-----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, J6GTi8onV+u5up6w2lbvhbc5uklGJGXr2FDbFY3sTPEDCGDr6uv6fLMs1yj3dHqX Z7PiCt+A6ewdbX88ZByxkQ== 0000092122-04-000233.txt : 20040602 0000092122-04-000233.hdr.sgml : 20040602 20040602161836 ACCESSION NUMBER: 0000092122-04-000233 CONFORMED SUBMISSION TYPE: U-1/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20040602 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHERN CO CENTRAL INDEX KEY: 0000092122 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 580690070 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U-1/A SEC ACT: 1935 Act SEC FILE NUMBER: 070-10186 FILM NUMBER: 04844704 BUSINESS ADDRESS: STREET 1: 270 PEACHTREE ST CITY: ATLANTA STATE: GA ZIP: 30303 BUSINESS PHONE: 4045065000 MAIL ADDRESS: STREET 1: 270 PEACHTREE STREET CITY: ATLANTA STATE: GA ZIP: 30303 U-1/A 1 am1_10186.txt File No. 70-10186 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 AMENDMENT NO. 1 TO FORM U-1 APPLICATION OR DECLARATION under The Public Utility Holding Company Act of 1935 THE SOUTHERN COMPANY 270 Peachtree Street, N.W. Atlanta, Georgia 30303 ALABAMA POWER COMPANY SOUTHERN COMMUNICATIONS SERVICES, INC. 600 North 18th Street 555 Glenridge Connector, Suite 500 Birmingham, Alabama 35291 Atlanta, Georgia 30342 GEORGIA POWER COMPANY SOUTHERN COMPANY CAPITAL FUNDING, INC. 241 Ralph McGill Boulevard, N.E. 1403 Foulk Road, Suite 102 Atlanta, Georgia 30308 Wilmington, Delaware 19803 GULF POWER COMPANY SOUTHERN COMPANY ENERGY SOLUTIONS, INC. One Energy Place 241 Ralph McGill Boulevard, N.E. Pensacola, Florida 32520 Atlanta, Georgia 30308 MISSISSIPPI POWER COMPANY SOUTHERN COMPANY SERVICES, INC. 2992 West Beach 241 Ralph McGill Boulevard, N.E. Gulfport, Mississippi 39501 Atlanta, Georgia 30308 SAVANNAH ELECTRIC AND POWER COMPANY SOUTHERN NUCLEAR OPERATING COMPANY, INC. 600 East Bay Street 40 Inverness Center Parkway Savannah, Georgia 31401 Birmingham, Alabama 35242 (Name of company or companies filing this statement and addresses of principal executive offices) THE SOUTHERN COMPANY (Name of top registered holding company parent of each applicant or declarant) Tommy Chisholm, Secretary The Southern Company 270 Peachtree Street, N.W. Atlanta, Georgia 30303 William E. Zales, Jr., Vice President Tommy Chisholm, Secretary and Corporate Secretary Southern Communications Services, Inc. Alabama Power Company 5555 Glenridge Connector, Suite 500 600 North 18th Street Atlanta, Georgia 30342 Birmingham, Alabama 35291 Janice G. Wolfe, Corporate Secretary Daniel P. McCollom, Secretary Georgia Power Company Southern Company Capital Funding, Inc. 241 Ralph McGill Boulevard, N.E. 1403 Foulk Road, Suite 102 Atlanta, Georgia 30308 Wilmington, Delaware 19803 Susan N. Ritenour, Secretary and Treasurer Tommy Chisholm, Vice President and Secretary Gulf Power Company Southern Company Energy Solutions, Inc. One Energy Place 241 Ralph McGill Boulevard, N.E. Pensacola, Florida 32520 Atlanta, Georgia 30308 Vicki L. Pierce, Corporate Secretary Tommy Chisholm, Vice President and Secretary 2992 West Beach Southern Company Services, Inc. Gulfport, Mississippi 39501 241 Ralph McGill Boulevard, N.E. Atlanta, Georgia 30308 Nancy E. Frankenhauser, Corporate Secretary Sherry A. Mitchell, Corporate Secretary Savannah Electric and Power Company Southern Nuclear Operating Company, Inc. 600 East Bay Street 40 Inverness Center Parkway Savannah, Georgia 31401 Birmingham, Alabama 35242
(Names and addresses of agents for service) The Commission is requested to mail signed copies of all orders, notices and communications to: Thomas A. Fanning John D. McLanahan, Esq. Executive Vice President, Treasurer Troutman Sanders LLP and Chief Financial Officer 600 Peachtree Street, N.E. The Southern Company Suite 5200 270 Peachtree Street, N.W. Atlanta, Georgia 30308-2216 Atlanta, Georgia 30303 The Application in the foregoing file is amended and restated in its entirety as follows: Item 1. Description of Proposed Transactions. 1.1 Introduction. This Application seeks a renewal and extension of certain existing authorizations with respect to the ongoing financing activities of The Southern Company ("Southern"). 1.2 Description of Southern and its Subsidiaries and Existing Financing Authority. Southern is a registered holding company under the Public Utility Holding Company Act of 1935, as amended (the "Act"). Its public utility subsidiaries include Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company and Savannah Electric and Power Company (collectively, the "Retail Operating Companies"). Alabama Power Company and Georgia Power Company each owns 50% of the outstanding common stock of Southern Electric Generating Company ("SEGCO"), which is also an operating public utility company. In addition, Southern owns all of the common stock of Southern Power Company ("Southern Power"), which is also an operating public utility company. Southern also owns all the outstanding common stock of Southern Communications Services, Inc., Southern Company Gas LLC, Southern Nuclear Operating Company, Inc., Southern Company Services, Inc. ("SCS"), Southern Management Development, Inc., Southern Telecom, Inc. and Southern Company Holdings, Inc. (collectively, the "Other Subsidiaries"). Southern also indirectly owns all of the outstanding shares of common stock of Southern Company Capital Funding, Inc. ("Capital Funding"). Capital Funding was organized under the laws of Delaware on January 24, 1997 and was authorized to be formed as a financing subsidiary pursuant to an order dated February 9, 2000 in File No. 70-9335 (HCAR No. 35-27134). Capital Funding is the only finance subsidiary (other than trusts formed by Capital Funding to issue trust preferred securities) that has been formed pursuant to the authority granted in HCAR No. 35-27134. The business of Capital Funding is limited to effecting financing transactions for Southern. In connection with such financing transactions, Southern may enter into one or more guarantee or credit support agreements in favor of Capital Funding. Capital Funding will be the only financing subsidiary on behalf of Southern that will issue Long-term Debt (as defined in Section 1.7 below), debt obligations related to Preferred Securities, Preferred Stock and Equity-linked Securities (each as defined in Section 1.7 below). Southern or Capital Funding may create trusts or other financing subsidiaries to issue Preferred Securities. In addition to the Retail Operating Companies, SEGCO, Southern Power and the Other Subsidiaries, Southern also engages through other direct and indirect subsidiaries in various other energy-related and non-utility businesses. 1.3 Financing Authorization. By an order dated December 27, 2000 in File No. 70-8277 (HCAR No. 35-27323), Southern is authorized to issue and sell from time to time in one or more transactions, through September 30, 2004, up to 35 million shares of its authorized but unissued common stock, $5 par value (the "Common Stock") (pursuant to which no shares have been issued as of May 17, 2004) (the "December 2000 Order").1 By an order dated March 28, 2001 in File No. 70-8789 (HCAR No. 35-27367), Southern is authorized to issue and sell from time to time through December 31, 2004 short-term and/or term loan notes and/or commercial paper in an aggregate principal amount not to exceed $2 billion outstanding at any time (pursuant to which $293 million was outstanding as of May 17, 2004) (the "March 2001 Order"). By an order dated December 22, 1999 in File No. 70-9557 (HCAR No. - 2 - 35-27118), Southern is authorized to issue and sell up to 88 million shares of Common Stock under its Southern Investment Plan, its Employee Savings Plan and its Employee Stock Ownership Plan (each as defined below in Section 1.7) through September 30, 2004 (the "December 1999 Order").2 By an order dated October 8, 1999 in File No. 70-8961 (HCAR No. 35-27082), Southern was authorized to guarantee the debt or other obligations of SCS, for an aggregate principal amount up to $160 million at any time outstanding through June 30, 2004 (pursuant to which $120 million was outstanding as of May 17, 2004) (the "October 1999 Order").3 By an order dated February 9, 2000 in File No. 70-9335 (HCAR No. 35-27134), Southern and Capital Funding were authorized to issue and sell from time to time in one or more transactions, through September 30, 2003, preferred securities and/or notes in an aggregate principal amount not to exceed $1.5 billion (the "February 2000 Order" and, together with the December 2000 Order, the March 2001 Order, the December 1999 Order and the October 1999 Order, collectively, the "Financing Orders"). 1.4 Summary of Requested Approvals. The applicant-declarants propose herein to amend and restate their current financing authorizations, as contained in the Financing Orders, for the period commencing with the effective date of the Commission's order in this proceeding and ending June 30, 2007 (the "Authorization Period"). Upon the effective date of the Commission's order in this proceeding, the applicant-declarants will relinquish their authority to issue securities and engage in the other transactions authorized under the Financing Orders. _______________________ 1 Southern is authorized under its charter to issue up to 1 billion shares of Common Stock. Capital Funding is authorized under its charter to issue up to 1,000 shares of its common stock. 2 As of May 1, 2004, Southern has issued 61 million shares pursuant to the December 1999 Order. 3 Pursuant to an order dated October 11, 2000 in File No. 70-9035 (HCAR No. 35-27246), Southern has existing authority to issue up to 40 million shares of Common Stock in accordance with the Southern Company Performance Stock Plan through February 17, 2007. Pursuant to an order dated June 7, 2001 in File No. 70-9869 (HCAR No. 35-27416), Southern has existing authority to issue up to 30 million shares of Common Stock in accordance with the Southern Company Omnibus Incentive Compensation Plan through May 22, 2011. The authorization under these orders is not being renewed pursuant to this filing. - 3 - Specifically, the applicant-declarants request authorization for the following transactions during the Authorization Period: 1. Southern and Capital Funding request authority to issue and sell from time to time, directly, Preferred Stock and, directly or indirectly through one or more financing subsidiaries, Preferred Securities (including without limitation trust preferred securities), Equity-linked Securities and/or Long-term Debt in an aggregate amount not to exceed $1.5 billion. Any such securities issued by Capital Funding (or other financing subsidiary for Preferred Securities) or a trust may be guaranteed by Southern. Any such securities may be convertible into Common Stock of Southern, provided that the value of Common Stock issuable upon such conversions may not exceed $2 billion in the aggregate. 2. Southern requests authority to issue and sell from time to time up to 35 million shares of Common Stock. 3. Southern requests authority to issue up to 85 million shares of Common Stock pursuant to its Employee Savings Plan, its Employee Stock Ownership Plan and its Southern Investment Plan, or other similar stock-based plans adopted in the future (collectively, the "Plans"), such shares to be in addition to any shares of Common Stock issued under the authority requested in (1) and (2) above. The Employing Companies (as defined below in Section 1.7) request authority to purchase Common Stock pursuant to the Employee Stock Ownership Plan. - 4 - 4. Southern requests authority to issue and sell from time to time notes to effect short-term and term loan and commercial paper borrowings in an amount at any time outstanding not to exceed $3 billion. 5. Southern requests authority to provide guarantees on behalf or for the benefit of SCS in an aggregate principal amount not to exceed $330 million at any time outstanding. 1.5 Parameters Applicable to Authorized Financing Transactions. The following general terms will be applicable where appropriate to the proposed external financing activities requested to be authorized hereby: Effective Cost of Money. The effective cost of capital on Long-term Debt, Preferred Stock, Preferred Securities, Equity-linked Securities, Short-term and Term Loan Notes and Commercial Paper (each as defined in Section 1.7) will not exceed competitive market rates available at the time of issuance for securities having the same or reasonably similar terms and conditions issued by similar companies of reasonably comparable credit quality; provided that in no event will the effective cost of capital (i) on any series of Long-term Debt exceed 700 basis points over a U.S. Treasury security having a remaining term equal to the term of such series, (ii) on any series of Short-term and Term Loan Notes or Commercial Paper exceed 700 basis points over the London Interbank Offered Rate for maturities of less than one year and (iii) on any series of Preferred Stock, Preferred Securities or Equity-linked Securities exceed 700 basis points over a U.S. treasury security having a remaining term equal to the term of such series. Maturity. The maturity of Long-term Debt and Preferred Securities will be between one and 50 years after the issuance thereof. Equity-linked Securities will be redeemed or mature no later than 50 years after the issuance thereof, unless converted into Common Stock. Preferred Stock will be redeemed no later than 50 years, unless it is perpetual in duration. - 5 - Issuance Expenses. The underwriting fees, commissions or other similar remuneration paid in connection with the non-competitive issue, sale or distribution of (i) Long-term Debt and Short-term and Term Loan Notes will not exceed 7% of the principal or total amount of the securities being issued and (ii) Preferred Stock, Common Stock, Preferred Securities or Equity-linked Securities will not exceed 7% of the principal or total amount of the securities being issued. No commission or fee will be payable in connection with the issuance and sale of Commercial Paper, except for a commission, payable to the dealer, not to exceed one-eighth of one percent per annum in respect of Commercial Paper sold through the dealer as principal. Common Equity Ratio. At all times during the Authorization Period, Southern and the applicant-declarants that are public utility subsidiaries of Southern each represents that it will maintain common equity ratio of at least thirty percent of its consolidated capitalization (common equity, preferred stock and long-term and short-term debt) as reflected in its most recent Form 10-K or Form 10-Q filed with the Commission adjusted to reflect changes in capitalization since the balance sheet date, unless otherwise authorized. Investment Grade Ratings. Southern and Capital Funding further represent that no guarantees or securities, other than Common Stock, Commercial Paper or short-term bank debt (with a maturity of one year or less), may be issued in reliance upon the authorization granted by the Commission pursuant to this Application, unless upon original issuance thereof (i) the security to be issued, if rated, is rated investment grade; (ii) all outstanding securities of the issuer that are rated are rated investment grade; and (iii) all outstanding securities of Southern that are rated are rated investment grade. For purposes of this provision, a security will be deemed to be rated "investment grade" if it is rated investment grade by at least one nationally recognized statistical rating organization, as that term is used in paragraphs (c)(2)(vi)(E), (F) and - 6 - (H) of Rule 15c3-1 under the Securities and Exchange Act of 1934, as amended. Southern and Capital Funding also request the Commission to reserve jurisdiction over the issuance of any guarantees or securities that do not satisfy these conditions. Authorization Period. No security will be issued pursuant to the authorization sought herein after the last day of the Authorization Period (June 30, 2007). Security Ratings. The ratings of the securities issued by Southern and Capital Funding are as follows: Southern Senior Unsecured Debt Moody's: A3 S&P: A- Southern Commercial Paper, Short-Term Moody's: P1 S&P: A1 Capital Funding Senior Unsecured Debt Moody's: A3 S&P: A- 1.6 Use of Proceeds. The proceeds from the sale of the securities authorized hereunder, including the Long-term Debt, the Short-term and Term Loan Notes, the Commercial Paper, the Preferred Stock, the Preferred Securities and the Common Stock, including the Common Stock sold pursuant to the Plans, will be used by Southern for general corporate purposes, to acquire the securities of associate companies and to acquire interests in other businesses, as permitted under the Act, including interests in "exempt wholesale generators" ("EWGs"), "energy related companies" under Rule 58 and "foreign utility companies" ("FUCOs"), in transactions permitted under Act, and for other lawful purposes. However, no proceeds will be used to acquire interests in other businesses or the securities of associate companies unless the financing is consummated in accordance with Commission order or is exempt from the Act. Southern does not seek in this proceeding any increase in the amount it is permitted to invest in EWGs and FUCOs. The proceeds of any financing by Capital Funding will be remitted, paid as a dividend, loaned or otherwise transferred to Southern or its designee. The - 7 - proceeds realized by SCS from borrowings guaranteed by Southern will be used to fund the general requirements of the business of SCS, including the possible refunding of outstanding indebtedness. 1.7 Description of Specific Financing Proposals. 1. Common Stock. Southern request authority to issue and sell up to 35 million shares of Common Stock in ordinary regular-way transactions in the auction market on the floor of the New York Stock Exchange, or any regional exchange on which Southern's Common Stock may be admitted to trading privilege, in block transactions on such exchanges or in the over-the-counter market, in which a broker or dealer may act as a principal for its own account and in "fixed-price offerings" off the floor of such exchanges, or "special offerings" and "exchange distributions" in accordance with the rules of such exchanges. Public distributions may be pursuant to private negotiations with underwriters, dealers or agents, or effected through competitive bidding among underwriters. In addition, sales may be made through private placements or other non-public offerings to one or more persons. The sale of the Common Stock will be made at market prices prevailing at the time of sale in the case of transactions on exchanges and at prices negotiated by the broker or dealer and related to prevailing market prices in the case of over-the-counter transactions. 2. Preferred Stock, Preferred Securities, Equity-linked Securities and Long-term Debt. Southern and Capital Funding request authority to issue and sell from time to time, directly, Preferred Stock and, directly or indirectly through one or more financing subsidiaries, Preferred Securities (including without limitation trust preferred securities), Equity-linked Securities and/or Long-term Debt in an aggregate amount not to exceed $1.5 billion. Any such - 8 - securities may be convertible into Common Stock of Southern, provided that the value of Common Stock issuable upon such conversions may not exceed $2 billion in the aggregate. Southern and Capital Funding wish to have the flexibility to issue, directly or indirectly through one or more statutory or business trusts or any other finance subsidiary, preferred securities (including, without limitation, trust preferred securities) (the "Preferred Securities"). Preferred Securities may be issued in one or more series with such rights, preferences and priorities as may be designated in the instrument creating each such series, as determined by the board of directors of Southern or Capital Funding, as applicable. Dividends or distributions on such securities will be made periodically and to the extent funds are legally available for such purpose, but may be made subject to terms which allow the issuer to defer dividend payments for specified periods. Southern would guarantee certain payments made by any trust or other finance subsidiary and associated with the Preferred Securities. Southern expects that the Preferred Securities would be issued using up to two different types of special purpose subsidiaries. One or more subsidiaries (each a "Financing Subsidiary") would issue the Preferred Securities. These subsidiaries would be established by Southern and/or Capital Funding that Southern would use to hold interests in one or more of the Finance Subsidiaries.4 A Financing Subsidiary would lend, dividend or otherwise transfer to Capital Funding or Southern, as applicable, the proceeds of the Preferred Securities it issues, ____________________________ 4 In the event that a Financing Subsidiary is organized as a limited liability company, Southern or Capital Funding may also organize a second special purpose subsidiary under Delaware or other state law ("Investment Subsidiary") to acquire and hold Financing Subsidiary membership interests, so as to comply with any requirement under any applicable law that a limited liability company have at least two members. Similarly, in the event that any Financing Subsidiary is organized as a limited partnership, an Investment Subsidiary may be organized to act as the general partner of the Financing Subsidiary. If a Financing Subsidiary is organized as a limited partnership, Southern may acquire, directly or indirectly through the Investment Subsidiary, a limited partnership interest in the Financing Subsidiary, in order to ensure that the Financing Subsidiary will have a limited partner to the extent required by applicable law. - 9 - together with the equity contributed to the Financing Subsidiary. In turn, Capital Funding would lend, 5 dividend or otherwise transfer directly or indirectly the proceeds to Southern. Southern or Capital Funding would issue guarantees6 related to: (a) payment of dividends or distributions on the Preferred Securities of any Financing Subsidiary, if, and to the extent that, the Financing Subsidiary has funds legally available for this purpose; (b) payments to holders of the Preferred Securities of amounts due upon liquidation of the Financing Subsidiary or redemption of its Preferred Securities; and (c) certain additional amounts that may be payable in respect of the Preferred Securities. In connection with the issuance of Preferred Securities, Southern proposes to organize one or more separate subsidiaries as a statutory trust or trusts of the State of Delaware or other comparable trust in any jurisdiction considered advantageous by Southern or any other entity or structure, foreign or domestic, that is considered advantageous by Southern. Southern requests that the Commission reserve jurisdiction over the use of a foreign entity as a Financing Subsidiary. Southern and Capital Funding propose that, in addition to, or as an alternative to, any Preferred Securities financing as described hereinabove, Southern or Capital Funding may issue and sell notes directly to investors. It is proposed that any notes so issued will be unsecured, may be either senior or subordinated obligations of Southern or Capital Funding, as the case may be, may be convertible or exchangeable into Common Stock of Southern or Preferred Stock and may have the benefit of a sinking fund (the "Long-term Debt"). Long-term Debt of Capital Funding will have the benefit of a guarantee or other credit support by Southern and may be subject to redemption or remarketing or a put option. Southern or Capital Funding will not issue Long-term Debt unless it has evaluated all relevant financial considerations (including, without limitation, _______________________ 5 The terms of any loan to Southern of the proceeds from the issuance of Preferred Securities would mirror the terms of those Preferred Securities. 6 Guarantees issued by Capital Funding would in turn be supported by Southern's own credit. - 10 - the cost of equity capital) and has determined that to do so is preferable to issuing Southern Common Stock or short-term debt. It is proposed that Southern or Capital Funding may issue and sell from time to time shares of its preferred stock (the "Preferred Stock"). Any such issue of Preferred Stock will have a specified par or stated value per share and, in accordance with applicable state law, will have such voting powers (if any), designations, preferences, rights and qualifications, limitations or restrictions as shall be stated and expressed in the resolution or resolutions providing for such issue adopted by the board of directors of Southern or Capital Funding, as the case may be, pursuant to authority vested in it by the provisions of its certificate of incorporation. The foregoing may include rights of conversion or exchange into Common Stock of Southern. Southern or Capital Funding may also issue and sell equity-linked securities, typically in the form of stock purchase units, which combine a security with a fixed obligation (e.g., Long-term Debt, Preferred Securities, Preferred Stock or other debt obligations of third parties, including U.S. Treasury securities) with a stock purchase contract that is exercisable (either mandatorily or at the option of the holder) within a relatively short period (e.g., one to six years after issuance) ("Equity-linked Securities"). Any such securities issued by Capital Funding or a trust or other finance subsidiary may be guaranteed by Southern. In addition, Southern proposes to issue and sell stock purchase contracts ("Stock Purchase Contracts") issued either separately or as part of units ("Stock Purchase Units"). The Stock Purchase Units would consist of (a) Stock Purchase Contracts and (b) Preferred Securities, Long-term Debt and/or debt obligations of third parties. 3. Short-term and Term Loan Notes and Commercial Paper. Southern proposes to issue and sell from time to time unsecured short-term and term loan - 11 - notes ("Short-term and Term Loan Notes") and commercial paper ("Commercial Paper") in an aggregate principal amount at any time outstanding not to exceed $3 billion. Short-term and Term Loan Notes and Commercial Paper may include commercial paper notes, bank notes and other forms of short-term indebtedness. Southern proposes to effect Short-term and Term Loan Note borrowings from one or more lending institutions. These borrowings will be evidenced by short-term and/or term loan notes, dated as of the date of the borrowings, and maturing not more than seven years after the date of issue, or "grid" short-term and/or long term notes, evidencing all outstanding borrowings from each lender, dated as of the date of the initial borrowings, and maturing not more than seven years after the date of issue. Southern proposes to issue Commercial Paper in the form of promissory notes with varying maturities not to exceed one year. These maturities may be subject to extension to a final maturity not to exceed 390 days. Actual maturities will be determined by market conditions, the effective interest costs and Southern's anticipated cash flow, including the proceeds of other borrowings, at the time of issuance. 4. Common Stock issued under Stock-based Plans. In addition to the foregoing, Southern also proposes to issue up to 85 million shares of Common Stock under the Plans. Currently, Southern maintains the following Plans: |X| Southern Investment Plan. The Southern Investment Plan (the "SIP") provides shareholders of record of Southern's Common Stock with a means of purchasing additional shares through the reinvestment of cash dividends and/or through optional cash payments. In addition, the SIP has a direct purchase feature that enables other eligible investors to become participants by making initial cash payments for the purchase of Common Stock. Shares of Common Stock are purchased under the SIP, at the option of Southern, from newly issued shares or shares purchased on the open market. The price per share for shares purchased - 12 - on the open market will be the weighted average price paid to acquire the shares, excluding broker commissions. When shares are purchased from Southern using cash dividends, the price per share generally will be equal to the average of the high and low sale prices on the dividend payment date. When shares are purchased from Southern with the investor's cash payments, the price per share generally will be equal to the average of the high and low sale prices on the 10th or 25th of each month, as applicable. |X| Employee Savings Plan. Under the Employee Savings Plan (the "Savings Plan"), each employee of Southern's subsidiaries may generally contribute a certain percentage of his or her compensation to an account administered on his or her behalf under the Savings Plan. These funds, together with funds contributed by the employer, would be invested in one or more of several funds, including a Southern Company Stock Fund consisting of Southern's Common Stock. Investment purchases for the funds may be made either on the open market or by private purchase, provided that no private purchase may be made of Common Stock of Southern at a price greater than the last sale price or the highest current independent bid price, whichever is higher, for the stock on the New York Stock Exchange, plus any applicable commission. In addition, Common Stock of Southern may be purchased directly from Southern under the SIP or under any similar plan made available to holders of record of shares of Common Stock of Southern, at the purchase price provided for in that plan. |X| Employee Stock Ownership Plan. The purpose of the Employee Stock Ownership Plan (the "ESOP") is to enable eligible employees of SCS and other affiliates or subsidiaries of Southern that adopt the ESOP (the "Employing Companies") to share in the future of Southern, to provide participants with an opportunity to accumulate capital for their future economic security and to enable participants to acquire Southern Common Stock. All of the applicant-declarants except for Capital Funding are currently Employing - 13 - Companies. The ESOP permits the Employing Companies to contribute cash or Common Stock in an amount or under a formula that SCS will determine in its sole and absolute discretion. Cash contributions would be used to purchase Common Stock at market value, as determined by SCS. Cash dividends paid on the contributed Common Stock allocated to participating employees' accounts generally would be reinvested in additional shares of Common Stock, unless the employee elects to have the dividends distributed to him. 5. Guarantees. SCS is a wholly-owned subsidiary of Southern. SCS provides certain services for Southern and its associate companies in the Southern electric system pursuant to authorization of the Commission. Southern proposes that it may guarantee indebtedness or other obligations incurred by SCS, as described herein, in an aggregate amount not to exceed $330 million at any time outstanding. Southern hereby requests authority for such guarantees. The transactions by SCS referred to herein do not require Commission approval. SCS may issue and sell new notes (the "Proposed Notes") to a lender or lenders other than Southern. The Proposed Notes would be issued pursuant to an agreement or agreements with such lender or lenders and may be guaranteed by Southern as to principal, premium, if any, and interest. The Proposed Notes may have terms of up to 50 years, contain sinking funds and bear interest at a rate or rates not to exceed 700 basis points per annum over the rate for United States Treasury securities of corresponding maturity at the time the lender or lenders commit to purchase the particular issue. SCS may engage an agent to place the Proposed Notes for a commission based upon the principal amount borrowed. - 14 - SCS also may effect short-term or term-loan borrowings under one or more revolving credit commitment agreements. Short-term borrowings under such agreement or agreements would have a maximum maturity of one year; term loans would have maturities up to 10 years. It is expected that the borrowings would be evidenced by a "grid" promissory note to be dated the date of the initial borrowing and the date of each borrowing thereafter when a "grid" short-term or term-loan note, as the case may be, is not outstanding. Such borrowings would bear interest at rates to be negotiated with the lending financial institution or institutions. In addition, it is expected that SCS will be obligated to pay fees in connection with the credit arrangements. Such interest rates and fees will be negotiated based upon prevailing market conditions. SCS also may effect borrowings from certain banks and other institutions. Such institutional borrowings will be evidenced by notes to be dated as of the date of such borrowings and to mature in not more than 10 years after the date of borrowing or by "grid" notes evidencing all outstanding borrowings from each lender to be dated as of the date of the initial borrowing and to mature in not more than 10 years after the date of borrowing. Generally, borrowings will be prepayable in whole, or in part, without penalty or premium, and will be at rates to be negotiated with the lending institutions based upon prevailing market conditions. SCS also may negotiate separate rates for, and/or agree not to prepay, particular borrowings if it is considered more favorable to SCS. Southern further proposes that it may guarantee obligations incurred by SCS in connection with installment purchases, sale-leasebacks, leases or other acquisitions of equipment or other assets. - 15 - 1.8 Certificate of Notification. Southern will file, on a quarterly basis corresponding with the periodic reporting requirements of the Securities Exchange Act of 1934, as amended, the following information in accordance with Rule 24 under the Act: (i) the amount and type of securities, including guarantees, sold during the quarter; (ii) a statement describing the uses for the proceeds of the securities issued; (iii) a statement describing the equity ratio of Southern at the end of the quarter and the effect of the securities issued during that quarter on the equity ratio, including dollar amounts and major components of total capitalization; (iv) market-to-book ratio of Southern's Common Stock; (v) price per share and number of shares of all stock (and market price at time of sale agreement) issued pursuant to the order in connection herewith during the Authorization Period; (vi) total number of shares issued under any of the Plans; (vii) balance sheets of Capital Funding if engaged in financings pursuant to the order in connection herewith; (viii) detail on guarantees issued pursuant to the order in connection herewith; (ix) if stock is transferred to a seller of a business being acquired, the number of shares, value and any restrictions; and (x) information on variable interest entities formed with any financing proceeds pursuant to the order in connection herewith. Southern will file Rule 24 certificates to notify the Commission of its issuances of securities that are exempt under the rules and regulations of the Act. Item 2. Fees, Commissions and Expenses. The fees and expenses in connection with the proposed transactions (other than those described in Item 1 hereof and other than underwriting discounts and commissions) are estimated not to exceed $5,000,000. The prospectus supplement relating to each offering of Common Stock, Long-term Debt, Preferred Stock, Preferred Securities or Equity-linked Securities will reflect - 16 - the actual expenses based upon the amount of the related offering. Item 3. Applicable Statutory Provisions. Southern considers that Sections 6(a), 7, 9(a), 10, 12(b), 12(c) and 12(f) of the Act and Rules 42, 45, 53 and 54 thereunder are applicable to the proposed transactions. Any notes issued by SCS to evidence borrowings by it as described herein will be exempt pursuant to Rule 52 under the Act. Other transactions by SCS referred to herein will be in the routine course of its business and not subject to Commission approval. Southern considers that the proposed issuance and sale of Common Stock under the Plans are subject to the provisions of Sections 6(a) and 7 of the Act and Rules 53 and 54 thereunder. Southern considers that any purchases of Southern's Common Stock by the Employing Companies pursuant to the ESOP prior to contributing such stock to the trust established pursuant to the ESOP are subject to the provisions of Sections 9(a) and 10 of the Act. The proposed transactions will be carried out in accordance with the procedure specified in Rule 23 and pursuant to an order of the Commission with respect thereto. Rule 53 Analysis. The proposed transactions are subject to Rule 53, which provides that, in determining whether to approve the issue or sale of a security for purposes of financing the acquisition of an "exempt wholesale generator" ("EWG") or "foreign utility company" ("FUCO"), as those terms are defined in sections 32 and 33, respectively, of the Act, the Commission shall not make certain adverse findings if the conditions set forth in Rule 53(a)(1) through (a)(4) are met, and are not otherwise made inapplicable by reason of the existence of any of the circumstances described in Rule 53(b). - 17 - Southern currently meets all of the conditions of Rule 53(a). At March 31, 2004, Southern's "aggregate investment," as defined in Rule 53(a)(1), in EWGs and FUCOs was approximately $244 million, or about 4.57% of Southern's "consolidated retained earnings," also as defined in Rule 53(a)(1), as of March 31, 2004 ($5.336 billion).7 With respect to Rule 53(a)(1), however, the Commission has determined that Southern's financing of investments in EWGs and FUCOs in an amount greater than the amount that would otherwise be allowed by Rule 53(a)(1) would not have either of the adverse effects set forth in Rule 53(c). See The Southern Company, Holding Company Act Release No. 26501, dated April 1, 1996 (the "Rule 53(c) Order"); and Holding Company Act Release No. 26646, dated January 15, 1997 (order denying request for reconsideration and motion to stay). The Rule 53(c) Order allows Southern to invest 100% of its consolidated retained earnings in EWGs and FUCOs. In addition, Southern has complied and will continue to comply with the record-keeping requirements of Rule 53(a)(2), the limitation under Rule 53(a)(3) on the use of operating company personnel to render services to EWGs and FUCOs and the requirements of Rule 53(a)(4) concerning the submission of copies of certain filings under the Act to retail rate regulatory commissions. Further, none of the circumstances described in Rule 53(b) has occurred. ______________________________ 7 Although Southern owns all of the equity in four indirect subsidiaries (EPZ Lease, Inc., Dutch Gas Lease, Inc., GAMOG Lease, Inc. and NUON Lease, Inc.), Southern has no direct or indirect investment or any aggregate investment within the meaning of Rule 53 in these FUCOs, including any direct or indirect guarantees or credit positions related to any capital or financing leases. (See Southern's application on Form U-1, File No. 70-9727, for further information.) Southern has executed limited keep-well commitments whereby Southern would be required to make capital contributions to SE Finance Capital Corp. II, SE Finance Capital Corp. or SE Finance Company, Inc. in the event of a shortfall in the scheduled debt service resulting from certain changes in the payments due from Southern under the Southern Company Income Tax Allocation Agreement. The maximum potential capital contribution required under these commitments is the unamortized balance of the related loans, which totaled approximately $380 million as of March 31, 2004. - 18 - Item 4. Regulatory Approval. No state commission and no federal commission (other than the Commission) has jurisdiction over the proposed transactions. Item 5. Procedure. The applicant-declarants hereby request that the Commission's order be issued as soon as the rules allow. The applicant-declarants hereby waive a recommended decision by a hearing officer or other responsible officer of the Commission, consent that the Division of Investment Management may assist in the preparation of the Commission's decision and/or order in this matter, unless such Division opposes the transactions proposed herein, and request that there be no 30-day waiting period between the issuance of the Commission's order and the date on which it is to become effective. Item 6. Exhibits and Financial Statements. (a) Exhibits A-1 - Composite Certificate of Incorporation of Southern reflecting all amendments thereto through January 5, 1994. (Designated in Registration No. 33-3546 as Exhibit 4(a), in Certificate of Notification, File No. 70-7341, as Exhibit A, and in Certificate of Notification, File No. 70-8181, as Exhibit A.) A-2 - By-Laws of Southern as amended effective February 17, 2003 and presently in effect. (Designated in Form 10-Q for the quarter ended June 30, 2003, File No. 1-3526, as Exhibit 3(a)1.) A-3 - Articles of Incorporation of Capital Funding dated January 24, 1997. A-4 - Bylaws of Capital Funding effective January 24, 1997 and presently in effect. A-5 - Subordinated Note Indenture dated as of February 1, 1997, among Southern, Capital Funding and Deutsche Bank Trust Company Americas (formerly known as Bankers Trust Company), as Trustee, and indentures supplemental thereto dated as of February 4, 1997. (Designated in Registration No. 333-28349 as Exhibits 4.1 and 4.2 and 333-28355 as Exhibit 4.2.) - 19 - A-6 - Subordinated Note Indenture dated as of June 1, 1997, among Southern, Capital Funding and Deutsche Bank Trust Company Americas (formerly known as Bankers Trust Company), as Trustee, and indentures supplemental thereto through July 31, 2002. (Designated in Southern's Form 10-K for the year ended December 31, 1997, File No. 1-3526, as Exhibit (4)(a)2, in Form 8-K dated June 18, 1998, File No. 1-3526, as Exhibit 4.2, in Form 8-K dated December 18, 1998, File No. 1-3526, as Exhibit 4.4 and in Form 8-K dated July 24, 2002, File No. 1-3526, as Exhibit 4.4.) A-7 - Senior Note Indenture dated as of February 1, 2002, among Southern, Capital Funding and The Bank of New York, as Trustee, and indentures supplemental thereto through those dated February 1, 2002. (Designated in Form 8-K dated January 29, 2002, File No. 1-3526, as Exhibits 4.1 and 4.2 and in Form 8-K dated January 30, 2002, File No. 1-3526, as Exhibit 4.2.) A-8 - Fifth Amended and Restated 364-Day Credit Facility by and among Southern and Bank of America, N.A., as Administrative Agent, Barclays Bank PLC and Commerzbank AG, New York and Grand Cayman Branches, as Co-Syndication Agents, The Bank of Nova Scotia and Mizuho Financial Group, as Co-Documentation Agents, ABN AMRO Bank N.V., Bank One, NA (Main Office-Chicago), Citibank, N.A., Wachovia Bank, National Association, and ING Capital LLC., as Co-Senior Managing Agents and Banc of America Securities LLC and Barclays Capital, as Joint Lead Arrangers and Joint Book Managers dated as of June 13, 2003 (to be filed confidentially pursuant to Rule 104.) F - Opinion of Troutman Sanders LLP.** G - Form of Notice.* I - Projected Cash Flow Summary of Southern for years 2004-07 (Filed confidentially pursuant to Rule 104).** J - Projected Capitalization of Southern for years 2004-07 (Filed confidentially pursuant to Rule 104).** * Previously filed. ** To be filed by amendment. - 20 - Exhibits heretofore filed with the Commission and designated as set forth above are hereby incorporated herein by reference and made a part hereof with the same effect as if filed herewith. (b) Financial Statements. Consolidated balance sheet, consolidated statements of capitalization, stockholders' equity and comprehensive income of Southern at March 31, 2004. (Designated in Southern's Form 10-Q for the quarter ended March 31, 2004, File No. 1-3526.) Statements of income and cash flows of Southern for the quarter ended March 31, 2004. (Designated in Southern's Form 10-Q for the quarter ended March 31, 2004, File No. 1-3526.) Since March 31, 2004, there have been no material adverse changes, not in the ordinary course of business, in the financial condition of Southern from that set forth in or contemplated by the foregoing financial statements. Item 7. Information as to Environmental Effects. a) As described in Item 1, the proposed transactions are of a routine and strictly financial nature in the ordinary course of the applicant-declarants' businesses. Accordingly, the Commission's action in this matter will not constitute any major federal action significantly affecting the quality of the human environment. b) No other federal agency has prepared or is preparing an environmental impact statement with regard to the proposed transactions. - 21 - SIGNATURE Pursuant to the requirements of the Public Utility Holding Company Act of 1935, each of the undersigned companies has duly caused this amendment to be signed on its behalf by the undersigned hereunto duly authorized. Dated: June 2, 2004 THE SOUTHERN COMPANY By: /s/Tommy Chisholm Tommy Chisholm Secretary ALABAMA POWER COMPANY By: /s/Wayne Boston Wayne Boston Assistant Secretary GEORGIA POWER COMPANY By: /s/Wayne Boston Wayne Boston Assistant Secretary GULF POWER COMPANY By: /s/Wayne Boston Wayne Boston Assistant Secretary - 22 - MISSISSIPPI POWER COMPANY By: /s/Wayne Boston Wayne Boston Assistant Secretary SAVANNAH ELECTRIC AND POWER COMPANY By: /s/Wayne Boston Wayne Boston Assistant Secretary SOUTHERN COMMUNICATIONS SERVICES, INC. By: /s/Tommy Chisholm Tommy Chisholm Secretary SOUTHERN COMPANY CAPITAL FUNDING, INC. By: /s/Wayne Boston Wayne Boston Assistant Secretary SOUTHERN COMPANY ENERGY SOLUTIONS, INC. By: /s/Tommy Chisholm Tommy Chisholm Vice President and Secretary - 23 - SOUTHERN COMPANY SERVICES, INC. By: /s/Tommy Chisholm Tommy Chisholm Vice President and Secretary SOUTHERN NUCLEAR OPERATING COMPANY, INC. By: /s/Wayne Boston Wayne Boston Assistant Secretary - 24 - EX-99 2 exa-3.txt EXHIBIT A-3 Exhibit A-3 CERTIFICATE OF INCORPORATION OF SOUTHERN COMPANY CAPITAL FUNDING, INC. 1. The name of the corporation is Southern Company Capital Funding, Inc.. 2. The address of its registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company. 3. The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity related to borrowing or otherwise raising monies for any of the purposes of The Southern Company and its subsidiaries. 4. The total number of shares of stock which the corporation shall have authority to issue is one thousand (1,000) of its $.01 par value common stock. 5. The name and mailing address of the incorporator are Thomas J. Hartland, Jr., 600 Peachtree Street, N.E., Suite 5200, Atlanta, Georgia 30308-2216. 6. The name and mailing address of each person who is to serve as a director until the first annual meeting of the stockholders or until a successor is elected and qualified is as follows: NAME MAILING ADDRESS ---- --------------- W. L. Westbrook 270 Peachtree Street, N.W., Suite 2200 Atlanta, Georgia 30303 7. The corporation is to have perpetual existence. 8. In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the board of directors is expressly authorized to make, alter or repeal the bylaws of the corporation. 9. Elections of directors need not be by written ballot unless the bylaws of the corporation shall so provide. 10. Meetings of stockholders may be held within or without the State of Delaware, as the bylaws may provide. The books of the corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the bylaws of the corporation. 11. The corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. 12. No director of the corporation shall be personally liable to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, or (iii) for any transaction from which the director received an improper personal benefit. I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 24th day of January, 1997. /s/Thomas J. Hartland, Jr. Thomas J. Hartland, Jr., Incorporator EX-99 3 exa-4.txt EXHIBIT A-4 Exhibit A-4 BY-LAWS OF SOUTHERN COMPANY CAPITAL FUNDING, INC. ARTICLE I OFFICES Section 1. The registered office shall be in the city of Wilmington, County of New Castle, State of Delaware. Section 2. The corporation may also have offices at such other places both within and without the State of Delaware as the board of directors may from time to time determine or the business of the corporation may require. ARTICLE II MEETINGS OF STOCKHOLDERS Section 1. All meetings of the stockholders for the election of directors shall be held at such place as may be fixed from time to time by the board of directors, or at such other place either within or without the State of Delaware as shall be designated from time to time by the board of directors and stated in the notice of the meeting. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof. Section 2. Annual meetings of stockholders shall be held at such date and time as shall be designated from time to time by the board of directors and stated in the notice of the meeting, at which they shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting. Section 3. Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the meeting. Section 4. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 5. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the certificate of incorporation, may be called by the president and shall be called by the president or secretary at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting. Section 6. Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting, to each stockholder entitled to vote at such meeting. Section 7. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. Section 8. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 9. When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes or of the certificate of incorporation, a different vote is required in which case such express provision shall govern and control the decision of such question. Section 10. Unless otherwise provided in the certificate of incorporation or in an agreement among shareholders as permitted under the General Corporation Law of the State of Delaware (the "Delaware Corporation Law"), each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three years from its date, unless the proxy provides for a longer period. Section 11. Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. ARTICLE III DIRECTORS Section 1. The number of directors which shall constitute the whole board shall be not less than one (1) nor more than fifteen (15). The initial board shall consist of one (1) director. Thereafter, within the limits above specified, the number of directors shall be determined by resolution of the board of directors or by the stockholders at the annual meeting. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2 of this Article, and each director elected shall hold office until his successor is elected and qualified. Directors need not be stockholders. Section 2. Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced. If there are no directors in office, then an election of directors may be held in the manner provided by statute. If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office. Section 3. The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the certificate of incorporation or by these bylaws directed or required to be exercised or done by the stockholders. MEETINGS OF THE BOARD OF DIRECTORS Section 4. The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of Delaware. Section 5. The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present. In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors. Section 6. Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board. Section 7. Special meetings of the board may be called by the president on 2 days' notice to each director, either personally or by mail or by telegram; special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two directors unless the board consists of only one director; in which case special meetings shall be called by the president or secretary in like manner and on like notice on the written request of the sole director. Section 8. At all meetings of the board a majority of the directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by statue or by the certificate of incorporation. If a quorum shall not be present at any meeting of the board of directors the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 9. Unless otherwise restricted by the certificate of incorporation or these bylaws, any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee. Section 10. Unless otherwise restricted by the certificate of incorporation or these bylaws, members of the board of directors, or any committee designated by the board of directors, may participate in a meeting of the board of directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting. COMMITTEES OF DIRECTORS Section 11. The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the certificate of incorporation, (except that a committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the board of directors as provided in the Delaware Corporate Law Section 151(a) fix any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the corporation) adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the bylaws of the corporation; and, unless the resolution or the certificate of incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock or to adopt a certificate of ownership and merger. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors. Section 12. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required. COMPENSATION OF DIRECTORS Section 13. Unless otherwise restricted by the certificate of incorporation or these bylaws, the board of directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings. REMOVAL OF DIRECTORS Section 14. Unless otherwise restricted by the certificate of incorporation or by law, any director of the entire board of directors may be removed, with or without cause, by the holders of a majority of shares entitled to vote at an election of directors. ARTICLE IV NOTICES Section 1. Whenever, under the provisions of the statutes or of the certificate of incorporation or of these bylaws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to directors may also be given by telegram. Section 2. Whenever any notice is required to be given under the provisions of the statutes or of the certificate of incorporation or of these bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. ARTICLE V OFFICERS Section 1. The officers of the corporation shall be chosen by the board of directors and may be at a minimum a president and a secretary. The board of directors may also choose such vice-presidents, treasurer and one or more assistant secretaries and assistant treasurers. Any number of offices may be held by the same person, unless the certificate of incorporation or these bylaws otherwise provide. Section 2. The board of directors at its first meeting after each annual meeting of stockholders shall choose a president and a secretary. Section 3. The board of directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board. Section 4. The salaries of all officers and agents of the corporation shall be fixed by the board of directors. Section 5. The officers of the corporation shall hold office until their successors are chosen and qualify. Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors. Any vacancy occurring in any office of the corporation shall be filled by the board of directors. THE PRESIDENT Section 6. The president shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the board of directors, shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect. Section 7. The president shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation. Section 8. In the absence of the treasurer or in the event of his inability or refusal to act or in the event that no treasurer has been appointed by the board of directors, the president shall perform all of the duties of the treasurer as so designated in Sections 12 through 15 of Article V of these by-laws. THE VICE-PRESIDENTS Section 9. In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president. The vice-presidents shall perform such other duties and have such other powers as the board of directors may from time to time prescribe. THE SECRETARY AND ASSISTANT SECRETARY Section 10. The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all the proceedings of the meetings of the corporation and of the board of directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he shall be. He shall have custody of the corporate seal of the corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by his signature or by the signature of such assistant secretary. The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature. Section 11. The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe. THE TREASURER AND ASSISTANT TREASURERS Section 12. The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors. Section 13. The treasurer shall disburse the funds of the corporation as may be ordered by the board of directors, taking proper vouchers for such disbursements, and shall render to the president and the board of directors, at its regular meetings, or when the board of directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation. Section 14. If required by the board of directors, he shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation. Section 15. The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the treasurer or in the event of his inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe. Section 16. Each officer of the corporation shall have the authority to execute and delivery any and all applications and filings as are necessary to be filed with federal, state and local regulatory agencies on behalf of the corporation. ARTICLE VI CERTIFICATES FOR SHARES Section 1. The shares of the corporation shall be represented by a certificate or shall be uncertificated. Certificates shall be signed by, or in the name of the corporation by, the chairman or vice-chairman of the board of directors, or the president or a vice-president and the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation. Within a reasonable time after the issuance or transfer of uncertificated stock, the corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to the Delaware Corporate Law Sections 151, 156, 202(a) or 218(a) or a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Section 2. Any of or all the signatures on a certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. LOST CERTIFICATES Section 3. The board of directors may direct a new certificate or certificates or uncertificated shares to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates or uncertificated shares, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed. TRANSFER OF STOCK Section 4. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Upon receipt of proper transfer instructions from the registered owner of uncertificated shares such uncertificated shares shall be cancelled and issuance of new equivalent uncertificated shares or certificated shares shall be made to the person entitled thereto and the transaction shall be recorded upon the books of the corporation. FIXING RECORD DATE Section 5. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting: provided, however, that the board of directors may fix a new record date for the adjourned meeting. REGISTERED STOCKHOLDERS Section 6. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. ARTICLE VII INDEMNIFICATION Section 1. The corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful. Section 2. The corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if he or she acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his or her duty to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. Section 3. To the extent that a director, officer, employee or agent of the corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections 1. and 2., or in defense of any claim, issue or matter therein, such individual shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him or her in connection therewith. Section 4. Any indemnification under Sections 1. and 2. (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he or she has met the applicable standard of conduct set forth in Sections 1. and 2. Such determination shall be made (1) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (3) by the stockholders. Section 5. Expenses incurred by an officer or director in defending a civil or criminal action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding as authorized by the board of directors in the specific case upon receipt of an undertaking by or on behalf of such director or officer to repay such amount unless it shall ultimately be determined that such individual is entitled to be indemnified by the corporation as authorized in this Section. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the board of directors deems appropriate. Section 6. The indemnification provided by this Article VII shall not be exclusive of any other rights to which those seeking indemnification may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such individual's official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. Section 7. The corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such in any such capacity, or arising out of his or her status as such, whether or not the corporation would have the power to indemnify against such liability under the provisions of this section. Section 8. For purposes of this Article VII, references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued. Section 9. For purposes of this Article VII, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to "serving at the request of the corporation" shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the corporation" as referred to in this Article VII. ARTICLE VIII GENERAL PROVISIONS DIVIDENDS Section 1. Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the board of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation. Section 2. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created. ANNUAL STATEMENT Section 3. The board of directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation. CHECKS Section 4. All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate. FISCAL YEAR Section 5. The fiscal year of the corporation shall be fixed by resolution of the board of directors. SEAL Section 6. The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. ARTICLE IX AMENDMENTS Section 1. These bylaws may be altered, amended or repealed or new bylaws may be adopted by the stockholders or by the board of directors, when such power is conferred upon the board of directors by the certificate of incorporation at any regular meeting of the stockholders or of the board of directors or at any special meeting of the stockholders or of the board of directors if notice of such alteration, amendment, repeal or adoption of new bylaws be contained in the notice of such special meeting. If the power to adopt, amend or repeal bylaws is conferred upon the board of directors by the certificate of incorporation it shall not divest or limit the power of the stockholders to adopt, amend or repeal bylaws. -----END PRIVACY-ENHANCED MESSAGE-----