As filed with the Securities and Exchange Commission on June 29, 1998.
Registration No. 333-56055
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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TEXAS UTILITIES COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 75-2669310
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1601 Bryan Street
Dallas, Texas 75201
(214) 812-4600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
ROBERT A. WOOLDRIDGE, Esq. PETER B. TINKHAM ROBERT J. REGER, JR.,
Worsham, Forsythe Texas Utilities Esq.
& Wooldridge, L.L.P. Company Reid & Priest LLP
1601 Bryan Street Secretary and 40 West 57th Street
Dallas, Texas 75201 Assistant New York, New York 10019
(214) 979-3000 Treasurer (212) 603-2000
1601 Bryan Street
Dallas, Texas
75201
(214) 812-4600
(NAMES AND ADDRESSES, INCLUDING ZIP CODES, AND TELEPHONE NUMBERS, INCLUDING
AREA CODES, OF AGENTS FOR SERVICE)
--------------------
It is respectfully requested that the Commission send copies of all
notices, orders and communications to:
STEPHEN K. WAITE, Esq.
Winthrop, Stimson, Putnam & Roberts
One Battery Park Plaza
New York, New York 10004-1490
(212) 858-1000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM
TIME TO TIME AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE WHEN
WARRANTED BY MARKET CONDITIONS AND OTHER FACTORS.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE
FOLLOWING BOX. [ ]
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE
OFFERED ON A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE
SECURITIES ACT OF 1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION
WITH DIVIDEND OR INTEREST REINVESTMENT PLANS, CHECK THE FOLLOWING BOX. [x]
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN
OFFERING PURSUANT TO RULE 462(B) UNDER THE SECURITIES ACT, PLEASE CHECK THE
FOLLOWING BOX AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF
THE EARLIER EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING. [ ]
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE
462(C) UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE
SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE
REGISTRATION STATEMENT FOR THE SAME OFFERING. [ ]
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE
434, PLEASE CHECK THE FOLLOWING BOX. [ ]
--------------------
<PAGE>
CALCULATION OF REGISTRATION FEE
===========================================================================
TITLE OF PROPOSED PROPOSED
EACH CLASS MAXIMUM MAXIMUM
OF SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER UNIT PRICE FEE
--------------------------------------------------------------------------
Common Stock,
without par
value .......... (1) (2) (1)(2) N/A
--------------------------------------------------------------------------
Stock
Purchase
Contracts(3) ... (1) (2) (1)(2) N/A
--------------------------------------------------------------------------
Stock
Purchase
Units(3) ....... (1) (2) (1)(2) N/A
--------------------------------------------------------------------------
Debt
Securities ..... (1)(5) (2) (1)(2)(4)(5) N/A
--------------------------------------------------------------------------
Total ..... $2,070,000,000 (2) $2,070,000,000(4) $610,650(6)
==========================================================================
(1) In no event will the aggregate initial offering price of all Common
Stock, Stock Purchase Contracts, Stock Purchase Units and Debt
Securities issued from time to time pursuant to this Registration
Statement exceed $2,070,000,000. If any such securities are issued at
an original issue discount, then the aggregate initial offering price
as so discounted shall not exceed $2,070,000,000, notwithstanding that
the stated principal amount of such securities may exceed such amount.
(2) The proposed maximum initial offering price per unit will be
determined, from time to time, by the registrant in connection with
the issuance of the Securities registered hereunder.
(3) Subject to footnote (1), there are being registered hereunder an
indeterminate number of shares of Common Stock issuable by the Company
upon settlement of the Stock Purchase Contracts or Stock Purchase
Units.
(4) Exclusive of accrued interest or distributions, if any.
(5) Subject to footnote (1), there are being registered hereunder an
indeterminate principal amount of Debt Securities which may be sold,
from time to time, by the Company.
(6) In connection with the initial filing of this Registration Statement
on June 4, 1998, $265,500 of this registration fee was paid.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT
THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT.
A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY
NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME
THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS
SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY
JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL
PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
SUCH JURISDICTION.
SUBJECT TO COMPLETION, DATED JUNE 29, 1998
PROSPECTUS
$2,070,000,000
TEXAS UTILITIES COMPANY
DEBT SECURITIES, COMMON STOCK,
STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
Texas Utilities Company (Company), directly or through such agents,
dealers or underwriters as may be designated from time to time, may offer,
issue and sell, together or separately, (i) its debt securities (Debt
Securities), (ii) shares of its common stock, without par value (Common
Stock), (iii) contracts to purchase shares of Common Stock (Stock Purchase
Contracts) and (iv) units, each representing ownership of a Stock Purchase
Contract and Debt Securities or debt obligations of third parties,
including U.S. Treasury securities, pledged to secure the holder's
obligation to purchase Common Stock under the Stock Purchase Contracts
(Stock Purchase Units).
The Debt Securities, Common Stock, Stock Purchase Contracts and Stock
Purchase Units are herein collectively referred to as the "Securities," and
Securities having an aggregate public offering price of up to
$2,070,000,000 (or its equivalent in foreign currencies or foreign currency
units based on the applicable exchange rate at the time of offering) will
be issued in amounts, at prices and on terms to be determined at the time
of sale.
The form in which the Securities are to be issued, their specific
designation, aggregate principal amount or aggregate initial offering
price, maturity, if any, rate and times of payment of interest or
dividends, if any, redemption, conversion, and sinking fund terms or other
rights, if any, exercise price and detachability, if any, and other
specific terms may also be set forth in a Prospectus Supplement, together
with the terms of an offering of such Securities. Any such Prospectus
Supplement will also contain information, as applicable, about certain
material United States Federal income tax considerations relating to the
particular Securities offered thereby.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The Securities may be sold directly by the Company, through agents
designated from time to time or to or through underwriters or dealers. The
Company reserves the sole right to accept, and together with its agents,
from time to time, to reject in whole or in part any proposed purchase of
Securities to be made directly or through agents. If any agents or
underwriters are involved in the sale of any Securities, the names of such
agents or underwriters and any applicable fees, commissions or discounts
will be set forth in Prospectus Supplement with respect to such Securities
(Prospectus Supplement). See PLAN OF DISTRIBUTION.
This Prospectus may not be used to consummate any sale of Securities
unless accompanied by a Prospectus Supplement.
The Common Stock of the Company is listed on the New York, Chicago and
Pacific stock exchanges under the symbol "TXU". Any Prospectus Supplement
will also contain information, where applicable, as to any other listing on
a securities exchange of the Securities covered by such Prospectus
Supplement.
The date of this Prospectus is ____________, 1998
<PAGE>
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS OR INCORPORATED HEREIN BY REFERENCE IN CONNECTION WITH THE
OFFERING DESCRIBED HEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY UNDERWRITER, DEALER OR AGENT INVOLVED IN THE OFFERING
DESCRIBED HEREIN. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THOSE
SPECIFICALLY OFFERED HEREBY OR OF ANY SECURITIES OFFERED HEREBY IN ANY
JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE.
AVAILABLE INFORMATION
On August 5, 1997, the Company became a holding company which
owns all of the outstanding common stock of Texas Energy Industries, Inc.
(formerly Texas Utilities Company) (TEI) (Commission File No. 1-3591) and
ENSERCH Corporation (ENSERCH) (Commission File No. 1-3183). The Company
is, and TEI and ENSERCH have been, subject to the informational
requirements of the Securities and Exchange Act of 1934, as amended
(Exchange Act), and in accordance therewith the Company files, and its
predecessors have filed, reports, proxy statements and other information
with the Commission. Such reports, proxy statements and other information
filed by the Company and its predecessors can be inspected and copied at
the public reference facilities maintained by the Commission at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the following
Regional Offices of the Commission: Chicago Regional Office, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661; and New York Regional
Office, 7 World Trade Center, Suite 1300, New York, New York 10048. Copies
of such material can also be obtained from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. In addition, the Commission maintains a World Wide Web
site (http://www.sec.gov) that contains reports and other information filed
by the Company, TEI and ENSERCH. The Common Stock of the Company is listed
on the New York, Chicago and Pacific stock exchanges, where reports, proxy
statements and other information concerning the Company and TEI may be
inspected. Reports, proxy statements and other information concerning
ENSERCH may be inspected at the New York and Chicago stock exchanges.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents, previously filed with the Commission
(Commission File No. 1-12833), pursuant to the Exchange Act, are
incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1997 (1997 10-K).
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998.
3. The Company's Current Reports on Form 8-K dated February 26, 1998,
March 13, 1998, April 8, 1998, April 9, 1998, April 17, 1998 and May 27,
1998 (as amended on June 25, 1998).
All documents filed by the Company pursuant to the Exchange Act after
the date of filing of the Registration Statement in which this Prospectus
is included and prior to effectiveness of such Registration Statement shall
be deemed to be incorporated by reference in this Prospectus and to be a
part hereof from the date of filing of such documents. All documents filed
by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this Prospectus and prior to the termination
of the offering hereunder shall be deemed to be incorporated by reference
in this Prospectus and to be a part hereof from the date of filing of such
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<PAGE>
documents; provided, however, that the documents enumerated above or
subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act prior to the filing with the Commission of the
Company's most recent Annual Report on Form 10-K shall not be incorporated
by reference in this Prospectus or be a part hereof from and after the
filing of such Annual Report on Form 10-K. The documents which are
incorporated by reference in this Prospectus are sometimes hereinafter
referred to as the "Incorporated Documents."
Any statement contained in an Incorporated Document shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed
document which is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a
part of this Prospectus.
THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH
PERSON, INCLUDING ANY BENEFICIAL OWNER OF SECURITIES, TO WHOM A COPY OF
THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY
SUCH PERSON, A COPY OF ANY AND ALL OF THE INCORPORATED DOCUMENTS, OTHER
THAN EXHIBITS TO SUCH DOCUMENTS (UNLESS SUCH EXHIBITS ARE SPECIFICALLY
INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS) AND ANY APPLICABLE INDENTURE
AND OFFICER'S CERTIFICATE, EACH AS DESCRIBED HEREIN. REQUESTS FOR SUCH
COPIES SHOULD BE DIRECTED TO: SECRETARY, TEXAS UTILITIES COMPANY, ENERGY
PLAZA, 1601 BRYAN STREET, DALLAS, TEXAS 75201; TELEPHONE NUMBER (214) 812-
4600.
THE COMPANY
The Company is a Texas corporation organized in 1996 for the purpose
of becoming the holding company for TEI, formerly Texas Utilities Company,
and ENSERCH upon the mergers of TEI and ENSERCH with wholly owned
subsidiaries of the Company.
TEI, a Texas corporation, is a holding company whose principal
subsidiary, Texas Utilities Electric Company (TU Electric), is an operating
public utility company engaged in the generation, purchase, transmission,
distribution and sale of electric energy in the north central, eastern and
western portions of Texas, an area with a population estimated at
6,020,000. TU Electric's operating revenues and consolidated net income
available for common stock for the twelve months ended December 31, 1997
were $6,135,417,000 and $745,024,000, respectively. TU Electric's total
capitalization at December 31, 1997 was $12,798,832,000. Two other
subsidiaries of TEI are engaged directly or indirectly in electric utility
operations: (i) Southwestern Electric Service Company (SESCO), which is
engaged in the purchase, transmission, distribution and sale of electric
energy in ten counties in the eastern and central parts of Texas, with a
population estimated at 126,900 and (ii) Texas Utilities Australia Pty.
Ltd. (TU Australia), which in 1995 acquired the common stock of Eastern
Energy Limited, a company engaged in the purchase, distribution, marketing
and sale of electric energy to approximately 489,000 customers in the
Melbourne area of Australia. Neither SESCO nor Eastern Energy Limited
generates any electricity. In November 1997, the Company consummated the
acquisition of Lufkin Conroe Communications Co. (LCC), a privately held,
independent local exchange telephone company, which subsequently became a
subsidiary of TEI. LCC has sixteen exchanges that serve approximately
100,000 access lines in the Alto, Conroe and Lufkin areas of southeast
Texas and also provides access services to a number of interexchange
carriers who provide long distance services. TEI also has other wholly
owned subsidiaries which perform specialized functions within the Texas
Utilities Company system.
ENSERCH, a Texas corporation, is an integrated company focused on
natural gas. ENSERCH operates primarily in the north central and eastern
parts of Texas. Its major business operations are natural gas pipeline,
processing, marketing and distribution. Through these business operations,
ENSERCH is engaged in owning and operating interconnected natural gas
transmission lines, underground storage reservoirs, compressor stations and
related properties in Texas; gathering and processing natural gas to remove
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<PAGE>
impurities and extract liquid hydrocarbons for sale, and the wholesale and
retail marketing of natural gas in several areas of the United States, and
owning and operating approximately 550 local gas utility distribution
systems in Texas.
In March 1998, the Company announced an offer by its wholly owned
subsidiary, TU Acquisitions PLC (TU Acquisitions), to acquire 100% of the
ordinary shares of The Energy Group PLC (TEG), including the ordinary
shares evidenced by American Depository Receipts, for 8.40 pound sterling
per share. Under the Company's offer, up to 20% of the TEG shares may be
exchanged for Company Common Stock with a value of approximately 8.65 pound
sterling per TEG share. TEG is the holding company for The Eastern Group
PLC, which is one of the largest regional electric companies in the United
Kingdom (U.K.), one of the largest U.K. generators of electricity and one
of the largest U.K. suppliers of natural gas. On May 19, 1998, the Company
declared its offer unconditional. At June 22, 1998 the Company had
acquired approximately 94.43% of TEG's issued share capital and is in the
process of acquiring the remaining shares.
The TEG businesses acquired by the Company (which exclude TEG's
Peabody Coal and Citizens Power businesses, which were sold by TEG to an
unaffiliated party in connection with the Company's offer) had assets of
approximately $10.2 billion at September 30, 1997 and $5.5 billion of
revenues for the twelve months ended December 31, 1997. Such businesses
had debt outstanding at September 30, 1997 of approximately $3.8 billion.
The estimated purchase price for the TEG shares is approximately $7.2
billion. The Company and TU Acquisitions and other intermediate U.K.
holding companies have entered into credit facilities with banking
institutions in the United States (U.S.) and the U.K., respectively, which
will provide committed financing sufficient to purchase the outstanding TEG
shares and pay related expenses.
In February 1998, the Company announced an offer through its wholly-
owned subsidiary, TU Australia, to acquire Allgas Energy Limited (Allgas),
a publicly held gas distribution company in Queensland, Australia. The
original offer, a combined cash and option offer of approximately $138
million, which was increased to approximately $145 million in April 1998,
is subject to acceptance by holders of at least 51% of Allgas outstanding
shares and the waiver by the Queensland government of the current 12.5%
limit on individual share holdings in Allgas. The Queensland government
has announced that this limitation will be lifted on July 1, 1998. TU
Australia has acquired 12.49% of the outstanding shares of Allgas. The
Company's bid has already received all necessary Australian and U.S.
regulatory approvals. Two competing bids are still outstanding. One
competing bid is at a lower price than TU Australia's and the other is at a
higher price. Both competing bids are subject to additional regulatory
approvals. Shareholders of Allgas now have through July 10, 1998 to accept
the Company's offer. The offer will be funded by TU Australia's cash flows
and bank lines.
The principal executive offices of the Company are located at 1601
Bryan Street, Dallas, Texas 75201-3411; the telephone number is (214) 812-
4600.
USE OF PROCEEDS
Unless otherwise set forth in a Prospectus Supplement, the net
proceeds from the offering of the Securities will be used for general
corporate purposes, including the repayment of short-term indebtedness
incurred in connection with the purchase of TEG shares.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for each of the years ended
December 31, 1993 through 1997 and the twelve months ended March 31, 1998
was 1.89, 2.29, 0.84, 2.39, 2.25 and 2.24, respectively. The twelve-month
period ended December 31, 1993 was affected by the recording of regulatory
disallowances of approximately $265 million after tax in TU Electric's
Docket 11735. The twelve-month period ended December 31, 1995 was affected
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<PAGE>
by the impairment of several nonperforming assets, including TU Electric's
partially completed Twin Oak and Forest Grove lignite-fueled facilities and
the New Mexico coal reserves of a subsidiary, as well as several minor
assets. Such impairment, on an after-tax basis, amounted to $802 million.
The twelve-month period ended December 31, 1997 includes a one time base
revenue refund of $80 million as a result of a settlement with the Public
Utility Commission of Texas.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued in one or more series under an
indenture or indentures (each an Indenture) between the Company and The
Bank of New York or other financial institutions to be named, as Trustee
(each an Indenture Trustee), a form of which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. The
following description of the terms of the Debt Securities does not purport
to be complete and is qualified in its entirety by reference to (i) the
respective Indenture and (ii) one or more officer's certificates
establishing the Debt Securities to which a form of Debt Security will be
attached. Whenever particular provisions or defined terms in an Indenture
are referred to under this DESCRIPTION OF DEBT SECURITIES, such provisions
or defined terms are incorporated by reference herein.
General. Each Indenture will provide for the issuance of Debt
Securities in an unlimited amount from time to time. All Debt Securities
will be unsecured obligations of the Company. All Debt Securities issued
under an Indenture will rank equally and ratably with all other Debt
Securities issued under such Indenture. An Indenture will not limit other
unsecured debt. The Company's financial statements included in the
Incorporated Documents show the amount of such other debt at the date of
such statements. See the Prospectus Supplement applicable to each series
of offered Debt Securities.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the Debt Securities: (1) the title of the
Debt Securities; (2) any limit upon the aggregate principal amount of the
Debt Securities; (3) the date or dates on which the principal of the Debt
Securities is payable or the method of determination thereof; (4) the rate
or rates, if any, or the method by which such rate will be determined, at
which the Debt Securities will bear interest, if any, the date or dates
from which any such interest will accrue, the Interest Payment Dates on
which any such interest will be payable, the Regular Record Date for any
interest payable on any Interest Payment Date and the Person or Persons to
whom interest on such Debt Securities will be payable on any Interest
Payment Date, if other than the Persons in whose names such Debt Securities
are registered at the close of business on the Regular Record Date for such
interest; (5) any right under the Indenture to extend the interest payment
period from time to time on the Debt Securities; (6) the place or places
where, subject to the terms of the respective Indenture as described below
under "Payment and Paying Agents," the principal of and premium, if any,
and interest on the Debt Securities will be payable and where, subject to
the terms of such Indenture as described below under "Registration and
Transfer," the Debt Securities may be presented for registration of
transfer or exchange and the place or places where notices and demands to
or upon the Company in respect of the Debt Securities and such Indenture
may be served; the Security Registrar for such Debt Securities; and, if
such is the case, that the principal of such Debt Securities will be
payable without presentment or surrender thereof; (7) the period or periods
within, or date or dates on, which, the price or prices at which and the
terms and conditions upon which Debt Securities may be redeemed, in whole
or in part, at the option of the Company; (8) the obligation or
obligations, if any, of the Company to redeem or purchase any of the Debt
Securities pursuant to any sinking fund or other mandatory redemption
provisions or at the option of the Holder thereof, and the period or
periods within which, or the date or dates on which, the price or prices at
which and the terms and conditions upon which the Debt Securities will be
redeemed or purchased, in whole or in part, pursuant to such obligation,
and applicable exceptions to the requirements of a notice of redemption in
the case of mandatory redemption or redemption at the option of the Holder;
(9) the denominations in which any Debt Securities will be issuable, if
other than denominations of $1,000 and any integral multiple thereof; (10)
the currency or currencies, including composite currencies in which the
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<PAGE>
principal of or any premium or interest on the Debt Securities will be
payable (if other than in Dollars); (11) if the principal of or any premium
or interest on the Debt Securities is to be payable, at the election of the
Company or the Holder thereof, in a coin or currency other than that in
which the Debt Securities are stated to be payable, the period or periods
within which and the terms and conditions upon which, such election is to
be made; (12) if the principal of or premium or interest on the Debt
Securities is to be payable, or is to be payable at the election of the
Company or a Holder thereof, in securities or other property, the type and
amount of such securities or other property, or the method or other means
by which such amount will be determined, and the period or periods within
which, and the terms and conditions upon which, any such election may be
made; (13) if the amount payable in respect of principal of or any premium
or interest on the Debt Securities may be determined with reference to an
index or other fact or event ascertainable outside of the respective
Indenture, the manner in which such amounts will be determined; (14) if
other than the principal amount thereof, the portion of the principal
amount of the Debt Securities which will be payable upon declaration of
acceleration of the Maturity thereof; (15) any Events of Default, in
addition to those specified in the respective Indenture, with respect to
the Debt Securities and any covenants of the Company for the benefit of the
Holders of the Debt Securities, in addition to those specified in such
Indenture; (16) the terms, if any, pursuant to which the Debt Securities
may be converted into or exchanged for shares of capital stock or other
securities of the Company or any other Person; (17) the obligations or
instruments, if any, which will be considered to be Eligible Obligations in
respect of such Debt Securities denominated in a currency other than
Dollars or in a composite currency, and any additional or alternative
provisions for the reinstatement of the Company's indebtedness in respect
of such Debt Securities after the satisfaction and discharge thereof; (18)
if the Debt Securities are to be issued in global form, (i) any limitations
on the rights of the Holder or Holders of such Debt Securities to transfer
or exchange the same or to obtain the registration of transfer thereof,
(ii) any limitations on the rights of the Holder or Holders thereof to
obtain certificates therefor in definitive form in lieu of temporary form
and (iii) any and all other matters incidental to such Debt Securities;
(19) if the Debt Securities are to be issuable as bearer securities, any
and all matters incidental thereto; (20) to the extent not addressed in
item (18) above, any limitations on the rights of the Holders of the Debt
Securities to transfer or exchange the Debt Securities or to obtain the
registration of transfer thereof, and if a service charge will be made for
the registration of transfer or exchange of the Debt Securities, the amount
or terms thereof; (21) any exceptions to the provisions governing payments
due on legal holidays or any variations in the definition of Business Day
with respect to such Debt Securities; (22) any collateral security,
assurance or guarantee for the Debt Securities; (23) the non-applicability
of the limitation on liens provisions to the Debt Securities; (24) any
rights or duties of another Person to assume the obligations of the Company
with respect to the Debt Securities and any rights or duties to discharge
and release any obligor with respect to such Debt Securities or the
Indenture to the extent related to such Debt Securities; and (25) any other
terms of the Debt Securities, not inconsistent with the provisions of the
respective Indenture (Indenture, Section 301).
Debt Securities may be sold at a discount below their principal
amount. Certain special United States federal income tax considerations,
if any, applicable to Debt Securities sold at an original issue discount
may be described in the applicable Prospectus Supplement. In addition,
certain special United States federal income tax or other considerations,
if any, applicable to any Debt Securities which are denominated in a
currency or currency unit other than Dollars may be described in the
applicable Prospectus Supplement.
Except as may otherwise be described in the applicable Prospectus
Supplement, the covenants contained in an Indenture will not afford Holders
of Debt Securities protection in the event of a highly-leveraged
transaction involving the Company.
Payment and Paying Agents. Except as may be provided in the
applicable Prospectus Supplement, interest, if any, on each Debt Security
payable on each Interest Payment Date will be paid to the Person in whose
name such Debt Security is registered as of the close of business on the
Regular Record Date relating to such Interest Payment Date; provided,
however, that interest payable at maturity (whether at stated maturity,
upon redemption or otherwise, herein a Maturity) will be paid to the
Person to whom principal is paid. However, if there has been a default in
the payment of interest on any Debt Security, such defaulted interest may
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be payable to the Holder of such Debt Security as of the close of business
on a date selected by the respective Indenture Trustee which is not more
than 15 days and not less than 10 days prior to the date proposed by the
Company for payment on such defaulted interest or in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which such Debt Security may be listed, if such Indenture Trustee deems
such manner of payment practicable (Indenture, Section 307).
Unless otherwise specified in the applicable Prospectus Supplement,
the principal of and premium, if any, and interest on, the Debt Securities
at Maturity will be payable upon presentation of the Debt Securities at the
corporate trust office of The Bank of New York, in The City of New York, as
Paying Agent for the Company. The Company may change the Place of Payment
on the Debt Securities, may appoint one or more additional Paying Agents
(including the Company) and may remove any Paying Agent, all at its
discretion (Indenture, Section 602).
Registration and Transfer. Unless otherwise specified in the
applicable Prospectus Supplement, the transfer of Debt Securities may be
registered, and Debt Securities may be exchanged for other Debt Securities
of the same series or tranche, of authorized denominations and of like
tenor and aggregate principal amount, at the corporate trust office of The
Bank of New York in The City of New York, as Security Registrar for the
Debt Securities. The Company may change the place for registration of
transfer and exchange of the Debt Securities and may designate one or more
additional places for such registration and exchange, all at its
discretion. Except as otherwise provided in the applicable Prospectus
Supplement, no service charge will be made for any transfer or exchange of
the Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of the
Debt Securities. The Company will not be required to execute or to provide
for the registration of transfer of, or the exchange of, (a) any Debt
Security during a period of 15 days prior to giving any notice of
redemption or (b) any Debt Security selected for redemption in whole or in
part, except the unredeemed portion of any Debt Security being redeemed in
part (Indenture, Section 305).
Defeasance. The principal amount of any series of Debt Securities
issued under an Indenture will be deemed to have been paid for purposes of
such Indenture and the entire indebtedness of the Company in respect
thereof will be deemed to have been satisfied and discharged if there shall
have been irrevocably deposited with the respective Indenture Trustee or
any paying agent, in trust: (a) money in an amount which will be
sufficient, or (b) in the case of a deposit made prior to the maturity of
the Debt Securities, Eligible Obligations (as defined below), the principal
of and the interest on which when due, without any regard to reinvestment
thereof, will provide moneys which, together with the money, if any,
deposited with or held by such Indenture Trustee, will be sufficient, or
(c) a combination of (a) and (b) which will be sufficient, to pay when due
the principal of and premium, if any, and interest, if any, due and to
become due on the Debt Securities of such series that are Outstanding. For
this purpose, Eligible Obligations include direct obligations of, or
obligations unconditionally guaranteed by, the United States of America
entitled to the benefit of the full faith and credit thereof and
certificates, depositary receipts or other instruments which evidence a
direct ownership interest in such obligations or in any specific interest
or principal payments due in respect thereof and which do not contain
provisions permitting the redemption or other prepayment thereof at the
option of the issuer thereof (Indenture, Section 701).
Limitation on Liens. The Indenture provides that, except as otherwise
specified with respect to a particular series of Debt Securities, so long
as any Debt Securities of any series are Outstanding, the Company will not
pledge, mortgage, hypothecate or grant a security interest in, or permit
any mortgage, pledge, security interest or other lien upon, any capital
stock of any Subsidiary (hereinafter defined) now or hereafter owned by the
Company to secure any Indebtedness (hereinafter defined), without making
effective provision whereby the Outstanding Debt Securities shall (so long
as such other Indebtedness shall be so secured) be equally and ratably
secured with any and all such other Indebtedness and any other indebtedness
similarly entitled to be equally and ratably secured. This restriction
does not apply to, or prevent the creation or existence of, (i) any
mortgage, pledge, security interest, lien or encumbrance upon any such
capital stock created at the time of the acquisition of such capital stock
by the Company or within one year after such time to secure all or a
portion of the purchase price for such capital stock; (ii) any mortgage,
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pledge, security interest, lien or encumbrance upon any such capital stock
existing thereon at the time of the acquisition thereof by the Company
(whether or not the obligations secured thereby are assumed by the
Company); or (iii) any extension, renewal or refunding of any mortgage,
pledge, security interest, lien or encumbrance described in (i) or (ii)
above on capital stock of any Subsidiary theretofore subject thereto (or
substantially the same capital stock) or any portion thereof. In addition,
this restriction will not apply to, and there will be excluded in computing
secured Indebtedness for the purpose of such restriction, Indebtedness
secured by any judgment, levy, execution, attachment or other similar lien
arising in connection with court proceedings, provided that either (i) the
execution or enforcement of each such lien is effectively stayed within 30
days after entry of the corresponding judgment (or the corresponding
judgment has been discharged within such 30 day period) and the claims
secured thereby are being contested in good faith by appropriate
proceedings timely commenced and diligently prosecuted; (ii) the payment of
each such lien is covered in full by insurance and the insurance company
has not denied or contested coverage thereof; or (iii) so long as each such
lien is adequately bonded, any appropriate legal proceedings that may have
been duly initiated for the review of the corresponding judgment, decree or
order shall not have been fully terminated or the period within which such
proceedings may be initiated shall not have expired (Indenture, Section
608).
For purposes of the restriction described in the preceding paragraph,
"Indebtedness" means (i) all indebtedness, whether or not represented by
bonds, debentures, notes or other securities, created or assumed by the
Company for the repayment of money borrowed; (ii) all indebtedness for
money borrowed secured by a lien upon property owned by the Company and
upon which indebtedness for money borrowed the Company customarily pays
interest, although the Company has not assumed or become liable for the
payment of such indebtedness for money borrowed; and (iii) all indebtedness
of others for money borrowed which is guaranteed as to payment of principal
by the Company or in effect guaranteed by the Company through a contingent
agreement to purchase such indebtedness for money borrowed, but excluding
from this definition any other contingent obligation of the Company in
respect of indebtedness for money borrowed or other obligations incurred by
others (Indenture, Section 608). "Subsidiary" means a corporation more
than 50% of the outstanding voting stock of which is owned, directly or
indirectly, by the Company or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries. For the purposes of this
definition, "voting stock" means stock that ordinarily has voting power for
the election of directors, whether at all times or only so long as no
senior class of stock has such voting power by reason of any contingency
(Indenture, Section 101).
Notwithstanding the foregoing, except as otherwise specified in the
Officer's Certificate with respect to a particular series of Debt
Securities, the Company may, without securing the Debt Securities, pledge,
mortgage, hypothecate or grant a security interest in, or permit any
mortgage, pledge, security interest or other lien (in addition to liens
expressly permitted as described in the second preceding paragraph) upon,
capital stock of any Subsidiary now or hereafter owned by the Company to
secure any Indebtedness (which would otherwise be subject to the foregoing
restriction) in an aggregate amount which, together with all other such
Indebtedness, does not exceed 5% of Consolidated Capitalization. For this
purpose, "Consolidated Capitalization" means the sum obtained by adding (i)
Consolidated Shareholders' Equity, (ii) Consolidated Indebtedness for money
borrowed (exclusive of any thereof which is due and payable within one year
of the date such sum is determined) and, without duplication, (iii) any
preference or preferred stock of the Company or any Consolidated Subsidiary
which is subject to mandatory redemption or sinking fund provisions
(Indenture, Section 608).
The term "Consolidated Shareholders' Equity" (as used above) means the
total Assets of the Company and its Consolidated Subsidiaries less all
liabilities of the Company and its Consolidated Subsidiaries. As used in
the foregoing definition, "liabilities" means all obligations which would,
in accordance with generally accepted accounting principles in the United
States, be classified on a balance sheet as liabilities, including without
limitation, (i) indebtedness secured by property of the Company or any of
its Consolidated Subsidiaries whether or not the Company or such
Consolidated Subsidiary is liable for the payment thereof unless, in the
case that the Company or such Consolidated Subsidiary is not so liable,
such property has not been included among the Assets of the Company or such
Consolidated Subsidiary on such balance sheet, (ii) deferred liabilities
and (iii) indebtedness of the Company or any of its Consolidated
Subsidiaries that is expressly subordinated in right and priority of
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payment to other liabilities of the Company or such Consolidated
Subsidiary. As used in this definition, "liabilities" includes preference
or preferred stock of the Company or any Consolidated Subsidiary only to
the extent of any such preference or preferred stock that is subject to
mandatory redemption or sinking fund provisions (Indenture, Section 608).
The term "Consolidated Subsidiary" (as used above) means at any date
any Subsidiary the financial statements of which under generally accepted
accounting principles would be consolidated with those of the Company in
its consolidated financial statements as of such date. The "Assets" of any
Person means the whole or any part of its business, property, assets, cash
and receivables. The term "Consolidated Indebtedness" means total
indebtedness as shown on the consolidated balance sheet of the Company and
its Consolidated Subsidiaries (Indenture, Section 608).
As of December 31, 1997, the Consolidated Capitalization of the
Company was $16,802,381,000.
Assignment of Obligations. The Company may assign its obligations
under any series of the Debt Securities to a directly or indirectly wholly-
owned subsidiary of the Company pursuant to a written assumption of such
obligations by such subsidiary, provided that no Event of Default, or event
which with the passage of time or the giving of required notice, or both,
would become an Event of Default, has occurred and is continuing. As
conditions to such assumption, the subsidiary assuming such obligations
will be required to deliver to the Trustee and to the Company an assumption
agreement and a supplemental indenture satisfactory in form and substance
to the Trustee pursuant to which such subsidiary (i) assumes, on a full
recourse basis, the Company's obligations on the Debt Securities and the
obligations under the Indenture relating to the Debt Securities, and
(ii) agrees that any covenants made by the Company with respect to such
Debt Securities will become solely covenants of, and shall relate to, such
subsidiary.
At the time of such assumption the Company will unconditionally
guarantee payment of such series of Debt Securities and will execute a
guarantee in form and substance satisfactory to the Trustee. Pursuant to
such guarantee, the Company will fully and unconditionally guarantee the
payment of the obligations of the assuming subsidiary under the Debt
Securities and under the Indenture relating to the Debt Securities,
including, without limitation, payment, as and when due, of the principal
of, premium, if any, and interest on, the Debt Securities. The Company
will be released and discharged from all its other obligations under the
Indenture.
Consolidation, Merger, and Sale of Assets. Under the terms of an
Indenture, the Company may not consolidate with or merge into any other
entity or convey, transfer or lease its properties and assets substantially
as an entirety to any entity, unless (i) the entity formed by such
consolidation or into which the Company is merged or the entity which
acquires by conveyance or transfer, or which leases, the property and
assets of the Company substantially as an entirety shall be a entity
organized and validly existing under the laws of any domestic jurisdiction
and such entity expressly assumes the Company's obligations on all Debt
Securities and under such Indenture, (ii) immediately after giving effect
to the transaction, no Event of Default, and no event which, after notice
or lapse of time or both, would become an Event of Default, shall have
occurred and be continuing, and (iii) the Company shall have delivered to
the respective Indenture Trustee an Officer's Certificate and an Opinion of
Counsel as provided in such Indenture (Indenture, Section 1101). The terms
of an Indenture will not restrict the Company in a merger in which the
Company is the surviving entity.
Events of Default. Each of the following will constitute an Event of
Default under the Indenture with respect to the Debt Securities of any
series: (a) failure to pay any interest on the Debt Securities of such
series within 30 days after the same becomes due and payable; (b) failure
to pay principal or premium, if any, on the Debt Securities of such series
when due and payable; (c) failure to perform, or breach of, any other
covenant or warranty of the Company in such Indenture (other than a
covenant or warranty of the Company in such Indenture solely for the
benefit of one or more series of Debt Securities other than such series)
for 90 days after written notice to the Company by the respective Indenture
Trustee, or to the Company and such Indenture Trustee by the Holders of at
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least 33% in principal amount of the Debt Securities of such series
Outstanding under such Indenture as provided in such Indenture; (d) the
entry by a court having jurisdiction in the premises of (1) a decree or
order for relief in respect of the Company in an involuntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or (2) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
by one or more Persons other than the Company seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official for the Company or for any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and any such decree
or order for relief or any such other decree or order shall have remained
unstayed and in effect for a period of 90 consecutive days; and (e) the
commencement by the Company of a voluntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a bankrupt
or insolvent, or the consent by it to the entry of a decree or order for
relief in respect of the Company in a case or other similar proceeding or
to the commencement of any bankruptcy or insolvency case or proceeding
against it under any applicable federal or state law or the filing by it of
a petition or answer or consent seeking reorganization or relief under any
applicable federal or state law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official
of the Company of any substantial part of its property, or the making by it
of an assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due, or
the authorization of such action by the Board of Directors (Indenture,
Section 801).
An Event of Default with respect to the Debt Securities of a
particular series may not necessarily constitute an Event of Default with
respect to Debt Securities of any other series issued under the same
Indenture or Debt Securities issued under any other Indenture.
Remedies. If an Event of Default due to the default in payment of
principal of or interest on any series of Debt Securities or due to the
default in the performance or breach of any other covenant or warranty of
the Company applicable to the Debt Securities of such series but not
applicable to all series of Debt Securities issued under the same Indenture
occurs and is continuing, then either the respective Indenture Trustee or
the Holders of not less than 33% in principal amount of the outstanding
Debt Securities of such series may declare the principal of all of the Debt
Securities of such series and interest accrued thereon to be due and
payable immediately. If an Event of Default due to the default in the
performance of any other covenants or agreements in an Indenture applicable
to all Outstanding Debt Securities under such Indenture or due to certain
events of bankruptcy, insolvency or reorganization of the Company has
occurred and is continuing, either the respective Indenture Trustee or the
Holders of not less than 33% in principal amount of all such Outstanding
Debt Securities, considered as one class, and not the Holders of the Debt
Securities of any one of such series, may make such declaration of
acceleration.
At any time after the declaration of acceleration with respect to the
Debt Securities of any series has been made and before a judgment or decree
for payment of the money due has been obtained, the Event or Events of
Default giving rise to such declaration of acceleration will, without
further act, be deemed to have been waived, and such declaration and its
consequences will, without further act, be deemed to have been rescinded
and annulled, if:
(a) the Company has paid or deposited with the respective Indenture
Trustee a sum sufficient to pay
(1) all overdue interest on all Debt Securities of such series;
(2) the principal of and premium, if any, on any Debt Securities
of such series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or rates
prescribed therefor in such Debt Securities;
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(3) interest upon overdue interest at the rate or rates
prescribed therefor in such Debt Securities, to the extent that
payment of such interest is lawful; and
(4) all amounts due to such Indenture Trustee under the
respective Indenture; and
(b) any other Event or Events of Default with respect to Debt
Securities of such series, other than the nonpayment of the principal of
the Debt Securities of such series which has become due solely by such
declaration of acceleration, have been cured or waived as provided in such
Indenture (Indenture, Section 802).
There is no automatic acceleration, even in the event of bankruptcy,
insolvency or reorganization of the Company.
Subject to the provisions of an Indenture relating to the duties of
the Indenture Trustee in case an Event of Default shall occur and be
continuing, the respective Indenture Trustee will be under no obligation to
exercise any of its rights or powers under such Indenture at the request or
direction of any of the Holders, unless such Holders shall have offered to
such Indenture Trustee reasonable security or indemnity (Indenture, Section
903). If an Event of Default has occurred and is continuing in respect of
a series of Debt Securities, subject to such provisions for the
indemnification of such Indenture Trustee, the Holders of a majority in
principal amount of the Outstanding Debt Securities of such series will
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to such Indenture Trustee, or
exercising any trust or power conferred on such Indenture Trustee, with
respect to the Debt Securities of such series; provided, however, that if
an Event of Default occurs and is continuing with respect to more than one
series of Debt Securities under an Indenture, the Holders of a majority in
aggregate principal amount of the Outstanding Debt Securities of all such
series, considered as one class, will have the right to make such
direction, and not the Holders of the Debt Securities of any one of such
series; and provided, further, that such direction will not be in conflict
with any rule of law or with such Indenture (Indenture, Section 812).
No Holder of Debt Securities of any series will have any right to
institute any proceeding with respect to the respective Indenture, or for
the appointment of a receiver or a trustee, or for any other remedy
thereunder, unless (i) such Holder has previously given to the respective
Indenture Trustee written notice of a continuing Event of Default with
respect to the Debt Securities of such series, (ii) the Holders of a
majority in aggregate principal amount of the Outstanding Debt Securities
of all series under such Indenture in respect of which an Event of Default
shall have occurred and be continuing, considered as one class, have made
written request to such Indenture Trustee, and such Holder or Holders have
offered reasonable indemnity to such Indenture Trustee to institute such
proceeding in respect of such Event of Default in its own name as trustee
and (iii) such Indenture Trustee has failed to institute any proceeding,
and has not received from the Holders of a majority in aggregate principal
amount of the Outstanding Debt Securities of such series a direction
inconsistent with such request, within 60 days after such notice, request
and offer (Indenture, Section 807). However, such limitations do not apply
to a suit instituted by a Holder of a Debt Security for the enforcement of
payment of the principal of or any premium or interest on such Debt
Security on or after the applicable due date specified in such Debt
Security (Indenture, Section 808).
The Company will be required to furnish to each Indenture Trustee
annually a statement by an appropriate officer as to such officer's
knowledge of the Company's compliance with all conditions and covenants
under the respective Indenture, such compliance to be determined without
regard to any period of grace or requirement of notice under such Indenture
(Indenture, Section 606).
Modification and Waiver. Without the consent of any Holder of Debt
Securities, the Company and the Indenture Trustee under an Indenture may
enter into one or more supplemental indentures for any of the following
purposes: (a) to evidence the assumption by any permitted successor to the
Company of the covenants of the Company in such Indenture and in any of the
Debt Securities Outstanding under such Indenture; or (b) to add one or more
covenants of the Company or other provisions for the benefit of all Holders
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or for the benefit of the Holders of, or to remain in effect only so long
as there shall be Outstanding, Debt Securities of one or more specified
series, or one or more specified Tranches thereof, or to surrender any
right or power conferred upon the Company by such Indenture; or (c) to add
any additional Events of Default with respect to Outstanding Debt
Securities; or (d) to change or eliminate any provision of such Indenture
or to add any new provision to such Indenture, provided that if such
change, elimination or addition will adversely affect the interests of the
Holders of Debt Securities of any series or Tranche in any material
respect, such change, elimination or addition will become effective with
respect to such series or Tranche only (1) when the consent of the Holders
of Debt Securities of such series or Tranche has been obtained in
accordance with such Indenture, or (2) when no Debt Securities of such
series or Tranche remain Outstanding under such Indenture; or (e) to
provide collateral security for all but not part of the Debt Securities
issued under such Indenture; or (f) to establish the form or terms of Debt
Securities of any other series or Tranche as permitted by such Indenture;
or (g) to provide for the authentication and delivery of bearer securities
and coupons appertaining thereto representing interest, if any, thereon and
for the procedures for the registration, exchange and replacement thereof
and for the giving of notice to, and the solicitation of the vote or
consent of, the Holders thereof, and for any and all other matters
incidental thereto; or (h) to evidence and provide for the acceptance of
appointment of a successor Indenture Trustee or co-trustee with respect to
the Debt Securities of one or more series and to add to or change any of
the provisions of such Indenture as shall be necessary to provide for or to
facilitate the administration of the trusts under such Indenture by more
than one trustee; or (i) to provide for the procedures required to permit
the utilization of a noncertificated system of registration for the Debt
Securities of all or any series or Tranche; or (j) to change any place
where (1) the principal of and premium, if any, and interest, if any, on
all or any series or Tranche of Debt Securities shall be payable, (2) all
or any series or Tranche of Debt Securities may be surrendered for
registration of transfer or exchange and (3) notices and demands to or upon
the Company in respect of Debt Securities and such Indenture may be served;
or (k) to cure any ambiguity or inconsistency or to add or change any other
provisions with respect to matters and questions arising under an
Indenture, provided such changes or additions shall not adversely affect
the interests of the Holders of Debt Securities of any series or Tranche
Outstanding under such Indenture in any material respect (Indenture,
Section 1201).
The Holders of a majority in aggregate principal amount of the Debt
Securities of all series then Outstanding under an Indenture may waive
compliance by the Company with certain restrictive provisions of such
Indenture (Indenture, Section 607). The Holders of a majority in principal
amount of the Outstanding Debt Securities of any series may waive any past
default under an Indenture with respect to such series, except a default in
the payment of principal, premium, or interest and certain covenants and
provisions of such Indenture that cannot be modified or be amended without
the consent of the Holder of each Outstanding Debt Security of such series
affected (Indenture, Section 813).
Without limiting the generality of the foregoing, if the Trust
Indenture Act is amended after the date of an Indenture in such a way as to
require changes to such Indenture or the incorporation therein of
additional provisions or so as to permit changes to, or the elimination of,
provisions which, at the date of such Indenture or at any time thereafter,
were required by the Trust Indenture Act to be contained in such Indenture,
such Indenture will be deemed to have been amended so as to conform to such
amendment of the Trust Indenture Act or to effect such changes, additions
or elimination, and the Company and the Indenture Trustee may, without the
consent of any Holders, enter into one or more supplemental indentures to
evidence or effect such amendment (Indenture, Section 1201).
Except as provided above, the consent of the Holders of a majority in
aggregate principal amount of the Debt Securities of all series then
Outstanding under an Indenture, considered as one class, is required for
the purpose of adding any provisions to, or changing in any manner, or
eliminating any of the provisions of, such Indenture or modifying in any
manner the rights of the Holders of such Debt Securities under such
Indenture pursuant to one or more supplemental indentures; provided,
however, that if less than all of the series of Debt Securities Outstanding
under an Indenture are directly affected by a proposed supplemental
indenture, then the consent only of the Holders of a majority in aggregate
principal amount of Outstanding Debt Securities of all series under such
Indenture so directly affected, considered as one class, shall be required;
and provided, further, that if the Debt Securities of any series shall have
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been issued in more than one Tranche and if the proposed supplemental
indenture shall directly affect the rights of the Holders of Debt
Securities of one or more, but less than all, of such Tranches, then the
consent only of the Holders of a majority in aggregate principal amount of
the Outstanding Debt Securities of all Tranches of such series so directly
affected, considered as one class, will be required; and provided further,
that no such amendment or modification may (a) change the Stated Maturity
of the principal of, or any installment of principal of or interest on, any
Debt Security, or reduce the principal amount thereof or the rate of
interest thereon (or the amount of any installment of interest thereon) or
change the method of calculating such rate or reduce any premium payable
upon the redemption thereof, or reduce the amount of the principal of a
discount Debt Security that would be due and payable upon a declaration of
acceleration of the maturity thereof, or change the coin or currency (or
other property) in which any Debt Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity of any Debt
Security (or, in the case of redemption, on or after the redemption date)
without, in any such case, the consent of the Holder of such Debt Security,
(b) reduce the percentage in principal amount of the Outstanding Debt
Securities of any series, or any Tranche thereof, the consent of the
Holders of which is required for any such supplemental indenture, or the
consent of the Holders of which is required for any waiver of compliance
with any provision of such Indenture or any default thereunder and its
consequences, or reduce the requirements for quorum or voting, without, in
any such case, the consent of the Holder of each outstanding Debt Security
of such series or Tranche, or (c) modify certain of the provisions of such
Indenture relating to supplemental indentures, waivers of certain covenants
and waivers of past defaults with respect to the Debt Securities of any
series or Tranche, without the consent of the Holder of each Outstanding
Debt Security under such Indenture affected thereby. A supplemental
indenture which changes or eliminates any covenant or other provision of an
Indenture which has expressly been included solely for the benefit of one
or more particular series of Debt Securities or one or more Tranches
thereof, or modifies the rights of the Holders of Debt Securities of such
series with respect to such covenant or other provision, will be deemed not
to affect the rights under such Indenture of the Holders of the Debt
Securities of any other series or Tranche (Indenture, Section 1202).
Each Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given
any request, demand, authorization, direction, notice, consent or waiver
under such Indenture, or whether a quorum is present at the meeting of the
Holders of Debt Securities, Debt Securities owned by the Company or any
other obligor upon the Debt Securities or any affiliate of the Company or
of such other obligor (unless the Company, such affiliate or such obligor
owns all Debt Securities Outstanding under such Indenture, determined
without regard to this provision) shall be disregarded and deemed not to be
Outstanding.
If the Company shall solicit from Holders any request, demand,
authorization, direction, notice, consent, election, waiver or other Act,
the Company may, at its option, fix in advance a record date for the
determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other such Act, but
the Company shall have no obligation to do so. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record date, but only
the Holders of record at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of the
requisite proportion of the Outstanding Debt Securities have authorized or
agreed or consented to such request, demand, authorization, direction,
notice, consent, waiver or other Act, and for that purpose the Outstanding
Debt Securities shall be computed as of the record date. Any request,
demand, authorization, direction, notice, consent, election, waiver or
other Act of a Holder shall bind every future Holder of the same Debt
Security and the Holder of every Debt Security issued upon the registration
of transfer thereof or in exchange therefor or in lieu thereof in respect
of anything done, omitted or suffered to be done by an Indenture Trustee or
the Company in reliance thereon, whether or not notation of such action is
made upon such Debt Security (Indenture, Section 104).
Resignation of an Indenture Trustee. An Indenture Trustee may resign
at any time by giving written notice thereof to the Company or may be
removed at any time with respect to the respective Indenture by Act of the
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Holders of a majority in principal amount of all series of Debt Securities
then Outstanding under such Indenture delivered to such Indenture Trustee
and the Company. No resignation or removal of an Indenture Trustee and no
appointment of a successor trustee will become effective until the
acceptance of appointment by a successor trustee in accordance with the
requirements of the respective Indenture. So long as no Event of Default
or event which, after notice or lapse of time, or both, would become an
Event of Default has occurred and is continuing and except with respect to
an Indenture Trustee appointed by Act of the Holders, if the Company has
delivered to the Indenture Trustee a resolution of its Board of Directors
appointing a successor trustee and such successor has accepted such
appointment in accordance with the terms of the respective Indenture, such
Indenture Trustee will be deemed to have resigned and the successor will be
deemed to have been appointed as trustee in accordance with such Indenture
(Indenture, Section 910).
Notices. Notices to Holders of Debt Securities will be given by mail
to the addresses of such Holders as they may appear in the security
register therefor (Indenture, Section 106).
Title. The Company, the respective Indenture Trustee, and any agent
of the Company or such Indenture Trustee, may treat the Person in whose
name Debt Securities are registered as the absolute owner thereof (whether
or not such Debt Securities may be overdue) for the purpose of making
payments and for all other purposes irrespective of notice to the contrary
(Indenture, Section 308).
Governing Law. Each Indenture and the Debt Securities will be
governed by, and construed in accordance with, the laws of the State of New
York (Indenture, Section 112).
Regarding the Indenture Trustee. The Indenture Trustee under the
first Indenture will be The Bank of New York. In addition to acting as
Indenture Trustee, The Bank of New York acts, and may act, as trustee under
various indentures and trusts of the Company and its affiliates. The
Company and its affiliates also maintain various banking and trust
relationships with The Bank of New York.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of Common Stock,
without par value, of which 245,315,522 shares were outstanding at May 31,
1998, and serial preference stock, par value $25 per share, none of which
has been issued. Outstanding shares of Common Stock on May 31, 1998 did
not include shares issuable in exchange for TEG shares. The following
statements with respect to such capital stock of the Company are a summary
of certain rights and privileges attaching to the stock under the laws of
the State of Texas and the Restated Articles of Incorporation and the
Bylaws of the Company, as amended. This summary does not purport to be
complete and is qualified in its entirety by reference to such laws, the
Restated Articles of Incorporation and the Bylaws of the Company, as
amended, for complete statements.
Each holder of shares of the Common Stock is entitled to one vote for
each share of Common Stock held on all questions submitted to holders of
shares and to cumulative voting at all elections of directors. The Common
Stock has no preemptive or conversion rights. Upon issuance and sale of
the shares offered hereby, such shares will be fully paid and
nonassessable.
The holders of the shares of the preference stock are not accorded
voting rights, except that, when dividends thereon are in default in an
amount equivalent to four full quarterly dividends, the holders of shares
of the preference stock are entitled to vote for the election of one-third
of the Board of Directors or two directors, whichever is greater, and, when
dividends are in default in an amount equivalent to eight full quarterly
dividends, for the election of the smallest number of directors necessary
so that a majority of the full Board of Directors shall have been elected
by the holders of the shares of the preference stock. The Company must
also secure the approval of the holders of two-thirds of the outstanding
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<PAGE>
shares of the preference stock prior to effecting various changes in its
capital structure.
After the payment of full preferential dividends on the shares of any
outstanding preference stock, holders of shares of the Common Stock are
entitled to dividends when and as declared by the Board of Directors.
After payment to the holders of shares of any outstanding preference stock
of the preferential amounts to which they are entitled, the remaining
assets to be distributed, if any, upon any dissolution or liquidation will
be distributed to the holders of shares of the Common Stock. Each share of
the Common Stock is equal to every other share of the Common Stock with
respect to dividends and also with respect to distributions upon any
dissolution or liquidation. (Reference is made to Note 4 to Consolidated
Financial Statements contained in the 1997 10-K.)
The Common Stock of the Company is listed on the New York, Chicago and
Pacific stock exchanges. Application will be made for the listing on such
exchanges of any additional shares offered hereby.
The transfer agent for the Common Stock is Texas Utilities Services
Inc., Dallas, Texas.
DESCRIPTION OF STOCK PURCHASE
CONTRACTS AND STOCK PURCHASE UNITS
The Company may issue Stock Purchase Contracts, including
contracts that obligate holders to purchase from the Company, and the
Company to sell to such holders, a specified number of shares of Common
Stock at a future date or dates. The consideration per share of Common
Stock may be fixed at the time the Stock Purchase Contracts are issued or
may be determined by reference to a specific formula set forth in the Stock
Purchase Contracts. The Stock Purchase Contracts may be issued separately
or as a part of Stock Purchase Units consisting of a Stock Purchase
Contract and either Debt Securities or debt obligations of third parties,
including U.S. Treasury securities that are pledged to secure the holders'
obligations to purchase the Common Stock under the Stock Purchase
Contracts. The Stock Purchase Contracts may require the Company to make
periodic payments to the holders of the Stock Purchase Units or vice versa,
and such payments may be unsecured or prefunded on some basis. The Stock
Purchase Contracts may require holders to secure their obligations
thereunder in a specified manner.
PLAN OF DISTRIBUTION
Any of the Securities being offered hereby may be sold in any one or
more of the following ways from time to time: (i) through agents; (ii) to
or through underwriters; (iii) through dealers; and (iv) directly by the
Company to purchasers.
The distribution of the Securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be
changed, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices.
Offers to purchase Securities may be solicited by agents designated by
the Company from time to time. Any such agent involved in the offer or sale
of the Securities in respect of which this Prospectus is delivered will be
named, and any commissions payable by the Company to such agent will be set
forth, in the applicable Prospectus Supplement. Unless otherwise indicated
in such Prospectus Supplement, any such agent will be acting on a
reasonable best efforts basis for the period of its appointment. Any such
agent may be deemed to be an underwriter, as that term is defined in the
Securities Act, of the Securities so offered and sold.
If Securities are sold by means of an underwritten offering, the
Company will execute an underwriting agreement with an underwriter or
underwriters at the time an agreement for such sale is reached, and the
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<PAGE>
names of the specific managing underwriter or underwriters, as well as any
other underwriters, the respective amounts underwritten and the terms of
the transaction, including commissions, discounts and any other
compensation of the underwriters and dealers, if any, will be set forth in
the applicable Prospectus Supplement which will be used by the underwriters
to make resales of the Securities in respect of which this Prospectus is
being delivered to the public. If underwriters are utilized in the sale of
any Securities in respect of which this Prospectus is being delivered, such
Securities will be acquired by the underwriters for their own account and
may be resold from time to time in one or more transactions, including
negotiated transactions, at fixed public offering prices or at varying
prices determined by the underwriters at the time of the sale. Securities
may be offered to the public either through underwriting syndicates
represented by managing underwriters or directly by one or more
underwriters. If any underwriter or underwriters are utilized in the sale
of Securities, unless otherwise indicated in the applicable Prospectus
Supplement, the underwriting agreement will provide that the obligations of
the underwriters are subject to certain conditions precedent and that the
underwriters with respect to a sale of such Securities will be obligated to
purchase all such Securities if any are purchased.
The Company may grant to the underwriters options to purchase
additional Securities, to cover over-allotments, if any, at the initial
public offering price (with additional underwriting commissions or
discounts), as may be set forth in the Prospectus Supplement relating
thereto. If the Company grants any over-allotment option, the terms of such
over-allotment option will be set forth in the Prospectus Supplement for
such Securities.
If a dealer is utilized in the sale of Securities in respect of which
this Prospectus is delivered, the Company will sell such Securities to the
dealer as principal. The dealer may then resell such Securities to the
public at varying prices to be determined by such dealer at the time of
resale. Any such dealer may be deemed to be an underwriter, as such item is
defined in Securities Act, of the Securities so offered and sold. The name
of the dealer and the terms of the transaction will be set forth in the
Prospectus Supplement relating thereto.
Offers to purchase Securities may be solicited directly by the Company
and the sale thereof may be made by the Company directly to institutional
investors or others, who may be deemed to be underwriters within the
meaning of the Securities Act with respect to any resale thereof. The terms
of any such sales will be described in the Prospectus Supplement relating
thereto.
Securities may also be offered and sold, if so indicated in the
applicable Prospectus Supplement, in connection with a remarketing upon
their purchase, in accordance with a redemption or repayment pursuant to
their terms, or otherwise, by one or more firms ("remarketing firms"),
acting as principals for their own accounts or as agents for the Company.
Any remarketing firm will be identified and the terms of its agreement, if
any, with the Company and its compensation will be described in the
applicable Prospectus Supplement. Remarketing firms may be deemed to be
underwriters, as that term is defined in the Securities Act, in connection
with the Securities remarketed thereby.
If so indicated in the applicable Prospectus Supplement, the Company
may authorize agents and underwriters to solicit offers by certain
institutions to purchase Securities from the Company at the public offering
price set forth in the applicable Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on the date or dates
stated in the applicable Prospectus Supplement. Such delayed delivery
contracts will be subject to only those conditions set forth in the
applicable Prospectus Supplement. A commission indicated in the applicable
Prospectus Supplement will be paid to underwriters and agents soliciting
purchase of Securities pursuant to delayed delivery contracts accepted by
the Company, as applicable.
Agents, underwriters, dealers and remarketing firms may be entitled
under relevant agreements with the Company, to indemnification by the
Company against certain liabilities, including liabilities under the
Securities Act, or to contribution with respect to payments which such
agents, underwriters, dealers and remarketing firms may be required to make
in respect thereof.
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<PAGE>
Each series of Securities will be a new issue and, other than the
Common Stock, which is listed on the New York, Chicago and Pacific stock
exchanges, will have no established trading market. The Company may elect
to list any series of Securities on an exchange, or in the case of the
Common Stock, on any additional exchange, but, unless otherwise specified
in the applicable Prospectus Supplement, the Company shall not be obligated
to do so. No assurance can be given as to the liquidity of the trading
market for any of the Securities.
Agents, underwriters, dealers and remarketing firms may be customers
of, engage in transactions with, or perform services for, the Company and
its subsidiaries in the ordinary course of business.
EXPERTS AND LEGALITY
The consolidated financial statements included in the latest Annual
Report of the Company on Form 10-K, incorporated herein by reference, have
been audited by Deloitte & Touche LLP, independent auditors, as stated in
their report included in said latest Annual Report of the Company on Form
10-K, and have been incorporated by reference herein in reliance upon such
report given upon authority of the firm as experts in accounting and
auditing.
With respect to any unaudited condensed consolidated interim financial
information included in the Company's Quarterly Reports on Form 10-Q which
are or will be incorporated herein by reference, Deloitte & Touche LLP has
applied limited procedures in accordance with professional standards for
reviews of such information. As stated in any of their reports included in
the Company's Quarterly Reports on Form 10-Q, which are or will be
incorporated herein by reference, Deloitte & Touche LLP did not audit and
did not express an opinion on such interim financial information. Deloitte
& Touche LLP is not subject to the liability provisions of Section 11 of
the 1933 Act for any of their reports on such unaudited condensed
consolidated interim financial information because such reports are not
"reports" or a "part" of the Registration Statement filed under the 1933
Act with respect to the Securities prepared or certified by an accountant
within the meaning of Sections 7 and 11 of the 1933 Act.
The legality of the securities offered hereby will be passed upon for
the Company by Worsham, Forsythe & Wooldridge, L.L.P. and by Reid & Priest
LLP, and for the Underwriters by Winthrop, Stimson, Putnam & Roberts, New
York, New York. However, all matters pertaining to incorporation of the
Company and all other matters of Texas law will be passed upon only by
Worsham, Forsythe & Wooldridge, L.L.P. At March 31, 1998, members of the
firm of Worsham, Forsythe & Wooldridge, L.L.P. owned approximately 41,200
shares of the common stock of the Company.
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<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses payable by the Company in
connection with the issuance and distribution of the securities to be
registered.
Filing fee - Securities and Exchange Commission . . . . . $610,650
Fees of the Trustee . . . . . . . . . . . . . . . . . . . 80,000*
Fees of Company's counsel
Worsham, Forsythe & Wooldridge, L.L.P. . . . . . . . . 200,000*
Reid & Priest LLP . . . . . . . . . . . . . . . . . . 200,000*
Auditors' fees . . . . . . . . . . . . . . . . . . . . . . 25,000*
Rating agencies' fees . . . . . . . . . . . . . . . . . . 65,000*
Printing, including Registration Statement,
prospectuses, exhibits, etc. . . . . . . . . . . . . . 10,000*
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 24,500*
-------
Total expenses . . . . . . . . . . . . . . . . . . . . . . $1,215,150*
===========
____________________
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article IX of the Restated Articles of Incorporation of the Company
provides as follows:
"The Corporation shall reimburse or indemnify any former, present
or future director, officer or employee of the Corporation, or any
person who may have served at its request as a director, officer or
employee of another corporation, or any former, present or future
director, officer or employee of the Corporation who shall have served
or shall be serving as an administrator, agent or fiduciary for the
Corporation or for another corporation at the request of the
Corporation (and his heirs, executors and administrators) from and
against all expenses and liabilities incurred by him or them, or
imposed on him or them, including, but not limited to, judgments,
settlements, court costs and attorneys' fees, in connection with, or
arising out of, the defense of any action, suit or proceeding in which
he may be involved by reason of his being or having been such
director, officer or employee, except with respect to matters as to
which he shall be adjudged in such action, suit or proceeding to be
liable because he did not act in good faith, or because of dishonesty
or conflict of interest in the performance of his duty.
"No former, present or future director, officer or employee of
the Corporation (or his heirs, executors and administrators) shall be
liable for any act, omission, step or conduct taken or had in good
faith, which is required, authorized or approved by any order or
orders issued pursuant to the Public Utility Holding Company Act of
1935, the Federal Power Act, or any other federal or state statute
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<PAGE>
regulating the Corporation or its subsidiaries, or any amendments to
any thereof. In any action, suit or proceeding based on any act,
omission, step or conduct, as in this paragraph described, the
provisions hereof shall be brought to the attention of the court. In
the event that the foregoing provisions of this paragraph are found by
the court not to constitute a valid defense, each such director,
officer or employee (and his heirs, executors and administrators)
shall be reimbursed for, or indemnified against, all expenses and
liabilities incurred by him or them, or imposed on him or them,
including, but not limited to, judgments, settlements, court costs and
attorneys' fees, in connection with, or arising out of, any such
action, suit or proceeding based on any act, omission, step or conduct
taken or had in good faith as in this paragraph described.
"The foregoing rights shall not be exclusive of other rights to
which any such director, officer or employee (or his heirs, executors
and administrators) may otherwise be entitled under any bylaw,
agreement, vote of shareholders or otherwise, and shall be available
whether or not the director, officer or employee continues to be a
director, officer or employee at the time of incurring such expenses
and liabilities. In furtherance, and not in limitation of the
foregoing provisions of this Article IX, the Corporation may indemnify
and insure any such persons to the fullest extent permitted by the
Texas Business Corporation Act, as amended from time to time, or the
laws of the State of Texas, as in effect from time to time."
Article 2.02-1 of the Texas Business Corporation Act permits the
Company, in certain circumstances, to indemnify any present or former
director, officer, employee or agent of the Company against judgments,
penalties, fines, settlements and reasonable expenses incurred in
connection with a proceeding in which any such person was, is or is
threatened to be, made a party by reason of holding such office or
position, but only to a limited extent for obligations resulting from a
proceeding in which the person is found liable on the basis that a personal
benefit was improperly received or in circumstances in which the person is
found liable in a derivative suit brought on behalf of the Company.
Article X of the Articles of Incorporation of the Company provides as
follows:
"A director of the Corporation shall not be liable to the
Corporation or its shareholders for monetary damages for any act or
omission in the director's capacity as a director, except that this
provision does not eliminate or limit the liability of a director to
the extent the director is found liable for:
(a) a breach of a director's duty of loyalty to the Corporation or its
shareholders;
(b) an act or omission not in good faith that constitutes a breach of
duty of a director to the Corporation or an act or omission that
involved intentional misconduct or a knowing violation of the law;
(c) a transaction from which a director received an improper benefit,
whether or not the benefit resulted from an action taken within the
scope of the director's office; or
(d) an act or omission for which the liability of a director is
expressly provided for by statute.
If the laws of the State of Texas are amended to authorize action
further eliminating or limiting the personal liability of directors,
then the liability of a director of the Corporation shall be
eliminated or limited to the fullest extent permitted by such laws as
so amended. Any repeal or modification of this Article X shall not
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<PAGE>
adversely affect any right of protection of a director of the
Corporation existing at the time of such repeal or modification."
Section 22 of the Company's bylaws provides as follows:
"Section 22. Insurance, Indemnification and Other Arrangements.
Without further specific approval of the shareholders of the
Corporation, the Corporation may purchase, enter into, maintain or
provide insurance, indemnification or other arrangements for the
benefit of any person who is or was a director, officer, employee or
agent of the Corporation or is or was serving another entity at the
request of the Corporation as a director, officer, employee, agent or
otherwise, to the fullest extent permitted by the laws of the State of
Texas, including without limitation Art. 2.02-1 of the Texas Business
Corporation Act or any successor provision, against any liability
asserted against or incurred by any such person in any such capacity
or arising out of such person's service in such capacity whether or
not the Corporation would otherwise have the power to indemnify
against any such liability under the Texas Business Corporation Act.
If the laws of the State of Texas are amended to authorize the
purchase, entering into, maintaining or providing of insurance,
indemnification or other arrangements in the nature of those permitted
hereby to a greater extent than presently permitted, then the
Corporation shall have the power and authority to purchase, enter
into, maintain and provide any additional arrangements in such regard
as shall be permitted from time to time by the laws of the State of
Texas without further approval of the shareholders of the Corporation.
No repeal or modification of such laws or this Section 22 shall
adversely affect any such arrangement or right to indemnification
existing at the time of such repeal or modification."
The Registrant has entered into agreements with its directors which
provide, among other things, for their indemnification by the Registrant to
the fullest extent permitted by Texas law, unless a final adjudication
establishes that the indemnitee's acts were committed in bad faith, were
the result of active and deliberate dishonesty or that the indemnitee
personally gained a financial profit to which the indemnitee was not
legally entitled. These agreements further provide, under certain
circumstances, for the advancement of expenses and the implementation of
other arrangements for the benefit of the indemnitee.
The Registrant has insurance covering its expenditures which might
arise in connection with its lawful indemnification of its directors and
officers for their liabilities and expenses. Directors and officers of the
Company also have insurance which insures them against certain other
liabilities and expenses.
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<PAGE>
ITEM 16. EXHIBITS.
PREVIOUSLY FILED*
______________________
WITH
FILE AS
EXHIBIT NUMBER EXHIBIT
_______ _______ _______
1(a) ** 1(a) -- Form of Underwriting Agreement
with respect to Common Stock.
1(b) ** 1(b) -- Form of Underwriting Agreement
with respect to Stock Purchase
Units.
1(c) ** 1(c) -- Form of Underwriting Agreement
with respect to Unsecured Senior
Notes.
4(a) 333-12391 3(a) -- Restated Articles of Incorporation
of the Company
4(b) 333-45657 4(b) -- Bylaws of the Company, as amended.
4(c) ** 4(c) -- Form of Indenture relating to the
Debt Securities.
4(d) ** 4(d) -- Form of Officers' Certificate
establishing a series of the Debt
Securities, including Form of the
Debt Securities.
4(e) ** 4(e) -- Form of Purchase Contract
Agreement.
4(f) ** 4(f) -- Form of Pledge Agreement.
4(g) ** 4(g) -- Form of Remarketing Agreement.
5(a) -- Opinion of Worsham, Forsythe &
Wooldridge, L.L.P., General
Counsel for the Company.
5(b) -- Opinion of Reid & Priest LLP, of
counsel to the Company.
12 ** 12 -- Computation of Ratio of Earnings
to Fixed Charges of the Company.
15 ** 15 -- Letter of Deloitte & Touche LLP
regarding unaudited condensed
interim financial information.
23(a) ** 23(a) -- Independent Auditors' Consent.
23(b) ** 23(b) -- Consents of Worsham, Forsythe &
Wooldridge, L.L.P. and Reid &
Priest LLP are contained in
Exhibits 5(a) and 5(b),
respectively.
24 ** Page II-7 -- Power of Attorney.
25(a) ** 25(a) -- Statement on Form T-1 of the Bank
of New York relating to Indenture
for the Debt Securities.
___________________
* Incorporated herein by reference.
** Previously filed with the original Registration Statement (333-56055)
on June 4, 1998.
II-4
<PAGE>
ITEM 17. UNDERTAKINGS.
a. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) under the
Securities Act of 1933 if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8 or Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the registrant pursuant to
Section 13 or 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's Annual Report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
b. That, insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions described
under Item 20 above, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
c. (i) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this
Form, within one business day of receipt of such request, and to send the
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<PAGE>
incorporated documents by first class mail or other equally prompt means;
and (ii) to arrange to provide for a facility in the U.S. for the purpose
of responding to such requests. The undertaking in subparagraph (i) above
includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding
to the request.
d. To supply by means of a post-effective amendment all information
concerning a transaction and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.
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<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT
MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED
THIS AMENDMENT TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY
THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF DALLAS, AND
STATE OF TEXAS, ON THE 26TH OF JUNE, 1998.
TEXAS UTILITIES COMPANY
BY /s/ Robet J. Reger, Jr.
------------------------------
(ROBERT J. REGER, JR., ESQ.,
ATTORNEY-IN-FACT)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATE INDICATED.
Signature Title Date
--------- ----- ----
Erle Nye* Principal
------------------------------------- Executive
(ERLE NYE, CHAIRMAN OF THE BOARD Officer and
AND CHIEF EXECUTIVE) Director
Michael J. McNally* Principal
------------------------------------- Financial
(MICHAEL J. MCNALLY, EXECUTIVE VICE Officer
PRESIDENT AND CHIEF FINANCIAL
OFFICER)
Jerry W. Pinkerton* Principal
------------------------------------- Accounting
(JERRY W. PINKERTON, CONTROLLER) Officer
J. S. Farrington* Director
-------------------------------------
(J. S. FARRINGTON)
Bayard H. Friedman* Director
-------------------------------------
(BAYARD H. FRIEDMAN)
William M. Griffin* Director June 26, 1998
-------------------------------------
(WILLIAM M. GRIFFIN)
Kerney Laday* Director
-------------------------------------
(KERNEY LADAY)
Margaret N. Maxey* Director
-------------------------------------
(MARGARET N. MAXEY)
James A. Middleton* Director
-------------------------------------
(JAMES A. MIDDLETON)
J. E. Oesterreicher* Director
-------------------------------------
(J. E. OESTERREICHER)
Charles R. Perry* Director
-------------------------------------
(CHARLES R. PERRY)
Herbert H. Richardson* Director
-------------------------------------
(HERBERT H. RICHARDSON)
*BY: /s/ Robert J. Reger, Jr.
------------------------------------------------
(ROBERT J. REGER, JR., ATTORNEY-IN-FACT)
II-7
<PAGE>
EXHIBIT INDEX
PREVIOUSLY FILED*
______________________
WITH
FILE AS
EXHIBIT NUMBER EXHIBIT
_______ _______ _______
1(a) ** 1(a) -- Form of Underwriting Agreement with respect
to Common Stock.
1(b) ** 1(b) -- Form of Underwriting Agreement with respect
to Stock Purchase Units.
1(c) ** 1(c) -- Form of Underwriting Agreement with respect
to Unsecured Senior Notes.
4(a) 333-12391 3(a) -- Restated Articles of Incorporation of the
Company
4(b) 333-45657 4(b) -- Bylaws of the Company, as amended.
4(c) ** 4(c) -- Form of Indenture relating to the Debt
Securities.
4(d) ** 4(d) -- Form of Officers' Certificate establishing
a series of the Debt Securities, including
Form of the Debt Securities.
4(e) ** 4(e) -- Form of Purchase Contract Agreement.
4(f) ** 4(f) -- Form of Pledge Agreement.
4(g) ** 4(g) -- Form of Remarketing Agreement.
5(a) -- Opinion of Worsham, Forsythe & Wooldridge,
L.L.P., General Counsel for the Company.
5(b) -- Opinion of Reid & Priest LLP, of counsel to
the Company.
12 ** 12 -- Computation of Ratio of Earnings to Fixed
Charges of the Company.
15 ** 15 -- Letter of Deloitte & Touche LLP regarding
unaudited condensed interim financial
information.
23(a) ** 23(a) -- Independent Auditors' Consent.
23(b) ** 23(b) -- Consents of Worsham, Forsythe & Wooldridge,
L.L.P. and Reid & Priest LLP are contained
in Exhibits 5(a) and 5(b), respectively.
24 ** Page -- Power of Attorney.
II-7
25(a) ** 25(a) -- Statement on Form T-1 of the Bank of New
York relating to Indenture for the Debt
Securities.
------------------------------------
* Incorporated herein by reference.
** Previously filed with the original Registration Statement (333-56055)
on June 4, 1998.
WORSHAM, FORSYTHE & WOOLDRIDGE, L.L.P
1601 BRYAN STREET
DALLAS, TEXAS 75201
Exhibit 5(a)
June 29, 1998
Texas Utilities Company
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Ladies and Gentlemen:
Referring to the proposed issuance by Texas Utilities
Company (Company) of up to $2,070,000,000 of the Company's
securities, which may include any of the following securities
(together hereinafter referred to as the Securities) (i) shares
of Common Stock, without par value (Common Stock), (ii) contracts
to purchase shares of Common Stock (Stock Purchase Contracts),
(iii) units, each comprised of a Stock Purchase Contract and
either unsecured senior notes (Debt Securities) or debt
obligations of third parties, including U.S. Treasury securities,
pledged to secure the holder's obligation to purchase Common
Stock under the Stock Purchase Contracts (Stock Purchase Units),
and (iv) Debt Securities issued not as a part of Stock Purchase
Units, all as contemplated in the Company's Amendment No. 1 to
Form S-3 registration statement (Registration Statement) to be
filed by the Company with the Securities and Exchange Commission
(Commission) under the Securities Act of 1933, on or about the
date hereof, we are of the opinion that:
1. The Company is a corporation validly organized and
existing under the laws of the State of Texas.
2. All requisite action necessary to make any Debt
Securities valid, legal and binding obligations of the Company
will have been taken when:
a. A Debt Securities Indenture with respect to such
Debt Securities shall have been executed and delivered
by a duly authorized officer or representative of the
Company and by the trustee under such Debt Securities
Indenture; and
b. The Board of Directors of the Company, or the
Executive Committee thereof pursuant to express
authority conferred on it by the Board of Directors, or
an officer duly authorized thereby, shall have taken
such action, pursuant to the terms of such Debt
Securities Indenture, as may be necessary to fix and
determine the terms of such Debt Securities, and such
Debt Securities shall have been issued and delivered in
accordance with the terms and provisions of such Debt
Securities Indenture and for the consideration
contemplated by, and otherwise in conformity with, the
Prospectus contained in the Registration Statement as
supplemented by a Prospectus Supplement with respect to
such issuance and delivery and the proceedings referred
to above.
3. All requisite action necessary to make any Stock
Purchase Contracts and Stock Purchase Units valid, legal and
binding obligations of the Company will have been taken when the
Board of Directors of the Company, or the Executive Committee
thereof pursuant to express authority conferred on it by the
Board of Directors, shall have taken such action as may be
necessary to fix and determine the terms of such Stock Purchase
Contracts or Stock Purchase Units, as the case may be, and such
Stock Purchase Contracts or Stock Purchase Units, as the case may
be shall have been issued and delivered in accordance with the
terms and provisions thereof and for the consideration
contemplated by, and otherwise in conformity with, the Prospectus
contained in the Registration Statement as supplemented by a
Prospectus Supplement with respect to such issuance and delivery
and the proceedings referred to above.
4. All requisite action necessary to make the Stock
validly issued, fully paid and non-assessable shall have been
taken when:
a. The Company's Board of Directors, or the Executive
Committee thereof pursuant to express authority
conferred on it by the Board of Directors, shall have
adopted appropriate resolutions approving and
authorizing the issuance and sale of the Stock and any
other action necessary to the consummation of the
proposed issuance and sale thereof; and
b. The Stock shall have been issued and delivered for
the consideration contemplated by, and otherwise in
conformity with, the Prospectus contained in the
Registration Statement as supplemented by a Prospectus
Supplement with respect to such issuance and sale and
the proceedings referred to above.
We are members of the Texas Bar and do not hold
ourselves out as experts on the laws of the State of New York.
Accordingly, in rendering this opinion, we have relied, with your
consent, as to all matters governed by the laws of New York, upon
an opinion of even date herewith addressed to you by Reid &
Priest LLP, of New York, New York, Counsel for the Company, which
is being filed as an exhibit to the Registration Statement.
We hereby consent to the use of our name in such
Registration Statement and to the use of this opinion as an
exhibit thereto.
Very truly yours,
Worsham, Forsythe
& Wooldridge, L.L.P.
By /s/ Neil D. Anderson
---------------------------------
A Partner
REID & PRIEST
40 WEST 57TH STREET
NEW YORK, NEW YORK 10019-4097
Exhibit 5(b)
(212) 603-2000
New York, New York
June 29, 1998
Texas Utilities Company
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Ladies and Gentlemen:
Referring to the proposed issuance by Texas Utilities
Company (Company) of up to $2,070,000,000 of the Company's
securities, which may include any of the following securities
(together hereinafter referred to as the Securities) (i) shares
of Common Stock, without par value (Common Stock), (ii) contracts
to purchase shares of Common Stock (Stock Purchase Contracts),
(iii) units, each comprised of a Stock Purchase Contract and
either unsecured senior notes (Debt Securities) or debt
obligations of third parties, including U.S. Treasury securities,
pledged to secure the holder's obligation to purchase Common
Stock under the Stock Purchase Contracts (Stock Purchase Units),
and (iv) Debt Securities issued not as a part of Stock Purchase
Units, all as contemplated in the Company's Amendment No. 1 to
Form S-3 registration statement (Registration Statement) to be
filed by the Company with the Securities and Exchange Commission
(Commission) under the Securities Act of 1933, on or about the
date hereof, we are of the opinion that:
1. The Company is a corporation validly organized and
existing under the laws of the State of Texas.
2. All requisite action necessary to make any Debt
Securities valid, legal and binding obligations of the Company
will have been taken when:
a. A Debt Securities Indenture with respect to such
Debt Securities shall have been executed and delivered
by a duly authorized officer or representative of the
Company and by the trustee under such Debt Securities
Indenture; and
b. The Board of Directors of the Company, or the
Executive Committee thereof pursuant to express
authority conferred on it by the Board of Directors,or
an officer duly authorized thereby, shall have taken
such action, pursuant to the terms of such Debt
Securities Indenture, as may be necessary to fix and
determine the terms of such Debt Securities, and such
Debt Securities shall have been issued and delivered in
accordance with the terms and provisions of such Debt
Securities Indenture and for the consideration
contemplated by, and otherwise in conformity with, the
Prospectus contained in the Registration Statement as
supplemented by a Prospectus Supplement with respect to
such issuance and delivery and the proceedings referred
to above.
3. All requisite action necessary to make any Stock
Purchase Contracts and Stock Purchase Units valid, legal and
binding obligations of the Company will have been taken when the
Board of Directors of the Company, or the Executive Committee
thereof pursuant to express authority conferred on it by the
Board of Directors, shall have taken such action as may be
necessary to fix and determine the terms of such Stock Purchase
Contracts or Stock Purchase Units, as the case may be, and such
Stock Purchase Contracts or Stock Purchase Units, as the case may
be shall have been issued and delivered in accordance with the
terms and provisions thereof and for the consideration
contemplated by, and otherwise in conformity with, the Prospectus
contained in the Registration Statement as supplemented by a
Prospectus Supplement with respect to such issuance and delivery
and the proceedings referred to above.
4. All requisite action necessary to make the Stock
validly issued, fully paid and non-assessable shall have been
taken when:
a. The Company's Board of Directors, or the Executive
Committee thereof pursuant to express authority
conferred on it by the Board of Directors, shall have
adopted appropriate resolutions approving and
authorizing the issuance and sale of the Stock and any
other action necessary to the consummation of the
proposed issuance and sale thereof; and
b. The Stock shall have been issued and delivered for
the consideration contemplated by, and otherwise in
conformity with, the Prospectus contained in the
Registration Statement as supplemented by a Prospectus
Supplement with respect to such issuance and sale and
the proceedings referred to above.
We are members of the New York Bar and do not hold
ourselves out as experts on the laws of the state of Texas.
Accordingly, in rendering this opinion, we have relied, with your
consent, as to all matters governed by the laws of Texas, upon an
opinion of even date herewith addressed to you by Worsham,
Forsythe & Wooldridge, L.L.P., of Dallas, Texas, General Counsel
for the Company, which is being filed as an exhibit to the
Registration Statement.
We hereby consent to the use of our name in such
Registration Statement and to the use of this opinion as an
exhibit thereto.
Very truly yours,
/s/ Reid & Priest LLP
Reid & Priest LLP
