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Filed pursuant to Rule 424B
Registration No. 333-72251
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MAY 11, 1999)
CONECTIV LOGO
$250,000,000
MEDIUM-TERM NOTES, SERIES A
DUE FROM NINE MONTHS TO 15 YEARS FROM DATE OF ISSUE
- --------------------------------------------------------------------------------
Conectiv may offer from time to time up to $250,000,000 in aggregate principal
amount of its Medium-Term Notes, Series A. The terms of each Note will be
determined at the time of sale and, if different from the terms described in the
accompanying prospectus or this prospectus supplement, will be specified in a
pricing supplement. These terms will include:
- - The stated maturity, which will be between 9 months and 15 years from date of
issue
- - The interest rate, which will be fixed
- - Interest payment dates, if other than May 1 and November 1
- - Any redemption provisions
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS
OR ANY PRICING SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<CAPTION>
PER NOTE TOTAL
------------------------------- -------------------------------
<S> <C> <C>
Public Offering Price.................... 100% $250,000,000
Agent's Discounts and Commissions........ .125% - .750% $312,500 - $1,875,000
Proceeds to Conectiv..................... 99.875% - 99.250% $248,125,000 - $249,687,500
</TABLE>
The Notes are being offered from time to time on behalf of Conectiv by Lehman
Brothers Inc., Banc One Capital Markets, Inc., Credit Suisse First Boston and
First Union Capital Markets Corp. (as Agents). Each Agent has agreed to use its
reasonable efforts to solicit offers to purchase the Notes. Conectiv has
reserved the right to sell Notes directly to investors, and no commissions would
be paid on any such sale. Conectiv may also sell Notes to an Agent acting as
principal for its own account. Conectiv or any Agent that solicits an offer to
purchase Notes may reject that offer in whole or in part. Conectiv reserves the
right to withdraw, cancel or modify its offering of the Notes without notice.
The Notes will not be listed on any securities exchange, and there can be no
assurance that the Notes will be sold or that there will be a secondary market
for the Notes.
- --------------------------------------------------------------------------------
LEHMAN BROTHERS
BANC ONE CAPITAL MARKETS, INC.
CREDIT SUISSE FIRST BOSTON
FIRST UNION CAPITAL MARKETS CORP.
May 17, 1999
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TABLE OF CONTENTS
<TABLE>
<S> <C>
PROSPECTUS SUPPLEMENT
Recent Developments......................................... S-2
Use of Proceeds............................................. S-3
Description of the Medium-Term Notes........................ S-3
Supplemental Plan of Distribution........................... S-9
PROSPECTUS
About this Prospectus....................................... 2
Where You Can Find More Information......................... 2
The Company................................................. 4
Use of Proceeds............................................. 5
Ratio of Earnings to Fixed Charges.......................... 5
Description of Debt Securities.............................. 5
Plan of Distribution........................................ 11
Legal Matters............................................... 12
Experts..................................................... 12
</TABLE>
RECENT DEVELOPMENTS
Conectiv announced on May 11, 1999, due to changes in the regulatory
environment in the electric utility industry, it is undertaking several
strategic initiatives designed to maximize stockholder value and position
Conectiv for future growth. These initiatives include: (1) a recapitalization of
Conectiv through a share buyback in order to employ a more efficient capital
structure appropriate for a competitive environment; (2) a reduction in the
quarterly dividend on the Company's Common Stock, par value $0.01 per share (the
"Shares"), designed to balance total shareholder return between stock
appreciation and dividend yield (the "Dividend Policy Change"); (3) a
realignment of Conectiv's generation business by pursuing the potential sale of
approximately 2,200 megawatts of nuclear and non-strategic baseload fossil
generation, with safeguards to assure continued energy reliability; (4) a focus
on value creation through growth of Conectiv's regulated electric and gas
delivery business, energy and the telecommunications business; and (5) the
implementation of a new productivity improvement and cost reduction program
aimed at positioning Conectiv to have a more competitive cost structure without
any reduction in quality and service.
Conectiv is offering to purchase up to 14 million Shares (including the
associated preferred stock purchase rights) at a price not greater than $25.50
nor less than $23.50 per Share in cash, as specified by tendering stockholders,
upon the terms and subject to the conditions set forth in the Issuer Tender
Offer Statement on Schedule 13E-4 filed with the Securities and Exchange
Commission. Assuming that we purchase 14 million Shares pursuant to the offer at
the maximum specified purchase price of $25.50 per Share, Conectiv expects the
maximum aggregate cost, including all fees and expenses applicable to the offer,
to be approximately $360,000,000.
Conectiv's Board of Directors intends to reduce per share dividends on the
Shares to an amount equal to 40% to 60% of Conectiv's earnings per Share, which
is expected to result in a quarterly dividend of $0.22 per Share as compared to
the previous quarterly dividend level of $0.385 per Share, subject to
declaration by Conectiv's Board of Directors and evaluation from time to time
based on the results of operations, financial condition, capital requirements
and other relevant considerations. Conectiv's Board of Directors intends that
the quarterly dividend on shares of Class A Common Stock will remain $0.80 per
share ($3.20 annualized rate) until March 31, 2001, subject to, among other
things, declaration by Conectiv's Board of Directors and the obligations of the
Board of Directors to consider the financial condition and regulatory
environment of Conectiv and the results of its operations.
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The summary unaudited consolidated pro forma financial information,
incorporated by reference from Conectiv's Form 8-K filed May 11, 1999, gives
effect to the purchase of Shares pursuant to the offer described above,
including the related incurrence of indebtedness, and the Dividend Policy
Change, based on certain assumptions described therein and in the related notes.
USE OF PROCEEDS
We intend to use the net proceeds from the issuance and sale of the offered
Notes, in part, to repay indebtedness outstanding under our five-year revolving
credit facility which was incurred for investments in our non-utility
businesses, and in part to fund our Share repurchase offer described above and
in the Incorporated Documents. At April 30, 1999, approximately $165,000,000 in
aggregate principal amount of indebtedness was outstanding under the five year
revolving facility, approximately $105,000,000 in aggregate principal amount of
which matures on June 7, 1999 with an interest rate of 5.23% per annum, and
approximately $60,000,000 principal amount of which matures on June 10, 1999
with an interest rate of 5.23% per annum. This revolving credit facility will
remain available to Conectiv after the application of the net proceeds of the
Notes to reduce the outstanding amounts, as discussed above, and we intend to
borrow under this facility to obtain funds necessary to fund our common stock
repurchase offer. In the event that the Share repurchase does not occur, we
intend to use the net proceeds from the issuance and sale of the Notes for
general corporate purposes.
DESCRIPTION OF THE MEDIUM-TERM NOTES
The following description of the particular terms of the Notes supplements,
and to the extent inconsistent therewith supersedes, the description of the
general terms and provisions of the Debt Securities set forth under "Description
of Debt Securities" in the accompanying prospectus. Certain capitalized terms
used but not defined in this prospectus supplement shall have the meanings given
to them in the accompanying prospectus, the Notes or the Indenture, as the case
may be. The particular terms of the Notes, and provisions of the Notes that vary
from the general provisions of the Notes described below and the general
provisions of the Debt Securities described in the accompanying prospectus, will
be described in the applicable pricing supplement.
GENERAL
Conectiv will issue from time to time up to $250,000,000 in aggregate
principal amount of its Medium-Term Notes, Series A (the "Notes"). The Notes
will be issued under an Indenture dated as of May 17, 1999 from Conectiv to
First Union Trust Company, National Association, as Trustee, which is more fully
described in the accompanying prospectus. Conectiv has initially designated
First Union Trust Company, National Association as its Paying Agent and Security
Registrar for the Notes.
The Notes will be issued in fully registered form only in denominations of
$1,000 and any larger amount that is an integral multiple of $1,000.
Each Note will mature on a date from nine months to 15 years from its date
of issue, as specified in the applicable pricing supplement. Each Note may also
be subject to redemption at Conectiv's option prior to its stated maturity date,
as specified in the applicable pricing supplement.
Interest on each Note will accrue from its date of issue and, except in the
limited circumstances described in this prospectus supplement or as otherwise
specified in the applicable pricing supplement, will be payable semiannually in
arrears on May 1 and November 1 of each year and at maturity. The interest rate
applicable to each Note and the other variable terms of each Note will be
established by Conectiv on the date of issue of such Note and will be specified
in the applicable pricing supplement.
Interest rates on the Notes may differ depending upon, among other factors,
the aggregate principal amount of Notes purchased in any single transaction. We
may also offer Notes with different variable terms to different investors
concurrently. We may change interest rates and other terms of Notes from
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time to time, but no such change will affect any Note previously issued or as to
which we have accepted an offer to purchase.
Each Note will be issued initially in book-entry form only (a Note so
represented, a "Book-Entry Note"). Each Book-Entry Note will be represented by
one or more fully registered global Notes (the "Global Notes") deposited with or
on behalf of The Depository Trust Company ("DTC"), or such other depositary as
may be identified in the applicable pricing supplement, as depositary. Except in
limited circumstances described below, Book-Entry Notes will not be exchangeable
for Notes in certificated form.
The pricing supplement relating to each Note will describe the following
terms:
- the date on which such Note will be issued;
- the stated maturity date of such Note;
- the fixed rate per annum at which such Note will bear interest, the
interest payment dates for such Note and any record dates for the
interest payable on any interest payment dates;
- the percentage of the principal amount at which such Note will be issued;
- whether such Note may be redeemed at the option of Conectiv prior to its
stated maturity date and, if so, the provisions relating to such
redemption;
- any other terms of such Note not inconsistent with the provisions of the
Indenture; and
- any sinking fund provisions or other mandatory redemption provisions
applicable to such Note.
PAYMENT OF PRINCIPAL AND ANY PREMIUM AND INTEREST
We will pay interest on the Notes, other than interest payable at maturity,
by check mailed to the address of the person in whose name such Notes are
registered in the security register (the "Holder") of such Notes as of the
regular record date relating to each interest payment date; provided, however,
that
- if the original issue date of a Note is after a regular record date and
before the corresponding interest payment date, interest for the period
from and including the original issue date for such Note to but excluding
such interest payment date will be paid on the next succeeding interest
payment date to the Holder of such Note on the related regular record
date;
- if and to the extent Conectiv defaults in the payment of the interest due
on any Note on any interest payment date, such defaulted interest will be
paid as described under "Description of Debt Securities -- Payment of
Debt Securities" in the accompanying prospectus;
- in the case where the registered Holder is the depositary or its nominee
(as would be the case for Book-Entry Notes), such payment may be made in
accordance with any other arrangements then in effect among Conectiv, the
Trustee or other Paying Agent and such Holder; and
- a registered Holder of $10,000,000 or more in aggregate principal amount
of Notes (whether having identical or different terms and provisions)
will be entitled to receive interest payments, if any, on any interest
payment date other than at maturity by wire transfer of immediately
available funds if appropriate wire transfer instructions have been
received in writing by Conectiv and the Paying Agent not less than 15
days prior to such interest payment date. Any such wire transfer
instructions received by Conectiv and the Paying Agent shall remain in
effect until revoked by such Holder.
Payment of principal, any premium and interest due on the Notes at maturity
will be made upon presentation of such Notes at the office of the Paying Agent.
So long as the depositary is the registered owner of any Global Note, the
depositary, or its nominee, as the case may be, will be considered the sole
Holder of the Book-Entry Notes represented by such Global Note for all purposes
under the Indenture, including payments. Accordingly, so long as the depositary
is the registered owner of any Global Note, payments of principal and any
premium and interest
S-4
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on Book-Entry Notes represented by such Global Note will be made to the
Beneficial Owners (as defined herein) of such Notes, as described below under
"-- Book-Entry Notes."
Unless otherwise specified in the applicable pricing supplement:
- each Note will bear interest from its original issue date at the rate per
annum on the face thereof until the principal thereof is paid or made
available for payment;
- interest on each Note will be payable semi-annually in arrears on each
interest payment date and at maturity;
- the first payment of interest on any such Note originally issued between
a regular record date and the related interest payment date will be made
on the interest payment date immediately following the next succeeding
regular record date to the Holder of such Note on such next succeeding
regular record date; and
- the regular record date with respect to any interest payment date for a
Note will be April 15 and October 15 (whether or not a Business Day (as
defined below)) immediately preceding the related interest payment date.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
If any interest payment date, any redemption date or the stated maturity of
a Note falls on a day that is not a Business Day, the related payment of
principal, premium, if any, or interest will be made on the next succeeding
Business Day as if made on the date such payment was due, and no interest will
accrue on the amount so payable for the period from and after such interest
payment date, redemption date or stated maturity, as the case may be, to the
date of such payment on the next succeeding Business Day.
Unless otherwise specified in the applicable pricing supplement, "Business
Day" means any day, other than a Saturday or Sunday or a day on which banking
institutions are not required to be open in the State of New York, the State of
Delaware or the State of North Carolina.
REDEMPTION
The pricing supplement relating to each Note will indicate either that such
Note cannot be redeemed at the election of Conectiv prior to the stated maturity
date or that such Note will be redeemable, at the election of Conectiv, in whole
or in part, on any date on or after the date designated as the "Initial
Redemption Date" in such pricing supplement, at the applicable redemption price
plus accrued interest to the date fixed for redemption. If such Note is so
redeemable, the redemption price will initially be a percentage of the principal
amount of such Note to be redeemed equal to the "Initial Redemption Price"
specified in such pricing supplement for the twelve-month period commencing on
the Initial Redemption Date and shall decline for the twelve-month period
commencing on each anniversary of the Initial Redemption Date by a percentage of
principal amount to be redeemed equal to the "Reduction Percentage" specified in
such pricing supplement until the redemption price is 100% of such principal
amount.
Unless otherwise specified in the applicable pricing supplement, the Notes
will not be subject to any sinking fund or other mandatory redemption
provisions.
Additional information concerning redemption is contained under
"Description of Debt Securities -- Redemption" in the accompanying prospectus.
Conectiv may also, at any time, purchase Notes at any price or prices in
the open market or otherwise. Notes so purchased by Conectiv may, at its
discretion, be held, resold or surrendered to the Trustee for cancellation.
S-5
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LIMITATION ON SECURED DEBT
So long as any of the Notes remain outstanding, Conectiv will not create,
issue, incur or assume any Secured Debt (as hereinafter defined) without the
consent of the Holders of a majority in principal amount of the outstanding
Securities of all series (including the Notes) and tranches with respect to
which this covenant is made (all such Securities being hereinafter called
"Benefitted Securities"), considered as one class; provided, however, that the
foregoing covenant will not prohibit the creation, issuance, incurrence or
assumption of any Secured Debt if either
- Conectiv shall make effective provision whereby all Benefitted Securities
then outstanding will be secured equally and ratably with such Secured
Debt; or
- Conectiv delivers to the Trustee bonds, notes or other evidences of
indebtedness secured by the Lien (as hereinafter defined) which secures
such Secured Debt in aggregate principal amount equal to the aggregate
principal amount of the Benefitted Securities then outstanding and
meeting certain other requirements set forth in the Indenture.
"Debt", with respect to any person, means
- indebtedness of such person for borrowed money evidenced by a bond,
debenture, note or other written instrument or agreement by which such
person is obligated to repay such borrowed money and
- any guaranty by such person of any such indebtedness of another person.
"Debt" does not include, among other things,
- indebtedness of such person under any installment sale or conditional
sale agreement or any other agreement relating to indebtedness for the
deferred purchase price of property or services,
- obligations of such person under any lease agreement (including any lease
intended as security), whether or not such obligations are required to be
capitalized on the balance sheet of such person under generally accepted
accounting principles, or
- liabilities secured by any Lien on any property owned by such person if
and to the extent that such person has not assumed or otherwise become
liable for the payment thereof.
"Lien" means any lien, deed of trust, pledge or security interest.
"Secured Debt", with respect to any person, means Debt created, issued,
incurred or assumed by such person which is secured by a Lien upon any shares of
stock of Delmarva Power & Light Company or Atlantic City Electric Company,
whether owned at the date of the initial authentication and delivery of the
Notes or thereafter acquired.
RELEASE OF PRIMARY LIABILITY
Conectiv may be released and discharged from all obligation on the Notes
and under the Indenture in respect of the Notes if:
- 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;
- a subsidiary of Conectiv assumes such obligations by delivering to the
Trustee and to Conectiv an assumption agreement and a supplemental
indenture pursuant to which such subsidiary
- assumes, on a full recourse basis, Conectiv's obligations on the Notes
and the obligations under the Indenture relating to the Notes, and
- agrees that any covenants made by Conectiv with respect to such Notes
will become solely covenants of, and shall relate to, such subsidiary;
and
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- at the time of such assumption Conectiv executes a guaranty pursuant to
which Conectiv will fully and unconditionally guarantee the payment of
the obligations of the assuming subsidiary under the Notes and under the
Indenture relating to the Notes, including without limitation, payment,
as and when due, of the principal of, premium, if any, and interest on
the Notes.
BOOK-ENTRY NOTES
DTC will act as securities depositary for the Book-Entry Notes. The
Book-Entry Notes will be issued only as fully registered securities registered
in the name of Cede & Co. (DTC's nominee). One or more fully-registered global
certificates for the Notes, representing the aggregate principal amount of
Notes, will be issued and will be deposited with DTC.
The following is based on information furnished by DTC:
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and
a "clearing agency" registered pursuant to the provisions of Section 17A of
the Securities Exchange Act of 1934. DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized
book-entry changes in Participants' accounts, thereby eliminating the need
for physical movement of securities certificates. "Direct Participants" in
DTC include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. DTC is owned by a
number of its Direct Participants and by the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc., and the National Association of
Securities Dealers, Inc. Access to the DTC system is also available to
others, such as securities brokers and dealers, banks and trust companies
that clear transactions through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on
file with the Securities and Exchange Commission.
Purchases of Notes under the DTC system must be made by or through
Direct Participants, which will receive a credit for the Notes on DTC's
records. The ownership interest of each actual purchaser of each Note
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected
to receive written confirmations providing details of the transaction, as
well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owner entered into the
transaction. Transfers of ownership interests in the Notes are to be
accomplished by entries made on the books of Participants acting on behalf
of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in the Notes, except in the event
that use of the book-entry system for the Notes is discontinued.
To facilitate subsequent transfers, all Notes deposited by
Participants with DTC are registered in the name of DTC's partnership
nominee, Cede & Co. The deposit of Notes with DTC and their registration in
the name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Notes are
credited, which may or may not be the Beneficial Owners. The Participants
will remain responsible for keeping account of their holdings on behalf of
their customers.
The delivery of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by
Direct Participants and Indirect Participants to Beneficial Owners will be
governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
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Redemption notices shall be sent to Cede & Co. If less than all of the
Notes are being redeemed, DTC's practice is to determine by lot the amount
of the interest of each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the
Notes. Under its usual procedures, DTC would mail an Omnibus Proxy to
Conectiv as soon as possible after the applicable record date. The Omnibus
Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Notes are credited on the applicable
record date (identified in a listing attached to the Omnibus Proxy).
Payments on the Notes will be made to DTC. DTC's practice is to credit
Direct Participants' accounts on the relevant payment date in accordance
with their respective holdings shown on DTC's records unless DTC has reason
to believe that it will not receive payment on such date. Payments by
Participants to Beneficial Owners will be governed by standing instructions
and customary practices, as is the case with securities held for the
accounts of customers in bearer form or registered in "street name", and
will be the responsibility of such Participant and not of DTC, the Paying
Agent or Conectiv, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payments to DTC will be the
responsibility of Conectiv and the Paying Agent, disbursement of such
payments to Direct Participants will be the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners will be the
responsibility of Direct Participants and Indirect Participants.
Management of DTC is aware that some computer applications, systems
and the like for processing data ("Systems") that are dependent upon
calendar dates, including dates before, on, and after January 1, 2000, may
encounter "Year 2000 problems." DTC has informed Direct Participants and
Indirect Participants and other members of the financial community (the
"Industry") that it has developed and is implementing a program so that its
Systems, as the same relate to the timely payment of distributions
(including principal and interest payments) to securityholders, book-entry
deliveries, and settlement of trades within DTC ("Depositary Services"),
continue to function appropriately. This program includes a technical
assessment and a remediation plan, each of which is complete. Additionally,
DTC's plan includes a testing phase, which is expected to be completed
within appropriate time frames.
However, DTC's ability to perform properly its services is also
dependent upon other parties, including, but not limited to, issuers and
their agents, as well as DTC's Direct Participants and Indirect
Participants, third party vendors from whom DTC licenses software and
hardware, and third party vendors on whom DTC relies for information or the
provision of services, including telecommunication and electrical utility
service providers, among others. DTC has informed the Industry that it is
contacting (and will continue to contact) third party vendors from whom DTC
acquires services to: (1) impress upon them the importance of such services
being Year 2000 compliant; and (2) determine the extent of their efforts
for Year 2000 remediation (and, as appropriate, testing) of their services.
In addition, DTC is in the process of developing such contingency plans as
it deems appropriate.
According to DTC, the information in the preceding two paragraphs with
respect to DTC has been provided to the Industry for informational purposes
only and is not intended to serve as a representation, warranty, or
contract modification of any kind.
DTC may discontinue providing its services as securities depository with
respect to the Notes at any time by giving reasonable notice to Conectiv or the
Paying Agent. Under such circumstances, in the event that a successor securities
depository is not obtained, certificates for the Notes will be delivered to the
Beneficial Owners.
Conectiv may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
certificates for the Notes will be delivered to the Beneficial Owners.
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The information in this section concerning DTC and DTC's system has been
obtained from sources that Conectiv believes to be reliable, but Conectiv takes
no responsibility for the accuracy thereof.
None of Conectiv, any Agents, the Trustee, any Paying Agent or any Security
Registrar for the Notes will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial ownership
interests in the Notes or for maintaining, supervising or reviewing any records
relating thereto.
Except as provided herein, a Beneficial Owner of an interest in a Global
Note will not be entitled to receive physical delivery of Notes. Accordingly,
each Beneficial Owner must rely on the procedures of DTC to exercise any rights
under the Notes.
SUPPLEMENTAL PLAN OF DISTRIBUTION
Under the terms of a Distribution Agreement dated May 17, 1999, the Notes
are offered on a continuing basis by Conectiv through the Agents, which have
agreed to use their best efforts to solicit purchases of the Notes. Conectiv
will pay each Agent a commission of from .125% to .750% of the principal amount
of each Note, depending on its stated maturity, sold through such Agent.
Conectiv will have the sole right to accept offers to purchase notes and may
reject any such offer, in whole or in part. Each Agent will have the right, in
its discretion reasonably exercised, without notice to Conectiv, to reject any
offer to purchase notes received by it, in whole or in part. Conectiv also may
sell Notes to each Agent, acting as principal, at or above par or at a discount
to be agreed upon at the time of sale, for resale to one or more investors or to
one or more broker-dealers (acting as principal for purposes of resale) at
varying prices related to prevailing market prices at the time of such resale,
as determined by such Agent or, if so agreed, at a fixed public offering price.
Unless otherwise specified in the applicable pricing supplement, any Note sold
to an Agent as principal will be purchased by such Agent at a price equal to
100% of the principal amount thereto less a percentage equal to the commission
applicable to an agency sale of a note of identical stated maturity. Conectiv
has reserved the right to sell Notes directly on its own behalf in those
jurisdictions where it is authorized to do so or as otherwise provided in the
applicable pricing supplement. In such circumstances, Conectiv will have the
sole right to accept offers to purchase Notes and may reject any offer to
purchase Notes in whole or in part. In the case of sales made directly by
Conectiv, no commissions will be paid.
An Agent purchasing Notes as principal may resell such Notes to dealers,
unless Conectiv and such Agent agree otherwise. Any such sales may be at a
discount, which will not exceed the amount set forth in the applicable pricing
supplement.
The Agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended. Conectiv has agreed to indemnify the Agents
against and contribute toward certain liabilities, including liabilities under
such Act. Conectiv has agreed to reimburse the Agents for certain expenses,
including, but not limited to, the fees and expenses of counsel to such Agents.
In the ordinary course of their respective businesses, certain of the
Agents and their affiliates have engaged, and may in the future engage, in
commercial banking and/or investment banking transactions with, and the
provision of services to, Conectiv and its affiliates. First Union Capital
Markets Corp. is an affiliate of First Union Trust Company, National
Association, which is acting as the Trustee under the Indenture and as the
Paying Agent and the Security Registrar in connection with the Notes. In
addition, First Union National Bank, an affiliate of First Union Capital Markets
Corp., and First National Bank of Chicago, an affiliate of Banc One Capital
Markets, Inc., are lenders under Conectiv's five-year revolving credit facility
and will receive their respective shares of any repayment of the five-year
revolving credit facility made from the proceeds of this offering. See "Use of
Proceeds." Accordingly, the offering is being made in compliance with the
requirements of Rule 2710(c)(8) of the National Association of Securities
Dealers, Inc. Conduct Rules.
Conectiv has been advised by the Agents that, in connection with the
offering made hereby, the Agents may purchase and sell the Notes in the open
market. These transactions may include over-
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allotment and stabilizing transactions and purchases to cove short positions
created by the Agents in connection with the offering. Stabilizing transactions
consist of certain bids or purchases for the purpose of preventing or retarding
a decline in the market price of the Notes, and short positions created by the
Agents involve the sale by the Agents of a greater aggregate principal amount of
Notes than they are required to purchase from Conectiv. The Agents also may
impose a penalty bid, whereby selling concessions allowed to broker-dealers in
respect of the notes sold in the offering may be reclaimed by the Agents if such
notes are repurchased by the Agents in stabilizing or covering transactions.
These activities may stabilize, maintain or otherwise affect the market price of
the Notes, which may be higher than the price that might otherwise prevail in
the open market; and these activities, if commenced, may be discontinued at any
time. These transactions may be effected in the over-the-counter market or
otherwise.
S-10
<PAGE> 11
[CONECTIV LOGO] PROSPECTUS
CONECTIV
800 King Street
Wilmington, Delaware 19899
(302) 429-3525
$250,000,000
DEBT SECURITIES
We may offer from time to time unsecured debt securities consisting of
senior notes and debentures, subordinated notes and debentures and/or other
unsecured evidences of indebtedness in one or more series. The aggregate initial
offering price of the securities that are offered will not exceed $250,000,000.
We will offer the securities in an amount and on terms to be determined by
market conditions at the time of the offering.
We will provide specific terms of these securities in supplements to this
prospectus. You should read this prospectus and any supplement carefully before
you invest. This prospectus may not be used to sell securities unless
accompanied by a prospectus supplement.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OF THE SECURITIES TO BE ISSUED UNDER THIS PROSPECTUS OR
DETERMINED IF THIS PROSPECTUS IS ACCURATE OR ADEQUATE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is May 11, 1999
<PAGE> 12
TABLE OF CONTENTS
<TABLE>
<S> <C>
About This Prospectus....................................... 2
Where You Can Find More Information......................... 2
The Company................................................. 4
Use of Proceeds............................................. 5
Ratio of Earnings to Fixed Charges.......................... 5
Description of Debt Securities.............................. 5
Plan of Distribution........................................ 11
Legal Matters............................................... 12
Experts..................................................... 12
</TABLE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that Conectiv ("we" or
"Conectiv") filed with the Securities and Exchange Commission (the "SEC")
utilizing a shelf registration process. Under this shelf process, we may sell
Debt Securities in a cumulative amount up to $250,000,000 in one or more
offerings through December 31, 1999. This prospectus provides you with a general
description of the Debt Securities we may offer. Whenever we sell Debt
Securities under this registration statement, we will provide supplements to
this prospectus which will contain specific information about the terms of that
particular transaction. The prospectus supplement or pricing supplement may also
add, update or change information contained in this prospectus. Although we will
try to include all information that we believe may be material to investors,
certain details that may be important to you may have been excluded. To obtain
more detailed information, you should read the exhibits filed by us with this
registration statement or our other SEC filings. You also should read this
prospectus and any prospectus supplement together with the additional
information described under the heading "WHERE YOU CAN FIND MORE INFORMATION."
We also regularly file with the SEC documents that include information
about our financial statements and our company, including information on matters
that might affect our future financial results. Our principal subsidiaries,
Delmarva Power & Light Company ("Delmarva") and Atlantic City Electric Company
("ACE"), also periodically file documents with the SEC. It is important for you
to read these documents, this Prospectus and the applicable Prospectus
Supplement before you invest.
WHERE YOU CAN FIND MORE INFORMATION
AVAILABLE INFORMATION
We file annual, quarterly and special reports, and other information with
the SEC. You may read and copy any document we file at the SEC's Public
Reference Room located at 450 Fifth Street, N. W., Room 1024 Washington, D. C.
20549 or at the SEC's other public reference facilities located at the New York
Regional Office 7 World Trade Center, Suite 1300, New York, New York 10048 and
Chicago Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Please call the SEC at 1-800-SEC-0330 to obtain
information about the operation of the public reference facilities. The
Company's Common Stock and Class A Common Stock are listed on the New York Stock
Exchange (NYSE: CIV and CIV.A, respectively).
Our SEC filings are also available for inspection at the offices of the New
York Stock Exchange at 20 Broad Street, New York, New York 10005. Please call
the New York Stock Exchange at (212) 656-5060 to learn how to obtain copies. The
SEC also maintains an Internet world wide web site that contains annual and
quarterly reports, proxy statements and other information about issuers. Our SEC
filings are available to the public over the Internet at the SEC's website at
http://www.sec.gov. Our SEC filings can also be reviewed at Conectiv's Internet
web site at http://www.conectiv.com. Please click on
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<PAGE> 13
"InvestorInfo" on the home page to access our SEC filings. The information
contained at our Internet web site (other than the SEC filings referred to
below) is not incorporated in this prospectus by reference and you should not
consider it a part of this prospectus.
INCORPORATION BY REFERENCE
We incorporate by reference the information we file with the SEC, which
means we can disclose important information to you by referring you to another
document filed separately with the SEC. The information incorporated by
reference is an important part of this prospectus, and information that we file
with the SEC at a later date will automatically update this prospectus. We
incorporate by reference the documents listed below and any future filings with
the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934 (the "Incorporated Documents"), until all the Debt Securities are sold:
- Annual Report of Conectiv on Form 10-K for the year ended December 31,
1998;
- Quarterly Report of Conectiv on Form 10-Q for the period ended March 31,
1999;
- Current Report of Conectiv on Form 8-K/A dated March 9, 1998;
- Current Reports of Conectiv on Form 8-K dated January 26, 1999, February
17, 1999, April 14, 1999 and May 11, 1999; and
- Current report of Atlantic Energy, Inc. on Form 8-K dated March 3, 1998.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Corporate Secretary -- Assistant Secretary
CONECTIV
800 King Street
Wilmington, Delaware 19899
(302) 429-3935
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We may only use this
prospectus to sell Debt Securities if it is accompanied by a prospectus
supplement. We are only offering these Debt Securities in states where the offer
is permitted. You should not assume that the information in this prospectus or
any applicable prospectus supplement is accurate as of any date other than the
date on the front of those documents.
3
<PAGE> 14
THE COMPANY
Conectiv is a registered public utility holding company under the Public
Utility Holding Company Act of 1935, as amended ("PUHCA") and is headquartered
in Wilmington, Delaware. On March 1, 1998, through a combination of Delmarva and
Atlantic, Delmarva and its direct subsidiaries and Atlantic's direct
subsidiaries, including ACE, became direct subsidiaries of Conectiv and Atlantic
was merged out of existence. Delmarva was incorporated under the laws of the
State of Delaware in 1909 and under the laws of the Commonwealth of Virginia in
1979. Delmarva's primary business includes producing, purchasing, delivering and
selling electricity; purchasing, transporting and selling natural gas; and
providing other services which are primarily energy-related. Delmarva provides
electric service in Delaware, Maryland and Virginia and gas service in Delaware.
ACE is a public utility company organized under the laws of the State of New
Jersey in 1924 by the merger and consolidation of several utility companies. ACE
is engaged in the generation, transmission, distribution, and sale of electric
energy in the southern part of New Jersey.
Conectiv provides vital services (energy, telecommunications, heating,
cooling and plumbing) to homes and businesses in the mid Atlantic region. We
currently have 950,000 regulated retail energy customers and 175,000
nonregulated retail energy, services and telecommunications customers in
Delaware, southern New Jersey, and parts of Virginia, Maryland and southeastern
Pennsylvania.
Conectiv is organized in three business groups: Energy, Power Delivery and
Services. Energy is a multi-fueled, asset-backed energy (electric, natural gas,
oil) provider to regulated and unregulated customers throughout the mid Atlantic
region. Power Delivery delivers electricity and natural gas in four regulated
franchise jurisdictions. Services include Conectiv Communications Inc. ("CCI"),
Conectiv Services Inc. ("CSI") and Conectiv Thermal Inc. ("CTS"). CCI was formed
in November 1997 and provides facilities-based local and long distance
telecommunications services. CSI commenced operations in 1996 as a full-service
heating, ventilation and air-conditioning ("HVAC") business and has expanded its
operation through acquisitions of other established HVAC businesses. CTS began
operation in 1995 and provides thermal energy services to large commercial and
industrial customers, including casinos, hotels and office complexes, primarily
in New Jersey.
The information above concerning Conectiv and its subsidiaries is only a
summary. For additional information concerning the Company and its subsidiaries,
you should refer to the information described in "Where You Can Find More
Information."
The principal executive offices of Conectiv are located at 800 King Street,
Wilmington, DE 19899 and the telephone number for Conectiv information is
1-800-424-8401.
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<PAGE> 15
USE OF PROCEEDS
Unless the applicable prospectus supplement indicates otherwise, we
anticipate adding the net proceeds to be received from the sale of the offered
Debt Securities to our general funds, which may be used to:
- repay short-term debt;
- finance capital expenditures of non-regulated subsidiary companies;
- repurchase shares of our common stock; and
- provide working capital.
Until all of the net proceeds are used, they may be temporarily invested in
short-term interest-bearing securities.
RATIO OF EARNINGS TO FIXED CHARGES
Our consolidated ratios of earnings to fixed charges for the periods
indicated are as follow:
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED DECEMBER 31,
------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
2.38 2.63 2.83 2.92 2.85
</TABLE>
For purposes of computing the ratio, earnings are net income plus income taxes
and fixed charges, less nonutility capitalized interest. Fixed charges consist
of interest on long- and short-term debt, amortization of debt discount, premium
and expense, preferred stock dividend requirements of subsidiaries and interest
on leases. Preferred dividend requirements for purposes of computing the ratio
have been increased to an amount representing the pre-tax earnings that would be
required to cover such dividend requirements.
DESCRIPTION OF DEBT SECURITIES
The following description states the general terms and provisions of our
unsecured debt securities. In this prospectus, "Debt Securities" means the
debentures, notes, bonds and other evidences of indebtedness that we will issue
and the Trustee will authenticate and deliver under an Indenture to be entered
into between us and the trustee, First Union Trust Company, National
Association. The prospectus supplement will describe the specific terms of the
Debt Securities offered through that prospectus supplement and any general terms
outlined in this section that will not apply to those Debt Securities.
We have summarized certain terms and provisions of the Indenture in this
section. The summary is not complete. Also, we have filed the form of the
Indenture as an exhibit to this registration statement. You should read the form
of Indenture for additional information before you buy any Debt Securities. The
Indenture will be qualified under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"). You should refer to the Trust Indenture Act for
provisions that apply to the Debt Securities. In the summary, we have included
references to section numbers of the Indenture so that you can more easily
locate these provisions. This summary also is subject to and qualified by
reference to the description of the particular terms of the Debt Securities
described in the applicable prospectus supplement or supplements and pricing
supplement or supplements. Capitalized terms used but not defined in this
summary have the meanings specified in the Indenture.
GENERAL
We may issue an unlimited amount of Debt Securities or other securities
under the Indenture. The Debt Securities will be our direct, senior, unsecured
obligations and will rank equally with any other senior, unsecured debt of
Conectiv. Debt Securities issued under the Indenture will be issued as part of a
series that has been established pursuant to a supplemental indenture, a Board
Resolution or an Officer's
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<PAGE> 16
Certificate designating the specific terms of the series of Debt Securities
(Section 2.01). These terms will be described in a prospectus supplement and
will include, among other things, the following:
- The title of the Debt Securities of the series;
- The denominations in which the Debt Securities can be issued if other
than denominations of $1,000 or any integral multiple thereof;
- Any limit upon the aggregate principal amount of the Debt Securities;
- The date or dates on which the principal and premium, if applicable, of
the Debt Securities will be payable;
- The interest rate or rates which the Debt Securities will bear, the
interest payment dates for the Debt Securities and any record dates for
the interest payable on any interest payment dates;
- The place or places where the principal of and premium, if any, and
interest, if any, on any of the Debt Securities will be payable;
- The percentage of the principal amount at which the Debt Securities will
be issued and any provisions that would permit the Debt Securities to be
payable prior to their final maturity at the election of Conectiv or of
the Holders of the Debt Securities;
- Any sinking fund provisions that would obligate us to repurchase or to
redeem part or all of the Debt Securities prior to their final maturity;
- Any deletions or modifications of or additions to the Events of Default
or covenants of Conectiv;
- The applicability of the provisions described under the Heading
"Defeasance" to the Debt Securities;
- Whether the Debt Securities will be issued in whole or in part in the
form of a "global security" (meaning a debt security issued under the
Indenture to represent all or part of an entire series of Debt
Securities); and
- Any other terms of the Debt Securities.
Some of the Debt Securities may be issued at a discount below their stated
principal amount bearing no interest or a reduced interest rate. These Debt
Securities are known as "Discount Securities." In such a case, any applicable
United States federal income tax consequences and other special factors
applicable to the Discount Securities should be considered prior to purchasing
such Discount Securities and will be described in a prospectus supplement.
PAYMENT OF DEBT SECURITIES (Sections 2.01 and 2.12)
Unless we state differently in a prospectus supplement, we may make
interest payments on any series of Debt Securities by mailing a check to the
address of the Holder listed on the Security Registrar's books or by wire
transfer to the account of any Holder as of the close of business on the regular
record date relating to such payment. However, we will pay interest payable at
maturity to the person to whom the principal is paid. If we have defaulted in
the payment of interest on any Debt Security, then we shall pay defaulted
interest in any lawful manner. We may pay such defaulted interest to the persons
who are Holders of Debt Securities as of the close of business on a date at
least 5 Business Days prior to the date on which we propose to pay such
defaulted interest.
Unless otherwise specified in the prospectus supplement, we will pay
principal, premium, if any, and interest on the Debt Securities at maturity upon
presentation of the Debt Securities at the corporate trust office of First Union
Trust Company, National Association, One Rodney Square, 920 King Street,
Wilmington, Delaware, 19801, as Paying Agent. In our discretion, we may change
the place of payment on the Debt Securities, and may remove any Paying Agent and
may appoint one or more additional Paying Agents (including ourselves or any of
our affiliates).
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<PAGE> 17
REGISTRATION AND TRANSFER (Sections 2.05 and 2.08)
You may exchange or transfer Debt Securities at the office of the Trustee.
The Trustee acts as our agent for registering Debt Securities in the names of
Holders and transferring Debt Securities. The Company may appoint or remove
additional agents or may act as its own agent for this purpose. The Company may
at its discretion change the place for registration of transfer of the Debt
Securities.
Except as otherwise provided in a prospectus supplement, there will be no
service charge for the registration of transfer or exchange of any Debt Security
but we may require you to pay any applicable tax or other governmental charge
payable in connection with the registration of transfer or exchange of Debt
Securities. We are not required to execute or to provide for the registration of
transfer of, or the exchange of, (a) Debt Securities during a period of 15 days
prior to giving any notice of redemption of such Debt Securities called for
redemption or (b) any Debt Securities selected for redemption, except the
unredeemed portion of any Debt Securities being redeemed in part.
REDEMPTION (Sections 9.02, 9.03 and 9.04)
The terms for the redemption of Debt Securities will be stated in the
applicable prospectus supplement. Unless the prospectus supplement states
differently and except with respect to Debt Securities redeemable at the option
of the Holder, Debt Securities will be redeemable upon notice by mail to each
Holder of Debt Securities to be redeemed between 30 and 60 days prior to the
redemption date. If less than all of the Debt Securities of any series are to be
redeemed, the Trustee will select the Debt Securities to be redeemed pro rata,
by lot or by another method as the Trustee deems fair and appropriate. Debt
Securities selected by the Trustee shall be redeemed in the amounts of $1,000
or, with respect to Securities of any series issuable in other denominations, in
amounts equal to the minimum principal denomination for such series of Debt
Securities and integral multiples thereof.
Any notice of redemption at the option of Conectiv may state that such
redemption will be conditional upon receipt by the Paying Agent of monies
sufficient to redeem all the Securities called for redemption not later than the
opening of business on the redemption date. If such monies are not deposited by
such date and time, the Paying Agent shall promptly notify the holders of all
Securities called for redemption of such fact and Conectiv shall not be required
to redeem such securities.
Debt Securities will cease to bear interest on the redemption date. Upon
the surrender of your Debt Securities, Conectiv will pay the redemption price
plus any premium and accrued interest. If only part of your Debt Securities is
redeemed, the Trustee will deliver to you a new Debt Security of the same series
for the remaining portion.
CONSOLIDATION, MERGER OR SALE (Sections 4.01 and 4.02)
The Indenture generally permits us to merge, convert or consolidate with or
to sell or lease all or substantially all of our assets to another United States
based company as long as:
- the resulting entity expressly assumes all of our obligations under the
Debt Securities and the Indenture;
- immediately after the transaction, no Event of Default exists;
- Conectiv delivers to the Trustee an officer's certificate and legal
opinion stating that the transaction complies with the Indenture; and
- certain other conditions are met.
If we merge or consolidate with or sell all or substantially all of our
assets to another United States based company, and satisfy the conditions
enumerated above, then we will be relieved of all obligations under the
Indenture and the Debt Securities.
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<PAGE> 18
EVENTS OF DEFAULT (Section 5.01)
"Event of Default," when used in the Indenture with respect to any series
of Debt Securities, means any of the following:
- failure to pay interest on Debt Securities for 30 days after the same
becomes due;
- failure to pay principal of or premium, if any, on Debt Securities when
due;
- failure to comply with any of our agreements in the Debt Securities or
the Indenture that applies to Debt Securities for 60 days after receiving
written notice of such failure;
- certain events in bankruptcy, insolvency or reorganization of Conectiv;
or
- any other Event of Default described in a prospectus supplement
applicable to that certain series of Debt Securities.
REMEDIES
Acceleration of Maturity (Section 5.02 and 5.04)
If an Event of Default (other than an Event of Default with respect to
certain events in bankruptcy, insolvency or reorganization of Conectiv) occurs
and is continuing, then either the Trustee or the Holders of not less than 33%
in aggregate principal amount of the outstanding Debt Securities may declare the
principal amount (or if any of the Debt Securities are Discount Securities, such
portion of the principal amount thereof as may specified in the terms thereof)
of all such outstanding Debt Securities, together with premium, if any, and
accrued interest, if any, to be due and payable immediately by written notice to
us (and to the Trustee if given by the Holders of Debt Securities).
If any Event of Default with respect to certain events in bankruptcy,
insolvency or reorganization of Conectiv occurs and is continuing, the principal
of, together with premium, if any, and interest, if any, on all the Debt
Securities shall become and be immediately due and payable without any
declaration or other act on the part of the Trustee of any Holders.
With certain exceptions, the Holders of a majority in principal amount of
the outstanding Debt Securities may waive an existing Event of Default. If all
existing Events of Default have been waived or cured, except nonpayment of any
amount that has become due solely because of acceleration, any such acceleration
and its consequences shall be automatically rescinded unless such rescission
would conflict with any judgment or decree.
The prospectus supplement for each series of Debt Securities that are
Discount Securities will describe the particular provisions that relate to the
acceleration of maturity of a portion of the principal amount of such series
when an Event of Default occurs and continues.
Right to Direct Proceedings (Section 5.05)
If an Event of Default occurs and is continuing, the Holders of a majority
in principal amount of the outstanding Debt Securities will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the
Trustee; provided, however, that (a) such direction does not conflict with any
rule of law or with the Indenture, and could not involve the Trustee in personal
liability in circumstances where indemnity would not, in the Trustee's sole
discretion, be adequate, (b) the Trustee determines that such direction does not
unduly prejudice the rights of the other Holders and (c) the Trustee may take
any other action deemed proper by the Trustee which is not inconsistent with
such direction.
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<PAGE> 19
Limitation on Right to Institute Proceedings (Section 5.06)
No Holder of Debt Securities shall have the right to pursue any remedy with
respect to the Indenture or the Debt Securities unless:
- the Holder provides the Trustee with written notice of a continuing Event
of Default;
- the Holders of at least 33% in principal amount of the outstanding Debt
Securities make a written request to the Trustee to pursue the remedy and
offer the Trustee reasonable security or indemnity against any loss,
liability or expense;
- the Trustee does not comply with the request within 60 days after receipt
of the request and the offer of security or indemnity; and
- the Holders of a majority of principal amount of the outstanding Debt
Securities do not give the Trustee a direction inconsistent with the
request during the 60-day period.
No Impairment of Right to Receive Payment (Section 5.07)
Notwithstanding any other provision in the Indenture (including remedies
which are subject to conditions precedent), each Holder of Debt Securities will
have the right, which is absolute and unconditional, to receive payment of the
principal of and premium, if any, and interest, if any, on the Debt Securities
when due and to institute suit for the enforcement of any such payment. Such
rights may not be impaired or affected without the consent of such Holder.
Notice of Default (Section 6.05)
If an Event of Default occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to each Holder of Debt Securities notice of the
Event of Default, within 90 days after it occurs. The Trust Indenture Act
currently permits the Trustee to withhold notices of default (except for certain
payment defaults) if the Trustee in good faith determines that witholding the
notice is in the interests of the Holders.
MODIFICATION OF THE INDENTURE (Sections 5.04, 8.01 and 8.02)
Modification Without Consent
Conectiv and the Trustee may amend and/or supplement the Indenture or the
Debt Securities without notice to or consent of any Holder for any of the
following purposes:
- to cure any ambiguity, omission, defect or inconsistency; or
- to evidence the succession of another entity to Conectiv and the
assumption by any such successor of the covenants of Conectiv in the
Indenture and the Debt Securities; or
- to provide for the procedures required to permit Conectiv to utilize, at
its option, a non-certificated system of registration for all or any
series of the Debt Securities; or
- to provide collateral security for the Debt Securities; or
- to add to the covenants of Conectiv for the benefit of all Holders of the
Debt Securities of one or more specific series or for the benefit of the
holders of the Debt Securities or to surrender any right or power
conferred upon Conectiv by the Indenture; or
- to make any change that does not adversely affect the rights of any
holder of any Debt Securities in any material respect.
Without limiting the generality of the foregoing, if the Trust Indenture
Act is amended after the date of the Indenture so as to require changes to the
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 the
Indenture or at any time thereafter, were required by the Trust Indenture Act to
be contained in the
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<PAGE> 20
Indenture, the Indenture will be deemed to have been amended so as to conform to
such amendment or to effect such changes or elimination, and the Company and the
Trustee may, without the consent of any holders of any Debt Securities, enter
into one or more supplemental indentures to evidence or effect such amendment.
Modification With Consent
Conectiv and the Trustee may amend and/or supplement the Indenture or the
Debt Securities without notice to any Holder but with the written consent of the
Holders of more than 50% of the aggregate principal amount of outstanding Debt
Securities of each series affected by the change. Without the consent of each
Holder affected, any amendment may not:
- reduce the amount of outstanding Debt Securities whose Holders must
consent to an amendment;
- reduce the rate of or extend the time for payment of interest on any Debt
Security;
- reduce the principal of or extend the fixed maturity of any Debt
Security;
- reduce the premium payable upon the redemption of any Debt Security or
change the time at which any Debt Security may or shall be redeemed;
- make any Debt Security payable in money other than that stated in the
Debt Security; or
- reduce the number of holders of Debt Securities that are required for any
waiver of default under the Indenture.
We may enter into supplemental indentures for other specified purposes,
including the creation of a new series of Debt Securities, without the consent
of any Holder of Debt Securities.
DEFEASANCE (Section 7.01)
We will be discharged from our obligations on the Debt Securities of any
series, or any portion of the principal amount thereof, at any time that we
irrevocably deposit in trust with the Trustee or any Paying Agent (other than
Conectiv) cash or non-redeemable U.S. Government Obligations, or a combination
of the two, sufficient to pay the principal of, and premium if any, and
interest, if any or other sums due to the maturity date or a redemption date of,
the Debt Securities of the series. If this happens, the Holders of Debt
Securities of the series will not be entitled to the benefits of the Indenture
except for registration of transfer and exchange of Debt Securities and
replacement of lost, stolen or mutilated Debt Securities.
"U.S. Government Obligations" include direct obligations of, or obligations
unconditionally guaranteed by, the United States 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.
DISCHARGE OF INDENTURE (Section 7.02)
The Indenture will cease to be of any effect when:
- all previously issued Debt Securities have been delivered to the Trustee
for cancellation and have been deemed paid; and
- all sums payable by us under the Indenture have been paid.
RESIGNATION AND REMOVAL OF THE TRUSTEE (Section 6.08)
The Trustee may resign at any time by giving written notice thereof to us.
The Holders of a majority in principal amount of the then outstanding Debt
Securities may remove the Trustee or, as long as no Event of Default has
occurred or is continuing, Conectiv may remove the Trustee.
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<PAGE> 21
No resignation or removal of the 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 Indenture.
PLAN OF DISTRIBUTION
We may sell the Debt Securities offered under this prospectus through
underwriters, agents or dealers or directly to purchasers.
UNDERWRITERS
Any agents or underwriters will be identified and their compensation
(including underwriting discount) will be described in the applicable prospectus
supplement. The prospectus supplement will also describe other terms of the
offering, including any discounts or concessions allowed or reallowed or paid to
dealers and any securities exchanges on which the offered securities may be
listed.
The distribution of Debt Securities under this prospectus may occur 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.
AGENTS AND DIRECT SALES
If the applicable prospectus supplement indicates, we will authorize
dealers or our agents to solicit offers by certain institutions to purchase
offered Debt Securities from us pursuant to contracts that provide for payment
and delivery on a future date. We must approve all institutions, but they may
include, among others:
- commercial and savings banks;
- insurance companies;
- pension funds;
- investment companies; and
- education and charitable institutions.
The institutional purchaser's obligations under the contract are subject
only to the condition that the purchase of the offered Debt Securities at the
time delivery is allowed by any laws that govern the purchaser. The dealers and
our agents will not be responsible for the validity or performance of the
contracts.
GENERAL INFORMATION
Underwriters, dealers and agents participating in a sale of Debt Securities
may be deemed to be underwriters as defined in the Securities Act, and any
discounts and commissions received by them and any profit realized by them on
resale of the Debt Securities may be deemed to be underwriting discounts and
commissions under the Securities Act. We may have agreements with the agents,
underwriters and dealers to indemnify them against certain civil liabilities,
including liabilities under the Securities Act, or to contribute with respect to
payments which the agents, underwriters or dealers may be required to make as a
result of those certain civil liabilities.
Unless we indicate differently in a prospectus supplement, we will not list
the Debt Securities on any securities exchange. If we sell a security offered
under this prospectus to an underwriter for public offering and sale, the
underwriter may make a market for that security but is not obligated to do so.
Therefore, we cannot give any assurances to you concerning the liquidity of any
security offered under this prospectus.
Agents and underwriters and their affiliates may be customers of, engage in
transactions with, or perform services for us or our subsidiary companies in the
ordinary course of business.
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LEGAL MATTERS
The validity of the Debt Securities will be passed upon for Conectiv by
Peter F. Clark, General Counsel for Conectiv, and for the underwriters or agents
by Thelen Reid & Priest LLP, New York, New York. Thelen Reid & Priest LLP
represents Conectiv in connection with certain federal income tax matters.
EXPERTS
The consolidated balance sheets of Conectiv and subsidiary companies as of
December 31, 1998 and 1997, and the related consolidated statements of income,
changes in common stockholders' equity and cash flows for each of the three
years in the period ended December 31, 1998, incorporated by reference in this
Registration Statement, have been incorporated herein in reliance on the report
of PricewaterhouseCoopers LLP, independent accountants, given on the authority
of that firm as experts in accounting and auditing.
The consolidated financial statements of Atlantic Energy, Inc. incorporated
herein by reference from their respective Current Report on Form 8-K dated March
3, 1998 have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their reports, which are incorporated herein by reference, and have
been so incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
Peter F. Clark, General Counsel for Conectiv, has reviewed the statements
made under "Description of Debt Securities" and in the Incorporated Documents as
to matters of law and legal conclusions. Such statements have been made in
reliance upon his authority as an expert.
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LOGO
CONECTIV LOGO
$250,000,000
Medium-Term Notes, Series A
Due Nine Months to 15 Years
from Date of Issue
-------------------------
PROSPECTUS SUPPLEMENT
May 17, 1999
-------------------------
LEHMAN BROTHERS
BANC ONE CAPITAL MARKETS, INC.
CREDIT SUISSE FIRST BOSTON
FIRST UNION CAPITAL MARKETS CORP.
