<PAGE>
As Filed with the Securities and Exchange Commission on June , 2000
File No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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VIRGINIA ELECTRIC AND VIRGINIA 54-418825
POWER COMPANY (State or other (I.R.S. Employer
(Exact name of jurisdiction of Identification No.)
registrant as specified incorporation or
in its charter) organization)
VIRGINIA POWER CAPITAL DELAWARE APPLIED FOR
TRUST II (State or other (I.R.S. Employer
(Exact name of jurisdiction of Identification No.)
registrant as specified incorporation or
in its Trust Agreement) organization)
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ONE JAMES RIVER PLAZA
701 EAST CARY STREET
RICHMOND, VIRGINIA 23219
(804) 771-3000
(Address including zip code, and telephone number, including area code, of
registrants' principal executive offices)
PATRICIA A. WILKERSON, VICE PRESIDENT AND CORPORATE SECRETARY
JAMES P. CARNEY, ASSISTANT TREASURER
VIRGINIA ELECTRIC AND POWER COMPANY
ONE JAMES RIVER PLAZA, 701 EAST CARY STREET
RICHMOND, VIRGINIA 23219
(804) 771-3000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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With a Copy to:
JAMES F. STUTTS JANE WHITT SELLERS
VIRGINIA ELECTRIC AND POWER COMPANY McGUIRE, WOODS, BATTLE & BOOTHE LLP
701 EAST CARY STREET ONE JAMES CENTER
RICHMOND, VIRGINIA 23219 RICHMOND, VIRGINIA 23219
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Approximate date of commencement of proposed sale to the public: From time to
time after effectiveness
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, 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(b)
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. [_]
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CALCULATION OF REGISTRATION FEE(1)
<TABLE>
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------------------------------------------------------------------------------------
<CAPTION>
Proposed Proposed
Title of each Class of Amount Maximum Maximum Amount of
Securities to be to be Offering Price Aggregate Registration
Registered Registered Per Share(2) Offering Price Fee
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mortgage Bonds.........
------------------------------------------------------------------------------------
Senior Debt
Securities............
------------------------------------------------------------------------------------
Junior Subordinated
Notes.................
------------------------------------------------------------------------------------
Trust Preferred
Securities and Related
Guarantee(3)..........
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Preferred Stock........
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Agreement Regarding
Expenses and
Liabilities...........
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TOTAL................ $1,500,000,000 $1,500,000,000 $396,000(4)(5)
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</TABLE>
(1) Estimated in accordance with Rule 457 solely for the purpose of calculating
the registration fee. Such amount in U.S. dollars or the equivalent thereof
in other currencies, as shall result in an aggregate offering price for all
securities of $1,500,000,000.
(2) Omitted pursuant to General Instruction II.D. of Form S-3.
(3) No separate consideration will be received for the guarantee by Virginia
Electric and Power Company.
(4) The $121,212 appropriate registration fees were paid in connection with
File No. 333-20561 and are being carried forward pursuant to Rule 429.
(5) The $31,250 appropriate registration fees were paid in connection with File
No. 33-50425 and are being carried forward pursuant to Rule 429.
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Pursuant to Rule 429 under the Securities Act of 1933, as amended, the
Prospectus constituting a part of this Registration Statement also relates to
$400,000,000 of the registrants' Junior Subordinated Notes registered for sale
in a Registration Statement on Form S-3 (File No. 333-20561). This Registration
Statement also constitutes Post-Effective Amendment No. 1 with respect to
Registration Statement No. 333-20561 and such Post-Effective Amendment shall
become effective concurrently with the effectiveness of this Registration
Statement in accordance with Section 8(c) of the Securities Act of 1933.
Pursuant to Rule 429 under the Securities Act of 1933, as amended, the
Prospectus constituting a part of this Registration Statement also relates to
$100,000,000 of the registrants' Preferred Stock registered for sale in a
Registration Statement on Form S-3 (File No. 33-50425). This Registration
Statement also constitutes Post-Effective Amendment No. 1 with respect to
Registration Statement No. 33-50425 and such Post-Effective Amendment shall
become effective concurrently with the effectiveness of this Registration
Statement in accordance with Section 8(c) of the Securities Act of 1933.
--------------
The registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrants
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 the Registration Statement shall become
effective on such date as the SEC, acting pursuant to Section 8(a), may
determine.
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<PAGE>
PROSPECTUS
LOGO
Virginia Electric and Power Company
One James River Plaza
701 East Cary Street
Richmond, Virginia 23219
(804) 771-3000
$1,500,000,000
Mortgage Bonds
Senior Debt Securities
Junior Subordinated Notes
Trust Preferred Securities and Related Guarantee
Preferred Stock
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. Any representation to the contrary is
a criminal offense.
This prospectus is dated , 2000.
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C>
About This Prospectus............................................... 1
Where You Can Find More Information................................. 1
The Company......................................................... 1
The Trust........................................................... 2
Use of Proceeds..................................................... 2
Coverage Ratios..................................................... 2
Description of the Bonds............................................ 3
Description of Debt Securities...................................... 5
Additional Terms of Senior Debt Securities.......................... 12
Additional Terms of Junior Subordinated Notes....................... 13
Description of the Trust Preferred Securities....................... 15
Description of the Guarantee........................................ 23
Relationship Among the Trust Preferred Securities, the Guarantee and
the Junior Subordinated Notes Held by the Trust.................... 26
Accounting Treatment................................................ 27
Description of Preferred Stock...................................... 27
Plan of Distribution................................................ 28
Legal Opinions...................................................... 28
Experts............................................................. 28
</TABLE>
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission utilizing a shelf registration process.
Under this shelf process, we may, from time to time, sell any combination of
the securities described in this prospectus in one or more offerings up to a
total dollar amount of $1,500,000,000. This prospectus provides you with a
general description of the securities we may offer. Each time we sell
securities, we will provide a prospectus supplement that will contain specific
information about the terms of that offering. Material United States federal
income tax considerations applicable to the offered securities will also be
discussed in the applicable prospectus supplement. The prospectus supplement
may also add, update or change information contained in this prospectus. You
should read both this prospectus and any prospectus supplement together with
additional information described under the heading WHERE YOU CAN FIND MORE
INFORMATION.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information with
the SEC. Our SEC filings are available to the public over the Internet at the
SEC's web site at http://www.sec.gov. You may also read and copy any document
we file at the SEC's public reference rooms in Washington, D.C., New York, New
York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. You may also read and copy these
documents at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
The SEC allows us to incorporate by reference the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings
made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until we sell all of the securities.
. Annual Report on Form 10-K for the year ended December 31, 1999;
. Quarterly Report on Form 10-Q for the quarter ended March 31, 2000;
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Corporate Secretary
Virginia Electric and Power Company
One James River Plaza
701 East Cary Street
Richmond, Virginia 23219
(804) 771-3000
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 are not
making an offer of these securities in any state where the offer is not
permitted. You should not assume that the information in this prospectus or
any prospectus supplement is accurate as of any date other than the date on
the front of those documents.
THE COMPANY
Virginia Electric and Power Company is a Virginia corporation with its
principal office located at 701 East Cary Street, Richmond, Virginia 23219.
The telephone number is (804) 771-3000. All of our common stock is held by
Dominion Resources, Inc., a Virginia corporation.
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The Company is a public utility engaged in the generation, transmission,
distribution and sale of electric energy within a 30,000 square-mile area in
Virginia and northeastern North Carolina. We transact business under the name
of Virginia Power in Virginia and under the name of North Carolina Power in
North Carolina. The Virginia service area comprises about 65% of Virginia's
total land area but accounts for over 80% of its population.
THE TRUST
Virginia Power Capital Trust II is a statutory business trust newly formed
under Delaware law by us, as sponsor for the Trust, and Chase Manhattan Bank
Delaware, who will serve as trustee in the State of Delaware for the purpose of
complying with the provisions of the Delaware Business Trust Act. The trust
agreement for the Trust will be amended and restated substantially in the form
filed as an exhibit to the registration statement, effective when securities of
the Trust are initially issued. The amended trust agreement will be qualified
as an indenture under the Trust Indenture Act of 1939.
The Trust exists for the exclusive purposes of
. issuing two classes of trust securities, Trust Preferred Securities and
trust common securities, which together represent undivided beneficial
interests in the assets of the Trust;
. investing the gross proceeds of the trust securities in our Junior
Subordinated Notes;
. making distributions; and
. engaging in only those other activities necessary, advisable or
incidental to the purposes listed above.
The Junior Subordinated Notes will be the sole asset of the Trust, and our
payments under the Junior Subordinated Notes and the Agreement as to Expenses
and Liabilities will be the sole revenue of the Trust.
No separate financial statements of the Trust are included in this
prospectus. We consider that these financial statements would not be material
to holders of the Trust Preferred Securities because the Trust has no
independent operations and the purposes of the Trust are as described above. We
do not expect that the Trust will be filing annual, quarterly or special
reports with the SEC.
The principal place of business of the Trust will be c/o Virginia Electric
and Power Company, One James River Plaza, 701 East Cary Street, Richmond,
Virginia 23219.
USE OF PROCEEDS
The net proceeds from the sale of the offered securities will be used to
meet a portion of the general capital requirements of the Company and for the
refinancing of other outstanding debt.
COVERAGE RATIOS
The ratio of earnings to fixed charges and ratio of earnings to fixed
charges and preferred stock dividends for each of the periods indicated is as
follows:
<TABLE>
<CAPTION>
Twelve Months ended Dec.
31, For the Twelve
------------------------ Months ended
1995 1996 1997 1998 1999 March 31, 2000
---- ---- ---- ---- ---- --------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges.... 2.99 3.14 3.21 2.19 3.50 3.61
Ratio of earnings to fixed charges and
preferred stock dividends............ 2.49 2.70 2.75 1.85 2.94 3.01
</TABLE>
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<PAGE>
In the ratio of earnings to fixed charges, earnings are determined by adding
taxes on income and fixed charges to income before extraordinary items. These
earnings are then divided by total fixed charges. Fixed charges consist of
interest charges (without reduction for Allowance for Funds Used During
Construction) on long-term and short-term debt, and the portion of rentals as
is representative of the interest factor.
In the ratio of earnings to fixed charges and preferred stock dividends,
earnings are determined by adding taxes on income, fixed charges, and preferred
stock dividends (grossed-up by a factor of pre-tax net income divided by net
income) to income before extraordinary items. These earnings are then divided
by the sum of total fixed charges and preferred stock dividends (as grossed-
up).
DESCRIPTION OF THE BONDS
We will issue our First and Refunding Mortgage Bonds (Bonds) in one or more
series under an Indenture of Mortgage dated November 1, 1935, as supplemented
and modified by eighty-five supplemental indentures and as to be supplemented
by one or more additional supplemental indentures to be entered into in
connection with each new series of Bonds. The Indenture of Mortgage and all
such supplemental indentures are collectively referred to as the Mortgage. The
Indenture of Mortgage, the eighty-five supplemental indentures and a form of
supplemental indenture are Exhibits to the Registration Statement of which this
Prospectus is a part. The Trustee under the Mortgage is The Chase Manhattan
Bank (the Trustee). We have summarized selected provisions of the Mortgage
below. Capitalized terms used in the summary have the meanings specified in the
Mortgage.
General
Unless otherwise provided in the applicable prospectus supplement, we will
issue the Bonds only in fully registered form, without coupons, in
denominations of $1,000 and integral multiples thereof and these will be
exchangeable for a like aggregate principal amount of Bonds of other authorized
denominations of the same series. No charge will be made for any transfer or
exchange of the Bonds, but we may require payment of a sum sufficient to cover
any stamp tax or other governmental charge. You may transfer and exchange your
Bonds at The Chase Manhattan Bank, 55 Water Street, New York, New York 10041.
Interest, Maturity and Payment
The Bonds will bear interest from their issue date at the rate shown in the
applicable prospectus supplement payable semiannually on the interest payment
dates shown in that prospectus supplement. The Bonds will mature on the date
shown in the applicable prospectus supplement. Interest will be paid to the
persons in whose names the Bonds are registered at the close of business on the
15th day (whether or not a business day) of the calendar month next preceding
the interest payment date, except for defaulted interest and except for
unmatured accrued interest on Bonds called for redemption on a date other than
an interest payment date. Principal of, premium, if any, and interest on the
Bonds are payable at the office or agency of the Trustee in New York City.
Provisions of a Particular Series
You should refer to the applicable prospectus supplement for the specific
terms relating to that particular series of Bonds including:
. its specific designation;
. the aggregate principal amount;
. the date or dates on which the series will mature;
. the rate per annum at which the series will bear interest;
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<PAGE>
. any optional or mandatory redemption provisions allowing the Bonds to be
redeemed at our option or of the holder of the Bonds including the
redemption or repayment dates and the redemption or repayment prices; and
. any other special terms.
Security and Priority
The Bonds will be our secured obligations, together with all other bonds
presently or issued later under the Mortgage. The Bonds will be secured by a
direct lien on all public utility property owned by us but subject to the
operation of the release provisions (which, in effect, permit the disposition
of all property in excess of the amount used under the Mortgage). Prior lien
debt on after-acquired property may be extended or refunded under the same lien
until property is certified under the Mortgage, but not after certification,
except upon consent of the holders of 60% in the amount of the bonds issued and
outstanding under the Mortgage. (See Sections 4.03 and 4.07 of the Mortgage.)
All cash, securities, accounts receivable, agreements, leases, materials and
supplies, automotive equipment, timber, coal and other minerals under the
mortgaged land, and certain other assets are excluded from the lien. (See
Preamble to the Indenture of Mortgage, Part VIII and Fourteenth Supplemental
Indenture, Part VI.) In case of a merger, consolidation or sale of
substantially all of our assets, the lien may be limited to our system at that
time. (See Sections 8.02, 8.03 and 8.04 of the Mortgage.)
The lien of the Mortgage must be duly recorded and filed, and is a first
lien junior only to (i) statutory liens and equitable priorities for taxes,
services, materials and supplies and (ii) pre-existing liens on after-acquired
property.
Other than the security afforded by the lien of the Mortgage and described
under the caption "DESCRIPTION OF THE BONDS," there are no provisions of the
Mortgage which provide holders of the Bonds protection in the event of a highly
leveraged transaction involving our Company. Such a transaction would require
regulatory approval, however, and we believe such approval would be unlikely in
a transaction that would result in our having a highly leveraged capital
structure.
Issuance of Additional Bonds or Other Debt
We may issue additional bonds under the Mortgage of any series from time to
time, but not more in aggregate amount than the amount authorized by our
shareholders (currently $5 billion), on the following bases:
1. Up to 60% of the net amount of additional property certified under
Section 2.03 and subject to no senior lien except permitted liens and
liens securing refundable debt, but only if net earnings (in 12
consecutive months within the 15 next previous months), after
depreciation but before income taxes, are at least twice the annual
interest charges on all bonds then outstanding or applied for and any
indebtedness secured by senior liens.
a. But no more than 20% of total net earnings may be from nonoperating
income and the aggregate of maintenance and repairs and depreciation
shall be not less than 15% of total operating revenues less the cost
of electricity purchased for resale and resale paid by us for
electric properties for such period.
b. Refundable debt may not exceed 60% of the property securing it or
15% of the bonds outstanding or issuable and is deducted from the
amount of bonds otherwise issuable. (See Sections 2.02, 2.03, 2.08,
2.09 and 4.16 of the Mortgage.)
2. Up to the amount of bonds or refundable debt retired (unless from
certain funds). (See Sections 2.02, 2.04, 2.05, 2.08 and 2.09 of the
Mortgage.)
3. Up to the amount of cash deposited for the purpose, but only if net
earnings are as required in 1 above. The cash may be withdrawn in the
amount of the bonds issuable as shown in 1 and 2 above, without regard
to earnings. This is the only restriction on the disposition of proceeds
of additional bonds. (See Sections 2.02, 2.06 and 2.07 of the Mortgage.)
The Bonds will be issued on the bases set forth above.
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The Mortgage does not limit the Company's ability to issue additional
unsecured debt.
Release and Substitution of Security
Property may be released upon filing a Credit Certificate or upon depositing
cash in the amount of the value of the property (which then may be withdrawn
upon filing a Credit Certificate). The Credit Certificate supplies evidence,
between formal certifications under Section 2.03 of the Mortgage, that credits
previously established on the basis of property acquisition or bonds or
refundable debt retirement have not been exhausted by showing that the
retirements that have not yet been certified are less than the balance of the
credits that would remain unused after the action then sought (including in
such credits the amount of additional property not formally certified and the
amount of release moneys, etc., then held by the Trustee). Instead of cash,
purchase money bonds or bonds of the United States or any State or their
respective political subdivisions may be deposited. Special provisions are made
for property and cash subject to senior liens and for refundable debt held in
pledge. (See Section 2.09(q), Article 5 and Article 6 of the Mortgage.)
Modification
With the consent of the holders of 75% in amount of all bonds issued and
outstanding under the Mortgage (including at least 60% in amount of each
affected series)
. any default may be waived except for a default in the payment of
principal or interest at their due dates; and
. the Mortgage may be changed in any way except to extend the due dates of
principal or interest or reduce the amount of principal, interest or
premium, if any. (See Section 7.24 and Article 14 of the Mortgage.)
Default and Action by the Trustee
An event of default includes:
. default in payment of principal of any series of bonds issued under the
Mortgage;
. continuous default for 90 days in payment of interest on any series of
such bonds (except that the default need only continue for 30 days in the
case of certain series);
. default for 90 days after notice in the performance of any other covenant
in the Mortgage and the occurrence of certain bankruptcy-related events.
(See Section 7.01. of the Mortgage)
During an event of default, the Trustee must use the same degree of care and
skill as a prudent person in the conduct of their own affairs. Subject to that
standard, a majority in amount of bonds issued under the Mortgage is necessary
to require the Trustee to take action, and the Trustee is entitled to be
indemnified to its satisfaction. (See Section 7.20 of Indenture of Mortgage and
Third Supplemental Indenture Sections 7.02 and 7.03.) We are required to report
annually to the Trustee that we are not in default under the Mortgage. (See
Third Supplemental Indenture Section 6.03.)
DESCRIPTION OF DEBT SECURITIES
The term Debt Securities includes the Senior Debt Securities and the Junior
Subordinated Notes. We will issue the Senior Debt Securities in one or more
series under our Senior Indenture dated as of June 1, 1998, between us and The
Chase Manhattan Bank as Trustee. We will issue the Junior Subordinated Notes in
one or more series under our Subordinated Note Indenture dated as of August 1,
1995 between us and The Chase Manhattan Bank (formerly Chemical Bank) as
Trustee, as supplemented from time to time. We have summarized selected
provisions of the Indentures below. The Senior Indenture and the Subordinated
Note
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Indenture are exhibits to the registration statement and you should read the
Indentures for provisions that may be important to you. In the summary below,
we have included references to section numbers of the Indentures so that you
can easily locate these provisions. Capitalized terms used in the summary have
the meanings specified in the Indentures.
General
The Senior Debt Securities will be our direct, unsecured obligations and
will rank equally with all of our other senior and unsubordinated debt. The
Junior Subordinated Notes will be our unsecured obligations and are junior in
right of payment to our Senior Indebtedness, as described under the caption
ADDITIONAL TERMS OF JUNIOR SUBORDINATED NOTES--Subordination.
Our ability to meet our obligations under the Debt Securities is dependent
on our earnings and cash flows. As of April 1, 2000, we have 6.5 million issued
and outstanding shares of Preferred Stock with an aggregate liquidation value
of $656.1 million. In addition to trade debt, we have ongoing corporate debt
programs used to finance our business activities. As of April 1, 2000, we had
approximately $4.1 billion of outstanding debt.
Neither of the Indentures limits the amount of Debt Securities that we may
issue under it. We may issue Debt Securities from time to time under the
Indentures in one or more series by entering into supplemental indentures or by
our Board of Directors or a duly authorized committee authorizing the issuance.
A form of supplemental indenture to each of the Indentures is an exhibit to the
registration statement.
The Indentures do not protect the holders of Debt Securities if we engage in
a highly leveraged transaction.
Provisions of a Particular Series
The Debt Securities of a series need not be issued at the same time, bear
interest at the same rate or mature on the same date. The prospectus supplement
for a particular series of Debt Securities will specify the terms of that
series, including, if applicable, some or all of the following:
. the title and type of the Debt Securities;
. the total principal amount of the Debt Securities;
. the portion of the principal payable upon acceleration of maturity, if
other than the entire principal;
. the date or dates on which principal is payable or the method for
determining the date or dates, and any right that we have to change the
date on which principal is payable;
. the interest rate or rates, if any, or the method for determining the
rate or rates, and the date or dates from which interest will accrue;
. any interest payment dates and the regular record date for the interest
payable on each interest payment date, if any;
. any payments due if the maturity of the Debt Securities is accelerated;
. any optional redemption terms, or with respect to the Senior Debt
Securities, any repayment terms;
. the obligations, if any, of the Company to redeem or purchase any
securities of the series pursuant to any sinking fund, purchase fund or
analogous provisions or at the option of the Holder thereof and the
period or periods within which, the price or prices at which the terms
and conditions upon which any Securities of the series shall be redeemed
or purchased, in whole or in part, pursuant to such obligation;
. any provisions that would obligate us to repurchase or otherwise redeem
the Debt Securities, or, with respect to the Senior Debt Securities, any
sinking fund provisions;
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. the currency in which payments will be made if other than U.S. dollars,
and the manner of determining the equivalent of those amounts in U.S.
dollars;
. if payments may be made, at our election or at the holder's election, in
a currency other than that in which the Debt Securities are stated to be
payable, then the currency in which those payments may be made, the terms
and conditions of the election and the manner of determining those
amounts;
. any index or formula used for determining principal, interest, or
premium, if any;
. the percentage of the principal amount at which the Debt Securities will
be issued, if other than 100% of the principal amount;
. whether the Debt Securities will be issued in fully registered
certificated form or book-entry form, represented by certificates
deposited with, or on behalf of, a securities depositary and registered
in the name of the depositary's nominee (Book-Entry Debt Securities);
. denominations, if other than $1,000 each or multiples of $1,000;
. any changes to events of defaults or covenants; and
. any other terms of the Debt Securities. (Sections 201 & 301 of the Senior
Indenture & Sections 201 & 301 of the Subordinated Note Indenture)
The prospectus supplement will also indicate any special tax implications of
the Debt Securities and any provisions granting special rights to holders when
a specified event occurs.
Conversion or Redemption
No Debt Security will be subject to conversion, amortization, or redemption,
unless otherwise provided in the applicable prospectus supplement. Any
provisions relating to the conversion or redemption of Debt Securities will be
set forth in the applicable prospectus supplement, including whether conversion
is mandatory or at our option. If no redemption date or redemption price is
indicated with respect to a Debt Security, we may not redeem the Debt Security
prior to Stated Maturity. Debt Securities subject to redemption by us will be
subject to the following terms:
. redeemable on and after the applicable redemption dates;
. redemption dates and redemption prices fixed at the time of sale and set
forth on the Debt Security; and
. redeemable in whole or in part (provided that any remaining principal
amount of the Debt Security will be equal to an authorized denomination)
at our option at the applicable redemption price, together with interest,
payable to the date of redemption, on notice given not less than 30 nor
more than 60 days prior to the date of redemption. (Section 1104 of the
Senior Indenture & Section 1104 of the Subordinated Note Indenture.)
We will not be required to:
. issue, register the transfer of, or exchange any Debt Securities of a
series during the period beginning 15 days before the date the notice is
mailed identifying the Debt Securities of that series that have been
selected for redemption; or
. register the transfer of, or exchange any Debt Security of that series
selected for redemption except the unredeemed portion of a Debt Security
being partially redeemed. (Section 305 of the Senior Indenture & Section
303 of the Subordinated Note Indenture.)
Payment and Transfer; Paying Agent
The paying agent will pay the principal of any Debt Securities only if those
Debt Securities are surrendered to it. Unless we state otherwise in the
applicable prospectus supplement, the paying agent will pay
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principal, interest and premium, if any, on Debt Securities, subject to such
surrender, where applicable, at its office or, at our option:
. by wire transfer to an account at a banking institution in the United
States that is designated in writing to the Trustee prior to the deadline
set forth in the applicable prospectus supplement by the person entitled
to that payment (which in the case of Book-Entry Debt Securities is the
securities depositary or its nominee); or
. by check mailed to the address of the person entitled to that interest as
that address appears in the security register for those Debt Securities.
(Sections 307 & 1001 of the Senior Indenture & Sections 305 and 1001 of
the Subordinated Note Indenture.)
Neither we nor the Trustee will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in a Book-Entry Debt Security, or for maintaining,
supervising or reviewing any records relating to the beneficial ownership
interests. We expect that the securities depositary, upon receipt of any
payment of principal, interest or premium, if any, in a Book-Entry Debt
Security, will credit immediately the accounts of the related participants with
payment in amounts proportionate to their respective holdings in principal
amount of beneficial interest in the Book-Entry Debt Security as shown on the
records of the securities depositary. We also expect that payments by
participants to owners of beneficial interests in a Book-Entry Debt Security
will be governed by standing customer instructions and customary practices, as
is now the case with securities held for the accounts of customers in bearer
form or registered in "street name" and will be the responsibility of the
participants.
Unless we state otherwise in the applicable prospectus supplement, the
Trustee will act as paying agent for the Debt Securities, and the principal
corporate trust office of the Trustee will be the office through which the
paying agent acts. We may, however, change or add paying agents or approve a
change in the office through which a paying agent acts. (Section 1002 of the
Senior Indenture & Section 1002 of the Subordinated Note Indenture.)
Any money that we have paid to a paying agent for principal or interest on
any Debt Securities which remains unclaimed at the end of two years after that
principal or interest has become due will be repaid to us at our request. After
repayment to the Company, holders should look only to us for those payments.
(Section 1003 of the Senior Indenture & Section 1003 of the Subordinated Note
Indenture.)
Fully registered securities may be transferred or exchanged at the corporate
trust office of the Trustee or at any other office or agency we maintain for
those purposes, without the payment of any service charge except for any tax or
governmental charge. (Section 1002 of the Senior Indenture & Section 1002 of
the Subordinated Note Indenture.)
Global Securities
We may issue some or all of the Debt Securities as Book-Entry Debt
Securities. Book-Entry Debt Securities will be represented by one or more fully
registered global certificates. Book-Entry Debt Securities of like tenor and
terms up to $400,000,000 aggregate principal amount may be represented by a
single global certificate. Each global certificate will be deposited and
registered with the securities depositary or its nominee or a custodian for the
securities depositary. Unless it is exchanged in whole or in part for Debt
Securities in definitive form, a global certificate may generally be
transferred only as a whole unless it is being transferred to certain nominees
of the depositary. (Section 305 of the Senior Indenture & Section 203 of the
Subordinated Note Indenture.)
Unless otherwise stated in any prospectus supplement, The Depository Trust
Company will act as the securities depositary. Beneficial interests in global
certificates will be shown on, and transfers of global certificates will be
effected only through, records maintained by the securities depositary and its
participants. If
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there are any additional or differing terms of the depositary arrangement with
respect to the Book-Entry Debt Securities, we will describe them in the
applicable prospectus supplement.
Holders of beneficial interests in Book-Entry Debt Securities represented by
a global certificate are referred to as beneficial owners. Beneficial owners
will be limited to institutions having accounts with the securities depositary
or its nominee, which are called participants in this discussion, and to
persons that hold beneficial interests through participants. When a global
certificate representing Book-Entry Debt Securities is issued, the securities
depositary will credit on its book-entry, registration and transfer system the
principal amounts of Book-Entry Debt Securities the global certificate
represents to the accounts of its participants. Ownership of beneficial
interests in a global certificate will be shown only on, and the transfer of
those ownership interests will be effected only through, records maintained by:
. the securities depositary, with respect to participants' interests; and
. any participant, with respect to interests the participant holds on
behalf of other persons.
As long as the securities depositary or its nominee is the registered holder
of a global certificate representing Book-Entry Debt Securities, that person
will be considered the sole owner and holder of the global certificate and the
Book-Entry Debt Securities it represents for all purposes. Except in limited
circumstances, beneficial owners:
. may not have the global certificate or any Book-Entry Debt Securities it
represents registered in their names;
. may not receive or be entitled to receive physical delivery of
certificated Book-Entry Debt Securities in exchange for the global
certificate; and
. will not be considered the owners or holders of the global certificate or
any Book-Entry Debt Securities it represents for any purposes under the
Debt Securities or the Indentures. (Section 202 of the Subordinated Note
Indenture.)
We will make all payments of principal, interest and premium, if any, on a
Book-Entry Debt Security to the securities depositary or its nominee as the
holder of the global certificate. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of securities in
definitive form. These laws may impair the ability to transfer beneficial
interests in a global certificate.
Payments participants make to beneficial owners holding interests through
those participants will be the responsibility of those participants. The
securities depositary may from time to time adopt various policies and
procedures governing payments, transfers, exchanges and other matters relating
to beneficial interests in a global certificate. None of the following will
have any responsibility or liability for any aspect of the securities
depositary's or any participant's records relating to beneficial interests in a
global certificate representing Book-Entry Debt Securities, for payments made
on account of those beneficial interests or for maintaining, supervising or
reviewing any records relating to those beneficial interests:
. the Company;
. the Trustee;
. the Trust (only with respect to the Junior Subordinated Notes if the
Junior Subordinated Notes are issued to a Trust); or
. any agent of any of the above.
Covenants
Under the Indentures we will:
. pay the principal, interest and premium, if any, on the Debt Securities
when due;
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. maintain a place of payment;
. preserve and keep in full force and effect the corporate existence except
as provided in the Indentures
. deliver an officer's certificate to the Trustee at the end of each fiscal
year confirming our compliance with our obligations under each of the
Indentures; and
. deposit sufficient funds with any paying agent on or before the due date
for any principal, interest or premium, if any.
. file a written notice with Trustee specifying the amount of original
issue discount (including daily rate and accrual periods) accrued on the
outstanding securities. (Sections 1001, 1002, 1003, 1004, 1005, 1006,
1007 of the Senior Indenture & Sections 1001, 1002, 1003 and 1006 of the
Subordinated Note Indenture.)
Consolidation, Merger or Sale
The Indentures provide that we may consolidate or merge with or into, or
sell all or substantially all of our properties and assets to, another
corporation or other entity, provided that any successor assumes our
obligations under the Indentures and the Debt Securities issued under the
Indentures. We must also deliver an opinion of counsel to the Trustee affirming
our compliance with all conditions in the applicable Indenture relating to the
transaction. When the conditions are satisfied, the successor will succeed to
and be substituted for us under the Senior Indenture, and we will be relieved
of our obligations under the Senior Indenture and the Debt Securities issued
under them. (Sections 801 & 802 of the Senior Indenture & Sections 801 & 802 of
the Subordinated Note Indenture.)
Events of Default
Event of Default when used in each of the Indentures, will mean any of the
following:
. failure to pay the principal or any premium on any Debt Security when
due;
. with respect to the Senior Debt Securities, failure to deposit any
sinking fund payment when due that continues for 60 days;
. failure to pay any interest on any Debt Securities of that series, when
due, that continues for 60 days; provided that, if applicable, for this
purpose, the date on which interest is due is the date on which we are
required to make payment following any deferral of interest payments by
it under the terms of Junior Subordinated Notes that permit such
deferrals;
. failure to perform any other covenant in the Indentures (other than a
covenant expressly included solely for the benefit of other series) that
continues for 90 days after the Trustee or the holders of at least 33% of
the outstanding Debt Securities (25% in the case of the Junior
Subordinated Notes) of that series give us written notice of the default;
. certain events in bankruptcy, insolvency or reorganization of the
Company; or
. any other Event of Default included in the Indentures or any supplemental
indenture. (Section 501 of the Senior Indenture & Section 501 of the
Subordinated Note Indenture.)
In the case of a general covenant default described above, the Trustee may
extend the grace period. In addition, if holders of a particular series have
given a notice of default, then holders of at least the same percentage of Debt
Securities of that series, together with the Trustee, may also extend the grace
period. The grace period will be automatically extended if we have initiated
and are diligently pursuing corrective action.
An Event of Default for a particular series of Debt Securities does not
necessarily constitute an Event of Default for any other series of Debt
Securities issued under the Indentures. Additional events of default may be
established for a particular series and, if established, will be described in
the applicable prospectus supplement.
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If an Event of Default for any series of Debt Securities occurs and
continues, the Trustee or the holders of at least 33% (25%, in the case of the
Junior Subordinated Notes) in aggregate principal amount of the Debt Securities
of the series may declare the entire principal of all the Debt Securities of
that series to be due and payable immediately. If this happens, subject to
certain conditions, the holders of a majority of the aggregate principal amount
of the Debt Securities of that series can void the trust agreement. (Section
502 of the Senior Indenture & Section 502 of the Subordinated Note Indenture.)
The Trustee may withhold notice to the holders of Debt Securities of any
default (except in the payment of principal or interest) if it considers the
withholding of notice to be in the best interests of the holders. Other than
its duties in case of a default, a Trustee is not obligated to exercise any of
its rights or powers under the Indentures at the request, order or direction of
any holders, unless the holders offer the Trustee reasonable indemnity. If they
provide this reasonable indemnification, the holders of a majority in principal
amount of any series of Debt Securities may direct the time, method and place
of conducting any proceeding or any remedy available to the Trustee, or
exercising any power conferred upon the Trustee, for any series of Debt
Securities. However, the Trustee shall give the holders of Debt Securities
notice of any default to the extent provided by the Trust Indenture Act.
(Sections 512, 601 & 602 of the Senior Indenture & Sections 512, 601 and 602 of
the Subordinated Note Indenture.)
The holder of any Debt Security will have an absolute and unconditional
right to receive payment of the principal, any premium and, within certain
limitations, any interest on that Debt Security on its maturity date or
redemption date and to enforce those payments. (Section 508 of the Senior
Indenture & Section 508 of the Subordinated Note Indenture.)
Satisfaction; Discharge
We may discharge all our obligations (except those described below) to
holders of the Debt Securities issued under the Indentures, which Debt
Securities have not already been delivered to the Trustee for cancellation and
which either have become due and payable or are by their terms due and payable
within one year, or are to be called for redemption within one year, by
depositing with the Trustee an amount certified to be sufficient to pay when
due the principal, interest and premium, if any, on all outstanding Debt
Securities. However, certain of our obligations under the Indentures will
survive, including with respect to the following:
. rights of holders to cause us to register the transfer, conversion,
substitution or exchange of Debt Securities of the applicable series;
. rights of holders to receive payments of principal of, and any interest
on, the Debt Securities of the applicable series, and other rights,
duties and obligations of the holders of Debt Securities with respect to
any amounts deposited with the Trustee; and
. the rights, obligations and immunities of the Trustee under the
Indentures. (Section 401 of Senior Indenture & Section 401 of
Subordinated Note Indenture.)
Modification of Indentures; Waiver
Under the Indentures our rights and obligations and the rights of the
holders may be modified with the consent of the holders of a majority in
aggregate principal amount of the outstanding Debt Securities of each series
affected by the modification. No modification of the principal or interest
payment terms, and no modification reducing the percentage required for
modifications, is effective against any holder without its consent. (Section
902 of the Senior Indenture & Section 902 of the Subordinated Note Indenture.)
In addition, we may supplement the Indentures to create new series of Debt
Securities and for certain other purposes, without the consent of any holders
of Debt Securities. (Section 901 of the Senior Indenture & Section 901 of the
Subordinated Note Indenture.)
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The holders of a majority of the outstanding Debt Securities of all series
under the applicable Indenture with respect to which a default has occurred and
is continuing may waive a default for all those series, except a default in the
payment of principal or interest, or any premium, on any Debt Securities or a
default with respect to a covenant or provision which cannot be amended or
modified without the consent of the holder of each outstanding Debt Security of
the series affected. (Section 513 of the Senior Indenture & Section 513 of the
Subordinated Note Indenture.)
In addition, under certain circumstances, the holders of a majority of the
outstanding Junior Subordinated Notes of any series may waive in advance, for
that series, our compliance with certain restrictive provisions of the
Subordinated Note Indenture under which those Junior Subordinated Notes were
issued. (Section 1008 of the Subordinated Note Indenture.)
Concerning the Trustee
The Chase Manhattan Bank is the Subordinated Note Indenture Trustee and the
Trustee under the Senior Indenture. We and certain of our affiliates maintain
deposit accounts and banking relationships with The Chase Manhattan Bank. The
Chase Manhattan Bank also serves as trustee under other indentures pursuant to
which securities of ours and of certain of our affiliates are outstanding. It
has purchased, and is likely to purchase in the future, our securities and
securities of our affiliates.
The Trustee will perform only those duties that are specifically set forth
in the Indentures unless an event of default under an Indenture occurs and is
continuing. The Trustee is under no obligation to exercise any of its powers
under the Indentures at the request of any holder of Debt Securities unless
that holder offers reasonable indemnity to the Trustee against the costs,
expenses and liabilities which it might incur as a result. (Section 601 of the
Senior Indenture & Section 601 of the Subordinated Note Indenture.)
The Trustee administers its corporate trust business at 450 West 33rd
Street, New York, New York 10001 (Attention: Capital Markets Fiduciary
Services).
ADDITIONAL TERMS OF SENIOR DEBT SECURITIES
Repayment at the Option of the Holder; Repurchases by the Company
Upon execution of the Fourth Supplemental Indenture to the Senior Indenture
dated June 1, 1998, the Company may at its discretion issue Senior Debt
Securities with repayment provisions at the option of the holder. We must repay
the Senior Debt Securities at the option of the Holders prior to the Stated
Maturity Date only if specified in the applicable prospectus supplement. Unless
otherwise provided in the prospectus supplement, the Senior Debt Securities
subject to repayment at the option of the Holder will be subject to repayment:
. on the specified Repayment Dates; and
. at a repayment price equal to 100% of the unpaid principal amount to be
repaid, together with unpaid interest accrued to the Repayment Date.
For any Senior Debt Security to be repaid, the Trustee must receive, at its
office maintained for that purpose in the Borough of Manhattan, New York City
not more than 60 nor less than 30 calendar days prior to the date of repayment:
. in the case of a certificated Senior Debt Security, the certificated
Senior Debt Security and the form in the Senior Debt Security entitled
Option of Holder to Elect Purchase duly completed; or
. in the case of a book-entry Senior Debt Security, instructions to that
effect from the beneficial owner to the securities depositary and
forwarded by the securities depositary. Exercise of the repayment option
by the Holder will be irrevocable.
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Only the securities depositary may exercise the repayment option in respect
of beneficial interests in the book-entry Senior Debt Securities. Accordingly,
beneficial owners that desire repayment in respect of all or any portion of
their beneficial interests must instruct the participants through which they
own their interests to direct the securities depositary to exercise the
repayment option on their behalf. All instructions given to participants from
beneficial owners relating to the option to elect repayment will be
irrevocable. In addition, at the time the instructions are given, each
beneficial owner will cause the participant through which it owns its interest
to transfer its interest in the book-entry Senior Debt Securities or the global
certificate representing the related book-entry Senior Debt Securities, on the
securities depositary's records, to the Trustee. See DESCRIPTION OF THE DEBT
SECURITIES--Global Securities.
Defeasance
We will be discharged from our obligations on the Senior Debt Securities of
any series at any time if we deposit with the Trustee sufficient cash or
government securities to pay the principal, interest, any premium and any other
sums due to the stated maturity date or a redemption date of the Senior Debt
Securities of the series. If this happens, the holders of the Senior Debt
Securities of the series will not be entitled to the benefits of the Senior
Indenture except for registration of transfer and exchange of Senior Debt
Securities and replacement of lost, stolen or mutilated Senior Debt Securities.
(Sections 1302 and 1304 of the Senior Indenture.)
Under federal income tax law as of the date of this prospectus, a discharge
may be treated as an exchange of the related Senior Debt Securities. Each
holder might be required to recognize gain or loss equal to the difference
between the holder's cost or other tax basis for the Senior Debt Securities and
the value of the holder's interest in the Trust. Holders might be required to
include as income a different amount than would be includable without the
discharge. We urge prospective investors to consult their own tax advisers as
to the consequences of a discharge, including the applicability and effect of
tax laws other than the federal income tax law.
ADDITIONAL TERMS OF JUNIOR SUBORDINATED NOTES
Additional Covenants Applicable to Junior Subordinated Notes
Under the Subordinated Note Indenture, we will:
. maintain 100% ownership of any trust to which the Junior Subordinated
Notes have been issued, if any, while the Junior Subordinated Notes
remain outstanding; and
. pay to any trust to which the Junior Subordinated Notes have been issued,
if any, any taxes, duties, assessments or governmental charges of
whatever nature (other than withholding taxes) imposed by the United
States or any other taxing authority on the trust, so that the net
amounts received and retained by the trust (after paying any taxes,
duties, assessments or other governmental charges) will be not less than
the trust would have received had no such taxes, duties, assessments or
other governmental charges been imposed. (Sections 303 and 305 of the
Subordinated Note Indenture.)
Option to Extend Interest Payment Period
We can defer interest payments by extending the interest payment period for
the number of consecutive extension periods specified in the applicable
prospectus supplement (each, an Extension Period). Other details regarding the
Extension Period will also be specified in the applicable prospectus
supplement. No Extension Period may extend beyond the maturity of the Junior
Subordinated Notes. At the end of the Extension Period(s), we will pay all
interest then accrued and unpaid, together with interest compounded quarterly
at the rate for the Junior Subordinated Notes, to the extent permitted by
applicable law. (Section 301 of the Subordinated Note Indenture.)
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During any Extension Period, we will not make distributions related to our
capital stock, including dividends, redemptions, repurchases, liquidation
payments, or guarantee payments. Also we will not make any payments, redeem or
repurchase any Debt Securities of equal or junior rank to the Junior
Subordinated Notes or make any guarantee payments on any such Debt Securities.
We may, however, make the following types of distributions:
. dividends paid in common stock;
. dividends in connection with the implementation of a shareholder rights
plan;
. payments to a trust holding securities of the same series under a
guarantee; or
. repurchases, redemptions or other acquisitions of shares of our capital
stock in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of employees, officers,
directors or consultants.
Subordination
Each series of Junior Subordinated Notes will be subordinate and junior in
right of payment, to the extent set forth in the Subordinated Note Indenture,
to all Senior Indebtedness as defined below. If:
. we make a payment or distribution of any of our assets to creditors upon
our dissolution, winding-up, liquidation or reorganization, whether in
bankruptcy, insolvency or otherwise;
. a default beyond any grace period has occurred and is continuing with
respect to the payment of principal, interest or any other monetary
amounts due and payable on any Senior Indebtedness; or
. the maturity of any Senior Indebtedness has been accelerated because of a
default on that Senior Indebtedness,
then the holders of Senior Indebtedness generally will have the right to
receive payment, in the case of the first instance, of all amounts due or to
become due upon that Senior Indebtedness, and, in the case of the second and
third instances, of all amounts due on that Senior Indebtedness, or we will
make provision for those payments, before the holders of any Junior
Subordinated Notes have the right to receive any payments of principal or
interest on their Junior Subordinated Notes. (Sections 1301 and 1303 of the
Subordinated Note Indenture.)
Senior Indebtedness means, with respect to any series of Junior Subordinated
Notes, the principal, premium, interest and any other payment in respect of any
of the following:
. all of our indebtedness for borrowed or purchased money that is evidenced
by notes, debentures, bonds or other written instruments;
. our obligations for reimbursement under letters of credit, banker's
acceptances, security purchase facilities or similar facilities issued
for our account;
. any of our other indebtedness or obligations with respect to commodity
contracts, interest rate commodity and currency swap agreements and other
similar agreements or arrangements; and
. all indebtedness of others of the kinds described in the preceding
categories which we have assumed or guaranteed.
Senior Indebtedness will not include our obligations to trade creditors or
indebtedness. (Section 101 of the Subordinated Note Indenture.)
Senior Indebtedness will be entitled to the benefits of the subordination
provisions in the Subordinated Note Indenture irrespective of the amendment,
modification or waiver of any term of the Senior Indebtedness. We may not amend
the Subordinated Note Indenture to change the subordination of any outstanding
Junior
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Subordinated Notes without the consent of each holder of Senior Indebtedness
that the amendment would adversely affect. (Section 1308 of the Subordinated
Note Indenture.)
The Subordinated Note Indenture does not limit the amount of Senior
Indebtedness that we may issue.
DESCRIPTION OF THE TRUST PREFERRED SECURITIES
The following is a summary of the principal terms of the Trust Preferred
Securities. The form of amended trust agreement is filed as an exhibit to the
registration statement of which this prospectus forms a part, or is
incorporated by reference. The terms of the Trust Preferred Securities will
include those stated in the amended trust agreement and those made part of the
amended trust agreement by the Trust Indenture Act.
General
The Trust will exist until terminated as provided in its amended trust
agreement. Except under certain circumstances, we will be entitled to appoint,
remove, or replace trustees, who will conduct the business and affairs of the
Trust. The trustees of the Trust will consist of:
. two employees, officers or affiliates of the Company as Administrative
Trustees;
. a financial institution unaffiliated with us that will act as property
trustee and as indenture trustee for purposes of the Trust Indenture Act,
under the terms set forth in a prospectus supplement (the Property
Trustee); and
. one trustee with its principal place of business or who resides in the
State of Delaware and who will act under the terms set forth in a
prospectus supplement. (Sections 6.1 through 6.5 of the Amended Trust
Agreement.)
The amended trust agreement will authorize the Administrative Trustees to
issue, on behalf of the Trust, two classes of trust securities, Trust Preferred
Securities and trust common securities, each of which will have the terms
described in this prospectus and in the applicable prospectus supplement. We
will own all of the trust common securities. The trust common securities will
rank equally in right of payment, and payments will be made on the trust common
securities, proportionately with the Trust Preferred Securities. However, if an
event of default occurs and is continuing under the amended trust agreement,
the rights of the holders of the trust common securities to payment for
distributions and payments upon liquidation, redemption and otherwise, will be
subordinated to the rights of the holders of the Trust Preferred Securities. We
will acquire, directly or indirectly, trust common securities in a total
liquidation amount of approximately 3% of the total capital of the Trust.
(Sections 3.6, 5.1, 5.2 and 7.1 of the Amended Trust Agreement.)
The proceeds from the sale of the Trust Preferred Securities will be used by
the Trust to purchase our Junior Subordinated Notes. These Junior Subordinated
Notes will be held in trust by the Property Trustee for the benefit of the
holders of the trust securities. We will guarantee the payments of
distributions and payments on redemption or liquidation with respect to the
Trust Preferred Securities, but only to the extent the Trust has funds
available to make those payments and has not made the payments. See DESCRIPTION
OF THE GUARANTEE.
The assets of the Trust available for distribution to the holders of Trust
Preferred Securities will be limited to payments from us under the Junior
Subordinated Notes held by the Trust. If we fail to make a payment on the
Junior Subordinated Notes, the Trust will not have sufficient funds to make
related payments, including distributions, on its Trust Preferred Securities.
The Guarantee, only when taken together with our obligations under the
Junior Subordinated Notes, the Subordinated Note Indenture and the amended
trust agreement, will have the effect of providing a full and unconditional
guarantee of amounts due on the Trust Preferred Securities issued by the Trust.
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The Trust Preferred Securities will have the terms, including distributions,
redemption, voting, liquidation rights and other preferred, deferred or other
special rights or restrictions that will be described in the amended trust
agreement or made part of the amended trust agreement by the Trust Indenture
Act or the Delaware Business Trust Act. The terms of the Trust Preferred
Securities will mirror the terms of the Junior Subordinated Notes held by the
Trust. In other words, the distribution rate and the distribution payment dates
and other payment dates for the Trust Preferred Securities will correspond to
the interest rate and interest payment dates and other payment dates on the
Junior Subordinated Notes. Holders of Trust Preferred Securities have no
preemptive or similar rights. (Section 7.1 of the Amended Trust Agreement.)
Provisions of a Particular Series
The Trust may issue only one series of Trust Preferred Securities. The
applicable prospectus supplement will set forth the principal terms of the
Trust Preferred Securities that will be offered, including:
. the name of the Trust Preferred Securities;
. the liquidation amount and number of Trust Preferred Securities issued;
. the annual distribution rate(s) or method of determining such rate(s),
the payment date(s) and the record dates used to determine the holders
who are to receive distributions;
. the date from which distributions will be cumulative;
. the optional redemption provisions, if any, including the prices, time
periods and other terms and conditions on which the Trust Preferred
Securities will be purchased or redeemed, in whole or in part;
. the terms and conditions, if any, upon which the Junior Subordinated
Notes and the related Guarantee may be distributed to holders of those
Trust Preferred Securities;
. any securities exchange on which the Trust Preferred Securities will be
listed;
. whether the Trust Preferred Securities are to be issued in book-entry
form and represented by one or more global certificates, and if so, the
depository for those global certificates and the specific terms of the
depositary arrangements; and
. any other relevant rights, preferences, privileges, limitations or
restrictions of the Trust Preferred Securities. (Article 7 of the Amended
Trust Agreement.)
The interest rate and interest and other payment dates of each series of
Junior Subordinated Notes issued to the Trust will correspond to the rate at
which distributions will be paid and the distribution and other payment dates
of the Trust Preferred Securities of the Trust.
Extensions
We have the right under the Subordinated Note Indenture to defer payments of
interest on the Junior Subordinated Notes which may be held by the Trust by
extending the interest payment period from time to time on the particular
series of Junior Subordinated Notes. The Administrative Trustees will give the
holders of the Trust Preferred Securities notice of any Extension Period
applicable to the Trust Securities upon their receipt of notice from us. If
distributions are deferred, the deferred distributions and accrued interest
will be paid to holders of record of the Trust Preferred Securities as they
appear on the books and records of the Trust on the record date next following
the termination of such deferral period. See ADDITIONAL TERMS OF JUNIOR
SUBORDINATED NOTES--Option to Extend Interest Payment Period.
Distributions on the Trust Preferred Securities will be made on the dates
payable to the extent that the Trust has funds available for the payment of
distributions in the property account. The Trust's funds available for
distribution to the holders of the trust securities will be limited to payments
received from us on the Junior
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Subordinated Notes. We have guaranteed the payment of distributions out of
monies held by the Trust to the extent set forth under DESCRIPTION OF THE
GUARANTEE.
Distributions on the Trust Preferred Securities will be payable to the
holders named on the securities books and records of the Trust at the close of
business on the relevant record dates, which, as long as the Trust Preferred
Securities remain in book-entry only form, will be one business day prior to
the relevant payment dates. Distributions will be paid through the Property
Trustee who will hold amounts received in respect of the Junior Subordinated
Notes in the Property Account for the benefit of the holders of the trust
securities. In the event that the Trust Preferred Securities do not continue to
remain in book-entry only form, the relevant record dates will conform to the
rules of any securities exchange on which the Trust Preferred Securities are
listed and, if none, the Administrative Trustees will have the right to select
relevant record dates, which will be more than 14 days but less than 60 days
prior to the relevant payment dates. In the event that any date on which
distributions are to be made on the Trust Preferred Securities is not a
business day, then payment of the distributions payable on that date will be
made on the next succeeding day which is a business day and without any
interest or other payment in respect of that delay, except that, if that
business day is in the next succeeding calendar year, the payment will be made
on the immediately preceding business day, in each case with the same force and
effect as if made on the record date. (Section 7.2 of the Amended Trust
Agreement.)
Mandatory Redemption of Trust Preferred Securities
The Trust Preferred Securities have no stated maturity date, but will be
redeemed upon the maturity of the Junior Subordinated Notes held by the Trust
or to the extent the Junior Subordinated Notes held by the Trust are redeemed
prior to maturity. The Junior Subordinated Notes will mature on the date
specified in the applicable prospectus supplement and may be redeemed at any
time, in whole but not in part, in certain circumstances upon the occurrence of
a Tax Event or an Investment Company Event as described below under Special
Event Redemption.
Upon the maturity of the Junior Subordinated Notes held by the Trust, the
proceeds of their repayment will simultaneously be applied to redeem all the
outstanding trust securities at the Redemption Price. Upon the redemption of
the Junior Subordinated Notes, held by the Trust either at our option or as a
result of a Tax Event or an Investment Company Event, the proceeds from the
redemption will simultaneously be applied to redeem trust securities having a
total liquidation amount equal to the total principal amount of the Junior
Subordinated Notes held by the Trust so redeemed at the redemption price;
provided, that holders of trust securities will be given not less than 30 nor
more than 60 days' notice of the redemption. In the event that fewer than all
of the outstanding trust securities are to be redeemed, the trust securities
will be redeemed proportionately. (Section 7.3 of the Amended Trust Agreement.)
Special Event Redemption
Both a Tax Event and an Investment Company Act Event constitute Special
Events for purposes of the redemption provisions described in the preceding
paragraph.
A Tax Event means that the Administrative Trustees have received an opinion
of independent tax counsel experienced in those matters to the effect that, as
a result of: any amendment to, change or announced proposed change in, the laws
or regulations of the United States or any of its political subdivisions or
taxing authorities, or any official administrative pronouncement, action or
judicial decision interpreting or applying those laws or regulations, which
amendment or change becomes effective or proposed change, pronouncement, action
or decision is announced on or after the date the Trust Preferred Securities
are issued and sold, there is more than an insubstantial risk that:
. the Trust is or within 90 days would be subject to U.S. federal income
tax with respect to income accrued or received on the Junior Subordinated
Notes held by it,
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. interest payable to the Trust on the Junior Subordinated Notes held by it
is not or within 90 days would not be deductible, in whole or in part, by
us for U.S. federal income tax purposes, or
. the Trust is or within 90 days would be subject to a material amount of
other taxes, duties or other governmental charges.
Investment Company Event means that the Administrative Trustees have
received an opinion of a nationally recognized independent counsel to the
effect that, as a result of an amendment to or change in the Investment Company
Act or regulations thereunder on or after the date the Trust Preferred
Securities are issued and sold, the Trust is or will be considered an
investment company and is required to be registered under the Investment
Company Act. (Section 1.1 of the Amended Trust Agreement.)
Redemption Procedures
The Trust may not redeem fewer than all the outstanding trust securities
unless all accrued and unpaid distributions have been paid on all trust
securities for all distribution periods terminating on or before the date of
redemption. In the event that fewer than all of the outstanding trust
securities are to be redeemed, the trust securities will be redeemed
proportionately.
If the Trust gives a notice of redemption in respect of the trust securities
(which notice will be irrevocable), then, by 12:00 noon, New York City time, on
the redemption date, and if we have paid to the Property Trustee a sufficient
amount of cash in connection with the related redemption or maturity of the
Junior Subordinated Notes held by it, the Property Trustee will irrevocably
deposit with the depositary funds sufficient to pay the applicable redemption
price and will give the depositary irrevocable instructions and authority to
pay the redemption price to the holders of the Trust Preferred Securities, and
the paying agent will pay the applicable redemption price to the holders of the
trust common securities by check. If notice of redemption has been given and
funds deposited as required, then, immediately prior to the close of business
on the date of the deposit, distributions will cease to accrue and all rights
of holders of Trust Preferred Securities called for redemption will cease,
except the right of the holders of the Trust Preferred Securities to receive
the redemption price but without interest on the redemption price. In the event
that any date fixed for redemption of Trust Preferred Securities is not a
business day, then payment of the redemption price payable on that date will be
made on the next succeeding day that is a business day, without any interest or
other payment in respect of any such delay, except that, if that business day
falls in the next calendar year, payment will be made on the immediately
preceding business day. In the event that payment of the redemption price in
respect of Trust Preferred Securities is improperly withheld or refused and not
paid either by the Trust or by us under the Guarantee, distributions on the
Trust Preferred Securities will continue to accrue at the then applicable rate
from the original redemption date to the date of payment, in which case the
actual payment date will be considered the date fixed for redemption for
purposes of calculating the redemption price.
Subject to the foregoing and applicable law, including, without limitation,
U.S. federal securities laws, we or our subsidiaries may at any time, and from
time to time, purchase outstanding Trust Preferred Securities by tender, in the
open market or by private agreement. (Section 7.4 of the Amended Trust
Agreement.)
Conversion or Exchange Rights
The terms on which the Trust Preferred Securities are convertible into or
exchangeable for common stock or our other securities will be contained in the
applicable prospectus supplement. Those terms will include provisions as to
whether conversion or exchange is mandatory, at the option of the holder or at
our option, and may include provisions under which the number of shares of
common stock or our other securities to be received by the holders of Trust
Preferred Securities would be subject to adjustment.
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Distribution of the Junior Subordinated Notes
We will have the right at any time to dissolve the Trust and, after
satisfaction of the liabilities of creditors of the Trust as provided by
applicable law, to cause Junior Subordinated Notes formerly held by the Trust
to be distributed to the holders of the Trust Preferred Securities in a total
stated principal amount equal to the total stated liquidation amount of the
Trust Preferred Securities then outstanding. Prior to any such dissolution, we
will obtain any required regulatory approvals. The right to dissolve the Trust
and distribute the Junior Subordinated Notes will be conditioned on our receipt
of an opinion rendered by an independent tax counsel that the distribution
would not result in the recognition of gain or loss for federal income tax
purposes by the holders. (Section 8.1 of the Amended Trust Agreement.)
Liquidation Distribution Upon Dissolution
The amended trust agreement will state that the Trust will be dissolved:
. upon our bankruptcy;
. upon the filing of a certificate of dissolution or its equivalent with
respect to us;
. upon the filing of a certificate of cancellation with respect to the
Trust after obtaining the consent of at least a majority in liquidation
amount of the Trust Preferred Securities, voting together as a single
class;
. 90 days after the revocation of our charter, but only if the charter is
not reinstated during that 90-day period;
. upon the distribution of the related Junior Subordinated Notes formerly
held by the Trust directly to the holders of the trust securities;
. upon the redemption of all of the trust securities; or
. upon entry of a court order for the dissolution of us or the Trust.
(Section 8.1 of the Amended Trust Agreement.)
In the event of a dissolution, after the Trust pays all amounts owed to
creditors, the holders of the Trust Preferred Securities will be entitled to
receive:
. cash equal to the total liquidation amount of each Trust Preferred
Security specified in an accompanying prospectus supplement, plus
accumulated and unpaid distributions to the date of payment, or
. Junior Subordinated Notes in a total principal amount equal to the total
liquidation amount of the Trust Preferred Securities.
If the Trust cannot pay the full amount due on its trust securities because
insufficient assets are available for payment, then the amounts payable by the
Trust on its trust securities will be paid proportionately. However, if an
event of default under the related amended trust agreement occurs, the total
amounts due on the Trust Preferred Securities will be paid before any
distribution on the trust common securities. Under certain circumstances
involving the dissolution of a Trust, subject to obtaining any required
regulatory approval, Junior Subordinated Notes will be distributed to the
holders of the trust securities in liquidation of that Trust. (Section 8.2 of
the Amended Trust Agreement.)
Trust Enforcement Events
An event of default under the Subordinated Note Indenture relating to the
Junior Subordinated Notes held by the Trust will be an event of default under
the amended trust agreement (a Trust Enforcement Event). See DESCRIPTION OF
DEBT SECURITIES--Events Of Default.
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In addition, the voluntary or involuntary dissolution, winding up or
termination of the Trust is also a Trust Enforcement Event, except in
connection with:
. the distribution of the Junior Subordinated Notes formerly held by the
Trust to holders of the trust securities of the Trust,
. the redemption of all of the trust securities of the Trust, and
. mergers, consolidations or amalgamations permitted by the amended trust
agreement of the Trust.
Under the amended trust agreement, the holder of the trust common securities
will be deemed to have waived any Trust Enforcement Event with respect to the
trust common securities until all Trust Enforcement Events with respect to the
Trust Preferred Securities have been cured, waived or otherwise eliminated.
Until all Trust Enforcement Events with respect to the Trust Preferred
Securities have been so cured, waived, or otherwise eliminated, the Property
Trustee will be deemed to be acting solely on behalf of the holders of the
Trust Preferred Securities and only the holders of the Trust Preferred
Securities will have the right to direct the Property Trustee with respect to
certain matters under the amended trust agreement and the Subordinated Note
Indenture. In the event that any Trust Enforcement Event with respect to the
Trust Preferred Securities is waived by the holders of the Trust Preferred
Securities as provided in the amended trust agreement, under the amended trust
agreement the holders of trust common securities have agreed that the waiver
also constitutes a waiver of the Trust Enforcement Event with respect to the
trust common securities for all purposes under the amended trust agreement
without any further act, vote or consent of the holders of trust common
securities. (Section 2.6 of the Amended Trust Agreement.)
We and the Administrative Trustees must file annually with the Property
Trustee a certificate evidencing compliance with all the applicable conditions
and covenants under the amended trust agreement. (Section 2.4 of the Amended
Trust Agreement.)
Upon the occurrence of a Trust Enforcement Event involving an event of
default under the Subordinated Note Indenture the Property Trustee, as the sole
holder of a particular series of Junior Subordinated Notes, will have the right
under the Subordinated Note Indenture to declare the principal of, interest and
premium, if any, on the Junior Subordinated Notes held by the Trust to be
immediately due and payable.
If a Property Trustee fails to enforce its rights under the amended trust
agreement or the Subordinated Note Indenture to the fullest extent permitted by
law and subject to the terms of the amended trust agreement and the
Subordinated Note Indenture, any holder of Trust Preferred Securities may sue
us, or seek other remedies, to enforce the Property Trustee's rights under the
amended trust agreement or the Subordinated Note Indenture without first
instituting a legal proceeding against the Property Trustee or any other
person. If a Trust Enforcement Event occurs and is continuing as a result of
our failure to pay principal of or interest or premium, if any, on the Junior
Subordinated Notes held by the Trust when payable, then a holder of the Trust
Preferred Securities may directly sue us or seek other remedies, to collect its
proportionate share of payments owned. See RELATIONSHIP AMONG THE TRUST
PREFERRED SECURITIES, THE GUARANTEE AND THE JUNIOR SUBORDINATED NOTES HELD BY
THE TRUST.
Removal and Replacement of Trustees
Only the holders of trust common securities have the right to remove or
replace the trustees of the Trust, except that while an event of default in
respect of the Junior Subordinated Notes held by the Trust has occurred or is
continuing, the holders of a majority of the Trust Preferred Securities will
have this right. The resignation or removal of any trustee and the appointment
of a successor trustee will be effective only on the acceptance of appointment
by the successor trustee in accordance with the provisions of the amended trust
agreement. (Section 6.6 of the Amended Trust Agreement.)
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Mergers, Consolidations or Amalgamations of the Trust
The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to any other corporation or other body (each, a
Merger Event), except as described below. The Trust may, with the consent of a
majority of its Administrative Trustees and without the consent of the holders
of its trust securities, consolidate, amalgamate, merge with or into, or be
replaced by another trust, provided that:
. the successor entity either
. assumes all of the obligations of the Trust relating to its trust
securities, or
. substitutes other securities for the trust securities that are
substantially similar to the trust securities, so long as the
successor securities rank the same as the trust securities for
distributions and payments upon liquidation, redemption and
otherwise;
. we acknowledge a trustee of the successor entity who has the same powers
and duties as the Property Trustee of the Trust, as the holder of a
particular series of Junior Subordinated Notes;
. the Trust Preferred Securities are listed, or any successor securities
will be listed, upon notice of issuance, on the same securities exchange
or other organization that the Trust Preferred Securities are then
listed;
. the Merger Event does not cause the Trust Preferred Securities or
successor securities to be downgraded by any nationally recognized rating
agency;
. the Merger Event does not adversely affect the rights, preferences and
privileges of the holders of the trust securities or successor securities
in any material way, other than with respect to any dilution of the
holders' interest in the new entity;
. the successor entity has a purpose identical to that of the Trust;
. prior to the Merger Event, we have received an opinion of counsel from a
nationally recognized law firm stating that
. the Merger Event does not adversely affect the rights of the holders
of the Trust Preferred Securities or any successor securities in any
material way, other than with respect to any dilution of the holders'
interest in the new entity, and
. following the Merger Event, neither the Trust nor the successor
entity will be required to register as an investment company under
the Investment Company Act; and
. we guarantee the obligations of the successor entity under the successor
securities in the same manner as in the Guarantee.
In addition, unless all of the holders of the Trust Preferred Securities and
trust common securities approve otherwise, the Trust will not consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit
any other entity to consolidate, amalgamate, merge with or into, or replace it,
if, in the opinion of a nationally recognized tax counsel experienced in such
matters, the transaction would cause the Trust or the successor entity to be
classified other than as a grantor trust for U.S. federal income tax purposes.
(Section 3.15 of the Amended Trust Agreement.)
Voting Rights; Amendment of Trust Agreement
The holders of Trust Preferred Securities have no voting rights except as
discussed under DESCRIPTION OF THE TRUST PREFERRED SECURITIES--Mergers,
Consolidations Or Amalgamations Of The Trust and DESCRIPTION OF THE GUARANTEE--
Amendments, and as otherwise required by law and the amended trust agreement.
Except as otherwise provided in this Trust Agreement or by any applicable
terms of the Securities, this Trust Agreement may only be amended by a written
instrument approved and executed by the Sponsor and
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(i) the Administrative Trustees (or, if there are more than two Administrative
Trustees, a majority of the Administrative Trustees), (ii) the Property
Trustee; and (iii) the Delaware Trustee if the amendment affects the rights,
powers, duties, obligations or immunities of the Delaware Trustee. However, if
any proposed amendment provides for, or the Administrative Trustees otherwise
propose to,
. change the amount or timing of any distribution of the Securities or
otherwise adversely affect the amount of any distribution required to be
made in respect of the Securities as of a specified date,
. restrict the right of a Holder of Securities to institute suit for the
enforcement of any such payment on or after such date, or effect
then the holders of the Trust Preferred Securities as a single class will be
entitled to vote on the amendment or proposal. In that case, the amendment or
proposal will only be effective if approved by each Holder of the Securities
in liquidation amount of the Trust Preferred Securities affected by the
amendment or proposal.
However, if any proposed amendment provides for, or the Administrative
Trustees otherwise propose to,
. effect any action that would adversely affect the powers, preferences or
special rights of the trust securities, whether by way of amendment to
the amended trust agreement or otherwise, or
. effect the dissolution, winding-up or termination of the Trust other than
under the terms of its amended trust agreement,
then the holders of the Trust Preferred Securities as a single class will be
entitled to vote on the amendment or proposal. In that case, the amendment or
proposal will only be effective if approved by at least a majority in
liquidation amount of the Trust Preferred Securities affected by the amendment
or proposal.
No amendment may be made to an amended trust agreement if that amendment
would:
. cause the Trust to be characterized as other than a grantor trust for
U.S. federal income tax purposes;
. reduce or otherwise adversely affect the powers of the Property Trustee;
or
. cause the Trust to be deemed to be an investment company which is
required to be registered under the Investment Company Act. (Section 11.1
of the Amended Trust Agreement.)
The holders of a majority of the total liquidation amount of the Trust
Preferred Securities have the right to:
. direct the time, method and place of conducting any proceeding for any
remedy available to the Property Trustee; or
. direct the exercise of any trust or power conferred upon the Property
Trustee under the amended trust agreement, including the right to direct
the Property Trustee, as the holder of a particular series of Junior
Subordinated Notes, to
. exercise the remedies available under the Subordinated Note Indenture
with respect to the Junior Subordinated Notes held by the Trust,
. waive any event of default under the Subordinated Note Indenture that
is waivable, or
. cancel an acceleration of the principal of the Junior Subordinated
Notes held by the Trust.
In addition, before taking any of the foregoing actions, the Property
Trustee must obtain an opinion of counsel stating that, as a result of that
action, the Trust will continue to be classified as a grantor trust for U.S.
federal income tax purposes. (Section 7.5 of the Amended Trust Agreement.)
As described in the form of amended trust agreement, the Property Trustee
may hold a meeting to have holders of Trust Preferred Securities vote on a
change or have them approve a change by written consent.
If a vote by the holders of Trust Preferred Securities is taken or a
consent is obtained, any Trust Preferred Securities owned by us or any of our
affiliates will, for purposes of the vote or consent, be treated as if they
were not outstanding, which will have the following consequences:
. we and any of our affiliates will not be able to vote on or consent to
matters requiring the vote or consent of holders of Trust Preferred
Securities; and
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. any Trust Preferred Securities owned by us or any of our affiliates will
not be counted in determining whether the required percentage of votes or
consents has been obtained. (Section 7.5 of the Amended Trust Agreement.)
Information Concerning the Property Trustee
For matters relating to compliance with the Trust Indenture Act, the
Property Trustee will have all of the duties and responsibilities of an
indenture trustee under the Trust Indenture Act. The Property Trustee, other
than during the occurrence and continuance of a Trust Enforcement Event,
undertakes to perform only the duties that are specifically described in the
amended trust agreement and, upon a Trust Enforcement Event, must use the same
degree of care and skill as a prudent person would exercise or use in the
conduct of his or her own affairs. Subject to this provision, the Property
Trustee is under no obligation to exercise any of the powers given it by the
applicable amended trust agreement at the request of any holder of Trust
Preferred Securities unless it is offered reasonable security or indemnity
against the costs, expenses and liabilities that it might incur. (Section 3.9
of the Amended Trust Agreement.)
Information Concerning the Administrative Trustees
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Trust in a way that:
. will not cause it to be deemed to be an investment company required to be
registered under the Investment Company Act;
. will cause it to be classified as a grantor trust for U.S. federal income
tax purposes; and
. will cause the Junior Subordinated Notes it holds to be treated as our
indebtedness for U.S. federal income tax purposes.
We and the Administrative Trustees are authorized to take any action, so
long as it is consistent with applicable law or the certificate of trust or
amended trust agreement, that we and the Administrative Trustees determine to
be necessary or desirable for those purposes. (Section 3.6 of the Amended Trust
Agreement.)
DESCRIPTION OF THE GUARANTEE
We will execute the Guarantee from time to time for the benefit of the
holders of the Trust Preferred Securities.
The Chase Manhattan Bank will act as Guarantee Trustee under the Guarantee.
The Guarantee Trustee will hold the Guarantee for the benefit of the holders of
the Trust Preferred Securities to which it relates.
The following description of the Guarantee is only a summary. The form of
Guarantee is an exhibit to the registration statement.
General
We will irrevocably and unconditionally agree under the Guarantee to pay the
Guarantee Payments that are defined below, to the extent specified in that
Guarantee, to the holders of the Trust Preferred Securities to which the
Guarantee relates, to the extent that the Guarantee Payments are not paid by or
on behalf of the Trust. We are required to pay the Guarantee Payments to the
extent specified in the Guarantee regardless of any defense, right of set-off
or counterclaim that we may have or may assert against any person. (Section 5.1
of the Guarantee.)
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The following payments and distributions on the Trust Preferred Securities
of a Trust are Guarantee Payments:
. any accrued and unpaid distributions required to be paid on the Trust
Preferred Securities but only to the extent that the Trust has funds
legally and immediately available for those distributions;
. the redemption price for any Trust Preferred Securities that the Trust
calls for redemption, including all accrued and unpaid distributions to
the redemption date, but only to the extent that the Trust has funds
legally and immediately available for the payment; and
. upon a dissolution, winding-up or termination of the Trust, other than in
connection with the distribution of Junior Subordinated Notes to the
holders of Trust Securities or the redemption of all the Trust Preferred
Securities, the lesser of:
. the sum of the liquidation amount and all accrued and unpaid
distributions on the Trust Preferred Securities to the payment date,
to the extent that the Trust has funds legally and immediately
available for the payment; and
. the amount of assets of the Trust remaining available for
distribution to holders of the Trust Preferred Securities in
liquidation of the Trust. (Section 1.1 of the Guarantee.)
We may satisfy our obligation to make a Guarantee Payment by making that
payment directly to the holders of the related Trust Preferred Securities or by
causing the Trust to make the payment to those holders. (Section 5.1 of the
Guarantee.)
The Guarantee will be a full and unconditional guarantee, subject to certain
subordination provisions, of the Guarantee Payments with respect to the related
Trust Preferred Securities from the time of issuance of those Trust Preferred
Securities, except that the Guarantee will only apply to the payment of
distributions and other payments on the Trust Preferred Securities when the
Trust has sufficient funds legally and immediately available to make those
distributions or other payments.
If we do not make the required payments on the Junior Subordinated Notes
that the Property Trustee holds under the Trust, the Trust will not make the
related payments on its Trust Preferred Securities.
Subordination
Our obligations under the Guarantee will be unsecured obligations of the
Company. Those obligations will rank:
. subordinate and junior in right of payment to all of our other
liabilities, other than obligations or liabilities that rank equal in
priority or subordinate by their terms;
. equal in priority with the Junior Subordinated Notes that we may issue
and similar guarantees; and
. senior to our common stock. (Section 6.2 of the Guarantee.)
We have $139 million in Junior Subordinated Notes outstanding that will rank
equal in priority with the Guarantee. We have common stock outstanding that
will rank junior to the Guarantee.
The Guarantee will be a guarantee of payment and not of collection. This
means that the guaranteed party may institute a legal proceeding directly
against us, as guarantor, to enforce its rights under the Guarantee without
first instituting a legal proceeding against any other person or entity.
(Section 5.4 of the Guarantee.)
The terms of the Trust Preferred Securities will provide that each holder of
the Trust Preferred Securities, by accepting those Trust Preferred Securities,
agrees to the subordination provisions and other terms of the Guarantee.
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Amendments
We may amend the Guarantee without the consent of any holder of the Trust
Preferred Securities to which the Guarantee relates if the amendment does not
materially and adversely affect the rights of those holders. We may otherwise
amend the Guarantee with the approval of the holders of at least a majority of
the outstanding Trust Preferred Securities to which the Guarantee. (Section 9.2
of the Guarantee.)
Termination
The Guarantee will terminate and be of no further effect when:
. the redemption price of the Trust Preferred Securities to which the
Guarantee relates is fully paid;
. we distribute the related Junior Subordinated Notes to the holders of
those Trust Preferred Securities; or
. the amounts payable upon liquidation of the Trust are fully paid.
(Section 7.1 of the Guarantee.)
The Guarantee will remain in effect or will be reinstated if at any time any
holder of the related Trust Preferred Securities must restore payment of any
sums paid to that holder with respect to those Trust Preferred Securities or
under the Guarantee.
Material Covenants
We will covenant that, so long as any Trust Preferred Securities remain
outstanding, if there is an event of default under the Guarantee or the amended
trust agreement:
. we will not make distributions related to our Debt Securities that rank
equally with or junior to the Junior Subordinated Notes held by the
Trust, including any payment of interest, principal or premium, or
repayments, repurchases or redemptions; and
. we will not make distributions related to our capital stock, including
dividends, redemptions, repurchases, liquidation payments, or guarantee
payments.
We may, however, make the following types of distributions:
. dividends paid in common stock;
. dividends in connection with the implementation of a shareholder rights
plan;
. payments to a trust holding securities of the same series under a
guarantee; and
. repurchases, redemptions or other acquisitions of shares of our capital
stock in connection with any benefit plan or other similar arrangement
with or for the benefit of employees, officers, directors or consultants.
(Section 6.1 of the Guarantee.)
Our ability to meet our obligations under the Guarantee is dependent on our
earnings and cash flows. The Trust, as holder of the Guarantee and a particular
series of Junior Subordinated Notes will generally have a junior position to
claims of our creditors, including trade creditors, debtholders, secured
creditors, taxing authorities, guarantee holders and any preferred
stockholders.
Events of Default
An event of default will occur under the Guarantee if we fail to perform any
of our payment obligations under the Guarantee. The holders of a majority of
the Trust Preferred Securities of any series may waive any such event of
default and its consequences on behalf of all of the holders of the Trust
Preferred Securities of that series. (Section 2.6 of the Guarantee.) The
Guarantee Trustee is entitled to enforce the Guarantee for the benefit of the
holders of the Trust Preferred Securities of a series if an event of default
occurs under the Guarantee. (Section 3.1 of the Guarantee.)
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The holders of a majority of the Trust Preferred Securities to which a
Guarantee relates have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee
with respect to the Guarantee or to direct the exercise of any trust or power
that the Guarantee Trustee holds under the Guarantee. Any holder of the related
Trust Preferred Securities may institute a legal proceeding directly against us
to enforce that holder's rights under the Guarantee without first instituting a
legal proceeding against the Guarantee Trustee or any other person or entity.
(Section 5.4 of the Guarantee.)
Concerning the Guarantee Trustee
The Chase Manhattan Bank is the Guarantee Trustee. It is also the Property
Trustee, the Subordinated Note Indenture Trustee and the Senior Indenture
Trustee. We and certain of our affiliates maintain deposit accounts and banking
relationships with The Chase Manhattan Bank. The Chase Manhattan Bank also
serves as trustee under other indentures pursuant to which securities of ours
and certain of our affiliates are outstanding.
The Guarantee Trustee will perform only those duties that are specifically
set forth in each Guarantee unless an event of default under the Guarantee
occurs and is continuing. In case an event of default occurs and is continuing,
the Guarantee Trustee will exercise the same degree of care as a prudent
individual would exercise in the conduct of his or her own affairs. (Section
3.1 of the Guarantee.) Subject to those provisions, the Guarantee Trustee is
under no obligation to exercise any of its powers under any Guarantee at the
request of any holder of the related Trust Preferred Securities unless that
holder offers reasonable indemnity to the Guarantee Trustee against the costs,
expenses and liabilities which it might incur as a result. (Section 3.2 of the
Guarantee.)
Agreements as to Expenses and Liabilities
We will enter into an Agreement as to Expenses and Liabilities under the
Trust Agreement. The Agreement as to Expenses and Liabilities will provide that
we will, with certain exceptions, irrevocably and unconditionally guarantee the
full payment of any indebtedness, expenses or liabilities of the Trust to each
person or entity to whom the Trust becomes indebted or liable. The exceptions
are the obligations of the Trust to pay to the holders of the related trust
common or other similar interests in the Trust the amounts due to the holders
under the terms of those trust common securities or those similar interests.
RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES, THE
GUARANTEE AND THE JUNIOR SUBORDINATED NOTES HELD BY THE TRUST
We will guarantee payments of distributions and redemption and liquidation
payments due on the Trust Preferred Securities, to the extent the Trust has
funds available for the payments, to the extent described under DESCRIPTION OF
THE GUARANTEE. No single document executed by us in connection with the
issuance of the Trust Preferred Securities will provide for our full,
irrevocable and unconditional guarantee of the Trust Preferred Securities. It
is only the combined operation of our obligations under the Guarantee, the
amended trust agreement and the Subordinated Note Indenture that has the effect
of providing a full, irrevocable and unconditional guarantee of the Trust's
obligations for the Trust Preferred Securities.
As long as we make payments of interest and other payments when due on the
Junior Subordinated Notes held by the Trust, those payments will be sufficient
to cover the payment of distributions and redemption and liquidation payments
due on the Trust Preferred Securities issued by the Trust, primarily because:
. the total principal amount of the Junior Subordinated Notes held by the
Trust will be equal to the sum of the total liquidation amount of the
trust securities;
. the interest rate and interest and other payment dates on the Junior
Subordinated Notes held by the Trust will match the distribution rate and
distribution and other payment dates for the Trust Preferred Securities;
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. we will pay for any and all costs, expenses and liabilities of the Trust
except its obligations under its Trust Preferred Securities; and
. each amended trust agreement will provide that the Trust will not engage
in any activity that is not consistent with the limited purposes of the
Trust.
If and to the extent that we do not make payments on the Junior Subordinated
Notes held by the Trust, the Trust will not have funds available to make
payments of distributions or other amounts due on its Trust Preferred
Securities. In those circumstances, you will not be able to rely upon the
Guarantee for payment of these amounts. Instead, you may directly sue us or
seek other remedies to collect your proportionate share of payments owed. If
you sue us to collect payment, then we will assume your rights as a holder of
Trust Preferred Securities under the amended trust agreement to the extent we
make a payment to you in any such legal action.
ACCOUNTING TREATMENT
The Trust will be treated as a subsidiary of ours for financial reporting
purposes. Accordingly, our consolidated financial statements will include the
accounts of the Trust. The Trust Preferred Securities, along with other Trust
Preferred Securities that we guarantee on an equivalent basis, will be
presented as a separate line item in our consolidated balance sheets, and
appropriate disclosures about the Trust Preferred Securities, the Guarantee and
the Junior Subordinated Notes held by the Trust will be included in the notes
to the consolidated financial statements. We will record distributions that the
Trust pays on the Trust Preferred Securities as an expense in our consolidated
statement of income.
DESCRIPTION OF PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of our authorized Preferred Stock. If we
offer Preferred Stock, the specific designations and rights will be described
in the prospectus supplement and a description will be filed with the SEC.
Our Board of Directors can, without approval of shareholders, issue one or
more series of Preferred Stock. The Board can also determine the number of
shares of each series and the rights, preferences and limitations of each
series including the dividend rights, voting rights, conversion rights,
redemption rights and any liquidation preferences of any wholly unissued series
of Preferred Stock, the number of shares constituting each series and the terms
and conditions of issue.
The Preferred Stock will, when issued, be fully paid and non-assessable.
Unless otherwise specified in the applicable prospectus supplement, the
Preferred Stock will rank on a parity in all respects with any outstanding
Preferred Stock we may have and will have priority over our common stock as to
dividends and distributions of assets. Therefore, the rights of any Preferred
Stock that may subsequently be issued may limit the rights of the holders of
our common stock and Preferred Stock.
The transfer agent, registrar, and dividend disbursement agent for a series
of Preferred Stock will be named in a prospectus supplement. The registrar for
shares of Preferred Stock will send notices to shareholders of any meetings at
which holders of the Preferred Stock have the right to elect directors or to
vote on any other matter.
27
<PAGE>
PLAN OF DISTRIBUTION
We may sell the offered securities (a) through agents; (b) through
underwriters or dealers; or (c) directly to one or more purchasers.
By Agents
Offered securities may be sold through agents that we designate. The agents
agree to use their reasonable best efforts to solicit purchases for the period
of their appointment.
By Underwriters
If underwriters are used in the sale, the offered securities will be
acquired by the underwriters for their own account. The underwriters may
resell the securities in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The obligations of the underwriters to purchase the
securities will be subject to certain conditions. The underwriters will be
obligated to purchase all the securities of the series offered if any of the
securities are purchased. Any initial public offering price and any discounts
or concessions allowed or re-allowed or paid to dealers may be changed from
time to time.
Direct Sales
We may also sell offered securities directly. In this case, no underwriters
or agents would be involved.
General Information
Underwriters, dealers and agents that participate in the distribution of
the offered securities may be underwriters as defined in the Securities Act of
1933 (the Act), and any discounts or commissions received by them from us and
any profit on the resale of the offered securities by them may be treated as
underwriting discounts and commissions under the Act. Any underwriters or
agents will be identified and their compensation described in a prospectus
supplement.
We may have agreements with the underwriters, dealers and agents to
indemnify them against certain civil liabilities, including liabilities under
the Act, or to contribute with respect to payments which the underwriters,
dealers or agents may be required to make.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, us or our subsidiaries in the ordinary course of their
businesses.
LEGAL OPINIONS
McGuire, Woods, Battle & Boothe LLP, Richmond Virginia, counsel to the
Company, will issue an opinion about the legality of the offered securities
for us. Certain matters relating to the formation of the Trust and the
issuance of the Trust Preferred Securities under Delaware law and the Trust
Agreement will be passed upon by Richards, Layton & Finger, special Delaware
counsel to the Trust and the Company. Any underwriters will be advised about
other issues relating to any offering by their own legal counsel.
EXPERTS
The financial statements incorporated in this prospectus by reference from
the Company's Annual Report on Form 10-K for the year ended December 31, 1999
have been audited by Deloitte & Touche LLP,
28
<PAGE>
independent auditors, as stated in their report, which is incorporated by
reference, and has been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
Legal conclusions relating to the Company's franchises and title to its
properties in the Company's Annual Report on Form 10-K and legal conclusions
under Description of the Bonds and Description of the Senior Notes and Junior
Subordinated Notes held by the Trust, including limitations upon the Company's
issuance of Bonds, have been reviewed by McGuire, Woods, Battle & Boothe LLP,
Richmond, Virginia, except that, with respect to the Bonds, insofar as matters
relating to title to properties are governed by the laws of West Virginia, they
have been reviewed by Jackson & Kelly, Charleston, West Virginia. The
statements are included on the authority of such firms, respectively, as
experts.
29
<PAGE>
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
About This Prospectus.................................................... 1
Where You Can Find More Information...................................... 1
The Company.............................................................. 1
The Trust................................................................ 2
Use of Proceeds.......................................................... 2
Coverage Ratios.......................................................... 2
Description of the Bonds................................................. 3
Description of Debt Securities........................................... 5
Additional Terms of Senior Debt Securities............................... 12
Additional Terms of Junior Subordinated Notes............................ 13
Description of the Trust Preferred Securities............................ 15
Description of the Guarantee............................................. 23
Relationship Among the Trust Preferred Securities, the Guarantee and the
Junior Subordinated Notes Held by the Trust............................. 26
Accounting Treatment..................................................... 27
Description of Preferred Stock........................................... 27
Plan of Distribution..................................................... 28
Legal Opinions........................................................... 28
Experts.................................................................. 28
</TABLE>
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LOGO
$1,500,000,000
Mortgage Bonds
Senior Debt Securities
Junior Subordinated Notes
Trust Preferred Securities and Related Guarantee
Preferred Stock
----------------
PROSPECTUS
----------------
June , 2000
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
<TABLE>
<CAPTION>
Estimated
----------
<S> <C>
Securities and Exchange Commission Fee (ACTUAL).................. $ 396,000
Fees and Expenses of Trustees.................................... 45,000
Rating Agency Fees............................................... 250,000
Printing Expenses................................................ 350,000
Accountants' Fees................................................ 120,000
Counsel Fees..................................................... 500,000
Recording Taxes & Fees, Listing Fees............................. 255,000
Miscellaneous.................................................... 100,000
----------
Total.......................................................... $2,016,000
==========
</TABLE>
Item 15. Indemnification of Directors and Officers.
Article VI of the registrant's Restated Articles of Incorporation, as
amended, provides that the registrant shall indemnify its directors and
officers to the fullest extent permitted by law. Article 10, Chapter 9, Title
13.1 of the Code of Virginia of 1950, as amended, permits indemnification of
directors and officers but does not permit indemnification against willful
misconduct or a knowing violation of the criminal law. The registrant maintains
director and officer liability insurance protecting the registrant's directors
and officers against certain claims resulting from their service in such
capacities, and the registrant from the liability assumed by it in accordance
with Article VI of its Restated Articles of Incorporation, as amended. The
current policy covers all occurrences during the period ending September 1,
2001 and is expected to be renewed in the ordinary course of business. In
general, the policy provides coverage for any misstatement, misleading
statement, act, omission, neglect or breach of duty committed or attempted by a
director or officer, but excludes, among other things, acts of deliberate
dishonesty and acts for personal profit or advantage to which the director or
officer was not entitled.
Item 16. Exhibits.
<TABLE>
<CAPTION>
Exhibit
No. Description of Document
------- -----------------------
<C> <S>
1(i) Form of Underwriting Agreement relating to the Senior Debt Securities
(filed herewith).
1(ii) Form of Underwriting Agreement relating to Preferred Stock (filed
herewith).
1(iii) Form of Underwriting Agreement relating to Trust Preferred Securities
(filed herewith).
1(iv) Form of Underwriting Agreement relating to Mortgage Bonds (filed
herewith).
4(i) Articles of Incorporation as amended, as in effect on May 6, 1999
(Exhibit 3.1), Form 10-Q for the fiscal quarter ended March 31, 1999,
File No. 1-2255, incorporated by reference).
4(ii) Bylaws as amended, as in effect on January 21, 2000 (Exhibit 3.2, Form
10-K for the fiscal year ended December 31, 1999, File No. 1-2255,
incorporated by reference).
4(iii) Form of Senior Indenture, dated as of June 1, 1998 as supplemented by
the First Supplemental Indenture (Exhibit 4.2 to Form 8-K dated June
12, 1998, File No. 1-2255, incorporated by reference); Second
Supplemental Indenture (Exhibit 4.2 to Form 8-K dated June 3, 1999,
File No. 1-2255, incorporated by reference) and Third Supplemental
Indenture (Exhibit 4.2, Form 8-K, dated October 27, 1999, File No. 1-
2255, incorporated by reference).
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description of Document
------- -----------------------
<C> <S>
4(iv) Subordinated Note Indenture, dated as of August 1, 1995 between
Virginia Electric and Power Company and The Chase Manhattan Bank
(formerly Chemical Bank), as Trustee, as supplemented (Exhibit 4(a),
Form S-3 Registration Statement File No. 333-20561 as filed on
January 28, 1997, incorporated by reference).
4(v) Indenture of Mortgage of the Company, dated November 1, 1935, as
supplemented and modified by fifty-eight Supplemental Indentures
(Exhibit 4(ii), Form 10-K for the fiscal year ended December 31,
1985, File No. 1-2255, incorporated by reference); Fifty-Ninth
Supplemental Indenture (Exhibit 4(ii), Form 10-Q for the quarter
ended March 31, 1986, File No. 1-2255, incorporated by reference);
Sixtieth Supplemental Indenture (Exhibit 4(ii), Form 10-Q for the
quarter ended September 30, 1986, File No. 1-2255, incorporated by
reference); Sixty-First Supplemental Indenture (Exhibit 4(ii), Form
8-K, dated June 2, 1987, File No. 1-2255, incorporated by reference);
Sixty-Second Supplemental Indenture (Exhibit 4(i), Form 8-K, dated
November 3, 1987, File No. 1-2255, incorporated by reference); Sixty-
Third Supplemental Indenture (Exhibit 4(i), Form 8-K, dated June 8,
1988, File No. 1-2255, incorporated by reference); Sixty-Fourth
Supplemental Indenture (Exhibit 4(i), Form 8-K, dated February 8,
1989, File No. 1-2255, incorporated by reference); Sixty-Fifth
Supplemental Indenture (Exhibit 4(i), Form 8-K, dated June 22, 1989,
File No. 1-2255, incorporated by reference); Sixty-Sixth Supplemental
Indenture (Exhibit 4(i), Form 8-K, dated February 27, 1990, File No.
1-2255, incorporated by reference); Sixty-Seventh Supplemental
Indenture (Exhibit 4(i), Form 8-K, dated April 2, 1991, File No. 1-
2255, incorporated by reference); Sixty-Eighth Supplemental Indenture
(Exhibit 4(i)), Sixty-Ninth Supplemental Indenture (Exhibit 4(ii))
and Seventieth Supplemental Indenture (Exhibit 4(iii), Form 8-K,
dated February 25, 1992, File No. 1-2255, incorporated by reference);
Seventy-First Supplemental Indenture (Exhibit 4(i)) and Seventy-
Second Supplemental Indenture (Exhibit 4(ii), Form 8-K, dated July 7,
1992, File No. 1-2255, incorporated by reference); Seventy-Third
Supplemental Indenture (Exhibit 4(i), Form 8-K, dated August 6, 1992,
File No. 1-2255, incorporated by reference); Seventy-Fourth
Supplemental Indenture (Exhibit 4(i), Form 8-K, dated February 10,
1993, File No. 1-2255, incorporated by reference); Seventy-Fifth
Supplemental Indenture (Exhibit 4(i), Form 8-K, dated April 6, 1993,
File No. 1-2255, incorporated by reference); Seventy-Sixth
Supplemental Indenture (Exhibit 4(i), Form 8-K, dated April 21, 1993,
File No. 1-2255, incorporated by reference); Seventy-Seventh
Supplemental Indenture (Exhibit 4(i), Form 8-K, dated June 8, 1993,
File No. 1-2255, incorporated by reference); Seventy-Eighth
Supplemental Indenture (Exhibit 4(i), Form 8-K, dated August 10,
1993, File No. 1-255, incorporated by reference); Seventy-Ninth
Supplemental Indenture (Exhibit 4(i), Form 8-K, dated August 10,
1993, File No. 1-2255, incorporated by reference); Eightieth
Supplemental Indenture (Exhibit 4(i), Form 8-K, dated October 12,
1993, File No. 1-2255, incorporated by reference); Eighty-First
Supplemental Indenture (Exhibit 4(iii), Form 10-K for the fiscal year
ended December 31, 1993, File No. 1-2255, incorporated by reference);
Eighty-Second Supplemental Indenture (Exhibit 4(i), Form 8-K, dated
January 18, 1994, File No. 1-2255, incorporated by reference);
Eighty-Third Supplemental Indenture (Exhibit 4(i), Form 8-K, dated
October 19, 1994, File No. 1-2255, incorporated by reference);
Eighty-Fourth Supplemental Indenture (Exhibit 4(i), Form 8-K, dated
March 22, 1995, File No. 1-2255, incorporated by reference; and
Eighty-Fifth Supplemental Indenture (Exhibit 4(i), Form 8-K, dated
February 20, 1997, File No. 1-2255, incorporated by reference).
4(vi) Form of Fourth Supplemental Indenture to Senior Indenture (filed
herewith).
4(vii) Form of Fifth Supplemental Indenture to Senior Indenture (filed
herewith).
4(viii) Form of Second Supplemental Indenture to Subordinated Note Indenture
(filed herewith).
4(ix) Form of Eighty-Sixth Supplemental Indenture to Indenture of Mortgage
(filed herewith).
4(x) Form of Guarantee Agreement to be delivered by Virginia Electric and
Power Company (filed herewith).
4(xi) Certificate of Trust of Virginia Power Capital Trust II (filed
herewith).
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description of Document
------- -----------------------
<C> <S>
4(xii) Trust Agreement of Virginia Power Capital Trust II, dated May 26,
2000 (filed herewith).
4(xiii) Form of Amended and Restated Trust Agreement of Virginia Power
Capital Trust II (filed herewith).
4(xiv) Form of Agreement as to Expenses and Liabilities (filed herewith).
5(i) Opinion of McGuire, Woods, Battle & Boothe LLP, counsel to the
Issuer, with respect to the Offered Securities (filed herewith).
5(ii) Opinion of Richards, Layton & Finger, Delaware counsel to the Issuer,
with respect to the Offered Securities (filed herewith).
12 Computation of Ratio of Earnings to Fixed Charges (filed herewith).
12(i) Computation of Ratio of Earnings to Fixed Charges and Preferred Stock
Dividends (filed herewith).
23(i) Consent of McGuire, Woods, Battle & Boothe LLP (contained in Exhibit
5(i)).
23(ii) Consent of Richards, Layton & Finger (contained in Exhibit 5(ii)).
23(iii) Consent of Jackson & Kelly (filed herewith).
23(iv) Consent of Deloitte & Touche LLP (filed herewith).
24 Powers of Attorney (included herein).
25(i) Statement of Eligibility of The Chase Manhattan Bank for the Senior
Debt Securities (filed herewith).
25(ii) Statement of Eligibility of The Chase Manhattan Bank for the Junior
Subordinated Notes (filed herewith).
25(iii) Statement of Eligibility of The Chase Manhattan Bank for the
Guarantee of Virginia Power Capital Trust II (filed herewith).
25(iv) Statement of Eligibility of The Chase Manhattan Bank for the Virginia
Power Capital Trust II Trust Preferred Securities (filed herewith).
25(v) Statement of Eligibility of The Chase Manhattan Bank for the Mortgage
Bonds (filed herewith).
</TABLE>
Item 17. Undertakings.
The undersigned registrants hereby undertake:
(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 and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the SEC pursuant to
Rule 424(b), if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement.
II-3
<PAGE>
(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 information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the SEC by the registrants pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in
this 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) The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of each
such registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement 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.
(5) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
each registrant pursuant to the foregoing provisions, or otherwise, the
registrants have 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 a
registrant of expenses incurred or paid by a director, officer or controlling
person of such 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, each registrant agrees that it
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.
(6) The undersigned registrants hereby further undertake:
(i) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by such registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(ii) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus 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.
II-4
<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 registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, the Commonwealth of Virginia, on the 1st
day of June 2000.
Date: Virginia Electric and Power Company
/s/ Thos. E. Capps
By: _________________________________
(Thos. E. Capps,
Chairman of the Board of
Directors)
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated and on the 1st of June 2000. The officers and directors
whose signatures appear below hereby constitute James F. Stutts, Patricia A.
Wilkerson, James P. Carney, Mark O. Webb, or Rhonda T. Boggs either of whom may
act, as their true and lawful attorneys-in-fact, with full power to sign on
their behalf individually and in each capacity stated below and file all
amendments and post-effective amendments to the registration statement making
such changes in the registration statement as the registrant deems appropriate,
and generally to do all things in their name in their capacities as officers
and directors to enable the registrant to comply with the provisions of the
Securities Act of 1933 and all requirements of the Securities and Exchange
Commission.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Thos. E. Capps Chairman of the Board of Directors and
___________________________________________ Director
Thos. E. Capps
/s/ Thomas F. Farrell, II Chief Executive Officer and Director
___________________________________________
Thomas F. Farrell, II
/s/ Edgar M. Roach, Jr. Chief Executive Officer and Director
___________________________________________
Edgar M. Roach, Jr.
/s/ G. Scott Hetzer Senior Vice President and Treasurer
___________________________________________
G. Scott Hetzer
/s/ Steven A. Rogers Vice President (Principal Accounting
___________________________________________ Officer)
Steven A. Rogers
</TABLE>
II-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, Virginia Power
Capital Trust II has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Richmond, the Commonwealth of Virginia, on the 1st day of June 2000.
Virginia Power Capital Trust II
By Virginia Electric and Power
Company, as Sponsor
/s/ James P. Carney
By: _________________________________
James P. Carney
Assistant Treasurer
II-6
