta Gas Light Company APPLICATION FOR AMENDMENT OF CHARTER The application for amendment of charter of Atlanta Gas Light Company in this proceeding has been filed and published as required by law and the petitioner has in all respects complied with the requirement of the law, and the said application is legitimately within the purview and intent of the Statues in such cases made and provided. It is thereupon considered, ordered and adjudged by the Court that said application for amendment be, and the same is hereby, in all respects granted as prayed for, and the charter of petitioner is hereby amended in accordance with the said application. Let this proceeding be recorded as provided by law and petitioner will pay the cost thereof. In Open Court, This 17 day of December, 1919. J.T. Pendleton -------------- Judge Superior Court, Atlanta Circuit. Georgia, Fulton County. TO THE SUPERIOR COURT OF SAID COUNTY. The petition of the Atlanta Gas Light Company shows as follows: (1) It is a corporation duly incorporated under the laws of Georgia by an Act of the General Assembly of Georgia, approved February 16th, 1856, as appears from the Acts of Georgia Legislatur 1855-6, page 420, et seq., to which reference is here made; that it said charter was amended by any act of the General Assembly of Georgia, approved October 14th, 1889, as shown in the Acts of Georgia Legislature 1888-9, page 1398 et seq., to which reference is here made; that its said charter was further amended by judgment of the Superior Court of Fulton County Georgia on the 17th day of December 1919, as appears from the records of said Court, to which reference is here made. (2) Petitioner desires that its said charter be further amended so as to withdraw from petitioner the power now enjoyed under its charter to make and sell and furnish electricity for any and all uses to which the same may be put advantageously, and the power to lay pipes and conduits, to erect poles and run wires either above or below the surface of the streets, roads and highways as may be desirable in each case for the purpose of furnishing electricity, and the power to maintain and repair its pipes, conduits, poles, wires and appurtenances for the purpose of furnishing electricity, the purpose and purport and object to said amendment being to lessen and modify the corporate powers of said Atlanta Gas Light Company to the extent named and to deny to said Company any charter power now possessed of manufacturing or furnishing or dealing in electricity. (3) Petitioner shows that the authority and directions to apply for and obtain and accept said amendment to said charter was granted by proper corporate action of petitioner through the unanimous vote of all of its outstanding capital stock on the 19th day of March 1929, as appears from a certified abstract from the min- utes of petitioner which is hereto attached as Exhibit "A". (4) That except as herein prayed for said charter shall not be otherwise affected, altered, amended or changed in any respect by this proceeding or by any order or decree of judgment passed in pursuance thereof. Colquitt & Conyers ------------------------ Attorneys for Atlanta Gas Light Company Filed in office this 20 day of Mar. 1929. T.C. Miller, Clerk ORDER AND JUDGMENT. ------------------- The foregoing application for amendment of the charter of the Atlanta Gas Light Company having been shown to the Court to have been filed and published as required by law, and it further appears that petitioner has in all respects complied with the requirements of law, and it further appearing that said amendment has been authorized by unanimous vote of all the stockholders of petitioner and that said amendment is legitimately within the purview of the laws of Georgia in such cases made and provided, IT IS THEREFORE considered, ordered, adjudged and decreed, that said application for amendment be and the same is hereby granted in all respects as prayed for, and the charter of petitioner is hereby amended in accordance with said application. This 20 day of April, 1929. Virlyn B. Moore --------------- Judge S.C.A.C. At a meeting of the stockholders of the Atlanta Gas Light Company held on March 13, 1929, pursuant to a regular and legal call for said meeting, and there being present and voting the entire outstanding issue of stock both common and preferred of said Company, there was adopted by unanimous vote of said entire outstanding issue of stock the following resolution to wit: "RESOLVED that the Atlanta Gas Light Company through its attorneys or other officers be and they are authorized and directed to apply to the Superior Court of Fulton County, Georgia, for an amendment to the charter of said Company withdrawing from said Company the power now enjoyed under its charter to make and sell and furnish electricity for any and all uses to which the same may be put advantageously, and the power to lay pipes and conduits, to erect poles and run wires either above or below the surface of the streets, roads and highways as may be desirable in each case for the purpose of furnishing electricity, and the power to maintain and repair its pipes, conduits, poles, wires and appurtenances for the purpose of furnishing electricity, the purpose and purport and object of said amendment being to lessen and modify the corporate powers of said Atlanta Gas Light Company to the extent named and to deny to said Company any charter power now possessed of manufacturing or furnishing or dealing in electricity. Be it further resolved by said unanimous vote as aforesaid that said amendment to said charter when secured be accepted and adopted by said Atlanta Gas Light Company." I, W. H. Wright, Secretary of the Atlanta Gas Light Company, does hereby certify that the foregoing is a correct and true extract from the minutes of the Atlanta Gas Light Company, properly setting forth the corporate action of said Company as the same was had on the date above named, and as the same appears of record in said minute: Witness my hand on the seal of said corporation this March 19th, 1929. M. H. Wright ------------ Secretary. (Corp. Seal) Exhibit "A" GEORGIA ) IN THE SUPERIOR COURT OF SAID COUNTY. FULTON COUNTY.) This the petition of ATLANTA GAS LIGHT COMPANY respectfully represents unto this Court as follows: 1. Petitioner is a corporation duly incorporated by an Act of the General Assembly of Georgia approved February 16, 1856, as shown by the Georgia Laws of 1855-6, page 420, et seq., to which reference is made; and as amended by an Act of the General Assembly of Georgia approved October 14, 1889, as shown by the Georgia Laws of 1888-9, page 1398, et seq., to which reference is made; and as amended by order of this Court entered on the 17th day of December, 1919, to which reference is made; and as amended by order of this Court entered on the 20th day of April, 1929, to which reference is also made. 2. Petitioner desires that its charter be amended in the manner set out in a resolution adopted at a special meeting of its stockholders held on the 14th day of September, 1929. A certified copy of said resolution is hereto attached marked Exhibit "A" and made a part hereof. Except as herein prayed for, petitioner desires that its charter shall not be otherwise affected, altered, amended or changed in any respect. Petitioner prays that this application be filed, recorded and published as provided by law, and that this Court do pass an order granting the same and amending its charter in accordance with this petition. Alston, Alston, Foster & Moise ------------------------------ Attys for Atlanta Gas Light Company. Filed Sept. 18, 1929. T. C. Miller C. S. C. ------------ RESOLVED, that the charter of the Atlanta Gas Light Company be amended by adding to Section One (1) of the Act of the Legislature of the State of Georgia, approved February 16, 1856, granting to the Atlanta Gas Light Company a charter, the following words: "Atlanta Gas Light Company is to have the right and power to exercise all of the powers conferred upon it by its original charter and by any amendment thereto heretofore or hereafter granted, in any municipality of the State of Georgia, and in and throughout the State of Georgia, and in addition shall have the right and power to manufacture gas, to lay pipe lines for the furnishing and distribution of gas, within any part of the State of Georgia; to connect its lines, now laid or to be laid, with pipe lines or other lines which have been laid or may hereafter be laid by it or any other person, partnership or corporation within the State of Georgia, whether such lines originate within or without the State of Georgia, for furnishing gas, and likewise to extend any system of pipe lines and mains or laterals or feed pipes now owned by it or which may hereafter be owned by it, and to furnish through the said pipe lines and through any pipes, mains, or laterals now owned by it or hereafter to be acquired by it, gas for heating, lighting and/or power purposes, and for any other purposes to which the same may be applied; to connect its mains, lines and/or pipes with those of any other person or corporation now or hereafter to be laid, and to furnish gas received therefrom through the same for any and all purposes for which the same may be then used". BE IT FURTHER RESOLVED, that the President or any Vice President of this Company be, and he is hereby authorized and directed to cause such petition or petitions as may be necessary or desirable to accomplish this amendment to be filed, and such orders as may be necessary or desirable to be taken thereon, and to do such other acts and things as may be deemed necessary or desirable to be done in order to put this amendment into effect. I, W. M. McFarland, the duly elected, qualified and acting Secretary of Atlanta Gas Light Company, HEREBY CERTIFY that the foregoing is a true and correct copy of a resolution duly adopted at a Special Meeting of the Stockholders of Atlanta Gas Light Company, duly held and convene on the 14th day of September, 1929, at which meeting a quorum was present and voting and that said resolution has not been annulled, revoked or amended in any way whatsoever, but is in full force and effect. WITNESS the signature of said officer of Atlanta Gas Light Company and its corporate seal hereto affixed this 16th day of September, 1929. W. M. McFarland ---------------- Secretary. (Corp Seal) IN THE SUPERIOR COURT OF FULTON COUNTY, GEORGIA. IN THE MATTER OF ORDER AMENDING CHARTER. PETITION OF ATLANTA GAS LIGHT COMPANY, AMENDMENT TO CHARTER. The petition of Atlanta Gas Light Company for amendment to its charter coming on for hearing and it being made to appear that the petition has been published once a week for four successive weeks in the manner required by law and the object of said petition being within the purview of the law, IT IS CONSIDERED, ORDERED AND ADJUDGED that the prayers of said petition be and the same are hereby granted and the charter of the Atlanta Gas Light Company is amended in the manner and respect set out in said petition. Let this judgement be filed and recorded in the manner provided by law. In open court this 22 day of October, 1929. G. H. Howard ------------ Judge, Superior Court, Atlanta Circuit. Filed in this office 18 day of Sept. 1929. T. C. Miller C. S. C. ------------ #14582 State of Georgia County of Fulton. TO THE SUPERIOR COURT OF SAID COUNTY: This the petition of Atlanta Gas Light Company respectfully shows: 1. It is a corporation duly incorporated under the laws of Georgia by an Act of the General Assembly approved February 16, 1856, as shown by the Public Acts 1855-56, pages 420, et seq. and as amended by an Act approved October 14, 1889 as shown by the Public Acts 1888-9, pages 1393, et seq., and as further amended by orders of this Court entered December 17, 1919, April 20, 1929 and October 22, 1929; all of which said laws and orders are hereby referred to. 2. Petitioner desires to amend its charter so as to provide that it shall have authority to issue preferred stock of the par value of one hundred ($100) dollars per share, which said preferred stock may be issued in one or more classes. Each class of said preferred stock shall have such preferences, voting powers, restrictions and qualifications as may be provided in the resolution or resolutions authorizing the issuance of the same, and adopted by the votes of the holders of the majority of the capital stock of Atlanta Gas Light Company then outstanding and entitled to vote. No share of preferred stock shall be issued in violation of the terms of any other preferred stock issued by petitioner and then outstanding. Any shares of capital stock of petitioner, common or preferred may be paid for in money or in properties at the reasonable market value thereof. Each share of common stock now outstanding or which may be issued shall be on equality one with the other in the amount of its par value and as well as to preferences, voting power, restrictions or qualifications. 3. The powers and privileges herein provided for shall be in addition to the powers and privileges conferred more upon petitioner by its/original charter and the aforementioned amendments thereto. 4. Petitioner attaches hereto marked "Exhibit A" a certified copy of resolutions unanimously adopted by the holders of all the shares of its capital stock now outstanding and entitled to vote. WHEREFORE, petitioner prays that this petition be filed and published in the manner required by law and that thereafter the same be granted and petitioner's charter be amended in accordance herewith. Respectfully submitted, Alston, Alston, Foster & Moise ------------------------------------ Attorneys for Petitioner. August 17, 1935. Filed in office this the 17 day of Aug. 1935 J. W. Simmons C.S.C. - ----------------------- "Exhibit A" ----------- "Resolved: That the charter of Atlanta Gas Light Company as heretofore amended be further amended so as to provide that Atlanta Gas Light Company shall have authority to issue preferred stock of the par value of one hundred ($100) dollars per share, which said preferred stock may be issued in one or more classes. Each class of said preferred stock shall have such preferences, voting powers, restrictions and qualifications as may be provided in the resolution or resolutions authorizing the issuance of the same, and adopted by the votes of the holders of the majority of the capital stock of Atlanta Gas Light Company then outstanding and entitled to vote. No share of preferred stock shall be issued in violation of the terms of any other preferred stock issued by Atlanta Gas Light Company and then outstanding. Any shares of capital stock of Atlanta Gas Light Company, common or preferred, may be paid for in money or in properties at the reasonable market value thereof. Each share of common stock now outstanding or which may be issued shall be on equality one with the other in the amount of its par value and as well as to preferences, voting power, restrictions or qualifications. The powers and privileges to be granted to Atlanta Gas Light Company through this amendment shall be in addition to the powers and privileges conferred upon it by its original charter and the amendments heretofore granted thereto. BE IT FURTHER RESOLVED: That the President or any Vice President of Atlanta Gas Light Company be, and is hereby, authorized and directed to cause a petition to be filed in the Superior Court of Fulton County, Georgia, praying that the charter of Atlanta Gas Light Company be amended as herein set out and that such orders as may be necessary or desirable be taken thereon and that any of said officers are hereby authorized to do all things necessary or desirable to be done in order to put this amendment into effect." I, E. J. Stern, Secretary of the special stockholders' meeting of Atlanta Gas Light Company held in Atlanta, Georgia, August 17, 1935 do hereby certify that the foregoing is a true and correct copy of the resolutions duly adopted at said Special meeting of the stockholders of Atlanta Gas Light Company, and that the meeting was duly held and convened on the 17th day of August, 1935 and that all the shares of stock of said Company outstanding and entitled to vote were present either in person or by proxy and voted unanimously for said resolutions; and that said resolutions have been annulled, revoked or amended in any way whatsoever, but are in full force and effect. Witness my official signature this 17th day of August, 1935. E. J. Stern Sec. ------------------ IN THE SUPERIOR COURT OF FULTON COUNTY, GEORGIA. In the matter of PETITION OF ATLANTA GAS LIGHT COMPANY FOR AMENDMENT TO CHARTER. ORDER AMENDING CHARTER ---------------------- The petition of Atlanta Gas Light Company for amendment to its charter coming on for hearing; and it being made to appear to the Court that the petition has been duly filed in the office of the Clerk of this Court and that it has been published once a week for four successive weeks in the manner required by law; and the object of said petition being within the purview of the law; It is CONSIDERED, ORDERED AND ADJUDGED: That the prayers of said petition be, and the same are hereby, granted and the charter of the Atlanta Gas Light Company is amended in the manner and respect set out in said petition. Let this judgment be filed and recorded in the manner provided by law. In Open Court this 13th day of September, 1935. John D. Humphries ----------------- Judge Superior Court, Atlanta Circuit. ================================================================================ PETITION FOR MERGER OF ATLANTA GAS LIGHT COMPANY, GEORGIA PUBLIC UTILITIES COMPANY and MACON GAS COMPANY Pursuant to Joint Agreement of Merger Dated March 7, 1941 and Order of the Superior Court of Fulton County, Georgia, Granting the Merger of Said Companies ================================================================================ FILED IN OFFICE, THIS THE 18 day of March 1941 /s/ Harry Magbee ------------------------- Deputy Clerk 1 To the Honorable Superior Court of Fulton County, Georgia: This petition of Atlanta Gas Light Company, Macon Gas Company and Georgia Public Utilities Company shows respectfully unto the Honorable the Superior Court of Fulton County, Georgia, as follows: 1. Atlanta Gas Light Company is a corporation organized and existing under the laws of the State of Georgia with its principal office in Fulton County, Georgia. Its charter was granted by an Act of the General Assembly of the State of Georgia approved February 16, 1856 (Georgia Laws 1855-1856, pages 420 et seq.). This charter was amended by an Act of the General Assembly approved October 14, 1889 (Georgia Laws 1888-1889, pages 1398 et seq.). Thereafter the charter of Atlanta Gas Light Company was amended by the Superior Court of Fulton County, Georgia, by its orders dated respectively December 17, 1919, April 20, 1929, October 22, 1929, and September 13, 1935. 2. Macon Gas Company is a corporation organized and existing under the laws of the State of Georgia with its principal office in Bibb County, Georgia. The charter of Macon Gas Company was granted to it under the name of The Macon Gas Light & Water Company by an Act of General Assembly of the State of Georgia approved February 21, 1876 (Georgia Laws 1876, pages 245 et seq.). This charter was amended by Acts of General Assembly approved October 13, 1885 (Georgia Laws 1884-85, pages 286 et seq.), an Act approved December 22, 1886 (Georgia Laws 1886, p. 218), and an Act approved December 23, 1886 (Georgia Laws 1886, p. 219). This charter was also amended by orders of the Superior Court of Bibb County, Georgia, dated March 29, 1889, October 17, 1891, November 25, 1898, January 2, 1906, January 8, 1906 2 July 17, 1911, November 13, 1923, and August 9, 1936. The aforesaid amendment granted by order of the Superior Court of Bibb County, Georgia, dated July 17, 1911, changed the name of the corporation to Macon Gas Company. 3. Georgia Public Utilities Company is a corporation organized and existing under the laws of the State of Georgia with its principal office in Richmond County, Georgia. Its charter was granted to it under the name of The Gas Light Company of Augusta by an Act of the General Assembly of the State of Georgia, approved January 21, 1852 (Georgia Laws 1851-52, pages 204 et seq.). This charter was amended by orders of the Superior Court of Richmond County, Georgia, dated May 13, 1881, December 2, 1893, June 5, 1905, and April 24, 1928. The amendment granted by the order of the Superior Court of Richmond County, Georgia, dated April 24, 1928 changed the name of the corporation to Georgia Public Utilities Company. 4. On March 7, 1941, Atlanta Gas Light Company, Macon Gas Company and Georgia Public Utilities Company, petitioners herein, entered into a Joint Agreement of Merger signed by a majority of the directors of each of said corporations under the corporate names and seals of the respective corporations, prescribing the terms and conditions of the merger, the mode of carrying the same into effect, the name and principal place of business in the State of Georgia of the resulting corporation, the maximum number of shares of capital stock authorized to be outstanding at any time and the manner of the issuance thereof, the number of shares which the resulting corporation will have and the classes of capital stock, the manner and terms of converting the capital stock of each of the merging corporations into stock or obligations of 3 the resulting corporation or the payment therefor, together with other provisions and details not inconsistent with law, deemed by the Directors of the several corporations to be necessary or proper. A copy of said Joint Agreement of Merger is hereto attached and made a part of this petition and paragraph. 5. Notice of the time, place and object of a meeting of the stockholders of each of said three corporations called separately for the purpose of voting upon said merger was given in accordance with the terms of the charters and by-laws of said corporations to, or was waived in writing by, each stockholder of record of each of said corporations, whether entitled to vote or not. At said separate meetings of the stockholders of said three corporations said Joint Agreement of Merger was considered and a vote by ballot, in person or by proxy, taken for the adoption or rejection of said Joint Agreement of Merger. At each of said meetings the holders of all of the stock of the respective corporations entitled to exercise the voting power on the proposal to merge, voted in favor of the adoption of said Agreement. Hereto attached and made a part of this petition and paragraph is a copy of said Joint Agreement of Merger to which are attached a certificate of the Secretary of each of said three corporations that at said respective separate meetings of the stockholders of said three corporations the holders of all of the stock of each of said corporations holding stock entitling them to exercise the voting power on the question of the adoption or rejection of said Joint Agreement of Merger voted in favor of the adoption of said Joint Agreement of Merger. Said certificates are under the seals of the respective corporations. 6. Under the provisions of said Joint Agreement of Merger Macon Gas Company and Georgia Public Utilities Company will be merged 4 into Atlanta Gas Light Company. This petition is presented to the Superior Court of Fulton County, Georgia as the Superior Court of the County of the principal place of business of the continuing corporation. 7. This petition is presented to obtain the grant of an order merging Macon Gas Company and Georgia Public Utilities Company into Atlanta Gas Light Company in accord with the laws of the State of Georgia so that the separate existence of Macon Gas Company and Georgia Public Utilities Company shall cease and they shall be merged into Atlanta Gas Light Company in accordance with said Joint Agreement of Merger, possessing all of the rights, privileges, powers, franchises and immunities as well of a public as of a private nature, except exemption from taxation and except exemption from special assessments for street paving or other special assessments, and so that all property, real, personal and mixed, and all debts due on whatever account, and all other things in action of or belonging to each of said corporations shall be vested in Atlanta Gas Light Company, and all property, rights, privileges, powers, franchises and immunities of said corporations, except exemption from taxation and except exemption from special assessments for street paving or other special assessments, and all and every other interest of said three corporations shall thereafter be as effectually the property of Atlanta Gas Light Company as the continuing corporation as they were of the several respective corporations, and so that title to any real estate, whether acquired by deed or otherwise, under the laws of this State vested in any of said corporations shall not revert or be in any way impaired by reason thereof; Provided, however, that all rights of creditors and all liens on the property of any of said corporations shall be preserved unimpaired, limited in lien to the property affected by such liens at the time of the merger, and all debts, liabilities and duties of said respective corporations shall thenceforth attach to Atlanta Gas Light Company and may 5 be enforced against it to the same extent as if said debts, liabilities and duties had been incurred by it. WHEREFORE, petitioners pray that this Honorable Court grant an order merging Atlanta Gas Light Company, Macon Gas Company and Georgia Public Utilities Company with the result that the existence of Atlanta Gas Light Company will continue and that Macon Gas Company and Georgia Public Utilities Company shall be merged into Atlanta Gas Light Company and that Atlanta Gas Light Company shall be vested with all the rights, privileges, powers, franchises and immunities as well of a public as of a private nature, except exemption from taxation and except exemption from special assessments for street paving or other special assessments, and with the results set forth in this petition and in accordance with the Joint Agreement of Merger, a copy of which is attached to the petition and made a part hereof, and that your petitioners have such other and further relief as in the premises may seem proper. ALSTON, FOSTER, MOISE & SIBLEY ------------------------------ Attorneys for Petitioners JOINT AGREEMENT OF MERGER made and entered into by and between the Directors of Atlanta Gas Light Company, a Georgia corporation, Georgia Public Utilities Company, a Georgia corporation and Macon Gas Company, a Georgia corporation, and under the respective names and seals of said three corporations, under date of March 7, 1941. WHEREAS the said three corporations, parties hereto, are each organized under the laws of the State of Georgia and none of said Corporations is of a character for which charters are granted only by the Secretary of State of Georgia; WHEREAS said Atlanta Gas Light Company has issued and now has outstanding 13,000 shares of its 6% Cumulative Preferred Stock, of the par value of $100 each, and 93,745 shares of its common stock, of the par value of $25 each; WHEREAS said Georgia Public Utilities Company has issued and now has outstanding 1,400 shares of its Preferred Stock, of the par value of $25 each, and 18,000 shares of its common stock, of the par value of $25 each; WHEREAS said Macon Gas Company has issued and now has out-standing 200 shares of its Preferred Stock, of the par value of $100 each, and 4,755 shares of its common stock, of the par value of $100 each; WHEREAS the Boards of Directors of said Atlanta Gas Light Company, said Georgia Public Utilities Company and said Macon Gas Company desire that said three corporations merge into a single continuing corporation under and pursuant to the provisions of the laws of the State of Georgia for the purpose of securing greater efficiency and economy of management and financing, and for the general welfare of said three corporations; 2 Now, therefore, in consideration of the premises and of the mutual agreements, covenants and provisions herein contained, and for the purpose of prescribing the terms and conditions of merger, and the mode of carrying the same into effect and of setting forth certain other provisions and matters pursuant to the laws of the State of Georgia or not inconsistent therewith, as prescribed by law or deemed necessary or proper by the Directors of said corporations parties hereto, the Directors of said three corporations under their respective corporate names and seals, have agreed and do hereby agree as follows: ARTICLE I Said Georgia Public Utilities Company and said Macon Gas Company shall be and they each hereby are merged into said Atlanta Gas Light Company, which shall continue its existence as the constituent corporation into which said Georgia Public Utilities Company and said Macon Gas Company are merged and which, as it shall exist as such continuing corporation after such merger shall have become effective under the laws of the State of Georgia, shall continue to have the name of Atlanta Gas Light Company and will be hereinafter sometimes called the "Merged Company". Nothing herein contained is intended to or shall be construed as contemplating or resulting in the creation of a new corporation, it being expressly understood that said Atlanta Gas Light Company is and shall remain in existence as the corporation into which said Georgia Public Utilities Company and said Macon Gas Company are merged. ARTICLE II The principal place of business of the Merged Company in the State of Georgia shall be Fulton County in said State. 3 ARTICLE III The corporate identity, existence, rights, privileges, powers, franchises, good will and immunities and all and singular the property, real and personal and mixed, all debts due on whatever account, as well as all other things in action of or belonging to said Atlanta Gas Light Company, after the merger herein provided for shall have become effective under the laws of the State of Georgia and without further act or deed, shall continue to be possessed by or vested in the Merged Company unaffected and unimpaired by this Agreement. The separate existence of said Georgia Public Utilities Company and said Macon Gas Company shall cease as soon as the merger herein provided for shall have become effective under the laws of the State of Georgia, and thereupon said two corporations and said Atlanta Gas Light Company shall become a single continuing corporation, in accordance with the terms of this Agreement, namely, the Merged Company. Upon the merger becoming effective under the laws of the State of Georgia, the Merged Company shall possess all the rights, privileges, powers, franchises, and immunities as well of a public as of a private nature, except exemptions from taxation and except exemptions from special assessments for street paving or other special assessments of each of said corporations; and all property real, personal and mixed, and all debts due on whatever account, and all other things in action of or belonging to said Georgia Public Utilities Company and said Macon Gas Company shall be, by operation of law and without further act or deed, vested in the Merged Company; and all property, rights, privileges, powers, franchises and immunities, except exemption from taxation and except exemption from special assessments for street paving or other special assessments, and all and every other interest of said Georgia Public Utilities Company and said Macon Gas Company shall, by operation of law and without further act or deed, be as effectually the property of the Merged Company as they presently are of the said Georgia Public Utilities Company and said Macon Gas Company; and the title to all real estate, whether acquired by deed or otherwise, 4 vested in said Georgia Public Utilities Company and said Macon Gas Company shall not revert or be impaired in any way by reason thereof, provided that all rights of creditors and all liens on the property of said Georgia Public Utilities Company and said Macon Gas Company shall be preserved unimpaired limited in lien to the property affected by such liens at the time the merger shall become effective as afore said; and all and singular the debts, liabilities and duties of said Georgia Public Utilities Company and said Macon Gas Company shall thenceforth attach to the Merged Company and may be enforced against it to the same extent as if said debts, liabilities and duties had been incurred by it. Without, in any way, limiting the generality of the foregoing, the indebtedness to attach to the Merged Company as aforesaid shall include (1) $709,000 principal amount of First Mortgage Bonds, 4 1/2% Series Due 1952, of Macon Gas Company, issued under and secured by Indenture of Mortgage of said Macon Gas Company to Central Hanover Bank and Trust Company, as Trustee, dated as of June 1, 1937; (2) $363,000 principal amount of Five Per Cent. First Mortgage Gold Bonds, due, as extended, February 1, 1941, of The Gas Light Company of Augusta (by change of name Georgia Public Utilities Company), issued under and secured by Indenture of Mortgage of said The Gas Light Company of Augusta to the First National Bank of Chicago, as Trustee, and Emile K. Boisot, as Co-Trustee, dated as of April 2, 1906, as supplemented by Supplemental Indenture, dated as of October 1, 1937, between said Georgia Public Utilities Company and said Trustees; (3) $140,000 principal amount of First Mortgage 6% Gold Bonds. Series A, due January 1, 1946, of Griffin Gas, Ice & Cold Storage Company (assumed by said Georgia Public Utilities Company), issued under and secured by Indenture of Mortgage of said Griffin Gas, Ice & Cold Storage Company to First Trust and Savings Bank and Melvin A. Traylor, as Trustees, dated as of January 1, 1926, assumed by said Georgia Public Utilities Company by Supplemental Indenture dated August 23, 1928; 5 (4) $75,000 principal amount of First Mortgage Gold Bonds of Valdosta Gas Company (assumed by said Georgia Public Utilities Company), issued under and secured by First Mortgage of Valdosta Gas Company to The Baltimore Trust Company, as Trustee, dated as of June 1, 1925, assumed by said Georgia Public Utilities Company by Supplemental Indenture dated as of November 29, 1935. Upon the merger herein provided for becoming effective under the laws of the State of Georgia, the Merged Company shall execute, acknowledge and deliver such supplemental indentures to the Trustees under the respective indentures of mortgage above mentioned, if any, as may be required pursuant to said indentures to provide for or evidence the assumption by the Merged Company of the respective obligations secured by said respective indentures of mortgage; but neither anything in this Agreement contained nor the execution and delivery of any such supplemental indenture shall be construed to extend or enlarge in any way the lien of any of said Indentures. ARTICLE IV The Merged Company, in addition to the powers conferred upon it by the laws of the State of Georgia, shall have the powers now granted to said Atlanta Gas Light Company under the Act of the General Assembly of the State of Georgia, approved February 16, 1856, incorporating said corporation, as shown by the Public Acts of Georgia of 1855-6, page 420 et seq., to which reference is hereby made, as the charter and charter powers granted thereby have been amended by an Act of the General Assembly of the State of Georgia, approved October 14, 1889, as shown by the Public Acts of said State of 1888-9, page 1398 et seq., to which reference is hereby made, and by Orders of the Superior Court of Fulton County of the State of Georgia, dated December 17, 1919, April 20, 1929, October 22, 1929 and September 13, 1935, respectively, each duly recorded on the minutes of the Superior Court 6 of said County and in the Charter Books in the Clerk's office of the Superior Court of said County, to which reference is hereby made as though they were part hereof; and further, to the extent that the same are not a limitation of or inconsistent with the foregoing powers, the Merged Company shall have the powers heretofore granted to (A) said Georgia Public Utilities Company, under the Act of the General Assembly of the State of Georgia, approved January 21, 1852, incorporating said corporation (then The Gas Light Company of Augusta), as shown by the Public Acts of said State of 1851-2, page 204, to which reference is hereby made, as the charter and charter powers granted thereby have been from time to time amended by Orders of the Superior Court of Richmond County, at the April term, 1881, on December 2, 1893, at the April term,1905 and on April 24, 1928, respectively, each duly recorded on the minutes of the Superior Court of said County, and in the Charter Books in the Clerk's office of the Superior Court of said County, to which reference is hereby made as though they were a part hereof; and (B) said Macon Gas Company, under an Act of the General Assembly of the State of Georgia approved February 21, 1876, incorporating said corporation (then Macon Gas-Light & Water Company), as shown by the Public Acts of said State of 1876, page 245 et seq., to which reference is hereby made, as the charter and charter powers granted thereby have been amended by three subsequent acts of said General Assembly approved October 13, 1885, December 22, 1886 and December 23, 1886 respectively, as shown by the Public Acts of said State of 1885, page 286, of 1886, page 218 and of 1886, page 219, respectively, to which reference is hereby made; and by certain Orders of the Superior Court of Bibb County of the State of Georgia, dated March 29, 1889, October 17, 1891, November 25, 1898, January 2, 1906, January 8, 1906, July 17, 1911, November 13, 1923 and August 19, 1936, respectively, each duly recorded on the minutes of the Superior Court of said county and in the Charter Books of the Clerk's office of the Superior Court in said county, to which reference is made as though they were a part hereof. 7 ARTICLE V The maximum number of shares of capital stock of the Merged Company authorized to be outstanding at any one time is as follows: 13,000 shares of Preferred Stock of the par value of One hundred Dollars ($100) per share. 250,000 shares of common stock of the par value of Twenty-five Dollars ($25) per share. The class of Preferred Stock (6% Cumulative--$100 par value) of the Merged Company now outstanding and to be outstanding when the merger herein provided for shall become effective under the laws of the State of Georgia, as herein provided, shall have the rights, preferences, voting powers, restrictions, limitations and qualifications set forth in the resolutions of the stockholders of said Atlanta Gas Light Company adopted at the special meeting of said stockholders called for such purpose held on September 28, 1935. Each other class of said Preferred Stock shall have such preferences, voting powers, restrictions, limitations and qualifications as may be hereafter prescribed in accordance with the applicable provisions of the charter of said Atlanta Gas Light Company, as amended, and applicable statutory provisions and adopted by the votes of the holders of the majority of the capital stock of the Merged Company then outstanding and entitled to vote: provided, however, that no share of such Preferred Stock shall be issued in violation of the terms of any other class or shares of Preferred Stock issued by the Merged Company and then outstanding. Each share of said common stock of the Merged Company outstanding when the merger herein provided for shall have become effective under the laws of the State of Georgia or which may thereafter be issued shall be on equality one with the other in the amount of its par value and as well as to preferences, voting power, restrictions or qualifications. 8 Any shares of capital stock of the Merged Company, whether of said common stock or said Preferred Stock, may be paid for in money or in properties at the reasonable market value thereof. ARTICLE VI The number of shares of its capital stock with which the Merged Company will begin business and the classes of such stock shall be (a) Thirteen Thousand (13,000) shares of Preferred Stock (6% Cumulative--$100 par value) of the par value of $100 per share, less the number of shares of such Preferred Stock, the appraisal and payment of which is demanded in the manner provided by law, and (b) 240,145 shares of common stock, of the par value of $25 per share. Upon the merger herein provided for becoming effective under the laws of the State of Georgia, the issued and outstanding shares of Preferred and common stock of said Atlanta Gas Light Company, said Georgia Public Utilities Company and said Macon Gas Company shall thereupon be, or become and be converted into, capital stock of the Merged Company in the manner and upon the terms hereinafter set forth: The shares of Preferred Stock (6% Cumulative--$100 par value) of said Atlanta Gas Light Company outstanding on the date when the merger shall become effective, namely, 13,000 shares of such stock less the number of shares thereof, payment and appraisal of which shall be demanded in the manner provided by law, shall continue unchanged as and be a like number of shares of the Preferred Stock (6% Cumulative--$100 par value) of the Merged Company; The 93,745 shares of common stock, of the par value of $25 per share, of said Atlanta Gas Light Company to be outstanding at said date, shall continue unchanged as and be a like number of shares of the common stock, of the par value of $25 per share, of the Merged Company; 9 The 1,400 shares of Preferred Stock, of the par value of $25 each, and the 18,000 shares of the common stock, of the par value of $25 each, of said Georgia Public Utilities Company, to be outstanding at said date, shall thereupon become and be converted into 116,637 shares of the common stock, of the par value of $25 per share, of the Merged Company; The 200 shares of Preferred Stock, of the par value of $100 each, and the 4,755 shares of the common stock of the par value of $100 each, of said Macon Gas Company, to be outstanding at said date, shall thereupon become and be converted into 29,763 shares of the common stock, of the par value of $25 per share, of the Merged Company. Inasmuch as said Atlanta Gas Light Company will continue as the Merged Company, the certificates representing the outstanding shares of Preferred Stock (6% Cumulative--$100 par value), other than any shares of such Preferred Stock, payment and appraisal of which shall have been demanded in the manner provided by law, and the outstanding shares of common stock, respectively, of said Atlanta Gas Light Company, shall continue to represent shares of said Preferred Stock and common stock, respectively, of the Merged Company after the merger herein provided for shall have become effective as aforesaid and no surrender or exchange of the same by the holders thereof shall be necessary. Upon the merger becoming effective under the laws of the State of Georgia and the conversion of the shares of Preferred and common stock of said Georgia Public Utilities Company and said Macon Gas Company outstanding at said date into shares of common stock of the Merged Company as aforesaid, the certificate or certificates representing such shares of Preferred and common stock of said Georgia Public Utilities Company and said Macon Gas Company may at any time thereafter be surrendered, duly endorsed in blank or accompanied by a stock power duly endorsed in blank (if required by the Merged Com- 10 pany), in exchange for a certificate or certificates representing the number of shares of common stock, of the par value of $25 per share, of the Merged Company into which the stock represented by the certificates so surrendered shall have been converted as aforesaid. ARTICLE VII Upon this Joint Agreement of Merger being duly presented to and adopted by the stockholders of said Atlanta Gas Light Company, said Georgia Public Utilities Company and said Macon Gas Company, respectively, all as provided by the laws of the State of Georgia in such case made and provided, then, said Atlanta Gas Light Company, said Georgia Public Utilities Company and said Macon Gas Company shall present a petition to the Superior Court of Fulton County, Georgia, or to the Judge of such Superior Court, with a copy of this Joint Agreement of Merger and the Certificate of the Secretary or an Assistant Secretary of each of said three corporations attached as provided by law, for an Order on such petition granting the merger of said Georgia Public Utilities Company and said Macon Gas Company into said Atlanta Gas Light Company and, upon the granting of such Order, shall file such petition with such Order thereon in the Office of the Clerk of such Superior Court and shall take all other action and make all payments necessary in order to make the merger herein provided for effective pursuant to and in accordance with the laws of the State of Georgia in such case made and provided. Without limiting in any manner the full force and effect of the provisions of Article III of the Joint Agreement of Merger or Georgia Laws, Extra Session 1937-1938, page 214, the parties hereto agree between themselves, for purposes of convenience, that said Georgia Public Utilities Company and said Macon Gas Company will each severally execute, acknowledge and deliver all such deeds and other 11 instruments as said Atlanta Gas Light Company shall deem necessary or desirable in order to evidence the transfer of title to real estate and real property by said two corporations to the Merged Company provided for in said Article III and in said Laws, for the purpose of placing the fact of said transfer or transfers on record in any proper place or places within or without of the State of Georgia. To the end that accounting matters relating to the merger herein provided for may be simplified, midnight of the last day of the calendar month immediately preceding the calendar month in which the merger herein provided for shall become effective under the laws of the State of Georgia, shall be the time as of which between the parties hereto such merger shall be treated as taking effect for all practical purposes. IN WITNESS WHEREOF the Directors of said Atlanta Gas Light Company, said Georgia Public Utilities Company and said Macon Gas Company have signed this Agreement under the corporate names and seals of said corporations, respectively, on the day and year first above written. Atlanta Gas Light Company By H. Carl Wolf [CORPORATE SEAL OF ATLANTA GAS C. F. Johansen LIGHT COMPANY APPEARS HERE] E. T. Anderson Jas. H. Motz being a majority of the Directors of the above Georgia Corporation. Attest: Jas. H. Motz Secretary 12 Georgia Public Utilities Company By H. Carl Wolf C. F. Johansen [CORPORATE SEAL OF GEORGIA PUBLIC E. T. Anderson UTILITIES COMPANY APPEARS HERE] Jas. H. Motz being a majority of the Directors of the above Georgia Corporation. Attest: Jas. H. Motz Secretary Macon Gas Company By H. Carl Wolf C. F. Johansen [CORPORATE SEAL OF MACON GAS E. T. Anderson COMPANY APPEARS HERE] E. C. Kollock C. G. Campbell being a majority of the Directors of the above Georgia Corporation. Attest: Jas. H. Motz Secretary Certificate of Secretary of ATLANTA GAS LIGHT COMPANY The undersigned, J. H. Motz, Secretary of Atlanta Gas Light Company, a Georgia corporation, hereby certifies that the Joint Agreement of Merger, dated March 7, 1941, to which this certificate is attached, is the Agreement which has been submitted to the stockholders of record of said corporation at a meeting thereof called separately for the purpose of voting upon the proposed merger provided for in said Joint Agreement of Merger and held on the 18th day of March, 1941; that notice of the time, place and object of said meeting was given in accordance with the terms of the charter and by-laws of said corporation to, or waived in writing by, each stockholder of record of such corporation, whether entitled to vote or not; that at said meeting said Joint Agreement of Merger was considered and a vote by ballot, in person or by proxy, was taken for the adoption or rejection of the same. The undersigned, as such Secretary of said corporation hereby further certifies that at said meeting of the stockholders of said Atlanta Gas Light Company held on March 18, 1941, all of the votes of stockholders of said corporation holding stock entitling them to exercise voting power on the proposal to merge Georgia Public Utilities Company, a Georgia corporation, and Macon Gas Company, a Georgia corporation, into said Atlanta Gas Light Company, were for the adoption of said Joint Agreement of Merger. In witness whereof the undersigned, as Secretary of said Atlanta Gas Light Company has hereunto set his hand and affixed the seal of said corporation, this 18th day of March, 1941. /s/ Jas. H. Motz -------------------------------------- [SEAL APPEARS HERE] Secretary of Atlanta Gas Light Company Certificate of Secretary of MACON GAS COMPANY The undersigned, J. H. Motz, Secretary of Macon Gas Company, a Georgia corporation, hereby certifies that the Joint Agreement of Merger, dated March 7, 1941, to which this certificate is attached, is the Agreement which has been submitted to the stockholders of record of said corporation at a meeting thereof called separately for the purpose of voting upon the proposed merger provided for in said Joint Agreement of Merger and held on the 17th day of March, 1941, pursuant to a duly executed waiver of notice of the time, place and object of said meeting as permitted by the terms of the charter and by-laws of said corporation and signed by each stockholder of record of such corporation, whether entitled to vote or not; that at said meeting said Joint Agreement of Merger was considered and a vote by ballot, in person or by proxy, was taken for the adoption or rejection of the same. The undersigned, as such Secretary of said corporation hereby further certifies that at said meeting of the stockholders of said Macon Gas Company held on March 17, 1941, all of the votes of stockholders of said corporation holding stock entitling them to exercise voting power on the proposal to merge said Macon Gas Company and Georgia Public Utilities Company, a Georgia corporation into Atlanta Gas Light Company, a Georgia corporation, were for the adoption of said Joint Agreement of Merger. In witness whereof the undersigned, as Secretary of said Macon Gas Company has hereunto set his hand and affixed the seal of said corporation, this 17th day of March, 1941. /s/ Jas. H. Motz ------------------------------ [SEAL APPEARS HERE] Secretary of Macon Gas Company Certificate of Secretary of GEORGIA PUBLIC UTILITIES COMPANY The undersigned, J. H. Motz, Secretary of Georgia Public Utilities Company, a Georgia corporation, hereby certifies that the Joint Agreement of Merger, dated March 7, 1941, to which this certificate is attached, is the Agreement which has been submitted to the stockholders of record of said corporation at a meeting thereof called separately for the purpose of voting upon the proposed merger provided for in said Joint Agreement of Merger and held on the 17th day of March, 1941, pursuant to a duly executed waiver of notice of the time, place and object of said meeting as permitted by the terms of the charter and by-laws of said corporation and signed by each stockholder of record of such corporation, whether entitled to vote or not; that at said meeting said Joint Agreement of Merger was considered and a vote by ballot, in person or by proxy, was taken for the adoption or rejection of the same. The undersigned, as such Secretary of said corporation hereby further certifies that at said meeting of the stockholders of said Georgia Public Utilities Company held on March 17, 1941, all of the votes of stockholders of said corporation holding stock entitling them to exercise voting power on the proposal to merge said Georgia Public Utilities Company and Macon Gas Company, a Georgia corporation, into Atlanta Gas Light Company, a Georgia corporation, were for the adoption of said joint Agreement of Merger. In witness whereof the undersigned, as Secretary of said Georgia Public Utilities Company has hereunto set his hand and affixed the seal of said corporation, this 17th day of March, 1941. /s/ Jas. H. Motz --------------------------------------- [SEAL APPEARS HERE] Secretary of Georgia Public Utilities Company ORDER The foregoing petition of Atlanta Gas Light Company, Macon Gas Company and Georgia Public Utilities Company for the merger of said three corporations under the laws of the State of Georgia with the result that the existence of Atlanta Gas Light Company shall continue, was presented to this Court and examined. It appearing to the Court that said petition is in accord with the laws of the State of Georgia made and provided in such causes, that the Joint Agreement of Merger was entered into by a majority of the directors of each of said corporations under the corporate names and seals of the respective corporations, that separate meetings of the stockholders of each of said corporations for the purpose of voting upon said merger were held, of which meetings notice of the time, place and object thereof was given in accordance with the terms of the charters and by-laws of said corporations to, or waived in writing by, each stockholder of record, whether entitled to vote or not, that at said meetings said Agreement was considered and that the holders of all of the stock of each of said corporations entitling them to exercise the voting power on the proposal to merge were in favor of said merger, and that the Secretaries of each of said corporations have so certified under the seals of the respective corporations, and that all acts and things necessary or proper to effect the merger of said corporations under said Joint Agreement of Merger have been done and exist: Now, THEREFORE, IT IS CONSIDERED, ORDERED AND ADJUDGED that the merger of Atlanta Gas Light Company, Macon Gas Company and Georgia Public Utilities Company is hereby granted under the terms and conditions of the foregoing petition and the Joint Agreement of Merger dated March 7, 1941 between said corporations, a copy of which is attached to the petition, with the result that the separate existence of Macon Gas Company and Georgia Public Utilities Company shall cease and they are merged into Atlanta Gas Light Com- 2 pany in accordance with said Joint Agreement of Merger and Atlanta Gas Light Company shall possess and have title to all of the rights, privileges, powers, franchises and immunities as well of a public as of a private nature, except exemption from taxation and except exemption from special assessments for street paving or other special assessments, and all property, real, personal and mixed, and all debts due on whatever account, and all other things in action of or belonging each to said of said corporations; all property rights, privileges, powers, franchises and immunities of said corporations except exemption from taxation and except exemption from special assessments for street paving or other special assessments, and all and every other interest of each of said three corporations shall be and are as effectually the property of Atlanta Gas Light Company as they were of the several respective corporations and title to any real estate, whether acquired by deed or otherwise under the laws of this State, vested in any of said corporations shall not revert or be in any way impaired by reason thereof: Provided, however, that all rights of creditors and of leins on property of any of said corporations shall be preserved unimpaired, limited in lien to the property affected by such liens at the time of the merger, and all debts, liabilities and duties of said respective corporations shall thenceforth attach to Atlanta Gas Company and may enforced against it to the same extent as if said debts, liabilities and duties had been incurred by it. It IS FURTHER CONSIDERED, ORDERED AND ADJUDGED that the charter of Atlanta Gas Light Company, the corporation the existence of which shall continue and into which Macon Gas Company and Georgia Public Utilities Company are hereby merged, consists of its charter granted by an Act of General Assembly of the State of Georgia approved February 16, 1856 (Georgia Laws 1855-56, pages 420 et seq.) the amendment thereto granted by an Act of the General Assembly approved October 14, 1889 (Georgia Laws 1888-89, pages 1398, et seq.) and the amendments to said charter granted by orders of the Superior This petition of ATLANTA GAS LIGHT COMPANY shows respectfully unto the Honorable Superior Court of Fulton County, Georgia, as follows: 1. Atlanta Gas Light Company is a corporation organized and existing under the laws of the State of Georgia with its principal office in Fulton County, Georgia. Its charter was granted by an Act of the General Assembly of the State of Georgia approved February 16, 1856 (Georgia Laws 1855-1856, pages 420 et seq.). This charter was amended by an Act of the General Assembly approved October 14, 1889 (Georgia Laws 1888-1889, pages 1398 et seq.). Thereafter the charter of Atlanta Gas Light Company was amended by the Superior Court of Fulton County, Georgia, by its orders dated respectively December l7, 1919, April 20, 1929, and September 13, 1935. Thereafter, Macon Gas Company and Georgia Public Utilities Company were merged into Atlanta Gas Light Company with Atlanta Gas Light Company as the continuing corporation by an order of the Superior Court of Fulton County, Georgia, dated March 18, 1941. 2. The authorized capital stock of Atlanta Gas Light Company consists of 250,000 shares of common stock of the par value of $25.00 per share, of which 240,145 shares are issued and outstanding, and 13,000 shares of preferred stock of the par value of $100.00 per share, all of which are issued and outstanding. The rights, preferences, voting powers, restrictions, limitations and qualifications of said preferred stock are set forth in the resolution of the stockholders of Atlanta Gas Light Company adopted at the special meeting of said stockholders called for such purpose, held on September 28, 1935. 3. Atlanta Gas Light Company files this petition to amend its charter so that the authorized capital stock of Atlanta Gas Light Company shall consist of the shares of stock in the amounts and with the designations, preferences and relative participating, voting and other special rights and qualifications, limitations or restrictions of such preferences and/or rights stated in the resolution of the stockholders of said Atlanta Gas Light Company, a certified copy of which is hereto attached, marked Exhibit "A" and made a part of this petition and paragraph. 4. The aforesaid resolution of the stockholders of Atlanta Gas Light Company, a copy of which is hereto attached marked Exhibit "A" was adopted at a special meeting of the stockholders of Atlanta Gas Light Company held on the 13th day of October, 1943, by a vote of all of the shares of common stock of Atlanta Gas Light Company outstanding. The holders of all of the common stock of Atlanta Gas Light Company waived notice in writing of the time, place and purpose of said special meeting of the stockholders of Atlanta Gas Light Company. WHEREFORE, petitioner prays that an order of this Honorable Court be granted amending its charter as set forth in this petition and Exhibit "A" hereto attached. [SIGNATURE APPEARS HERE] ------------------------ Attorneys for Petitioner. EXHIBIT "A" RESOLVED by the stockholders of Atlanta Gas Light Company in meeting duly and legally called, assembled and held that the charter of Atlanta Gas Light Company be amended by eliminating all of the provisions of its charter and amendments thereto relating to its capital stock and inserting in lieu thereof the following: The maximum number of shares of capital stock of Atlanta Gas Light Company authorized to be outstanding at any one time is as follows: 250,000 shares of common stock of the par value of $25.00 per share, 13,000 shares of preferred stock of the par value of $100.00 per share, and 20,000 shares of 4 1/2% cumulative preferred stock of the par value of $100.00 per share. The 13,000 shares of preferred stock of the par value of $100.00 per share are presently outstanding with the preferences, voting powers, restrictions, limitations and qualifications set forth in the resolultion of the stockholders of said Atlanta Gas Light Company adopted at the special meeting of said stockkholders called for such purpose, held on September 28, 1935, and shall not be altered in anywise hereby. Upon the redemption of the said 13,000 shares of preferred stock of the par value of $100.00 per share, said shares shall be eliminated from the authorized capital stock of Atlanta Gas Light Company, which shall cancel said shares of stock and shall have no right to re-issue the whole or any of said shares of stock, and the capital of Atlanta Gas Light Company shall be reduced by an amount equal to the aggregate par value of the said 13,000 shares. Subject and subordinate in all respects to the preferences, voting powers, restrictions, limitations and qualifications of said 13,000 shares of preferred stock, as set forth in the resolution of the stockholders of Atlanta Gas Light Company adopted at the special meeting of said stockholders called for such purpose, held on September 28, 1935, the preferences and relative participating, voting and other special rights of the 20,000 shares of 4 1/2% cumulative preferred stock and of the common stock of Atlanta Gas Light Company (hereinafter called the "Preferred Stock" and the "Common Stock", respectively), and the qualifications, limitations or restrictions of such preferences and/or rights shall be as follows: Division A-The Preferred Stock 1. Dividends. Out of the assets of the corporation available for dividends, the holders of the Preferred Stock shall be entitled to receive, if and when declared payable by the Board of Directors, dividends in lawful money of the United States of America at the rate of Four 50/100ths Dollars ($4.50) per share per annum and no more, payable quarterly on March 1, June 1, September 1 and December 1 in each year, before any dividends shall be declared or paid upon or set apart for the Common Stock, the first quarterly dividend to be payable December 1, 1943; and such dividends on the Preferred Stock shall be cumulative from September 1, 1943, so that, if in any past dividend period or periods full dividends upon the outstanding Preferred Stock at the rate aforesaid shall not have been paid, the deficiency (without interest) shall be paid or declared and set apart for payment before any dividends shall be declared or paid upon or set apart for the Common Stock. 2. Preference on Liquidation, etc. In the event of any liquidation, dissolution, or winding up of the corporation, or reduction or decrease of its capital resulting in a distribution of assets to the holders of the Common Stock, the holders of the Preferred Stock shall be entitled to receive, for each share thereof, the sum of One hundred Dollars ($100) per share, plus, in case such liquidation, dissolutuion, winding up, reduction or decrease shall have been voluntary, an amount per share equal to the difference between One hundred Dollars ($100) and the redemption price per share at the time in effect, together with all dividends accrued or in arrears thereon before any distribution of assets shall be made to the holders of the Common Stock: but the holders of the Preferred Stock shall be entitled to no further participation in such distribution. If upon any such liquidation, dissolution, winding up, reduction or decrease, the assets distributable among the holders of the Preferred Stock shall be insufficient to permit the payment of the full preferential amount aforesaid, then the entire assets of the corporation to be distributed shall be distributed among the holders of the Preferred Stock then outstanding, ratably in proportion to the full preferential amounts to which they are respectively entitled. As used herein the expression "dividends accrued or in arrears" means in respect of each share of the Preferred Stock, that amount which shall be equal to simple interest upon the sum of One hundred Dollars ($100) at an annual rate of four and one-half per centum (4 1/2%) per annum, and no more, from September 1, 1943 to the date as of which the computation is to be made, less the aggregate amount of all dividends theretofore paid thereon or declared and set aside for payment in respect thereof. Shares of Preferred Stock at any time owned by the corporation shall, for the purposes of this definition, be deemed to have received in dividends an amount per share equal to that which, during the time such shares were so owned, was paid upon or became payable to holders of record of outstanding shares of Preferred Stock not then so owned by the corporation. Nothing in this Paragraph 2 shall be deemed to prevent the purchase or redemption of Preferred Stock in any manner permitted by Paragraph 3 of this Division. Neither shall anything in this Paragraph 2 be deemed to prevent the purchase, acquisition or other retirement by the corporation of shares of Common Stock if the requirements of Paragraph 1 of Division B hereof shall be complied with and no such purchase, acquisition or other retirement in compliance with such requirements nor any purchase of shares of Preferred Stock permitted by Paragraph 3 of this Division shall be deemed to be a reduction or decrease of capital resulting in a distribution of assets to any of its stockholders within the meaning of this Paragraph 2 whether or not the shares so redeemed or purchased shall be retired. A consolidation or merger of the corporation or a sale or transfer of substantially all of its assets as an entirety shall not be regarded as a liquidation, dissolution or winding up of the corporation or as a reduction or decrease of its capital resulting in distribution of assets within the meaning of this Paragraph 2. 3. Redemption and Repurchase. The corporation may, at its option expressed by vote of its Board of Directors, at any time or from time to time, redeem the whole or any part of the Preferred Stock at the redemption price per share in effect at the time as follows: One Hundred Seven 25/100ths Dollars ($107.25) per share plus any dividends at the time accrued or in arrears if redeemed during the period extending to and including August 31, 1948; and One Hundred Five 25/100ths Dollars ($105.25) per share plus any dividends at the time accrued or in arrears, if redeemed at any to me thereafter. Notice of any proposed redemption of Preferred Stock shall be given by the corporation by mailing a copy of such notice, at least thirty (30) days prior to the date fixed for such redemption, to the holders of record of the Preferred Stock to be redeemed, at their respective addresses then appearing on the books of the corporation. Any such redemption of Preferred Stock shall be in such amount, at such place an by such method, whether by lot or pro rata, as shall from time to time be determined by vote of the Board of Directors. From and after the date fixed in any such notice as the date of redemption, unless default shall be made by the corporation in providing funds sufficient for such redemption at the time and place specified for the payment thereof pursuant to said notice, all dividends on the shares called for redemption shall cease to accrue; and from and after the date so fixed, unless default be made as aforesaid, or from and after the date of the earlier deposit by the corporation, in trust, with a solvent bank or trust company doing business in the City of Atlanta, State of Georgia, or in the Borough of Manhattan, City and State of New York, of funds sufficient for such redemption (a statement of the intention so to deposit having been included in said notice), all rights of the holders of the shares so called for redemption as stockholders of the corporation, except only the right to receive when due the redemption funds to which they are entitled, shall cease and determine, and such shares shall be deemed to be no longer outstanding. Any funds so deposited which shall remain unclaimed by the holders of such Preferred Stock at the end of six (6) years after the redemption date, together with any interest there on that 2 shall have been allowed by the bank or trust company with which the deposit shall have been made, shall be paid by it to the corporation. The corporation may also from time to time repurchase shares of Preferred Stock at not exceeding the price at which the same may be redeemed plus the usual and customary brokerage commissions paid in connection with the purchase thereof. Shares of Preferred Stock redeemed or repurchased by the corporation and not retired may from time to time be reissued by it. 4. Restrictions on Certain Corporate Action. So long as any shares of the Preferred Stock shall remain outstanding, each of the following described proceedings, matters and things shall require the written consent or the affirmative vote of the holders of at least two-thirds of the issued and outstanding shares of Preferred Stock, such vote being taken at a meeting called for the purpose: (a) The creation, authorization or issuance of any shares of any class of stock (other than additional shares of Preferred Stock) ranking prior to or on a parity with the Preferred Stock as to dividends or assets, or any class of security convertible into stock ranking prior to or on a parity with the Preferred Stock as to dividends or assets; (b) The reclassification of shares of stock of any class ranking junior to the Preferred Stock or having preferences junior in any respect to the preferences of the Preferred Stock into shares of stock of a class ranking prior to or on a parity with the Preferred Stock; (c) Any change in the provision hereof relative to the rights, designations, privileges or voting powers of any of the Preferred Stock in any manner prejudicial to the holders thereof; and (d) The reduction of the par value of or the capital allocable to the outstanding Preferred Stock; or the reduction below Five Million Dollars ($5,000,000) of the aggregate capital allocable to the Common Stock and any other stock of the corporation ranking junior to the Preferred Stock, except in a case where a State of Federal regulatory body having jurisdiction shall have required the corporation to reduce the book value of its assets and, in connection therewith, the capital allocable to stock of one or more classes, ranking junior to the Preferred Stock, is to be reduced in an amount or amounts not exceeding in the aggregate the amount of such reduction in book value of assets. So long as any shares of Preferred Stock shall remain outstanding, each of the following described proceedings, matters and things shall require the written consent of the holders of a majority of the issued and outstanding shares of Preferred Stock or the affirmative vote of a majority of the shares of Preferred Stock present or represented at a meeting called for the purpose at which a quorum is present: (e) The merger or consolidation of the corporation with or into any other corporation, or sale of all or substantially all of the assets of the corporation, unless such merger, consolidation or sale, or the issuance or 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 under the Public Utility Holding Company Act of 1935, or by any successor commission or other regulatory authority of the United States having jurisdiction in the premises; (f) The issuance of any unsecured notes, debentures or other securities representing unsecured indebtedness, or assumption of any such unsecured securities, other than for the purpose of refunding outstanding unsecured securities theretofore issued or assumed or effecting the retirement, by redemption or otherwise, of outstanding shares of the Preferred Stock, or of a class of stock ranking prior thereto, or on a parity therewith, if immediately after such issue or assumption the total principal amount of all securities or assumed and then outstanding would exceed ten per cent. (10%) of the aggregate of (i) the total principal amount of all bonds or other securities representing secured indebtedness issued or assumed by the corporation and then to be outstanding and (ii) the total of the capital and surplus of the corporation as then to be stated on its books. 3 At any meeting of the holders of the Preferred Stock which shall be called for the purposes of clauses (e) or (f) of this Paragraph 4, the presence in person or by proxy of the holders of a majority of the issued and outstanding shares of Preferred Stock shall be necessary to constitute a quorum; provided, however, that if such quorum shall not be obtained at such meeting or at any adjournment thereof within thirty (30) days from the date of the meeting as originally called, then the presence in person or by proxy of the holders of one-third of the issued and outstanding shares of Preferred Stock shall be sufficient to constitute a quorum. So long as any shares of the Preferred Stock shall remain outstanding, the Company shall not without the written consent or the affirmative vote of the holders of a majority of the issued and outstanding shares of Preferred Stock issue any additional shares of Preferred Stock unless the net earnings of the Company (after provision for depreciation) available for the payment of dividends on shares of Preferred Stock, for any twelve consecutive calendar months within the fifteen calendar months immediately preceding the month within which such additional shares are to be issued, have been at least three times the dividend requirements for a twelve months period upon all shares of Preferred Stock to be outstanding immediately after the proposed issue of such additional shares, but excluding from the foregoing computation interest charges on all indebtedness which is to be retired through the issue of such additional shares. Where such additional shares are to be issued in connection with the acquisition of any property, the earnings of the property to be acquired may be included on a pro forma basis in the foregoing computation. The holders of the Preferred Stock shall not have any right under the provisions hereinabove in this Paragraph 4 set forth to vote in respect of the creation, issuance or disposition of shares of any class of stock or any indebtedness of the corporation if, through the application of proceeds thereof or otherwise in connection with the issuance thereof, provision is to be made for the redemption of all of the Preferred Stock at the time outstanding. 5. Voting Rights. The holders of the Preferred Stock shall not be entitled to vote except as follows: (a) As provided in the preceding Paragraph 4; or (b) As may from time to time be mandatorily provided by the laws of Georgia; or (c) If, at the time of any annual meeting of stockholders for the election of directors, dividends on any of the outstanding Preferred Stock shall be in default in an amount equivalent to four or more full quarterly dividends, there shall accrue to holders of outstanding shares of Preferred Stock the right, as a class, to elect the smallest number of directors necessary to constitute a majority of the full Board, which right may be exercised at such meeting and thereafter until no dividends on any Preferred Stock shall be in default and the dividends thereon for the then current quarterly dividend period shall have been declared and funds sufficient for the payment thereof set apart, at which time such right shall terminate. So long as holders of the Preferred Stock shall have the right to elect a majority of the directors under the terms of clause (c) of the first sentence of this Paragraph 5, such right shall be exercised by holders of the Preferred Stock voting as a class, and holders of the Common Stock voting separately as a class shall be entitled to elect the remaining directors. Whenever, under the provisions of this Paragraph 5, the right of holders of outstanding Preferred Stock to elect directors shall terminate, the Board of Directors shall, within ten (10) days after delivery to the corporation at its principal office of a request to such effect signed by and holder of any outstanding stock ranking junior to the Preferred Stock as to dividends or assets and entitled to vote, call a special meeting of the holders of such junior stock entitled to vote to be held within forty (40) days from the delivery of such request for the purpose of electing a full Board of Directors to serve until the next annual meeting and until their respective successors shall be elected and shall qualify. If at any meeting called as aforesaid for the purpose of electing a full Board of Directors after termination of the right of holders of outstanding Preferred Stock to elect directors as in this 4 Paragraph 5 provided, any director shall not be reelected, his term of office shall end upon the election and qualification of his successor, notwithstanding that the term for which such director was originally elected shall not at the time have expired. If, during any interval between annual meetings of stockholders for the election of directors while the holders of Preferred Stock shall be entitled to elect any director pursuant to this Paragraph 5, the number of directors in office who have been elected by the holders of the Preferred Stock or Common Stock, as the case may be, shall become less than the total number of directors which the holders of shares of such class are entitled to elect, whether by reason of the resignation, death or removal of any director or directors, or an increase in the total number of directors, (1) the vacancy or vacancies shall be filed by a majority vote of the remaining directors if they constitute a quorum, but in each such case the majority vote must include the votes of a majority of directors then in office who were either elected by the votes of shares of such class or succeeded to a vacancy originally filled by the votes of shares of such class and (2) if the remaining directors do not constitute a quorum, they shall call a special meeting of the holders of shares of such class upon not less than five (5) days' notice and the vacancy or vacancies shall be filled at such special meeting. Any director may be removed from office either by vote of the holders of a majority of the shares of the class of stock voted for his election or for his predecessor in cases where such director was elected by the Board of Directors or by vote of a majority of the entire Board of Directors, but in the latter case the majority vote of the entire Board so voting must include the votes of a majority of the other directors then in office who were either elected by the votes of shares of such class or succeeded to a vacancy originally filed by the votes of shares of such class. A special meeting of holders of shares of any class may be called by a majority vote of the Board of Directors for the purpose of removing a director in accordance with the provisions of the preceding sentence, and shall be called to be held within forty (40) days after there shall have been delivered to the corporation at its principal office a request or requests to such effect signed by the holders of at least five per cent. (5%) of the outstanding shares of the class entitled to vote with respect to the removal of any such director. The holders of Preferred Stock shall not be entitled to receive notice of any meeting of holders of any class of stock at which they are not entitled to vote. Division B--The Common Stock 1. Dividends. Out of any assets of the corporation available for dividends remaining after full cumulative dividends upon the Preferred Stock then outstanding shall have been paid, or declared and a sum sufficient for the payment thereof set apart, for all past quarterly dividend periods, and after or concurrently with making payment of or provision for full dividends on the Preferred Stock then outstanding for the current quarterly dividend period, then, and not otherwise, dividends may be paid upon the Common Stock to the exclusion of the Preferred Stock; provided, however, that so long as any shares of Preferred Stock shall remain outstanding, the corporation shall not declare or pay any dividend or make any other distribution on any shares of its capital stock of any class ranking junior to the Preferred Stock (other than a dividend payable in shares of capital stock of such class) or purchase, acquire or otherwise retire for a consideration (except from the proceeds of new financing through the issuance and sale of any shares of any class of stock ranking junior to the Preferred Stock) any shares of its capital stock of any class ranking junior to the Preferred Stock if in either case (i) the aggregate amount so paid, distributed and/or applied after December 31, 1942, including the amount proposed to be paid, distributed and/or applied, plus the aggregate amount of all dividends theretofore declared or paid after said date on the Preferred Stock and on any shares of capital stock ranking prior to or on a parity with the Preferred Stock shall or would exceed the aggregate of the net income of the corporation accumulated after December 31, 1942 plus the sum of One Million Four Hundred Thirty Thousand Dollars ($1,430,000) or (ii) the sum of the amount of the capital represented by all shares of capital stock of all classes ranking junior to the Preferred Stock 5 and of the surplus of the corporation is at the time below, or would as a result of such dividend or other distribution or such purchase, acquisition or other retirement of stock be reduced below, the sum of One Hundred Dollars ($100) for each of the issued and outstanding shares of Preferred Stock or the sum of Two Million Dollars ($2,000,000), whichever shall be the greater. Net income of the corporation for the purpose of this Paragraph 1 shall mean the gross earnings of the corporation less all proper deductions for operating expenses, taxes (including income, excess profits and other taxes based on or measured by income), interest charges and other appropriate items, including provision for maintenance, and provision for depreciation or retirements determined in accordance with such system of accounts as may be prescribed by governmental authorities having jurisdiction in the premises or in the absence thereof in accordance with sound accounting practice; provided, however, that in determining the net income of the corporation for the purposes of this Paragraph 1 no deduction or adjustment shall be made for or in respect of (a) expenses in connection with the redemption or retirement of any securities issued by the corporation, including any amount paid in excess of the principal amount of securities redeemed or retired and, in the event that such redemption or retirement is effected with the proceeds of sale of other securities of the corporation, interest on the securities redeemed or retired from the date on which the funds required for such redemption or retirement are deposited in trust for such purpose to the date of redemption or retirement; (b) profits and losses from sales of public utility property or other capital assets, or taxes on or in respect of any such profits; (c) any earned surplus applicable to any period prior to January 1, 1943; (d) amortization of utility plant adjustment accounts or other intangibles; or (e) amortization of the book values of gas manufacturing and storage facilities owned by the corporation on September 1, 1943 which are or shall hereafter become no longer used or useful by reason of the substitution of natural gas. 2. Distribution of Assets. In the event of any liquidation, dissolution or winding up of the corporation, or any reduction or decrease of its capital resulting in a distribution of assets to the holders of the Common Stock, after there shall have been paid to or set aside for the holders of the Preferred Stock the full preferential amounts to which they are respectively entitled under the provisions of Paragraph 2 of Division A hereof, the holders of the Common Stock shall be entitled to receive, pro rata, all of the remaining assets of the corporation available for distribution to its stockholders. The Board of Directors, by vote of a majority of the members thereof, may distribute in kind to the holders of Common Stock such remaining assets of the corporation or may sell, transfer or otherwise dispose of all or any of the remaining property and assets of the corporation to any other corporation and receive payment therefor wholly or partly in cash and/or in stock and/or in obligations of such corporation and may sell all or any part of the consideration received therefor and distribute the balance thereof in kind to the holders of the Common Stock. 3. Voting Rights. Subject to the voting rights expressly conferred upon the Preferred Stock by Division A hereof, holders of the Common Stock shall exclusively possess full voting power for the election of directors and for all other purposes. Division C--Provisions Applicable to Both Classes of Stock 1. The Board of Directors shall have authority from time to time to set apart out of any assets of the corporation otherwise available for dividends a reserve or reserves as working capital or for any other proper purpose or purposes, and to reduce, abolish or add to any such reserve or reserves from time to time as said Board may deem to be in the interests of the corporation; and said Board shall likewise have power to determine in its discretion what part of the assets of the corporation available for dividends in excess of such reserve or reserves shall be declared as dividends and paid to the stockholders of the corporation. 2. No holder of stock, or of rights or options to purchase stock, of the corporation of any class, as such, shall have any preemptive or preferential right to purchase or subscribe to any shares of stock, or rights or options to purchase stock, of the corporation of any class, whether now or 6 hereafter authorized, or any obligations convertible into stock, or into rights or options to purchase stock of the corporation (including any notes, bonds or other evidences of indebtedness to which are attached or with which are issued warrants or other rights to purchase any stock of the corporation), issued or sold, or any right of subscription to any thereof other than such, if any, as the Board of Directors in its discretion may from time to time fix; and shares of stock, rights or options to purchase stock, or obligations convertible into stock or into rights or options to purchase stock, of the corporation may from time to time be issued and sold to such parties, whether stockholders or others, as the Board of Directors in its sole discretion may determine, and in the event the Board of Directors determines to issue or sell any thereof to stockholders at any time, the same may be offered to holders of any class or classes of stock exclusively or to the holders of all classes of stock, and, if offered to more than one class of stock, in such proportions as between said classes of stock, as the Board of Directors in its discretion may determine. 3. Each holder of record of shares of any class of stock entitled to vote at any meeting of stockholders, or of holders of any class of stock, shall, as to all matters in respect of which such stock has voting power, be entitled to one vote for each share of such stock held and owned by him, as shown by the stock books of the corporation, and may cast such vote in person, or by proxy. Except as herein expressly provided, or mandatorily provided by the laws of Georgia, a quorum of any class of stock entitled to vote as a class at any meeting shall consist of a majority of such class, and a plurality vote of such quorum shall govern. 4. No holder of shares of any class of stock shall have any right to the issue of a duplicate or other certificate for any of such shares to replace a certificate represented to have been lost, stolen or destroyed unless there shall first be delivered to the Company a bond of indemnity in such form, for such amount and with such surety or sureties as the Board of Directors may approve. --------------- The undersigned, JAS. H. MOTZ, Secretary of Atlanta Gas Light Company, certifies that the foregoing resolution of the stockholders of Atlanta Gas Light Company to which this certificate is attached, was adopted at a special meeting of the stockholders of Atlanta Gas Light Company held on the 13th day of October, 1943, at which were present the holders of all of the shares of common stock of Atlanta Gas Light Company, and all of the holders of common stock of Atlanta Gas Light Company voted in favor of and consented to the adoption of said resolution to amend the charter of Atlanta Gas Light Company. IN WITNESS WHEREOF, the undersigned as Secretary of Atlanta Gas Light Company has hereunto set his hand and affixed the seal of said corporation, this 15th day of October, 1943. /s/ [Jas H. Motz] ......................................... Secretary of Atlanta Gas Light Company The foregoing petition of Atlanta Gas Light Company to amend its charter wa presented to this court and examined. It appearing to the court that said petition is in accord with the laws of the State of Georgia made and provided in such causes, that the common stockholders of Atlanta Gas Light Company adopted the resolution attached to the petition as Exhibit "A" to authorize this amendment to its charter at a special meeting of the stockholders called for said purpose, notice of which was waived by all of said stockholders, by a favorable vote for an consent to said amendment by the vote of all of the holders of common stock of Atlanta Gas Light Company and that all acts and things necessary or proper to effect such amendment to the charter of Atlanta Gas Light Company have been done and exist an said amendment is found by the court to be lawful. NOW THEREFORE, it is considered, ordered and adjudged that the charter of Atlanta Gas Light Company is amended as set forth in the foregoing petition and the resolution of the stockholders of Atlanta Gas Light Company attached there to marked Exhibit "A". This 15 day of October, 1943. [SIGNATURE APPEARS HERE] ------------------------- Judge, Superior Court Atlanta Circuit. FILED IN OFFICE, THIS THE 15 day of Oct 1943 - -- --- [SIGNATURE APPEARS HERE] - ------------------------ Deputy Clerk This petition of ATLANTA GAS LIGHT COMPANY shows respectfully unto the Honorable Superior Court of Fulton County, Georgia, as follows: 1. Atlanta Gas Light Company is a corporation organized and existing under the laws of the State of Georgia with its principal office in Fulton County, Georgia. Its charter was granted by an Act of the General Assembly of the State of Georgia approved February 16, 1856 (Georgia Laws 1855-1856, pages 420 et seq.). This charter was amended by an Act of the General Assembly approved October 14, 1889 (Georgia Laws 1888-1889, pages 1398 et seq.). Thereafter the charter of Atlanta Gas Light Company was amended by the Superior Court of Fulton County, Georgia, by its orders dated respectively December 17, 1919, Arpil 20, 1929, October 22, 1929, and September 13, 1935. Thereafter, Macon Gas Company and Georgia Public Utilities Company were merged into Atlanta Gas Light Company with Atlanta Gas Light Company as the continuing corporation by an order of the Superior Court of Fulton County, Georgia, dated March 18, 1941. Thereafter the charter of Atlantic Gas Light Company was amended by the Superior Court of Fulton County, Georgia, by its order dated October 15, 1943. 2. The authorized capital stock of Atlanta Gas Light Company consists of 250,000 shares of common stock of the par value of $25.00 per share, of which 240,145 shares are issued and outstanding, 13,000 shares of preferred stock of the par value of $100.00 per share with the rights, preferences, voting powers, restrictions, limitations and qualifications set forth in the resolution of the stockholders of Atlanta Gas Light Company adopted at the special meeting of said stockholders called for such purpose, held on September 28, 1935, none of which said shares of preferred stock are outstanding, and 20,000 shares of 4 1/2% cumulative preferred stock of the par value of $100.00 per share with the preferences and relative participating, voting and other special rights and the qualifications, limitations or restrictions of such preferences and/or rights stated in the aforesaid amendment to the charter of Atlanta Gas Light Company, granted by order of this Honorable Court on the 15th day of October, 1943. 3. Since the aforesaid amendment to the charter of Atlanta Gas Light Company, granted by order of this Honorable Court on the 15th day of October, 1943, Atlanta Gas Light Company has called for redemption, redeemed and cancelled the 13,000 shares of preferred stock of the par value of $100.00 per share aforesaid and under the provisions of its charter, as heretofore amended, Atlanta Gas Light Company has no right to reissue any of said shares of stock and said shares are no longer outstanding and have ceased to be a part of the capital stock of the corporation. Atlanta Gas Light Company files this petition to amend its charter in order to eliminate and strike therefrom all references to said 13,000 shares of preferred stock issued under the aforesaid resolution adopted at a special meeting of September 28, 1935, as confirmed by the amendment granted by this Honorable Court hereinabove referred to in this paragraph 3. 4. At a special meeting of the stockholders of Atlanta Gas Light Company held on the 22nd day of November, 1943, called for the purpose of acting on the resolution to amend its charter, all of the shares of common stock of Atlanta Gas Light Company out- standing were voted in favor of the adoption of a resolution to amend the charter of Atlanta Gas Light Company, a copy of which resolution is hereto attached marked Exhibit "A" and made a part of this petition and paragraph. The holders of all of the common stock of Atlanta Gas Light Company waived notice in writing of the time, place and purpose of said special meeting of the stockholders of Atlanta Gas Light Company. WHEREFORE, petitioner prays that an order of this Honorable Court be granted amending its charter as set forth in this petition and in Exhibit "A" hereto attached. /s/ Moise, Post & Gardner ------------------------- Attorneys for Petitioner. ---------------- Exhibit "A" RESOLVED by the stockholders of Atlanta Gas Light Company in meeting duly and legally called, assembled and held that the charter of Atlanta Gas Light Company be amended by eliminating all references in said charter to 13,000 shares of preferred stock of the par value of $100.00 per share with the rights, preferences, voting powers, restrictions, limitations and qualifications set forth in the resolution of the stockholders of Atlanta Gas Light Company adopted at a special meeting of said stockholders called for such purpose, held on September 28, 1935, so that there shall be stricken from the charter of Atlanta Gas Light Company as amended by order of the Superior Court of Fulton County, Georgia, granted on the 15th day of October, 1943, the following: "The maximum number of shares of capital stock of Atlanta Gas Light Company authorized to be outstanding at any one time is as follows: "250,000 shares of commons stock of the par value of $25.00 per share, "13,000 shares of preferred stock of the par value of $100.00 per share, and "20,000 shares of 4 1/2% cumulative preferred stock of the par value of $100.00 per share. "The 13,000 shares of preferred stock of the par value of $100.00 per share are presently outstanding with the preferences, voting powers, restrictions, limitations and qualifications set forth in the resolution of the stockholders of said Atlanta Gas Light Company adopted at the special meeting of said stockholders called for such purpose, held on September 28, 1935, and shall not be altered in anywise hereby. "Upon the redemption of the said 13,000 shares of preferred stock of the par value of $100.00 per share, said shares shall be eliminated from the authorized capital stock of Atlanta Gas Light Company, which shall cancel said shares of stock and shall have no right to reissue the whole or any of said shares of stock and the capital of Atlanta Gas Light Company shall be reduced by an amount equal to the aggregate par value of the said 13,000 shares. "Subject and subordinate in all respects to the preferences, voting powers, restrictions, limitations and qualifications of said 13,000 shares of preferred stock, as set forth in the resolution of the stockholders of Atlanta Gas Light Company adopted at the special meeting of said stockholders called for such purpose, held on September 28, 1935, the preferences and relative participating, voting and other special rights of the 20,000 shares of 4 1/2% cumulative preferred stock and of the common stock of Atlanta Gas Light Company (hereinafter called the "Preferred Stock" and the "Common Stock', respectively), and the qualifications, limitations or restrictions of such preferences and/or rights shall be as follows:" 2 and that there shall be substituted in lieu thereof the following: "The maximum number of shares of capital stock of Atlanta Gas Light Company authorized to be outstanding at any one time is as follows: "250,000 shares of common stock of the par value of $25.00 per share, and "20,000 shares of 4 1/2% cumulative preferred stock of the par value of $100.00 per share authorized by the amendment to the charter of the corporation granted by the Superior Court of Fulton County, Georgia, on the 15th day of October, 1943. "The preferences and relative participating, voting and other special rights of the 20,000 shares of 4 1/2% cumulative preferred stock and of the common stock of Atlanta Gas Light Company (hereinafter called the "Preferred Stock" and the "Common Stock", respectively), and the qualifications, limitations or restrictions of such preferences and/or rights shall be as follows:" ------------- The undersigned, Jas H. Motz, Secretary of Atlanta Gas Light Company certifies that the foregoing resolution of the stockholders of Atlanta Gas Light Company to which this certificate is attached, was adopted at a special meeting of the stockholders of Atlanta Gas Light Company held on the 22nd day of November, 1943, at which were present the holders of all of the shares of common stock of Atlanta Gas Company and all of the holders of common stock of Atlanta Gas Light Company voted in favor of and consented to the adoption of said resolution to amend the charter of Atlanta Gas Light Company. IN WITNESS WHEREOF, the undersigned as Secretary of Atlanta Gas Light Company has hereunto set his hand and affixed the seal of said corporation, this 22nd day of November, 1943. /s/ Jas. H. Motz -------------------------------------- Secretary of Atlanta Gas Light Company ---------------- The foregoing petition of Atlanta Gas Light Company to amend its charter was presented to this court and examined. It appearing to the court that said petition is in accord with the laws of the State of Georgia made and provided in such causes, that the common stockholders of Atlanta Gas Light Company adopted the resolution attached to the petition as Exhibit "A" to authorize this amendment to its charter at a special meeting of the stockholders called for said purpose, notice of which was waived by all of said stockholders, by a favorable vote for and consent to said amendment by the vote of all of the holders of common stock of Atlanta Gas Light Company and that all acts and things necessary or proper to effect such amendment to the charter of Atlanta Gas Light Company have been done and exist and said amendment is found by the court to be lawful. NOW, THEREFORE, it is considered, ordered and adjudged that the charter of Atlanta Gas Light Company is amended as set forth in the foregoing petition and the resolution of the stockholders of Atlanta Gas Light Company attached thereto marked Exhibit "A". This 22nd day of November, 1943. /s/ FRANK A. HOOPER, JR. ------------------------------- Judge, Superior Court Atlanta Circuit. 3 TO THE HONORABLE THE SUPERIOR COURT OF FULTON COUNTY GEORGIA This the petition of Atlanta Gas Light Company shows respectfully unto the Honorable the Superior Court of Fulton County, Georgia, as follows: 1. Atlanta Gas Light Company is a corporation organized and existing under the laws of the State of Georgia with its principal office in Fulton County, Georgia. Its charter was granted by an Act of General Assembly of the State of Georgia approved February 16, 1856 (Georgia Laws 1855-1856, pages 420 et seq). This charter was amended by an Act of the General Assembly approved October 14, 1889 (Georgia Laws 1888-1889, pages 1398 et seq). Thereafter the charter of Atlanta Gas Light Company was amended by the Superior Court of Fulton County, Georgia, by its orders dated respectively December 17, 1919, April 20, 1929, October 22, 1929, September 13, 1935, October 15, 1943 and November 22, 1943. 2. At a meeting of the stockholders of Atlanta Gas Light Company held on the 23rd day of July, 1947, notice of which meeting and the purpose thereof were waived in writing by the holders of all the common stock of Atlanta Gas Light Company, a resolution was adopted by the vote of the holders of all of the common stock of Atlanta Gas Light Company entitled to vote thereon that the charter of Atlanta Gas Light Company be amended in the manner set forth in said resolution, a duly certified copy of which is attached to this petition marked Exhibit "A" and made a part of this petition and paragraph. WHEREFORE, petitioner prays that its charter be amended in the manner set forth in said resolution and that an order of this Honorable Court be entered granting the prayers of this petition and so amending petitioner's charter. /s/ Moise, Post & Gardner ________________________________________ Attorneys for Atlanta Gas Light Company. EXHIBIT "A" RESOLVED by the stockholders of Atlanta Gas Light Company, in meeting duly and legally called, assembled and held, that the charter of Atlanta Gas Light Company be amended so that the number of Directors shall be not less than three nor more than eleven, but otherwise shall be such number as may be provided from time to time by the by-laws. RESOLVED FURTHER that the charter of Atlanta Gas Light Company also be amended by amending the provisions inserted in the charter by the amendment thereto granted by order of the Superior Court of Fulton County, Georgia, dated October 15, 1943, as follows: (1) By eliminating from said provisions the following: "The maximum number of shares of capital stock of Atlanta Gas Light Company authorized to be outstanding at any one time is as follows: "250,000 shares of common stock of the par value of $25.00 per share, and" and inserting in lieu thereof the following: "The maximum number of shares of capital stock of Atlanta Gas Light Company authorized to be outstanding at any one time is as follows: "1,000,000 shares of common stock of the par value of $10.00 per share, and" and by providing that the 240,145 shares of common stock of the par value of $25.00 per share presently issued and outstanding be and they hereby are reclassified as and changed into 802,553 shares of common stock of the par value of $10.00 per share. (2) By inserting in paragraph 3 of Division C of the said provisions, immediately following the first sentence thereof the following: "At all elections of directors the holders of each class of stock entitled to vote shall be entitled to as many votes as shall equal the number of his shares of stock multiplied by the number of directors to be elected by the holders of stock of such class, and he may cast all of such votes for a single director or may distribute them among the number to be voted for, or any two or more of them as he may see fit." (3) By inserting in paragraph 2 of Division C of the said provisions at the end thereof the following: "Provided, however, that if the Board of Directors shall at any time determine to offer for cash any shares of Common Stock, whether now or hereafter authorized, or to offer for cash any securities convertible into Common Stock of the corporation other than by a public offering of such shares or securities to or through underwriters or investment bankers who agree to make a public offering of such shares or securities, the right to purchase the same shall first be offered to the holders of record, on a date to be fixed by the Board of Directors for such purpose, of the outstanding shares of Common Stock pro rata upon terms not less favorable to such holders than those upon which the Board of Directors shall authorize the issue of such shares or securities to others than holders of record of the Common Stock; and, provided further, that the time within which the holders of record of the Common Stock; may exercise such rights shall be determined by the Board of Directors but shall in no event be less than twenty (20) days after the date of mailing of notice that such rights are available. No alteration, amendment or repeal of any of the provisions of this paragraph 2 shall be effected without the written consent or the affirmative vote of the holders of at least two-thirds of the issued and outstanding shares of Common Stock, such vote being taken at a meeting called for the purpose." (4) By inserting in paragraph 1 of Division B of the said provisions at the end thereof the following: "1a. The corporation shall not declare or pay any dividend on its Common Stock (other than dividends payable in Common Stock) or make any distribution on, or purchase or otherwise acquire for value, any of its Common Stock (each such payment, distribution, purchase and/or acquisition being herein referred to as a 'common stock dividend') except to the extent permitted by the following provisions: (a) No common stock dividend shall be declared or paid in an amount which, together with all other common stock dividends declared in the year ending on (and including) the date of the declaration of such common stock dividend, would in the aggregate exceed fifty per cent (50%) of the net income of the corporation available for dividends on its common stock for the twelve (12) consecutive calendar months ending on the last day of the calendar month next preceding the declaration of such common stock dividend, if at the end of such calendar month the ratio (herein referred to as the 'capitalization ratio') of the sum of the par value of, or stated capital represented by, the outstanding shares of common stock and the surplus of the corporation to the total capitalization and surplus of the corporation (after adjustment, in each case, of the surplus accounts to reflect payment of such common stock dividend) would be less than twenty per cent (20%); (b) If the capitalization ratio shall be twenty per cent (20%) or more, but less than twenty-five per cent (25%), no common stock dividend shall be declared or paid in an amount which, together with all other common stock dividends declared in the twelve months ending on (and including) the date of the declaration of such common stock dividend, would exceed seventy-five (75%) of the net income of the corporation available for dividends on its common stock for the twelve (12) consecutive calendar months ending on the last day of the calendar month next preceding the declaration of such common stock dividends; and (c) If the capitalization ratio shall be in excess of twenty-five per cent (25%), no common stock dividend shall be declared or paid which would reduce the capitalization ratio to less than twenty-five per cent (25%) except to the extent permitted by the foregoing clauses (a) and (b). For the purposes of this paragraph 1a the following terms shall have the following meanings: (a) The term 'net income' shall mean the gross earnings of the corporation from all sources less all proper deductions for operating expenses, taxes (including income, excess profits and other taxes based on or measured by income or undistributed earnings or income), interest charges and other appropriate items, including provision for maintenance, retirements, depreciation and obsolescence determined in accordance with such system of accounting as may be prescribed by governmental authorities having jurisdiction in the premises or in the absence thereof in accordance with sound accounting practice, and less all dividends paid or accrued upon the preferred stock of the corporation or upon any shares of any class of stock ranking prior to or on a parity with the preferred stock as to dividends or assets: provided, however, that no deduction or adjustment shall be made for or in respect of (i) expenses in connection with the redemption or retirement of any securities issued by the corporation including any amount paid in excess of the principal amount or par or stated value of securities redeemed or retired and, in the event that such redemption or retirement is effected with the proceeds of sale of other securities of the corporation, interest or dividends on the securities redeemed or retired from the date on which the funds required for such redemption or retirement are deposited in trust for such purpose to the date of redemption or retirement, or (ii) profits or losses from sales of public utility property or other capital assets, or from the reacquisition of any securities of the corporation, or taxes on or in respect of any such profits, or (iii) eliminations, other than through periodic amortization charges against earnings, of intangibles or utility plant adjustment accounts, or (iv) eliminations, other than through periodic charges against earnings of the book value of gas manufacturing and storage facilities owned by the corporation on January 1, 1947, which then are or thereafter shall become no longer used or useful by reason of the substitution of natural gas. (b) The term 'total capitalization' shall mean the aggregate of the principal amount of all indebtedness of the corporation outstanding in the hands of the public maturing more than twelve (12) months after the date of issue or assumption thereof, plus the par value of, or stated capital represented by, the outstanding shares of all classes of stock of the corporation. (c) The term "surplus" shall mean capital surplus, earned surplus and any other surplus of the corporation." The undersigned, JAS. H. MOTZ, Secretary of the Atlanta Gas Light Company, certifies that the foregoing resolution of the stockholders of the Atlanta Gas Light Company to which this certificate is attached was adopted at a special meeting of the stockholders of Atlanta Gas Light Company held on the 23rd day of July, 1947, at which were present the holders of all the shares of Common Stock of Atlanta Gas Light Company and all of the holders of Common Stock of Atlanta Gas Light Company voted in favor of and consented to the adoption of said resolution to amend the charter of Atlanta Gas Light Company. IN WITNESS WHEREOF, the undersigned, as Secretary of Atlanta Gas Light Company, has hereunto set his hand and affixed the seal of said corporation, this 14th day of October, 1947. /s/ Jas H. Motz [SEAL APPEARS HERE] ----------------------------------------- Secretary of Atlanta Gas Light Company. O R D E R The foregoing petition of Atlanta Gas Light Company to amend its charter was presented to this court and examined. It appearing to the court that said petition is in accord with the laws of the State of Georgia made and provided in such causes, that the common stockholders of Atlanta Gas Light Company adopted the resolution attached to the petition as Exhibit "A" to authorize this amendment to its charter at a special meeting of the stockholders called for said purpose, notice of which was waived by all of said stockholders, by a favorable vote for and consent to said amendment by the vote of all of the holders of common stock of Atlanta Gas Light Company and that all acts and things necessary or proper to effect such amendment to the charter of Atlanta Gas Light Company have been done and exist and said amendment is found by the court to be lawful. NOW, THEREFORE, it is considered, ordered and adjudged that the charter of Atlanta Gas Light Company is amended as set forth in the foregoing petition and the resolution of the stockholders of Atlanta Gas Light Company attached thereto marked Exhibit "A". This 17th day of October, 1947. --------- /s/ Bond Almand -------------------------------------------- Judge Superior Court, Atlanta Circuit. TO THE HONORABLE THE SUPERIOR COURT OF FULTON COUNTY, GEORGIA This the petition of Atlanta Gas Light Company shows respectfully unto the Honorable the Superior Court of Fulton County, Georgia as follows: 1. Atlanta Gas Light Company is a corporation organized and existing under the laws of the State of Georgia with its principal office in Fulton County, Georgia. Its charter was granted by an Act of the General Assembly of the State of Georgia approved February 16, 1856 (Georgia Laws 1855-1856, pages 420 et seq.). This charter was amended by an Act of the General Assembly approved October 14,1889 (Georgia Laws 1388-1389, pages 1398 et seq). Thereafter the charter of Atlanta Gas Light Company was attended by the Superior Court of Fulton County, Georgia, by its orders dated respectively December 13, 1935, April 20, 1929, October 20, 1929, September 13, 1935, October 15, 1943, November 22, 1943 and October 17, 1947. 2. At a meeting of the stockholders of Atlanta Gas Light Company held on the 14th day of August, 1951 notice of which meeting and the purpose thereof was duly and loyally given, a resolution was adopted by the vote of the holders of more than two-thirds (2/3) of the Common Stock of Atlanta Gas Light Company entitled to vote thereon and by a vote of more than two-thirds (2/3) of the holders of all of the Preferred Stock of Atlanta Gas Light Company entitled to vote thereon (the holders of Common Stock voting on a class and the holders of the Preferred Stock voting as a separate class) that the charter of Atlanta Gas Light Company be attended in the manner set forth in said resolution, a duly certified copy of which is attached to this petition marked Exhibit "A" and made a part of this petition and paragraph. THEREFORE, petition prays that its charter to amended in the manner set forth in said resolution and that an order of this Honorable Court be entered granting the prayers of this petition and so amending petitioner's charter. /s/ Moise, Post & Gardner --------------------------------------- Attorneys for Atlanta Gas Light Company. RESOLVED by the stockholders of Atlanta Gas Light Company, the holders of the Common Stock voting as a class and the holders of the Preferred Stock voting as a separate class and that the charter of Atlanta Gas Light Company be amended by amending and modifying the provisions of sub-paragraph (f) of paragraph 4, of Division A thereof by striking said sub-paragraph (f) of Paragraph 4, of Division A, reading as follows: "(f) The issuance of any unsecured notes, debentures or other securities representing unsecured indebtedness, or assumption of any such unsecured securities, other than for the purpose of refunding outstanding unsecured securities theretofore issued or assumed or effecting the retirement, by redemption or otherwise, of outstanding shares of the Preferred Stock, or of a class of stock ranking prior thereto, or on a parity therewith, if immediately after such issue or assumption the total principal amount of all unsecured securities issued or assumed and then outstanding would exceed ten per cent (10%) of the aggregate of (I) the total principal amount of all bonds or other securities representing secured indebtedness issued or assured by the corporation and then to be outstanding, and (II) the total of the capital and surplus of the corporation as then to be stated of its books." and substituting in lieu thereof: "(f) The issuance of any unsecured notes, debentures or other securities representing unsecured indebtedness (other than indebtedness maturing not more than one year from the date of creation or assumption of any such unsecured securities) except for the purpose of refunding outstanding unsecured debt securities issued or assumed or effecting the retirement, by redemption or otherwise, of outstanding shares of the Preferred Stock, or of a class of stock ranking prior thereto or on a parity therewith, if immediately after such issue or assumption the total principal amount of all unsecured securities issued or assumed and then outstanding, including the unsecured indebtedness then to be issued but excluding indebtedness maturing not more than one year from the date of creation, would exceed ten per centum (10%) of the aggregate of (1) the total principal amount of all bonds or other securities representing secured indebtedness issued or assumed by the corporation and then to be outstanding, and (ii) the total of the capital and surplus of the corporation as then to be stated on its books; provided, that any unsecured securities issued under any authorization of holders of Preferred Stock (and any securities issued to refund the same) shall not be considered in determining the amount of additional securities which may be issued or assumed within the aforesaid 10% limitation." The undersigned, JAS. H. MOTZ, Secretary of Atlanta Gas Light Company, ------------ certifies that the foregoing resolution of the stockholders of Atlanta Gas Light Company to which this certificate is attached was adopted at a special meeting of the stockholders of Atlanta Gas Light Company held on the 14th day of August, 1951, the said special meeting of the stockholders having been called for the purpose of the considering the foregoing resolution. At said special meeting of the stockholders the holders of the Common Stock of Atlanta Gas Light Company voted as a class and more than two-thirds (2/3) of the Common Stock of Atlanta Gas Light Company was voted favorably for said amendment and at said special meeting of the stockholders the holders of the Preferred Stock of Atlanta Gas Light Company voted as a separate class and more than two-thirds (2/3) of the Preferred Stock of Atlanta Gas Light Company was voted favorably for said amendment. The said resolution to amend the charter of Atlanta Gas Light Company was adopted by the vote of the holders of more than a two-thirds majority of the Common Stock of Atlanta Gas Light Company and by the holders of more than a two-thirds (2/3) majority of the Preferred Stock of Atlanta Gas Light Company. IN WITNESS WHEREOF, the undersigned, as Secretary of Atlanta Gas Light Company, has hereunto set his hand and affixed the seal of Atlanta Gas Light Company, this 14th day of August, 1951. /s/ Jas. H. Motz [CORPORATE SEAL -------------------------------------------- APPEARS HERE] Secretary Atlanta Gas Light Company. The foregoing petition of Atlanta Gas Light Company to amend its charter was presented to this court and examined. It appearing to the court that said petition is in accord with the laws of the State of Georgia made and provided in such causes, that the Common Stockholders of Atlanta Gas Light Company adopted the resolution attached to the petition as Exhibit "A" to authorize this amendment to its charter at a special meeting of the stockholders called for said purpose, notice of which was duly and legally given, by a favorable vote for and consent to said amendment by the vote of the holders of more than two-thirds (2/3) of the Common Stock of Atlanta Gas Light Company and that the Preferred Stockholders of Atlanta Gas Light Company adopted the resolution attached to the petition as Exhibit "A" to authorize this amendment to its charter at a special meeting of the stockholders called for said purpose, notice of which was duly and legally given, by a favorable vote for and consent to said amendment by the vote of the holders of more than two-thirds (2/3) of the Preferred Stock of Atlanta Gas Light Company and that all acts and things necessary or proper to effect such amendment to the charter of Atlanta Gas Light Company have been done and exist and said resolution is found by the court to be lawful. NOW, THEREFORE, it is considered, ordered and adjudged that the charter of Atlanta Gas Light Company is amended as set forth in the foregoing petition and the resolution of the stockholders of Atlanta Gas Light Company attached thereto marked Exhibit "A". This 14 day of August, 1951. /s/ Virlyn B. Moore ---------------------------------- Superior Court, Atlanta Circuit. [TEXT ABOVE ILLEGIBLE ON COPY] 14, Aug '51 /s/ G. M. Paschal ------------------- Deputy Clerk IN THE SUPERIOR COURT OF FULTON COUNTY, GEORGIA - ------------------------------ In Re No. 23324 .......... Atlanta Gas Light Company - ------------------------------ PETITION TO AMEND CHARTER This the petition of Atlanta Gas Light Company shows respectfully unto the Honorable the Superior Court of Fulton County, Georgia as follows: 1. Atlanta Gas Light Company is a corporation organized and existing under the laws of the State of Georgia with its principal office in Fulton County, Georgia. Its charter was granted by an Act of the General Assembly of the State of Georgia approved February 16, 1856 (Georgia Laws 1855-1856, pages 420 et seq.). This charter was amended by an Act of the General Assembly approved October 14, 1889 (Georgia Laws 1888-1889, pages 1398 et seq.). Thereafter the charter of Atlanta Gas Light Company was amended by the Superior Court of Fulton County, Georgia, by its orders dated respectively December 17, 1919, April 20, 1929, October 22, 1929, September 13, 1935, October 15, 1943, November 22, 1943, October 17, 1947 and August 14, 1951. 2. At a meeting of the Stockholders of Atlanta Gas Light Company held on the 25th day of November, 1952, notice of which meeting and the purpose thereof was duly and legally given, a resolution was adopted by the vote of the holders of more than two-thirds (2/3) majority of the Common Stock of Atlanta Gas Light Company entitled to vote thereon and by a vote of more than a two-thirds (2/3) majority of the holders of all of the Preferred Stock of Atlanta Gas Light Company entitled to vote thereon (the holders of Common Stock voting as a class and the holders of the Preferred Stock voting as a separate class) that the charter of Atlanta Gas Light Company be amended in the manner set forth in said resolution, a duly certified copy of which is attached to this petition marked Exhibit "A" and made a part of this petition and paragraph. WHEREFORE, petitioner prays that its charter be amended in the manner set forth in said resolution and that an order of this Honorable Court be entered granting the prayers of this petition and so amending petitioner's charter. /s/ Moise, Post & Gardner ....................................... Attorney for Atlanta Gas Light Company. EXHIBIT A RESOLVED, by the Stockholders of Atlanta Gas Light Company at a meeting duly and legally called, assembled and held, with the holders of the Common Stock voting as a class and the holders of the 4 1/2% Cumulative Preferred Stock voting as a seperate class, that the charter of Atlanta Gas Light Company be amended by eliminating therefrom all of the provisions of the amendments thereto approved by the Superior Court of Fulton County, Georgia by its Orders dated October 15, 1943, November 22, 1943, October 17, 1947 and August 14, 1951 and inserting in lieu thereof the following: SECTION 1 Authorized Capital Stock Section 1.01. The maximum number of shares of Capital Stock of Atlanta Gas Light Company (hereinafter referred to as the "Company") authorized to be outstanding at any one time is as follows: 1,000,000 shares of Common Stock of the par value of $10 per share, 20,000 shares of 4 1/2% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4 1/2% Preferred Stock"), and 30,000 shares of 4.60% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.60% Preferred Stock"). The preferences, voting powers, restrictions, limitations and qualifications of the different classes of Capital Stock shall be as follows: SECTION 2 Definitions Section 2.01. The term "Preferred Stock" shall mean any class of Preferred Stock described in Section 3 and any other class of stock with respect to which dividends and amounts payable upon liquidation, dissolution or winding up of the Company, or upon reduction or decrease of its capital resulting in a distribution of assets to holders of any class of Junior Stock, shall be payable on a parity with the amounts payable in respect of Preferred Stock described in Section 3, notwithstanding that any such other class of Preferred Stock may have a par value, dividend rate, redemption prices, amounts payable thereon upon liquidation, dissolution or winding up, sinking or purchase fund, voting rights and other terms and provisions varying from those of the classes of such Preferred Stock then described in Section 3. SECTION 2.02. The term "Junior Stock" shall mean the Common Stock and stock of any other class ranking junior to the Preferred Stock in respect of dividends or amounts payable upon any liquidation, dissolution or winding up of the Company or upon reduction or decrease of its capital resulting in a distribution of assets to holders of any class of Junior Stock. SECTION 2.03. The term "accrued dividends" shall mean, in respect to each share of any class of stock, that amount which shall be equal to simple interest upon the par value at the annual dividend rate fixed for such class of stock and no more, from and including the date upon which dividends on such share became cumulative and (i) up to but not including the date fixed for payment in liquidation or for redemption, or, as the case may be, (ii) up to and including the last day of any period for which such accrued dividends are to be determined, less the aggregate amount of all dividends theretofore paid or declared and set apart for payment thereon. Computation of accrued dividends in respect of any portion of a quarterly dividend period shall be by the 360-day year, 30-day month, method of computing interest. SECTION 2.04. The term "gross income available for payment of interest charges" shall mean the total operating revenues and other income net of the Company, less all proper deductions for operating expenses, taxes (including income, excess profits and other taxes based on or measured by income or 1 undistributed earnings or income), and other appropriate items, including provision for maintenance, and provision for retirements, depreciation and obsolescence (but in no event less than the largest minimum provisions required by the terms of any indenture or agreement relating to any outstanding indebtedness of the Company) but excluding any charges for interest on indebtedness outstanding and any credits or charges on account of amortization of debt premium, discount and expense, all to be determined in accordance with sound accounting practice. In determining such "gross income available for payment of interest charges", no deduction or adjustment shall be made for or in respect of (1) profits or losses from sales of property carried in plant or investment accounts of the Company, or from the reacquisition of any securities of the Company, or taxes on or in respect of such profits, (2) charges for the elimination or amortization of utility plant adjustment or acquisition accounts or other intangibles, or (3) charges for the elimination or amortization of the book values of gas manufacturing and storage facilities owned by the Company, which shall become no longer used or useful by reason of the substitution of natural gas. SECTION 2.05. The term "net income of the Company available for dividends" shall mean the total operating revenues and other income net of the Company, less all proper deductions for operating expenses, taxes (including income, excess profits, and other taxes based on or measured by income or undistributed earnings or income), interest charges and other appropriate items, including provision for maintenance, and provision for retirements, depreciation and obsolescence (but in no event less than the largest minimum provisions required by the terms of any indenture or agreement securing any outstanding indebtedness of the Company), and including credits or charges for amortization of debt premium, discount and expense, all to be determined in accordance with sound accounting practice. In determining such "net income of the Company available for dividends", no deduction or adjustment shall be made for or in respect of (1) expenses in connection with the redemption or retirement of any securities issued by the Company, including any amount paid in excess of the principal amount or par or stated value of securities redeemed or retired, or, in the event that such redemption or retirement is effected with the proceeds of the sale of other securities of the Company, interest or dividends on the securities redeemed or retired from the date on which the funds required for such redemption or retirement are deposited in trust for such purpose to the date of redemption or retirement; (2) profits or losses from sales of property carried in plant or investment accounts of the Company, or from the reacquisition of any securities of the Company, or taxes on or in respect of such profits; (3) eliminations, other than through periodic amortization charges against earnings, of intangibles or utility plant adjustment or acquisition accounts; or (4) eliminations, other than through periodic charges against earnings, of the book value of gas manufacturing and storage facilities owned by the Company, which shall become no longer used or useful by reason of the substitution of natural gas. SECTION 2.06. The term "net income of the Company available for dividends on Junior Stock" shall mean "net income of the Company available for dividends", as defined above, less all dividends accrued for any period for which a computation is being made, whether or not paid, (i) on all outstanding Preferred Stock, and (ii) on all outstanding stock of any class ranking as to dividends prior to such Preferred Stock. SECTION 2.07. The term "net income of the Company available for dividends on the Common Stock" shall mean "net income of the Company available for dividends on Junior Stock", as defined above, less all dividends accrued for any period for which a computation is being made, whether or not paid, on outstanding Junior Stock ranking as to dividends prior to the Common Stock. SECTION 2.08. The term "Common Stock Equity" shall mean the aggregate of the par value of, or stated capital represented by the outstanding Common Stock of the Company, plus the capital surplus and earned surplus of the Company and plus premiums on all capital stock of the Company. SECTION 2.09. The term "Capitalization" shall mean the aggregate of (i) the Common Stock Equity, (ii) the principal amount of all indebtedness of the Company maturing more than twelve (12) months after the date of issue or assumption thereof, and (iii) the par value of, or stated capital represented 2 by, any outstanding stock of the Company other than Common Stock. For the purposes of this Section 2.09, any indebtedness which is extended or renewed shall be deemed to have been issued on the date of such extension or renewal. Section 2.10. The term "sound accounting practice" shall mean recognized principles of accounting practice followed by companies engaged in a business similar to that of the Company, except as otherwise required by any applicable rules, regulations or orders of the Georgia Public Service Commission or other public regulatory authority having jurisdiction over the accounts of the Company, provided that the Company may, at the time, contest in good faith the validity or applicability to the Company of any such rule, regulation or order, and pending such contest, such rule, regulation or order shall not be controlling. SECTION 3 Preferred Stock Section 3.01. 4 1/2% Preferred Stock. (a) Dividends. Out of any assets of the Company available for dividends, the holders of the 4 1/2% Preferred Stock shall be entitled to receive, but only when and as declared by the Board of Directors, dividends at the rate of 4 1/2% per annum, and no more. Dividends declared shall be payable quarterly on March 1, June 1, September 1 and December 1 in each year, to stockholders of record on a date not more than 30 days prior to such payment date, as may be determined by the Board of Directors of the Company. Dividends on the 4 1/2% Preferred Stock shall be cumulative from and including the first day of the quarterly dividend period in which such shares shall be issued. So long as any shares of 4 1/2% Preferred Stock are outstanding, no dividends shall be declared or paid upon or set apart for the shares of any class of Junior Stock, nor any sums applied to the purchase, redemption or other retirement of any class of Junior Stock, unless full dividends on all shares of the 4 1/2% Preferred Stock and of any other class of Preferred Stock outstanding for all past quarterly dividend periods shall have been paid or declared and a sum sufficient for the payment thereof set apart and the full dividend for the then current quarterly dividend period shall have been or concurrently shall be paid or declared and set apart. The amount of any deficiency for past dividend periods may be paid or declared and set apart at any time without reference to any quarterly dividend payment date. Unpaid accrued dividends on the 4 1/2% Preferred Stock shall not bear interest. (b) Liquidation. In the event of any liquidation, dissolution or winding up of the Company or reduction or decrease of its capital resulting in a distribution of assets to the holders of any class of Junior Stock, the holders of 4 1/2% Preferred Stock shall be entitled to receive the amounts prescribed in Section 4.02. (c) Redemption Provisions. The Company may at its option, expressed by resolution of its Board of Directors, redeem the 4 1/2% Preferred Stock in the manner provided in Section 4.03(A) at any time or from time to time at $100 per share plus a premium of $5.25 per share, together in each case with accrued dividends. (d) Voting Powers and Other Rights. The holders of 4 1/2% Preferred Stock shall have such voting power and other rights and be subject to such restrictions and qualifications, as are set forth in Sections 4 to 6, hereof, inclusive. Section 3.02. 4.60% Preferred Stock. (a) Dividends. Out of any assets of the Company available for dividends, the holders of the 4.60% Preferred Stock shall be entitled to receive, but only when and as declared by the Board of Directors, dividends at the rate of 4.60% per annum, and no more. Dividends declared shall be payable quarterly on March 1, June 1, September 1 and December 1 in each year, to stockholders of record on a date 3 not more than 30 days prior to such payment date, as may be determined by the Board of Directors of the Company. Dividends on the 4.60% Preferred Stock shall be cumulative from and including the first day of the quarterly dividend period in which such shares shall be issued. So long as any shares of 4.60% Preferred Stock are outstanding, no dividends shall be declared or paid upon or set apart for the shares of any class of Junior Stock, nor any sums applied to the purchase, redemption or other retirement of any class of Junior Stock, unless full dividends on all shares of the 4.60% Preferred Stock and of any other class of Preferred Stock outstanding for all past quarterly dividend periods shall have been paid or declared and a sum sufficient for the payment thereof set apart and the full dividend for the then current quarterly dividend period shall have been or concurrently shall be paid or declared and set apart. The amount of any deficiency for past dividend periods may be paid or declared and set apart at any time without reference to any quarterly dividend payment date. Unpaid accrued dividends on the 4.60% Preferred Stock shall not bear interest. (b) Liquidation. In the event of any liquidation, dissolution or winding up of the Company or reduction or decrease of its capital resulting in a distribution of assets to the holders of any class of Junior Stock, the holders of 4.60% Preferred Stock shall be entitled to receive the amounts prescribed in Section 4.02. (c) Redemption Provisions. The Company may at its option expressed by resolution of its Board of Directors redeem the 4.60% Preferred Stock in the manner provided in Section 4.03(A) at any time or from time to time at $100 per share plus a premium of: $4.50 per share if redeemed prior to December 1, 1957, $3.50 per share if redeemed on December 1, 1957 or thereafter prior to December 1, 1962, $2.50 if redeemed on December 1, 1962 or thereafter prior to December 1, 1967, and $1.50 per share if redeemed on or after December 1, 1967; together in each case with accrued dividends. (d) Sinking Fund. The 4.60% Preferred Stock shall be entitled to the benefits of a sinking fund as follows: A. The Company (unless prevented from so doing by any applicable restriction of law or contained in the Charter of the Company, as amended, or in any agreement now existing relating to indebtedness of the Company) shall call for redemption on December 1 in each year, commencing with the year 1955, at $100 per share, plus accrued dividends (hereinafter sometimes called the "sinking fund redemption price"), in the manner provided in Section 4.03(A), a number of shares of the 4.60% Preferred Stock equal to (i) 3% of the aggregate number of shares of such stock originally issued from time to time prior to the October 15 next preceding such December 1, less (ii) the number of shares for which the Company shall have taken credit against such sinking fund obligation pursuant to the provisions of subsection B of this Section 3.02(d) and shall deposit with a Transfer Agent for such stock, in trust for such redemption, at least one day prior to such December 1 an amount of money sufficient to redeem at the sinking fund redemption price therof the shares so called for redemption on such date. Such sinking fund obligation shall be cumulative, so that if on any December 1 on or after December 1, 1955 the Company shall not have satisfied to the full extent the sinking fund obligation then due, whether by reason of any applicable restriction of the character above mentioned or otherwise, then any such deficiency shall be made good on December 1 in the succeeding year or years as soon as and to the extent permitted by law and any applicable restriction of the character aforesaid; and until any such deficiency shall have been so made good no dividends shall be declared or paid upon or set apart for the shares of any class of Junior Stock, nor any sums applied to the purchase, redemption or other retirement of any class of Junior Stock. B. The Company shall have the right to satisfy in whole or in part any sinking fund obligation (including any deficiency in any past sinking fund obligation) by crediting against such obligation (1) any shares of the 4.60% Preferred Stock, purchased or otherwise acquired by the Company, and/or 4 (2) shares of such stock which shall have redeemed at the optional redemption price thereof, such credit to be effected by delivering to a Transfer Agent for the 4.60% Preferred Stock, not later (except in connection with the satisfaction of any sinking fund deficiency) than the October 15 next preceeding the December 1 on which there is due any sinking fund obligation in respect of which such credit is to be taken, a certificate signed by its President or one of its Vice Presidents or its Treasurer or one of its Assistant Treasurers, specifying the election of the Company to take such credit and stating that no previous sinking fund credit has been taken in respect of any such shares. The Company shall deliver to a Transfer Agent for the 4.60% Preferred Stock, within forty-five (45) days after the delivery of any such certificate, certificates properly endorsed in blank for transfer or accompanied by proper instruments of assignment or transfer in blank and bearing all necessary stock transfer tax stamps thereto affixed and cancelled, for any shares of such stock purchased or otherwise acquired by the Company which are to be used as a credit against the sinking fund obligation so to be satisfied. (e) Voting Powers and other Rights. The holders of 4.60% Preferred Stock shall have such voting power and other rights and be subject to such restrictions and qualifications, as are set forth in Sections 4 to 6, hereof, inclusive. SECTION 4 Preferences on Liquidation, Redemption Provisions, Restrictions on Certain Corporate Action, Voting Powers and Other Rights applicable to all classes of Preferred Stock. SECTION 4.01. Dividend Rights. Dividends in full shall not be paid or set apart for payment on any class of the Preferred Stock for any dividend period unless dividends in full have been or are contemporaneously paid or set apart for payment on all outstanding shares of all classes of Preferred Stock for such dividend period and for all prior dividend periods. When the specified dividends are not paid in full on any class of Preferred Stock, the shares of each class of Preferred Stock shall share ratably in the payment of dividends, including accumulations, if any, in accordance with the sums which would be payable on said shares if all dividends were paid in full. SECTION 4.02. Liquidation Rights. In the event of any liquidation dissolution or winding up of the Company, or reduction or decrease of its capital resulting in a distribution of assets to the holders of any class of Junior Stock, whether voluntary or involuntary, the holders of each class of Preferred Stock shall be entitled to receive, for each share thereof, the par value thereof, plus, in case such liquidation, dissolution, winding up, reduction or decrease shall have been voluntary, an amount per share equal to the redemption premium that would then be payable to the holders thereof if such Preferred Stock were to be redeemed at the option of the Company, together in each case with accrued dividends, before any distribution of the assets shall be made to the holders of shares in any class of Junior Stock; but the holders of Preferred Stock shall be entitled to no further participation in such distribution. A consolidation or merger of the Company or sale, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the property or assets of the Company shall not be deemed a dissolution, liquidation or winding up of the Company within the meaning of this Section 4.02. SECTION 4.03. Redemption Provisions. (A) Preferred Stock shall be subject to redemption at the applicable redemption prices provided for each class thereof in such amount, at such place and by such method, which, if in part, shall be by lot, as shall from time to time be determined by resolution of the Board of Directors, unless otherwise provided for by an agreement by holders of all shares of any class of Preferred Stock being redeemed. Notice of any proposed redemption of any class of Preferred Stock shall be given by the Company by mailing a copy of such notice, at least thirty (30) days but not more than 5 ninety (90) days prior to the date fixed for such redemption, to the holders of record of any shares of Preferred Stock to be redeemed at their respective addresses then appearing on the books of the Company. On or after the date specified in such notice, each holder of shares of Preferred Stock called for redemption as aforesaid, shall be entitled to receive therefor the redemption price thereof, upon presentation and surrender at the place designated in such notice of the certificates for such shares of Preferred Stock held by him, bearing all necessary stock transfer tax stamps thereto affixed and cancelled, and (if required by the Company) properly endorsed in blank for transfer or accompanied by proper instruments of assignment or transfer in blank. On and after the date fixed for redemption, if notice is given as aforesaid, and unless default is made by the Company in providing moneys for payment of the redemption price, all dividends on the shares called for redemption shall cease to accrue; and on and after such redemption date, unless default be made as aforesaid, or on and after the date of earlier deposit by the Company with a bank or trust company doing business in the City of New York, New York, or in the City of Atlanta, Georgia, and having a capital and surplus of at least $1,000,000, in trust for the benefit of the holders of the shares of the Preferred Stock so called for redemption, of all funds necessary for redemption as aforesaid (provided in the latter case that there shall have been mailed as aforesaid to holders of record of shares to be redeemed, a notice of the redemption thereof or that the Company shall have executed and delivered to each Transfer Agent for the Preferred Stock or to the bank or trust company with which such deposit is made an instrument irrevocably authorizing it to mail such notice at the Company's expense) all rights of the holders of the shares called for redemption as stockholders of the Company, except only the right to receive the redemption price, shall cease and determine. Any funds so deposited which shall remain unclaimed by the holders of such Preferred Stock at the end of six (6) years after the redemption date, together with any interest thereon which shall have been allowed by the bank or trust company with which such deposit shall have been made, shall be paid by it to the Company, and thereafter such holders shall look only to the Company therefor. (B) The Company may, subject to the provisions of paragraph (C) below, also from time to time purchase shares of Preferred Stock for any sinking fund provided for the benefit of any class of Preferred Stock and otherwise at not exceeding the applicable redemption prices thereof at the time in effect and accrued dividends thereon to the date of purchase, plus customary brokerage commissions. Shares of Preferred Stock so purchased not used to satisfy sinking fund obligations may in the discretion of the Board of Directors be reissued or otherwise disposed of from time to time to the extent permitted by law. (C) If and so long as there are dividends in arrears on any shares of Preferred Stock, the Company shall not redeem or purchase any shares of Preferred Stock, unless, in the case of redemptions, all of the outstanding Preferred Stock is redeemed or, in the case of purchases, an offer to purchase on a comparable basis is made to the holders of all the outstanding Preferred Stock. If and so long as a default exists in any sinking fund obligation provided for the benefit of any class or classes of Preferred Stock, the Company shall not redeem or purchase any shares of Preferred Stock unless,in the case of redemptions all of the outstanding Preferred Stock of such class or classes is redeemed or, in the case of purchases, such purchases are solely of such class or classes of Preferred Stock and are made pursuant to an offer to purchase on a comparable basis to the holders of all of the outstanding Preferred Stock of such class or classes. SECTION 4.04. Restrictions on Corporate Action. (A) So long as any Preferred Stock is outstanding, the Company shall not, without the consent (given in writing without a meeting or by vote in person or by proxy at a meeting called for the purpose) of the holders of at least two-thirds of the aggregate number of shares of all classes of Preferred Stock entitled to vote then outstanding-- (i) Create, authorize or increase the authorized amount of, any shares of any class of stock ranking as to dividends or assets prior to the Preferred Stock or of any obligation or security convertible into stock ranking as to dividends or assets prior to the Preferred Stock; or (ii) Reclassify any shares of stock of any class into shares of stock of a class ranking as to dividends or assets prior to the Preferred Stock or reclassify and shares of any class of Junior Stock into shares of Preferred Stock; or 6 (iii) Amend, change or repeal any of the express terms of the Preferred Stock outstanding in any manner prejudicial to the holders thereof, except that, if such amendment, change or repeal is prejudicial to the holders of less than all classes of Preferred Stock, the consent of only the holders of two-thirds of the aggregate number of shares of the class or classes thereof entitled to vote then outstanding so affected shall be required; or (iv) Reduce the par value of the capital allocable to the outstanding Preferred Stock, or reduce below the greater of $5,000,000 or the aggregate par value of all classes of Preferred Stock at the time outstanding the aggregate capital allocable to Junior Stock, except in any case where a State or Federal regulatory body having jurisdiction shall have required the Company to reduce the book value of its assets and in conjunction therewith the capital allocable to one or more classes of Junior Stock is to be reduced in an amount or amounts not exceeding in the aggregate the amount of such reduction of book value of assets; or (v) Issue shares of Preferred Stock in addition to the 20,000 shares of 4 1/2% Preferred Stock outstanding and 30,000 shares of 4.60% Preferred Stock originally issued unless, after giving effect to such additional shares, (a) the net income of the Company available for dividends for any period of twelve (12) consecutive calendar months within the fifteen (15) calendar months immediately preceding the calendar month within which such additional shares of stock are to be issued, shall have been at least two and one-half (2 1/2) times the aggregate annual dividend requirements upon the entire amount to be outstanding of Preferred Stock and of any stocks of the Company of any class ranking as to dividends prior to the Preferred Stock, (b) the gross income available for payment of interest charges for any period of twelve (12) consecutive calendar months within the fifteen (15) calendar months immediately preceding the calendar month within which such additional shares of stock are to be issued, shall have been at least one and one-half (1 1/2) times the sum of (1) the aggregate annual interest charges on all indebtedness of the Company to be outstanding, and (2) the aggregate annual dividend requirements upon the entire amount to be outstanding of Preferred Stock and of any stocks of the Company of any class ranking as to dividends prior to the Preferred Stock, and (c) the aggregate of the capital of the Company applicable to all Junior Stock, plus the capital surplus and earned surplus of the Company and plus premiums on capital stock of the Company of any class, shall not be less than the aggregate amount payable upon involuntary liquidation, dissolution or winding up of the Company to the holders of all shares of all classes of Preferred Stock to be outstanding. In the foregoing computations, there shall be excluded (a) all indebtedness and all shares of Preferred Stock to be retired in connection with the issue of such additional shares, and (b) all interest charges on all indebtedness and dividends requirements on all shares of stock to be retired in connection with the issue of such additional shares. The net earnings of any property which has been acquired by the Company during or after the period for which income is computed, or of any property which is to be acquired in connection with the issuance of any such additional shares, if capable of being separately determined or estimated, may be included on a pro forma basis in the foregoing computations; and if within or after the period for which income is computed, any substantial portion of the properties of the Company shall have been disposed of, the net earnings of such property, if capable of being separately determined or estimated, shall be excluded in the foregoing computations. (B) So long as any Preferred Stock is outstanding, the Company shall not, without the consent (given in writing without a meeting or by vote in person or by proxy at a meeting called for the purpose) of the holders of a majority of the aggregate number of shares of all classes of Preferred Stock entitled to vote then outstanding-- (i) Issue, create or assume (including as an issuance any extension or renewal) any unsecured securities (notes, debentures or other securities representing unsecured indebtedness other than indebtedness maturing not more than one year from the date of issuance, creation or assumption of 7 any such unsecured securities) for any purpose, except for the purpose of refunding outstanding unsecured securities of such character or effecting the retirement, by redemption or otherwise, of outstanding shares of the Preferred Stock, or of a class of stock ranking prior thereto, if immediately after such issue, creation or assumption the total principal amount of all unsecured securities issued, created or assumed and then outstanding, including the unsecured securities then to be issued but excluding indebtedness maturing not more than one year from the date of creation, would exceed ten percent (10%) of the aggregate of (i) the total principal amount of all bonds or other securities representing secured indebtedness issued, created or assumed by the Company and then to be outstanding, and (ii) the total of the capital and surplus (including premiums on capital stock) of the Company as then to be stated on its books; provided, that any unsecured securities issued under any authorization of holders of Preferred Stock (and any securities issued to refund the same) shall be excluded from the computation of the amount of unsecured securities which may be issued, created or assumed within the aforesaid ten percent (10%) limitation; or (ii) Merge or consolidate with or into any other corporation or corporations unless such merger or consolidation, or the issuance and assumption of all securities to be issued or assumed in connection with any such merger or consolidation, shall have been ordered, approved or permitted by a regulatory authority of the United States of America or of the State of Georgia having jurisdiction in the premises; provided that the provisions of this clause (ii) shall not apply to a purchase or other acquisition by the Company of franchises or assets of another corporation, in any manner which does not involve a merger or consolidation; or (iii) Sell lease or otherwise dispose of (except by merger or consolidation) all or substantially all of its property to any person. No consent of the holders of any class or classes of Preferred Stock hereinabove set forth as specified in paragraphs (A) or (B) shall be required, if provision is made for the redemption of all shares of such class or classes of Preferred Stock at the time outstanding, or provision is made that the proposed action shall not be effective unless provision is made for the purchase, redemption or other retirement of all shares of such class or classes of Preferred Stock at the time outstanding. SECTION 4.05. Voting Rights. The holders of Preferred Stock shall not be entitled to vote except: (a) as provided above under Section 4.04, but in the case of any class of Preferred Stock other than the 4 1/2% Preferred Stock and the 4.60% Preferred Stock, only to the extent, if any, specified in any amendment or amendments to the Charter establishing the terms thereof; (b) as may from time to time be required by laws of Georgia; and (c) voting separately as a class for the election of the smallest number of directors necessary to constitute a majority of the Board of Directors whenever and as often as dividends payable on any Preferred Stock outstanding shall be in arrears in an amount equivalent to or exceeding four (4) quarterly dividends, which right may be exercised at any annual meeting and at any special meeting of stockholders called for the purpose of electing Directors, until such time as arrears in dividends on the Preferred Stock and the current dividend thereon shall have been paid or declared and set apart for payment, whereupon all voting rights given by this clause (c) shall be divested from the Preferred Stock (subject, however, to being at any time or from time to time similarly revived and divested). So long as holders of the Preferred Stock shall have the right to elect directors under the terms of the foregoing clause (c), the holders of the Common Stock voting separately as a class shall, subject to the voting rights of any other class of Junior Stock, be entitled to elect the remaining directors. Whenever, under the provisions of the foregoing clause (c) the right of holders of the Preferred Stock, if any, to elect directors shall accrue or shall terminate, the Board of Directors shall, within ten (10) days after delivery to the Company as its principal office of a request or requests to such effect signed by the holders of at least five percent (5%) of the outstanding shares of any class of stock entitled to vote, call a special meeting in accordance with the By-laws of the Company of the holders of the class 8 or classes of stock of the Company entitled to vote, to be held within forty (40) days from the delivery of such requests, for the purpose of electing a full Board of Directors to serve until the next annual meeting and until their respective successors shall be elected and shall qualify; provided, however, that if the annual meeting of stockholders for the election of directors is to be held within sixty (60) days after the delivery of such request, the Board of Directors need not act thereon. If, at any special meeting called as aforesaid or at any annual meeting of stockholders after accrual or termination of the right of holders of the Preferred Stock to elect directors as in the foregoing clause (c) provided, any director shall not be reelected, his term of office shall end upon the election and qualification of his successor, notwithstanding that the term for which such director was originally elected shall not at the time have expired. If, during any interval between annual meetings of stockholder for the election of directors while holders of the Preferred Stock shall be entitled to elect any director pursuant to the foregoing clause (c), the number of directors in office who have been elected by the holders of the Preferred Stock (voting as a class) or by the holders of the Common Stock (voting as a class), as the case may be, shall become less than the total number of directors subject to election by holders of shares of such class, whether by reason of the resignation, death or removal of any director or directors, or an increase in the total number of directors, the vacancy or vacancies shall be filled (1) by the remaining directors or director, if any, then in office who either were or was elected by the votes of shares of such class or succeeded to a vacancy originally filled by the votes of shares of such class or (2) if there is no such director remaining in office, at a special meeting of holders of shares of such class called by the President of the Company to be held within forty (40) days after there shall have been delivered to the Company at its principal office a request or requests signed by the holders of at least five percent (5%) of the outstanding shares of such class; provided, however, that such request need not be so acted upon if delivered less than sixty (60) days before the date fixed for the annual meeting of stockholders for the election of directors. Any director may be removed from office for cause by vote of the holders of a majority of the shares of the class of stock which voted for his election (or for his predecessor in case such director was elected by directors) or by vote of a majority of the entire Board of Directors but in the latter case the majority vote of the entire Board so voting must include the votes of a majority of the other Directors then in office who were either elected by the votes of shares of such class or succeeded to a vacancy originally filed by the votes of shares of such class. A special meeting of holders of shares of any class may be called by a majority vote of the Board of Directors or by the President for the purpose of removing a director in accordance with the provisions of the preceding sentence, and shall be called to be held within forty (40) days after there shall have been delivered to the Company at its principal office a request or requests to such effect signed by holders of at least five percent (5%) of the outstanding shares of the class entitled to vote with respect to the removal of any such director; provided, however, that such request need not be so acted upon if delivered less than sixty (60) days before the date fixed for the annual meeting of stockholders for the election of directors. SECTION 4.06. Dividend Restrictions on Junior Stock. So long as any shares of any class of Preferred Stock shall be outstanding, the Company shall not declare or pay any dividends on any shares of Junior Stock (other than dividends payable in shares of Junior Stock) or make any other distribution on any shares of Junior Stock or make any expenditures for the purchase, redemption or other retirement for a consideration of shares of Junior Stock (other than in exchange for or from the proceeds of the sale of other shares of Junior Stock and other than Junior Stock required to be redeemed or retired for any sinking or purchase fund for any class of Junior Stock) except from net income of the Company available for dividends on Junior Stock accumulated subsequent to September 30, 1950, plus the sum of $100,000, or if after giving effect to such declaration, payment, distribution or expenditure the aggregate of the capital of the Company applicable to all Junior Stock outstanding, plus the earned surplus and capital surplus of the Company and plus premiums on capital stock of the Company of any class, is or would thereby become less than the greater of $5,000,000 or the aggregate amount payable upon involuntary liquidation, dissolution or winding up of the Company to the holders of all shares of all classes of Preferred Stock at the time outstanding. 9 SECTION 5 The Common Stock Section 5.01. Dividends. Out of any assets of the Company available for dividends remaining after full cumulative dividends upon all shares of all classes of Preferred Stock, and of all classes of Junior Stock (if any) ranking as to dividends ahead of the Common Stock, then outstanding, shall have been paid, or declared and a sum sufficient for the payment thereof set apart, for all past quarterly dividend periods, and after or concurrently with making payment of or provision for full dividends on the Preferred Stock and on any Junior Stock ranking as to dividends ahead of the Common Stock then outstanding for the current quarterly dividend period, and not otherwise, dividends may, subject to Sections 3.01(a), 3.02(a) and 4.06, be paid upon the Common Stock to the exclusion of the Preferred Stock or of any class of Junior Stock (other than Common Stock), (any such dividend and/or payment being hereinafter called "Common Stock Dividend"), within the following limitations: (a) No Common Stock Dividend shall be declared in an amount which, together with all other Common Stock Dividends declared in the year ending on (and including) the date of the declaration of such Common Stock Dividend, would in the aggregate exceed (1) fifty percent (50%) of the net income of the Company available for dividends on the Common Stock for any period of twelve (12) consecutive calendar months within the fifteen (15) calendar months immediately preceding the declaration of such Common Stock Dividend, if at the end of such twelve (12) months' period the ratio (herein referred to as the "Capitalization Ratio") of the Common Stock Equity of the Company to the Capitalization, after adjustment, in each case, of the surplus accounts to reflect payment of such Common Stock Dividend, would be less than twenty percent (20%); or (2) seventy-five percent (75%) of the net income of the Company available for dividends on the Common Stock for any such period of twelve (12) consecutive calander months, if the Capitalization Ratio at the end of such period, after such adjustment, would be twenty percent (20%) or more, but less than twenty- five percent (25%); (b) If the Capitalization Ratio at the end of such twelve (12) months' period, adjusted as provided in clause (a), would be in excess of twenty- five percent (25%), no Common Stock Dividend shall be declared which would reduce the Capitalization Ratio to less than twenty-five percent (25%); provided, however, that even though such Common Stock Dividend would reduce the Capitalization Ratio to less than 25%, such Common Stock Dividend may be declared to the extent that the same, together with all Common Stock Dividends declared within the year ending with (and including) the date of declaration of such Common Stock Dividend, does not exceed the applicable percentage of the net income of the Company available for dividends on the Common Stock for any twelve (12) consecutive calendar months within the fifteen (15) calendar months immediately preceding such Common Stock Dividends permitted under (a) above. Section 5.02. Distribution of Assets. In the event of any liquidation, dissolution or winding up of the Company, or any reduction or decrease of its capital resulting in a distribution of assets to the holders of the Common Stock, after there shall have been paid to or set aside for the holders of Preferred Stock and of any Junior Stock outstanding (other than Common Stock) the full preferential amounts to which they are respectively entitled, the holders of the common Stock shall be entitled to receive, pro rata, all of the remaining assets of the corporation available for distribution to its stockholders. The Board of Directors by vote of a majority of the members thereof, may distribute in kind to the holders of the Common Stock such remaining assets of the Company or may sell, transfer or otherwise dispose of all or any of the remaining property and assets of the Company to any other corporation or person and receive payment therefor wholly or partly in cash and/or in stock and/or in obligations of such corporation and may sell all or any part of the consideration received therefor or distribute the same and/or the balance thereof in kind to the holders of the Common Stock. 10 SECTION 6 Miscellaneous Section 6.01. Voting Provisions. At any meeting of the holders of the Preferred Stock which shall be called for any purpose, pursuant to Section 4, the presence in person or by proxy of the holders of the majority of the issued and outstanding shares of all classes of Preferred Stock (or, in the case of a meeting of stockholders of less than all classes of Preferred Stock, a majority of the issued and outstanding shares of all such classes of Preferred Stock entitled to vote at such meeting) shall be necessary for a quorum, provided, however, that if such quorum shall not be obtained at such meeting or at any adjournment thereof within thirty (30) days from the date of the meeting as originally called, then the presence in person or by proxy of the holders of one-third of the issued and outstanding shares of the classes of Preferred Stock entitled to vote at the meeting shall be sufficient for a quorum. At all elections of Directors each holder of any class of stock entitled to vote shall be entitled to as many votes as shall equal (1) the number of votes such holder would have (except for the provisions of this paragraph) multiplied by (2) the number of Directors to be elected by the holders of stock of such class, and may cast all of such votes for a single director or may distribute them among the number to be voted for, or any two or more of them as such holder may see fit. Each holder of Preferred Stock, as to all matters in respect of which such stock has voting power, shall be entitled to one vote for each share of stock standing in his name; provided that if there shall be several classes of Preferred Stock outstanding which have different par values per share, for the purposes of all votes or consents contemplated in Section 4 the class having the lowest par value per share shall be entitled to one vote per share and each other class shall be entitled to a number of votes per share so that the number of votes for each share of any such class bears the same proportion to the par value per share thereof. Subject to the voting rights expressly conferred upon the Preferred Stock by Section 4 and the voting rights of any other class of Junior Stock outstanding, the holders of Common Stock shall exclusively possess full voting rights for the election of Directors and for all other purposes and each holder shall be entitled to one vote for each share thereof standing in his name. Except as herein expressly provided, or mandatorily provided by the laws of Georgia, a quorum of any class or classes of stock entitled to vote as a class at any meeting shall consist of a majority of such class or classes, as the case may be, and a plurality vote of such quorum shall govern. No holders of any class of dtock shall be entitled to receive notice of any meetings of holders of any other class of stock at which they are not entitled to vote. Section 6.02. Reserves. The Board of Directors shall have authority from time to time to set apart out of any assets of the Company otherwise available for dividends a reserve or reserves as working capital or for any other purpose or purposes, and to reduce, abolish or add to any such reserve or reserves from time to time as said board may deem to be in the interests of the Company; and said Board shall likewise have power to determine in its discretion what part of the assets of the Company available for dividends in excess of such reserve or reserves shall be declared as dividends and paid to the stockholders of the Company. Section 6.03. Preemptive Rights. No holder of stock, or of rights or options to purchase stock, of the Company of any class, as such, shall have any preemptive or preferential right to purchase or subscribe to any shares of stock, or rights or options to purchase stock, of the Company of any class,whether now or hereafter authorized, or any obligations convertible into stock, or into rights or options to purchase stock of the Company (including any notes, bonds or other evidences of indebtedness to which are attached or with which are issued warrants or other rights to purchase any stock of the Company), issued or sold, or any right of subscription to any thereof other than such, if any, as the Board of Directors in its discretion may from time to time fix; and shares of stock, rights or options to purchase stock, or obligations convertible into stock or into rights or options to purchase stock, of the Company 11 may from time to time be issued and sold to such parties, whether stockholders or others, as the Board of Directors in its sole discretion may determine, and in the event the Board of Directors determines to issue or sell any thereof to stockholders at any time, the same may be offered to holders of any class or classes of stock exclusively or to the holders of all classes of stock, and, if offered to more than one class of stock, in such proportions as between said classes of stock, as the Board of Directors in its discretion may determine; provided, however, that if the Board of Directors shall at any time determine to offer for cash any shares of Common Stock, whether now or hereafter authorized, or to offer for cash any securities convertible into Common Stock of the Company other than by a public offering of such shares or securities to or through underwriters or investment bankers who agree to make a public offering of such shares or securities, the right to purchase the same shall first be offered to the holders of record, on a date to be fixed by the Board of Directors for such purpose, of the outstanding shares of Common Stock, pro rata upon terms not less favorable to such holders than those upon which the Board of Directors shall authorize the issue of such shares or securities to others than holders of record of the Common Stock; and, provided further, that the time within which the holders of record of the Common Stock may exercise such rights shall be determined by the Board of Directors but shall in no event be less than twenty (20) days after the date of mailing of notice that such rights are available. No alteration, amendment or repeal of any of the provisions of this Section 6.03 shall be effected without the written consent or the affirmative vote of the holders of at least two-thirds of the issued and outstanding shares of Common Stock, such vote being taken at a meeting called for the purpose. SECTION 6.04. Duplicate Certificates. No holder of shares of any class of stock shall have any right to the issue of a duplicate or other certificate for any of such shares to replace a certificate or certificates represented to have been lost, stolen or destroyed unless there shall first be delivered to the Company a bond of indemnity in such form, for such amount and with such surety or sureties as the Board of Directors may approve. SECTION 6.05. Scrip Certificates. No certificates for fractional shares of any class of stock shall be issued. In lieu thereof scrip certificates may be issued by the Company representing rights to such fractional shares and exchangeable, when accompanied by other certificates in such amount as to represent in the aggregate one or more full shares of stock, for certificates for full shares of stock. The holders of scrip certificates will not be entitled to any rights as stockholders of the Company until the scrip certificates are so exchanged. Such scrip certificates may, at the election of the Board of Directors of the Company, be in bearer form, shall be non-dividend bearing, non-voting and shall have such expiration date as the Board of Directors of the Company shall determine at the time of the authorization or issuance of such scrip certificates. SECTION 6.06. Amendments of Charter. Unless otherwise required by law and subject to the rights of any class of stock hereafter created, the Company's Charter may, (a) without any vote or consent of holders of Preferred Stock, be amended to increase the maximum number of shares of Preferred Stock and to create and authorize a number of shares of one or more different classes of Preferred Stock with terms and provisions permitted by and consistent with Section 2.01; or (b) without any vote or consent of holders of Preferred Stock except as provided in Section 4.04, be amended in any other respect. To make and effect any Charter amendment, such amendment shall be adopted by the vote of the holders of a two-thirds majority of the Common Stock of the Company or by the holders of such lesser number of shares of Common Stock as may at the time be permitted by law so to amend the Charter. 12 The undersigned, Jas. H. Motz, Secretary of Atlanta Gas Light Company, certifies that the foregoing resolution of the Stockholders of Atlanta Gas Light Company to which this certificate is attached was adopted at a special meeting of the Stockholders of Atlanta Gas Light Company held on the 25th day of November, 1952, the said special meeting of the Stockholders having been called for the purpose of considering the foregoing resolution. At said special meeting of the Stockholders the holders of the Common Stock of Atlanta Gas Light Company voted as a class and more than two-thirds (2/3) of the Common Stock of Atlanta Gas Light Company was voted favorably for said amendment and at said special meeting of the Stockholders the holders of the Preferred Stock of Atlanta Gas Light Company voted as a separate class and more than two-thirds (2/3) of the Preferred Stock of Atlanta Gas Light Company was voted favorably for said amendment. The said resolution to amend the charter of Atlanta Gas Light Company was adopted by the vote of the holders of more than a two-thirds (2/3) majority of the Common Stock of Atlanta Gas Light Company and by the holders of more than a two-thirds (2/3) majority of the Preferred Stock of Atlanta Gas Light Company. IN WITNESS WHEREOF, the undersigned, as Secretary of Atlanta Gas Light Company, has hereunto set his hand and affixed the seal of Atlanta Gas Light Company, this 25th day of November, 1952. (Seal) /s/ Jas. H. Motz ---------------------------------------------------- Jas. H. Motz, Secretary of Atlanta Gas Light Company The foregoing petition of Atlanta Gas Light Company to amend its charter was presented to this Court and examined. It appearing to the Court that said petition is in accord with the laws of the State of Georgia made and provided in such causes, that the Common Stockholders of Atlanta Gas Light Company adopted the resolution attached to the petition as Exhibit "A" to authorize this amendment to its charter at a special meeting of the Stockholders called for said purposes, notice of which was duly and legally given, by a favorable vote for and consent to said amendment by the vote of the holders of more than two-thirds (2/3) if the Common Stock of Atlanta Gas Light Company and that the Preferred Stockholders of Atlanta Gas Light Company adopted the resolution attached to the petition as Exhibit "A" to authorize this amendment to its charter at a special meeting of the Stockholders called for said purpose, notice of which was duly and legally given, by favorable vote for consent to said amendment by the vote of the holders of more than two-thirds (2/3) of the Preferred Stock of Atlanta Gas Light Company have been done and exist and said resolution is found by the Court to be lawful. NOW, THEREFORE, it is considered, ordered and adjudged that the charter of Atlanta Gas Light Company is amended as set forth in the foregoing petition and the resolution of the Stockholders of Atlanta Gas Light Company attached thereto marked Exhibit "A". This 25th day of November, 1952. /s/ Walter C. Hendrix ...................................... Judge Superior Court, Atlanta Circuit. FILED IN OFFICE, THIS THE 25 day of Nov 1952 ...... ............. D.W. Brown. ......................... State of Georgia ) ) ss.: County of Fulton ) I, J. W. Simmons, Clerk of the Superior Court of Fulton County, Georgia, do hereby certify that the within and foregoing is a true and correct copy of petition of Atlanta Gas Light Company for Charter amendment and the order of Court thereon allowing same, all of which appears of file and record in this office. Witness my hand and seal of office this the 25 day of Nov. 1952. (SEAL) J. W. Simmons Clerk of Superior Court, Fulton County, Georgia 15 STATE OF GEORGIA OFFICE OF SECRETARY OF STATE I, BEN W. FORTSON, JR., SECRETARY OF STATE OF THE STATE OF GEORGIA, DO HEREBY CERTIFY, THAT the Charter of "Atlanta Gas Light Company", was on the 25th day of November, 1952, duly amended under the laws of the State of Georgia by the Superior Court of Fulton County, in accordance with the certified copy hereto attached, and that a certified copy has been duly filed in the office of the Secretary of State and the fees therefor paid, as prescribed by law. In Testimony Whereof, I have hereunto set my hand and affixed the seal of my office, at the Capital, in the City of Atlanta, this 25th day of November, in the year of our Lord One Thousand Nine Hundred and Fifty- two and of the Independence of the United States of America the One Hundred and Seventy-seventh. BEN W. FORTSON, JR. Secretary of State, Ex-Officio Corporation Commissioner of the State of Georgia. 16 No. 26153 TO THE HONORABLE THE SUPERIOR COURT OF FULTON COUNTY, GEORGIA This the petition of Atlanta Gas Light Company show respectfully unto the Honorable the Superior Court of Fulton County, Georgia as follows: 1. Atlanta Gas Light Company is a corporation organized and existing under the laws of the State of Georgia with its principal office in Fulton County, Georgia. Its charter was granted by an Act of the General Assembly of the State of Georgia approved February 16, 1856 (Georgia Laws 1855-1856, pages 420 et seq.). This charter was amended by an Act of the General Assembly approved October 14, 1889, Georgia Laws 1888-1889, pages 1398 et seq.). Thereafter the charter of Atlanta Gas Light Company was amended by the Superior Court of Fulton County, Georgia, by its orders dated respectively December 17, 1919, April 20, 1929, October 22, 1929, September 13, 1935, October 15, 1943, November 22, 1943, October 17, 1947, August 14, 1951 and November 25, 1952. 2. At a meeting of the stockholders of Atlanta Gas Light Company held on the 7th day of December, 1955, notice of which meeting and the purpose thereof was duly and legally given, resolutions were adopted in each case by the vote of the holders of more than two-thirds (2/3) of the Common Stock of Atlanta Gas Light Company entitled to vote thereon that the charter of Atlanta Gas Light Company be amended in the manner set forth in said resolutions, a duly certified copy of which is attached to this petition marked Exhibit "A" and made a part of this petition and paragraph. WHEREFORE, petitioner prays that its charter be amended in the manner set forth in said resolution and that an order of this Honorable Court be entered granting the prayers of this petition and so amending petitioner's charter. Moise, Post & Gardner --------------------------------------- Attorneys for Atlanta Gas Light Company -2- EXHIBIT A RESOLVED, by the Common Stockholders of Atlanta Gas Light Company, at a meeting duly and legally called, assembled and held, that the Charter, as amended, of Atlanta Gas Light Company be further amended by eliminating therefrom all of the provisions of Section 1.01, as amended, and inserting in lieu thereof a new Section 1.01 to read as follows: "Section 1.01. The maximum number of shares of Capital Stock of Atlanta Gas Light Company (hereinafter referred to as the "Company") authorized to be outstanding at any one time is as follows: 1,000,000 shares of Common Stock of the par value of $10 per share, 20,000 shares of 41/2% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "41/2% Preferred Stock"), 30,000 shares of 4.60% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.60% Preferred Stock"), and 30,000 shares of the 4.44% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.44% Preferred Stock"). The preferences, voting powers, restrictions, limitations and qualifications of the different classes of Capital Stock shall be as follows: " RESOLVED, that the Charter, as amended, of Atlanta Gas Light Company be further amended by the addition of a new Section under Section 3 to be designated as Section 3.03 and to read as follows: "Section 3.03. 4.44% Preferred Stock. (a) Dividends. Out of any assets of the Company available for dividends, the holders of the 4.44% Preferred Stock shall be entitled to receive, but only when and as declared by the Board of Directors, dividends at the rate of 4.44% per annum, and no more. Dividends declared shall be payable quarterly on March 1, June 1, September 1 and December 1 in each year, to Stockholders of record on a date not more than 30 days prior to such payment date, as may be determined by the Board of Directors of the Company. Dividends on the 4.44% Preferred Stock shall be cumulative from and including the first day of the quarterly dividend period in which such shares shall be issued. So long as any shares of 4.44% Preferred Stock are outstanding, no dividends shall be declared or paid upon or set apart for the shares of any class of Junior Stock, nor any sums applied to the purchase, redemption or other retirement of any class of Junior Stock, unless full dividends on all shares of the 4.44% Preferred Stock and of any other class of Preferred Stock outstanding for all past quarterly dividend periods shall have been paid or declared and a sum sufficient for the payment thereof set apart and the full dividend for the then current quarterly dividend period shall have been or concurrently shall be paid or declared and set apart. The amount of any deficiency for the past dividend periods may be paid or declared and set apart at any time without reference to any quarterly dividend payment date. Unpaid accrued dividends on the 4.44% Preferred Stock shall not bear interest. (b) Liquidation. In the event of any liquidation, dissolution or winding up of the Company or reduction or decrease of its capital resulting in a distribution of assets to the holders of any class of Junior Stock, the holders of 4.44% Preferred Stock shall be entitled to receive the amounts prescribed in Section 4.02. (c) Redemption Provisions. The Company may at its option expressed by resolution of its Board of Directors redeem the 4.44% Preferred Stock in the manner provided in Section 4.03 (A) at any time or from time to time at $100 per share plus a premium of: $6.75 per share if redeemed prior to December 1, 1960; $5.75 per share if redeemed on December 1, 1960 or thereafter and prior to December 1, 1965; $4.75 per share if redeemed on December 1, 1965 or thereafter and prior to December 1, 1970; and $4.25 per share if redeemed on or after December 1, 1970; together in each case with accrued dividends. (d) Purchase Fund. The 4.44% Preferred Stock shall be entitled to the benefits of a Purchase Fund as follows: The Company (unless prevented from so doing by any applicable restriction of law or contained in the Charter of the Company, as amended, or in any agreement now existing relating to indebtedness of the Company) will each year, beginning in 1957, so long as any shares of the 4.44% Preferred Stock are outstanding, make an offer (hereinafter called a "Purchase Offer") to the holders of shares of the 4.44% Preferred Stock to purchase on December 1 in each such year 900 shares (less the number of shares, if any, purchased for surrender in accordance with the provisions of the following paragraph) of said 4.44% Preferred Stock at prices up to but not exceeding $102.25 per share. The obligation of the Company to make annually the above-mentioned Purchase Offer and to purchase shares of the 4.44% Preferred Stock of the Company tendered for sale in accordance with the terms thereof, is hereinafter referred to as the "Purchase Fund Obligation." In addition to or in lieu of making a Purchase Offer, a Purchase Fund Obligation may also be satisfied in whole or in part by the purchase by the Company, if obtainable, at not exceeding $102.25 per share and accrued dividends to the date of purchase and the surrender for cancellation to the Transfer Agent for the 4.44% Preferred Stock on or before December 1 in each such year of certificates for not more than 900 shares of said 4.44% Preferred Stock. Beginning on or prior to October 15, 1957 and on or prior to October 15 in each year thereafter, the Company shall furnish the Transfer Agent for the 4.44% Preferred Stock with a certificate signed by the President, or a Vice President, or the Treasurer, or an Assistant Treasurer of the Company stating (a) the number of shares of the 4.44% Preferred Stock, if any, purchased by the Company and to be surrendered on or prior to December 1 in such year, and that said shares had been purchased by the Company at prices not exceeding $102.25 per share plus accrued dividends to the date of purchase and (b) that the Company will make an offer to the holders of its outstanding 4.44% Preferred Stock to purchase a number of shares of the 4.44% Preferred Stock, if any, sufficient to satisfy the Purchase Fund Obligation (or the balance thereof as the case may be) for such year. If the certificate filed in any such year shall state that a Purchase Offer is to be made in such year the Transfer Agent for the 4.44% Preferred Stock shall on or prior to November 1 of such year mail to the holders of record of the 4.44% Preferred Stock at the close of business on the day preceding such mailing, a notice, in the name of the Company, that the Company will on December 1 of such year accept offers to sell the number of shares required to satisfy the Purchase Fund Obligation then due at prices not exceeding $102.25 per share. The Company may require, and in such event said notice shall specify, that each offer to sell shares of the 4.44% Preferred Stock shall be accompanied by the certificate or certificates for the shares so offered, together with evidence satisfactory to the Transfer Agent of the right of the holder of such shares to so sell the same to the Company. In any year in which a Purchase Offer is made, the Transfer Agent shall on December 1 of such year, on behalf of the Company, accept offers to sell shares of the 4.44% Preferred Stock received by it up to the full number of shares covered by the Purchase Offer upon such basis as will result in the lowest aggregate cost to the Company. The Transfer Agent shall accept offers made at the same price on a pro rata basis, as nearly as practicable. In the event any person whose offer is accepted shall thereafter fail to make good such offer said Transfer Agent shall to the extent possible accept in lieu thereof the best offer or offers, if any, theretofore received and not therefore accepted. On or prior to December 1 in each year in which a Purchase Offer shall have been made, the Company shall surrender to the Transfer Agent for the 4.44% Preferred Stock, for cancellation, certificates for the number of shares of 4.44% Preferred Stock, if any, specified in the certificate for such year as having been purchased by the Company for surrender to the Transfer Agent and deposit with said Transfer Agent cash sufficient to purchase shares of 4.44% Preferred Stock, if any, accepted for purchase pursuant to the Purchase Offer made in such year and thereafter shall deposit additional funds required to carry out the Purchase Offer for such year. The Transfer Agent shall, on or before the next succeeding January 2, return to the Company any funds deposited with it and not used or required to purchase shares of the 4.44% Preferred Stock pursuant to the Purchase Offer for such year. The Purchase Fund Obligation in any year shall be deemed to be fully satisfied if the Company shall have complied with the provisions of this Section 3.03 (d) notwithstanding that the total number of shares purchased by it shall be less than the total number of shares covered by the Company's Purchase Offer for that year because insufficient offers to sell were received by it. Purchase Fund Obligations shall be cumulative to the extent that if in any year the Company fails to make and carry out a Purchase Offer, if and to the extent a Purchase Offer is required to be made in such year, such failure shall be made good in the manner hereinafter set forth before any dividends shall be declared, paid upon, or set apart for any shares of Junior Stock or any sums applied to the purchase, redemption or other retirement of Junior Stock. Any such failure may be made good at any time by the making and carrying out of a special offer (hereinafter called a "Special Purchase Offer") to purchase at a price of $102.25 per share plus accrued dividends, if any, to the date of purchase, the number of shares of 4.44% Preferred Stock as to which failure exists and, to that end, the Company shall file with the Transfer Agent a certificate signed by the President or a Vice President or the Treasurer or an Assistant Treasurer of the Company, specifying a date, not less than 45 days after the date of filing of such certificate, on which offers to sell shares of the 4.44% Preferred Stock will be accepted. Special Purchase Offers shall otherwise be made and carried out on not less than 30 days notice and in the same manner as hereinabove provided for Purchase Offers to be carried out on December 1. Shares of the 4.44% Preferred Stock purchased pursuant to any Purchase Offer, or Special Purchase Offer, or surrendered in whole or partial satisfaction of a Purchase Fund Obligation in any year, shall be cancelled and shall not be reissued as shares of said class. (e) Voting Powers and Other Rights. The holders of the 4.44% Preferred Stock shall have such voting powers and other rights and be subject to such restrictions and qualifications as are set forth in Sections 4 to 6 hereof, inclusive." The undersigned, JAS. H. MOTZ, Secretary of Atlanta Gas Light Company, ------------ certifies that the foregoing resolutions of the stockholders of Atlanta Gas Light Company to which this certificate is attached were adopted at a special meeting of the stockholders of Atlanta Gas Light Company held on the 7th day of December, 1955, the said special meeting of the stockholders having been called for the purpose of considering the foregoing resolutions to amend the Charter of Atlanta Gas Light Company. At said special meeting of stockholders more than two-thirds (2/3) of the Common Stock of Atlanta Gas Light Company was voted favorably for said resolutions. IN WITNESS WHEREOF, the undersigned, as Secretary of Atlanta Gas Light Company, has hereunto set his hand and affixed the seal of Atlanta Gas Light Company, this 7th day of December, 1955. /s/ Jas. H. Motz (SEAL) ------------------------------------------ Secretary of Atlanta Gas Light Company The foregoing petition of Atlanta Gas Light Company to amend its charter was presented to this court and examined. It appearing to the court that said petition is in accord with the laws of the State of Georgia made and provided in such causes, that the Common Stockholders of Atlanta Gas Light Company adopted the resolutions attached to the petition as Exhibit "A" to authorize this amendment to its charter at a special meeting of the stockholders called for said purpose, notice of which was duly and legally given, by a favorable vote for and consent to said amendment by the vote of the holders of more than two-thirds (2/3) of the Common Stock of Atlanta Gas Light Company and that all acts and things necessary or proper to effect such amendment to the charter of Atlanta Gas Light Company have been done and exist and said resolutions are found by the court to be lawful. NOW, THEREFORE, it is considered, ordered and adjudged that the charter of Atlanta Gas Light Company is amended as set forth in the foregoing petition and the resolutions of the stockholders of Atlanta Gas Light Company attached thereto marked Exhibit "A". This 7th day of December, 1955. Geo. P. Whitman Sr. -------------------------------------- Judge Superior Court, Atlanta Circuit. Filed in office this the 7th day of Dec. 1955. N. A. Lanford, D. Clk TO THE HONORABLE THE SUPERIOR COURT OF FULTON COUNTY, GEORGIA This the petition of ATLANTA GAS LIGHT COMPANY shows respectfully ------------------------- unto the Honorable the Superior Court of Fulton County, Georgia, as follows: 1. Atlanta Gas Light Company is a corporation organized and existing under the laws of the State of Georgia with its principal office in Fulton County, Georgia. Its charter was granted by an Act of the General Assembly of the State of Georgia approved February 16, 1856 (Georgia Laws 1855-1856, pages 420 et seq.). This charter was amended by an Act of the General Assembly approved October 14, 1889 (Georgia Laws 1888-1889, pages 1398 et seq.). Thereafter the charter of Atlanta Gas Light Company was amended by the Superior Court of Fulton County, Georgia, by its orders dated respectively December 17, 1919, April 20, 1929, October 22, 1929, September 13, 1935, October 15, 1943, November 22, 1943, October 17, 1947, August 14, 1951, November 25, 1952, and December 7, 1955. 2. At the regular annual meeting of the stockholders of Atlanta Gas Light Company held on the 22nd day of January, 1957, notice of which meeting and the purpose thereof was duly and legally given, a resolution was adopted by the vote of the holders of more than two-thirds (2/3) of the Common Stock of Atlanta Gas Light Company entitled to vote thereon that the charter of Atlanta Gas Light Company be amended in the manner set forth in said resolution, a duly certified copy of which is attached to this petition marked Exhibit "A" and made a part of this petition and paragraph. More than two-thirds (2/3) of the Common Stock of Atlanta Gas Light Company was voted in favor of each and every one of the four amendments to the charter of Atlanta Gas Light Company referred to in said resolution. WHEREFORE, petitioner prays that its charter be amended in the manner set forth in said resolution and that an order of this Honorable Court be entered granting the prayers of this petition and so amending petitioner's charter. /s/ Moise Post & Gardner ----------------------------------------- ATTORNEYS FOR ATLANTA GAS LIGHT COMPANY EXHIBIT "A" ----------- I RESOLVED, by the Common Stockholders of Atlanta Gas Light Company, at a meeting duly and legally called, assembled and held, that the Charter, as amended, of Atlanta Gas Light Company be further amended by eliminating therefrom all of the provisions of Section 1.01 of the amendment to the Charter granted by order of the Superior Court of Fulton County dated November 25, 1952, as heretofore amended, and inserting in lieu thereof a new Section 1.01 to read as follows: "Section 1.01. The maximum number of shares of Capital Stock of Atlanta Gas Light Company (hereinafter referred to as the "Company"), authorized to be outstanding at any one time is a follows: "2,000,000 shares of Common Stock of the par value of $10 per share, "20,000 shares of 4-1/2% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4-1/2% Preferred Stock"), "30,000 shares of 4.60% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.60% Preferred Stock"), and "30,000 shares of 4.44% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.44% Preferred Stock"). "The preferences, voting powers, restrictions, limitations and qualifications of the different classes of Capital Stock shall be as follows:" II RESOLVED, that the Charter, as amended, of Atlanta Gas Light Company be further amended by eliminating from the first sentences of Section 6.03 of the amendment to the Charter granted by order of the Superior Court of Fulton County dated November 25, 1952, the word and figures "twenty (20)", and inserting in lieu thereof the word and figures "fourteen (14)". III RESOLVED, that without depriving Atlanta Gas Light Company of full power and authority to issue bonds or other evidences of indebtedness and to secure the same by mortgage upon any or all or its property, real and personal, rights, privileges and franchises, which power said Company shall have, the Charter of Atlanta Gas Light Company, as amended, shall be further amended by striking therefrom the following: (a) The last sentence of Section II of the Act of the General Assembly of the State of Georgia approved October 14, 1889, amending the Charter of Atlanta Gas Light Company, which sentence reads as follows: "Such bonds and mortgage shall be executed and acknowledged by such officers of the Company as may be designated for the purpose by the Board of Directors, but the issue of said bonds and the execution of such mortgage or mortgages shall, in every case, be first authorized and directed at a meeting of the stockholders duly called for the purpose." (b) That part of paragraph 4 of the petition of Atlanta Gas Light Company to amend its Charter filed in the Superior Court of Fulton County November 17,1919, which part to be so stricken reads as follows: "That said corporation in addition shall have full power and authority to issue bonds or other evidences of indebtedness, and to secure the same by mortgage upon any or all of its property, real and personal, rights, privileges and franchises, and to such amount as it may be necessary whenever duly authorized by the stockholder or petitioner; "That it further have express power and authority to either lease or mortgage its property, real and personal, and its franchises, and to execute conveyances appropriate to such purposes when so authorized by three-fourths vote of the entire voting stock of petitioner, or whenever any such action may be ratified by such vote." IV RESOLVED, that the Charter, as amended, of Atlanta Gas Light Company be further amended by striking therefrom 3. Section III of the Act of the General Assembly of the State of Georgia approved February 16, 1856, granting a charter to Atlanta Gas Light Company, which Section reads as follows: "3. Section III. And be it further enacted, that the capital of said corporation shall be divided into shares of twenty-five dollars each and be transferable only on the transfer book of the Company, and until such transfer is regularly made thereon, shall be held bound and liable for all debts due and owing to the corporation by the holder thereof, and by order of the Directors on conformity to such by-laws as the Stockholders may adopt in relation thereto, may be sold at public auction for the purpose of paying any debts or debts due by the individual Stockholders to the Company, they accounting to such Stockholders for any surplus of the proceeds of such sale remaining after the payment of such debt or debts. The undersigned, JAS. H. MOTZ, Secretary of Atlanta Gas Light Company, ------------ certifies that the foregoing resolution of the stockholders of Atlanta Gas Light Company, to which this certificate is attached, was adopted at the regular annual meeting of the stockholders of Atlanta Gas Light Company held on the 22nd day of January, 1957, notice of the purpose of said meeting having included a notice of the purpose to amend the charter of Atlanta Gas Light Company as set forth in said resolution. At said meeting of the stockholders the holders of more than two-thirds (2/3) of the Common Stock of Atlanta Gas Light Company voted favorably for said resolution. IN WITNESS WHEREOF, the undersigned, as Secretary of Atlanta Gas Light Company, has hereunto set his hand and affixed the seal of Atlanta Gas Light Company, this 22nd day of January, 1957. /s/ Jas. H. Motz (SEAL) ----------------------------------- Secretary, Atlanta Gas Light Company The foregoing petition of Atlanta Gas Light Company to amend its charter was presented to this Court and examined. It appearing to the Court that said petition is in accord with the laws of the State of Georgia made and provided in said causes, that the Common Stockholders of Atlanta Gas Light Company adopted the resolution attached to the petition as Exhibit "A" to authorize this amendment to its charter at the regular annual meeting of the stockholders of said corporation, notice of the purpose of the meeting to amend the charter having been duly and legally given, by a favorable vote for and consent to said amendment by the vote of the holders of more than two-thirds (2/3) of the Common Stock of Atlanta Gas Light Company in favor of each and every one of the four amendments set forth in said resolution and that all acts and things necessary or proper to effect such amendment to the charter of Atlanta Gas Light Company have been done and exist and said resolution is found by the Court to be lawful and fully authorized. NOW, THEREFORE, IT IS CONSIDERED, ORDERED AND ADJUSTED that the charter of Atlanta Gas Light Company is amended as set forth in the foregoing petition and the resolution of the stockholders of Atlanta Gas Light Company attached thereto marked Exhibit "A". This 25th day of January, 1957. Geo. P. W. Whitman, Sr. ------------------------------------------ JUDGE, SUPERIOR COURT, ATLANTA CIRCUIT 25, Jan 57 N.A. Lanford TO THE HONORABLE THE SUPERIOR COURT OF FULTON COUNTY, GEORGIA This the petition of ATLANTA GAS LIGHT COMPANY shows ------------------------- respectfully unto the Honorable the Superior Court of Fulton County, Georgia, as follows: 1. Atlanta Gas Light Company is a corporation organized and existing under the laws of the State of Georgia with its principal office in Fulton County, Georgia. Its charter was granted by an Act of the General Assembly of the State of Georgia approved February 16, 1856 (Georgia Laws 1855-1856, pages 420 et seq.). This charter was amended by an Act of the General Assembly approved October 14, 1889 (Georgia Laws 1888-1889, pages 1398 et seq.). Thereafter the charter of Atlanta Gas Light Company was amended by the Superior Court of Fulton County, Georgia, by its orders dated respectively December 17, 1919, April 20, 1929, October 22, 1929, September 13, 1935, October 15, 1943, November 22, 1943, October 17, 1947, August 14, 1951, November 25, 1952, December 7, 1955, and January 25, 1957. 2. At the regular annual meeting of the stockholders of Atlanta Gas Light Company held on the 26th day of January, 1960, notice of which meeting was duly and legally given, a resolution was adopted by a vote of the holders of more than two-thirds (2/3) of the Common Stock of Atlanta Gas Light Company entitled to vote thereon that the charter of Atlanta Gas Light Company be amended in the manner set forth in said resolution, a duly certified copy of which is attached to this petition marked Exhibit "A" and made a part of this petition and paragraph. More than two-thirds (2/3) of the Common Stock of Atlanta Gas Light Company was voted in favor of said amendment to the charter of Atlanta Gas Light Company referred to in said resolution. WHEREFORE, petitioner prays that its charter be amended in the manner set forth in said resolution and that an order of this Honorable Court be entered granting the prayers of this petition and so amending petitioner's charter. /s/ Moise, Post & Gardner --------------------------------------- ATTORNEYS FOR ATLANTA GAS LIGHT COMPANY RESOLVED, that, without in any way or manner affecting (a) the annual election of the Board of Directors of the Corporation as fixed by the By-Laws of the Corporation, (b) the voting rights of the Stockholders of the Corporation, or (c) the right of any of said Stockholders to be represented by an attorney or proxy at any meeting of said Stockholders, the Charter of the Corporation, as amended, shall be further amended by striking all of the provisions of 4. Sec. IV of the Act of the General Assembly of the State of Georgia, approved February 16, 1856 (Georgia Laws 1855-1856, pages 420 and 421), incorporating the Corporation. RESOLVED, that the Charter of the Corporation, as amended, shall be further amended by inserting between Section 6.01 and Section 6.02 of the Amendment to said Charter granted by the Superior Court of Fulton County, Georgia, by its Order dated November 25, 1952 the following section: Section 6.01A. Board of Directors. The business and property of the Company shall be conducted and managed by a Board of not less than five (5) nor more than fifteen (15) Directors, but otherwise shall be such number as is fixed or may be fixed from time to time by the By-laws of the Company. RESOLVED, that the Charter of the Corporation, as amended, be further amended by striking all of the provisions of Section 6.04 from the Amendment to said Charter granted by the Superior Court of Fulton County, Georgia, by its Order dated November 25, 1952 and inserting in lieu of said Section the following Section: Section 6.04. Mutilated, Lost or Destroyed Certificates. In case of the loss, mutilation or destruction of any certificate of stock of the Company, a new or duplicate certificate may be issued in lieu thereof upon such terms and conditions as the Board of Directors shall prescribe. The undersigned, JAS. H. MOTZ, Secretary of Atlanta Gas Light Company, certifies that the foregoing resolution of the Stockholders of Atlanta Gas Light Company, to which this certificate is attached, was adopted at the regular annual meeting of the Stockholders of Atlanta Gas Light Company held on the 26th day of January, 1960, due notice of which was given to the Stock- holders. At said meeting of the Stockholders, the holders of more than two- thirds (2/3) of the Common Stock of Atlanta Gas Light Company voted favorably for said resolution. IN WITNESS WHEREOF, the undersigned, as Secretary of Atlanta Gas Light Company, has hereunto set his hand and affixed the seal of Atlanta Gas Light Company, this 5th day of January, 1960. /s/ Jas. H. Motz ----------------------------------(SEAL) Secretary, Atlanta Gas Light Company EXHIBIT "A" The foregoing petition of Atlanta Gas Light Company to amend its charter was presented to this Court and examined. It appearing to the Court that said petition is in accord with the laws of the State of Georgia made and provided in said causes, that the Common Stockholders of Atlanta Gas Light Company adopted the resolution attached to the petition as Exhibit "A" to authorize this amendment to its charter at the regular annual meeting of the Stockholders of said Corporation, notice of the purpose of the meeting to amend the charter having been duly and legally given, by a favorable vote for and consent to said amendment by the vote of the holders of more than two-thirds (2/3) of the Common Stock of Atlanta Gas Light Company in favor of said amendment set forth in said resolution and that all acts and things necessary or proper to effect such amendment to the charter of Atlanta Gas Light Company have been done and exist and said resolution is found by the Court to be lawful and fully authorized. NOW, THEREFORE, IT IS CONSIDERED, ORDERED AND ADJUDGED that the charter of Atlanta Gas Light Company is amended as set forth in the foregoing petition and the resolution of the Stockholders of Atlanta Gas Light Company attached thereto marked Exhibit "A". This 8th day of February, 1960. -------------------------------------------- JUDGE, SUPERIOR COURT, ATLANTA CIRCUIT G E O R G I A ::: FULTON COUNTY ::: TO THE HONORABLE THE SUPERIOR COURT OF SAID COUNTY: This the petition of ATLANTA GAS LIGHT COMPANY shows ------------------------- respectfully unto the Honorable the Superior Court of Fulton County, Georgia, as follows: 1. Atlanta Gas Light Company is a corporation organized and existing under the laws of the State of Georgia with its principal office in Fulton County, Georgia. Its charter was granted by an Act of the General Assembly of the State of Georgia approved February 16, 1856 (Georgia Laws 1855-1856, pages 420, et. seq.) This charter was amended by an Act of the General Assembly approved October 14, 1889 (Georgia Laws 1888-1889, pages 1398, et. seq.) Thereafter the charter of Atlanta Gas Light Company was amended by the Superior Court of Fulton County, Georgia, by its orders dated respectively December 17, 1919, April 20, 1929, October 22, 1929, September 13, 1935, October 15, 1943, November 22, 1943, October 17, 1947, August 14, 1951, November 25, 1952, December 7, 1955, January 25, 1957 and February 8, 1960. 2. At a special meeting of the stockholders of petitioner held on the 24th day of August, 1961, a resolution was adopted by the stockholders of Atlanta Gas Light Company by a vote of two-thirds (2/3) majority of its stock authorizing an amendment to its charter changing its common stock from $10 par value to $5 par value, changing its authorized common capital stock from 2,000,000 shares of $10 par value to 4,000,000 shares of $5 par value, and providing that the outstanding certificates for shares of $10 par value, upon the date of the granting of this amendment to the charter, shall become the same number of shares of stock of $5 par value. A copy of said resolution duly certified by the Secretary of the corporation is hereto attached marked Exhibit "A" and made a part of this petition. WHEREFORE, petitioner prays that its charter be amended in the manner set forth in said resolution and that an order of this Honorable Court be entered granting the prayers of this petition and so amending petitioner's charter. [SIGNATURE APPEARS HERE] ----------------------------------------- ATTORNEYS FOR ATLANTA GAS LIGHT COMPANY RESOLVED, by the Common Stockholders of Atlanta Gas Light Company, at a meeting duly and legally called, assembled and held, that the Charter, as amended, of Atlanta Gas Light Company be further amended by eliminating therefrom all of the provisions of Section 1.01, as amended, and inserting in lieu thereof a new Section 1.01 to read as follows: Section 1.01. The maximum number of shares of Capital Stock of Atlanta Gas Light Company (hereinafter referred to as the "Company"), authorized to be outstanding at any one time is as follows: 4,000,000 shares of Common Stock of the par value of $5 per share, 20,000 shares of 4 1/2% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4-1/2% Preferred Stock"), 30,000 shares of 4.60% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.60% Preferred Stock"), and 30,000 shares of 4.44% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.44% Preferred Stock"). The issued and outstanding 1,200,996 shares of Common Stock of the Company of the par value of $10 per share are hereby split, reclassified and changed into 2,401,992 shares of Common Stock of the par value of $5 per share, said split, reclassification and change to be accomplished by the issuance to the holders of the currently outstanding 1,200,996 shares of Common Stock of the par value of $10 per share of record at the close of business on the day this amendment to the Charter becomes effective of certificates for 1,200,996 shares of Common Stock of the par value of $5 per share on the basis of one additional share of Common Stock of the par value of $5 per share for each outstanding share of Common Stock of the par value of $10 per share in lieu of the surrender and exchange of the existing certificates which shall thereafter represent 1,200,996 shares of Common Stock of the par value of $5 per share. The additional shares upon issuance shall be fully paid and non-assessable shares of Common Stock of the par value of $5 per share of this Company. The preferences, voting powers, restrictions, limitations and qualifications of the different classes of Capital Stock shall be as follows: The undersigned, JAS. H. MOTZ, Secretary of Atlanta Gas Light ------------ Company, certifies that the foregoing resolution of the stockholders of Atlanta Gas Light Company, to which this certificate is attached, was adopted at a special meeting of the stockholders of Atlanta Gas Light Company held on the 24th day of Aug., 1961, notice of the purpose of said meeting having included a notice of the purpose to amend the charter of Atlanta Gas Light Company as set forth in said resolution. At said meeting of the stockholders, the holders of more than two-thirds (2/3) of the Common Stock of Atlanta Gas Light Company voted favorably for said resolution. EXHIBIT "A" IN WITNESS WHEREOF, the undersigned, as Secretary of Atlanta Gas Light Company, has hereunto set his hand and affixed the seal of Atlanta Gas Light Company, this 30th day ---- of August, 1961. Jas. H Motz ---------------------------------------(SEAL) SECRETARY, ATLANTA GAS LIGHT COMPANY The foregoing petition of Atlanta Gas Light Company to amend its charter was presented to this Court and examined. It appearing to the Court that said petition is in accord with the laws of the State of Georgia made and provided in said causes, that the Common Stockholders of Atlanta Gas Light Company adopted the resolution attached to the petition as Exhibit "A" to authorize this amendment to its charter at a special meeting of the stockholders of said corporation, notice of the purpose of the meeting to amend the charter having been duly and legally given, by a favorable vote for and consent to said amendment by the vote of the holders of more than two-thirds (2/3) of the Common Stock of Atlanta Gas Light Company in favor of each and every one of the amendments set forth in said resolution and that all acts and things necessary or proper to effect such amendment to the charter of Atlanta Gas Light Company have been done and exist and said resolution is found by the Court to be lawful and fully authorized. NOW, THEREFORE, IT IS CONSIDERED, ORDERED AND ADJUDGED that the charter of Atlanta Gas Light Company is amended as set forth in the foregoing petition and the resolution of the stockholders of Atlanta Gas Light Company attached thereto marked Exhibit "A". This _______ day of __________________________, 1961. ______________________________________________________ GEORGIA :: FULTON COUNTY :: TO THE HONORABLE THE SUPERIOR COURT OF SAID COUNTY: This the petition of ATLANTA GAS LIGHT COMPANY ------------------------- shows respectfully unto the Honorable the Superior Court of Fulton County, Georgia, as follows: 1. Atlanta Gas Light Company is a corporation organized and existing under the laws of the State of Georgia with its principal office in Fulton County, Georgia. Its charter was granted by an Act of the General Assembly of the State of Georgia approved February 16, 1856 (Georgia Laws 1955-56, pages 420, et. seq.) This charter was amended by an Act of the General Assembly approved October 14, 1889 (Georgia Laws 1888-1889, pages 1398, et. seq.) Thereafter the charter of Atlanta Gas Light Company was amended by the Superior Court of Fulton County, Georgia, by its orders dated respectively December 17, 1919, April 20, 1929, October 22, 1929, September 13, 1935, October 15, 1943, November 22, 1943, October 17, 1947, August 14, 1951, November 25, 1952, December 7, 1955, January 25, 1957, February 8, 1960, and September 1, 1961. 2. At a regular meeting of the stockholders of petitioner held on January 26, 1965, a resolution was adopted by the stockholders of Atlanta Gas Light Company by a vote of more than two-thirds (2/3) majority of its stock authorizing an amendment to its charter changing its authorized common capital stock from 4,000,000 shares of $5.00 par value to 5,000,000 shares of $5.00 par value, and by eliminating from its charter as amended all of the provisions of Section 1.01, as amended, and inserting in lieu thereof a new Section 1.01 to read as follows: "SECTION 1.01. The maximum number of shares of Capital Stock of Atlanta Gas Light Company (hereinafter referred to as the "Company"), authorized to be outstanding at any one time is as follows: 5,000,000 shares of Common Stock of the par value of $5 per share, 20,000 shares of 4 -1/2% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4- 1/2% Preferred Stock"), 30,000 shares of 4.60% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.60% Preferred Stock"), and 30,000 shares of 4.44% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.44% Preferred Stock"). The preferences, voting powers, restrictions, limitations and qualifications of the different classes of Capital Stock shall be as follows: A copy of said resolution duly certified by the Secretary of the corporation is hereto attached marked Exhibit "A" and made a part of this petition. WHEREFORE, petitioner prays that its charter be amended in the manner set forth in said resolution and that an order of this Honorable Court be entered granting the prayers of this petition and so amending petitioner's charter. /s/ Hansell, Post, Brandon & Dorsey -------------------------------------------------- HANSELL, POST, BRANDON & DORSEY Attorneys for Atlanta Gas Light Company. "RESOLVED, by the Common Stockholders of Atlantic Gas Light Company, at a regular meeting duly and legally called, assembled and held, that the charter, as amended, of Atlanta Gas Light Company be further amended by changing its authorized common capital stock from 4,000,000 shares of $5.00 par value to 5,000,000 shares of $5.00 par value, and by eliminating from its charter as amended all of the provisions of Section 1.01, as amended, and inserting in lieu thereof a new Section 1.01 to read as follows: 'SECTION 1.01. The maximum number of shares of Capital Stock of Atlanta Gas Light Company (hereinafter referred to as the "Company"), authorized to be outstanding at any one time is as follows: 5,000,000 shares of Common Stock of the par value of $5 per share, 20,000 shares of 4 1/2% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.1/2% Preferred Stock"), 30,000 shares of 4.60% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.60% Preferred Stock"), and 30,000 shares of 4.44% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.44% Preferred Stock"). The preferences, voting powers, restrictions, limitations and qualifications of the different classes of Capital Stock shall be as follows:' " The undersigned, L. GEORGE FOLSOM, Secretary of Atlanta Gas Light Company, certifies that the foregoing resolution of the stockholders of Atlanta Gas Light Company, to which this certificate is attached, was adopted at the regular meeting of the stockholders of Atlanta Gas Light Company held on January 26, 1965, notice of the purpose of said meeting having included a notice of the purpose to amend the charter of Atlanta Gas Light Company as set forth in said resolution. At said meeting of the stockholders, the holders of more than two-thirds (2/3) of the Common Stock of Atlanta Gas Light Company voted favorably for said resolution. All as appears on the Minutes of said corporation. IN WITNESS WHEREOF, the undersigned, as secretary of Atlanta Gas Light Company, has hereunto set his hand and affixed the seal of Atlanta Gas Light Company, this 26th day of January, 1965. ---- ------- ---- /s/ L. George Folsom (SEAL) ------------------------------------ L. GEORGE FOLSOM, SECRETARY ATLANTA GAS LIGHT COMPANY The foregoing petition of Atlanta Gas Light Company to amend its charter was presented to this Court and examined. It appearing to the Court that said petition is in accord with the laws of the State of Georgia made and provided in said causes, that the Common Stockholders of Atlanta Gas Light Company adopted the resolution attached to the petition as Exhibit "A" to authorize this amendment to its charter at a regular meeting of the stockholders of said corporation, notice of the purpose of the meeting to amend the charter having been duly and legally given, by a favorable vote for and consent to said amendment by the vote of the holders of more than two-thirds (2/3) of the Common Stock of Atlanta Gas Light Company in favor of the amendment set forth in said resolution and that all sets and things necessary or proper to effect such amendment to the charter of Atlanta Gas Light Company have been done and exist and said resolution is found by the Court to be lawful and fully authorized. NOW, THEREFORE, IT IS CONSIDERED, ORDERED AND ADJUDGED that the charter of Atlanta Gas Light Company is amended as set forth in the foregoing petition and the resolution of the stockholders of Atlanta Gas Light Company attached thereto marked Exhibit "A". This 26th day of January, 199 ---- -------, --. [SIGNATURE APPEARS HERE] ---------------------------------------- JUDGE, SUPERIOR COURT, ATLANTA CIRCUIT GEORGIA: FULTON COUNTY: NOW COMES PETITIONER, ATLANTA GAS LIGHT COMPANY, and respectfully shows ------------------------- unto this Honorable Court as follows: 1. Atlanta Gas Light Company is a corporation organized and existing under the laws of the State Georgia with its principal office in Fulton County, Georgia. Its charter was granted by an Act of the General Assembly of the State Georgia approved February 16, 1856 (Georgia Laws 1855-56, pages 420, et seq.). This Charter was amended by an Act of the General Assembly approved October 14, 1889 (Georgia laws 1883-1889, page 1398, et seq.). Thereafter the charter of Atlanta Gas Light Company was amended by the Superior Court of Fulton County, Georgia, by its orders dated respectively December 17, 1919, April 20, 1929, October 22, 1929, October 15, 1943, November 22, 1943, October 17, 1947, August 14, 1951, November 25, 1952, December 7, 1955, January 25, 1957, February 8, 1960, September 1, 1961, and January 26, 1965. 2. At a duly held special meeting of the holders of the Common Stock of petitioner held on July 20, 1965, resolutions were adopted by such stockholders of petitioner by a vote of two-thirds (2/3) majority of the Common Stock of petitioner that the charter of petitioner be amended in the manner set forth in said resolutions, a duly certified copy of which is attached to this petition marked Exhibit XX and made a part of this petition and paragraph. WHEREFORE, petitioner prays that its charter be amended in the manner set forth in said resolutions and that an order of this Honorable Court be entered granting the prayers of this petition and so amending the charter of petitioner. /S/ Hansell, Post, Brandon & Dorsey -------------------------------- HANSELL, POST, BRANDON & DORSEY Attorneys for ATLANTA GAS LIGHT COMPANY Sixth Floor First National Bank Building Atlanta 3, Georgia 522-3553 - 2 - EXHIBIT "A" RESOLVED, by the Common Stockholders of Atlanta Gas Light Company, at a meeting duly and legally called, assembled and held, that the Charter, as amended, of Atlanta Gas Light Company be further amended by eliminating therefrom all of the provisions of Section 1.01, as amended, and inserting in lieu thereof a new Section 1.01 to read as follows: "Section 1.01. The maximum number of shares of Capital Stock of Atlanta Gas Light Company (hereinafter referred to as the "Company") authorized to be outstanding at any one time is as follows: 5,000,000 shares of Common Stock of the par value of $5 per share, 20,000 shares of 4 1/2% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4 1/2% Preferred Stock"), 30,000 shares of 4.60% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.60% Preferred Stock"), 30,000 shares of 4.44% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.44% Preferred Stock"), and 50,000 shares of 4.72% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.72% Preferred Stock"). The preferences, voting powers, restrictions, limitations and qualifications of the different classes of Capital Stock shall be as follows:" RESOLVED, that the Charter, as amended, of Atlanta Gas Light Company be further amended by the addition of a new Section under Section 3 to be designated as Section 3.04 and to read as follows: "Section 3.04. 4.72% Preferred Stock. (a) Dividends. Out of any assets of the Company available for dividends, the holders of the 4.72% Preferred Stock shall be entitled to receive, but only when and as declared by the Board of Directors, dividends at the rate of 4.72% per annum, and no more. Dividends declared shall be payable quarterly on March 1, June 1, September 1, and December 1 in each year, to stockholders of record on a date not more than 30 days prior to such payment date, as may be determined by the Board of Directors of the Company. Dividends on the 4.72% Preferred Stock shall be cumulative from and including the first day of the quarterly dividend period in which such shares shall be issued. So long as any shares of 4.72% Preferred Stock are outstanding, no dividends shall be declared or paid upon, or set apart for, the shares of any class of Junior Stock, nor any sums applied to the purchase, redemption or other retirement of any class of Junior Stock, unless full dividends on all shares of the 4.72% Preferred Stock and of any other class of Preferred Stock outstanding for all past quarterly dividend periods shall have been paid or declared and a sum sufficient for the payment thereof set apart and the full dividend for the then current quarterly dividend period shall have been of concurrently shall be paid or declared and set apart. The amount of any deficiency for the past dividend periods may be paid or declared and set apart at any time without reference to any quarterly dividend payment date. Unpaid accrued dividends on the 4.72% Preferred Stock shall not bear interest. (b) Liquidation. In the event of any liquidation, dissolution or winding up of the Company or reduction or decrease of its capital resulting in a distribution of assets to the holders of any class of Junior Stock, the holders of 4.72% Preferred Stock shall be entitled to receive the amounts prescribed in Section 4.02. 1 (c) Redemption Provisions. The Company may at its option expressed by resolution of its Board of Directors redeem the 4.72% Preferred Stock in the manner provided in Section 4.03 (A) at any time or from time to time at $100 per share plus a premium of: $6.20 per share if redeemed prior to June 1, 1970; $5.00 per share if redeemed on June 1, 1970 or thereafter and prior to June 1, 1975; $3.80 per share if redeemed on June 1, 1975 or thereafter and prior to June 1, 1980; and $3.00 per share if redeemed on or after June 1, 1980; together in each case with accrued dividends. (d) Purchase Fund. The 4.72% Preferred Stock shall be entitled to the benefits of a Purchase Fund as follows: The Company (unless prevented from so doing by any applicable restriction of law or contained in the Charter of the Company, as amended, or in any agreement now existing relating to indebtedness of the Company) will each year, beginning in 1968, so long as any shares of the 4.72% Preferred Stock are outstanding, make an offer (hereinafter called a "Purchase Offer") to the holders of shares of the 4.72% Preferred Stock to purchase on December 1 in each such year 1,000 shares (less the number of shares, if any, purchased for surrender in accordance with the provisions of the following paragraph) of said 4.72% Preferred Stock at prices up to but not exceeding $101.50 per share. The obligation of the Company to make annually the above-mentioned Purchase Offer and to purchase shares of the 4.72% Preferred Stock of the Company tendered for sale in accordance with the terms thereof, is hereinafter referred to as the "Purchase Fund Obligation." In addition to or in lieu of making a Purchase Offer, a Purchase Fund Obligation may also be satisfied in whole or in part by the purchase by the Company, if obtainable, at not exceeding $101.50 per share plus accrued dividends to the date of purchase and the surrender for cancellation to the Transfer Agent for the 4.72% Preferred Stock on or before December 1 in each such year of certificates for not more than 1,000 shares of said 4.72% Preferred Stock. Beginning on or prior to October 15, 1968 and on or prior to October 15 in each year thereafter, the Company shall furnish the Transfer Agent for the 4.72% Preferred Stock with a certificate signed by the President, or a Vice President, or the Treasurer, or an Assistant Treasurer of the Company stating (a) the number of shares of the 4.72% Preferred Stock, if any, purchased by the Company and to be surrendered on or prior to December 1 in such year, and that said shares had been purchased by the Company at prices not exceeding $101.50 per share plus accrued dividends to the date of purchase and (b) that the Company will make an offer to the holders of its outstanding 4.72% Preferred Stock to purchase a number of shares of the 4.72% Preferred Stock, if any, sufficient to satisfy the Purchase Fund Obligation (or the balance thereof as the case may be) for such year. If the certificate filed in any such year shall state that a Purchase Offer is to be made in such year, the Transfer Agent for the 4.72% Preferred Stock shall on or prior to November 1 of such year mail to the holders of record of the 4.72% Preferred Stock at the close of business on the day preceding such mailing a notice, in the name of the Company, that the Company will on December 1 of such year accept offers to sell the number of shares required to satisfy the Purchase Fund Obligation then due at prices not exceeding $101.50 per share. The Company may require, and in such event said notice shall specify, that each offer to sell shares of the 4.72% Preferred Stock shall be accompanied by the certificate or certificates for the shares so offered, together with evidence satisfactory to the Transfer Agent of the right of the holder of such shares to so sell the same to the Company. In any year in which a Purchase Offer is made, the Transfer Agent shall on December 1 of such year, on behalf of the Company, accept offers to sell shares of the 4.72% Preferred Stock received 2 by it up to the full number of shares covered by the Purchase Offer upon such basis as will result in the lowest aggregate cost to the Company. The Transfer Agent shall accept offers made at the same price on a pro rata basis, as nearly a practicable. In the event any person whose offer is accepted shall thereafter fail to make good such offer said Transfer Agent shall to the extent possible accept in lieu thereof the best offer or offers, if any, theretofore received and not theretofore accepted. On or prior to December 1 in each year in which a Purchase Offer shall have been made, the Company shall surrender to the Transfer Agent for the 4.72% Preferred Stock, for cancellation, certificates for the number of shares of 4.72% Preferred Stock, if any, specified in the certificate for such year as having been purchased by the Company for surrender to the Transfer Agent and deposit with said Transfer Agent cash sufficient to purchase shares 4.72% Preferred Stock, if any, accepted for purchase pursuant to the Purchase Offer made in such year and thereafter shall deposit any additional funds required to carry out the Purchase Offer for such year. The Transfer Agent shall, on or before the next succeeding January 2, return to the Company any funds deposited with it and not used or required to purchase shares of the 4.72% Preferred Stock pursuant to the Purchase Offer for such year. The Purchase Fund Obligation in any year shall be deemed to be fully satisfied if the Company shall have complied with the provisions of this Section 3.04(d) notwithstanding that the total number of shares purchased by it shall be less than the total number of shares covered by the Company's Purchase Offer for that year because insufficient offers to sell were received by it. Purchase Fund Obligations shall be cumulative only to the extent that if in any year the Company fails to make and carry out a Purchase offer, if and to the extent a Purchase Offer is required to be made in such year, such failure shall be made good in the manner hereinafter set forth before any dividends shall be declared, paid upon, or set apart for any shares of Junior Stock or any sums applied to the purchase, redemption, or other retirement of Junior Stock. Any such failure may be made good at any time by the making and carrying out of a special offer (hereinafter called "Special Purchase Offer") to purchase at a price of $101.50 per share plus accrued dividends, if any, to the date of purchase, the number of shares of 4.72% Preferred Stock as to which failure exists and, to that end, the Company shall file with the Transfer a Agent certificate signed by the President or a Vice President or the Treasurer or an Assistant Treasurer of the Company specifying a date, not less than 45 days after the date of filing of such certificate, on which offers to sell shares of the 4.72% Preferred Stock will be accepted. Special Purchase Offers shall otherwise be made and carried out on not less than 30 day's notice and in the same manner as hereinabove provided for Purchase Offers to be carried out on December 1. Shares of the 4.72% Preferred Stock purchased pursuant to any Purchase Offer, or Special Purchase Offer, or surrendered in whole or partial satisfaction of a Purchase Fund Obligation in any year, shall be cancelled and shall not be reissued as shares of said class. (e) Voting Powers and Other Rights. The holders of the 4.72% Preferred Stock shall have such voting powers and other rights and be subject to such restrictions and qualifications as are set forth in Sections 4 to 6 hereof, inclusive." RESOLVED, that the Charter, as amended, of Atlanta Gas Light Company be further amended by eliminating from Section 5.01 thereof the following: "subject to Sections 3.01(a), 3.02(a) and 4.06,", and inserting in lieu thereof the following: "subject to any applicable restrictions in Section 4 or Section 5 or elsewhere in this Charter contained,". CERTIFICATE ----------- The undersigned, L. GEORGE FOLSOM, SECRETARY OF ATLANTA GAS LIGHT --------- ------ COMPANY, certifies that the foregoing resolutions of the holders of the Common Stock of Atlanta Gas Light Company, to which this certificate is attached, were adopted at a special meeting of the holders of the Common Stock of Atlanta Gas Light Company held on the 20th day of July, 1995, notice of the purpose of said meeting having included a notice of the purpose to amend the charter of Atlanta Gas Light Company as set forth in said resolutions. As said meeting of such stockholders, the holders of more than two-thirds of the Common Stock of Atlanta Gas Light Company voted favorably for said resolutions. All as appears on the Minutes of said corporation. IN WITNESS WHEREOF, the undersigned, as Secretary of Atlanta Gas Light Company, has hereunto set his hand and affixed the seal of Atlanta Gas Light Company, this 20th day of July, 1965. ---- ---- /s/ L. George Folsom (SEAL) --------------------------------- L. GEORGE FOLSOM SECRETARY OF ATLANTA GAS LIGHT COMPANY ORDER ----- The foregoing petition of ATLANTA GAS LIGHT COMPANY to amend its charter was presented to this Court and examined. IT APPEARING to the Court that said petition is in accordance with the laws of the State of Georgia made and provided in said causes, that the holders of the Common Stock of Atlanta Gas Light Company duly adopted the resolutions attached to the petition as Exhibit "A" to authorize this amendment to its charter at a special meeting of such stockholders, notice of the purpose of the meeting to amend the charter having been duly and legally given, by a favorable vote for and consent to said amendment by the vote of the holders of more than two-thirds (2/3) of the Common Stock of Atlanta Gas Light Company and that all acts and things necessary or proper to effect such amendment to the charter of Atlanta Gas Light Company have been done and exist and said resolutions are found by the Court to be lawful and fully authorized. NOW, THEREFORE, IT IS CONSIDERED, ORDERED AND ADJUDGED that the charter of Atlanta Gas Light Company is amended as set forth in the foregoing petition and the resolutions of the holders of the Common Stock of Atlanta Gas Light Company attached thereto marked Exhibit "A". This 20th day of July, 1965. ---- ---- /s/ G. P. Whitman, Sr. --------------------------------------- JUDGE, SUPERIOR COURT, ATLANTA CIRCUIT STATE OF GEORGIA: COUNTY OF FULTON: TO THE SUPERIOR COURT OF SAID COUNTY AND STATE: NOW COME ATLANTA GAS LIGHT COMPANY and SAVANNAH GAS COMPANY, petitioners, ------------------------- -------------------- and respectfully show unto this Honorable Court the following: 1. Atlanta Gas Light Company is a corporation organized and existing under the laws of the State of Georgia with its principal office in Fulton County, Georgia. Its charter was granted by an Act of the General Assembly of the State of Georgia, approved February 16, 1856, incorporating said corporation, as shown by the Public Acts of Georgia of 1855-6, page 420 et seq., to which reference is hereby made, as the charter and charter powers granted thereby have been amended by an Act of the General Assembly of the State of Georgia, approved October 14, 1889, as shown by the Public Acts of said State of 1888-9, page 1308 et seq., to which reference is hereby made, and by Orders of the Superior Court of Fulton County of the State of Georgia, dated December 17, 1919, April 20, 1929, October 22, 1929, and September 13, 1935, March 18, 1941 (granting a petition of Merger to the Georgia Public Utilities Company and Macon Gas Company into Atlanta Gas Light Company with Atlanta Gas Light Company as the continuing corporation), October 15, 1943, November 22, 1943, October 17, 1947, August 14, 1951, November 25, 1952, December 7, 1955, January 25, 1957, February 8, 1960, September 1, 1961, January 26, 1965 and July 20, 1965, respectively. 2. Savannah Gas Company is a corporation organized and existing under the laws of the State of Georgia with its principal office in Chatham County, Georgia. The charter of Savannah Gas Company was granted to it under the name of Savannah-St. Augustine Gas Company by order of the Superior Court of Chatham County, Georgia, dated October 9, 1944. Its charter was amended on December 26, 1944 (granting a petition of merger of St. Augustine Gas Company with Savannah-St. Augustine Gas Company as the surviving corporation), December 21, 1945 (changing the name of the corporation to South Atlantic Gas Company), February 26, 1947, August 9, 1947, October 20, 1949, June 2, 1952 (granting a petition of merger of Trustees Garden Village Associates, Inc. and Trustees Garden Village, Inc. with South Atlantic Gas Company as the surviving corporation), June 2, 1952, August 17, 1953, June 15, 1955, December 12, 1955 and August 19, 1964 (which included changing the name of the corporation to Savannah Gas Company), respectively. 3. On December 14, 1965, Atlanta Gas Light Company and Savannah Gas Company, petitioners herein, entered into a Joint Agreement of Merger signed by a majority of the directors of each of said corporations under the corporate names and seals of the respective corporations, a copy of said Joint Agreement of Merger being attached hereto marked Exhibit A, and made a part of this petition and paragraph. Under the provisions thereof, Atlanta Gas Light Company will be the resulting and continuing corporation, and the principal place of business of Atlanta Gas Light Company will continue to be located in Fulton County, Georgia. 4. Notice of the time, place and object of a meeting of the stockholders of each of said corporations called separately for the purpose of voting upon said merger was given in accordance with the terms of the charters and by-laws of said corporations to each stockholder of record of each of said corporations, whether entitled to vote or not. At said separate meetings of the stockholders of said corporations said Joint Agreement of Merger was considered and a vote by ballot, in person or by proxy, was taken for the adoption or rejection of said Joint Agreement of Merger. At said meetings, the holders of 71.2% of the -2- common stock of Atlanta Gas Light Company voted for the adoption of the said Joint Agreement of Merger, 33% of the common stock of Savannah Gas Company voted for the adoption of the said Joint Agreement of Merger, and 32.5% of the 5% Cumulative Preferred Stock of Savannah Gas Company voted for the adoption of the said Joint Agreement of Merger, those being the holders of the only stock entitled to exercise the voting power on the proposal to merge. Attached hereto marked Exhibits B and C respectively and made a part of this petition and paragraph are Certificates of the Secretary of the said Atlanta Gas Light Company and of the Secretary of the said Savannah Gas Company certifying that at respective separate meetings of the stockholders of the aforesaid corporations, the holders of the stock of each of said corporations entitled to exercise the voting power on the adoption or rejection of said Joint Agreement of Merger voted in favor of and for the adoption of said Joint Agreement of Merger in the percentages indicated thereon. 5. This petition is presented to obtain an order of this Honorable Court merging Savannah Gas Company into Atlanta Gas Light Company so that the separate existence of Savannah Gas Company shall cease and Atlanta Gas Light Company shall continue as the continuing corporation in accordance with the aforesaid Joint Agreement of Merger under the laws of the State of Georgia. WHEREFORE, petitioners pray that this Honorable Court grant an order merging Atlanta Gas Light Company and Savannah Gas Company with the result that the existence of Atlanta Gas Light Company will continue and that Savannah Gas Company will be merged into Atlanta Gas Light Company as prayed for in this petition and in accordance with the laws of the State of Georgia and the Joint Agreement of Merger, and that your petitioners have such other and further relief as in the premises may seem proper. /s/ Hansell, Post, Brandon & Dorsey --------------------------------------- HANSELL, POST, BRANDON & DORSEY Attorneys for Atlanta Gas Light Company Sixth Floor First National Bank Building Atlanta, Georgia 30303 -3- /s/ H. H. Hillyer, Jr. --------------------------------- H. H. HILLYER, JR. Attorney for Savannah Gas Company /s/ Joseph M. Oliver --------------------------------- Whitney Building JOSEPH M. OLIVER, New Orleans 70130 Attorney for Savannah Gas Company Morel Building Savannah, Georgia. EXHIBIT A JOINT AGREEMENT OF MERGER JOINT AGREEMENT OF MERGER made and entered into by and between the Directors of ATLANTA GAS LIGHT COMPANY, a Georgia corporation, having its principal office in the City of Atlanta, Fulton County, Georgia, and the Directors of SAVANNAH GAS COMPANY, a Georgia corporation, having its principal office in the City of Savannah, County of Chatham, Georgia, and under the respective names and seals of said Corporations, under date of December 14, 1965. Whereas, the said two Corporations, parties hereto, are each organized under the laws of the State of Georgia, and neither of said Corporations is of a character for which Charters are granted only by the Secretary of Sate of Georgia, and Whereas, Atlanta Gas Light Company has issued and now has outstanding 3,783,138 shares of Common Stock of the par value of $5 per share, 21,900 shares of 4.44% Cumulative Preferred Stock of the par value of $100 per share, 20,000 shares of 41/2% Cumulative Preferred Stock of the par value of $100 per share, 20,100 shares of 4.60% Cumulative Preferred Stock of the par value of $100 per share, and 50,000 shares of 4.72% Cumulative Preferred Stock of the par value of $100 per share, and Whereas, Savannah Gas Company has issued and now has outstanding 538,000 shares of Common Stock of the par value of $2.50 per share and 10,000 shares of 5% Cumulative Preferred Stock of the par value of $100 per share, and Whereas, the Boards of Directors of Atlanta Gas Light Company and of Savannah Gas Company desire that said two corporations merge into a single continuing corporation under and pursuant to the provisions of the laws of the State of Georgia for the purpose of securing greater efficiency and economy of management, operations and financing and for the general welfare of the said two corporations, their stockholders and their customers. Now Therefore, in consideration of the premises and of the mutual agreements, covenants and provisions herein contained, and for the purpose of prescribing the terms and conditions of the merger, and the mode of carrying the same into effect and of setting forth certain other provisions and matters pursuant to the laws of the State of Georgia or not inconsistent therewith, as prescribed by law or deemed necessary or proper by the Directors of said corporations parties hereto, the Directors of said two corporations under their respective corporate names and seals have agreed and do hereby agree as follows: ARTICLE I. Said Savannah Gas Company shall be and is hereby merged into said Atlanta Gas Light Company, which shall continue its existence as the continuing corporation into which said Savannah Gas Company is merged and which, as it shall exist as such continuing corporation after such merger shall have become effective under the laws of the State of Georgia, shall continue to have the name of Atlanta Gas Light Company and will be hereinafter sometimes called the "Merged Company". Nothing herein contained is intended to or shall be construed as contemplating or resulting in the creation of a new corporation, it being expressly understood that said Atlanta Gas Light Company is and shall remain in existence as the corporation into which said Savannah Gas Company is merged. 1 ARTICLE II. The principal place of business of the Merged Company in the State of Georgia shall be Fulton County in said State. ARTICLE III. The Charter of Atlanta Gas Light Company, as amended, shall be the charter of the Merged Company with such additional amendments thereto as are herein provided. The corporate identity, existence, rights, privileges, powers, franchises, good will and immunities and all and singular the property, real, personal and mixed, all debts due on whatever account, as well as all other things in action of or belonging to said Atlanta Gas Light Company, after the merger herein provided for shall have become effective under the laws of the State of Georgia and without further act or deed, shall continue to be possessed by or vested in the Merged Company unaffected and unimpaired by this Agreement. The separate existence of said Savannah Gas Company shall cease as soon as the merger herein provided for shall have become effective under the laws of the State of Georgia, and thereupon Savannah Gas Company and Atlanta Gas Light Company shall become a single continuing corporation, in accordance with the terms of this Agreement, namely, the Merged Company. Upon the merger becoming effective under the laws of the State of Georgia, the Merged Company shall possess all the rights, privileges, powers, franchises and immunities as well of a public as of a private nature, including, but not limited to, governmental licenses, consents, permits and grants issued by any political subdivision or governmental agency, except exemptions from taxation and except exemptions from special assessments for street paving or other special assessments, of each of said corporations; and all property, real, personal and mixed, and all debts due on whatever account, and all other things in action of or belonging to said Savannah Gas Company and Atlanta Gas Light Company shall be, by operation of law and without further act or deed, vested in the Merged Company; and all property, rights, privileges, powers, franchises and immunities, except exemption from taxation and except exemption from special assessments for street paving or other special assessments, and all and every other interest of said Savannah Gas Company and Atlanta Gas Light Company shall, by operation of law and without further act or deed, be as effectually the property of the Merged Company as they presently are of the said Savannah Gas Company and Atlanta Gas Light Company; and the title to all real estate, whether acquired by deed or otherwise, under the laws of this State vested in said Savannah Gas Company and Atlanta Gas Light Company shall not revert or be in any way impaired by reason hereof, provided that all rights of creditors and all liens on the property of said Savannah Gas Company and Atlanta Gas Light Company shall be preserved unimpaired, limited in lien to the property affected by such liens at the time the merger shall become effective as aforesaid, except as may otherwise be provided for under any existing indenture or indentures of mortgage of Atlanta Gas Light Company or Savannah Gas Company to Trustees and except that, subject to the prior liens of the indentures of mortgage of Savannah Gas Company, the lien of the indenture of mortgage of the Atlanta Gas Light Company may, to the extent contemplated thereby, attach to the property of Savannah Gas Company; and all and singular the debts, liabilities and duties of said Savannah Gas Company and Atlanta Gas Light Company shall thenceforth attach to the Merged Company and may be enforced against it to the same extent as if said debts, liabilities and duties had been incurred by it. Without, in any way, -2- limiting the generality of the foregoing, the indebtedness to attach to the Merged Company as aforesaid shall include, in addition to the indebtedness of Atlanta Gas Light Company, the following indebtedness of Savannah Gas Company as of December 14, 1965, less any sinking fund payment or any other payments thereon subsequent to December 14, 1965, and prior to the effective date of the merger: (1) $1,330,000.00 principal amount of First Mortgage Bonds, 3 1/2% Series A due 1975, of South Atlantic Gas Company (by change of name the Savannah Gas Company), issued under and secured by Indenture of Mortgage and Deed of Trust from South Atlantic Gas Company to The Liberty National Bank & Trust Company of Savannah and Fred C. Allen, Trustees, dated as of December 1, 1950, (hereinafter called the "Original Mortgage"); (2) $166,000.00 principal amount of First Mortgage Bonds, 4% Series B due 1977, of South Atlantic Gas Company (by change of name the Savannah Gas Company), issued under and secured by a Supplemental Indenture of Mortgage and Deed of Trust to the Original Mortgage from South Atlantic Gas Company to The Liberty National Bank & Trust Company of Savannah and Fred C. Allen, Trustees, dated as of April 1, 1952; (3) $198,000.00 principal amount of First Mortgage Bonds, 4% Series C due 1978, of South Atlantic Gas Company (by change of name the Savannah Gas Company), issued under and secured by Second Supplemental Indenture of Mortgage and Deed of Trust to the Original Mortgage from South Atlantic Gas Company to The Liberty National Bank & Trust Company of Savannah and Fred C. Allen, Trustees, dated as of October 1, 1953; (4) $861,000.00 principal amount of First Mortgage Bonds, 4 1/2% Series E due 1981, of South Atlantic Gas Company (by change of name the Savannah Gas Company), issued under and secured by Fourth Supplemental Indenture of Mortgage and Deed of Trust, to the Original Mortgage from South Atlantic Gas Company to The Liberty National Bank & Trust Company of Savannah and Fred C. Allen, Trustees, dated as of January 2, 1956; (5) $960,000.00 principal amount of First Mortgage Bonds, 4 3/4% Series G due 1988, of South Atlantic Gas Company (by change of name the Savannah Gas Company), issued under and secured by Eighth Supplemental Indenture of Mortgage and Deed of Trust to the Original Mortgage from South Atlantic Gas Company to The Liberty National Bank & Trust Company of Savannah, as Trustee, dated as of September 1, 1963; (6) $1,910,000.00 principal amount of First Mortgage Bonds, 4 3/4% Series H due 1990, of Savannah Gas Company, issued under and secured by Ninth Supplemental Indenture of Mortgage and Deed of Trust to the Original Mortgage from Savannah Gas Company to The Liberty National Bank & Trust Company of Savannah as Trustee, dated as of February 1, 1965; (7) $1,275,000.00 principal amount of General Mortgage Bonds, 5 1/4% Series A due 1978, of South Atlantic Gas Company (by change of name the Savannah Gas Company), issued under and secured by an Indenture of Mortgage and Deed of Trust from South Atlantic Gas Company to The First National Bank of Atlanta, as Trustee, dated as of January 2, 1958. -3- Upon the merger herein provided for becoming effective under the laws of the State of Georgia, the Merged Company shall execute, acknowledge and deliver such supplemental indentures to the Trustees under the respective indentures of mortgage of Savannah Gas Company above mentioned, if any, as may be required pursuant to said indentures to provide for or evidence the assumption by the Merged Company of the respective obligations secured by said respective indentures of mortgage; but neither anything in this Agreement contained nor the execution and delivery of any such supplemental indenture shall be construed to extend or enlarge in any way the lien of any of said indentures unless provided for otherwise in the aforementioned indentures of mortgage. ARTICLE IV. The Merged Company, in addition to the powers conferred upon it by the laws of the State of Georgia, shall have the powers now granted to said Atlanta Gas Light Company under the Act of the General Assembly of the State of Georgia, approved February 16, 1856, incorporating said corporation, as shown by the Public Acts of Georgia of 1855-6, page 420 et seq., to which reference is hereby made, as the charter and charter powers granted thereby have been amended by an Act of the General Assembly of the State of Georgia, approved October 14, 1889, as shown by the Public Acts of said State of 1888-9, page 1398 et seq., to which reference is hereby made, and by Orders of the Superior Court of Fulton County of the State of Georgia, dated December 17, 1919, April 20, 1929, October 22, 1929, and September 13, 1935, March 18, 1941 (granting a petition of merger to the Georgia Public Utilities Company and Macon Gas Company into Atlanta Gas Light Company with Atlanta Gas Light Company as the continuing corporation and under which all the rights, privileges, powers, franchises and immunities of such Georgia Public Utilities Company and Macon Gas Company were vested in Atlanta Gas Light Company as the continuing corporation), October 15, 1943, November 22, 1943, October 17, 1947, August 14, 1951, November 25, 1952, December 7, 1955, January 25, 1957, February 8, 1960, September 1, 1961, January 26, 1965 and July 20, 1965, respectively, each duly recorded on the minutes of the Superior Court of said County and in the Charter Books in the Clerk's office of the Superior Court of said County, to which reference is hereby made as though they were a part hereof, and further, to the extent that the same are not a limitation of or inconsistent with the foregoing powers, or with the charter of Atlanta Gas Light Company which shall be the charter of the Merged Company, the Merged Company shall also have the powers heretofore granted to Savannah Gas Company under the powers, franchises, rights, privileges and immunities granted to Savannah Gas Company under Orders of the Superior Court of Chatham County of the State of Georgia dated October 9, 1944 (incorporating the Savannah-St. Augustine Gas Company), December 26, 1944 (granted a petition of merger of St. Augustine Gas Company with Savannah-St. Augustine Gas Company as the surviving corporation), December 21, 1945 (changing the name of the corporation to South Atlantic Gas Company), February 26, 1947, August 9, 1947, October 20, 1949, June 2, 1952 (granting a petition of merger of Trustees Garden Village Associates, Inc. and Trustees Garden Village, Inc. with South Atlantic Gas Company as the surviving corporation), August 17, 1953, June 15, 1955, December 12, 1955 and August 19, 1964 (which included changing the name of the corporation to Savannah Gas Company), respectively, each duly recorded on the minutes of the Superior Court of said County, and in the Charter Books in the Clerk's office of the Superior Court of said County, to which reference is hereby made as though they were a part hereof, as well as any powers, franchises, rights, privileges and im- munities granted by the legislature of the State of Georgia and now vested in Savannah Gas Company including, but not limited to, those granted under the Act of the General Assembly of the State of Georgia approved December 14, 1849, incorporating Savannah Gas Company, as shown by the Public Acts of Georgia of 1849-50, p. 194 et seq., to which reference is hereby made, and under the Act of the General Assembly of said State, approved March 3, 1875, incorporating Mutual Gas Light Company of Savannah, Georgia, as shown by the Public Acts of Georgia of 1875, p. 193 et seq., to which reference is hereby made. ARTICLE V. The maximum number of shares of capital stock of the Merged Company authorized to be outstanding at any one time is as follows: 6,000,000 shares of Common Stock of the par value of $5 per share, 21,900 shares of 4.44% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.44% Preferred Stock"), 20,000 shares of 4 1/2% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4 1/2% Preferred Stock"), 20,100 shares of 4.60% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.60% Preferred Stock"), 50,000 shares of 4.72% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the and 4.72% Preferred Stock"), 10,000 shares of 5% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "5% Preferred Stock"). The designations, preferences, voting powers, restrictions, limitations and qualifications of the several classes of Preferred Stock and of the Common Stock of the Merged Company shall be as set forth in the applicable provisions of the Charter of Atlanta Gas Light Company, as amended, and as may be fixed by applicable statutory provisions; provided, however, that no share of any such class of Preferred Stock shall be issued in violation of the terms of any other class or shares of Preferred Stock issued by the Merged Company and then outstanding. The 5% Preferred Stock of the Merged Company shall have the same general rights and preferences and shall rank on a parity with the other classes of Preferred Stock of the Merged Company but shall have the following specific rights and preferences: (a) Dividends. Out of any assets of the Merged Company available for dividends, the holders of the 5% Preferred Stock shall be entitled to receive, but only when and as declared by the Board of Directors, dividends at the rate of 5% per annum, and no more. Dividends declared shall be payable quarterly on March 1, June 1, September 1 and December 1 in each year, to stockholders of record on a date not more than 30 days prior to such payment date, as may be determined by the Board of Directors of the Merged Company. Dividends on the 5% Preferred Stock shall be cumulative from and including January 1, 1966, provided however no dividends shall accumulate on the 5% Cumulative Preferred Stock of Savannah Gas Company after December 31, 1965. 5 So long as any shares of 5% Preferred Stock are outstanding, no dividends shall be declared or paid upon, or set apart for, the shares of any class of Junior Stock, nor any sums applied to the purchase, redemption or other retirement of any class of Junior Stock, unless full dividends on all shares of the 5% Preferred Stock and of any other class of Preferred Stock outstanding for all past quarterly dividend periods shall have been paid or declared and a sum sufficient for the payment thereof set apart and the full dividend for the then current quarterly dividend periods shall have been or concurrently shall be paid or declared and set apart. The amount of any deficiency for the past dividend periods may be paid or declared and set apart at any time without reference to any quarterly dividend payment date. Unpaid accrued dividends on the 5% Preferred Stock shall not bear interest. (b) Liquidation. In the event of any liquidation, dissolution or winding up of the Merged Company or reduction or decrease of its capital resulting in a distribution of assets to the holders of any class of Junior Stock, the holders of 5% Preferred Stock shall be entitled to receive the amounts prescribed in Section 4.02 of the Charter of Atlanta Gas Light Company, as amended. (c) Redemption Provisions. The Merged Company may at its option expressed by resolution of its Board of Directors redeem the 5% Preferred Stock in the manner provided in Section 4.03(A) of the Charter of Atlanta Gas Light Company, as amended, at any time or from time to time at $105 per share plus accrued dividends. (d) Voting Powers and Other Rights. The holders of the 5% Preferred Stock shall have such voting power and other rights and be subject to such restrictions and qualifications, as are set forth in Sections 4 to 6, inclusive of the Charter of Atlanta Gas Light Company, as amended. Each share of the Common Stock of the Merged Company when the merger herein provided for shall become effective under the laws of the State of Georgia or which may thereafter be issued shall be on equality one with the other in the amount of its par value and as to preferences, voting powers, restrictions, limitations or qualifications. ARTICLE VI. The number of shares of capital stock with which the Merged Company will begin business and the classes of such stock shall be: 4,123,413 shares of Common Stock, $5 par value, 21,900 shares 4.44% Cumulative Preferred Stock, $100 par value, 20,000 shares 4 1/2% Cumulative Preferred Stock, $100 par value, 20,100 shares 4.60% Cumulative Preferred Stock, $100 par value, 50,000 shares 4.72% Cumulative Preferred Stock, $100 par value, 10,000 shares 5% Cumulative Preferred Stock, $100 par value. The above numbers of shares will be reduced by the number of shares of any such stock the appraisal of and payments for which is demanded in the manner provided by law. 6 Upon the merger herein provided for becoming effective under the laws of the State of Georgia, the issued and outstanding shares of Common and Preferred Stock of Atlanta Gas Light Company shall thereupon be stock of the Merged Company and the issued and outstanding shares of Common and Preferred Stock of Savannah Gas Company shall thereupon become and be converted into stock of the Merged Company in the manner and upon the terms hereinafter set forth: The shares of each class of Cumulative Preferred Stock of said Atlanta Gas Light Company outstanding on the date when the merger shall become effective, less the number of shares thereof, payment and appraisal of which shall be demanded in the manner provided by law, shall continue unchanged as and be a like number of shares of the same class of the Cumulative Preferred Stock of the Merged Company. The 3,783,138 shares of Common Stock, of the par value of $5 per share, of said Atlanta Gas Light Company to be outstanding at said date, less the number of shares thereof, payment and appraisal which shall be determined in the manner provided by law, shall continue unchanged, as and be a like number of shares of the Common Stock of the par value of $5 per share of the Merged Company; The 10,000 shares of 5% Cumulative Preferred Stock of the par value of $100 per share of said Savannah Gas Company, to be outstanding at said date, less the number of shares thereof, payment and appraisal of which shall be demanded in the manner provided by law, shall thereupon become and be converted into shares of 5% Cumulative Preferred Stock of the par value of $100 per share of the Merged Company. The 538,000 shares of the Common Stock, with a par value of $2.50 per share, of said Savannah Gas Company, to be outstanding at said date, less the number of shares thereof owned by Atlanta Gas Light Company and less the number of shares thereof, payment and appraisal of which shall be demanded in the manner provided by law, shall thereupon become and be converted into shares of the Common Stock of the par value of $5 per share of the Merged Company. All of the shares of Common Stock of Savannah Gas Company owned by Atlanta Gas Light Company on the effective date of the merger shall be surrendered and cancelled. The basis for the conversion of shares (which is believed to be fair and equitable, taking all relevant factors into consideration) is that all of Savannah Gas Company's presently outstanding $2.50 par value Common Stock shall be converted into $5 par value Common Stock of the Merged Company at the rate of thirteen (13) shares of such Common Stock of the Merged Company for each twenty (20) shares of Common Stock of Savannah Gas Company. The basis for the conversion of the shares of 5% Cumulative Preferred Stock with a par value of $100 per share of Savannah Gas Company into the shares of 5% Cumulative Preferred Stock with a par value of $100 per share of the Merged Company shall be at the rate of one (1) share of such 5% Cumulative Preferred Stock of Savannah Gas Company for each one (1) share of 5% Cumulative Preferred Stock of the Merged Company. Since the said Atlanta Gas Light Company will continue as the Merged Company, the certificates representing all the outstanding shares of each class of its Preferred Stock and the outstanding shares of its Common Stock, other than any shares of such stock, payment and ap- 7 praisal of which shall have been demanded in the manner provided by law, shall continue to represent shares of said Preferred Stock and Common Stock, respectively, of the Merged Company after the merger herein provided for shall have become effective as aforesaid and no surrender or exchange of such certificates by the holders thereof shall be necessary. Upon the merger becoming effective under the laws of the State of Georgia, a certificate or certificates representing shares of 5% Cumulative Preferred Stock of said Savannah Gas Company may at any time thereafter be surrendered, duly endorsed in blank or accompanied by a stock power duly endorsed in blank (if required by the Merged Company), in exchange for a certificate or certificates representing an equal number of shares of 5% Cumulative Preferred Stock with a par value of $100 per share of the Merged Company, and a certificate or certificates representing shares of Common Stock of said Savannah Gas Company may also at any time thereafter be surrendered, duly endorsed in blank or accompanied by a stock power duly endorsed in blank (if required by the Merged Company) in exchange for a certificate or certificates representing the number of shares of Common Stock of the par value of $5 per share of the Merged Company to which the surrendering party is entitled under the terms hereof. The Merged Company will not issue fractional shares of its Common Stock, but there shall be deposited by the Merged Company with The First National Bank of Atlanta as agent for the Stockholders of Savannah Gas Company, a number of shares of Common Stock of the Merged Company equal to the aggregate number of fractional shares which would be issued but for this provision, to be held by said Bank as agent for the stockholders of Savannah Gas Company who would be entitled to receive a fractional share but for this provision, for the purpose of matching and combining fractional interests in such shares into whole interests, or the purchase and sale of such fractional interests among stockholders of Savannah Gas Company and the sale, on behalf of, and as agent for, such stockholders of such number of fractional or whole interests as may be necessary to adjust for any remaining fractional interests after such matching. In the event said Bank has not received from any such stockholder of Savannah Gas Company on or before 60 days following the date of the merger, notice that such stockholder of Savannah Gas Company desires said Bank to purchase on his behalf a fractional interest sufficient, when added to the fractional share already held in his behalf, to equal one whole share, then said Bank shall sell for cash such stockholder's interest in the fractional share held by said Bank on his behalf, and shall remit the proceeds thereof to such stockholder. Such fractional interests shall not be transferable except as hereinabove set forth. Any proceeds of such sale not claimed within a period of two (2) years from the date of such sale shall be paid to the Merged Company, after which the stockholder entitled thereto shall look only to the Merged Company for the repayment thereof, without interest. After the effective date of the merger, any Common Stock of Savannah Gas Company which has not been converted into Common Stock of the Merged Company shall have no further right to vote, nor to receive dividends. In addition, after the effective date of the merger, any 5% Cumulative Preferred Stock of Savannah Gas Company which has not been converted into 5% Cumulative Preferred Stock of the Merged Company shall have no further right to vote, nor to receive dividends. ARTICLE VII. The by-laws, officers and directors of the Merged Company shall be the same as those of Atlanta Gas Light Company as of the effective date of the merger. 8 ARTICLE VIII. Both Atlanta Gas Light Company and Savannah Gas Company agree to take, or cause to be taken, any and all action as might be necessary or appropriate to carry out the intent and purposes of this Agreement of Merger. ARTICLE IX. This Agreement of Merger shall be submitted for approval to the stockholders of both Atlanta Gas Light Company and Savannah Gas Company at a meeting of each corporation to be called in accordance with law and under and pursuant to the by-laws of each of the respective corporations. Upon approval by the requisite number of stockholders, a petition shall be prepared and presented to the Superior Court of Fulton County, Georgia, requesting that Savannah Gas Company be merged into Atlanta Gas Light Company in accordance with the terms hereof. IN WITNESS WHEREOF, Atlanta Gas Light Company has caused this Agreement to be executed on its behalf by its President and by a majority of its Board of Directors, and Savannah Gas Company has caused the same to be executed on its behalf by its President and by a majority of its Board of Directors, and each has caused its corporate seal to be affixed hereto and the same to be attested by its Secretary or by its Assistant Secretary, as of the day and year first above written. Atlanta Gas Light Company By s/ W. L. LEE --------------------------------------------- President /s/ R. O. ARNOLD /s/ HENRY J. MILLER - ------------------------------ --------------------------------------------- /s/ CALDER B. CLAY /s/ ALLEN POST - ------------------------------ --------------------------------------------- /s/ R. H. DOBBS, JR. /s/ GEO. A. SANCKEN - ------------------------------ --------------------------------------------- /s/ HARRISON JONES /s/ ROBERT P. SHAPPARD, JR. - ------------------------------ --------------------------------------------- /s/ W.L. LEE /s/ FREEMAN STRICKLAND - ------------------------------ --------------------------------------------- /s/ R. G. TABER --------------------------------------------- [Corporate Seal] ATTEST: A Majority of the Board of Directors of s/ L. G. FOLSOM Atlanta Gas Light Company. - ------------------------------ Secretary. 9 SAVANNAH GAS COMPANY By /s/ H. HANSELL HILLYER ----------------------------- President /s/ FRANK BARRAGAN, JR. /s/ THOS. M. JOHNSON - ----------------------------- ------------------------------- /s/ WALTER E. BENFIELD, JR. /s/ JOSEPH M. OLIVER - ----------------------------- ------------------------------- /s/ J. E. CAY, JR. /s/ CLARENCE. B REINSCHMIDT - ----------------------------- ------------------------------- /s/ W. B. DAVIS /s/ TERRELL T. TUTEN - ----------------------------- ------------------------------- /s/ GRANGER HANSELL - ----------------------------- ------------------------------- /s/ H. HANSELL HILLYER - ----------------------------- ------------------------------- /s/ H. H. HILLYER, JR. - ----------------------------- ------------------------------- A Majority of the Board of Directors of Savannah Gas Company. [Corporate Seal] ATTEST: /s/ W. B. DAVIS - ----------------------------- Secretary. 10 EXHIBIT B --------- Certificate of Secretary of ATLANTA GAS LIGHT COMPANY The undersigned, L. G. FOLSOM, Secretary of Atlanta Gas Light Company, a Georgia corporation, hereby certifies that the Joint Agreement of Merger, dated as of December 14, 1965, to which this certificate is attached, is the Agreement which has been submitted to the stockholders of record of said corporation at a meeting thereof called separately for the purpose of voting upon the proposed merger provided for in said Joint Agreement of Merger and held on the 25th day of January, 1966; that notice of the time, place and object of said meeting was given in accordance with the terms of the charter and bylaws of said corporation to each stockholder of record of such corporation. Whether entitled to vote or not; that at said meeting said Joint Agreement of Merger was considered and a vote by ballot, in person or by proxy, was taken for the adoption or rejection of the same. The undersigned, as such Secretary of said corporation, hereby further certifies that at said meeting of the stockholders of said Atlanta Gas Light Company held on January 25, 1955. 71.2% of the holders of the common stock of Atlanta Gas Light Company, which is the only stock of said corporation entitled to exercise voting power on the proposal to merge Savannah Gas Company into Atlanta Gas Light Company, voted for the adoption of said Joint Agreement of Merger. IN WITNESS WHEREOF, the undersigned, as Secretary of said Atlanta Gas Light Company has hereunto set his hand and affixed the seal of said corporation, this 27th day of January, 1966. /s/ L. G. Folsom ---------------------------------------- Secretary of Atlanta Gas Light Company [SEAL] EXHIBIT C --------- Certificate of Secretary of SAVANNAH GAS COMPANY The undersigned, W. B. DAVIS, Secretary of Savannah Gas Company, a Georgia corporation, hereby certifies that the Joint Agreement of Merger, dated as of December 14, 1965, to which this certificate is attached, is the Agreement which has been submitted to the stockholders of record of said corporation at a meeting thereof called separately for the purpose of voting upon the proposed merger provided for in said Joint Agreement of Merger and held on the 25th day of January, 1966; that notice of the time, place and object of said meeting was given in accordance with the terms of the charter and bylaws of said corporation to each stockholder of record of such corporation, whether entitled to vote or not; that at said meeting said Joint Agreement of Merger was considered and a vote by ballot, in person or by proxy, was taken for the adoption or rejection of the same. The undersigned, as such Secretary of said corporation hereby further certifies that at said meeting of the stockholders of said Savannah Gas Company held on January 25, 1966, 33% of the holders of the common stock of Savannah Gas Company and 82.5% of the holders of the 5% Cumulative Preferred Stock of Savannah Gas Company, which are the only stockholders of said corporation entitled to exercise voting power on the proposal to merge Savannah Gas Company into Atlanta Gas Light Company, voted for the adoption of said Joint Agreement of Merger. IN WITNESS WHEREOF, the undersigned, as Secretary of said Savannah Gas Company has hereunto set his hand and affixed the seal of said corporation, this 25th day of January, 1966. /s/ W. B. Davis ------------------------------------------ Secretary of Savannah Gas Company (Seal) ORDER ----- The foregoing petition of Atlanta Gas Light Company and Savannah Gas Company for the merger of said corporations under the laws of the State of Georgia having been presented to this Court and examined, and IT APPEARING to this Court that said petition is in accordance with the laws of the State of Georgia, that the Joint Agreement of Merger has been duly entered into by a majority of the Board of Directors of both corporations, that meetings of the stockholders of each of said corporations called separately for the purpose of voting upon said merger were held, of which meetings notice of the time, place and purpose thereof were given in accordance with the charter and by-laws of the said corporations to each stockholder of record, whether entitled to vote or not, that at said meetings said Joint Agreement of Merger was considered and a majority of the holders of each class of said stock of said corporations entitled to exercise the voting power on the proposal to merge voted for the adoption of the said Joint Agreement of Merger, and the Secretaries of both corporations have so certified under the seals of their respective corporations, and that all acts and things necessary or proper to effect the merger of both corporations in accordance with said Joint Agreement of Merger and with the law have been done; NOW, THEREFORE, IT IS ORDERED AND DECREED, that Atlanta Gas Light Company and Savannah Gas Company are hereby merged in accordance with and under the terms and conditions of the foregoing petition, the Joint Agreement of Merger dated as of December 14, 1965, between said corporations and the laws of the State of Georgia, with the result that the separate existence of Savannah Gas Company shall cease and it shall be merged into Atlanta Gas Light Company with Atlanta Gas Light Company as the continuing corporation in accordance with said Joint Agreement of Merger and the laws of the State of Georgia. This 31st day of January, 1966. ---- ------- /s/ Sam Phillips McKenzie -------------------------------------- JUDGE, FULTON SUPERIOR COURT FILED IN OFFICE THIS THE 31 DAY OF JANUARY, 1966 - -- ------- -- D.M. Callaway - -------------------------- Deputy Clerk IN THE SUPERIOR COURT OF FULTON COUNTY STATE OF GEORGIA GEORGIA FULTON COUNTY The Petition of Atlanta Gas Light Company, Petitioner, shows the Court as follows: The Articles of Amendment of Atlanta Gas Light Company, executed by the President and attested by the Secretary, are attached hereto. WHEREFORE, Petitioner prays that the Articles of Amendment of Atlanta Gas Light Company be granted. /s/ Allen Post -------------------------------------- ALLEN POST /s/ Albert G. Norman, Jr. -------------------------------------- ALBERT G. NORMAN, JR. For Hansell, Post, Brandon & Dorsey Attorneys for Petitioner, Atlanta Gas Light Company 3300 First National Bank Tower Atlanta, Georgia 30303 522-3558 ARTICLES OF AMENDMENT Pursuant to the provisions of the Georgia Business Corporation Code and in particular Section 22-904 thereof, Atlanta Gas Light Company, a corporation organized and existing under the laws of the State of Georgia with its registered office in Fulton County, Georgia, adopts the following Articles of Amendment to its Articles of Incorporation (Charter): I. The name of the corporation is Atlanta Gas Light Company. II. (a) The following amendment of the Articles of Incorporation (Charter) was adopted by the shareholders of the corporation of February 6, 1970, in the manner prescribed by the Georgia Business Corporation Code: Section 1.01 of the Articles of Incorporation (Charter) of the corporation was amended to read as follows: "Section 1.01. The maximum number of shares of capital stock of Atlanta Gas Light Company (hereinafter referred to as the "Company") authorized to be outstanding at any one time is as follows: 6,000,000 shares of Common Stock of the par value of $5 per share, 21,900 shares of 4.44% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.44% Preferred Stock"), 20,000 shares of 4-1/2% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4-1/2% Preferred Stock"), -1- 20,100 shares of 4.60% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.60% Preferred Stock"), 50,000 shares of 4.72% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.72% Preferred Stock"), 10,000 shares of 5% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "5% Preferred Stock"), and 100,000 shares of Cumulative Preferred Stock of the par value of $100 per share. "The designations, preferences, voting powers, restrictions, limitations and qualifications of the several classes of Stock of Atlanta Gas Light Company shall be as set forth in the applicable provisions of this Charter (or Articles of Incorporation) as amended, or as may be fixed by applicable statutory provisions, or as may from time to time be lawfully provided by resolution of the Board of Directors of the Company, provided, however, that no share of any such class or series of Preferred Stock shall be issued in violation of the terms of any other class or series of Preferred Stock then outstanding." And Section 3 of the Articles of Incorporation (Charter) was amended by the addition of a new section to be designated Section 3.05 to read as follows: "Section 3.05 - Shares of Preferred or Special Class in Series: "The shares of any Preferred or special class may be divided into and issued in series. If the shares of any such class are -2- to be issued in series, then each series shall be so designated as to distinguish the shares thereof from the shares of all other series and classes. Any or all of the series of any such class and the variations in the relative rights and preferences as between different series may be fixed and determined by this Charter (or Articles of Incorporation) as amended, but all shares of the same class shall be identical except as to the following relative rights and preferences, as to which there may be variations between different series: "(1) The rate of dividend and the date from which dividends shall be accumulated. "(2) Whether shares can be redeemed and, if so, the redemption price and the terms and conditions of redemption. "(3) The amount payable upon shares in event of voluntary and involuntary liquidation. "(4) Purchase, retirement or sinking fund provisions, if any, for the redemption or purchase of shares. "(5) The terms and conditions, if any, on which shares may be converted. "(6) Whether or not shares have voting rights, and the extent of such voting rights, if any. "To the extent that this Charter (or Articles of Incorporation) as amended, shall not have established series and fixed and determined the variations in the relative rights and preferences as between series, the Board of Directors is hereby expressly authorized and empowered to divide any or all of such classes into series, and within the limitations set forth in the laws of Georgia and in this Charter (or Articles of Incorporation) to fix and determine the relative rights and preferences of the shares of any series so established. In order for the Board of Directors to establish a series, the Board of Directors shall adopt a resolution setting forth the designation of the series and fixing and determining the relative rights and preferences thereof, or so much thereof as shall not be fixed and determined by the Charter (or Articles of Incorporation); provided, however, that nothing in this section shall be construed to authorize the Board of Directors, after shares have been issued, to make any change in the designations, preferences, limitations, and relative rights of such shares. The Board of Directors may also provide for the issue, sale and distribution of any authorized but unissued shares of any such preferred or special class of stock." (b) The shareholder vote required to adopt such amendment was the affirmative vote of the holders of a majority of the shares of the Common Stock of the corporation entitled to vote. (c) The number of shares of Common Stock of the corporation outstanding and entitled to vote was 4,123,413. (d) The vote for such amendment was 3,036,770 shares of the Common Stock of the corporation entitled to vote. -4- III. (a) The following amendment of the Articles of Incorporation (Charter) was adopted by the shareholders of the corporation on February 6, 1970, in the manner prescribed by the Georgia Business Corporation Code: "That certain amendments to the Charter of the Company made by order of the Superior Court of Fulton County, Georgia, entered on the 20th day of April, 1929 is stricken in its entirety, and the Company has, and shall have, the power described in that certain Act of the General Assembly of the State of Georgia approved October 14, 1889 (1888-89 Ga. Laws 1398, 1399), to make, sell and furnish electricity for any and all uses to which the same may be put advantageously, and the power to lay pipes and conduits, to erect poles and run wires either above or below the surface of the streets, roads and highways as may be desirable in each case for the purpose of furnishing electricity, and the power to maintain and repair its pipes, conduits, poles, wires and appurtenances for the purpose of furnishing electricity." And the following was added to the Articles of Incorporation (Charter) of the corporation: "The Company shall have the power to make, sell, furnish, distribute or otherwise deal with liquefied petroleum gas, bottled gas, steam, hot water, chilled water and any other gas, liquid, fuel, energy, agency, substance, matter or material which can be furnished, delivered or carried by -5- means of pipes, ducts or conduits or by the use of movable containers. In addition to any powers, privileges and rights which the Company may have under the laws of the State of Georgia or elsewhere in this Charter (Articles of Incorporation) as amended from time to time, the Company shall also have the power to perform any lawful act connected with any purpose, authority, power, right, business or action which it may lawfully exercise or engage in". (b) The shareholder vote required to adopt such amendment was the affirmative vote of the holders of a majority of the shares of the Common Stock of the corporation entitled to vote. (c) The number of shares of Common Stock of the corporation outstanding and entitled to vote was 4,123,413. (d) The vote for such amendment was 3,078,656 shares of the Common Stock of the corporation entitled to vote. IN WITNESS WHEREOF, ATLANTA GAS LIGHT COMPANY has caused these Articles of Amendment to be executed and its corporate seal to be affixed and has caused the foregoing to be attested, all by its duly authorized officers, on this 9th day of February, 1970. ATLANTA GAS LIGHT COMPANY By ----------------------- President ATTEST: (Corporate Seal) [SIGNATURE APPEARS HERE] - ---------------------------- Secretary -6- O R D E R --------- The foregoing Articles of Amendment of Atlanta Gas Light Company having been presented to and examined by the undersigned Judge of the Superior Court of Fulton County, Georgia, they are found to be lawful, and It is hereby ordered and declared that said amendments and said Articles of Amendment of Atlanta Gas Light Company be, and the same are hereby, granted. This 10th day of February, 1970. [SIGNATURE APPEARS HERE] ---------------------------------- Judge, Superior Court of Fulton County, Georgia ATLANTA GAS LIGHT COMPANY ---------------- CERTIFICATE OF DESIGNATION OF A SERIES OF CUMULATIVE PRE- FERRED STOCK AS 8.32% CUMULATIVE PREFERRED STOCK AND FIXING DIVIDEND AND OTHER PREFERENCES AND RIGHTS OF SUCH SERIES BY RESOLUTION OF BOARD OF DIRECTORS Pursuant to the Provisions of Section 22-502 of the Georgia Business Corporation Code ---------------- We, the undersigned, W. L. LEE and L. G. FOLSOM, President and Secretary, respectively, of Atlanta Gas Light Company, a corporation organized and existing under the laws of the State of Georgia (hereinafter sometimes referred to as the Company), DO HEREBY CERTIFY as follows: FIRST: That the Board of Directors of the Company, pursuant to authority expressly vested in it by the provisions of the Charter (Articles of Incorporation), as amended, has, at a meeting of said Board, duly convened and held on the 7th day of June, 1971, at which meeting a quorum for the transaction of business was present and acting throughout, duly adopted the following preamble and resolution: "WHEREAS, the Common Stockholders of Atlanta Gas Light Company, at a meeting duly and legally held on February 6, 1970, granted to this Board of Directors the authority to establish and designate series of the authorized but unissued Cumulative Preferred Stock and to fix and determine the relative rights and preferences thereof within the limitations set forth in the laws of Georgia and in the Charter of this Company and to issue, sell and distribute a series so established, "NOW, THEREFORE, BE IT "RESOLVED, that, as contemplated by Section 3.05 of the Charter, a series of Cumulative Preferred Stock of the par value of $100 per share of Atlanta Gas Light Company be designated as "8.32% Cumulative Preferred Stock" and that 80,000 shares of the heretofore authorized but unissued shares of Cumulative Preferred Stock be issued as shares of the 8.32% Cumulative Preferred Stock (hereinafter referred to as the 8.32% Preferred Stock) with the following rights, preferences, voting powers, restrictions, limitations and qualifications: (1) Dividends. Out of any assets of the Company available for dividends, the holders of the 8.32% Preferred Stock shall be entitled to receive, but only when and as declared by the Board of Directors, dividends at the rate of 8.32% per annum on the par value thereof, and no more. Dividends declared shall be payable quarterly on March 1, June 1, September 1 and December 1 in each year, to stockholders of record on a date not more than 30 days prior to such payment date, as may be determined by the Board of Directors of the Company. Dividends on the 8.32% Preferred Stock shall be cumulative from and including the first day of the quarterly dividend period in which such shares shall be issued. So long as any shares of 8.32% Preferred Stock are outstanding, no dividends shall be declared or paid upon, or set apart for, the shares of any class of Junior Stock, nor any sums applied to the purchase, redemption or other retirement of any class of Junior Stock, unless full dividends on all shares of the 8.32% Preferred Stock and of any other class or series of Preferred Stock outstanding for all past quarterly dividend periods shall have been paid or declared and a sum sufficient for the payment thereof set apart and the full dividend for the then current quarterly dividend period shall have been or concurrently shall be paid or declared and set apart. The amount of any deficiency for the past dividend periods may be paid or declared and set apart at any time without reference to any quarterly dividend payment date. Unpaid accrued dividends on the 8.32% Preferred Stock shall not bear interest. (2) Liquidation In the event of any liquidation, dissolution or winding up of the Company or reduction or decrease of its capital resulting in a distribution of assets to the holders of any class of Junior Stock, the holders of 8.32% Preferred Stock shall be entitled to receive the amounts prescribed in Section 4.02 of the Charter of the Company as amended. (3) Redemption Provisions. The Company may at its option expressed by resolution of its Board of Directors redeem the 8.32% Preferred Stock in the manner provided in Section 4.03 (A) of the Charter of the Company, as amended, at any time or from time to time at $100 per share plus a premium of: $8.32 per share if redeemed prior to June 1, 1976; $6.24 per share if redeemed on June 1, 1976 or thereafter and prior to June 1, 1981; $4.16 per share if redeemed on June 1, 1981 or thereafter and prior to June 1, 1986; and $2.08 per share if redeemed on or after June 1, 1986; together in each case with accrued dividends; provided, however, that no such redemption of shares of 8.32% Preferred Stock pursuant to the aforementioned option shall be made prior to June 1, 1976, directly or indirectly as a part of, or in anticipation of, any refunding operation involving the incurring of indebtedness by the Company, or through the issuance of capital stock ranking equally with or prior to the 8.32% Preferred Stock as to dividends or assets, if such indebtedness has an effective interest cost to the Company (calculated after adjustment, in accordance with generally accepted financial practice, for any premium received or discount granted in connection with indebtedness being incurred in such refunding operation ), or such stock has an effective dividend cost to the Company (so calculated) of less than 8.44%. (4) Purchase Fund. The 8.32% Preferred Stock shall be entitled to the benefits of a Purchase Fund as follows: The Company (unless prevented from so doing by any applicable restriction of law or contained in the Charter of the Company, as amended) will each year, beginning in 1974, so long as any shares of the 8.32% Preferred Stock are outstanding, make an offer (hereinafter called a "Purchase Offer") to the holders of shares of the 8.32% Preferred Stock to purchase on June 1 in each such year 1,600 shares (less the number of shares, if any, purchased for surrender in accordance with the provisions of the following paragraph) of said 8.32% Preferred Stock at prices up to but not exceeding $100 per share. The obligation of the Company to make annually the above-mentioned Purchase Offer and to purchase shares of the 8.32% Preferred Stock of the Company tendered for sale in accordance with the terms thereof, is hereinafter referred to as the "Purchase Fund Obligation." In addition to or in lieu of making a Purchase Offer, a Purchase Fund Obligation may also be satisfied in whole or in part by the purchase by the Company, if obtainable, at not exceeding $100 per share plus accrued dividends to the date of purchase and the surrender for cancellation to the Transfer Agent for the 8.32% Preferred Stock on or before June 1 in each such year of certificates for not more than 1,600 shares of said 8.32% Preferred Stock. Beginning on or prior to April 15, 1974 and on or prior to April 15 in each year thereafter, the Company shall furnish the Transfer Agent for the 8.32% Preferred Stock with a certificate signed by the President or a Vice President or the Treasurer or an Assistant Treasurer of the Company stating (a) the number of shares of 8.32% Preferred Stock, if any, purchased by the Company and to be surrendered on or prior to June 1 in such year, and that said shares had been purchased by the company at prices not exceeding $100 per share plus accrued dividends to the date of purchase and (b) that the Company will make an offer to the holders of its outstanding 8.32% Preferred Stock to purchase a number of shares of the 8.32% Preferred Stock, if any, sufficient to satisfy the Purchase Fund Obligation (or the balance thereof as the case may be) for such year. 2 If the certificate filed in any such year shall state that a Purchase Offer is to be made in such year, the Transfer Agent for the 8.32% Preferred Stock shall on or prior to May 1 of such year mail to the holders of record of the 8.32% Preferred Stock at the close of business on the day preceding such mailing, a notice, in the name of the Company, that the Company will on June 1 of such year accept offers to sell the number of, shares required to satisfy the Purchase Fund Obligation then due at prices not exceeding $100 per share. The Company may require, and in such event said notice shall specify, that each offer to sell shares of the 8.32% Preferred Stock shall be accompanied by the certificate or certificates for the shares so offered, together with evidence satisfactory to the Transfer Agent of the right of the holder of such shares to so sell the same to the Company. In any year in which a Purchase Offer is made, the Transfer Agent shall on June 1 of such year, on behalf of the Company, accept offers to sell shares of the 8.32% Preferred Stock received by it up to the full number of shares covered by the Purchase Offer upon such basis as will result in the lowest aggregate cost to the Company. The Transfer Agent shall accept offers made at the same price on a pro rata basis, as nearly as practicable. In the event any person whose offer is accepted shall thereafter fail to make good such offer said Transfer Agent shall to the extent possible accept in lieu thereof the best offer or offers, if any, theretofore received and not theretofore accepted. On or prior to June 1 in each year in which a Purchase Offer shall have been made, the Company shall surrender to the Transfer Agent for the 8.32% Preferred Stock, for cancellation, certificates, for the number of shares of 8.32% Preferred Stock, if any, specified in the certificate for such year as having been purchased by the Company for surrender to the Transfer Agent and deposit with said Transfer Agent cash sufficient to purchase shares of 8.32% Preferred Stock, if any, accepted for purchase pursuant to the Purchase Offer made in such year and thereafter shall deposit any additional funds required to carry out the Purchase Offer for such year. The Transfer Agent shall, on or before the next succeeding July 15, return to the Company any funds deposited with it and not used or required to purchase shares of the 8.32% Preferred Stock pursuant to the Purchase Offer for such year. The Purchase Fund Obligations in any year shall be deemed to be fully satisfied if the Company shall have complied with the provisions of this Paragraph (4) notwithstanding that the total number of shares purchased by it shall be less than the total number of shares covered by the Company's Purchase Offer for that year because insufficient offers to sell were received by it. Purchase Fund Obligations shall be cumulative only to the extent that if any year the Company fails to make and carry out a Purchase Offer (if and to the extent a Purchase Offer is required to be made in such year), such failure shall be made good in the manner hereinafter set forth before any dividends shall be declared, paid upon, or set apart for any shares of Junior Stock or any sums applied to the Purchase, redemption, or other retirement of Junior Stock. Any such failure may be good at any time by the making and carrying out of a special offer (hereinafter called "Special Purchase Offer") to purchase at a price of $100 per share plus accrued dividends, if any, to the date of purchase, the number of shares of 8.32% Preferred Stock as to which failure exists, and to that end, the Company shall file with the Transfer Agent a certificate signed by the President or a Vice President or the Treasurer or an Assistant Treasurer of the Company specifying a date, not less than 45 days after the date of filing of such certificate, on which offers to sell shares of the 8.32% Preferred Stock will be accepted. Special Purchase Offers shall otherwise be made and carried out on not less than 30 days' notice and in the same manner as hereinabove provided for Purchase Offers to be carried out on June 1. Shares of the 8.32% Preferred Stock purchased pursuant to any Purchase Offer, or Special Purchase Offer, or surrendered in whole or partial satisfaction of a Purchase Fund Obligation in any year, shall be cancelled and shall not be reissued as shares of said series. 3 (5) Voting Powers and Other Rights. The holders of the 8.32% Preferred Stock shall have such voting powers and other rights and be subject to such restrictions and qualifications as are set forth in Sections 4 to 6, inclusive, of the Charter of the Company, as amended, and for the purposes of said Sections, the 8.32% Preferred Stock shall be deemed to be, and shall be treated in all respects as, a class of Preferred Stock of the Company." SECOND: The number of shares of Cumulative Preferred Stock of the par value of $100 per share authorized but unissued by the Charter, as amended, is 100,000 and the number of shares of the series of said class of stock designated as 8.32% Preferred Stock is 80,000. IN WITNESS WHEREOF, the undersigned, said W. L. Lee and said L. G. Folsom, have made this Certificate under the seal of said Atlanta Gas Light Company and have signed the same as President and Secretary, respectively, of said Atlanta Gas Light Company, this 10th day of June, 1971. /s/ W. L. Lee -------------------------------- W. L. Lee President ATLANTA GAS LIGHT COMPANY Attest: /s/ L. G. Folsom - --------------------------------- L. G. Folsom Secretary of ATLANTA GAS LIGHT COMPANY [CORPORATE SEAL APPEARS HERE] ATLANTA GAS LIGHT COMPANY INCORPORATED FEBRUARY 15, 1856 GEORGIA 4 ARTICLES OF AMENDMENT Pursuant to the provisions of the Georgia Business Corporation Code and in particular Section 22-904 thereof, Atlanta Gas Light Company, a corporation organized and existing under the laws of the State of Georgia, with its registered office in Fulton County, Georgia, adopts the following Articles of Amendment to its Articles of Incorporation (Charter): I. The name of the corporation is Atlanta Gas Light Company. II. (a) The following amendment of the Articles of Incorporation (Charter) was adopted by the shareholders of the corporation on June 12, 1973, in the manner prescribed by the Georgia Business Corporation Code: Section 1.01 of the Articles of Incorporation (Charter) of the corporation was amended to read as follows: "Section 1.01. The maximum number of shares of capital stock of Atlanta Gas Light Company (hereinafter referred to as the 'Company') authorized to be outstanding at any one time is as follows: 6,000,000 shares of Common Stock of the par value of $5 per share, 21,900 shares of 4.44% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the '4.44% Preferred Stock'), 20,000 shares of 4 1/2% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the '4 1/2% Preferred Stock'), 20,100 shares of 4.60% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the '4.60% Preferred Stock'), 50,000 shares of 4.72% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the '4.72% Preferred Stock'), 10,000 shares of 5% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the '5% Preferred Stock'), 80,000 shares of 8.32% Series Cumulative Preferred Stock of the par value of $100 per share, and 320,000 shares of Cumulative Preferred Stock of the par value of $100 per share. "The designations, preferences, voting powers, restrictions, limitations and qualifications of the several classes or series of Stock of Atlanta Gas Light Company shall be as set forth in the applicable provisions of this Charter (Articles of Incorporation), as amended, or as may be fixed by applicable statutory provisions, or as may from time to time be lawfully provided by resolution of the Board of Directors of the Company, provided, however, that no share of any such class or series of Preferred Stock shall be issued in violation of the terms of any other class or series of Preferred Stock then outstanding." (b) The shareholder vote required to adopt such amendment was the affirmative vote of the holders of a majority of the shares of the Common Stock of the corporation entitled to vote. (c) The number of shares of Common Stock of the corporation outstanding and entitled to vote was 4,535,755. (d) The vote for such amendment was 3,235,948 shares of the Common Stock of the corporation entitled to vote. III. (a) The following amendment of the Articles of Incorporation -2- (Charter) was adopted by the shareholders of the corporation on June 12, 1973, in the manner prescribed by the Georgia Business Corporation Code: Section 4.04(B) (i) of the Articles of Incorporation (Charter) of the corporation was amended to read as follows: "(B) So long as any Preferred Stock is outstanding, the Company shall not, without the consent (given in writing without a meeting or by vote in person or by proxy at a meeting called for the purpose) of the holders of a majority of the aggregate number of shares of all classes of Preferred Stock entitled to vote then outstanding- (i) Issue, create or assume (including as an issuance any extension or renewal) any unsecured securities (notes, debentures or other securities representing unsecured indebtedness other than indebtedness maturing not more than one year from the date of issuance, creation or assumption of any such unsecured securities) for any purpose, except for the purpose of refunding outstanding unsecured securities of such character or effecting the retirement, by redemption or otherwise, of outstanding shares of the Preferred Stock, or of a class of stock ranking prior thereto, if immediately after such issue, creation or assumption the total principal amount of all unsecured securities issued, created or assumed and then outstanding, including the unsecured securities then to be issued but excluding indebtedness maturing not more than one year from the date of creation, would exceed twenty percent (20%) of the aggregate of (i) the total principal amount of all bonds or other securities representing secured indebtedness issued, created or assumed by the Company and then to be outstanding, and -3- (ii) the total of the capital and surplus (including premiums on capital stock) of the Company as then to be stated on its books; provided, that any unsecured securities issued under any authorization of holders of Preferred Stock (and any securities issued to refund the same) shall be excluded from the computation of the amount of unsecured securities which may be issued, created or assumed within the aforesaid twenty percent (20%) limitation; or" (b) The shareholders vote required to adopt such amendment was the affirmative vote of the holders of a majority of the shares of the Common Stock of the corporation entitled to vote, the holders of the majority of the shares of the Cumulative Preferred Stock of the corporation entitled to vote and the holders of the majority of the total shares of the corporation entitled to vote thereon. (c) The number of shares of Common Stock of the corporation outstanding and entitled to vote was 4,535,755. The number of shares of Cumulative Preferred Stock of the corporation outstanding and entitled to vote was 181,768. The total shares of the corporation outstanding and entitled to vote was 4,717,523. (d) The vote for such amendment was (i) 3,189,509 shares of the Common Stock of the corporation entitled to vote, (ii) 127,178 shares of the Cumulative Preferred Stock of the corporation outstanding and entitled to vote, and (iii) 3,316,687 shares of the total shares of the corporation entitled to vote. IN WITNESS WHEREOF, ATLANTA GAS LIGHT COMPANY has caused these Articles of Amendment to be executed and its corporate seal to be affixed and has caused the foregoing to be attested, all by its duly authorized officers, on this 21st day ---- of June, 1973. ATLANTA GAS LIGHT COMPANY [Corporate Seal] ATTEST: By______________________________________ President [Signature appears here] _________________________________ Secretary IN THE SUPERIOR COURT OF FULTON COUNTY STATE OF GEORGIA GEORGIA, FULTON COUNTY: The Petition of Atlanta Gas Light Company, Petitioner, shows the Court as follows: The Articles of Amendment of Atlanta Gas Light Company, executed by the President and attested by the Secretary, are attached hereto. WHEREFORE, Petitioner prays that the Articles of Amendment of Atlanta Gas Light Company be granted. /s/ Allen Post ----------------------------------- ALLEN POST /s/ N. William Bath ---------------------------------- N. WILLIAM BATH For Hansell, Post, Brandon & Dorsey Attorneys for Petitioner, Atlanta Gas Light Company 3300 First National Bank Tower Atlanta, Georgia 30303 658-9600 O R D E R --------- The foregoing Articles of Amendment of Atlanta Gas Light Company having been presented to and examined by the undersigned Judge of the Superior Court of Fulton County, Georgia, they are found to be lawful, and It is hereby ordered and declared that said amendments and said Articles of Amendment of Atlanta Gas Light Company be, and the same are hereby, granted. This 22nd day of June, 1973. /s/ John S. Langford, Jr. ------------------------------------- JUDGE, SUPERIOR COURT, FULTON COUNTY, GEORGIA ATLANTA GAS LIGHT COMPANY --------------- CERTIFICATE OF DESIGNATION OF A SERIES OF CUMULATIVE PREFERRED STOCK AS 7.84% CUMULATIVE PREFERRED STOCK AND FIXING DIVIDEND AND OTHER PREFERENCES AND RIGHTS OF SUCH SERIES BY RESOLUTION OF BOARD OF DIRECTORS Pursuant to the Provisions of Section 22-502 of the Georgia Business Corporation Code ----------------- We, the undersigned, W. L. Lee and L. G. Folsum, President and Secretary, respectively, of Atlanta Gas Light Company, a corporation organized and existing under the laws of the State of Georgia (hereinafter sometimes referred to as the Company), DO HEREBY CERTIFY as follows: FIRST: That the Board of Directors of the Company, pursuant to authority expressly vested in it by the provisions of the Charter (Articles of Incorporation), as amended, has, at a meeting of said Board, duly convened and held on the 9th day of July, 1973, at which meeting a quorum for the transaction of business was present and acting throughout, duly adopted the following preamble and resolution: "WHEREAS, the Common Stockholders of Atlanta Gas Light Company have heretofore granted to this Board of Directors the authority to establish and designate series of the authorized but unissued Cumulative Preferred Stock of the Company and to fix and determine the relative rights and preferences thereof within the limitations set forth in the laws of Georgia and in the Charter of this Company and to issue, sell and distribute a series so established, "NOW, THEREFORE, BE IT "RESOLVED, that, as contemplated by Section 3.05 of the Charter, a series of Cumulative Preferred Stock of the par value of $100 per share of Atlanta Gas Light Company be designated as '7.84% Cumulative Preferred Stock' and that 75,000 shares of the heretofore authorized but unissued shares of Cumulative Preferred Stock be issued as shares of the 7.84% Cumulative Preferred Stock (hereinafter referred to as the 7.84% Preferred Stock) with the following rights, preferences, voting powers, restrictions, limitations and qualifications: (1) Dividends. Out of any assets of the Company available for dividends, the holders of the 7.84% Preferred Stock shall be entitled to receive, but only when and as declared by the Board of Directors, dividends at the rate of 7.84% per annum on the par value thereof, and no more. Dividends declared shall be payable quarterly on March 1, June 1, September 1 and December 1 in each year, to stockholders of record on a date not more than 30 days prior to such payment date, as may be determined by the Board of Directors of the Company. Dividends on the 7.84% Preferred Stock shall be cumulative from and including the initial date of issue of any shares of the 7.84% Preferred Stock. So long as any shares of 7.84% Preferred Stock are outstanding, no dividends shall be declared or paid upon, or set apart for, the shares of any class of Junior Stock, nor any sums applied to the purchase, redemption or other retirement of any class of Junior Stock, unless full dividends on all shares of the 7.84% Preferred Stock and of any other class or series of Preferred Stock outstanding for all past quarterly dividend periods shall have been paid or declared and a sum sufficient for the payment thereof set apart and the full dividend for the then current quarterly dividend period shall have been or concurrently shall be paid or declared and set apart. The amount of any deficiency for the past dividend periods may be paid or declared and set apart at any time without reference to any quarterly dividend payment date. Unpaid accrued dividends on the 7.84% Preferred Stock shall not bear interest. (2) Liquidation. In the event of any liquidation, dissolution or winding up of the Company or reduction or decrease of its capital resulting in a distribution of assets to the holders of any class of Junior Stock, the holders of 7.84% Preferred Stock shall be entitled to receive the amounts presented in Section 4.02 of the Charter of the Company as amended. (3) Redemption Provisions. The Company may at its option expressed by resolution of its Board of Directors redeem the 7.84% Preferred Stock in the manner provided in Section 4.03 (A) of the Charter of the Company, as amended, at any time or from time to time at $100 per share plus a premium of: $7.84 per share if redeemed prior to July 1, 1978; $5.88 per share if redeemed on July 1, 1978 or thereafter and prior to July 1, 1983; $3.92 per share if redeemed on July 1, 1983 or thereafter and prior to July 1, 1988; and $1.96 per share if redeemed on or after July 1, 1988; together in each case with accrued dividends; provided, however, that no such redemption of shares of 7.84% Preferred Stock pursuant to the aforementioned option shall be made prior to July 1, 1978, directly or indirectly as a part of, or in anticipation of, any refunding operation involving the incurring of indebtedness by the Company, or through the issuance of capital stock ranking equally with or prior to the 7.84% Preferred Stock as to dividends or assets, if such indebtedness has an effective interest cost to the Company (calculated after adjustment, in accordance with generally accepted financial practice, for any premium received or discount granted in connection with indebtedness being incurred in such refunding operation), or such stock has an effective dividend cost to the Company (so calculated) of less than 7.90%. (4) Purchase Fund. The 7.84% Preferred Stock shall be entitled to the benefits of a Purchase Fund as follows: The Company (unless prevented from so doing by any applicable restriction of law or contained in the Charter of the Company, as amended) will each year, beginning in 1976, so long as any shares of the 7.84% Preferred Stock are outstanding, make an offer (hereinafter called a "Purchase Offer") to the holders of shares of the 7.84% Preferred Stock to purchase on July 1 in each such year 1,500 shares (less the number of shares, if any, purchased for surrender in accordance with the provisions of the following paragraph) of said 7.84% Preferred Stock at prices up to but not exceeding $100 per share. The obligation of the Company to make annually the above-mentioned Purchase Offer and to purchase shares of the 7.84% Preferred Stock of the Company tendered for sale in accordance with terms thereof, is hereinafter referred to as the "Purchase Fund Obligation." In addition to or in lieu of making a Purchase Offer, a Purchase Fund Obligation may also be satisfied in whole or in part by the purchase by the Company, if obtainable, at not exceeding $100 per share plus accrued dividends to the date of purchase and the surrender for cancellation to the Transfer Agent for the 7.84% Preferred Stock on or before July 1 in each such year of certificates for not more than 1,500 shares of said 7.84% Preferred Stock. Beginning on or prior to May 15, 1976 and on or prior to May 15 in each year thereafter, the Company shall furnish the Transfer Agent for the 7.84% Preferred Stock with a certificate signed by the President or a Vice President or the Treasurer or an Assistant Treasurer of the Company stating (a) the number of shares of the 7.84% Preferred Stock, if any, purchased by the Company and to be surrendered on or prior to July 1 in such year, and that said shares had 2 been purchased by the Company at prices not exceeding $100 per share plus accrued dividends to the date of purchase and (b) that the Company will make an offer to the holders of its outstanding 7.84% Preferred Stock to purchase a number of shares of the 7.84% Preferred Stock, if any, sufficient to satisfy the Purchase Fund Obligation (or the balance thereof as the case may be) for such year. If the certificate filed in any such year shall state that a Purchase Offer is to be made in such year, the Transfer Agent for the 7.84% Preferred Stock shall on or prior to June 1 of such year mail to the holders of record of the 7.84% Preferred Stock at the close of business on the day preceding such mailing, a notice in the name of the Company, that the Company will on July 1 of such year accept offers to sell the number of shares required to satisfy the Purchase Fund Obligation then due at prices not exceeding $100 per share. The Company may require, and in such event said notice shall specify, that each offer to sell shares of the 7.84% Preferred Stock shall be accompanied by the certificate or certificates for the shares so offered, together with evidence satisfactory to the Transfer Agent of the right of the holder of such shares to so sell the same to the Company. In any year in which a Purchase Offer is made, the Transfer Agent shall on July 1 of such year, on behalf of the Company, accept offers to sell shares of the 7.84% Preferred Stock received by it up to the full number of shares covered by the Purchase Offer upon such basis as will result in the lowest aggregate cost to the Company. The Transfer Agent shall accept offers made at the same price on a pro rata basis, as nearly as practicable. In the event any person whose offer is accepted shall thereafter fail to make good such offer said Transfer Agent shall to the extent possible accept in lieu thereof the best offer or offers, if any, theretofore received and not theretofore accepted. On or prior to July 1 in each year in which a Purchase Offer shall have been made, the Company shall surrender to the Transfer Agent for the 7.84% Preferred Stock, for cancellation, certificates, for the number of shares of 7.84% Preferred Stock, if any, specified in the certificate for such year as having been purchased by the Company for surrender to the Transfer Agent and deposit with said Transfer Agent cash sufficient to purchase shares of 7.84% Preferred Stock, if any, accepted for purchase pursuant to the Purchase Offer made in such year and thereafter shall deposit any additional funds required to carry out the Purchase Offer for such year. The Transfer Agent shall, on or before the next succeeding August 15, return to the Company any funds deposited with it and not used or required to purchase shares of the 7.84% Preferred Stock pursuant to the Purchase Offer for such year. The Purchase Fund Obligations in any year shall be deemed to be fully satisfied if the Company shall have complied with the provisions of this Paragraph (4) notwithstanding that the total number of shares purchased by it shall be less than the total number of shares covered by the Company's Purchase Offer for that year because insufficient offers to sell were received by it. Purchase Fund Obligations shall be cumulative only to the extent that if any year the Company fails to make and carry out a Purchase Offer (if and to the extent a Purchase Offer is required to be made in such year), such failure shall be made good in the manner hereinafter set forth before any dividends shall be declared, paid upon, or set apart for any shares of Junior Stock or any sums applied to the purchase, redemption, or other retirement of Junior Stock. Any such failure may be made good at any time by the making and carrying out of a special offer (hereinafter called "Special Purchase Offer") to purchase at a price of $100 per share plus accrued dividends, if any, to the date of purchase, the number of shares of 7.84% Preferred Stock as to which failure exists and, to that end, the Company shall file with the Transfer Agent a certificate signed by the President or a Vice President or the Treasurer or an Assistant Treasurer of the Company specifying a date, not less than 45 days after the date of filing of such certificate, on which offers to sell shares of the 7.84% Preferred Stock will be accepted. Special Purchase Offers shall otherwise be made and carried out on not less than 30 days' notice and in the same manner as hereinabove provided for Purchase Offers to be carried out on July 1. 3 Shares of the 7.84% Preferred Stock purchased pursuant to any Purchase Offer, or Special Purchase Offer, or surrendered in whole or partial satisfaction of a Purchase Fund Obligation in any year, shall be canceled and shall not be reissued as shares of said series. (5) Voting Powers and Other Rights. The holders of the 7.84% Preferred Stock shall have such voting powers and other rights and the subject to such restrictions and qualifications as are set forth in Section 4 to 6, inclusive, of the Charter of the Company, as amended, and for the purposes of said Sections, the 7.84% Preferred Stock shall be deemed to be, and shall be treated in all respects as, a class of Preferred Stock of the Company." SECOND: The number of authorized but unissued sahres of Cumulative Preferred Stock of the par value of $100 per share authorized by the Charter, as amended, is 320,000 and the number of shares of the series of said class of stock designated as 7.84% Cumulative Preferred Stock is 75,000. IN WITNESS WHEREOF, the undersigned, said W. L. Lee and said L. G. Folsom, have made this Certificate under the seal of said Atlanta Gas Light Company and have signed the same as President and Secretary, respectively, of said Atlanta Gas Light Company, this 10th day of July, 1973. /s/ W. L. Lee ----------------------------------------- W. L. Lee President ATLANTA GAS LIGHT COMPANY Attest: /s/ L. G. Folsom - ----------------------------------- L. G. Folsom Secretary of ATLANTA GAS LIGHT COMPANY (CORPORATE SEAL) ATLANTA GAS LIGHT COMPANY INCORPORATED FEBRUARY 16, 1856 GEORGIA 4 ARTICLES OF AMENDMENT --------------------- Pursuant to the provisions of the Georgia Business Corporation Code and in particular Section 22-904 thereof, ATLANTA GAS LIGHT COMPANY, a corporation organized and existing under the laws of the State of Georgia, with its registered office in Fulton County, Georgia, adopts the following Articles of Amendment to its Articles of Incorporation (Charter): I. The name of the corporation is ATLANTA GAS LIGHT COMPANY. II. (a) The following amendment of the Articles of Incorporation (Charter) was adopted by the shareholders of the corporation on February 6, 1976, in the manner prescribed by the Georgia Business Corporation Code: Section 1.01 of the Articles of Incorporation (Charter) of the corporation was amended to read as follows: "Section 1.01. The maximum number of shares of capital stock of Atlanta Gas Light Company (hereinafter referred to as the "Company") authorized to be outstanding at any one time is as follows: 6,000,000 shares of Common Stock of the par value of $5 per share, 21,900 shares of 4.44% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to at the "4.44% Preferred Stock"), 20,000 shares of 4.50% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.50% Preferred Stock"), 20,100 shares of 4.60% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.60% Preferred Stock"), 50,000 shares of 4.72% Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.72% Preferred Stock"), 10,000 shares of 5% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "5% Preferred Stock"), 80,000 shares of 8.32% Series Cumulative Preferred Stock of the par value of $100 per share, 75,000 shares of 7.84% Series Cumulative Preferred Stock of the par value of $100 per share, 245,000 shares of Cumulative Preferred Stock of the par value of $100 per share, and 1,000,000 shares of Cumulative Preferred Stock of no par value with the amount of stated capital allocated to each share to be determined by the Board of Directors of the Company at the time of issue thereof, and with the maximum aggregate stated capital allocable to all such shares at any time outstanding of not more than $30,000,000. The designations, preferences, voting powers, restrictions, limitations and qualifications of the several classes of series of stock of Atlanta Gas Light Company shall be as set forth in the applicable provisions of this Charter (Articles of Incorporation), as amended, or as may be fixed by applicable statutory provisions, or as may from time to time be lawfully provided by resolution of the Board of Directors of the Company, provided, however, that no share of any such class or series of Preferred Stock shall be issued in violation of the terms of any other class or series of Preferred Stock then outstanding." Section 2.01 of the Articles of Incorporation (Charter) of the corporation was amended to read as follows: "Section 2.01. The term "Preferred Stock" shall mean any class of Preferred Stock described in Section 3 and any other class of stock with respect to which dividends and amounts payable upon liquidation, dissolution or winding up of the Company, or upon reduction or decrease -2- of its capital resulting in a distribution of assets to holders of any class of Junior Stock, shall be payable on a parity with the amounts payable in respect of Preferred Stock described in Section 3, notwithstanding that any such other class of Preferred Stock may have a par value (or be of no par value), dividend rate, redemption prices, amounts payable thereon upon liquidation, dissolution or winding up, sinking or purchase fund, voting rights and other terms and provisions varying form those of the classes of such Preferred Stock then described in Section 3." Section 2.03 of the Articles of Incorporation (Charter of the corporation was amended to read as follows: "Section 2.03. The term 'accrued dividends' shall mean, in respect to each share of any class of stock, that amount which shall be equal to simple interest upon the par value, or the stated capital allocated to shares of no par value, at the annual dividend rate fixed for such class of stock and no more, from and including the date upon which dividends on such share became cumulative and (i) up to but not including the date fixed for payment in liquidation or for redemption, or, as the case may be, (ii) up to and including the last day of any period for which such accrued dividends are to be determined, less the aggregate amount of all dividends theretofore paid or declared and set apart for payment thereon. Computation of accrued dividends in respect of any portion of a quarterly dividend period shall be by the 360-day year, 30-day month, method of computing interest." Section 4.02 of the Articles of Incorporation (Charter) of the corporation was amended to read as follows: "Section 4.02. Liquidation Rights. In the event of any ------------------ liquidation, dissolution or winding up of the Company, -3- or reduction or decrease of its capital resulting in a distribution of assets to the holders of any class of Junior Stock, whether voluntary or involuntary, the holders of each class of Preferred Stock shall be entitled to receive for each share thereof the par value, or an amount equal to the stated capital allocated to shares of no par value, thereof, plus, in case such liquidation, dissolution, winding up, reduction or decrease shall have been voluntary, an amount per share equal to the redemption premium that would then be payable to the holders thereof if such Preferred Stock were to be payable to the holders thereof if such Preferred Stock were to be redeemed at the option of the Company, together in each case with accrued dividends, before any distribution of the assets shall be made to the holders of shares of any class of Junior Stock; but the holders of Preferred Stock shall be entitled to no further participation in such distribution. A consolidation or merger of the Company or sale, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the property or assets of the Company shall not be deemed a dissolution, liquidation or winding up of the Company within the meaning of this Section 4.02." Section 4.04 (iv) of the Articles of Incorporation (Charter) of the corporation was amended to read as follows: "(iv) Reduce the par value of the capital allocable to the outstanding Preferred Stock with par value, or reduce the stated capital allocated to outstanding Preferred Stock of no par value, or reduce below the greater of $5,000,000 or the aggregate par value and/or stated capital of all classes of Preferred Stock at the time outstanding the aggregate capital allocable to Junior Stock, except in any case where a State -4- or Federal regulatory body having jurisdiction shall have required the Company to reduce the book value of its assets and in conjunction therewith the capital allocable to one or more classes of Junior Stock is to be reduced in an amount or amounts not exceeding in the aggregate the amount of such reduction of book value of assets; or" Section 6.01 of the Articles of Incorporation (Charter) of the corporation was amended as follows: "Section 6.01. Voting Provisions. At any meeting of the holders of ----------------- the Preferred Stock which shall be called for any purpose, pursuant to Section 4, the presence in person or by proxy of the holders of the majority of the issued and outstanding shares of all classes of Preferred Stock (or, in the case of a meeting of stockholders of less than all classes of Preferred Stock, a majority of the issued and outstanding shares of all such classes of Preferred Stock entitled to vote at such meeting) shall be necessary for a quorum, provided, however, that if such quorum shall not be obtained at such meeting or at any adjournment thereof within thirty (30) days from the date of the meeting as originally called, then the presence in person or by proxy of the holders of one-third of the issued and outstanding shares of the classes of Preferred Stock entitled to vote at the meeting shall be sufficient for a quorum. "At all elections of Directors each holder of any class of stock entitled to vote shall be entitled to as many votes as shall equal (1) the number of votes such holder would have (except for the provisions of this paragraph) multiplied by (2) the number of Directors to be elected by the holders of stock of such class, and may cast all of such votes for a single director or may distribute them among the number to be voted for, or any two or more of them as such holder may see fit. -5- "Each holder of Preferred Stock, as to all matters in respect of which such stock has voting power, shall be entitled to one vote for each share of stock standing in his name; provided that if there shall be several classes of Preferred Stock outstanding which have different par values per share or different amounts of stated capital allocated to shares of no par value, for the purposes of all votes or consents contemplated in Section 4 the class having the lowest par value or amount of stated capital per share shall be entitled to one vote per share and each other class of par or no par value Preferred Stock shall be entitled to a number of votes per share so that the number of votes for each share of any such class bears the same proportion to the par value per share or stated capital allocated per no par value share thereof as one vote per share bears per share to the shares having the lowest par value per share or amount of stated capital per no par value share. "Subject to the voting rights expressly conferred upon the Preferred Stock by Section 4 and the voting rights of any other class of Junior Stock outstanding, the holders of Common Stock shall exclusively possess full voting rights for the election of Directors and for all other purposes and each holder shall be entitled to one vote for each share thereof standing in his name. "Except as herein expressly provided, or mandatorily provided by the laws of Georgia, a quorum of any class or classes of stock entitled to vote as a class at any meeting shall consist of a majority of such class or classes, as the case may be, and a plurality vote of such quorum shall govern. "No holders of any class of stock shall be entitled to receive notice of any meeting of holders of any other class of stock at which they are not entitled to vote." -6- (b) The shareholder vote required to adopt such amendment was the affirmative vote of the holders of a majority of the shares of the Common Stock of the corporation entitled to vote. (c) The number of shares of Common Stock of the corporation outstanding and entitled to vote was 4,535,755. (d) The vote for such amendment was 3,301,201 shares of the Common Stock of the corporation entitled to vote. IN WITNESS WHEREOF, ATLANTA GAS LIGHT COMPANY has caused these Articles of Amendment to be executed and its corporate seal to be affixed and has caused the foregoing to be attested, all by its duly authorized officers, on this 2nd day of March, 1976. ATLANTA GAS LIGHT COMPANY By [SIGNATURE APPEARS HERE] ------------------------------ President ATTEST: (Corporate Seal) /s/ L. G. Folsom - ---------------------------------- Secretary -7- IN THE SUPERIOR COURT OF FULTON COUNTY STATE OF GEORGIA G E O R G I A, FULTON COUNTY: The petition of ATLANTA GAS LIGHT COMPANY, Petitioner, shows the Court as follows: The Articles of Amendment of Atlanta Gas Light Company, executed by the President and attested by the Secretary, are attached hereto. WHEREFORE, Petitioner prays that the Articles of Amendment of Atlanta Gas Light Company be granted. /s/ Allen Post ----------------------------- ALLEN POST /s/ Albert G. Norman, Jr. ----------------------------- ALBERT G. NORMAN, JR. /s/ N. William Bath ----------------------------- N. WILLIAM BATH For Hansell, Post, Brandon & Dorsey Attorneys for the Petitioner, Atlanta Gas Light Company 3300 First National Bank Tower Atlanta, Georgia 30303 Telephone 404-581-8000 ATLANTA GAS LIGHT COMPANY ----------- CERTIFICATE OF DESIGNATION OF A SERIES OF CUMULATIVE PRE- FERRED STOCK AS 9.30% SERIES CUMULATIVE PREFERRED STOCK AND FIXING DIVIDEND AND OTHER PREFERENCES AND RIGHTS OF SUCH SERIES BY RESOLUTION OF BOARD OF DIRECTORS Pursuant to the Provisions of Section 22-502 of the Georgia Business Corporation Code ----------- We, the undersigned, Joe T. LaBoon and L. G. Folsom, President and Secretary, respectively, of Atlanta Gas Light Company, a corporation organized and existing under the laws of the State of Georgia (hereinafter sometimes referred to as the Company), DO HEREBY CERTIFY as follows: FIRST: That the Board of Directors of the Company, pursuant to authority expressly vested in it by the provisions of the Charter (Articles of Incorporation), as amended, has, at a meeting of said Board, duly convened and held on the fifth day of November, 1976, at which meeting a quorum for the transaction of business was present and acting throughout, duly adopted the following preamble and resolution: "WHEREAS, the Common Stockholders of Atlanta Gas Light Company have heretofore approved an amendment to the Charter of the Company which granted to this Board of Directors the authority to establish and designate series of the authorized but unissued Cumulative Preferred Stock of the Company and to fix and determine the relative rights and preferences thereof within the limitations set forth in the laws of Georgia and in the Charter of this Company and to issue, sell and distribute a series so established, "NOW, THEREFORE, BE IT "RESOLVED, that, as contemplated by Section 3.05 of the Charter, a series of Cumulative Preferred Stock of the par value of $100 per share of Atlanta Gas Light Company be designated as `9.30% Series Cumulative Preferred Stock' and that 100,000 shares of the heretofore authorized but unissued shares of Cumulative Preferred Stock be issued as shares of the 9.30% Series Cumulative Preferred Stock (hereinafter referred to as the 9.30% Preferred Stock) with the following rights, preferences, voting powers, restrictions, limitations and qualifications: (1) DIVIDENDS. Out of any assets of the Company available for dividends, the holders of the 9.30% Preferred Stock shall be entitled to receive, but only when and as declared by the Board of Directors, dividends at the rate of 9.30% per annum on the par value thereof, and no more. Dividends declared shall be payable quarterly on March 1, June 1, September 1 and December 1 in each year, to stockholders of record on a date not more than 30 days prior to such payment date, as may be determined by the Board of Directors of the Company. Dividends on the 9.30% Preferred Stock shall be cumulative from and including the initial date of issue of any shares of the 9.30% Preferred Stock. So long as any shares of 9.30% Preferred Stock are outstanding, no dividends shall be declared or paid upon, or set apart for, the share of any class of Junior Stock, nor any sums applied to the purchase, redemption or other retirement of any class of Junior Stock, unless full dividends on all shares of the 9.30% Preferred Stock and of any other class or series of Preferred Stock outstanding for all past quarterly dividend periods shall have been paid or declared and a sum sufficient for the payment thereof set apart and the full dividend for the then current quarterly dividend period shall have been or concurrently shall be paid or declared and set apart. The amount of any deficiency for the past dividend periods may be paid or declared and set apart at any time without reference to any quarterly dividend payment date. Unpaid accrued dividends on the 9.30% Preferred Stock shall not bear interest. (2) LIQUIDATION. In the event of any liquidation, dissolution or winding up of the Company or reduction or decrease of its capital resulting in a distribution of assets to the holders of any class of Junior Stock, the holders of 9.30% Preferred Stock shall be entitled to receive the amounts prescribed in Section 4.02 of the Charter of the Company as amended. (3) OPTIONAL REDEMPTION PROVISIONS. The Company may at its option expressed by resolution of its Board of Directors redeem the 9.30% Preferred Stock in the manner provided in Section 4.03 (A) of the Charter of the Company, as amended, at any time or from time to time at $100 per share plus a premium of: $9.30 per share if redeemed on or prior to December 1, 1977; $8.64 per share if redeemed after December 1, 1977 and on or prior to December 1, 1978; $7.97 per share if redeemed after December 1, 1978 and on or prior to December 1, 1979; $7.31 per share if redeemed after December 1, 1979 and on or prior to December 1, 1980; $6.64 per share if redeemed after December 1, 1980 and on or prior to December 1, 1981; $5.98 per share if redeemed after December 1, 1981 and on or prior to December 1, 1982; $5.31 per share if redeemed after December 1, 1982 and on or prior to December 1, 1983; $4.65 per share if redeemed after December 1, 1983 and on or prior to December 1, 1984; $3.99 per share if redeemed after December 1, 1984 and on or prior to December 1, 1985; $3.32 per share if redeemed after December 1, 1985 and on or prior to December 1, 1986; $2.66 per share if redeemed after December 1, 1986 and on or prior to December 1, 1987; $1.99 per share if redeemed after December 1, 1987 and on or prior to December 1, 1988; $1.33 per share if redeemed after December 1, 1988 and on or prior to December 1, 1989; and $0.66 per share if redeemed after December 1, 1989 and on or prior to December 1, 1990; and, thereafter, without premium; together in each case with accrued dividends; provided, however, that no such redemption of shares of 9.30% Preferred Stock pursuant to the aforementioned option shall be made prior to December 1, 1986, directly or indirectly as a part of, or in anticipation of, any refunding operation involving the incurring of indebtedness by the Company, or through the issuance of capital stock ranking equally with or prior to the 9.30% Preferred Stock as to dividends or assets, if (i) such indebtedness has an effective interest cost to the Company (calculated after adjustment, in accordance with generally accepted financial practice, for any premium received or discount granted in connection with indebtedness being incurred in such refunding operation), or such stock has an effective dividend cost to the Company (so calculated), of less than 9.30% per annum, or (ii) such indebtedness or capital stock (assuming, for the purposes of this part (3), that such capital stock will be redeemed or repurchased on the dates and in the amounts provided for such redemption or repurchase in the Charter of the Company, as amended, or in any resolutions 2 relating to such capital stock) has, as of the date of the proposed redemption of shares of 9.30% Preferred Stock, a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity (assuming, for the purposes of this part (3), that such 9.30% Preferred Stock will be redeemed on the dates and in the amounts provided for such redemption in this resolution) of the 9.30% Preferred Stock. For the purposes of this part (3) the term "Weighted Average Life to Maturity" of any indebtedness or capital stock shall mean, as at the time of determination hereof, the number of years obtained by dividing the then Remaining Dollar-Years of such indebtedness or capital stock by the then outstanding principal amount of such indebtedness or the aggregate par value of the then outstanding shares of such capital stock (or, if such capital stock has no par value, then the aggregate stated value thereof), as the case may be. As used in the preceding sentence, the term "Remaining Dollar-Years" of any indebtedness or capital stock shall mean the amount obtained by (a) multiplying the amount of each then remaining sinking fund, serial maturity or other required prepayment, repayment or redemption, including repayment at final maturity, by the number of years (calculated to the nearest one-twelfth) which will elapse between the date of the determination and the date of that required prepayment, repayment or redemption, and (b) totalling all of the products obtained in (a). (4) SINKING FUND. The 9.30% Preferred Stock shall be entitled to the benefits of a Sinking Fund as follows: The Company (unless prevented from so doing by any applicable restriction of law or contained in the Charter of the Company, as amended) will call for redemption on notice given as provided in Section 4.03 of the Charter and redeem (i) on December 1 of each year (hereinafter a "Sinking Fund Date"), commencing December 1, 1981 and continuing so long as any shares of the 9.30% Preferred Stock are outstanding 9.090 shares of the 9.30% Preferred Stock, and (ii) on December 1, 1991, any shares of the 9.30% Preferred Stock which are then outstanding, at a redemption price of $100 per share, plus accrued and unpaid dividends thereon to the date fixed for redemption, whether or not earned or declared. Such obligation to make sinking fund redemptions shall be cumulative, so that if the Company shall for any reason fail to make any such sinking fund redemption, the amount of the deficiency shall be set aside and applied to the redemption of such shares of the 9.30% Preferred Stock before the Company shall declare, pay or set apart any dividend for any share of Junior Stock or apply any sum to the purchase, redemption or other retirement of any share of Junior Stock or Preferred Stock; provided, however, that, notwithstanding the existence of any such deficiency, the Company may make any required sinking fund redemption on any other series of Preferred Stock if the number of shares of such other series of Preferred Stock being so redeemed bears (as nearly as practicable) the same ratio to the total number of shares of such other series then due to be redeemed as the number of shares of the 9.30% Preferred Stock being redeemed bears to the total number of shares of such series then due to be redeemed. (5) PURCHASE OR OTHER ACQUISITION: PROVISIONS AS TO REDEEMED OR REPURCHASED SHARES. The Company shall not, and shall not permit any subsidiary to, purchase or otherwise acquire any shares of the 9.30% Preferred Stock except pursuant to the provisions of part (3) or part (4) hereof. All shares of the 9.30% Preferred Stock at any time redeemed pursuant to part (3) hereof, or redeemed for the sinking fund pursuant to part (4) hereof, shall be retired and cancelled; provided, however, that none of such shares redeemed for the sinking fund pursuant to part (4) hereof shall be reissued under any circumstances and none of such shares redeemed pursuant to part (3) hereof shall be reissued until all of the remaining outstanding shares of the 9.30% Preferred Stock shall have been redeemed pursuant to part (3) hereof or redeemed for the sinking fund pursuant to part (4) hereof. If less than all the shares of the 9.30% Preferred Stock are to be redeemed 3 pursuant to part (3) hereof or redeemed for the sinking fund pursuant to part (4) hereof, the shares to be redeemed shall be selected pro rata so that there shall be redeemed from each registered holder of such shares that number of whole shares, as nearly as practicable to the nearest share, as bears the same ratio to the total number of shares of such Series held by such holder as the total number of shares to be redeemed bears to the total number of shares of such Series at the time outstanding. No redemption of shares pursuant to part (3) hereof shall be credited to, or relieve the Company of its obligations to make, the sinking fund redemptions of shares required by part (4) hereof, but any such redemption of shares pursuant to part (3) hereof shall be applied to reduce, in the inverse order, the latest maturing obligation to redeem shares for the sinking fund pursuant to part (4) hereof. (6) Voting Powers and Other Rights. The holders of the 9.30% Preferred Stock shall have such voting powers (including, but not limited to, the right and power to consent or vote pursuant to Sections 4.04 and 4.05 of the Charter of the Company) and other rights and be subject to such restrictions and qualifications as are set forth in Sections 4 to 6, inclusive, of the Charter of the Company, as amended, and for the purposes of said Sections, the 9.30% Preferred Stock shall be deemed to be, and shall be treated in all respects as, a class of Preferred Stock of the Company. The foregoing statement of rights and powers is made pursuant to the provisions of Section 3.05 of the Charter granting the power to fix the rights and preferences of the variouor series of Cumulative Preferred Stock, including the power to fix the voting rights of each such series. The voting rights of the holders of the 9.30% Preferred Stock shall not in any way be limited by the provisions of Section 4.05(a) of the Charter and such holders shall be entitled to all of the voting rights provided under Section 4.04 of the Charter." SECOND: The number of authorized but unissued shares of Cumulative Preferred Stock of the par value of $100 per share authorized by the Charter, as amended, is 245,000 and the number of shares of the series of said class of stock designated as 9.30% Series Cumulative Preferred Stock is 100,000. IN WITNESS WHEREOF, the undersigned, said Joe T. LaBoon and said L. G. Folsom, have made this Certificate under the seal of said Atlanta Gas Light Company and have signed the same as President and Secretary, respectively, of said Atlanta Gas Light Company, this 8th day of November, 1976. /s/ Joe T. LaBoon ----------------------------------------- President Atlanta Gas Light Company [CORPORATE SEAL] Attest: ------------------------------- Secretary of Atlanta Gas Light Company 4 ARTICLES OF AMENDMENT ATLANTA GAS LIGHT COMPANY Pursuant to the provisions of the Georgia Business Corporation Code, Atlanta Gas Light Company, a profit corporation organized and existing under laws of the State of Georgia, has adopted an amendment to the Articles of Incorporation (Charter) of said Corporation as follows: I. The name of the Corporation is Atlanta Gas Light Company. II. Section 6.03 of the Articles of Incorporation (Charter) of said Corporation are hereby amended to read as follows: Section 6.03. Preemptive Rights. No holder of stock, or of rights ----------------- or options to purchase stock, of the Company of any class, as such, shall have any preemptive or preferential right to purchase or subscribe to any shares of stock, or rights or options to purchase stock, of the Company of any class, whether now or hereafter authorized, or any obligations convertible into stock, or into rights or options to purchase stock of the Company (including any notes, bonds or other evidences of indebtedness to which are attached or with which are issued warrants or other rights to purchase any stock of the Company), issued or sold, or any right of subscription to any thereof other than such, if any, as the Board of Directors in its discretion may from time to time fix;and shares of stock, rights or options to purchase stock, or obligations convertible into stock or into rights of options to purchase stock, of the Company may from time to time be issued and sold to such parties, whether stockholders or others, as the Board of Directors in its sole discretion may determine, and in the event the Board of Directors determines to issue or sell any thereof to stockholders at any time, the same may be offered to holders of any class or classes of stock exclusively or to the holders of all classes of stock, and, if offered to more than one class of stock, in such proportions as between said classes of stock, as the Board of Directors in its discretion may determine; provided, however, that if the Board of Directors shall at any time determine to offer for cash any shares of Common Stock, whether now or hereafter authorized (exclusive of any shares of Common Stock to be issued in connection with the Atlanta Gas Light Company Employees' Stock Ownership Plan, instituted as effective for the fiscal year ended September 30, 1978, any successor plan thereto and any dividend reinvestment plan which may be adopted by the Board of Directors of the Company), or to offer for cash any securities convertible into Common Stock of the Company other than by a public offering of such shares or securities to or through underwriters or investment bankers who agree to make a public offering of such shares or securities, the right to purchase the same shall first be offered to the holders of record, on a date to be fixed by the Board of Directors for such purpose, of the outstanding shares of Common Stock, pro rata upon terms not less favorable to such holders than those upon which the Board of Directors shall authorize the issue of such shares or securities to others than holders of record of the Common Stock; and provided further, that the time within which the holders of record of the Common Stock may exercise such rights shall be determined by the Board of Directors but shall in no event be less than fourteen (14) days after the date of mailing of notice that such rights are available. No alteration, amendment or repeal of any of the provisions of this Section 6.03 shall be effected without the written consent or the affirmative vote of the holders of at least two-thirds of the issued and outstanding shares of Common Stock, such vote being taken at a meeting called for the purpose. III. Said amendment was adopted by vote of the shareholders on February 1, 1980. IV. A total of 4,535,755 shares of Common Stock of the Corporation were outstanding and entitled to vote on the -2- amendment, the affirmative vote of at least two-thirds of which were required to adopt the amendment. The amendment was adopted by a vote of 3,116,840 shares of Common Stock or 68.7% of the outstanding shares. IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment to be executed and its Corporate seal affixed and has caused the foregoing to be attested, all by its duly authorized officers, on the ??? day of ????, 1980. ATLANTA GAS LIGHT COMPANY By: /s/ [SIGNATURE APPEARS HERE] --------------------------------- President [CORPORATE SEAL] Attest: /s/ [SIGNATURE APPEARS HERE] ------------------------------- Secretary -3- ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF ATLANTA GAS LIGHT COMPANY Pursuant to the provisions of the Georgia Business Corporation Code, Atlanta Gas Light Company, a profit corporation organized and existing under the laws of the State of Georgia, has adopted amendments to the Articles of Incorporation (Charter) of said Corporation as follows: I. The name of the corporation is Atlanta Gas Light Company. II. The following amendments to the Articles of Incorporation were adopted by the shareholders of the Corporation in the manner prescribed by the Georgia Business Corporation Code: (a) Section 1.01 of the Articles of Incorporation (Charter) of said Corporation is hereby amended to read as follows: Section 1.01. The maximum number of shares of capital stock of Atlanta Gas Light Company (hereinafter referred to as the "Company") authorized to be outstanding at any one time is as follows: 10,000,000 shares of Common Stock of the par value of $5 per share. 21,900 shares of 4.44% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.44% Preferred Stock"), 20,100 shares of 4.50% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.50% Preferred Stock"), 20,100 shares of 4.60% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.60% Preferred Stock"), 50,000 shares of 4.72% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.72% Preferred Stock"), 10,000 shares of 5% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "5% Preferred Stock"), 80,000 shares of 8.32% Series Cumulative Preferred Stock of the par value of $100 per share, 75,000 shares of 7.84% Series Cumulative Preferred Stock of the par value of $100 per share, 245,000 shares of Cumulative Preferred Stock of the par value of $100 per share, and 1,000,000 shares of Cumulative Preferred Stock of no par value with the amount of stated capital allocated to each share to be determined by the Board of Directors of the Company at the time of issue thereof, and with the maximum aggregate stated capital allocable to all such shares at any time outstanding of not more than $30,000,000. The designations, preferences, voting powers, restrictions, limitations and qualifications of the several classes or series of stock of Atlanta Gas Light Company shall be as set forth in the applicable provisions of this Charter (Articles of Incorporation), as amended, or as may be fixed by applicable statutory provisions, or as may from time to time be lawfully provided by resolution of the Board of Directors of the Company, provided, however, that no share of any such class or series of Preferred Stock shall be issued in violation of the terms of any other class or series of Preferred Stock then outstanding. (b) Section 6.03 of the Article of Incorporation (Charter) of said Corporation is hereby amended to read as follows: Section 6.03 Preemptive Rights. No holder of stock, or of rights ----------------- or options to purchase stock, of the Company of any class, as such, shall have any preemptive or preferential rights to purchase or subscribe to any shares of stock, or rights or options to purchase stock, of the Company of any class, whether now or hereafter authorized, or any obligations convertible into stock, or into rights or options to purchase stock of the Company (including any notes, bonds or other evidences of indebtedness to which are attached or with which are issued warrants or other rights to purchase any stock of the Company), issued or sold or any right of subscription to any thereof other than such, if any, as the Board of Directors in its discretion may from time to time fix; and shares of stock, rights or options to purchase stock, or obligations convertible into stock or into rights or 2 options to purchase stock, of the Company may from time to time be issued and sold to such parties, whether stockholders or others, as the Board of Directors in its sole discretion may determine, and in the event the Board of Directors determines to issue or sell any thereof to stockholders at any time, the same may be offered to holders of any class or classes of stock exclusively or to the holders of all classes of stock, and if offered to more than one class of stock, in such proportions as between said classes of stock, as the Board of Directors in its discretion may determine; provided, however, that if the Board of Directors shall at any time determine to offer for cash any shares of Common Stock, whether now or hereafter authorized (exclusive of any shares of Common Stock to be issued in connection with the Atlanta Gas Light Company Employees" Stock Ownership Plan, instituted as effective for the fiscal year ended September 30, 1978, any successor plan thereto, any dividend reinvestment plan including any feature for optional stock purchases, and any successor plan thereto and any other similar plan which may be adopted by the Board of Directors of the Company for the general benefit of the Company's shareholders and/or employees which involves the issuance of original issue Common Stock of the Company), or to offer for cash any securities convertible into Common Stock of the Company other than by a public offering of such shares or securities to or through underwriters or investment bankers who agree to make a public offering of such shares or securities, the right to purchase the same shall first be offered to the holders of record, on a date to be fixed by the Board of Directors for such purpose, of the outstanding shares of Common Stock, pro rata upon terms not less favorable to such holders than those upon which the Board of Directors shall authorize the issue of such shares or securities to others than holders of record of the Common Stock; and provided further, that the time within which the holders of record of the Common Stock may exercise such rights shall be determined by the Board of Directors but shall in no event be less than fourteen (14) days after the date of mailing of notice that such rights are available. No alteration, amendment or repeal of any of the provisions of this Section 6.03 shall be effected without the written consent or the affirmative vote of the holders of at least two-thirds of the issued and outstanding shares of Common Stock, such vote being taken at a meeting called for the purpose. III. The amendments were adopted by vote of the shareholders of the Corporation on February 4, 1983. 3 IV. (a) A total of 4,631,714 shares of Common Stock of the Corporation were outstanding and entitled to vote on the amendment to Section 1.01 of the Articles of Incorporation (Charter), the affirmative vote of at least a majority of which were required to adopt the amendment. The amendment was adopted by a vote of 3,328,806 shares of Common Stock or 71.9% of the outstanding shares. (b) A total of 4,631,714 shares of Common Stock of the Corporation were outstanding and entitled to vote on the amendment to Section 6.03 of the Articles of Incorporation (Charter), the affirmative vote of at least two-thirds of which were required to adopt the amendment. The amendment was adopted by a vote of 3,144,714 shares of Common Stock or 67.9% of the outstanding shares. IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment to be executed and its corporate seal affixed and has caused the foregoing to be attested, all by its duly authorized officers, on this 14th day of February, 1983. ATLANTA GAS LIGHT COMPANY By: /s/ Joe T. LaBoon ----------------------------- Joe T. LaBoon Title: President ATTEST: /s/ R. H. Woodward, Jr. - ------------------------------ R. H. Woodward, Jr., Secretary [SEAL APPEARS HERE] 4 ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF ATLANTA GAS LIGHT COMPANY Pursuant to the provision of the Georgia Business Corporation Code, Atlanta Gas Light Company, a profit corporation organized and existing under the laws of the State of Georgia, has adopted amendments to the Articles of Incorporation (Charter) of said Corporation as follows: I. The name of corporation is Atlanta Gas Light Company. II. The following amendments to the Articles of Incorporation were adopted by the shareholders of the Corporation in the manner prescribed by the Georgia Business Corporation Code: (a) Section 6.01 of the Articles of Incorporation (Charter) of said Corporation is hereby amended to read as follows: Section 6.01. Voting Provisions. At any ----------------- meeting of the holders of the Preferred Stock which shall be called for any purpose, pursuant to Section 4, the presence in person or by proxy of the holders of the majority of the issued and outstanding shares of all classes of Preferred Stock (or, in the case of a meeting of stockholders of less than all classes of Preferred Stock, a majority of the issued and outstanding shares of all such classes of Preferred Stock entitled to vote at such meeting) shall be necessary for a quorum, provided,however, that if such quorum shall not be obtained at such meeting or at any adjournment thereof within thirty (30) days from the date of the meeting as originally called, then the presence in person or by proxy of the holders of one-third of the issued and outstanding shares of the classes of Preferred Stock entitled to vote at the meeting shall be sufficient for a quorum. Each holder of Preferred Stock, as to all matters in respect of which such stock has voting power, shall be entitled to one vote for each share of stock standing in his name; provided that if there shall be several classes of Preferred Stock outstanding which have different par values per share or different amounts of stated capital allocated to shares of no par value, for the purposes of all votes or consents contemplated in Section 4 the class having the lowest par value or amount of stated capital per share shall be entitled to one vote per share and each other class of par or no par value Preferred Stock shall be entitled to a number of votes per share so that the number of votes for each share of any such class bears the same proportion to the par value per share of stated capital allocated per no par value share thereof as one vote per share bears per share to the shares having the lowest par value per share or amount of stated capital per no par value share. Subject to the voting rights expressly conferred upon the Preferred Stock by Section 4 and the voting rights of any other class of Junior Stock outstanding, the holders of Common Stock shall exclusively possess full voting rights for the election of Directors and for all other purposes and each holder shall be entitled to one vote for each share thereof standing in his name. Except as herein expressly provided, or mandatorily provided by the laws of Georgia, a quorum of any class or classes of stock entitled to vote as a class at any meeting shall consist of a majority of such class or classes, as the case may be, and a plurality vote of such quorum shall govern. No holders of any class of stock shall be entitled to receive notice of any meeting of holders of any other class of stock at which they are not entitled to vote. (b) Section 6 of the Articles of Incorporation (Charter) of said Corporation is hereby amended by adding the following provision: Section 6.07 Business Combinations With Related Persons. -------- ------------ ---- ------- ------- (a) Definitions. The following definitions shall apply ----------- for purposes of this Section 6.07: Affiliate. An "Affiliate" of, or Person "affiliated with," --------- a specified Person, is a Person that directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified. The term "control" (including the terms "control- ling", "controlled by" and "under common control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. Associate. The term "Associate," when used to indicate a --------- relationship with any Persons, 2 means (1) any Person (other than this Company or a majority-owned subsidiary of this Company) of which such Person is an officer, director or partner or is, directly or indirectly, the Beneficial Owner of ten percent (10%) or more of any class of equity securities, (2) any trust or other estate in which such Person has a substantial beneficial interest or as to which such Person serves as a trustee or in a similar capacity, and (3) any relative or spouse of such Person, or any relative of such spouse. Beneficial Owner. Any Person shall be deemed to be the "Beneficial Owner" of, or to beneficially own, any shares of stock of this Company. (1) which it owns directly, whether or not of record, or (2) which it has the right to acquire pursuant to any agreement or understanding or upon the exercise of conversion rights, warrants or options or otherwise, whether or not presently exercisable, or (3) which are owned, directly or indirectly (including shares deemed to be owned through application of clause (2) above), by an Affiliate or Associate, or (4) as to which it has the sole or shared power to direct the voting or disposition, or (5) which are owned, directly or indirectly, by any other Person (including any shares which such other Person has the right to acquire pursuant to any agreement or understanding, or upon exercise of conversion rights, warrants or options or otherwise, whether or not presently exercisable) with which such person or its Affiliate or Associate has any agreement or arrangement or understanding for the purpose of acquiring, holding, voting or disposing of stock of this Company. Business Combination. The term "Business Combination" shall mean: -------- ----------- (1) a merger or consolidation of this Company or any Subsidiary with or into any other Person, or of such other Person with or into this Company or any Subsidiary, or, (2) any sale, exchange, lease, mortgage, pledge, transfer or other disposition of all or any substantial part of the assets of this Company or an Subsidiary to any other Person, or 3 (3) any sale, exchange, lease, mortgage, pledge, transfer or other disposition for value by any other Person of any assets to this Company or any Subsidiary in exchange for Outstanding Shares, or outstanding shares of any Subsidiary, where the result of such transaction is that such other Person is the Beneficial Owner of a majority of the Outstanding Shares, or (4) the liquidation or dissolution of the Company or any Subsidiary pursuant to a plan or proposal proposed by or on behalf of a Related Person. Continuing Director. The term "Continuing Director" shall mean any member ---------- -------- of the Board of Directors who is not affiliated with a Related Person and was a director of the Company prior to the time a Related Person became such, and any successor to such Continuing Director who is not affiliated with a Related Person and was recommended by a majority of the Continuing Directors then on the Board of Directors, provided that at the time of such recommendation, Continuing Directors comprise a majority of the Board. If there is no Related Person, all members of the Board of Directors shall be deemed to be "Continuing Directors." Date of Determination. The term "Date of Determination" shall mean ---- -- ------------- (1) the date on which a binding agreement (except for the fulfillment of conditions precedent, including, without limitations, votes of shareholders to approve such transaction) is entered into by this Company, as authorized by the Board of Directors, and another Person providing for any Business Combination, or (2) if such an agreement as referred to in (1) above is amended so as to make it less favorable to this Company or its shareholders, the date on which such amendment is entered into by the Company, as authorized by the Board of Directors, or (3) in cases where neither items (1) nor (2) shall be applicable, the record date for the determination of shareholders of this Company entitled to notice of and to vote upon the transaction in question. The Board of Directors shall have the power and duty to determine pursuant to the foregoing the Date of Determination as to any transaction for the purposes of Section 6.07. Any such determination made by the Board of Directors in good faith shall be conclusive and binding for all purposes of Section 6.07. Fair Market Value. The term "Fair Market Value" shall mean, as of any ---- ------ ----- date: (1) in the case of stock, either (a) the median of the averages of the daily high and low sale prices during the 30-day period immediately preceding such date of a share of such stock on the Composite Tape for New York Stock Exchange-Listed Stocks, or, if such stock is not quoted on the Composite Tape, on the New York Stock Exchange, or, if such stock is not listed on such Exchange, 4 on the principal United States securities exchange registered under the Securities Exchange Act of 1934 on which such stock is listed; or (b) if such stock is not listed on any such exchange, the median of the averages of the daily closing bid and closing asked quotations on the National Association of Securities Dealers Automated Quotations Systems ("NASDAQ") (or any successor system then in use), or the median of the averages of the daily high and low sales prices on the NASDAQ National Market System, if applicable, for such stock during the 30-day period preceding such date, or if no such quotations are then available, the fair market value as determined in good faith by a majority of the Continuing Directors; and (2) in the case of property other than cash or stock, the fair market value of such property on such date as determined in good faith by a majority of the Continuing Directors. Outstanding Shares. The term "Outstanding Shares" shall mean any ----------- ------ issued shares of capital stock of the Company with the right generally to vote for the election of directors, but shall not include any shares (prior to issue) which may be issuable pursuant to any agreement or upon exercise of conversion rights, warrants, options or otherwise. Person. The term "Person" shall mean any individual, partnership, ------ corporation, group or other entity (other than the Company, any Subsidiary of the Company or a trustee holding stock for the benefit of employees of the Company or its Subsidiaries, or any one of them, pursuant to one or more employee benefit plans or arrangements). When two or more Persons act as a partnership, limited partnership, syndicate, association or other group for the purposes of acquiring, holding, voting or disposing of the Outstanding Shares, such partnership, syndicate, association, or group shall be deemed a "Person". Related Person. The term "Related Person" shall mean any Person ------- ------ which, together with the Affiliates and Associates of such Person, is the Beneficial Owner as of the Date of Determination or immediately prior to the consummation of a Business Combination, or both, of at least that number of shares of stock of the Company equal to twenty percent (20%) of all of the Outstanding Shares, but does not include any one or a group of more than one Continuing Director. The term "Related Person" shall include the Affiliates and Associates of such Related Person. Subsidiary. The term "Subsidiary" shall mean any corporation of ---------- which a majority of any class of equity security is owned, directly or indirectly, by the Company. Determination of the Application of Section 6.07. The Board of ------------- -- -- ----------- -- ------- ---- Directors shall have the power and the duty to determine for the purposes of Section 6.07, on the basis of the information known to the Board of Directors, any fact 5 determinable under Section 6.07 and the applicability of all definitions to transactions contemplated by Section 6.07, including but not limited to the following: (1) the number of shares of stock of the Company beneficially owned by a Person, and (2) whether a Person is an Affiliate or Associate of another, and (3) the fair market value, to be determined pursuant to the definition of "Fair Market Value" contained in Section 6.07(a), of consideration other than cash received or to be received for Outstanding Shares. Any such determination shall be conclusive and binding for all purposes of Section 6.07, provided, that such determination is approved by a majority of the -------- Continuing Directors then in office. (b) Voting Requirements for Business Combinations with Related Persons. ------ ------------ --- -------- ------------ ---- ------- ------- Except as set forth in subparagraph (c) and (d) of this Section 6.07, if as of the Date of Determination with respect to any Business Combination, any Person that is a party to such Business Combination is a Related Person, the affirmative vote or consent of the holders of at least seventy-five percent (75%) of all of the Outstanding Shares shall be required to approve such Business Combination. Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified, by law or in any agreement with any national securities exchange or otherwise, and shall be in addition to any shareholder vote which would be required without reference to this Section 6.07. (c) Nonapplicability of Special Voting Requirements. The provisions of ---------------- -- ------- ------ ------------ Section 6.07(b) shall not apply if all of the following conditions shall have --- been met, provided, however, that nothing contained in Section 6.07 shall be -------- construed to relieve any Related Person from any fiduciary obligation imposed by law: (1) The consideration to be received by the Company or per share by holders of Outstanding Shares shall be in cash or in the same form as the consideration given by the Related Person in acquiring Outstanding Shares at any time during the period commencing on the date of the first acquisition by such Related Person of any Outstanding Shares and ending on and including the date upon which the Related Person became a Related Person. If the Related Person paid for Outstanding Shares with varying forms of consideration, the form of consideration to 6 be received by the Company or per share by holders of Outstanding Shares shall be either cash or the form of consideration used to acquire the largest number of Outstanding Shares acquired by the Related Person during such period. (2) The Fair Market Value of the consideration received in such Business Combination by the Company (analyzed on a per share basis) or per share by holders of Outstanding Shares is not less than the highest per share price (including brokerage commissions, transfer taxes and soliciting dealers' fees) paid by such Related Person in acquiring any of its holdings of Outstanding Shares. (3) The ratio of: (i) the Fair Market Value of the consideration to be received in such Business Combination by the Company (analyzed on a per share basis) or per share by holders of Outstanding Shares to (ii) the per share market price of Outstanding Shares immediately prior to the announcement of the Business Combination is a least as great as the ratio of (iii) the highest per share price (including brokerage commissions, transfer taxes and soliciting dealers' fees) which such Related Person has paid for any of the Outstanding Shares acquired by it prior to the Date of Determination, to (iv) the per share market price of Outstanding Shares immediately prior to the initial acquisition by such Related Person of any Outstanding Shares. (4) If the Related Person is a corporation, the Fair Market Value of the consideration to be received in such Business Combination by the Company (analyzed on a per share basis) or per share by holders of Outstanding Shares shall not be less than the earnings per share of Outstanding Shares during the four full consecutive fiscal quarters immediately preceding the Date of Determination multiplied by the highest price/earnings multiple of such Related Person, as customarily computed and reported in the financial community, attained by such Related Person during the five 7 fiscal years immediately preceding such Date of Determination; (5) The Fair Market Value of the consideration to be received in such Business Combination by the Company (analyzed on a per share basis) or per share by holders of Outstanding Shares shall be not less than the sum of: (i) the higher of (A) the highest gross per share price paid or agreed to be paid by the Related Person to acquire any of the Outstanding Shares of the Company beneficially owned by such Related Person or (B) the highest per share market price for such Outstanding Shares since the Related Person became a Related Person, plus (ii) an amount equal to the highest price/earnings multiple of the Company, as customarily computed and reported in the financial community, attained by the Company during the five fiscal years immediately preceding the Date of Determination multiplied by the aggregate amount, if any, by which 10% of such higher per share price determined under (i) above exceeds the smallest quarterly common stock dividend per share (annualized) paid in cash since the date on which such Related Person became a Related Person; (6) The Fair Market Value of the consideration to be received in such Business Combination by the Company (analyzed on a per share basis) or per share by holders of Outstanding Shares shall be not less than the per share book value of Outstanding Shares at the end of the most recent fiscal year preceding the Date of Determination, calculated in accordance with generally accepted accounting methods; (7) After such Related Person has become a Related Person and prior to the consummation of such Business Combination: (i) except as approved by a majority of the Continuing Directors, there shall have been no failure to declare and pay at the regular date therefor any dividends (whether or not cumulative) on any outstanding Preferred Stock of the Company; and (ii) there shall have been (A) no reduction in the annual dividend from that most recently paid on Outstanding Shares (except as necessary to reflect any subdivision of the Outstanding Shares through stock dividend, stock 8 split, or otherwise), except as approved by a majority of the Continuing Directors, and (B) an increase in such annual dividend as necessary to reflect any reclassification (including a reserve stock split), recapitalization, reorganization or any similar transaction which has the effect of reducing the number of Outstanding Shares, unless the failure so to increase such annual dividend is approved by a majority of the Continuing Directors. (8) After such Related Person has become a Related Person, such Related Person shall not have received the benefit, directly or indirectly (except proportionately as a shareholder of the Company) of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by the Company or a Subsidiary, whether in anticipation of or in connection with such Business Combination or otherwise. (d) Approval by Continuing Directors. The provisions of Section 6.07 -------- -- ---------- --------- (b) and (c) shall not be applicable to any particular Business Combination or other event covered thereby, and such Business Combination or other event covered thereby shall require only such affirmative vote as is required by law and by any other provision of these Articles of Incorporation, if both of the following conditions with respect to such Business Combination or other event shall have been satisfied: (i) the Business Combination or other event shall have been approved by a majority of the Continuing Directors; and (ii) at the time of such approval, Continuing Directors comprised at least a majority of the Board of Directors. (e) Amendment. The affirmative vote of shareholders required to alter, --------- amend or repeal this Section 6.07, or to alter, amend or repeal any other provision of the Articles of Incorporation of the Company in any respect which would or might have the effect, directly or indirectly, of modifying, permitting any action inconsistent with, or permitting circumvention of, this Section 6.07 (including, but not limited to, any amendment of the Articles of Incorporation which would effect a reclassification of any securities of this Company which has the effect, directly or indirectly, of increasing the proportionate share of Outstanding Shares, or outstanding shares of any Subsidiary, beneficially owned by a Related Person), shall be at least seventy-five percent (75%) of all of the Outstanding Shares; provided, however, that if such proposed alteration, -------- amendment or repeal is approved by a majority of the Continuing Directors and at the time of such approval Continuing Directors comprise at least a majority of the Board of Directors, then such proposed alteration, amendment or repeal shall 9 require for approval only such affirmative vote as is required by law and by any other provision of these Articles of Incorporation. The 75% affirmative vote provided for above shall be in addition to any shareholder vote which would be required without reference to this Section 6.07. (c) Section 6 of the Articles of Incorporation (Charter) of said Corporation is further amended by adding the provision which follows: Section 6.08. Amendment of the By-Laws. --------- -- --- ------- (a) No action shall be taken by the shareholders with respect to altering, amending or repealing the By-Laws of the Company except by the affirmative vote of the holders of at least two-thirds (66-2/3%) of all of the Outstanding Shares. Such affirmative vote shall be in addition to any shareholder vote which would be required without reference to this Section 6.08. (b) Amendment. The affirmative vote of shareholders required to --------- alter, amend or repeal this Section 6.08, or to alter, amend or repeal any other provision of the Articles of Incorporation of the Company in any respect which would or might have the effect, directly or indirectly, of modifying, permitting any action inconsistent with, or permitting circumvention of, this Section 6.08 shall be at least two- thirds (66-2/3%) of all of the Outstanding Shares, excluding from the number of shares deemed to be Outstanding Shares for purposes of such vote to amend, alter or repeal this section, all shares beneficially owned by a Related Person (but such shares will be deemed to be Outstanding Shares for purposes of determining whether a quorum is present at the meeting); provided, however, that if such proposed -------- alteration, amendment or repeal is approved by a majority of the Continuing Directors and at the time of such approval Continuing Directors comprise at least a majority of the Board of Directors, then such proposed alteration, amendment or repeal shall require for approval only such affirmative vote as is required by law and by any other provision of these Articles of Incorporation. The 66 2/3% affirmative vote provided for herein shall be in addition to any shareholder vote which would be required without reference to this Section 6.08. (c) The definitions set forth in Section 6.07(a) as submitted at the Annual Meeting of Shareholders held on February 1, 1995 are incorporated by reference herein. III. The amendments were adopted by vote of the shareholders of the Corporation on February 1, 1985. 10 IV. (a) A total of 7,701,255 shares of Common Stock of the Corporation were outstanding and entitled to vote on the amendment to Section 6.01 of the Articles of Incorporation (Charter). The affirmative vote of at least 3,850,628 shares of Common Stock was required to adopt the amendment. The amendment was adopted by a vote of 4,289,279 shares of Common Stock, or 55.7% of the outstanding shares. (b) A total of 7,701,255 shares of Common Stock of the Corporation were outstanding and entitled to vote on the amendment which adds Section 6.07 to the Articles of Incorporation (Charter). The affirmative vote of at least 3,850,628 shares of Common Stock were required to adopt the amendment. The amendment was adopted by a vote of 4,264,451 shares of Common Stock, or 55.4% of the outstanding shares. (c) A total of 7,701,255 shares of Common Stock of the Corporation were outstanding and entitled to vote on the amendment which adds Section 6.08 to the Articles of Incorporation (Charter). The affirmative vote of at least 3,850,628 shares of Common Stock were required to adopt the amendment. The amendment was adopted by a vote of 4,300,511 shares of Common Stock, or 55.8% of the outstanding shares. IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment to be executed and its corporate seal affixed and has caused the foregoing to be attested, all by its duly authorized officers, on this 16th day of February, ---- 1985. ATLANTA GAS LIGHT COMPANY By: /s/ Joe T. LaBoon ------------------------ Joe T. LaBoon Title: President ATTEST: /s/ R. H. Person - ------------------------------- R. H. Person, Secretary [SEAL APPEARS HERE] 12 ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF ATLANTA GAS LIGHT COMPANY Pursuant to the provisions of the Georgia Business Corporation Code, Atlanta Gas Light Company, a profit corporation organized and existing under the laws of the State of Georgia, has adopted an amendment to the Articles of Incorporation (Charter) of said Corporation as follows: I. The name of the corporation is Atlanta Gas Light Company. II. The following amendment to the Articles of Incorporation was adopted by the shareholders of the Corporation in the manner prescribed by the Georgia Business Corporation Code: Section 1.01 of the Articles of Incorporation (Charter) of said Corporation is hereby amended to read as follows: Section 1.01. The maximum number of shares of capital stock of Atlanta Gas Light Company (hereinafter referred to as the "Company") authorized to be outstanding at any one time is as follows: 30,000,000 shares of Common Stock of the par value of $5 per share. 21,900 shares of 4.44% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.44% Preferred Stock"), 20,000 shares of 4.50% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.50% Preferred Stock"), 20,100 shares of 4.60% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.60% Preferred Stock"), 50,000 shares of 4.72% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.72% Preferred Stock"). 10,000 shares of 5% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "5% Preferred Stock"). 80,000 shares of 8.32% Series Cumulative Preferred Stock of the par value of $100 per share. 75,000 shares of 7.84% Series Cumulative Preferred Stock of the par value of $100 per share, 145,000 shares of Cumulative Preferred Stock of the par value of $100 per share, and 1,000,000 shares of Cumulative Preferred Stock of no par value with the amount of stated capital allocated to each share to be determined by the Board of Directors of the Company at the time of issue thereof, and with the maximum aggregate stated capital allocable to all such shares at any time outstanding of not more than $30,000,000. The designations, preference, voting powers, restrictions, limitations and qualifications of the several classes or series of stock of Atlanta Gas Light Company shall be as set forth in the applicable provisions of this Charter (Articles of Incorporation), as amended, or as may be fixed by applicable statutory provisions, or as may from time to time be lawfully provided by resolution of the Board of Directors of the Company, provided, however, that no share of any such class or series of Preferred Stock shall be issued in violation of the terms of any other class or series of Preferred Stock then outstanding. III. The amendment was adopted by vote of the shareholders of the Corporation on February 7, 1986. IV. A total of 7,806,613 shares of Common Stock of the Corporation were outstanding and entitled to vote on the amendment, the affirmative vote of at least 3,903,308 of which were required to adopt the amendment. The amendment was adopted by a vote of 5,483,999 shares of Common Stock. 2 IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment to be executed and its corporate seal affixed and has caused the foregoing to be attested, all by its duly authorized officers, on this 25th day of February, ---- 1986. ATLANTA GAS LIGHT COMPANY By: /s/ Joe T. LaBoon -------------------------------------- Joe T. LaBoon, Chairman of the Board ATTEST: /s/ R. H. Person - -------------------------------- R. H. Person, Secretary (SEAL) ARTICLES OF AMENDMENT OF ARTICLES OF INCORPORATION OF ATLANTA GAS LIGHT COMPANY I. The name of the corporation is Atlanta Gas Light Company (the "Company"). II. On February 15, 1988, the holders of the Common Stock, $5.00 par value per share (the "Common Stock"), of the Company adopted an amendment (the "Amendment") to the Articles of Incorporation of the Company which added a new Section 6.01B to the Articles of Incorporation. The text of the Amendment is set forth in Article IV hereof. III. On the record date, there were 18,822,738 shares of Common Stock outstanding and entitled to vote, and the affirmative vote of a majority (9,411,370) of the outstanding shares was required to adopt the Amendment. The affirmative vote of 14,279,795 shares, constituting a majority of the outstanding shares of Common Stock, was cast for the Amendment. No shares of any class of stock other than the Common Stock were entitled to vote on the Amendment. IV. The Amendment eliminated the personal monetary liability of Directors of the Company for breaches of certain of their fiduciary duties as Directors to the full extent allowed by Georgia law, as follows: Section 6.01B Director Liabilities. A Director of the Company shall -------------------- not be personally liable to the Company or its shareholders for monetary damages for breach of his duty of care or other duty as a Director, except for liability (i) for any appropriation, in violation of his duties, of any business opportunity of the Company; (ii) for any acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) for the types of liability set forth in Section 14-2-154 of the Official Code of Georgia Annotated or successor provisions; or (iv) for any transaction from which the Director derives an improper personal benefit. If the Official Code of Georgia Annotated is amended after approval by the shareholders of this Section to authorize corporate action further limiting the personal liability of Directors, then the liability of a Director of the Company shall be limited to the fullest extent permitted by the Official Code of Georgia Annotated, as so amended. Any repeal or modification of the foregoing paragraph by the shareholders of the Company shall not adversely affect any right or protection of a Director of the Company existing at the time of such repeal or modifications. IN WITNESS WHEREOF, the Company has caused these Articles of Amendment to be executed by its Senior Vice President-Finance and its corporate seal to be hereunto affixed and to be attested by its Secretary, this 11th day of May, 1988. ATLANTA GAS LIGHT COMPANY By: /s/ B. Lloyd Fackler ---------------------------------- B. Lloyd Fackler Senior Vice President-Finance [SEAL] Attest: /s/ K. R. McKinley ------------------------------ K. R. McKinley Secretary -2- ARTICLES OF CORRECTION OF ATLANTA GAS LIGHT COMPANY The Articles of Correction of Atlanta Gas Light Company, a Georgia corporation (the "Company"), are filed pursuant to Section 14-2-5 of the Official Code of Georgia Annotated to correct the below-described record of corporate action. On May 11, 1988, the Company filed Articles of Amendment with the Secretary of State. Article II of said Articles of Amendment inaccurately states that the date of shareholder action was February 15, 1988. Article II of said Articles of Amendment hereby is corrected to read as follows: "II. On February 5, 1988, the holders of the Common Stock, $5.00 par value per share (the "Common Stock"), of the Company adopted an amendment (the "Amendment") to the Articles of Incorporation of the Company which added a new Section 6.01B to the Articles of Incorporation. The text of the Amendment is set forth in Article IV hereof." IN WITNESS WHEREOF, the Company has caused these Articles of Correction to be executed by its Senior Vice President-Finance and its corporate seal to be hereunto affixed and to be attested by its Secretary, this 9th day of June, 1988. ` ATLANTA GAS LIGHT COMPANY By: /s/ B. Lloyd Fackler ------------------------------ B. Lloyd Fackler Senior Vice President-Finance Attest: /s/ K. P.McKinley -------------------------- K.P. McKinley Secretary [SEAL] ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF ATLANTA GAS LIGHT COMPANY Pursuant to Section 14-2-1003 of the Official Code of Georgia Annotated (the "Code"), the Board of Directors of Atlanta Gas Light Company, a Georgia Corporation (the "Company"), recommended amendments to the Company's Articles of Incorporation (the "Articles") to the Shareholders of the Company at the Company's annual meeting of Shareholders, held February 2, 1990. At the meeting, the Shareholders duly approved and adopted each of the following amendments in accordance with the provisions of Code Section 14-2-1003: I. Section 4.04(B)(i) of the Company's Articles was deleted and Sections 4.04(B)(ii) and 4.04(B)(iii) were redesignated as Sections 4.04(B)(i) and 4.04(B)(ii), respectively. As amended, Section 4.04(B) provides as follows: "Section 4.04. Restrictions on Corporate Action. (B) So long as any Preferred Stock is outstanding, the Company shall not, without the consent (given in writing without a meeting or by vote in person or by proxy at a meeting called for the purpose) of the holders of a majority of the aggregate number of shares of all classes of Preferred Stock entitled to vote then outstanding (i) Merge or consolidate with or into any other corporation or corporations unless such merger or consolidation, or the issuance and assumption of all securities to be issued or assumed in connection with any such merger or consolidation, shall have been ordered, approved or permitted by a regulatory authority of the United States of America or of the State of Georgia having jurisdiction in the premises; provided that the provisions of this clause (i) shall not apply to a purchase or other acquisition by the Company of franchises or assets of another corporation, in any manner which does not involve a merger or consolidation; or (ii) Sell, lease or otherwise dispose of (except by merger or consolidation) all or substantially all of its property to any person." II. Section 6.01B of the Articles was amended to limit the liability of directors to the extent permitted by the Code, and as amended provides as follows: "Section 6.01B. Director Liabilities. A Director of the Company shall not be personally liable to the Company or its shareholders for monetary damages for breach of his duty of care or other duty as a Director, except for liability (i) for any appropriation, in violation of his duties, of any business opportunity of the Company; (ii) for any acts or omissions which involve intentional misconduct or a knowing violation of law; (iii) for the types of liability set forth in Section 14-2-832 of the Official Code of Georgia Annotated or successor provisions; or (iv) for any transaction from which the Director derives an improper personal benefit. If the Official Code of Georgia Annotated is amended after approval by the shareholders of this Section to authorize corporate action further limiting the personal liability of Directors, then the liability of a Director of the Company shall be limited to the fullest extent permitted by the Official Code of Georgia Annotated, as so amended. Any repeal or modification of the foregoing paragraph by the shareholders of the Company shall not adversely affect any right or protection of a Director of the Company existing at the time of such repeal or modification." III. Section 6.07 of the Articles was amended to extend its coverage to certain additional types of business combinations. As amended, Section 6.07 provides as follows: "Section 6.07. Business Combinations with Related Persons. (a) Definitions. The following definitions shall apply for purposes of this Section 6.07: Affiliate. An "Affiliate" of, or Person "affiliated with," a specified Person, is a Person that directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a specified Person. The term "control" (including the terms "controlling," "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise and the beneficial ownership of shares representing ten percent (10%) or more of the votes entitled to be cast by the Corporation's voting shares shall create an irrebuttable presumption of control. Associate. The term "Associate," when used to indicate a relationship with any Person, means (1) any Person (other than this Company or a subsidiary of this Company) of which such Person is an officer, director or partner or is the Beneficial Owner of ten percent (10%) or more of any class of equity securities, (2) any trust or other estate in which such Person has a beneficial interest of ten percent (10%) or more or as to which such Person serves as a trustee or in a similar fiduciary capacity, and (3) any relative or spouse of such Person, or any relative of such spouse who has the same home as such Person. Beneficial Owner. A Person shall be considered to be the "Beneficial Owner" of any equity securities of this Company; (1) which such Person or any of such Person's Affiliates or Associates owns, directly or indirectly; -2- (2) which such Person or any of such Person's Affiliates or Associates, directly or indirectly, has (y) the right to acquire, whether such right is exercisable immediately or only after the passage of time, agreement, arrangement, or understanding or upon the exercise of conversion rights, exchange rights, warrants or options or otherwise; or (z) the right to vote pursuant to any agreement, arrangement, or understanding; (3) which are owned, directly or indirectly, by any other Person with which such Person or any of its Affiliates or Associates has any agreement, arrangement, or understanding for the purpose of acquiring, holding, voting, or disposing of equity securities of this Company. Business Combination. The Term 'Business Combination' shall mean: (1) a merger or consolidation of this Company or any Subsidiary with or into any other Person, or of such other Person with or into this Company or any Subsidiary, or (2) any sale, exchange, lease, mortgage, pledge, transfer or other disposition, in one transaction or a series of transactions, of the assets of this Company or any Subsidiary having an aggregate book value as of the end of the Company's most recently ended fiscal quarter of ten percent (10%) or more of the net assets of the Company to any other Person, or (3) any sale, exchange, lease, mortgage, pledge, transfer or other disposition for value by any other Person of any assets to this Company or any Subsidiary in exchange for Outstanding Shares, or outstanding shares of any Subsidiary, where the result of such transaction is that such other Person is the Beneficial Owner of a majority of the Outstanding Shares, or (4) the liquidation or dissolution of the Company or any Subsidiary proposed by or on behalf of a Related Person, or (5) any share exchange in which the shares of Common Stock of the Company or of any Subsidiary having an aggregate book value as of the end of the Company's most recently ended fiscal quarter of ten percent (10%) or more of the net assets of the Company are exchanged for shares, other securities, cash or other property, or (6) any amendment of these Articles of Incorporation which would effect a reclassification of any securities of this Company, (including a reverse stock split or the equivalent thereof) or any merger of the Company with any of its Subsidiaries, which has the effect, directly or indirectly, of increasing the proportionate share of any class of the Outstanding Shares of the Company or any Subsidiary beneficially owned by a Related Person. -3- Continuing Director. The term "Continuing Director" shall mean any member of the Board of Directors who is not a Related Person or an Affiliate or Associate of a Related Person or of any such Affiliate or Associate, or a representative of a Related Person or of any such Affiliate or Associate, and was a Director of the Company prior to the time a Related Person became such, and any successor to such Continuing Director who is not an Affiliate or Associate of a Related Person and was recommended by a majority of the Continuing Directors then on the Board of Directors, provided that at the time of such recommendation, Continuing Directors comprise a majority of the Board. If there is no Related Person, all members of the Board of Directors shall be deemed to be "Continuing Directors." Date of Determination. The term "Date of Determination" shall mean (1) the date on which a binding agreement (except for the fulfillment of conditions precedent, including, without limitation, votes of shareholders to approve such transaction) is entered into by this Company, as authorized by the Board of Directors, and another Person providing for any Business Combination, or (2) if such an agreement as referred to in item (1) above is amended so as to make it less favorable to this Company or its shareholders, the date on which such amendment is entered into by the Company, as authorized by the Board of Directors, or (3) in cases where neither items (1) nor (2) shall be applicable, the record date for the determination of shareholders of this Company entitled to notice of and to vote upon the transaction in question. The Board of Directors shall have the power and duty to determine pursuant to the foregoing the Date of Determination as to any transaction for purposes of this Section 6.07. Any such determination made by the Board of Directors in good faith shall be conclusive and binding for all purposes of Section 6.07. Fair Market Value. The term "Fair Market Value" shall mean, as of any date: (1) in the case of stock, either (a) the median of the averages of the daily high and low sale prices during the 30-day period immediately preceding such date of a share of such stock on the Composite Tape for New York Stock Exchange-Listed Stocks, or, if such stock is not quoted on the Composite Tape, on the New York Stock Exchange, or, if such stock is not listed on such Exchange, on the principal United States securities exchange registered under the Securities Exchange Act of 1934 on which such stock is listed; or (b) if such stock is not listed on any such exchange, the median of the averages of the daily closing bid and closing asked quotations on the National Association of Securities Dealers Automated Quotations System ("NASDAQ") (or any successor system then in use), or the median of the averages of the daily high and low sales prices on the NASDAQ National Market System, if applicable, for such stock during the 30-day period preceding such date, or if no such quotations are then available, the fair market value as determined in good faith by a majority of the Continuing Directors; and (2) in the case of property other than cash or stock, the fair market value of such property on such date as determined in good faith by a majority of the Continuing Directors. Outstanding Shares. The term "Outstanding Shares" shall mean any issued shares of capital stock of the Company with the right -4- generally to vote for the election of directors, but shall not include any shares (prior to issue) which may be issuable pursuant to any agreement or upon exercise of conversion rights, warrants, options or otherwise. Person. The term 'Person' shall mean any individual, partnership, corporation, group or other entity (other than the Company, any Subsidiary of the Company or a trustee holding stock for the benefit of employees of the Company or its Subsidiaries, or any one of them, pursuant to one or more employee benefit plans or arrangements). When two or more Persons act as a partnership, limited partnership, syndicate, association or other group for the purposes of acquiring, holding, voting or disposing of the Outstanding Shares, such partnership, syndicate, association, or group shall be deemed a 'Person.' Related Person. The term 'Related Person' shall mean any Person which, together with the Affiliates and Associates of such Person, is the Beneficial Owner as of the Date of Determination or immediately prior to the consummation of a Business Combination, or both, of at least that number of shares of stock of the Company equal to twenty percent (20%) of all of the Outstanding Shares, but does not include any one or a group of more than one Continuing Director. The term 'Related Person' shall include the Affiliates and Associates of such Related Person. Subsidiary. The term 'Subsidiary' shall mean any corporation of which a majority of any class of equity security is owned, directly or indirectly, by the Company. Determination of the Application of Section 6.07. The Board of Directors shall have the power and the duty to determine for the purposes of Section 6.07 on the basis of the information known to the Board of Directors, any fact determinable under Section 6.07 and the applicability of all definitions to transactions contemplated by Section 6.07, including but not limited to the following: (1) the number of shares of stock of the Company owned by a Person, and (2) whether a Person is an Affiliate or Associate of another, and (3) the fair market value, to be determined pursuant to the definition of 'Fair Market Value' contained in this Section 6.07(a), of consideration other than cash received or to be received for Outstanding Shares. Any such determination shall be conclusive and binding for all purposes of Section 6.07, provided that such determination is approved by a majority of the Continuing Directors then in office. (b) Voting Requirements for Business Combinations with Related Persons. Except as set forth in subparagraph (c) and (d) of this -5- Section 6.07, if as of the Date of Determination with respect to any Business Combination, any Person that is a party to such Business Combination is a Related Person, the affirmative vote or consent of the holders of at least seventy-five percent (75%) of all Outstanding Shares shall be required to approve such Business Combination. Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified, by law or in any agreement with any national securities exchange or otherwise, and shall be in addition to any shareholder vote which would be required without references to this Section 6.07. (c) Nonapplicability of Special Voting Requirements. The provisions of Section 6.07(b) shall not apply if all of the following conditions shall have been met, provided, however, that nothing contained in this Section 6.07 shall be construed to relieve any Related Person from any fiduciary obligation imposed by law: (1) The consideration to be received by the Company or per share by holders of Outstanding Shares shall be in cash or in the same form as the consideration given by the Related Person in acquiring Outstanding Shares at any time during the period commencing on the date of the first acquisition by such Related Person of any Outstanding Shares and ending on and including the date upon which the Related Person became a Related Person. If the Related Person paid for Outstanding Shares with varying forms of consideration, the form of consideration to be received by the Company or per share by holders of Outstanding Shares shall be either cash or the form of consideration used to acquire the largest number of Outstanding Shares acquired by the Related Person during such two-year period. (2) The Fair Market Value of the consideration received in such Business Combination by the Company (analyzed on a per share basis) or per share by holders of Outstanding Shares is not less than the highest per share price (including brokerage commissions, transfer taxes and soliciting dealers' fees) paid by such Related Person in acquiring any of its holdings of Outstanding Shares. (3) The ratio of: (i) the Fair Market Value of the consideration to be received in such Business Combination by the Company (analyzed on a per share basis) or per share by holders of Outstanding Shares to (ii) the per share market price of Outstanding Shares immediately prior to the announcement of the Business Combination is at least as great as the ratio of (iii) the highest per share price (including brokerage commissions, transfer taxes and soliciting dealers' fees) which such Related Person has paid for any of the Outstanding Shares acquired by it prior to the Date of Determination, to -6- (iv) the per share market price of Outstanding Shares immediately prior to the initial acquisition by such Related Person of any Outstanding Shares. (4) If the Related Person is a corporation, the Fair Market Value of the consideration to be received in such Business Combination by the Company (analyzed on a per share basis) or per share holders of Outstanding Shares shall be not less than the earnings per share of Outstanding Shares during the four full consecutive fiscal quarters immediately preceding the Date of Determination for solicitation of votes on such Business Combination multiplied by the then price/earnings multiple (if any) of such Related Person as customarily computed and reported in the financial community; (5) The Fair Market Value of consideration to be received in such Business Combination by the Company (analyzed on a er share basis) or per share by holders of Outstanding Shares shall be not less than the sum of: (i) the higher of (A) the highest gross per share price paid or agreed to be paid by the Related Person to acquire any of the Outstanding Shares of the Company beneficially owned by such Related Person or (B) the highest per share market price for such Outstanding Shares since the Related Person became a Related Person, plus (ii) an amount equal to the highest price/earnings multiple of the Company, as customarily computed and reported in the financial community, attained by the Company during the five fiscal years immediately preceding the Date of Determination multiplied by the aggregate amount, if any, by which 10% of such higher per share price determined under (i) above exceeds the smallest quarterly common stock dividend per share (annualized) paid in cash since the date on which such Related Person became a Related Person; (6) The Fair Market Value of the consideration to be received in such Business Combination by the Company (analyzed on a per share basis) or per share by holders of Outstanding Shares shall not be less than the per share book value of Outstanding Shares at the end of the most recent fiscal year preceding the Date of Determination, calculated in accordance with generally accepted accounting methods; (7) After such Related Person has become a Related Person and prior to the consummation of such Business Combination: (i) except as approved by two-thirds of the Continuing Directors, there shall have been no failure to declare and pay at the regular date therefor any dividends (whether or not cumulative) on any outstanding Preferred Stock of the Company; and (ii) there shall have been (A) no reduction in the annual dividend from that most recently paid on Outstanding Shares (except as necessary to reflect any subdivision of the Outstanding Shares through stock -7- dividend, stock split, or otherwise), except as approved by two-thirds of the Continuing Directors, and (B) an increase in such annual dividend as necessary to reflect any reclassification (including a reverse stock split), recapitalization, reorganization or any similar transaction which has the effect of reducing the number of Outstanding Shares, unless the failure so to increase such annual dividend is approved by two-thirds of the Continuing Directors; (8) After such Related Person has become a Related Person, such Related Person shall not have received the benefit, directly or indirectly (except proportionately as a shareholder of the Company) of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by the Company, whether in anticipation of or in connection with such Business Combination or otherwise. (d) Approval by Continuing Directors. The provisions of Section 6.07(b) and (c) shall not be applicable to any particular Business Combination or other event covered thereby, and such Business Combination or other event covered thereby shall require only such affirmative vote as is required by law and by any other provision of these Articles of Incorporation, if both of the following conditions with respect to such Business Combination or other event shall have been satisfied: (i) the Business Combination or other event shall have been approved by two-thirds of the Continuing Directors; and (ii) at the time of such approval, Continuing Directors comprised at least a majority of the Board of Directors. (e) Amendment. The affirmative vote of shareholders required to alter, amend or repeal this Section 6.07, or to alter, amend, or repeal any other provision of the Articles of Incorporation of the Company in any respect which would or might have the effect, directly or indirectly, of modifying, permitting any action inconsistent with, or permitting circumvention of, this Section 6.07 (including, but not limited to, any amendment of the Articles of Incorporation which would effect a reclassification of any securities of this Company which has the effect, directly or indirectly, of increasing the proportionate share of Outstanding Shares, or outstanding shares of any Subsidiary, beneficially owned by a Related Person), shall be at least seventy-five percent (75%) of all of the Outstanding Shares; provided, however, -------- that if such proposed alteration, amendment or repeal is approved by two-thirds of the Continuing Directors and at the time of such approval Continuing Directors comprise at least a majority of the Board of Directors, then such proposed alteration, amendment or repeal shall require for approval only such affirmative vote as is required by law and by any other provision of these Articles of Incorporation. The 75% affirmative vote provided for above shall be in addition to any shareholder vote which would be required without reference to this Section 6.07." -8- IV. New Section 6.09 was added to the Articles and provides as follows: "Section 6.09. Business Combination Statute. For purposes of any By-Law adopted by the Company pursuant to Sections 14-2-1131 to 1133, inclusive, of the Official Code of Georgia Annotated (the 'Code'), as now in effect and as from time to time amended, the term 'business combination' shall mean, in addition to the transactions described in those Code Sections, any share exchange with any interested shareholder, or any affiliate of an interested shareholder,as defined in Section 14-2-1110 of the Official Code of Georgia Annotated, as now in effect and as from time to time amended, or any other corporation, whether or not itself an interested shareholder, which is, or after the share exchange would be, an affiliate of an interested shareholder that was an interested shareholder prior to the consummation of the transaction." V. New Section 6.10 was added to the Articles and provides as follows: "Section 6.10. Restoration of Appraisal Rights. (a) A record shareholder of the Corporation is entitled to dissent from, and to obtain payment of the fair value of his shares in the event of, any of the business combinations described in subclauses (1), (2), (4), (5) or (6) of the clause entitled 'Business Combination' of Section 6.07(a), with a Related Person (as defined in the clause entitled 'Related Person' of Section 6.07(a)) unless such transaction is approved by the Board of Directors in the manner prescribed in subsection (d) of Section 6.07. (b) For purposes of this Section a 'record shareholder' shall mean any person in whose name shares are registered in the records of the Corporation or the beneficial owner of shares to the extent of the rights granted by a nominee certificate on file with the Corporation." IN WITNESS WHEREOF, the undersigned executed this document on the 20th day of February, 1990. /s/ K.R. McKinley ------------------------------ K.R. McKinley Corporate Secretary -9- ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION (CHARTER) OF ATLANTA GAS LIGHT COMPANY I. The name of the corporation is: Atlanta Gas Light Company. II. Effective the date hereof, pursuant to Sections 1.01 and 3.05 of the Articles of Incorporation (Charter) of Atlanta Gas Light Company (the "Company") and Section 14-2-602 of the Georgia Business Corporation Code, Section 3 of the Charter of the Company hereby is amended to add the following as new Sections 3.04B and 3.04C to create a new series of Cumulative Preferred Stock, par value of $100 per share, and a new series of Cumulative Preferred Stock, no par value per share: "SECTION 3.04B. 7.70% SERIES $100 PAR VALUE CUMULATIVE PREFERRED STOCK. The Company shall have the authority to issue 145,000 shares of $100 par value 7.70% Series Cumulative Preferred Stock (the "7.70% Series Preferred Stock"), which shall have the following preferences limitations and relative rights: (1) CUMULATIVE DIVIDENDS. The holders of 7.70% Series Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available therefor, cumulative dividends per share at the rate of 7.70% per annum on the par value thereof, payable quarterly on the first day of March, June, September and December in each year. Dividends on shares of 7.70% Series Preferred Stock shall commence to accrue and shall be cumulative from and including the date of issuance and shall cease to accrue on and after the date fixed for redemption pursuant to paragraph (3) of this Section 3.04B. So long as any shares of 7.70% Series Preferred Stock are outstanding, no dividends shall be declared or paid upon, or set apart for, the shares of any class of Junior Stock, nor any sums applied to the purchase, redemption or other retirement of any class of Junior Stock, unless full dividends on all shares of the 7.70% Series Preferred Stock and of any other class or series of Preferred Stock outstanding for all past quarterly dividend periods shall have been paid or declared and a sum sufficient for the payment thereof set apart and the full dividend for the then current quarterly dividend period shall have been or concurrently shall be paid or declared and set apart. The amount of any deficiency for the past dividend periods may be paid or declared and set apart at any time without reference to any quarterly dividend payment date. Unpaid accrued dividends on the 7.70% Series Preferred Stock shall not bear interest. (2) LIQUIDATION. In the event of any liquidation, dissolution or winding up of the Company or reduction or decrease of its capital resulting in a distribution of assets to the holders of any class of Junior Stock, the holders of 7.70% Series Preferred Stock shall be entitled to receive the amounts prescribed in Section 4.02 of the Charter of the Company, as amended. (3) OPTIONAL REDEMPTION. The Company may at its option expressed by resolution of the Board of Directors redeem all or part of the 7.70% Series Preferred Stock in the manner provided in Section 4.03(A) of the Charter of the Company, as amended, at any time and from time to time on or after September 1, 1997. The per share redemption price shall be equal to the par value per share of the 7.70% Series Preferred Stock plus an amount equal to the accumulated but unpaid dividends thereon up to but not including the date fixed for redemption. All shares of the 7.70% Series Preferred Stock at any time redeemed pursuant to this subparagraph (3) shall be retired and canceled and thereafter shall be deemed to be authorized but unissued shares of Cumulative Preferred Stock of the par value of $100 per share. (4) VOTING POWERS. Except as otherwise provided by law or as specifically provided by Sections 4 and 6 of the Charter of the Company, the shares of 7.70% Series Preferred Stock shall have no voting rights. SECTION 3.04C. 7.70% SERIES NO PAR VALUE CUMULATIVE PREFERRED STOCK (STATED VALUE $100 PER SHARE). The Company shall have the authority to issue 300,000 shares of no par value 7.70% Series Cumulative Preferred Stock (the "7.70% No Par Preferred Stock"), which shall have the following preferences limitations and relative rights: -2- (1) STATED VALUE. The stated value of, and the stated capital allocated to, the 7.70% No Par Preferred Stock shall be $100 per share. (2) CUMULATIVE DIVIDENDS. The holders of 7.70% No Par Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available therefor, cumulative dividends per share at the rate of 7.70% per annum on the stated value thereof, payable quarterly on the first day of March, June, September and December in each year. Dividends on shares of 7.70% No Par Preferred Stock shall commence to accrue and shall be cumulative from and including the date of issuance and shall cease to accrue on and after the date fixed for redemption pursuant to paragraph (4) of this Section 3.04C. So long as any shares of 7.70% No Par Preferred Stock are outstanding, no dividends shall be declared or paid upon, or set apart for, the shares of any class of Junior Stock, nor any sums applied to the purchase, redemption or other retirement of any class of Junior Stock, unless full dividends on all shares of the 7.70% No Par Preferred Stock and of any other class or series of Preferred Stock outstanding for all past quarterly dividend periods shall have been paid or declared and a sum sufficient for the payment thereof set apart and the full dividend for the then current quarterly dividend period shall have been or concurrently shall be paid or declared and set apart. The amount of any deficiency for the past dividend periods may be paid or declared and set apart at any time without reference to any quarterly dividend payment date. Unpaid accrued dividends on the 7.70% No Par Preferred Stock shall not bear interest. (3) LIQUIDATION. In the event of any liquidation, dissolution or winding up of the Company or reduction or decrease of its capital resulting in a distribution of assets to the holders of any class of Junior Stock, the holders of 7.70% No Par Preferred Stock shall be entitled to receive the amounts prescribed in Section 4.02 of the Charter of the Company, as amended. -3- (4) OPTIONAL REDEMPTION. The Company may at its option expressed by resolution of the Board of Directors redeem all or part of the 7.70% No Par Preferred Stock in the manner provided in Section 4.03(A) of the Charter of the Company, as amended, at any time and from time to time on or after September 1, 1997. The per share redemption price shall be equal to the stated value per share of the 7.70% No Par Preferred Stock plus an amount equal to the accumulated but unpaid dividends thereon up to but not including the date fixed for redemption. All shares of the 7.70% No Par Preferred Stock at any time redeemed pursuant to this subparagraph (4) shall be retired and canceled and thereafter shall be deemed to be authorized but unissued shares of Cumulative Preferred Stock of no par value. (5) VOTING POWERS. Except as otherwise provided by law or as specifically provided by Sections 4 and 6 of the Charter of the Company, the shares of 7.70% No Par Preferred Stock shall have no voting rights." III. These amendments were duly adopted by the board of directors of the Company as of October 9, 1992. IN WITNESS WHEREOF, the Company has caused these Articles of Amendment to the Articles of Incorporation to be executed by its duly authorized officer as of the 9th day of October, 1992. ATLANTA GAS LIGHT COMPANY By:/s/ Thomas H. Benson ----------------------- Thomas H. Benson Senior Vice President -4- ARTICLES OF CORRECTION OF ATLANTA GAS LIGHT COMPANY The Articles of Correction of Atlanta Gas Light Company, a Georgia corporation (the "Company"), are filed pursuant to Section 14-2-124 of the Official Code of Georgia Annotated to correct the below-described record of corporate action. On October 9, 1992, the Company filed with the Secretary of State Articles of Amendment to the Articles of Incorporation (Charter) of the Company (the "Articles of Incorporation"). Article II of said Articles of Amendment amends Section 3 of the Charter of the Company by adding new Sections 3.04B and 3.04C. Subparagraph (3) of Section 3.04B and subparagraph (4) of Section 3.04C incorrectly state that the Company may redeem the shares of Cumulative Preferred Stock designated in the Articles of Amendment on or after September 1, 1997 rather than the correct date of December 1, 1997. Accordingly, new Sections 3.04B and 3.04C as set forth in Article II of said Articles of Amendment hereby are corrected so as to read in their entirety as follows: "SECTION 3.04B. 7.70% SERIES $100 PAR VALUE CUMULATIVE PREFERRED STOCK. The Company shall have the authority to issue 145,000 shares of $100 par value 7.70% Series Cumulative Preferred Stock (the "7.70% Series Preferred Stock"), which shall have the following preferences limitations and relative rights: (1) CUMULATIVE DIVIDENDS. The holders of 7.70% Series Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available therefor, cumulative dividends per share at the rate of 7.70% per annum on the par value thereof, payable quarterly on the first day of March, June, September and December in each year. Dividends on shares of 7.70% Series Preferred Stock shall commence to accrue and shall be cumulative from and including the date of issuance and shall cease to accrue on and after the date fixed for redemption pursuant to paragraph (3) of this Section 3.04B. So long as any shares of 7.70% Series Preferred Stock are outstanding, no dividends shall be declared or paid upon, or set apart for, the shares of any class of Junior Stock, nor any sums applied to the purchase, redemption or other retirement of any class of Junior Stock, unless full dividends on all shares of the 7.70% Series Preferred Stock and of any other class or series of Preferred Stock outstanding for all past quarterly dividend periods shall have been paid or declared and a sum sufficient for the payment thereof set apart and the full dividend for the then current quarterly dividend period shall have been or concurrently shall be paid or declared and set apart. The amount of any deficiency for the past dividend periods may be paid or declared and set apart at any time without reference to any quarterly dividend payment date. Unpaid accrued dividends on the 7.70% Series Preferred Stock shall not bear interest. (2) LIQUIDATION. In the event of any liquidation, dissolution or winding up of the Company or reduction or decrease of its capital resulting in a distribution of assets to the holders of any class of Junior Stock, the holders of 7.70% Series Preferred Stock shall be entitled to receive the amounts prescribed in Section 4.02 of the Charter of the Company, as amended. (3) OPTIONAL REDEMPTION. The Company may at its option expressed by resolution of the Board of Directors redeem all or part of the 7.70% Series Preferred Stock in the manner provided in Section 4.03(A) of the Charter of the Company, as amended, at any time and from time to time on or after December 1, 1997. The per share redemption price shall be equal to the par value per share of the 7.70% Series Preferred Stock plus an amount equal to the accumulated but unpaid dividends thereon up to but not including the date fixed for redemption. All shares of the 7.70% Series Preferred Stock at any time redeemed pursuant to this subparagraph (3) shall be retired and canceled and thereafter shall be deemed to be authorized but unissued shares of Cumulative Preferred Stock of the par value of $100 per share. (4) VOTING POWERS. Except as otherwise provided by law or as specifically provided by Sections 4 and 6 of the Charter of the Company, the shares of 7.70% Series Preferred Stock shall have no voting rights. SECTION 3.04C. 7.70% SERIES NO PAR VALUE CUMULATIVE PREFERRED STOCK (STATED VALUE $100 PER SHARE). The Company shall have the authority to issue 300,000 shares of no par value 7.70% Series Cumulative Preferred -2- Stock (the "7.70% No Par Preferred Stock"), which shall have the following preferences limitations and relative rights: (1) STATED VALUE. The stated value of, and the stated capital allocated to, the 7.70% No Par Preferred Stock shall be $100 per share. (2) CUMULATIVE DIVIDENDS. The holders of 7.70% No Par Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available therefor, cumulative dividends per share at the rate of 7.70% per annum on the stated value thereof, payable quarterly on the first day of March, June, September and December in each year. Dividends on shares of 7.70% No Par Preferred Stock shall commence to accrue and shall be cumulative from and including the date of issuance and shall cease to accrue on and after the date fixed for redemption pursuant to paragraph (4) of this Section 3.04C. So long as any shares of 7.70% No Par Preferred Stock are outstanding, no dividends shall be declared or paid upon, or set apart for, the shares of any class of Junior Stock, nor any sums applied to the purchase, redemption or other retirement of any class of Junior Stock, unless full dividends on all shares of the 7.70% No Par Preferred Stock and of any other class or series of Preferred Stock outstanding for all past quarterly dividend periods shall have been paid or declared and a sum sufficient for the payment thereof set apart and the full dividend for the then current quarterly dividend period shall have been or concurrently shall be paid or declared and set apart. The amount of any deficiency for the past dividend periods may be paid or declared and set apart at any time without reference to any quarterly dividend payment date. Unpaid accrued dividends on the 7.70% No Par Preferred Stock shall not bear interest. -3- (3) LIQUIDATION. In the event of any liquidation, dissolution or winding up of the Company or reduction or decrease of its capital resulting in a distribution of assets to the holders of any class of Junior Stock, the holders of 7.70% No Par Preferred Stock shall be entitled to receive the amounts prescribed in Section 4.02 of the Charter of the Company, as amended. (4) OPTIONAL REDEMPTION. The Company may at its option expressed by resolution of the Board of Directors redeem all or part of the 7.70% No Par Preferred Stock in the manner provided in Section 4.03(A) of the Charter of the Company, as amended, at any time and from time to time on or after December 1, 1997. The per share redemption price shall be equal to the stated value per share of the 7.70% No Par Preferred Stock plus an amount equal to the accumulated but unpaid dividends thereon up to but not including the date fixed for redemption. All shares of the 7.70% No Par Preferred Stock at any time redeemed pursuant to this subparagraph (4) shall be retired and canceled and thereafter shall be deemed to be authorized but unissued shares of Cumulative Preferred Stock of no par value. (5) VOTING POWERS. Except as otherwise provided by law or as specifically provided by Sections 4 and 6 of the Charter of the Company, the shares of 7.70% No Par Preferred Stock shall have no voting rights." IN WITNESS WHEREOF, the Company has caused these Articles of Correction to be executed by its duly authorized officer as of this 16th day of October 1992. ATLANTA GAS LIGHT COMPANY By: /s/ Robert L. Goocher ------------------------------ Robert L. Goocher Vice President-Finance -4- ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION (CHARTER) OF ATLANTA GAS LIGHT COMPANY I. The name of the corporation is: Atlanta Gas Light Company. II. Effective the date hereof, the Articles of Incorporation (Charter) of Atlanta Gas Light Company (the "Company") hereby are amended as follows: (A) Section 1.01 of the Charter hereby is amended by deleting said Section in its entirety and substituting in lieu thereof the following: "Section 1.01. The maximum number of shares of capital stock of Atlanta Gas Light Company (hereinafter referred to as the "Company") authorized to be outstanding at any one time is as follows: 100,000,000 shares of Common Stock of the par value of $5 per share, 20,000 shares of 4.50% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.50% Preferred Stock"), 50,000 shares of 4.72% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "4.72% Preferred Stock"), 10,000 shares of 5% Cumulative Preferred Stock of the par value of $100 per share (hereinafter referred to as the "5% Preferred Stock"), 80,000 shares of 8.32% Series Cumulative Preferred Stock of the par value of $100 per share, 75,000 shares of 7.84% Series Cumulative Preferred Stock of the par value of $100 per share, 245,000 shares of Cumulative Preferred Stock of the par value of $100 per share, 1,000,000 shares of Cumulative Preferred Stock of no par value with the amount of stated capital allocated to each share to be determined by the Board of Directors of the Company at the time of issue thereof, and with the maximum aggregate stated capital allocable to all such shares at any time outstanding of not more than $30,000,000, and 10,000,000 shares of Preferred Stock of no par value with the amount of stated capital allocated to each share to be determined by the Board of Directors of the Company at the time of issuance thereof. The designations, preferences, voting powers, restrictions, limitations and qualifications of the several classes or series of stock of Atlanta Gas Light Company shall be as set forth in the applicable provisions of this Charter (Articles of Incorporation), as amended, or as may be fixed by applicable statutory provisions, or as may from time to time be lawfully provided by resolution of the Board of Directors of the Company, provided, however, that no share of any such class or series of Preferred Stock shall be issued in violation of the terms of any other class or series of Preferred Stock then outstanding." (B) Section 3.02 of the Charter hereby is amended by deleting the text of such Section in its entirety and replacing such text with the term "Reserved." (C) Section 3.03 of the Charter hereby is amended by deleting the text of such Section in its entirety and replacing such text with the term "Reserved." (D) Section 4.01 of the Charter hereby is amended by deleting such Section in its entirety and substituting in lieu thereof the following: "Section 4.01. Dividend Rights. Dividends in full shall not be paid or set apart for payment on any class or series of the Preferred Stock for any dividend period unless dividends then due and payable for all past dividend periods on all classes or series of Preferred Stock have been or are contemporaneously paid in full or set apart for payment in full. When the specific dividends then due and owing for past dividend periods are not paid in full on any class of Preferred Stock, the shares of each class of Preferred Stock with respect to which dividends are then due and owing for past dividend periods shall share ratably in the payment of dividends, including accumulations, if any, in accordance with the sums which would be payable on said shares if all dividends were paid in full." (E) Subparagraph (v) of Section 4.04(A) of the Charter hereby is amended by deleting such subparagraph in its entirety and substituting in lieu thereof the following: "(v) Issue shares of Preferred Stock in addition to the 20,000 shares of 4 1/2% Preferred Stock outstanding unless, after giving effect to such additional shares, (a) the net income of the Company available for dividends for any period of twelve (12) consecutive calendar months within the fifteen (15) calendar months immediately preceding the calendar month within which such additional shares of stock are to be issued shall have been at least two and one-half (2 1/2) times the aggregate annual dividend requirements upon the entire amount to be outstanding of Preferred Stock and of any stocks of the Company of any class ranking as to dividends prior to the Preferred Stock, (b) the gross income available for payment of interest charges for any period of twelve (12) consecutive calendar months within the fifteen (15) calendar months immediately preceding the calendar month within which such additional shares of stock are to be issued shall have been at least one and one-half (1 1/2) times the sum of (1) the aggregate annual interest charges on all indebtedness of the Company to be outstanding, and (2) the aggregate annual dividend requirements upon the entire amount to be outstanding of Preferred Stock and of any stocks of the Company of any class ranking as to dividends prior to the Preferred Stock, and (c) the aggregate of the capital of the Company applicable to all Junior Stock, plus the capital surplus and earned surplus of the Company and plus premiums on capital stock of the Company of any class, shall not be less than the aggregate amount payable upon involuntary liquidation, dissolution or winding up of the Company to the holders of all shares of all classes of Preferred Stock to be outstanding. In the foregoing computations, there shall be excluded (a) all indebtedness and all shares of Preferred Stock to be retired in connection with the issue of such additional shares, and (b) all interest charges on all indebtedness and dividend requirements on all shares of stock to be retired in connection with the issue of such additional shares. The net earnings of any property which has been acquired by the Company during or after the period for which income is computed, or of any property which is to be acquired in connection with the issuance of any such additional shares, if capable of being separately determined or estimated, may be included on a pro forma basis in the foregoing computations; and if within or after the period for which income is computed, any substantial portion of the properties of the Company shall have been disposed of, the net earnings of such property, if capable of being separately determined or estimated, shall be excluded in the foregoing computations." EX-3 3 EXHIBIT 3.2 ARTICLES OF MERGER OF ATLANTA GAS LIGHT COMPANY AND AGL MERGER CO. 1. The Amended and Restated Agreement and Plan of Merger attached hereto as Exhibit A and incorporated herein by reference was duly approved by the Board of Directors of Atlanta Gas Light Company, a Georgia corporation ("AGL"), and the Board of Directors of AGL Merger Co., a Georgia corporation ("Merger Sub"). 2. The name of the surviving corporation is Atlanta Gas Light Company, a Georgia corporation. 3. The Merger was duly approved by the shareholders of AGL and Merger Sub. 4. Pursuant to the Agreement and Plan of Merger, the merger of AGL and Merger Sub shall be effective as of the date and time of filing hereof. Executed as of March 6, 1996. ATLANTA GAS LIGHT COMPANY, a Georgia corporation By: /s/ David R. Jones -------------------------------------- David R. Jones President and Chief Executive Officer [SEAL] ATTEST: /s/ Melanie M. Platt - ---------------------------- Melanie M. Platt Corporate Secretary AGL MERGER CO., a Georgia corporation By: /s/ David R. Jones ---------------------------------- David R. Jones President [SEAL] ATTEST: /s/ Melanie M. Platt - ---------------------------- Melanie M. Platt Secretary AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER ------------------------------------------------ By and Among AGL Resources Inc., a Georgia corporation Atlanta Gas Light Company, a Georgia corporation and AGL Merger Co., a Georgia corporation ------------------------------------------------ Dated February 29, 1996 AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER This AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of February 29, 1996, amends and restates the Agreement and Plan of Merger, dated January 19, 1996, by and among Atlanta Gas Light Company, a Georgia corporation ("AGL"), AGL Resources Inc., a Georgia corporation ("Holdings"), and AGL Merger Co., a Georgia corporation ("Merger Sub") (collectively, the "Parties"). WITNESSETH: WHEREAS, AGL has an authorized capitalization consisting of 100,000,000 shares of Common Stock, $5 par value (the "AGL Common Stock"), of which 55,176,476 shares were issued and outstanding as of February 27, 1996, and 11,480,000 shares of Preferred Stock, of which 2,352,801 shares (consisting of shares of 7 separate series) were issued and outstanding as of February 27, 1996 (the "AGL Preferred Stock"); and WHEREAS, Merger Sub has an authorized capitalization consisting of 1,000 shares of Common Stock, $.01 par value (the "Merger Sub Common Stock"), of which 1 share has been issued and is outstanding and owned beneficially and of record by Holdings; and WHEREAS, Holdings has an authorized capitalization consisting of 750,000,000 shares of Common Stock, $5 par value (the "Holdings Common Stock"), of which 1 share has been issued and is outstanding and owned beneficially and of record by AGL; 10,000,000 shares of Class A Junior Participating Preferred Stock (the "Class A Preferred Stock"), without par value; and 10,000,000 shares of Preferred Stock, with or without par value (the "Holdings Preferred Stock"); and WHEREAS, the Boards of Directors of the respective Parties hereto deem it advisable to merge Merger Sub with and into AGL (the "Merger") in accordance with the Georgia Business Corporation Code and this Agreement whereby the shares of AGL Common Stock will be converted into shares of Holdings Common Stock; and WHEREAS, the Boards of Directors of the respective Parties deem it advisable and in the best interest of the respective Parties to amend and restate the Agreement to clarify the mechanics of the merger with respect to certain Common Stock plans of AGL pursuant to Article IX of the Agreement; NOW, THEREFORE, in consideration of the premises and the representations, warranties and agreements herein contained, the parties hereto agree that Merger Sub shall be merged with and into AGL which shall be the corporation surviving such merger and that the terms and conditions of such merger, the mode of carrying it into effect, and the manner of converting and exchanging shares shall be as follows: ARTICLE I THE MERGER (a) Subject to and in accordance with the provisions of this Agreement, Articles of Merger as set forth in Exhibit I hereto (the "Articles") shall be executed and acknowledged by each of AGL and Merger Sub and thereafter delivered to the Secretary of State of the State of Georgia for filing, as provided in Section 14-2-1105 of the Georgia Business Corporation Code, upon which filing with the Secretary of State and its issuance of a Certificate of Merger, the Merger shall become effective (the "Effective Time"). At the Effective Time, the separate existence of Merger Sub shall cease and Merger Sub shall be merged with and into AGL (Merger Sub and AGL being sometimes referred to herein as the "Constituent Corporations" and AGL, the corporation designated in the Articles as the surviving corporation, being sometimes referred to herein as the "Surviving Corporation"). (b) Prior to and after the Effective Time, Holdings, AGL and Merger Sub, respectively, shall take all such action as may be necessary or appropriate in order to effectuate the Merger. In this connection, Holdings shall issue shares of Holdings Common Stock which the holders of AGL Common Stock shall be entitled to receive as provided in Article II hereof. In the event that at any time after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Surviving Corporation with all rights, privileges, approvals, immunities and franchises and all property, real, personal and mixed, of either of the Constituent Corporations, the officers and directors of each of the Constituent Corporations as of the Effective Time shall take all such further action. ARTICLE II TERMS OF CONVERSION AND EXCHANGE OF SHARES At the Effective Time: (a) Each share of AGL Common Stock issued immediately prior to the Effective Time shall thereupon, and without surrender of stock certificates or any other action on the part of the holder thereof, be changed and converted into one share of Holdings Common Stock, which shall thereupon be issued, fully paid and nonassessable; such shares of AGL Common Stock to be converted shall be deemed to include any shares then held in its treasury, and such converted treasury shares shall, immediately following the Effective Time, be deemed to be held in Holdings' treasury; (b) The shares of AGL Preferred Stock issued and outstanding immediately prior to the Effective Time shall not be converted or otherwise affected by the Merger, and each such share shall continue to be issued and outstanding and to be one fully paid and nonassessable share of the particular series of AGL Preferred Stock of the Surviving Corporation; and (c) Each share of Merger Sub Common Stock issued and outstanding immediately prior to the Effective Time shall be converted into one share of common stock of the Surviving Corporation. ARTICLE III STOCK OPTIONS At the Effective Time, each outstanding option to purchase shares of AGL Common Stock will be assumed by Holdings. Each such option will be exercisable in accordance with its existing terms for the same number of shares of Holdings Common Stock as the number of shares of AGL Common Stock subject to such option. ARTICLE IV CHARTER AND BY-LAWS From and after the Effective Time, and until thereafter amended as provided by the AGL Charter, as amended (the "Charter"), and by law, the AGL Charter as in effect immediately prior to the Effective Time shall be and continue to be the Charter of the Surviving Corporation. From and after the Effective Time, and until thereafter amended as provided by the Charter and the By-Laws of AGL, as amended, and by law, the By-Laws of AGL as in effect immediately prior to the Effective Time shall be and continue to be the By-Laws of the Surviving Corporation. ARTICLE V DIRECTORS AND OFFICERS The persons who are Directors and officers of AGL immediately prior to the Effective Time shall continue as Directors and officers, respectively, of the Surviving Corporation and shall continue to hold office as provided in the By- Laws of the Surviving Corporation. If, at or following the Effective Time, a vacancy shall exist in the Board of Directors or in the position of any officer of the Surviving Corporation, such vacancy may be filled in the manner provided in the By-Laws of the Surviving Corporation. ARTICLE VI STOCK CERTIFICATES Following the Effective Time, each holder of an outstanding certificate or certificates theretofore representing shares of AGL Common Stock may, but shall not be required to, surrender the same to Holdings for cancellation or transfer, and each such holder or transferee will be entitled to receive certificates representing the same number of shares of Holdings Common Stock as the shares of AGL Common Stock previously represented by the stock certificates surrendered. Until so surrendered or presented for transfer, each outstanding certificate which, prior to the Effective Time, represented AGL Common Stock shall be deemed and treated for all corporate purposes to represent the ownership of the same number of shares of Holdings Common Stock as though such surrender or transfer and exchange had taken place. The stock transfer books for the AGL Common Stock shall be deemed to be closed at the Effective Time and no transfer of outstanding shares of AGL Common Stock outstanding prior to the Effective Time shall thereafter be made on such books. Following the Effective Time, the holders of certificates representing AGL Common Stock outstanding immediately before the Effective Time shall cease to have any rights with respect to the stock of the Surviving Corporation and their sole rights shall be with respect to the Holdings Common Stock to which their shares of AGL Common Stock shall have been converted in the Merger. ARTICLE VII CONDITIONS OF THE MERGER Consummation of the Merger is subject to the satisfaction of the following conditions: (a) The Merger shall have received the approval of the holders of capital stock of each of the Constituent Corporations as required by their Charter or Articles of Incorporation and the Georgia Business Corporation Code. (b) There shall have been obtained an opinion or opinions of counsel satisfactory to the Board of Directors of AGL with respect to the tax consequences of the Merger and other transactions incident thereto. (c) There shall have been obtained all of the regulatory approvals and exemptions necessary, appropriate or desirable to be obtained prior to effectuating the Merger and the Restructuring (as defined), as such approvals and exemptions are described in the Proxy Statement related to AGL's 1996 Annual Meeting of Shareholders. (d) The Holdings Common Stock to be issued and to be reserved for issuance pursuant to the Merger shall have been approved for listing, upon official notice of issuance, by the New York Stock Exchange. (e) The Articles shall have been filed with the Secretary of State of the State of Georgia. ARTICLE VIII TERMINATION At any time prior to the filing of the Articles with the Secretary of State of the State of Georgia, the Merger may be terminated by the Board of Directors of any corporation a party hereto notwithstanding approval of the Merger by the stockholders of all or any of the corporations parties hereto. ARTICLE IX AGL STOCK PLANS The obligations of AGL under the following AGL plans: (i) the Retirement Savings Plus Plan, (ii) the Leveraged Employee Stock Ownership Plan, (iii) the Long-Term Stock Incentive Plan of 1990, (iv) the Nonqualified Savings Plan and (v) the Dividend Reinvestment and Stock Purchase Plan shall continue as obligations of AGL after the Effective Time, provided, however, that after the Effective Time AGL shall issue Holdings Common Stock under the terms of such plans in lieu of AGL Common Stock whenever stock is required in connection with such plans. Holdings shall take all required corporate action to assume the obligations of AGL under the 1996 Non-Employee Directors Equity Compensation Plan. ARTICLE X CANCELLATION OF AGL'S HOLDINGS COMMON STOCK Immediately after the Effective Time, each share of Holdings Common Stock held by AGL immediately prior to the Effective Time shall be cancelled. ARTICLE XI MISCELLANEOUS This Agreement may be executed in counterparts, each of which when so executed shall be deemed to be an original, and such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, AGL, Merger Sub and Holdings, pursuant to approval and authorization duly given by resolutions adopted by their respective Boards of Directors, have each caused this Amended and Restated Agreement and Plan of Merger to be executed by its Chairman of the Board, President and Chief Executive Officer or one of its Vice Presidents and its corporate seal to be affixed hereto and attested by its Secretary. ATLANTA GAS LIGHT COMPANY, a Georgia corporation /s/ J. Michael Riley -------------------------------------- [SEAL] By: J. Michael Riley Vice President, Finance and Accounting ATTEST: /s/ Melanie M. Platt - --------------------------------- Melanie M. Platt Corporate Secretary AGL RESOURCES INC., a Georgia corporation /s/ David R. Jones ------------------------------------- [SEAL] By: David R. Jones President and Chief Executive Officer ATTEST: /s/ Melanie M. Platt - --------------------------------- Melanie M. Platt Corporate Secretary AGL MERGER CO., a Georgia corporation /s/ David R. Jones ---------------------------------------- [SEAL] By: David R. Jones President ATTEST: /s/ Melanie M. Platt - ----------------------------------- Melanie M. Platt Secretary EX-3 4 EXHIBIT 3.3 ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION (CHARTER) OF ATLANTA GAS LIGHT COMPANY I. CORPORATE NAME The name of the corporation is: Atlanta Gas Light Company. II. AMENDMENT Effective the date hereof, the Articles of Incorporation (Charter) of Atlanta Gas Light Company (the "Company") hereby are amended by deleting Section 6.01(a) of the Charter in its entirety and substituting in lieu therof the following: "Section 6.01(a). Board of Directors. The business and property of the Company shall be conducted and managed by a Board of Directors, which shall consist of such number of Directors as shall be fixed from time to time exclusively pursuant to a resolution adopted by the Board of Directors and otherwise in compliance with the Company's By-Laws." All other provisions of the Charter remain unchanged. III. ADOPTION OF AMENDMENT This Amendment was duly adopted on August 5, 1996, having been approved on such date by the Company's shareholders, as required by Section 14-2-1003 of the Georgia Business Corporation Code. IN WITNESS WHEREOF, the Company has caused these Articles of Amendment to the Articles of Incorporation (Charter) to be duly executed by its authorized officer as of the 3rd day of October 1996. ATLANTA GAS LIGHT COMPANY By: /s/ Melanie M. Platt ---------------------------------- Melanie M. Platt, Corporate Secretary EX-10 5 EXHIBIT 10.54 Exhibit 10.54 AMENDMENT TO FS SERVICE AGREEMENT Recitals Transcontinental Gas Pipe Line Corporation ("TGPL") and Atlanta Gas Light Company are parties to two FS Agreements dated August 1, 1991, for Daily Sales Entitlements of 20,000 Mcf/day and 33,800 Mcf/day, with termination dates of March 31, 1997 and March 31, 2001, respectively. The Federal Energy Regulatory Commission issued an "Order on Compliance Filing and on Rehearing and Accepting Settlement Subject to Clarification" on October 4, 1993, in Dockets RS92-86-000, et al. which, among other things, required the modification of TGPL's form of Service Agreement under Rate Schedule FS; TGPL made a Compliance filing reflecting the modifications required by the October 4 Order; Accordingly, Article IV, Section 2 and Section 3(d)(ii) of Exhibit A of the FS Agreement is amended as follows: ARTICLE IV POINT(S) OF DELIVERY AND AGENCY AUTHORITY 2. Buyer hereby appoints Seller as its agent for the purpose of arranging for the transportation of gas (a) purchased and sold hereunder from the Delivery Point(s) to the ultimate point(s) of delivery ("Redelivery Points") to Buyer listed on Exhibit "B" attached hereto and/or (b) pursuant to the agency authority granted in the immediately following paragraph of this Section 2 relating to Buyer's Eminence storage service. In consideration of Buyer's obligation under this Service Agreement, including the payment of certain fees pursuant to Article III hereof, Seller agrees to accept such agency appointment. Pursuant to this agency authority Seller may nominate and schedule transportation service under Buyer's IT and FT Agreements as an agent for Buyer. Seller shall be responsible for all imbalance penalties incurred in connection with such transportation under this Service Agreement. In addition, Buyer hereby appoints Seller as its exclusive agent for the purpose of managing storage services received by Buyer under the terms of Seller's Rate Schedule ESS. In consideration of Buyer's obligation under this Service Agreement, including the payment of certain fees pursuant to Article III hereof, Seller agrees to accept such agency appointment. Pursuant to this agency authority, Seller shall perform all functions necessary to manage Buyer's Eminence storage service, including but not limited to submitting nominations, scheduling storage injections and withdrawals and receipt and payment of injection and withdrawal charges for such service. Buyer understands and acknowledges that Seller will perform such agency functions on an aggregated basis for all Buyers under Seller's Rate Schedule FS. Buyer agrees not to exercise any rights it has under the FT Agreement or otherwise which would interfere in any way with Seller's ability to utilize a pro rata share of capacity entitlements under the FT Agreement(s), as set forth in Transco's FT Rate Schedule, ("Telescoped Rights") (including any associated upstream Rate Schedule IT or third party pipeline capacity entitlements) to arrange for the transportation of gas purchased and sold to Buyer hereunder. For purposes of the preceding sentence, Seller's pro rata share at Station 65 shall be equal to the product of (i) a percentage calculated by dividing Buyer's Daily Sales Entitlement by Buyer's Total Daily Transportation Contract Quantity under the FT Agreement(s) and (ii) a percentage calculated by dividing the quantity of gas requested hereunder from Seller on such day by Buyer's total daily sales entitlement under the FS Agreement. For purposes of determining Seller's pro rata share of capacity at any point on Seller's system the product of (i) and (ii) above shall be multiplied by Buyer's Transportation Contract Quantity under the FT Agreement at the applicable point. Buyer hereby appoints Seller as its agent under Buyer's FT or IT arrangements with Seller for the purpose of accomplishing the transportation of gas to the Eminence storage field. In furtherance of that purpose, Buyer shall notify Seller at or before 3 p.m. each day of any FT capacity upstream of the Eminence storage field which will be unscheduled under Buyer's FT Agreement with Seller for the second day following. Seller shall use such information to schedule, as agent, firm injections into the Eminence storage field. These firm injections into the Eminence storage field are subject to being preempted by Buyer's actual use of its FT entitlements on any given day. If Seller is unable to accomplish all the injections into the Eminence storage field through use of all Buyers' FT capacity, the remaining injections (IT Quantity) shall be accomplished by Seller, as agent, under IT arrangements. In such event, Seller as agent shall be reimbursed by Buyer for IT charges incurred on Buyer's behalf pursuant to the following formula: Buyer shall reimburse Seller an amount equal to the product of (i) a percentage, computed by dividing Buyer's then current Daily FS and OFS Sales Entitlements (limited to FS and OFS sales agreements in existence on August 1, 1993) by the sum of all of Seller's then current FS and OFS sales obligations (limited to FS and OFS sales agreements in existence on August 1, 1993), times Seller's IT quantity not to exceed 50,000 Mcf/day, as same may change from time to time, multiplied by (ii) any IT charges in excess of the FT rate level incurred by Seller for such injections. Buyer may direct Seller to nominate and schedule at the Delivery Point(s) gas purchased under this Agreement utilizing Buyer's long haul IT agreements with Seller (IT Agreements). If Buyer's IT capacity is not sufficient for Seller to effect the delivery of any or a portion of such gas at the Redelivery Point(s), Buyer shall advise Seller what portion, if any, of its FS purchases to deliver utilizing (a) Buyer's IT Agreements, not to exceed the extent of IT capacity available to Buyer, and (b) Buyer's long haul FT agreements with Seller (FT Agreements). Seller will not be in breech of any of its obligations under Articles I, IV, or V of this Agreement if Seller is unable to effect delivery of such gas at the Redelivery Point(s) because of insufficient IT capacity, nor shall Seller be deemed to have failed to deliver the quantities requested by Buyer which Seller is unable to redeliver for such reason. The availability of gas supplies for sales hereunder which are to be transported using IT Agreements shall be determined on the same basis as if they were being transported under FT Agreements. EXHIBIT A 3(d)(ii) The three arbitrators shall meet and hear the parties with respect to matters relevant to which proposed Firm Service Fee will compensate Seller for the value of providing and maintaining long term gas supplies, on terms and conditions consistent with a "swing service, which shall include but not be limited to executed long term sales agreements between other Sellers serving the same or similar markets and their customers. In deciding which proposed Firm Service Fee will compensate Seller for the value of providing the foregoing service, the arbitrators shall consider as part of Seller's compensation the Non-Gas Demand charges and Rate Schedule ESS charges (for capacity for which Seller has agency authority) to be paid by Buyer to Seller. The jurisdiction of the arbitrators shall be limited to the selection, based on all relevant evidence presented, of either the Final Offer or the Final Counter Offer proposed either by Seller or by Buyer pursuant to the provisions of this subsection (d). No other Service Fee will be selected by the arbitrators. The decision by the arbitrators shall be in writing, signed by the arbitrators or a majority of them, rendered within seventy (70) days of the appointment of the third arbitrator, and final, binding and non-appealable, except as set forth in the Uniform Arbitration Act of Delaware as to the parties hereto. The provisions adopted by the arbitrators shall be effective as of the first day of the applicable year, regardless of the actual date of decision of the arbitrators. During any period prior to a decision by the arbitrators but after commencement of the Contract Year for which the Service Fee is being renegotiated, Buyer shall continue to pay the Service Fee that was in effect during the previous Contract Year. Such Service Fee shall be adjusted retroactively, as necessary, to conform to the arbitrators decision. TRANSCO GAS MARKETING COMPANY Agent for TRANSCONTINENTAL GAS PIPE LINE CORPORATION Name: /S/ H. Dean Jones II H. Dean Jones II Title: Senior Vice President Date: May 2, 1994 (Signatures Continued on Next Page) (Signatures Concluded from Previous Page) ATLANTA GAS LIGHT COMPANY Name: /S/ Stephen J. Gunther Title: Vice President Date: September 13, 1994 EX-10 6 EXHIBIT 10.55 (letterhead of Southern Natural Gas Company appears here) SOUTHERN NATURAL GAS June 30, 1994 Mr. Stephen J. Gunther Vice President-Gas Supply and Federal Regulation Atlanta Gas Light Company P.O. Box 4569 Atlanta, Georgia 30302 Re: Amendment to Letter Agreement dated October 22, 1993 among and between Southern Natural Gas Company, Atlanta Gas Light Company and Chattanooga Gas Company Dear Mr. Gunther: By letter agreement dated October 22, 1993, Atlanta Gas Light Company (Atlanta), Southern Natural Gas Company (Southern) and Chattanooga Gas Company (Chattanooga) agreed on certain terms and conditions with respect to the service elections of Atlanta and Chattanooga to be effective November 1, 1993. Such letter agreement shall be referred to throughout as the "Letter Agreement." In paragraph 6 of the Letter Agreement, Southern agreed that it would file with the Federal Energy Regulatory Commission ("Commission") for authorization to abandon by assignment and novation of its obligations to Atlanta a portion of the transportation service ("ANR Transportation Service") and storage service ("ANR Storage Service) Southern receives from ANR Pipeline Company ("ANR") and ANR Storage Company, ("ANR Storage") respectively. Such portion of the transportation and storage service is attributable to service Southern provides on its system under its Rate Schedules CSS-1, CSS-2 and STS-1 on behalf of Atlanta. Atlanta has requested to amend the terms of paragraph 6 to the Letter Agreement to provide for the assignment and Mr. Stephen J. Gunther June 30, 1994 Page 2 of 9 novation of the ANR Storage Service without the assignment and novation of the ANR Transportation Service. Southern is agreeable to such amendment subject to the terms and conditions set forth below. In addition, at the time the Letter Agreement was executed, Southern intended to implement zone matrix rates as provided by the Commission's September 3, 1993 Order in Docket Nos. RS92-10-001, et al. Southern does not now have in effect zone matrix rates thereby requiring that the Letter Agreement be amended with respect to the commodity rates to be charged for the transportation to be performed by Southern under Rate Schedule STS-1. Further, on May 4, 1994, in Docket No. RP94-183-000, the Commission issued an order which required Southern to remove certain provisions in its Rate Schedule STS- 1 to provide for the transportation of third party gas to and from storage. The order also required Southern to proceed with a process under which Southern would assign its rights in the ANR Transportation Service and ANR Storage Service at the customer's election. The terms of this amendment reflect the terms applicable to an election by Atlanta to take assignment of the ANR Storage Service and/or ANR Transportation Service pursuant to the May 4 Order and under which Southern will reflect such election in its tariff filings complying with the May 4 Order, hereinafter the "Compliance Filings." Accordingly, in consideration of the mutual agreements and covenants contained herein, Southern, Atlanta and Chattanooga agree as follows: 1. Atlanta and Southern agree to the amendment of the last paragraph in paragraph 6 to the Letter Agreement such that Southern agrees to file with the Commission Mr. Stephen J. Gunther June 30,1994 Page 3 of 9 an application or request in the Compliance Filings to abandon a percentage of the ANR Storage Service equal to that portion of the service received by Atlanta under Southern's Rate Schedules CSS-1 and CSS-2 pursuant to the 50-day and 100-day storage service agreements ("Storage Agreements") between Southern and ANR Storage Company dated January 31, 1979, and February 1, 1979. Further, Atlanta and Southern continue to understand that if the abandonment, assignment or novation is modified by the Commission and results in the allocation of GSR costs to the ANR Storage Service or the ANR Transportation Service, then Southern will seek authority from the Commission to rescind such abandonment, assignment or novation and reinstate the current service if requested by AGL in writing within fifteen (15) days of the date of the order of the Federal Energy Regulatory Commission (Commission) resulting in such allocation; provided however, that nothing contained herein shall obligate Southern to rescind such abandonment or assignment without approval from the Commission. 2. Upon execution of this amendment, receipt of consent from ANR Storage, and receipt of authorization from the Commission, Southern agrees to assign by execution of an assignment and novation agreement with Atlanta and ANR Storage those portions of the Storage Agreements applicable to services provided to Atlanta without assignment of the ANR Transportation Service. Southern's assignment of the Storage Agreements and Atlanta's acceptance of such assignment shall be conditioned on the occurrence of the following events: Mr. Stephen J. Gunther June 30,1994 Page 4 of 9 (a) The amendment by Atlanta and Southern of the Storage Transportation Agreement dated June 1, 1979, as further described below in paragraph 3; and (b) The receipt of authorization from the Commission acceptable to Southern and Atlanta under either specific authority or on a pregranted basis for authorization for Southern to abandon the ANR Storage Service by assignment to Atlanta and for authorization to amend Southern's Rate Schedule STS under the terms set forth below in paragraph 3; and (c) The receipt of ANR Storage's affirmation and consent to such assignment and novation. It is understood that a Commission authorization rendered as requested in 2(b) above which results in Atlanta having direct or indirect responsibility for transition costs, including GSR costs, of ANR that are not currently included in ANR's Rate Schedules X-115 and X-116, under which the ANR Transportation Service is performed, may not be acceptable to Atlanta. 3. In further consideration for the agreement herein, Southern and Atlanta agree to amend the Storage Transportation Agreement between Southern and Atlanta dated June 1, 1979, as follows: (a) to include monthly payment by Atlanta to Southern of Atlanta's percentage of the MW Monthly Charge and the Michigan Wisconsin Mr. Stephen J. Gunther June 30,1994 Page 5 of 9 Excess Charge set forth in Section 10.2(a) (iii) and Section 10.2(a)(iv), respectively, and the fuel gas charges set forth in Articles 4,5,6and 7 to the Exhibit B to Southern's Rate Schedules CSS-1 and CSS-2; and (b) to state that it is understood and agreed that it is the intent of the parties that Southern will flow-through to Atlanta its percentage of any charges or surcharges attributable to that portion of the ANR Transportation Service provided to Atlanta and incurred by Southern under the ANR Transportation Service as provided in ANR Pipeline Company's Rate Schedules X-115 and X-116, or any applicable successor Rate Schedules. 4. Atlanta and Southern further agree that the commodity charge for service under Rate Schedule STS-1 shall be (i) the Zone 3 commodity charge (including applicable surcharges and fuel) set forth under Southern's Rate Schedule FT for that portion of the total volumes delivered to Atlanta at its Redelivery Points equal to the volumes delivered by Southern to ANR at Shadyside under Atlanta's Rate Schedule FT Service Agreements and those volumes which were delivered to ANR Storage for injection from pipeline sources other than Southern's system; and, (ii) the Zone 3 commodity charge (including applicable surcharges and fuel) under Southern's Rate Schedule IT for that portion of the total volumes delivered to Atlanta at its Redelivery Points equal to the volumes delivered by Southern to ANR at Shadyside under Atlanta's Rate Schedule IT Service Agreement. It is understood and agreed that nothing contained herein shall obligate Southern to transport Mr. Stephen J. Gunther June 30,1994 Page 6 of 9 and deliver any quantities of gas under Rate Schedule STS-1 on behalf of Atlanta which exceed Atlanta's Winter Contract Quantity as set forth in Rate Schedule STS-1. During the winter withdrawal period, Southern shall allocate such withdrawal volumes under (i) and (ii) above on a prorata basis based on the ratio of volumes available for withdrawal under (i) and (ii) above. Southern shall use the gas accounting calculations of ANR Storage to determine the total volumes available for withdrawal. If during the Contract Year, defined under Rate Schedule STS-1, gas is withdrawn or released from the ANR Storage Service assigned to Atlanta (Assigned Storage Service), and the withdrawn or released storage gas is not delivered to Atlanta's Redelivery Points under the Storage Transportation Agreement (Off-System Volume), then Atlanta shall pay Southern a commodity charge equal to the effective summer period Zone 1 commodity rate under Southern's FT Rate Schedule applicable to that portion of the Off-System Volume attributable to Atlanta's deliveries to Southern at Shadyside during the relevant Contract Year (Shadyside Portion). The Shadyside Portion shall be determined in accordance with the following formula: SP = OS X (SV / TV) where "SP" is the Shadyside Portion; "OS" is the Off-System Volume; "SV" is the total volume available for withdrawal from the Assigned Storage Service as of November 1 of the Contract Year that was delivered by Atlanta to Southern at Shadyside, as adjusted to include subsequent deliveries to storage of gas that was delivered by Atlanta to Southern at Shadyside, if any, during the relevant winter withdrawal period; and "TV" is the total volume available for withdrawal from the Assigned Storage Mr. Stephen J. Gunther June 30,1994 Page 7 of 9 Service as of November 1 of the Contract Year, as adjusted to include subsequent deliveries to storage, if any, during the relevant winter withdrawal period. Atlanta agrees to calculate and inform Southern in writing of the OS, SV and TV volumes no later than 30 days following the end of a Contract Year. Atlanta agrees that Southern, at it sole cost and expense, shall have the right to audit Atlanta's books and accounts to verify the submitted OS, SV and TV volumes within one year from the date Atlanta submits such volumes to Southern. Atlanta stipulates and agrees that, in the event Southern implements separate production area rates or returns to a Zone Matrix Rate Design, such that production area costs are no longer reflected in the applicable zone of delivery commodity charge, or in the event Southern implements separate injection and withdrawal rates for transportation in and out of storage under its Rate Schedules FT-NN and CSS, Atlanta will not oppose paying the effective production-area commodity charge or injection charge for the transportation service to Shadyside, provided that each unit of storage gas transported by Southern in its production area is charged the applicable production area rate only one time, and provided further that for so long as such separate production area, injection or matrix rates are in effect the separate charges for the Shadyside Portion of the Offsystem Volumes as provided above will not apply. 5. The parties agree and acknowledge, (a) that Atlanta has waived the obligation by Southern under paragraph 6 of the Letter Agreement to file to amend its certificate to allow for the injection of third-party gas and to file to abandon the ANR Storage Service and ANR Transportation Service within 45 days of the date of the Letter Agreement; and Mr. Stephen J. Gunther June 30,1994 Page 8 of 9 (b) that, instead, Southern will make any necessary filings as part of or in conjunction with the Compliance Filings required by the Commission's May 4 Order. Further, Southern and Atlanta each agree to pursue with due diligence receipt of the necessary consent from ANR Storage to assign the ANR Storage Service. 6. The parties agree that, except as expressly recited herein, no other terms or conditions of the Letter Agreement shall be considered amended or waived pursuant to this amendment and all other terms and conditions of the Letter Agreement shall remain in full force and effect. Please indicate your agreement to the terms of this amendment by executing this letter in the spaces provided below. Very truly yours, SOUTHERN NATURAL GAS COMPANY By: /S/ Jim J. Cleary Its: Vice President Agreed to and accepted as of this 13 day of July 1994 ATLANTA GAS LIGHT COMPANY By: /S/ Stephen J. Gunther Its: Vice President Mr. Stephen J. Gunther June 30, 1994 Page 9 of 9 Agreed to and accepted as of this day of : CHATTANOOGA GAS COMPANY By: /s/ Kenneth A. Royse Its: President EX-10 7 EXHIBIT 10.56 (letterhead of Sonat Services Inc. appears here) December 22, 1994 Ms. Eileen Stanek Atlanta Gas Light Company 303 Peachtree Center, N.E. Atlanta, GA 30302 Dear Eileen: Enclosed please find three copies of the three-party agreement between ANR Storage Company (ANR), Atlanta Gas Light Company (Atlanta) and Southern Natural Gas Company (Southern) associated with the transfer of storage volumes and service from Southern to Atlanta. Please execute the enclosed copies, forward one fully executed copy to Jim Lane at ANR, and return one copy to me for Southern's files. I am sorry that I was unable to get these to you before the holidays. I hope your holiday was happy. Very truly yours, /s/ Patty Patricia S. Francis Senior Attorney PSF:tmb Enclosure (letterhead of Coastal appears here) November 28, 1994 Southern Natural Gas Company P.O. Box 2563 Birmingham, Alabama 35202-2563 Atlanta Gas Light Company P.O. Box 4569 atlanta, Georgia 30302 Re: Gas Storage Agreement, dated January 31, 1979 ("50-day Agreement"), and Gas Storage Agreement, dated February 1, 1979 ("100-day Agreement"), between ANR Storage Company ("ANR") and Southern Natural Gas Company ("Southern") Dear Sirs: Pursuant to the order issued by the Federal Energy Regulatory Commission ("FERC") in Docket Nos. RP94- 183-001, et al., dated September 23, 1994, Southern has requested that ANR consent to the transfer, effective November 1, 1994, to Atlanta Gas Light Company ("Atlanta") by Southern of a storage account volume of 5,650,000 Mcf of gas (measured on a saturated basis) which Southern has previously delivered to ANR for storage under the 50-day Agreement and a storage account volume of 5,550,000 Mcf of gas (measured on a saturated basis) which Southern has previously delivered to ANR for storage under the 100-day Agreement. Said storage account volumes of 5, 650, 000 Mcf for the 50-day Agreement and 5, 550, 000 Mcf for the 100- day Agreement shall hereinafter be referred to collectively as the "Storage Account Volumes." The 50-day Agreement and the 100-day Agreement are hereinafter referred to collectively as the "Agreements". The gas is to be transferred as is and where is in place at ANR's Kalkaska County, Michigan, storage fields to Atlanta for storage service under FS Service Agreements between ANR and Atlanta, dated as of November 1, 1994 ("FS Service Agreements"). ANR is willing to consent to this transfer of storage volumes under these circumstances. In consideration of the mutual covenants contained herein, and for the reasons recited above, Atlanta, ANR and Southern agree as follows: 1. ANR and Southern agree as follows: Southern Natural Gas Company Atlanta Gas Light Company November 28, 1994 Page 2 A. The 50-day Agreement is hereby amended, effective November 1, 1994, as follows: (i) Southern's Maximum Daily Withdrawal Quantity shall be reduced from 117,638 Mcf to 4,638 Mcf under Section 1. 1 (f) (1) , from 82,347 Mcf to 3, 247 Mcf under Section 1. 1 (f) (2) and from 47,055 Mcf to 1,855 Mcf under Section 1.1(f)(3). (ii) Section 1. 1 (k) shall be amended to reduce Southern's Winter Contract Quantity from 5,881,900 Mcf to 231,900 Mcf. (iii) Section 1. 1 (d) shall be amended to reduce Southern's Daily Injection Rate from 29,410 Mcf to 1,160 Mcf. (iv) Section 8.1 of the Agreements shall be amended to reduce the monthly demand charge from $426,375 to $16,810. B. All other terms and conditions of the 50-day Agreement, including ANR's obligation to redeliver to Southern its remaining storage account volume, less the storage account volume transferred hereunder, for Southern's customers, other than Atlanta, shall remain in full force and effect. 2. ANR and Southern further agree as follows: A. The 100-day Agreement is hereby amended, effective November 1, 1994, as follows: (i) Southern's Maximum Daily Withdrawal Quantity shall be reduced from 56,208 Mcf to 708 Mcf under Section 1.1(f)(1) , from 39,346 Mcf to 496 Mcf under Section 1.1(f)(2) and from 22,483 Mcf to 283 Mcf under Section 1.1(f)(3) . (ii) Section 1. 1 (k) shall be amended to reduce Southern's Winter Contract Quantity from 5,620,800 Mcf to 70,800 Mcf. (iii) Section 1. 1 (d) shall be amended to reduce Southern's Daily Injection Rate from 28,104 Mcf to 354 Mcf. (iv) Section 8. 1 of the Agreements shall be amended Southern Natural Gas Company Atlanta Gas Light Company November 28, 1994 Page 3 to reduce the monthly demand charge from $272,551 to $3,433. B. All other terms and conditions of the 100-day Agreement, including ANR's obligation to redeliver to Southern its remaining storage account volume, less the storage account volume transferred hereunder, for Southern's customers, other than Atlanta, shall remain in full force and effect. 3. Effective November 1, 1994, Atlanta and Southern agree that the CSS-1 Agreement, dated June 1, 1979 and CSS-2 Agreement, dated June 1, 1979 between Southern and Atlanta (collectively the "CSS Agreements") shall be and they hereby are terminated. Atlanta shall remain responsible for any amounts accrued and owing under the CSS Agreements for storage services up to November 1, 1994. In addition, Atlanta and Southern agree herein to the amendment of the Storage Transportation Agreement, dated June 1, 1979 ("STS Agreement") between Atlanta and Southern to reflect the changes made by Southern to the STS Agreement in Volume 2A of Southern's FERC Gas Tariff which were accepted by the FERC in the September 23 Order. 4. ANR releases and discharges Southern from all claims for any liability or debt that may arise with respect to the Storage Account Volumes assigned to Atlanta, except for any amounts accrued and owing under the Agreements with respect to such Storage Account Volumes up to November 1, 1994. Atlanta accepts such assignment of the Storage Account Volumes from Southern. Further, ANR agrees that Southern shall have no contractual obligation to pay ANR for any services rendered by ANR after November 1, 1994 with respect to the storage of the Storage Account Volumes transferred to Atlanta or the withdrawal of such Storage Account Volumes from storage. 5. Southern agrees that, as a result of the transfer of the Storage Account Volumes by Southern to Atlanta, ANR has fulfilled its obligations to Southern under the Agreements with respect to such Storage Account Volumes and that ANR shall have no contractual obligations from and after November 1, 1994, to store or redeliver such Storage Account Volumes to or for the account of Southern. 6. The conversion factor used and to be used to convert the Mcf"s of the Storage Account Volumes from gas measured on a saturated basis to gas measured on a dry basis is 1.017708. -3- Southern Natural Gas Company Atlanta Gas Light Company November 28, 1994 Page 4 Please confirm our agreement, by signing in the place provided below and returning to the undersigned the enclosed copies of this letter. Very truly yours, ANR STORAGE COMPANY BY: /S/ Richard A. Lietz Its: Executive Vice President Accepted and agreed to this 14th day of December, 1994 SOUTHERN NATURAL GAS COMPANY By: /S/ Greg P. Meyers Its: Vice President Accepted and agreed to this 5th day of January, 1995 ATLANTA GAS LIGHT COMPANY By: /S/ Stephen J. Gunther Its: Vice President -4- (letterhead of Tennessee Gas Pipeline appears here) December 13, 1995 Atlanta Gas Light Company 303 Peachtree Street Atlanta, GA 30308-4239 Attn: Debbie McNeely Dear Debbie: This letter sets forth our agreement with respect to the amendments of the Firm Storage Agreements No. 2031 and 3998 between Tennessee Gas Pipeline (TGP) and Atlanta Gas Light Company (the "Parties"). Our agreement is as follows: 1. The Agreement No. 3998 is hereby amended to increase the Maximum Storage Quantity (MSQ) by 3,000,000 Dth effective January 1, 1996. 2. The Agreement No. 3998 is hereby amended to increase the Maximum Daily Withdrawal (MDQ) on meter number 07-0020 (TGP-Portland Storage Withdrawal) by 20,000 Dth/d effective January 1, 1996. 3. The Agreement No. 3998 is hereby amended to increase the Maximum Daily Injection (MDI) on meter number 06-0020 (TGP-Portland Storage Injection) by 20,000 Dth/d effective January 1, 1996. 4. The Agreement No. 2031 is hereby terminated effective December 31, 1995. Please acknowledge your acceptance of the amendments by signing below and returning to my attention the duplicate originals of the letter. Upon execution by TGP, an original will be forwarded to your for your files. Sincerely, /S/ Craig S. Harris Sr. Customer Service Representative TENNESSEE GAS PIPELINE By: L. G. Williams Director, Transportation Services Central Region ATLANTA GAS LIGHT COMPANY By: /S/ Stephen J. Gunther Date: December 19, 1993 (letterhead of Tennessee Gas Pipeline appears here) December 14, 1995 Chattanooga Gas Company 303 Peachtree Street Atlanta, GA 30308-4239 Attn: Debbie McNeely Dear Debbie: This letter sets forth our agreement with respect to the amendments of the Firm Storage Agreements No. 2027 and 3999 between Tennessee Gas Pipeline (TGP) and Chattanooga Gas Company (the "Parties"). Our agreement is as follows: 1. The Agreement No. 3999 is hereby amended to increase the Maximum Storage Quantity (MSQ) by 1,845,000 Dth effective January 1, 1996. 2. The Agreement No. 3999 is hereby amended to increase the Maximum Daily Withdrawal (MDQ) on meter number 07-0020 (TGP-Portland Storage Withdrawal) by 12,300 Dth/d effective January 1, 1996. 3. The Agreement No. 3999 is hereby amended to increase the Maximum Daily Injection (MDI) on meter number 06-0020 (TGP-Portland Storage Injection) by 12,300 Dth/d effective January 1, 1996. 4. The Agreement No. 2027 is hereby terminated effective December 31, 1995. Please acknowledge your acceptance of the amendments by signing below and returning to my attention the duplicate originals of the letter. Upon execution by TGP, an original will be forwarded to your for your files. Sincerely, /S/ Craig S. Harris Sr. Customer Service Representative TENNESSEE GAS PIPELINE By: /S/ L. G. Williams Director, Transportation Services Central Region ATLANTA GAS LIGHT COMPANY By:/S/ Stephen J. Gunther Date: December 19, 1995 EX-10 8 EXHIBIT 10.57 DISPLACEMENT SERVICE AGREEMENT THIS AGREEMENT, made and effective as of this 4th day of April 1996, by and between Washington Gas Light Company ("Seller") and Atlanta Gas Light Company ("Buyer"). WITNESSETH WHEREAS, Buyer has entered into a Firm Peaking Service Agreement (FPS-1 Agreement) with Cove Point LNG Company, Limited Partnership. (Cove Point LNG) and desires to have its Gas under the FPS- 1 Agreement delivered by displacement from the facilities of Cove Point LNG to its facilities utilizing Seller's services hereunder; and WHEREAS, Seller has firm transportation arrangements on and agreements with various interstate pipelines and a blanket certificate issued by the Federal Energy Regulatory Commission (FERC) 39 F.E.R.C.P. 61,119 (1987), pursuant to which Seller is willing to provide a displacement service to Buyer hereunder. THEREFORE, in consideration of the mutual covenants and promises contained herein, the parties do hereby agree: I. DEFINITIONS A. British Thermal Unit shall mean the amount of heat required to raise the temperature of one avoirdupois pound of water one degree Fahrenheit at 60 degrees Fahrenheit. B. Day shall mean the 24-hour period commencing at eight o'clock (8:00) a.m. Eastern Standard Time. C. Dekatherm or Dth shall mean a quantity of heat equal to ten therms or one million British thermal units (one MMBtu). D. Delivery Point shall mean the existing metering station at the point of interconnection between the facilities of Buyer and the facilities of Seller's Transporters. 1 E. Displacement Imbalance shall be the difference between Displacement Quantities and Exchange Quantities during the Term of this Agreement. F. Displacement Quantity shall mean up to 69,000 dekatherms per day as such quantity of Gas is available under Buyer's FPS-1 Agreement that Buyer nominates for delivery to the Receipt Point. G. Exchange Quantity shall mean on any day a quantity of gas equal to the Displacement Quantity for such day pursuant to Buyer's FPS-1 Agreement that Seller shall arrange to be delivered to the Delivery Point. H. Gas means natural gas, revaporized liquefied natural gas (LNG) or any commonly accepted suitable equivalent. I. MMBtu shall mean one million (1,000,000) BTUs. J. Receipt Point shall mean the point of interconnection between the facilities of Cove Point LNG and the facilities of Seller. K. Seller's Transporters shall mean Transcontinental Gas Pipeline Corporation or any other interstate pipeline or entity with whom Seller has a firm transportation agreement and under which Seller can provide Displacement Service to Buyer hereunder. L. Psia shall mean pounds per square inch absolute. M. Therm shall mean a quantity of heat equal to one hundred thousand British thermal units (100,000 Btu's). N. Total Heating Value Per Cubic Foot shall mean the number of BTU's produced by the combustion, at constant pressure, of one cubic foot of gas, saturated with water vapor, at 14.73 psia and 60 degrees Fahrenheit, with air of the same pressure and temperature as the gas, when the products of combustion are cooled to the initial temperature of gas and air, and when the water formed by combustion is condensed to a liquid state and then adjusted to a dry basis. II. TERM 2 The Term of this Agreement shall commence on December 15, 1996 and shall continue through March 15, 1997. This Agreement shall continue for like periods in subsequent years, on a year-to-year basis, unless terminated by either party upon no less than one hundred and twenty (120) days prior written notice to the other, non-terminating party; Provided that this agreement shall not be terminated prior to March 15, 1997. III. RATE For services provided during the effectiveness of this Agreement, Seller shall charge Buyer a rate of $0.50 per dekatherm of Gas delivered to the Delivery Point hereunder and received by Buyer. IV. SERVICE A. Displacement Service. Seller shall provide a firm displacement service to Buyer by receiving Displacement Quantities at the Receipt Point and by arranging for equivalent Exchange Quantities to be delivered to the Delivery Point. B. Nominations. Buyer may make Displacement Quantity Nominations to Seller in accordance with Article VI hereunder. Upon receiving such nominations, Seller shall arrange to receive such quantities at the Receipt Point and to deliver an equivalent Exchange Quantity to Buyer at the Delivery Point pursuant to Seller's flexible delivery point rights under its firm transportation agreements with Seller's Transporters. Seller warrants that it has sufficient firm capacity on Seller's Transporters to deliver the Exchange Quantities to the Delivery Point on a firm basis. Buyer warrants that it has sufficient capacity to receive the Exchange Quantities on a firm basis. C. Imbalances. It is the parties' intent that there be no Displacement Imbalances during the Term of this Agreement. To the extent that measurement records show an imbalance at the end of a month, Seller shall reimburse Buyer if Displacement Quantities exceed Exchange Quantities, and Buyer shall reimburse Seller if Exchange Quantities exceed Displacement Quantities. To the extent the measurement records show an imbalance at the end of a month, Seller shall, within 30 days, reimburse Buyer with an amount of gas equal to the positive difference, if any, between the Displacement Quantities and the Exchange Quantities, and Buyer shall, within 30 days, reimburse 3 Seller with an amount of gas equal to the negative difference, if any, between the Displacement Quantities and the Exchange Quantities. V. AGENCY DESIGNATION During the effectiveness of this Agreement, Buyer agrees to designate Seller as Buyer's Agent under Buyer's FPS-1 Agreement for the limited purpose of making nominations and scheduling Gas for delivery to Buyer, as well as the utilization of Buyer's rights under such agreement. As Buyer's Agent, Seller shall be responsible for submitting and receiving notices, making nominations and performing all necessary administrative duties under Buyer's FPS-1 Agreement and under Cove Point LNG's applicable FERC-approved Tariffs in order to provide services to Buyer hereunder. VI. NOTICES AND COMMUNICATIONS A. Displacement Quantity Nominations. During the Term of this Agreement, Buyer shall be the sole party to determine when to make Displacement Quantity Nominations under Article IV-B. Buyer agrees to provide Seller with a minimum of two (2) hours notice prior to any Day for which Buyer exercises its right to withdraw gas from storage under its FPS-1 Agreement with Cove Point LNG. Seller agrees to make a reasonable effort to accommodate any Displacement Quantity Nomination provided by Buyer after the commencement of a Day. Upon receipt of Buyer's Displacement Quantity Nomination, Seller shall nominate and schedule the delivery of the Displacement Quantity in accordance with its agency powers and responsibilities under Article V. Displacement Quantities delivered hereunder shall be considered by the parties as first through the meter(s) at the Delivery Point. Any telephonic notice provided by one party to the other under this Paragraph A shall be followed up by facsimile transmission by the party providing the notice. B. Representatives. The parties agree to have at least one representative available by telephone at all times to receive notices to each other hereunder including notices of operational conditions on their respective systems on a daily basis. Each shall notify the other of the name(s) and telephone number(s) of the representative(s) authorized to receive notices hereunder. Telephone notice to one of such representatives shall constitute sufficient notice and shall be binding upon both parites; provided any notice of termination hereunder be given in writing in accordance Paragraph C below. 4 C. Notices. Notices required under this Agreement, except as provided in Paragraph B above, shall be sent in writing as follows: (a) Buyer: Atlanta Gas Light Company 303 Peachtree Street, N. E. Atlanta, Georgia 30308 Attn: Steve Gunther (b) Seller: Washington Gas Light Company 6801 Industrial Road Springfield, Virginia 22151 Attn: Stephen J. Shaiko Notice under this provision shall be construed as given when sent to the proper address by registered mail with return receipt; but written notice actually received by other means shall be fully effective. When speed of notice is essential, written notice shall be preceded by other appropriate communication (telephone or facsimile). VII. LAW AND REGULATION This Agreement shall be subject to applicable federal and state laws and applicable orders, rules and regulations of any local, state or federal governmental authority having or asserting jurisdiction; provided that nothing contained herein shall be construed as a waiver of any right to question or contest any such law, order, rule or regulation in any forum having jurisdiction over the subject matter. This Agreement is further subject to all necessary regulatory and governmental approvals and permits including all necessary authorizations from FERC and other applicable federal, state, county, and local authorities. The parties agree to use their best efforts to obtain such approvals and permits and to cooperate in good faith to execute all papers necessary to effectuate the mutual obligations contemplated hereunder. It is understood that if the necessary regulatory approvals cannot be obtained, this Agreement shall terminate, and the parties shall have no other obligation or liability to each other. VIII. BILLING AND METERING 5 A. Billing. On or before the tenth (10th) day of each month, Seller shall render a bill to Buyer that shall include a statement showing the amount due and any imbalance quantities applicable to the preceding month, along with a computation of the amount due and payable by Buyer. B. Payment. Buyer shall remit to Seller all amounts due pursuant to this Agreement, on or before the twentieth (20th) day of each month for service for the preceding month. If bills are not so paid, a late payment charge may be added equal to one percent of the unpaid bill. At the end of each nominal thirty (30) day billing interval thereafter, Seller may add an additional late payment charge equal to one and one-half percent of any unpaid amount. Should a dispute arise regarding the amount payable in any invoice rendered hereunder, the owing party shall pay the undisputed amount and notify the other party of any disputed amount. The parties agree to negotiate in good faith to mutually resolve the disputed amount in a timely manner with interest (determined by the prime commercial rate charged by Citibank, N.A., New York, New York) accruing from the original due date on any unverified disputed amount determined to be a valid amount due. C. Measurements. The volume and total heating value of Displacement Quantities delivered to the Receipt Point shall be determined by meters installed and maintained by either Cove Point or Seller at such point. The volume and total heating value of Exchange Quantities delivered to the Delivery Point shall be determined by Seller's Transporter(s) under such transporter's FERC-approved Tariffs. If at the end of Term of this Agreement, measurement records show the existence of a Displacement Imbalance, Seller, shall reimburse Buyer's cost therefor, if Displacement Quantities exceed Exchange Quantities, and Buyer shall reimburse Seller's cost therefor, if Exchange Quantities exceed Displacement Quantities. To the extent the measurement records show an imbalance at the end of a month, Seller shall, within 30 days, reimburse Buyer's costs therefor if Displacement Quantities exceed Exchange Quantities, and Buyer shall, within 30 days, reimburse Seller's costs therefor if Exchange Quantities exceed Displacement Quantities. D. Inspection of Records. Each party shall have the right at reasonable hours to examine the books, records, and charges of the other to the extent necessary to verify the accuracy of any statement, charge, or computation made under this Agreement. In the event an error is discovered in the amount billed in any statement rendered by Seller, such error shall be adjusted thirty (30) days of the determination thereof; provided 6 that claim therefor shall have been made within sixty (60) days from the date of discovery of such error. No error will be adjusted after twenty-four (24) months from the date of such statement. E. Metering Equipment. The parties understand that the metering equipment of Seller's Transporters shall be utilized to measure the receipt and delivery of Exchange Quantities under this Agreement. The parties further understand that either Cove Point LNG's or Seller's metering equipment shall be utilized to measure the receipt of Displacement Quantities. The parties agree to use their best efforts and their rights under transportation agreements with interstate pipelines and Cove Point LNG to obtain necessary measurement data and records to verify the accurate measurement of receipts and deliveries hereunder, including the taking of appropriate steps to correct any inaccurate readings as soon as possible. The parties agree to be bound by the proper implementation of FERC approved Tariffs of Seller's Transporters and Cove Point LNG regarding the measurement of receipts and deliveries under this Agreement. X. FORCE MAJEURE A. Effect of Force Majeure. Neither party to this Agreement shall be liable for any damage or loss that may occur due to any Force Majeure as defined herein; provided that the party whose ability to perform is affected by Force Majeure promptly notifies the other party of the Force Majeure and that such party uses all reasonable efforts to remedy the situation and to restore its ability to perform. In the event either party is rendered unable, wholly or in part, by Force Majeure to carry out its obligations under this Agreement, other than the obligations of such party to make payment of amounts due hereunder, then the obligations of both parties hereto, so far as they are affected by Force Majeure, shall be suspended during the continuance of such Force Majeure. B. Definition. The term "Force Majeure" as used herein, and as applied to either party hereto, shall include the passage of laws or promulgation of regulations, acts of God, strikes, lockouts, or other labor disturbances, acts of sabotage, acts of the public enemy, war, blockades, insurrections, riots, epidemics, fires, floods, washouts, arrests, civil disturbances, explosions, breakage or accidents to machinery or lines of pipe, failure of electrical generating or transmission facilities and equipment, freezing of wells or pipelines, partial or entire failure to such wells, or any other cause, whether of the kind herein enumerated, or otherwise, not reasonably within the control of the party 7 claiming Force Majeure and which by exercise of due diligence such party is unable to prevent or overcome. It is understood that settlement of strikes, lockouts, or labor disturbances shall be entirely within the discretion of the affected party, and that the above requirement that any Force Majeure shall be remedied with all reasonable dispatch shall not require the settlement of strikes, lockouts, or labor disturbances by acceding to the demands of any opposing party when such course is inadvisable in the sole discretion or judgment of the party experiencing such strikes, lockouts or labor disturbances. XI. CONFIDENTIALITY The parties agree to treat this Agreement on a confidential basis and not publicly disclose it to any party without the consent of the other; provided that each party, after notice to the other party and after making all reasonable efforts to protect confidentiality including seeking an appropriate protective order, may disclose the Agreement to appropriate parties in connection with a regulatory proceeding to which such party is, or may become, subject. XII. MISCELLANEOUS TERMS A. Integration of Agreement. This instrument and the documents expressly incorporated herein by reference constitute the entire Agreement between the parties regarding the Displacement Services contemplated. No statement, promise, or inducement made by either party or agent of either party which is not contained in this Agreement shall be binding herein. Subject to the other provisions of this Agreement, this Agreement may not be enlarged, modified, or altered except in writing signed by both parties. B. Severability. If any part, term, or provision of this Agreement is specifically held by a court or regulatory authority to be illegal or in conflict with applicable law or regulation, the validity of the remaining portions or provisions affected, and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain the particular part, term, or provision so held to be illegal or in conflict. C. Waiver. No waiver by either party of any one or more defaults by the other in the performance of any provisions of this Agreement shall operate or be construed as a waiver of any future default or defaults, whether of a like or different 8 character. If either party should be in default of any of its obligations under this Agreement or violates any of the terms or conditions hereof and fails to correct or cure same within thirty (30) days after receipt of written notice from the other party, in addition to all other legal and equitable remedies available to the non-defaulting party, this Agreement may be terminated by such non-defaulting party thereafter on fifteen (15) days written notice of same to the defaulting party. Notwithstanding anything in the Agreement to the contrary, any remedies afforded in this Agreement shall be taken and construed as cumulative, that is in addition to every other remedy provided herein or by law. D. Headings. Article headings have been inserted for the purpose of convenience and ready reference. They do not purport to, and shall not be deemed to, define, limit, or extend the scope or extent of the Articles to which they pertain. E. Assignability and Effect. There shall be no assignment, transfer, or subcontracting of this Agreement, nor of any interest in this Agreement, nor delegation of duties hereunder, except upon written consent of the party against which such assignment, delegation, or subcontracting would, in the absence of this provision, be effective, such consent not to be unreasonably withheld. F. Succession. This Agreement shall inure to the benefit of, and be binding upon, the heirs, executors, administrators,, assignees, and successors of the respective parties. G. Indemnification. Each party hereunder agrees to indemnify, defend and hold harmless the other from and against all liabilities, suits, actions,, damages, costs and expenses (including, but not limited to, reasonable attorneys' fees) resulting from or arising out of acts, omissions, negligence, breach of any statutory duty, or intentional misconduct by itself, its officers, its employees or agents of the indemnifying party occurring in the performance of this Agreement. H. Applicable Law. This Agreement shall be construed in accordance with the laws of Virginia. I. Possession. Solely for purposes of this Agreement, (i) Buyer shall be deemed to be in control and possession of gas transported hereunder prior to delivery to Seller at the Receipt Point and after redelivery to Buyer at the Delivery Point, and (ii) 9 Seller shall be deemed to be in control and possession of gas transported hereunder after delivery to Seller at the Receipt Point. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers, as of the day and year first written above. Seller: WASHINGTON GAS LIGHT COMPANY Witness: By: /S/ Kathleen McKee By: /S/ J. M. Schepis Secretary Senior Vice President (Title) (Title) Buyer: ATLANTA GAS LIGHT COMPANY Witness By: /S/ Eileen G. Stanek By: /S/ Stephen J. Gunther Director Federal Regulatory Affairs Vice President (Title) (Title) 10 EX-10 9 EXHIBIT 10.58 AMENDATORY AGREEMENT This Amendment is entered into this 26th day of July, 1996, between SOUTHERN NATURAL GAS COMPANY ("Company") and Chattanooga Gas Company ("Shipper"). WITNESSETH: WHEREAS, Company and Shipper are parties to a firm transportation agreement dated November 1, 1994, (#904470) as amended March 1, 1995, under Company's Rate Schedule FT ("Agreement") for an aggregate quantity of 7,949 Mcf per day of Transportation Demand for separately stated terms; and WHEREAS, Company and Shipper have had discussions regarding an extension of the primary term for a portion of the Transportation Demand under the Agreement as more specifically provided for herein; NOW THEREFORE, in consideration of the premises and the mutual benefits and covenants contained herein, the parties agree as follows: I . Section 4.1 of the FT Agreement shall be deleted in its entirety and the following Section 4.1 substituted therefor. "Subject to the provisions hereof, this Agreement shall become effective as of the date first hereinabove written and shall be in full force and effect for primary terms through the following dates: (a) April 30, 2007 for 3,300 Mcf per day of Transportation Demand, and shall continue and remain in force and effect for successive terms of one year each thereafter, unless and until cancelled by either party giving 180 days written notice to the other party prior to the end of the primary term or any yearly extension thereof; and (b) February 28, 2000 for 4,649 Mcf per day of Transportation Demand, and shall continue and remain in force and effect for successive terms of one year each thereafter if the parties mutually agree in writing to each such yearly extension at least 60 days prior to the end of the primary term or subsequent yearly extension." 2. Except as provided herein, the Agreement shall remain in full force and effect as written. 3. This Amendment is subject to all applicable, valid laws, orders, rules and regulations of any governmental entity having jurisdiction over the parties or the subject matter hereof. 4. This Amendment shall be binding on the parties' respective successors and assigns. WHEREFORE, the parties have executed this Amendment through their duly authorized representatives to be effective as of the date first written above. ATTEST: SOUTHERN NATURAL GAS COMPANY By: /S/ illegible signature By: /S/ William G. Cope Title: Asst. Secretary Title: Director - Customer Services ATTEST: CHATTANOOGA GAS COMPANY By: /S/ Anne C. Tkacs By: /S/ James S. Thomas, Jr. Title: General Attorney Title: Asst. Sec. 2 EX-10 10 EXHIBIT 10.59 Amendatory Agreement This Amendment is entered into this 23rd day of August, 1996, between SOUTHERN NATURAL GAS COMPANY ("Company") and ATLANTA GAS LIGHT COMPANY ("Shipper"). RECITALS: 1. Company and Shipper are parties to a firm transportation agreement dated September 1, 1994 (#902470) for 100,000 Mcf per day, as amended March 1, 1995 (the "September FT Agreement"), a firm transportation agreement dated November 1, 1994 (#904460), as amended March 1, 1995 and June 1, 1995, for 255,812 Mcf per day (the "November FT Agreement"), a no-notice firm transportation agreement dated November 1, 1994 (#904461) as amended March 1, 1995 for 406,222 Mcf per day (the "FT-NN Agreement"), and a contract storage service agreement dated November 1, 1994 as amended March 1, 1995 (#S20150) for 20,117,674 Mcf (the "CSS Agreement"); 2. Shipper has notified Company that it desires to extend the term of the September FT Agreement, the November FT Agreement, the FT-NN Agreement, and the CSS Agreement as provided below. AGREEMENTS: In consideration for the premises and the mutual promises and covenants contained herein, the parties agree as follows: 1. Section 4.1 of the September FT Agreement shall be deleted in its entirety and the following Section 4.1 substituted therefor: 4.1 Subject to the provisions hereof, this Agreement shall become effective as of the date first hereinabove written and shall be in full force and effect for a primary term through February 28, 1999, and shall continue and remain in force and effect for successive terms of one year each thereafter if the parties mutually agree in writing to each such yearly extension at least 60 days prior to the end of the primary term or any subsequent yearly extension. 2. The First Revised Exhibit E to the September FT Agreement shall be deleted in its entirety and the Second Revised Exhibit E attached hereto shall be substituted therefor. 3. Section 4.1 of the November FT Agreement shall be deleted in its entirety and the following Section 4.1 substituted therefor: 4.1 Subject to the provisions hereof, this Agreement shall become effective as of the date first hereinabove written and shall be in full force and effect for a primary term through the following dates: (a) April 30, 2007, for 110,905 Mcf per day of Transportation Demand and June 30, 2007, for 1,000 Mcf per day of Transportation Demand and shall continue and remain in force and effect for successive terms of one year each after the end of each primary term for the specified volume, unless and until canceled with respect to the associated volume by either party giving 180 days written notice to the other party prior to the end of the specified primary term or any yearly extension thereof; (b) February 29, 2000, for 21,139 Mcf per day of Transportation Demand and shall continue and remain in force and effect for successive terms of one year each thereafter if the parties mutually agree in writing to each such yearly extension at least 60 days prior to the end of the primary term or subsequent yearly extension; and (c) February 28, 1999, for 122,768 Mcf per day of Transportation Demand and shall continue and remain in force and effect for successive terms of one year each thereafter if the parties mutually agree in writing to each such yearly extension at least 60 days prior to the end of the primary term or subsequent yearly extension. 4. Section 4.1 of the FT-NN Agreement shall be deleted in its entirety and the following Section 4. 1 substituted therefor: - - 2 - 4.1 Subject to the provisions hereof, this Agreement shall become effective as of the date first hereinabove written and shall be in full force and effect for a primary term through the following dates: (a) February 29, 2000, for 24,133 Mcf per day of Transportation Demand and shall continue and remain in force and effect for successive terms of one year each thereafter if the parties mutually agree in writing to each such yearly extension at least 60 days prior to the end of the primary term or subsequent yearly extension; and (b) February 28, 1999, for 382,089 Mcf per day of Transportation Demand and shall continue and remain in force and effect for successive terms of one year each thereafter if the parties mutually agree in writing to each such yearly extension at least 60 days prior to the end of the primary term or subsequent yearly extension. 5. Section 4.1 of the CSS Agreement shall be deleted in its entirety and the following Section 4.1 substituted therefor: 4.1 Subject to the provisions hereof, this Agreement shall become effective as of the date first hereinabove written and shall be in full force and effect for a primary term through the following dates: (a) February 29, 2000, for 1, 195,179 Mcf per day of Maximum Storage Quantity and shall continue and remain in force and effect for successive terms of one year each thereafter if the parties mutually agree in writing to each such yearly extension at least 60 days prior to the end of the primary term or subsequent yearly extension; and (b) February 28,1999, for 18,922,495 Mcf per day of Maximum Storage Quantity and shall continue and remain in force and effect for successive terms of one year each thereafter if the parties mutually agree in writing to each such yearly extension at least 60 days prior to - - 3 - the end of the primary term or subsequent yearly extension. 6. Except as provided herein, the September FT Agreement, the November FT Agreement, the FT-NN Agreement, and the CSS Agreement shall remain in full force and effect as written. 7. This Amendment is subject to all applicable, valid laws, orders, rules, and regulations of any governmental entity having jurisdiction over the parties or the subject matter hereof. WHEREFORE, the parties have executed this Amendment through their duly authorized representatives to be effective as of the date first written above. ATTEST: SOUTHERN NATURAL GAS COMPANY By: /S/ Jim J. Cleary By: /S/ James E. Moylan, Jr. Vice President Title: President ATTEST: ATLANTA GAS LIGHT COMPANY BY: /S/ Melanie M. Platt BY: /S/ Thomas H. Benson Title: Corporate Secretary Title: Executive Vice President and Chief Operating Officer - - 4 - Service Agreement No. 902470 SECOND REVISED EXHIBIT E DISCOUNT INFORMATION Discounted Rates: (1) The Reservation Charge under this Agreement shall be $10.50/Mcf; (2) The applicable GSR Cost Surcharge and GSR Volumetric Surcharge shall be capped at 50% each; (3) AR other surcharges shall be assessed at full rate under this Agreement. Discounted Rate Effective from 3/l/95 to 2/28/99 /S/ Thomas H. Benson /S/ James E. Moylan, Jr. ATLANTA GAS LIGHT COMPANY SOUTHERN NATURAL GAS COMPANY EX-21 11 SUBSIDIARIES OF THE REGISTRANT ATLANTA GAS LIGHT COMPANY FORM 10-K FOR THE YEAR ENDED SEPTEMBER 30, 1996 Subsidiaries of the Registrant Atlanta Gas Light Company has one (1) active wholly owned subsidiary, Chattanooga Gas Company, a Tennessee Corporation. Financial statements of the subsidiary are included in the consolidated financial statements which are a part of Atlanta Gas Light Company's Form 10-K. EX-23 12 EXHIBIT 23 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement No. 33-50233 on Form S-3 of our report dated November 5, 1996, appearing in this Annual Report on Form 10-K of Atlanta Gas Light Company for the year ended September 30, 1996. /S/ DELOITTE & TOUCHE LLP DELOITTE & TOUCHE LLP Atlanta, Georgia December 26, 1996 EX-27 13 FINANCIAL DATA SCHEDULE
UT 0000008154 ATLANTA GAS LIGHT COMPANY 1,000,000 12-MOS SEP-30-1996 OCT-01-1995 SEP-30-1996 PER-BOOK 1,361 0 283 68 16 1,728 277 166 60 503 56 3 555 152 0 0 0 0 0 0 459 1,728 1,218 48 334 1,096 122 8 130 49 81 4 76 59 42 90 0.00 0.00
-----END PRIVACY-ENHANCED MESSAGE-----